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

I move:

That this House notes the Government's economic mismanagement and its sustained failure to deliver improved economic outcomes for Australians during its seven year term in office, measured by:

(1) wage stagnation;

(2) near record levels of underemployment;

(3) high and rising rates of labour underutilisation, particularly for young people and in regional areas;

(4) high levels of youth unemployment;

(5) Australia's higher unemployment relative to peer nations;

(6) weak consumption growth;

(7) weak business investment; and

(8) weak and declining productivity growth.

This motion calls this government to account for its economic mismanagement and the negative consequences flowing from that. Our economy is weak. We all see this. We see this when we go back to our electorates and talk to our constituents. We see this with the lowest wages growth on record. We see this with labour productivity going back for the first time ever. These are not records that we want to be setting. We see this in the fact that retailers are shutting their doors every night on the news and that when we look on main street there are shops boarded up. We see this in the fact that consumer confidence is low and that the banks gave evidence to the House Economics Committee that roughly only a quarter of the government's first tranche of tax cuts was actually spent. We see unemployment stuck above five per cent. When we look at comparator economies, like the UK and the US, unemployment is far lower; far fewer people are negatively affected by this scourge. We see that in those economies unemployment is at levels that they haven't seen for half a century. Here, we are stuck. We see, more worryingly, that underemployment is high and rising: over eight per cent, and underutilisation of labour is nearly 20 per cent in some regions.

Why are we in this shocking position, where our living standards are lower than they should be and we are less resilient to shocks than we should be? For two key reasons: firstly, this government is actually damaging our economy through its policies and, secondly, this government is not implementing policies that it should to benefit our economy.

Let's imagine the Australian economy were a patient. It turns up to get help. There are two doctors: Dr RBA and Dr Frydenberg. Dr RBA says: 'You don't look well. I'll administer some help.' It lowers interest rates to levels nearly one-third of the level they were at the depths of the GFC. That helps a bit. But then the patient turns around to see what Dr Frydenberg is doing. Dr Frydenberg is heading out the door with the patient's wallet, riffling through it and taking notes out. The patient says, 'Hey, I thought you were here to help me!' Dr Frydenberg says, 'No, I need a surplus.' What we see—

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

I call the minister on a point of order.

Jason Wood (La Trobe, Liberal Party, Assistant Minister for Customs, Community Safety and Multicultural Affairs) Share this | Link to this | Hansard source

When referring to members, could you refer to them by their position.

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

I would encourage the member for Fraser to refer to people by their proper titles.

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

The Treasurer is heading out the door. I like the fact that he didn't dispute me on the facts; he disputed me on the name. That's a very important point, Deputy Speaker. The Treasurer is heading out the door.

What we see is that monetary policy is being counteracted by this government. What we see is a government that is underspending on the NDIS to the tune of $4.6 billion in a year. We have expansionary monetary policy, which is there to put downward pressure on the currency to help net exporters to boost employment in export sectors. We see expansionary monetary policy, which is to lower borrowing costs, which is to boost the capacity of borrowers to spend. What do we see the government doing? We see its policies counteracting expansionary monetary policy. We see its policies not increasing government spending in key areas based on good policy but taking money out of the economy. It's not only heartless, it's not only bad policy; it's actually counteracting what the Reserve Bank is doing. So at the heart of our economy is a structural problem where our two main economic levers are working at odds. This must change. The Governor of the Reserve Bank said that, with interest rates at the lowest level they have been since Federation, Australia should not rely on monetary policy alone. Too true! This government needs to act on fiscal policy, on economic reform. It needs to take some action with its own levers so that the Reserve Bank is not doing all of the heavy lifting.

What should the government be doing? First and foremost, it should stop underspending in areas where good public policy would suggest more investment needs to be made. Secondly, it should be spending on infrastructure. Economic experts, the Reserve Bank and others are lining up to state that, with record low interest rates and slack in the labour market, we need more infrastructure spending—not just the mega-projects, but local projects in outer suburban areas and in regional areas. This government needs to be doing far more—good policy projects that could boost employment. The Reserve Bank has been saying it time and time again, but this government will not listen. The government should bring forward targeted tax cuts. What this government is focused on is tax cuts, often in the never-never, for the highest income earners. That's not what our government needs. It's not good public policy and it's also not what our economy needs in the short term.

Our economy's weaknesses have been years in the making—years of inaction by this government. What we see right now is that this government is acting in a way that counteracts what the Reserve Bank is trying to achieve and it is not implementing a raft of policies that our economy needs—investment in infrastructure, investment in people through VET, investment in the NDIS. This government needs to take action to boost our living standards and our resilience to economic shocks.

Trent Zimmerman (North Sydney, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Anne Aly (Cowan, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

When we think about words, we have to recognise that they have power. They articulate a point, a proposition, and sometimes they can define a person. Let's think about the word 'hypocrite' and what it means. The opposition went to the last election on a platform of wanting $387 billion of new taxes and then had the temerity and the gumption to come into this place, after the government had been elected on that platform, and say the government should cut taxes. A hypocrite would make that argument. Somebody who lacks any substance or any economic understanding would go into the public domain and argue that case and then come into this place and argue the reverse. The power of words matters. A hypocrite will get up and make those arguments.

Today we have a motion that has been put forward by the member for Fraser. He has done so having gone to the last election, his first election, arguing that the solution to Australia's economic challenges is a massive new set of taxes that undermines confidence in the housing market, undermines investment in the future building of Australia and undermines the disposable income of Australian retirees. Funnily enough, he comes into this place and, going off the verbal diatribe the member for Fraser gave just moments ago, apparently the solution now is to cut taxes! Continuing he has a background in economics, he either lives up to the definition of certain words or he just says what he thinks is necessary at the time to make an argument but there is no sense of core belief or conviction.

He verballed the Reserve Bank governor when he appeared before the economics committee. The member of Fraser is a member of that committee and I am the chair. When the Reserve Bank governor came before that committee he outlined that what monetary policy can achieve can be exhausted, that it is not a lever within itself. But at the last hearing of the economics committee—I can't even remember if the member for Fraser was still there—when it was put to the RBA governor, 'Are you arguing for more and more fiscal stimulus versus actual structural reform,' he said he was arguing for the latter.

The problem the member for Fraser has is that the Labor Party's only solution for structural reform is to impose new taxes. That's what they took to the last election, that's what they took to the previous election, it's what they took to the one before that and the one before that, because in the end they have no sense of vision or purpose.

The fundamentals of the Australian economy show that it is resilient against global headwinds. We shouldn't underestimate the challenge that we face around coronavirus and the impact on global supply chains and the like. We shouldn't underestimate the economic challenges we face because of other countries lowering their interest rates. Australia has to manage and meet those challenges to make sure that our exports are competitive. We've suffered drought and bushfires. But, despite all that, we have millions more people employed in the Australian economy today than there were when we were first elected to government—about 1½ million since we first came to office, an increase of 13.2 per cent. At every point that the government have faced economic challenges outside our control, we've met them through rational policy that informs and promotes investment in the Australian economy, by doing things like cutting taxes—yes, we have definitely done that, despite the best efforts of the member for Fraser and many of the acolytes on the other side of the opposition benches—and we want to continue to invest in those types of measures so that we continue to build the strength of the Australian economy.

If only the opposition would come on that journey. If only they would take to the next election a platform for structural reform and cutting taxes. Of course, we have no idea what they're going to take to the next election or even what they're going to prosecute in this term of parliament, as they jump around deciding what their targets are going to be. Apparently they're now going to abolish whole sectors of the economy but not admit to it. But the choice we face now and the Australian people face now is whether or not we continue the leadership we need to make sure we have a strong economy into the future—and it doesn't rest on the opposition benches.

Anne Aly (Cowan, Australian Labor Party) Share this | Link to this | Hansard source

It is always a treat to hear the member for Goldstein tell us what we're all thinking and what we all said and where we're all heading. He's such a great mansplainer.

Milton Dick (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

If only he was on the front bench! If only he was a minister!

Anne Aly (Cowan, Australian Labor Party) Share this | Link to this | Hansard source

If only! If only he was class president! I'd like to start by commending the member for Fraser for bringing the government's dismal performance on the economy to the attention of the House. There's a lot to get through in the 4½ minutes that I have left to speak, but I think the list provided in the motion is quite an exhaustive list.

Unlike those on the other side, I like to rely on evidence and expertise from people who know what they're talking about. So I think a good place to start is to look at the forecasts that were made by a panel of 24 leading economists, published on The Conversation last month. That panel looked at the year ahead and concluded:

2020 is shaping up as a dismal year for the economy, with no progress on many of the key measures that matter for Australians.

One of those key measures is economic growth, which is projected to stay at or below two per cent for at least another year. We're now seeing the longest period of low economic growth since the early 1990s recession. To put that into context, economic growth has rarely been as low as 1.4 per cent outside of a recession. When we take into account population growth, and income and production per citizen, all of this has gone backwards. The last time that happened was during the GFC; and the time before that was in the early 1990s, in the recession. Household spending has failed also to keep up, and we know that households are spending less, primarily because they have less money to spend. There is less disposable income.

That brings me to the point about wage stagnation, which is listed in this motion. We've seen slow growth in real wages under this government. And why would we expect wages to grow when Minister Cormann came out and admitted that keeping wages low is the centrepiece of this government's economic strategy—keep wages low? The panel that I mentioned of the 24 leading economists concluded that it will be domestic rather than overseas conditions that hold back Australian growth. So, the member for Goldstein can talk about conditions that are out of the control of this government, but the fact is that it is well within this government's reach to create the conditions for economic growth. On this point this government is continuing to fail Australians.

Standards of living in Australia: the growth in our living standards is expected to slow to 2.4 per cent. Nominal GDP is expected to slow. The unemployment rate is expected to be at five to 5.5 per cent, rather than falling to the 4.5 per cent that the Reserve Bank states is necessary for economic growth. Household spending, as I mentioned, is barely growing. Financial markets provide less support to households. We've got a drop in labour productivity, and the Productivity Commission makes the point that 'this year Australia's productivity has slid backwards for the first time since the mining boom'. The report by the Productivity Commission shows that two measures of productivity fell in 2018-19.

Despite all of this, despite the weak productivity growth, slow wage growth and wage stagnation, despite economic growth being the worst it's ever been since the GFC, despite high unemployment, despite weak consumption growth, despite weak consumption growth, despite low rates in retail growth, with, as the member for Fraser mentioned, shops closing their doors left, right and centre—even huge multinationals that were successful in Australia are now closing their doors—despite weak business in investment and weakness in productivity, this government refuses to enact any fiscal measures, instead relying on the Reserve Bank. (Time expired)

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

We've heard it all now: the Labor Party's worried about multinationals closing their doors in Australia. Well, I never thought I'd see the day when they'd send someone all the way from Perth to tell this government that the problem that we face is that multinationals are closing their doors in Australia. That's it: we had it wrong all this time. Most of this time we thought the unreconstructed economics of 'Chairman' Swan that has guided the Labor Party through the mists of time and election failure would get them through, but apparently the problem all along was multinationals closing their doors.

This message really resonates with me—and has resonated with me for a long time. But this is what we get from the Labor Party: they pre-select and elect to this parliament—through fluke, I assume, not good management—such economic thoroughbreds as the member for Fraser, Professor Leigh, and what do they do with them? They leave them languishing on the back bench as far away from the dispatch box as they can. It is ironic, because I find myself standing about as far away from the dispatch box as you can get without joining the National Party, so I'm probably in a worse position than the member for Fraser. Nonetheless, we've got plenty of experts on economics. We've got plenty of people. Our front bench is full of people who understand how the economy works, and not once have they stood up in this chamber and complained about the fact that multinationals are finding it a bit difficult in the economy at the moment. That's what we have here.

Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

He's got nothing!

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

We'll get to you: don't worry, Jonesy, we're coming to you.

As the member for Fraser knows, if you want to get real wage growth going, underemployment down and create economic opportunity, you have to get productivity moving. The only way to get productivity moving is through innovation. How do you get people to innovate? You get people to innovate when you reward risk and forgive failure. What is the Labor Party doing every single day of the week, besides bemoaning the fate of multinationals in our economy? They make sure that if you fail you get punished, and if you succeed you also get punished. This is the party that created an industrial relations system that ensures that enterprise agreements are rolling over and being terminated at record numbers. We only have to look at McDonald's. I don't know why the member is leaving.

Anne Aly (Cowan, Australian Labor Party) Share this | Link to this | Hansard source

Because you're giving me a headache!

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

We were about to talk about her favourite thing—a multinational—and then she leaves through the door. I thought I was making it relevant for her. McDonald's recently, with the support of the union, went to the Fair Work Commission and said, 'We want to roll over our enterprise agreement.' The Fair Work Commission has made it so impossible for them to do that. The enterprise agreement has now lapsed and all their workers will go back on the award. Does this mean higher wages? No; it means lower wages. Does this mean more hours for hardworking Australians trying to get ahead? No. McDonald's has made it clear that they will have to close a significant number of their stores for hours that they would prefer to have them open, because of the complexity of the award system that they support, that they aid, that they abet, that they refuse to reform. And the member for Fraser knows this. The member for Fraser can pretend otherwise, but I know that he and Professor Leigh are fully aware that the huge problem in this country is the rigidity of the industrial relations system—a system that they created, but their major donors won't let them talk about reforming.

So don't be fooled when they walk into this place and bemoan the fact we have underemployment and that real wages aren't growing fast enough, because they are the real obstacles to any increase in real wages, they are the obstacles to innovation in this country, and they are the obstacles to ordinary Australians being able to get ahead. They are the obstacles to young Australians from being able—

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Link to this | Hansard source

Seven years! Seven years!

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

The member for Morton says we've been here for seven years. Give us your proposal on industrial relations that doesn't involve embedding the special power and privilege of your largest donors at the centre of it, because you don't care about Australians; you only care about the donors that you get. You're appalling. You should be ashamed of yourselves for even bringing this motion to this House.

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Link to this | Hansard source

Bring back Bronwyn Bishop! I'm pleased to speak on the motion moved by the member for Fraser which notes the government's economic mismanagement. I thank him for bringing it to the chamber. It highlights the government's sustained failure to deliver improved economic outcomes for Australians during its seven long, wasted years in office. I just want to repeat that: this is the coalition's seventh year in office. We heard from the previous speaker that, somehow, this is the Labor Party's manufacturing of economic dire straits.

The current dismal economic prospects for working Australians have this coalition government's economic fingerprints all over them, as mentioned by the member for Fraser. Just last week we saw new economic data revealing that wages growth, which has been weak, has further stalled. The ABS Wage Price Index confirmed that wages growth remained stagnant at 2.2 per cent, effectively meaning that many people are going backwards. That falls way short of the budget forecast, which had been downgraded only two months ago. The Treasurer's claim that 'wages growth is a core focus for this government' is a joke. A core focus? It's been a complete failure. January labour force figures, also released last week, show youth unemployment has increased to 12.1 per cent. There are now 271,000 young Australians without a job. That's disgraceful. In my home state of Queensland, it's even worse at 15.6 per cent. About one in six young Queenslanders are unemployed.

But it's not just the unemployed; it's also the underemployed. Recent labour force figures reveal a record high number of underemployed Australians. Figures reveal that 1.2 million Australians are looking for more work but are unable to find it. There are 273,000 more Australians underemployed today than in 2013 when the Abbott government took office. Since Prime Minister Morrison took office, there are nearly 90,000 more underemployed people.

Labor's been calling on the government to take action about the growing problem of underemployment for more than five years. The underemployment rate of 8.6 per cent and the underutilisation rate of 13.9 per cent for January are both way too high. The result of all of this is that more than two million Australian citizens are underutilised—they're looking for work or more work because the coalition's economy is floundering.

The serious structural issues that the Morrison Liberal government has not dealt with in the labour market will continue to generate insecure work and low wages growth. This is a recipe for generational inequality. Not surprisingly, those who've already had a pretty good go at accumulating wealth are the only ones who are continuing to get a go. Wage earners with few assets are struggling just to break even, and some are going backwards. Those who've already accumulated substantial assets will be the big winners as their assets increase in value. Falling interest rates mean cheap money, which in turn pushes up asset prices.

These twin problems plaguing the economy—growing unemployment and low wages growth—are impacting on Australians everywhere. We can see that it's harder for working Australians to make ends meet, to pay the bills and to pay off debt. Working Australians are trying to have a go. But if economic growth doesn't improve, their chances of getting ahead are zero.

The decision of General Motors last week to finish off forever the iconic Holden brand in Australia was the result of nearly seven years of manufacturing neglect by the Abbott, Turnbull and Morrison governments. I remember former Treasurer Joe Hockey goading General Motors to leave Australia. Wasn't that a wise decision! Of course Holden chose to close down their car-making factories in Melbourne and Adelaide the very next day, way back in December 2013. And what has the government done since? Without government support, Holden's gone.

Government action or inaction has consequences for the market. The coalition government ripped away support from the car industry, and this is the result. The decision to end the brand—to see dealerships disappear all along the Moorooka magic mile and elsewhere, along with between 600 and maybe 6,000 jobs—is in part a result of the neglect and indifference of the A-T-M governments. Australians who've worked for the Holden brand for generations, Australians who've built their businesses and livelihoods around the Holden brand and Australians who've owned and driven Holden motor vehicles their whole lives—these people all deserve an explanation from the Morrison government.

Australians need a plan to boost the economy and get wages moving again. But the Morrison-McCormack government is too busy finger-pointing, blame-shifting, attacking unions and playing musical chairs to actually do their job. Like much of the Australian economy, wages growth was weak long before the bushfires hit or anyone had heard of the coronavirus. For seven years, the Abbott-Turnbull-Morrison governments have failed to address this fundamental economic challenge that impacts on the lives of all working Australians. It's time the Morrison government stopped navel-gazing and focused on coming up with a comprehensive plan to restore the economic and wages growth— (Time expired)

Julian Simmonds (Ryan, Liberal National Party) Share this | Link to this | Hansard source

Well, it's Monday morning of a new sitting week but, as sure as the sun shines upon us, Labor are up to their favourite activity, and that is talking down the Australian economy. They love talking down the Australian economy because, for them, it is all about the politics of this place. With the absence of any economic plan whatsoever, the Labor members instead offer up and revert back to this one trick that they have, which is to seek to ignore the facts and try political point-scoring. The idea that Labor and the member for Moreton would come into this place and seek to lecture this government on economic management is farcical, and it simply denies their own record and the facts. When it comes to Labor and the economy, they wreck the joint. They can't manage money because they love to spend your—the taxpayers of Australia's—money. They simply think that they can spend your money better than you can and that they know how to spend your money better than you do. We see reckless policies leading to reckless spending time and time again from the Labor members opposite, because we know that, for them, again, it's all about the politics. For this government, though, it's all about everyday Australians and how we support them through a strong economy and sound economic management.

Whilst I know that my efforts today to educate Labor members on the economic record of this government is likely to fall on deaf ears, I do think it is important that Australians understand just what the economic plan of this government is achieving for Australians. We have fixed the Labor mess yet again. On this side of the House we're working together, growing our economy, easing the cost of living and getting more people into work. Under this government, if you have a go you get a go, and the more people that have a go the more productivity is driven up and the better off we are together as a nation.

Increased productivity is leading us to a brighter future and higher wages, with employment growth that is now more than three times what we inherited from Labor. We're also putting more Australians into the workforce. This government has created over 1.5 million jobs in the last six years. Australia, we now know from a recent announcement, has the lowest level of welfare dependency in 30 years. Despite some tough economic conditions, we are enjoying our 28th consecutive year of economic growth. The Australian economy has grown, on average, 3.1 per cent per year—this is in comparison to the OECD average, which sits at 2.2 per cent. We have maintained our AAA credit rating, and we are one of only 10 developed countries to have this rating.

All of that does not come about without hard work and discipline from this Morrison-McCormack government. The Labor members opposite would have you believe that these aren't achievements, that they can simply talk the economy down to where they want it, to where they can play politics with it. Well, the answer is this government is in fact putting more people into work and delivering lower taxes to boot for more than 10 million Australians. Because while Labor wants to take more money out of your pocket, this government wants to make sure that you keep more money and more of what you earn. We are giving businesses more incentives to employ more Australians, to boost productivity, to export more, to make more and to sell more. We've delivered tax relief for 3.4 million small mum and dad businesses that are employing over seven million Australians.

Our strong budget has meant that we can deliver the essential services that Australians rely on, because at the end of the day a surplus is not a means to an end in itself, but a way of supporting our fellow Australians: with an extra $37 billion in funding for schools over the next decade, new hospital agreements delivering $31 billion in funding over five years, 2,300 new life-changing medicines on the PBS, $100 billion invested in vital infrastructure around the nation, and record investments in defence and national security. Because of our strong economic management, we have faced the unprecedented disasters of this summer and supported our fellow Australians, and we continue to do so. (Time expired)

Llew O'Brien (Wide Bay, National Party) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.