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

Labor supports the Appropriation Bill (No. 1) 2019-2020, the Appropriation Bill (No. 2) 2019-2020 and the Appropriation (Parliamentary Departments) Bill (No. 1) 2019-2020 but we don't support the approach of this Liberal-National government to the economy. This is a third term government now. They've spent the bulk of the last six years wandering around the country, pretending to be doing a good job of managing the economy, at the same time as the facts tell a very different story. After six years of those opposite, Australia's economy is defined by slowing growth, stagnant wages, declining living standards, weak consumption, weak productivity—the list goes on and on, as the Treasurer would say. The economy, under those opposite, is floundering. Ordinary Australians are struggling. Those opposite have absolutely no idea or no plan to turn it around and the main reason is that they are in denial about the weaknesses in our own economy.

The Treasurer was at it again today. He likes to pretend that the fundamentals of the Australian economy are strong. He continues to set a very low bar for economic strength and he continues to trip over it. Saying that the foundations of the economy are strong ignores the fact that, for many people in middle Australia, their circumstances and their experience of the economy are very different to the picture that's painted, badly, by the Treasurer. If the economy were going so well, Australians wouldn't have the feeling that, no matter how hard they work, they just can't seem to get ahead and that the link between effort and reward has been severed in this country. For so long now, the idea in Australia that, if you put the effort in, you can get ahead and provide for your loved ones—arguably the most important principle we have in the economy—has been diminished, undermined and trashed by the lack of economic policy from those opposite.

If anything could have really brought this home to the government at the beginning of its third term, I think today's release of the Household, Income and Labour Dynamics in Australia survey, the HILDA survey, should have been the wake-up call that the government needed when it came to its mismanagement of the economy. The data in that HILDA report today was a stunning reminder of the economic failures of those opposite. What it showed was that living standards have gone backwards under the Liberal government. It showed that real median household income declined by almost $500 per person in 2017, and it also showed that people are actually earning less now than in 2013, when government changed hands when those opposite were elected. Their living standards have gone backwards. That is a shameful indictment of the economic mismanagement of those opposite. After six years in office, declining living standards and stagnant wages really do say it all about what's happening in the economy under the mismanagement of those opposite. It's what happens when a third-term government has a political strategy to distract from these economic failures but doesn't have an economic strategy to get the economy growing again, get wages moving and get living standards moving in the right direction. Living standards have been moving, of course, but they have been moving in the wrong direction under those opposite.

The data that was released today went back 10 years. We had the headline in The Australian 'Aussies no better off since GFC', which showed that the data goes back to 2009. So that people don't get the impression that living standards have been in decline since the GFC—and you might get that impression from reading some of the material—it's really important to remember that we're talking about a $500 decrease in 2017 but there were two annual increases under the former Labor government, both of them over $4,000 in a single year, in 2009 and 2012. So we have in that 10-year period had growth in living standards. We have had growth in people's capacity to provide for their loved ones. But the story of the last six years has been a very disappointing one for an economy like ours, a rich country with a proud tradition of economic growth—28 years of economic growth, principally as a consequence of the decisions taken by Hawke and Keating and then Rudd and Gillard. We have had 28 years of uninterrupted economic expansion. The idea that those opposite can spend six years in office and, at the end of those six years, have living standards further behind than when they were first elected says so much about what's happened under the Liberals and Nationals in this country since 2013. The same goes for the figures on poverty. The percentage of the population in relative poverty in today's HILDA data increased to 10.4 per cent in 2017, so people are getting poorer in this country. More and more people are falling further and further behind.

So Australians are understandably worried about their wages, their jobs and the fact that those opposite don't seem to have a plan to turn things around because they are in denial about the weakness in the economy. They are in denial when it comes to the floundering economy and the fact that middle Australia is struggling quite badly.

Lest we give the impression that today's HILDA data is some kind of outlier—and for those who attempt to take the Treasurer at his word when he says that everything is hunky-dory in the economy—let's just have a bit of a tour around what's happening elsewhere in the domestic economy. This is a report card on what has happened in the economy over the past six years. Economic growth is the slowest it's been for 10 years, since the GFC. The national economy has fallen from eighth fastest growing in the OECD to 20th today. Australia's now in the longest per capita recession since 1982. Wages growth has been stuck at or around record lows for the last few years under the Liberals, with low wages growth, in the finance minister's words, a deliberate design feature of their economic strategy.

We've got weak consumption and weak productivity growth. Productivity has actually fallen for four consecutive quarters. Every single quarter that the current Treasurer has been the Treasurer has seen productivity growth go backwards. Productivity is where we get economic growth from, and it's gone backwards in four consecutive quarters. The current Treasurer has never been in that job with positive productivity growth. That's an extraordinary fact. Household spending is weak, contributing hardly anything to growth. Unemployment and underemployment remain too high. Unemployment is much higher than in comparable countries. Underemployment is a massive challenge. There are too many people, almost two million people, who either are out of work or would like to work more hours and can't find those hours. That's another extraordinarily damning statistic. Youth unemployment is 12 per cent, more than double the national average.

We know that the economy is not hunky-dory, as the Treasurer likes to pretend, because the Reserve Bank have had to cut interest rates to one per cent. The cash rate is just one per cent. That's a third of what it was in the darkest days of the global financial crisis. The Reserve Bank have been crying out for some help. They've made the understandable point—indeed the obvious point—that monetary policy can't do all of the heavy lifting in the economy and that the best way to deal with the slowing economy that we have now is for fiscal policy and monetary policy to be working hand in hand, but, unfortunately, the Reserve Bank have had to do so much of the heavy lifting without any substantial assistance from those opposite.

Remember when interest rates were three per cent and Joe Hockey, the former Treasurer, described them as being at emergency levels? Now they're a third of that. The reason the Reserve Bank have had to do that is that, principally, in their own words, the chief domestic economic challenge that we have is weak consumption, which is a function of a long period of very weak incomes growth. That is the nub of the problem that we have, which is being neglected in this economy by this third-term government.

This debate is on the appropriations bills—largely about the budget. At the same time as we've got all of these failures in the macroeconomy, all this data which shows that things are not as good as the Treasurer likes to pretend, we've see in the budget itself that net debt has more than doubled. It is well over double what was inherited by those opposite in 2013. Gross debt has only ever been higher than half a trillion dollars under one government—this one—and it's been over half a trillion dollars for some years and will be for some years to come as well.

This is the report card after six years and into the third term of this Abbott-Turnbull-Morrison government. This is what we're seeing in the economy. I'll make two additional points about that. The outgoing Secretary of the Department of the Prime Minister and Cabinet made a very sensible contribution the other day about productivity. As I mentioned before, productivity growth has gone backwards for four consecutive quarters and it's been very weak for five years now. The point that the secretary made on his departure from PM&C was that one of the reasons we've got such an appalling performance on productivity is that there isn't a plan to lift it. Productivity is about people having the skills to adapt and to adopt new technology. It's about making sure that people can keep those skills up to date. It's about having the right kind of public infrastructure soon enough to make a difference to this soft economy, not in 10 years time. Productivity is the crucially important missing piece from what is served up and pitched up by those opposite.

The other point I wanted to make is about Australia's standing in the global economy. One of the things that we are most proud of on this side of the House is that, during the global financial crisis, Australia led the world in its policy response and in the outcomes that we were able to achieve. The response was not just the government's, although I pay tribute to Rudd, Gillard, Swan and Tanner and to everyone else involved in that response, including Albanese, Bowen and others. The policy response has been recognised the world over as the best policy response in the developed world, but it wasn't government on its own—businesses held onto workers where they could. We worked together and we came up with an amazing outcome for Australia.

My concern is that we've gone from being a leader in the global economy 10 years ago to now being a laggard. If you look at the unemployment numbers I mentioned before, you'll see that a lot of comparable countries have unemployment rates with a three or four in front of it, and ours has a five. In the global financial crisis ours had a five, and many of theirs had a 10, a 12 or even a 15. If you compare our performance against the United States, for example, we started the crisis with unemployment at around five per cent. At its worst it got to 10 per cent in the US, I think, but it stayed around the same level, five per cent, in Australia. That's something we should be really proud of. But now under those opposite we've diminished in the global economy. After six years, we have fallen far down the league table, whether it be in GDP growth or a whole range of other indicators—unemployment and the like. That is a real shame. After all that this country did to withstand the worst that the world could throw at us during the GFC, to see that peter out under those opposite is a very disappointing development when it comes to the economy.

We've done our best to ask the Prime Minister, the Treasurer and other ministers very factual questions about the underperformance of the economy, whether it be about the living standards data today or data around growth or other important indicators. When we ask about these issues, it's disappointing but not especially surprising, unfortunately, that all we hear from the Treasurer in particular, but also from the Prime Minister and others, is them banging on about the Labor Party. When they go back to their offices after question time and they wonder how the economy has gotten so soft, wages have gotten so stagnant and living standards have gone backwards so dramatically, perhaps they could reflect on the fact that maybe if they spent a little bit less time focused on us in the opposition and a bit more time coming up with a plan to grow the economy and to get wages and living standards moving in the right direction again they'd be more successful than they have been. More of the same is not going to cut it.

This economy, after six years of those opposite, is soft in all of the ways I've mentioned. It needn't be so soft. It's soft because those opposite spent so much time trying to design little wedges for us in the parliament, playing a political game, coming up with names to call people and coming up with neat little glib lines to say when the cameras are on.

What the Australian people really expect from those opposite—what they want from them and what they deserve from them—is a government which looks at the data on productivity, growth, wages, living standards, consumption, retail and confidence and all of the other things which have headed in the wrong direction. They deserve, need and expect a government which will take those challenges seriously, not one which will spend all of its time playing politics and spending all of its time talking about the Labor Party.

We had an election. We lost the election; those opposite won it. It's time for them to behave like they won it and take responsibility for the economy, which is floundering on their watch. They are in their third term now. It is long past time for their reflex reaction to any question about the economy to be a long, unhinged and breathless rant about the Labor Party and our views on the economy.

My view is that the reason we don't have sufficient growth in this economy to get wages, jobs and living standards going in the right direction is that those opposite got through an election with very little by way of an agenda. They got to the other side, they didn't expect to win, and so they just reached for the shelf and dusted off the old playbook. So you had this pathetic prime ministerial speech—I think it was in Perth—about their war on red tape, which only amounted to a war on legislative punctuation, and saying the same old stuff about unions. We had it in parliament this week and last week as well. They don't really have an agenda for the future. They dust off the old rhetoric, but they don't know what they can do to turn the economy around, and they don't really know what the future of this country should look like.

They won't grow the economy by pointing the finger or playing those political games. They won't grow wages by cutting penalty rates or making it harder for people to organise and speak up for themselves. They won't grow retirement incomes by attacking super or adopting the member for Hughes' idea, which is to include the family home in the pension asset test. This third-term government, in conclusion, needs to spend less time on political strategy and more time on economic policy, because, for as long as they are in denial about growth, living standards, wages and all of the rest of it, they give themselves and this country absolutely no chance of turning things around.

Debate adjourned.