Paul Fletcher (Bradfield, Liberal Party, Minister for Communications, Cyber Safety and the Arts) Share this | Hansard source

I'm pleased to have the opportunity to speak in this debate about how we address disadvantage. I want to start by agreeing, very much, with the proposition that the shadow minister has just put, which is that there is a strong link between the economy and how we address disadvantage. In fact, the data is very clear: there's a strong link between unemployment and poverty, and the best way that we can move people out of poverty is to get them into a job. And the best way to get as many people into a job as possible is to have a strong and growing economy which is generating jobs.

My source for the proposition that there is a strong link between employment and moving people out of poverty is a recent report from ACOSS, the Australian Council of Social Service, and UNSW in Sydney, Poverty in Australia 2018, which points out that only seven per cent of households whose main source of income are wages are meeting the test of poverty set out in the report. I hasten to add that the test of poverty used in that report is a relative income, or relative poverty, test rather than an absolute one. But I think we can all agree on the proposition that the more people we can get into employment, the more we can move people out of poverty.

Every Australian who moves from welfare to work experiences a personal victory, but our nation is also better off the more people are able to move from welfare to work. That is why our Liberal-National government has had a relentless focus on a strong economy which generates jobs. That's why we've focused on lowering taxes for small and medium businesses, those with turnovers up to $50 million: around nine in 10 jobs are private sector jobs. If we reduce the tax burden on businesses, we make it easier for them to employ people. That's why we've entered into free trade agreements with China, Japan, Korea and Singapore and why we joined the TPP-11. It's about generating new export opportunities for Australian businesses. It's about generating jobs. It's why we're investing $100 billion in infrastructure around Australia: infrastructure projects generate jobs.

The plan is working. Since we came to government in 2013, the strengthening economy has generated more than 1.4 million jobs. As we see more people getting jobs, we see a fall in the number of working-age Australians on welfare. In fact, as at June 2018, the number of working-age Australians on income support payments was 230,000 fewer than in June 2014. That is progress to celebrate. Of course there is more to do, but we are seeing our plan working and, as a consequence, the share of working Australians on income support payments has fallen to 14.3 per cent, the lowest rate of welfare dependency in 30 years.

I make the point that these outcomes are of particular importance for vulnerable Australians, because, as we get more vulnerable Australians into work, that has particular benefits for those at the lowest end of the income distribution. The statistics are noteworthy. Between 1988-89 and 2015-16, that group, those at the lowest end of income distribution, has experienced much stronger growth in labour income than elsewhere in the distribution. In turn, what that reflects is a substantial increase in the proportion of those at the lower end of the income distribution engaging in paid work. Over that same period, it's risen from 29 per cent to 44 per cent.

Of course, the link between a strong economy and supporting our most vulnerable—responding in the best way to those in disadvantage—is relevant because it's so important that we can fund the social welfare safety net. Spending on social security and welfare, at $180 billion, is more than one-third of the entire Commonwealth budget in 2019-20. When our spending on social welfare is such a large part of the Commonwealth's budget, it is critically important that our spending is sustainable.

We make a promise to Australians that, if they have particular needs, they will be supported with a particular benefit, be it the age pension for those over 65½ who meet the income and assets test; be it Newstart for those of working age who are unemployed; or be it the disability support pension for those suffering from a permanent disability that stops them from working. If we make that promise, it is so important that we keep it. We never want to run the risk that we do not have the money to pay for the benefits that we promise. Yet this was the risk that the previous Labor government ran. Under the Rudd-Gillard-Rudd government, social security and welfare spending grew at around twice the rate of revenue growth—6.2 per cent a year, compared with total tax receipt growth of 3.3 per cent a year. That was unsustainable. We ran the risk of not being able to meet the promises we had made to vulnerable Australians. Thankfully, we've worked hard to turn that position around since we came to government in 2013 and it is now the case that expenditure on social security and welfare is growing at a sustainable rate—and it is growing at a lower rate than the rate of growth of tax receipts.

I want to make the point that it is so important that we have a clear focus on what the issues are and what the needs are. We have heard from the other side of this House, over quite a number of years, the claim that we are seeing rising inequality. In fact, the most recent Household, Income and Labour Dynamics in Australia Survey, from 2018, showed there had been little net change in income inequality between 2001 and 2016. The respected Melbourne Institute economist, Professor Roger Wilkins, recently commented:

… not only is income inequality not rising, our best guess is that it is actually falling.

There is another point to make here that is very important: economic mobility is high in Australia. Almost everybody moves across the income distribution over the course of a lifetime. While at any point in time there is a distribution with those on higher incomes and those on lower incomes, the data shows that many people move through that distribution. There may well be reasons why your income is low at a particular point, but it may well be that your income is relatively higher at later stages.

I also make the point that, as a nation, we have enjoyed a 29-year period of uninterrupted economic growth. That is so important in being able to deliver increasing prosperity to all Australians. Indeed, it's noteworthy that, according to the recent Productivity Commission report on poverty, over the period from 1988-89 to 2015-16 those at the bottom of the income distribution saw their incomes grow by an average of two per cent a year. That's actually a little higher than the growth we've seen from those in the middle of the income distribution.

Here is what Commissioner Jonathan Coppel said in summarising the findings. He said that he hoped this major piece of work by the Productivity Commission would:

… dispel the popular perception that the benefits of growth are not being broadly shared.

I'd also make the point that, compared to many countries, we have a very tightly-targeted social welfare system. In other words, that $180 billion overwhelmingly goes to those with the greatest need. The evidence is that Australians in the lowest 20 per cent of incomes receive the highest amount of social assistance benefits, an average of $517 a week, whereas those in the highest 20 per cent of incomes receive only $28 per week. You may say that that is as it should be. Of course it is as it should be. But I make the point—this is something both sides of parliament can take some credit for—that our tightly-targeted social welfare system in Australia achieves that outcome in distinction to less-well-designed social welfare systems in other countries, where, in fact, a proportion of benefits go to those already on high incomes.

I close with this question: what is Labor's position when it comes to these issues? What would they practically do? It is very hard to work out what their position is on Newstart, for example. Prior to the election, we were told that Labor's position was that there was going to be a review of Newstart. You might well ask: if Labor were serious about this, did they include in their costings the over $3 billion a year that it would cost to provide the increase to Newstart that they were strongly hinting they were going to provide? Do you know what? They did not include it in their costings. This is classic Labor, walking both sides of the street and hinting they were going to increase Newstart. Bill Shorten said, 'We're not reviewing Newstart to keep it at such low levels.' They never included it in their costings. Typical Labor—unfunded empathy.

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