Nick Champion (Wakefield, Australian Labor Party) Share this | Hansard source

It's always hard to follow the member for Blair. I think it is the member for Blair—somewhere around Ipswich way. He's always a very well-prepared, well-thought-out speaker.

A government member: Doesn't say much for you!

I'm receiving a bit of negative feedback from across the aisle from my friend. There's a bell ringing around this country, and it seems it's ringing louder and louder. The only people who can't hear this are the government. It gets louder and louder every day. By election time, it will be like a gong. It's a warning bell to the government, the community and society, because fundamentally we have a whole lot of troubling aspects in the economy. We have low wages growth. We have rising income taxes for working- and middle-class Australians. We have cuts in penalty rates at a time when workers are supposed to be asking for a pay rise. We have sham contracting in the labour market. We have vicious competition in many areas of the labour market. We have a shift away from the traditional arrangements of permanent employment, permanent part-time employment and even the traditional arrangement of casual employment. We have increasingly more arrangements in the labour market, whether it is labour hire or self-contracting or subcontracting. Sometimes we have contracts upon contracts. All of these arrangements are designed to have a vicious deflationary effect on wages. That is the reason they exist. We've seen it in Caltex and Bardier and one wage scandal after another. All of this ripples throughout the economy.

I've seen many situations in my own electorate. They were working people who once would have been on predictable arrangements with predictable pay rises and would have had a level of security which is commensurate with their ability to not just pay the bills, but also to get ahead. If they worked hard, they could get into a situation where they could become middle class and their kids could go to uni, which is the Australian dream. Traditionally, it's been the dream of Anglo-Saxon postwar economies. That is, we would have a large middle-class—fewer super-rich people and fewer poor people, but a large middle class. That was the aim of the society. All of Menzies' speeches—and we hear it all the time from those opposite—were consistent with that, and so were the speeches of most postwar leaders.

What we're seeing is income deceleration out there in the economy, and this affects the consumer economy. One of the things around the penalty-rates debate is that I've had cafe owners say me: 'If only I could cut the penalty rates, I could open up on a Sunday or I could employ someone else on a Sunday.' I say: 'That's fair enough that you might look at your own enterprise and think that, but what happens if everybody does it? There's less money in the economy.' Most particularly, what happens when the big entities get to do it? They just profit that. They take that wages cut and put it in their pocket or give it to shareholders. It's not new thinking. Otto Niemeyer during the Depression famously had the same idea: cut pensions by 10 per cent and wages by 10 per cent and put your economy back into surplus. There is one problem with that—and we've got Mr Hughes' portrait up there to remind us all in this chamber of the effects of history—it doesn't work. In actual fact, you find that your economy decelerates. It's an interesting thing. We've got that big warning bell—that gong—going off in the economy.

I've said before in the House—and it's worthwhile repeating here—that we hear from the government all the time that a job is the best form of welfare, but it can be put another way too. ACOSS put it in Poverty in Australia 2016:

Being unemployed is the strongest overall predictor of poverty, with higher rates of poverty amongst this group than any other group.

So what happens when a government sets out, in parts of the economy, to court unemployment for groups of people? You saw it in the car industry this week. The last car rolled down the line at GMH Elizabeth. You can go on Facebook. There is a page tracking this car's progress from the body shop to the paint shop. It's now getting the doors, the windscreens, the dash and the engine put in it. It's slowly making its way. On Friday, that last car will come off the line. With that last car, thousands and thousands of workers in the economy will suddenly have the predictability and certainty of a highly skilled job with good wages suddenly ripped away. We know what's going to happen to the car company. Nine hundred and fifty people are going to seek other work. Some of them are going to be unemployed, and that unemployment will be the greatest predictor of whether they stay in or out of poverty. It's largely dependent on their family circumstances and what's happening in their own family units. In the components sector, it's going to be very difficult indeed. It's going to be very difficult for blue-collar people in South Australia, where they also face big reductions in the shipbuilding workforce, big reductions in civil construction and big reductions in commercial construction at the moment. So we're seeing a sort of blue-collar hit on jobs in South Australia. We're seeing the same thing in Victoria. Often, the jobs that the government talk about as though they're creating them—but, actually, it's the private economy creating them—don't directly translate to those who are losing their jobs. So there's going to be great dislocation come Monday next week.

You see that uncertainty spread by this government all the time. It's spread in terms of not just the economy and wages but the energy crisis. We see the government order a report. We have business, unions, state premiers, the Labor opposition and Senate parties all lining up behind the Clean Energy Target. So you've got a semblance of certainty, you've got modelling and you've got government process. They ordered a report, they got the report and they considered the report. Initially, they said nice things about the Clean Energy Target. Then what do we have coming out of the party room? It's a result of the division and the malevolent power that Tony Abbott has on the coalition party room to say no, to spike things and to threaten the leadership. Of course, that uncertainty around energy policy ripples throughout households. It ripples throughout manufacturers. Every manufacturer I've been to see has talked to me about power. Every food manufacturer, welding shop—wherever you go, people are talking about their power contracts in manufacturing. It impacts on investment. Higher education is more expensive.

The government are slowly—and you can see it everywhere, such as with the housing affordability crisis—putting up big blockades on the ramps to the middle class. They are keeping everybody on a low road in a low-wages economy. This hasn't worked anywhere else. They'll tell us on this bill that they're doing tax reform. But they're not dealing with negative gearing and the capital gains tax concessions, which are fuelling the housing affordability crisis. They're not dealing with trusts, where we know people income-split and deliberately manipulate the taxation system to lower their taxation rates. They're not dealing with the people who spend thousands and thousands of dollars every year on their accountants to reduce their tax so they don't contribute to society. They would rather pay their accountant than pay the taxman. What kind of disloyal, miserly thinking that is—that you would rather give your accountant 10 grand or 15 grand than give your country 10 grand or 15 grand! It's lunacy. It's actual lunacy. It's a deeply sort of immoral/amoral thing to do. So they're not dealing effectively with the people who are just dodging their responsibilities. It's not just about dodging tax; it's about dodging your responsibility as a citizen. They don't want to pay for the roads that they drive on and they don't want to pay for someone else's health care and education. They don't want to pay for the very things that make us a community and a society.

Tax cuts by themselves are not tax reforms. It's not tax reform to just simply cut tax. This has been done before. Ronald Reagan did it, and George Herbert Bush famously said, 'So what I'm saying is: it's just not gonna work,' and then he went on to refer to a man who's investing in 'voodoo economics'. We know what that did to public finances in the United States. It destroyed them. So simply handing out unfunded tax cuts doesn't do anything for your economic growth. We know what the predicted and modelled economic growth is. It's one per cent in 20 years time, and the wages that we're supposedly all going to benefit from will be two bucks a day in 20 years time.

This is an assault not just on an economy that might serve working Australians; it's an assault on good public finances. It's an assault on good public finances to think that you can give out this $65 billion tax cut. But let's not forget that we've had different figures all the way along. First of all, the Prime Minister said $24 billion, $26 billion and $50 billion in answers in question time. It was in the shadow Treasurer's speech. Then the Treasurer said, 'It's $36.5 billion,' and then he came back and said, 'Oh, it's $65.4 billion.' So they're all over the shop. What we do know is that this is an assault on good, cautious public finance. It's a departure from the traditional role of conservatism in this country—a departure from my grandfather's Liberal sort of faith. This is just a big giveaway to the top end of the town in the vain hope that you might somehow get an economic policy out of it.

Meanwhile, what are they doing to the people who have stagnant wages growth and whose friends and family—and maybe themselves—are being thrown into an economy where labour hire is increasingly prevalent and, with it, job insecurity and sham contracting becoming increasingly more prevalent? Well, they're giving those people an income tax rise. If you're on 55 grand a year, your tax is going up $275 bucks. It doesn't seem to make much sense. Those people are actually the big contributors to economic growth in this country. They're the ones who spend their wages at shops, buy things, invest in things and make things. If you're on 80 grand, it's an extra $400.

All of this means that there is a big bell ringing in the economy—ding, ding, ding, ding, ding, ding, and on and on it goes. Everybody else in the country can hear it and everybody else in the country knows it. Even the CBA's chief economist, Mr Blythe, talked about wages growth being two per cent 'if you're lucky'. He is reported in the Australian Financial Reviewas saying:

We used to talk about wages policy … and considering the current backdrop. I think maybe the time has come again to think about that.

You've got there a bank economist talking about wages policy. The government should listen to him. Frankly, they should also listen to the opposition and start thinking about what they're doing to public finances, to public trust in the economy and to overall economic growth—because this bill is not going to be good for it. It's going to be very, very bad for it. It's going to be very bad for public finances and very bad for the national economy.

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