Nick Champion (Wakefield, Australian Labor Party, Shadow Assistant Minister for Manufacturing and Science) Share this | Hansard source

I'm happy to get up here and support the appropriations bills Nos 1 and 2, one about parliamentary departments No.1, and Nos 5 and 6. Of course, Labor always support supply. The lessons of 1975 have not been lost on the Labor Party. It is important, though, for the contest over the budget to protect the nation state. We don't want to get into a situation like that in the United States of America where they have to come up with one deal after another simply to fund the public service, public servants and public service jobs. We don't want our nation beset with crises of that nature.

Nevertheless, this is going to be a debate about the government's budget strategy and, in particular, their ideas about corporate tax. We know that the government's budget basically backed in an idea which has no support in this country. It can't find support in the public sphere and it can't find support in this nation's parliament, particularly in the other place. That idea is $80 billion worth of corporate tax cuts, which are tax cuts the like of which Australia has never seen. We know when the Hawke-Keating government undertook taxation reform in the 1980s it involved a lowering of corporate tax rates, but it also involved a broadening of the base with things like the fringe benefits tax, capital gains tax and the petroleum resource rent tax. That was taxation reform. It involved spirited debate at the taxation summit and, as I think Mr Keating notably once said, they crossed the finish line with one wheel off the chariot.

Taxation reform is difficult. It's hard work. If you broaden the base, if you lower rates, that sort of reform is noted and lauded. Keating's reforms of the eighties were good all round, but this budget starts with a different idea, a Reaganesque idea: you just give $80 billion to companies and $17 billion to big banks, and somehow that idea, that great largesse, blows a hole in the nation's budget and blows a hole in its capacity to deliver services to schools, hospitals, aged-care homes and everything else that the federal government might fund and simply lowers the rate for companies, and somehow that will translate into a common good, a public good. That is nonsense. It's such nonsense that even in the United States of America, where this idea originated, it's starting to lose support.

In The Economist on 26 April, in the print edition, the headline read: 'Marco Rubio offers his Trump-crazed party a glint of hope. The Florida senator thinks that reheating Reaganomics is a dead end.' I encourage those opposite to read the article. It's not written by a socialist; it's in The Economist, so they would be safe in reading it. They might want to read Mr Rubio's quote in the article. It says:

"There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers," he says—

quoting Mr Rubio—

"In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money's been massively poured back into the American worker."

Think about this. Marco Rubio is on the conservative end of his party in the United States of America, the home of that sort of neoliberal idea—the Reaganomics—where, if you somehow lower the corporate tax rate, there will be a magical nirvana of higher wages and higher revenues, and somehow everything will work out in the never-never. In America, Senator Rubio puts a sword to that idea in the US Senate.

You would think that those opposite would just stop and think about what they're doing to their own political brand and what they're doing to this nation's capacity to fund schools and hospitals, pay down debt and encourage growth. We know the sort of corporate largesse. As I said before: $80 billion to corporations in the corporate tax cut and $17 billion to banks, despite all of the evidence to the royal commission—day after day after day of evidence of poor corporate ethics, bad corporate behaviour and one story after another, and now amazingly involving children's bank accounts. You would think there would be some underlying ethical boundary to bad behaviour, but clearly not. Every day, when we see these stories, we know it was the right call to have the royal commission, and we now see this government still wanting to shove $17 billion to Australian banks.

It's interesting. The other problem with this budget is that it has an assumption that you'll get reasonable wages growth in the coming years, but this of course does not match up with what this government's doing. On the one hand, the government say wages will grow, but we know that their policy is divorced from this. We know they're going to cut penalty rates. That's this government's policy: cut penalty rates and hack into workers. And we know they're going to get stuck into unions. They're the two basic tenets of this government's wages policy—surprise, surprise! On the one hand they want to do these things and on another they expect wages growth. On 17 May, The Sydney Morning Herald reported that wages growth was 'stuck in the mud'. It talked about how workers 'got a 0.5 per cent pay rise in the three months to March', which is 'the softest result in the history of the series'. It talked about how 1.3 million workers in the retail industry are banking an average pay rise of 1.5 per cent, which is actually a real wage cut of 0.4 per cent in real terms when compared to inflation. Think about the consequences of expecting your wages to go to one end and then having them go the other. Capital Economics' chief economist, Paul Dales, is quoting as saying wage growth is 'stuck in the mud at 2.1 per cent in the first quarter and likely to stay there or thereabouts' for the rest of the year.

But it wasn't just them. The Australian Financial Review on 17 May quotes deputy governor Guy Debelle. He's talking about what normally happens: the unemployment rate goes down and workers then have some capacity to ask for a pay rise. He says:

There is a risk that it may take a lower unemployment rate than we currently expect to generate a sustained move higher than the 2 per cent focal point evident in May wage outcomes today.

This is a problem for the old model—that is, where unemployment fell, workers would have more bargaining power and thus ask for a pay rise. We've got the deputy governor of the Reserve Bank here saying that that model might well be broken.

Why is it broken? I'll tell you why: because this government has set out to break it. This is why they are appointing Fair Work Commissioners who side with employers. This is why they are hacking into penalty rates. This is why they oppose increases to the minimum wage. This is why we have the very, very concerning series of charges brought against trade union officials for blackmail. That tactic went out with the 17th century. Of course, it's not surprising, when these charges are brought, to see that they don't survive the court process because it is not blackmail to ask for a pay rise or to get your union to ask for a pay rise. That's part of a healthy wages system.

So this government is wrong on tax and wrong on wages. It's not just the Labor Party saying so and not just a union saying so. The Reserve Bank of Australia and other economists are putting a pretty cogent case about wages. The Australia Institute is saying magical wage growth underpins the budget forecasts. You are not going to get magical wages growth if you are hacking into workers and unions every day. I'll tell you, Deputy Speaker, for your own information, you have to let workers and unions bargain. It's not criminal, either in civil law or criminal law, to have a strike to withdraw your labour; it's a standard right across industrialised economies, and it has been for some time.

So if those things are broken, then necessarily we are starting to question the government's approach to things like Newstart as well. Of course, the level of Newstart is a concern. It's a concern with ACOSS, Social Services and many people in my electorate, including the Anti Poverty Network, who take issue with it and have sent representatives to see me about it. It's also a concern with business. Jennifer Westacott was on Sky News, saying:

But we've got to make sure while they're on Newstart that it's adequate, that we're not entrenching them into disadvantage, that they've got the opportunity to get back into the workforce because they're able to maintain a reasonable standard of living. I mean $39 a day is not a lot of money, it's a very low amount of money for people to actually live on.

This is certainly the case. I've noticed many people in my electorate struggling on Newstart at the level that it's at, and also dealing with a regime of oversight that is very, very onerous. If you miss a simple appointment or if there's a mistake with your appointment with a job services provider, you can be cut and thrown into poverty and sometimes homelessness very quickly indeed. So we do have to be mindful in this place about just how difficult it is to live on Newstart and just how onerous a regime we are imposing on people who are on very low incomes, particularly if they have to sustain over a long period of time out of the labour market or are in and out of casual work or are in labour hire, which is the other big problem. We have to have be cognisant of that. When not only the Australian Council of Social Services is telling you it's not adequate but when business is also telling you it is not adequate, you know there is a case to be answered here.

I'm very proud that Labor has committed to reviewing the nature of these payments and I think we should review them with an eye to the adequacy of those payments and with a view to preventing people from falling into poverty. Once you have fallen into poverty, we know, it doesn't just affect your capacity to apply for work but there's also a fair bit of evidence to say that once you have fallen into those poverty traps, it's very hard to make the right judgements to get out of them. And it is very hard to live on very low incomes for a long period of time.

So this government's budget strategy, which Ayn Rand would be proud of, I don't think is very sensible or well thought out or reasonable in the modern era. We are saying to the government: you are going down the wrong path; you need to reconsider. The Labor Party won't follow you down this path so you should split the bills, allow us to do taxation reform for those who need it and, for those who don't—the big corporates—we should leave them to do what they should do, which is invest, create jobs and pay taxes like everyone else. We should get back to having a sustainable fiscal strategy which provides tax relief to those who need it, which pays down debt and which allows us as a nation to provide the services that we need now such as schools and hospitals and that we will need for the future.

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