Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Industry) Share this | Hansard source

Thank you very much. I rise to speak on the Appropriation Bill (No. 1) 2019-2020 and to respond to some of the claims made by the government that somehow the economy is going so well. The fact is we've got some major challenges in this country—some structural challenges, economic headwinds—that the government seems to want to either ignore or wish away. The reality is that, regardless of the rhetoric by the Prime Minister or the Treasurer, we have some very challenging times indeed.

I think that if we were to confine ourselves to the facts, rather than the fiction and mythology of the Morrison government, we might then be able to work our way to a solution. To find your way to a solution you have to accept there's a problem. The government has failed to accept that there are significant problems and failed to acknowledge that they have been derelict in dealing with these matters.

This is the seventh year of this government. It's had many iterations. They've been decapitating leaders at a rapid rate, but the fact is that it is the same government with a different leader. It is the seventh year, yet so many of the issues that beset this nation have not been attended to. I can name many: the skills deficiency in the labour market; dealing with reform in, for example, my own portfolio; dealing with research and development investment; tackling the issues that are required; the skills agenda; and making sure that we're responsive to emerging areas of demand in the labour market that are not being attended to. There are so many areas that we have a problem with. Yet you have a Prime Minister and a Treasurer slapping each other's back and doing victory laps while failing the Australian people.

I want to go to some of those facts. First, Australia is experiencing the slowest economic growth since the global financial crisis. Of course, Labor was in power at the time of that economic shock, the greatest economic shock in 70 years, and we responded more quickly and more appropriately than any other developed nation. That has been affirmed many times over. I was the labour minister at a G20 meeting in Moscow in 2013, where it was the unanimous view of the other 19 representatives around the table that Australia had acquitted itself really well because we moved quickly enough and appropriately enough to deal with the massive contraction of private capital. In doing so, we avoided a recession and we saved hundreds of thousands of jobs and thousands and thousands of businesses. We did that, but right now, without the same excuse that one might have had when dealing with the biggest economic shock since the Great Depression, Australia is experiencing its slowest economic growth.

Second, Australia is in its longest per capita recession since the 1982 recession. Mr Deputy Speaker McVeigh, you may recall that that was the recession presided over by Malcolm Fraser—that's how long ago we're talking about—before the election of the Hawke government. We are now in the position of having the longest per capita recession since then, some 37 years ago. Third, Australia became one of the two fastest-growing economies in the OECD under Labor and, indeed, was the eighth-fastest when the government changed hands in 2013. But, under this government, we have dropped to 20th. Think about that. We were one of the two fastest-growing economies during the GFC, but presently we are 20th in the OECD in terms of economic growth. Fourth, living standards have declined under this government, with real household median income lower than it was in 2013. So, since the election of the Abbott-Turnbull-Morrison government, we've seen a significant decline and living standards have fallen.

Fifth, wages have grown at one-eighth the pace of profits other the past year. Now, we're very happy to see profitable companies. That's a good thing; we want to see that. But the failure of this government to attend to the lowest wage growth on record is not only unfair insofar as it affects millions of workers in this country; it is affecting our economy. When you have the lowest wage growth on record, it ultimately leads to falling consumer confidence and falling business confidence, it impacts adversely on aggregate demand and, in effect, you have a consumption problem. Because of that, we have an anaemic economy, and the only thing that seems to be at the disposal of the government or, indeed, the institutions that we have—it is not the government, because the government sits on its hands—is the Reserve Bank, using monetary policy. But increasingly it has less room to move as we continue to cut interest rates. And, of course, the only other institution that's doing anything to mitigate the adverse impacts—

A division having been called in the House of Representatives—

Sitting suspended from 11:43 to 11:55

As I was saying before we were interrupted by the main chamber, the issue of wages is a critical one, and there's not one policy pronouncement by the government to attend to it. Indeed, if you look at the budget forecasts, you can see every budget forecast by this government since its election in 2013 has been wrong—has been overstated—insofar as wage growth is concerned. Wage growth is a problem, and it's not a recent problem. It's been a problem now for years, and there's been no effort by this government to fix that. As I was saying before we suspended, we have had the Reserve Bank seeking to deal with economic problems using its levers. The only other institution that is seeking to attend to this is the Fair Work Commission. To the credit of the Fair Work Commission, and in particular the president, Ian Ross, there have been three consecutive Fair Work Commission decisions on wages that have actually meant real increases in wages. That only affects about a quarter of the employment in this country, yet it does flow through to other areas. But without the Reserve Bank, who, by the way acknowledge the persistent historically low wage growth, and without the Fair Work Commission introducing real wage increases in three consecutive Fair Work decisions, nothing has been done. Certainly nothing has been done in relation to wages by this do-nothing government, and yet they boast about it. That's what's even more galling.

Sixth, productivity has declined every quarter for the last four quarters. So they cannot even claim that they have done anything to arrest the decline in productivity. That's a problem too, because, of course, it is another metric that shows an economy in decline.

Seventh, underemployment is at record highs—1.1 million people in this country are seeking to find more work but are unable to find it. You join that with the unemployment number, we're talking about 1.8 million Australians looking for some work or looking for more work and not being able to find it. I think one of the problems of the government and its economic deficiency is it seems to not understand that the headline unemployment figure is no longer sufficient to show whether the labour market is healthy with respect to unemployment. Because underemployment now is so much a part of the labour market, relying on the idea that the labour market's tightening, because unemployment is at 5.2 per cent is erroneous. It is a foolish and wrong-headed approach. There is so much slack in the labour market, because there are over one million Australians that are looking for more work and are unable to find it, and therefore there is no tightening; there is no tightening, therefore, there is no likelihood of wages going up of their own accord. Yet the government still fails to attend to this problem.

Eighth is that household debt is at a record high of around 190 per cent of disposable income. Ninth is that consumer confidence is down over the year and consumption growth is weak. And I talked about that earlier. When you have low wages growth you have falling consumer confidence, and that affects business confidence. If you look at the trends for consumer and business confidence over the course of the last several years, what you'll see is that, while there might be some peaks and troughs, the underlying long-term trend for consumer confidence is below the long-term average and the long-term trend for business confidence is lower than average. Both metrics underline how anaemic our economy is, and yet the government doesn't recognise it. If you don't recognise the deficiencies or failures in your own economy, then of course it will be harder for the government to prescribe any proper response. Whether it's deliberate, whether it's ignorance or whether it's just incompetence, this government is failing to act on these matters, despite the overwhelming evidence that there are real issues with our economy. The tenth is business investment. As a percentage of GDP, it is at around the lowest levels since the recession of the early 1990s, and business conditions have deteriorated over the past year.

These 10 axiomatic facts go to the point that Labor has been making for some years, and that is that we have an economy that has major challenges, an economy that is having the longest per capita recession since the terrible 1982 depression that many people endured under the Fraser years. Of course, Mr Howard was Treasurer then, as I recall. Household debt is up, business confidence is down and consumer confidence is down. Even employment growth, the one metric the government likes to boast about, pretty much coincides with population growth. That's not to say we don't welcome jobs. We welcome any new job. But let's be very clear: when you've got 1.1 million Australians looking for more work, they might be finding jobs, but they're not finding enough hours in those jobs to pay for things that matter to them. So that's what people are screaming for, that's what they're calling out for: more work in our economy. But, because of the slack in our labour market, there is no likelihood of wages just rising because of the scarcity of labour.

To add to those 10 facts, there is a skill deficit in the labour market. I have been talking to many, many businesses in all sectors of the economy, and they've been talking about the problems of skill shortages in their sectors. Yet, we don't have a tertiary and vocational training system to respond readily and swiftly enough to deal with the emerging demands in the labour market. These are real structural problems and, if this government had been elected in May for the first time, I guess it could have been forgiven for its inability to respond. But this is the seventh year of this government, and yet these matters that have been before it now for years on end have not been attended to. It hasn't even made an attempt to respond to these problems. So for that reason, quite rightly, Labor calls out this government for being unable, incompetent or just indifferent to these challenges. What we need to see is a lot more effort. In my own portfolio, I would hope that the government, after six years and in its third term, would start looking at some form of industry policy to help our small and medium enterprises and even larger businesses.

We would say that one of the reasons the economy is underperforming is that the government has a political strategy but not an economic policy. Think of the future of manufacturing. Incomprehensibly, at a time of great challenges for the global manufacturing industry, the current government has wiped its hands of any responsibility. In fact, it famously goaded a major car manufacturer to leave our shores, and of course they chose to do so the following day. That was a grave mistake, but it exemplifies, I think, the government's ideological predisposition not to help the corporate sector. The government likes to say it is the government for business, but the reality is, when you look at research and development, when you look at investment in skills, when you look at incentives for businesses to invest in research and development, it is left wanting.

In my engagement with business, already in the last few months in my portfolio I have seen significant concerns raised by the business community about the failure of government. I'd have a lot more to say if I had more time, including on issues around small business access to credit and many other issues, but I'm happy to leave that for another time. But this is a do-nothing government. It needs to do more. It is failing the Australian people, doing victory laps, slapping itself on the back and not really attending to its job.

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