Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

It didn't do much to boost domestic demand, as the member at the table says in the last point that he'll make on this subject!

The point I'm making is: this is a test that the government set for itself. This is a test that the government asked to be judged on. It remains to be seen whether there will be a surplus this year. We won't actually technically know the budget position in final terms until September of this year. So we will wait and see what happens in the budget and in the final budget outcome. But they've begged to be judged on this, and I think it's appropriate that people now say: 'Well, if you can't tell us that you'll definitely get to surplus, why did you promise that you would? Why did you print the mugs? Why did you do all the dodgy ads? Why did you do all the sloganeering? Why did you claim victory?' It's the equivalent of claiming victory for next year's premiership. I think it will be humiliating for the Treasurer if he falls short, not because we set the test for him but because he would be failing a test that he set for himself.

At the start of the government, three treasurers ago, but in the same Liberal-National government, those opposite said that there would be a surplus in the first year and every year after that, and they're none for six and they can't guarantee that they won't be none for seven. I think they should be held accountable for their own test. One of the reasons why this matters is that those opposite have enjoyed relatively good economic conditions—challenging at the moment, challenging at times. But overall they're in their seventh year and in their third term and they've experienced nothing like the global turbulence that the former Labor government experienced—absolutely nothing like it. So they have no excuse, now into their seventh year, into their third term, for such a long and damaging period of economic mismanagement. Because they've had those six deficits, despite promising they'd all be surpluses, what we have seen is that net debt in this country has actually more than doubled on their watch. That's an important point. Whenever you hear those opposite talk about debt, remember that most of the debt in the Commonwealth budget is Liberal debt. Most of the debt in the budget has actually been accumulated under the life of this government and not under the life of the former, Labor government.

Net debt has never been higher in this country. It's now $403 billion. It was $175 billion in September 2013 when government changed hands. So it's a 130 per cent increase in net debt. For those who like to bang on about debt, every Australian needs to know and needs to remember that most of the debt in the Commonwealth budget is Liberal debt. Most of it has accumulated on the watch of those opposite. They have more than doubled net debt. If you want to talk about gross debt, it's through half a trillion dollars. It's the only government in the history of Australia that's had more than half a trillion dollars of gross debt. It's $570 billion at the moment. It is more than double what it was when the Liberals took office. It was $280 billion back then; it's $570 billion now. So there is a 104 per cent increase in gross debt. That's not something those opposite like to talk about, but it is a fact, nonetheless.

The point we make about all of this, the point that marries up the seventh year and the third term of economic mismanagement, incompetence, inertia, inaction and ineptitude with what we're seeing now with the coronavirus is that they had no plan for the economy before the virus hit and they have no plan now. The Prime Minister, the Treasurer, the Health Minister and the Chief Medical Officer did a long press conference yesterday where they talked about the significance of the challenge. And I don't quibble with that; it will be a significant challenge. I've said many times that the hit to the economy from the coronavirus will be substantial. But in all of those words that were spoken yesterday at that press conference—probably thousands of words—there was not one word of a plan. There was nothing to give the Australian people confidence that, having been told that this would be a big economic event, the government is actually prepared to do something about it.

The government had no plan before the virus. They had a plan to get through the election; they did that; they got to the other side of the election. I think one of the reasons Australians are so disappointed in the Prime Minister and the Treasurer is that, having won the election, they had no plan to take the country forward—to support growth in the economy when it is flagging, to support wages in the economy when they are stagnant, or to even meet some of the tests they set themselves around deficits and surpluses in particular. As a consequence of that, we've got all that data I mentioned a moment ago—slowing growth and bad outcomes for productivity, wages, business investment, household debt and the private domestic economy. All those things are a consequence of a government that didn't have a plan before the virus and doesn't have a plan now.

Australians are crying out for two things: leadership from the Prime Minister—and he has been found wanting—and some kind of economic plan that will give them confidence that those opposite understand the challenges in the economy but are also prepared to act on them and do something about it. Instead of that, the government spends most of its time talking about the Labor Party and none of its time coming up with a plan to support families, workers and businesses when the economy is as soft as it is today.

Labor has been saying since August last year that the weakening in the economic situation warranted the government doing something about it. Under the member for Grayndler's leadership, we are determined to not just point out where the government has got things wrong but to also be as constructive as possible where we think we can help the government get things right. That's why, way back in August, we went out and said: 'The government doesn't have a plan for this soft economy. Here are some ideas'—and we put some ideas on the table to try and help the government through that. The disappointing bit is that the government hasn't picked up and run with any of those ideas; they are prepared to vandalise and jeopardise the economy in the interests of playing day-to-day politics.

But what has been heartening is the absolute avalanche of businesses, business peak organisations, the Reserve Bank, other credible organisations, expert economists and others in our community who have come in behind some of the proposals we have made. For example, the Australian Industry Group has been very positive about our suggestions for business investment. It has pointed out, as have others, that the Reserve Bank is doing the best it can by cutting interest rates to a quarter of what they were during the global financial crisis. But that, on its own, has not been enough. It has also puffed up asset prices; and it has hurt savers at the same time, as it doesn't really flow through to the real economy. The Reserve Bank can't do it all on its own. That's a point Ai Group has made, and I commend it for making that point repeatedly. Deloitte said that the pain in our economy has been homegrown. EY talked about the economy losing momentum. The BCA said we need to pull all the levers if we really want to get a sustained rise in investment to lock in future productivity growth and income growth.

The point I am making—and it is a bit the same with zero net emissions by 2050—is that there is an extraordinary alliance of Labor, business groups, community groups, unions, the RBA and the IMF. All of these groups know and understand that something has to change in our economy; we cannot continue to limp on like this. Unfortunately, the only ones who think everything is hunky-dory—'What are people whingeing about?'—are those who occupy the Treasury bench. That's why we've had such a prolonged period of weakness, and that's why you have had the Reserve Bank cut interest rates repeatedly but with diminishing effect. That's why you have had the Governor of the Reserve Bank repeatedly calling for the government to do something so that fiscal policy, the budget, the government is doing something to support the efforts of the Reserve Bank in monetary policy.

There's one other point that the Treasurer in particular likes to make. He likes to make some international comparisons, and I wanted to briefly touch on some of those before I make some other points. The Treasurer likes to talk about the IMF forecast—I think he did it again this morning on that interview he did with Fran Kelly on Radio National. He talks about the IMF forecasts over the coming years. Well, let's talk about the IMF forecasts. The IMF has actually downgraded their expectations for our economy by more than they've downgraded the other advanced economies. The government, themselves, as I said a moment ago, downgraded their own forecasts for growth and for wages and for the unemployment rate. And the Reserve Bank has actually downgraded their expectations for Australian economic growth three times over the last little while since the election. I think that speaks volumes about the government's actual performance rather than what the forecast might be going forward.

I do understand as well that for a lot of people in the Australian community they switch on the radio or they catch snippets of the TV news and the conversation about the economy can be quite technical. There are lots of numbers and all the rest of it, and there's a contest of economic policy in this building. But I think what it really boils down to is this: the economy is not delivering for ordinary working people. All of the data shows that. But really, you don't need to be a genius to know that people are struggling. You just need to talk to real people in real communities, who are doing it tough. They're doing it tough because wages have been so stagnant for so long now and they can't keep up with some of those costs of living that I mentioned a moment ago. That's why people are doing it so tough in our community. If you look at wages in particular, we had more wages numbers out, I think, last week, and they were stagnant again. They keep falling short of the budget forecasts. Those opposite have actually got the worst record on wages on record. They've downgraded wages growth in almost every budget and budget update since 2013, and the Reserve Bank says that weak wages under this government has become the 'new normal'. This is what we're talking about here. And at the same time we've got rising unemployment, and those two things are related—the unemployment rate increased last week. Almost two million Australians are looking for work or more work, and 1.2 million Australians are looking for more hours but they can't find those extra hours that they need to feed their families and look after each other. Youth unemployment is bad. There is something like 280,000 extra underemployed Australians since the government came to office.

I could go on and on, but the point is really this: the people-facing part of the economy, the part of the economy that people understand best, the part which is about wages and consumption and household debt, if the government hasn't seen the flashing amber light in that part of the economy, you've got to wonder what they've been doing for three terms and seven years. It beggars belief that having seen what's going on in the economy that those opposite are prepared to do absolutely nothing to turn things around.

There's a hint in why that's the case, particularly when it comes to wages, and that is that the finance minister, who has been the finance minister for every day of this third-term government, was asked not that long ago—I think in maybe May—about wages being stagnant, and he described that outcome as a deliberate design feature of the government's economic policy. That was remarkably frank, remarkably honest. I commend him for that. But it really speaks volumes. This is a deliberate outcome. Those opposite celebrate low wages. It's a deliberate design feature of their economic policy architecture. That's what the finance minister said. He's been in the cabinet every day of this government and he belled the cat. It really does speak volumes about those opposite that that is their economic priority. When it comes to stagnant wages, if that's what they were looking for, well, mission accomplished, because that's what we've had for a long time now.

Those opposite like to talk about risk in the economy. The riskiest outcome is this inertia, inaction, incompetence and ineptitude on the economy. Australians can't afford more and more years of stagnant wages or record household debt. They can't afford to go on under a government which cares so little about them that they won't come up with a plan to turn things around. It's true in the economy, it's true in energy policy and it's true right across the board—no leadership, no plan.

There is one thing that has made people particularly angry in communities around Australia. There are council campaigns in my part of the world, and there are the same in the minister's part of the world at the moment. We're doing a lot of doorknocking. When you get to people's doors in communities right around South-East Queensland, one of the main things that people want to raise with you is the absence of leadership, particularly over the fire season. When things got difficult in Australia, they wanted their Prime Minister to step up. He didn't do it. That's probably the dominant sentiment that people are talking about when you knock on their door at the moment.

What's getting them really, really steamed up, what is making them so disappointed in and so angry with this Prime Minister, is that this is a guy who has said for some time that he can do a better job managing taxpayer money than anybody else. Then, after all the times where he has said, 'It's not our money; it's your money,' and all of these slogans from this adman masquerading as a Prime Minister, they turn on the TV and see these sports rorts, road rorts and change room rorts—all of these rorts that those opposite have been responsible for. They see $100 million go out the door, principally to support the government's political prospects, rather than to support the good work of many other sporting groups who were deemed more eligible and more worthy by the relevant commission and the relevant independent experts. The audit office said that it was dodgy from beginning to end, so people do get steamed up about that. You want to talk about economic management? Well, economic management is about getting bang for the taxpayer buck, and using taxpayer money for such egregious pork-barrelling to support their own political interests gets people very angry, and I think for good reason.

We're up for a debate. We're up for a contest of ideas on the economy, and that contest really boils down to one thing: on this side of the House, we're prepared to provide the economic leadership necessary to come up with an economic plan which makes the economy work for ordinary Australians and not against them. Those opposite are either unwilling or unable to show that leadership, to come up with that plan, and we see the consequences of that in years of economic stagnation, wage stagnation and slowing growth. We see that in years of our economy underperforming when we look at the economies that we compare ourselves to. We see that in rising unemployment. And the problem with that is, when we do approach legitimate challenges like this coronavirus, which will have a substantial impact, we do so from a position of weakness because those opposite couldn't be bothered supporting the economy and making it as strong as they could when things started to turn down some time ago. There was no plan before the virus, no plan during it and no sign of a plan afterwards. That sells the ordinary working people of this country short. They have a right to expect leadership from the Prime Minister and a plan for the economy, and they're not getting either of those things.

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