Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

This government spends so much of its time in this building and in the broader community patting itself on the back in relation to its economic management. If boasting by the government were counted in the national accounts, this economy would have soared to well beyond pre-COVID levels. But unfortunately, when you scratch beneath the surface of this government's claims, you realise that when it comes to what's actually going on in communities around this country, what's actually going on in households and around kitchen tables, the real underlying story is nowhere near as good. This government is very good at cherry-picking statistics. We're used to the line 'lies, damned lies, and statistics', so it's important when we talk about this government's economic management that we focus on statistics that mean something to people.

Let's look at GDP growth, the overarching measure of the economy. If we look at total GDP growth over the course of this government, Australia doesn't rank too badly. We might get a bronze medal, but that's only because this country has experienced such high population growth over the last decade. When you extract population growth and look at per capita GDP growth, we don't even get a participation certificate but drop way down the rankings. That's the measure that is important. Per capita measures are important because they indicate what's happening to people's standard of living. Why is it that GDP growth per capita has been so weak over the term of this government? Productivity growth is one of the key measures, and productivity growth has stalled or during parts of the last decade gone backwards. I'll drill into that in more detail later.

What does this mean? It means our living standards have stalled. We are experiencing one of the worst periods of living standard change since the Great Depression. Perhaps the best single measure of this for households, the most meaningful statistic, is wages. I want to spend a bit of time on what's going on in the labour market because this government goes on and on about what's occurring in the economy in terms of total jobs created. But they don't talk about the wages those jobs are providing to households and the quality of those jobs in terms of how secure people are in their workplace. What's happening to real wages in our economy? The period between 2013 and 2020 saw the worst real wages outcomes since the Great Depression. Real wages in the lead-up to COVID were lower than real wages in 2013. For a country that is rightly accustomed to households experiencing growing living standards over time, this is an absolutely appalling outcome. It represents a decade of economic mismanagement.

I want to talk about the RBA's take on what we're going to see over the coming couple of years, and this reflects the abysmal projections in the government's budget papers. In its statement of monetary policy on 2 February the RBA said that wages growth has picked up, but it has only just returned to the rates prevailing prior to the pandemic. This means that what we're seeing is wages growth returning to the wages growth our country was experiencing in the worst decade since the Great Depression. I might stress that the RBA is talking about average wages growth. What that means is that many in our community are experiencing even worse outcomes than that. I don't want to get into basic statistics, but if the average rate of wages growth between 2013 and 2019 was negative then many in the community are experiencing wages growth that's worse than mildly negative, so no wonder there's so much frustration building in the community. The RBA statement to the Standing Committee on Economics review on 11 February reinforced this by stressing that they see that the vast bulk of Australians will continue to experience wages growth with a two in front of it for the next year or more. The government's forecasts in their budget and the RBA's forecasts stress that we have a weak labour market when it comes to real wages growth and there's no end in sight for people—no wonder people are frustrated.

It's not just that those in work are experiencing low real wages growth—in fact, many are actually experiencing negative real wages growth—what about underemployment? Underemployment, we know, has become a much more structurally important part of the labour force since the 1970s and 1980s. Back in the 1980s, full-time work was much more of a prominent part of the labour market, a much more common form of employment, so underemployment was nowhere near as much of an issue. Today, we know that underemployment is a critically important part of the labour market to evaluate if we're looking at the labour market's overall performance. To be sure, unemployment is still a key statistic, but we can't look at that alone; we have to look at the number of people in part-time work who want more hours.

While underemployment has fallen recently, it is also true to say that it remains stubbornly high. It remains a real problem. Not only is it a real problem in aggregate terms but we know from analysis undertaken recently that it remains highly problematic in a number of regional communities around Australia in particular. We know that labour underutilisation is particularly bad in a number of regional communities—for example, in Queensland and WA and in the Hunter. We know that unemployment plus underemployment in those communities is over 15 per cent. This is a huge structural problem which this government has no answers to.

Not only that, but a number of macroeconomic forecasters—including Treasury, in estimates this week—have indicated that there is probably slackness in the labour market on top of these structural underemployment figures. We heard that the number of people entering the labour market seeking jobs was greater than expected by macroeconomic forecasters, putting greater downward pressure on wages. In the face of this sustained downward pressure on wages, after a decade of weak performance, this government has no plan.

So we see real wages growth at historically low levels. We see underemployment, reflecting the fact that there are many, many individuals and households who can't make ends meet with the hours that they're getting. But there's an additional element to the labour market which is critically important. Quite apart from the amount of money many people are getting, they're facing insecure work. They're facing conditions in the workplace which are problematic above and beyond the amount of money they're getting. Even when a household might be getting as many hours as they seek in aggregate, those hours might be very erratic across weeks. Even when a household might be getting the income, or close to the income, they feel they need to sustain their standard of living, they may have issues securing a mortgage. There are real and growing problems when it comes to insecure work in our economy, which this government has no answers to.

The labour market tells us a lot about our standard of living. It tells us that real wages have stalled or are declining for many people. It tells us, through the underemployment statistics, that many, many people want more work, which is a reflection of the fact that the work they're getting is not giving them the standard of living they require or aspire to. Also, it tells us there are many people who have issues that transcend the dollars they're receiving in their pocket. They have insecure work, which means that their work patterns do not give them or their families the security they need. That has huge implications for them saving over the long term for their retirement, huge implications for how they deal with economic shocks, and huge implications for them, for example, entering the housing market—and all of this in an economy where inflation is now rearing its ugly head.

All of this is occurring in our labour market, where we now see growing inflation in products that are the biggest part of the household budget for people on the lowest incomes—people on benefits or age pensioners. We see inflation rising across the board, but we see it rising the most in the areas of fuel, transport, clothing, footwear and furnishings. When we look at which groups in our society are most adversely affected by rising inflation, they're all the people we would expect: people on low incomes, people on benefits, age pensioners. This government has no agenda for raising our quality of life, for raising productivity, for raising our standard of living and for raising GDP per capita. That's why many people are, rightfully, particularly worried about inflation rearing its head in this strategy- and policy-free environment.

We have what the government was calling a couple of years ago a snapback. At that time we criticised them for trying to snap back to an economy that was so weak at that time and had underperformed for so many years in the lead-up to COVID. So we have a snapback. That's exactly what we're seeing. We're seeing the economy snap back to the real wages growth that we were experiencing pre-COVID. We're seeing something as lacking in ambition as a snapback after $1 trillion in debt has been accumulated, after an unprecedented period of expansionary monetary policy and after a number of our exports have gone through periods of elevated prices. The government had an opportunity to recalibrate, to build in microeconomic reform and to restructure the economy, and that opportunity was not taken advantage of. This is exactly what we're seeing reflected in the per capita economic measures.

This is a segue to productivity growth. Productivity growth is one of the key, if not the key, medium- and long-term determinants of rising per capita standards of living. We are coming off one of the worst decades of productivity growth in our nation's history. We're coming off the worst decade of productivity growth in more than half a century. Where is this government's plan to boost productivity growth?

Labor has laid out a plan that touches on productivity growth along so many dimensions. We have had a childcare policy for a couple of years now that is going to be so critical to boosting labour participation by so many of our skilled and experienced women. Of course, it's also critically important as a matter of fairness but, for the purposes of looking at it in this context, it's also a really important microeconomic reform. We have our investment in human capital, our investment in TAFEs and our investment in apprenticeships. This so critical to dealing with some of the labour shortages and supply chain issues that our country is experiencing.

We need to spend our investment in infrastructure so much more efficiently. One example is rewiring the nation. That is going to do so much to help put downward pressure on energy prices over the next 10 to 20 years. Of course, then there is a suite of policies in the realm of government procurement. They are going to be so critical to getting better value for money for one of the single biggest components of spending in our economy.

I want to segue from that examination of outcomes in the labour market to industrial relations because I think industrial relations is both a productivity issue and a fairness issue. It is also an issue that has to be addressed if we're going to get better real wage outcomes for many people in our economy. It's linked to that issue of insecure work that I touched on. We go to this election with a really comprehensive plan when it comes to industrial relations. It touches on some of the real challenges in this economy.

Insecure work is going to be dealt with along a number of dimensions. For example, the Fair Work Act is going to have its objectives changed and the Fair Work Commission is going to have powers added so it can deal with this very challenging issue. There is going to be equal pay for equal substantive roles. That is a long-overdue change in a number of important sectors of our economy. There is going to be an objective test for what is casual work. Again, this is something that should have been dealt with in this term, but this government bodgied it. There are going to be improved processes for government procurement. There's going to be a limit on no-fixed-term contracts. So there is a whole suite of policies that are going to do so much to deal with that issue of insecure work and the damage that it is doing to the quality of life of so many people.

Again, I return to some of those key determinants for people's quality of life. We need reforms and economic management from government that can start to put some upward pressure on people's real wages and create an economic environment where we start to deal with underemployment so that we deal with that slackness in the labour market. And we need to start to deal with insecure work. Of course, we need to retain some flexibility in the workforce. Flexibility suits many people, but it is not something that is benefiting all too many people in the labour force. Flexibility in too many contexts is something that is being imposed upon them and they bear too much risk without appropriate compensation.

We talk about the economy so much in this building, and that's appropriate. But there are far too many statistics at times, without drilling down into what are the statistics that actually mean something to people. There's far too much cherrypicking through the national accounts and through the daily ABS releases. But when it comes to things that actually matter for people's quality of life—their real wages, their security in work and whether they're getting enough hours—it's clear that this last decade has been a lost decade. We can only fix these issues if we have a comprehensive plan to do with productivity and to do with people's dignity in the workplace.

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