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

I rise to speak to Appropriation Bill (No.3) 2019-2020 and the related bill. We really need to have a proper debate about what's happening fiscally in this country. I think we need to look at a number of things in the economy that are not going particularly well.

I think it's important to note, firstly, that, despite the rhetoric of the Prime Minister and Treasurer, unemployment is rising in this country. What's becoming of critical concern for Labor and indeed others is that underemployment has been rising now over many years. In fact, underemployment reached a record high last month, according to the ABS. We have a very high underemployment rate, at 8.6 per cent. We have one of the highest underutilisation rates, but there have never been as many underemployed Australians in our history. We have more people now looking for more work in our economy and in our labour market who are not able to find it. If you combine those that have no work with those who have too little work, you have an underutilised economy.

That's one of the reasons why wage growth is so persistently low. Wage growth presided over by this Prime Minister and Treasurer has now been lower than at any time in our history. No real wage growth, stagnant wage growth—in fact, wages are going backwards in many parts of our economy. One of the reasons that's a problem is that there is nothing that the government seeks to do to arrest that problem. There are no plans on foot by the government to lift wages. Low wages means an impact on aggregate demand, which means an impact on our economy and an impact on consumer confidence and business confidence, and that is leading to, as I say, very difficult economic circumstances.

The government seeks to pretend, and to convince the Australian public, that somehow these problems that are arising have all happened subsequent to the tragic bushfires and the coronavirus. We know that's not true, and the Reserve Bank knows that's not true. Firstly, the Reserve Bank revised down the forecast of the budget on a number of occasions prior to the bushfires and prior to the coronavirus. That's important to remember.

Labor will work with the government on those two issues. We've been seeking to work with the government on the bushfire recovery. Mr Deputy Speaker Rob Mitchell, you know all too well the impacts of bushfires in your electorate over many years, and so too do many members. We're working with the government there. We have provided suggestions to the government. Some have been taken up. We provided one this week in relation to supporting small businesses in fire affected areas, and I'll go to that a little later.

The fact is the government cannot pretend that the impact on our economy is just due to those two significant events because the revision of the budget forecast and indeed, perhaps more importantly, the deployment of monetary policy by the Reserve Bank occurred in the main prior to those two events. For example, the Reserve Bank cut interest rates on three occasions prior to the bushfires and prior to the coronavirus outbreak. That was because the economy was weakening and because the government does not have an economic plan to respond to the weakening of our economy. The government has left all of the heavy lifting to the Reserve Bank. So the Reserve Bank is using monetary policy, there is no fiscal response by the government and we're now getting to the point where monetary policy cannot be deployed much further, if at all, in the future.

Meanwhile the suggestions we made to bring forward tax cuts to stimulant the economy fell on deaf ears. I think we'll now find ourselves in greater trouble. That really does go to what I said at the outset, which is that we have a growing problem of underemployment in our labour market as a result in large part from the failing economy.

It may have seemed to be the right thing to do at the time, but it was unwise for the Treasurer to boast about returning the budget to surplus. He liked to use the AC/DC album title Back In Black. He probably should have used Split Enz's song title 'I See Red' because the fact is that the chances of us returning to budget surplus are very unlikely. The reason for that is, as I said, they have no economic plan. If they were honest, they would say that they probably didn't expect to win the last election. They won the election and the plan is not there, and that is becoming increasingly obvious. It's obvious in this place too. The amount of substantial legislation being debated in the parliament is woeful. There are not sufficient bills to deal with the economy or other matters that matter to the Australian public. That speaks to a government that doesn't have an agenda and instead is looking for things to distract the public.

We'll work with the government on dealing with the coronavirus, as we have done with the bushfires and the recovery thereafter. We have been critical of the speed by which the government has dealt with that matter. We do think there are major problems. I think the rhetoric of the government doesn't match what's happening in those fire affected regions. Look at the data that has been provided to date in relation to concessional loans and grants. Of all the applications made for concessional loans, as of last Friday fewer than five per cent had been approved.

In terms of grants being provided to small businesses, of all of the applications made to provide grants to small businesses in fire affected areas on Kangaroo Island, on the South Coast of New South Wales, in the Blue Mountains or in East Gippsland, only 20 per cent have been approved—one in five applications. We know that small businesses who rely on cash flow cannot wait for a government that is too slow in providing support to them. They cannot wait. Indeed, if they do have to wait, in many cases they will hit the wall. They will go under. The failure to deliver even those things that have been promised by the government to businesses is a major problem. It needs to move much more quickly. But, I'm afraid to say, it's likely that, as a result of the tardiness, the red tape and the sheer lack of political will, small businesses in these fire affected regions will go under. They will go under because of the failure and incompetence of the government. That's the truth of it.

This week the Labor leader, Anthony Albanese, and I, along with members who represent some of these fire affected areas, suggested a policy for the government to consider implementing to support small business—namely, to use wage assistance in a manner that was used for businesses affected by Cyclone Yasi in 2011. The then Labor government provided assistance in the form of Newstart to businesses to maintain the employment of their staff. It was, effectively, a subsidy for wages. It was taken up. It was effective. It was targeted. It allowed for 13 weeks, and subsequently 26 weeks, of subsidies over that 12-month period. We suggest that the government consider doing that here. We know that the first people to get hit in their local economies are casual employees, part-time and even full-time employees. If these businesses have no revenue coming in then they can't maintain employment for those workers. If those workers are not gainfully employed then they're not spending in the local economy. Not only are businesses directly impacted by the fires in trouble; what is also happening is that other businesses that rely upon the consumption of their goods and services will also falter. This initiative has been used before by a federal government, a Labor government. It can be used by this government too. I'd implore the Prime Minister and indeed the minister for small business and other ministers to consider the proposition that was provided and suggested in good faith by the opposition for not only those businesses that have been impacted, in terms of bricks and mortar, but those businesses on the South Coast, on Kangaroo Island, in Gippsland and in the Blue Mountains that are suffering because revenue has just disappeared.

Some businesses in tourism and hospitality have not been directly impacted, in terms of their dwellings having been burnt by fire. But, in terms of the loss of business, they've been well and truly impacted and they will not continue to survive, let alone thrive, if they're not provided with support that's targeted, measured and expeditious. We say to the government: first and foremost you have an obligation to support small businesses in these regions, so when you promise something you have to deliver it, and if you don't deliver it in time then these businesses won't be there to receive the support. The red tape, which is currently congesting the system such that businesses are unable to receive such support, has to be removed. Cut the red tape. Get the support to businesses that need this support, otherwise they won't be there this time next year or, indeed, in a month's time.

Further, insofar as small businesses, we are concerned for those businesses and for their employees. If you provide a wage subsidy, as occurred after the terrible affects of Cyclone Yasi, then you'll see businesses being able to maintain employment for some or all of their staff. I think that's a really useful suggestion. It's one that has been tried and tested. It's something the government should really embrace, and I really do hope they think about that. It has been used before, and I'm surprised the government haven't actually thought about using it in these circumstances, given the scale of these bushfires and the impact upon businesses. I really find it difficult to understand why they haven't gone down that path.

The economy is in trouble. It started to falter before the bushfires and before coronavirus. The Treasury was revising the forecasts of the budget well before the outbreak of the coronavirus or, indeed, the fires. So it's not right to say that the correlation is that the economy's now struggling because of these two events. It was occurring before then. Unemployment was rising, underemployment was rising, and we have enormous underutilisation in our labour market. That's also one of the reasons that wages are stagnant—because there's no tightening in the labour market if you have record underutilisation at 13.9 per cent of the labour market. The only lever that the government wants to use to increase wages is to see a tightening of the labour market—but, when the labour market is as slack as it is because of record high underemployment, that's not going to happen. If there is no other policy prescription, we will not see wages grow in real terms for a very long time. That of course has an impact on consumer confidence, business confidence and aggregate demand, which continues the cycle and will also have an impact on future employment opportunities and future wage growth.

So the government have a lot to do here. We will work with them on these two events, as we have been with the tragic disaster of the bushfires. We have, in good faith, been proposing some good ideas and we ask them to take them up. We ask the Prime Minister to take up the idea of providing wage subsidies to small businesses in fire affected areas, which could do quite a lot for those regions.

(Quorum formed)

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