Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I rise tonight to speak against the Social Services Legislation Amendment Bill 2017. Once again, we see the truly twisted priorities of this coalition government in evidence in the bill before us. I want to focus on the heartless cuts to the family tax benefit, which is one of the biggest cuts as part of this particular measure. Before I do so, I want to comment on the fact that—this picks up on Senator McAllister's point—not only is this a truly unfair and heartless measure, it also defies economic logic and comes within the category of economic vandalism. I will explain what I mean by that.

Recently, the Treasurer, Mr Morrison, indicated that record low wage growth was 'the biggest challenge facing the Australian economy'. He made those comments following the decision of the Fair Work Commission which we have discussed quite often in this place. That decision attacks the Sunday penalty rates of thousands of hospitality and retail workers. We know that Mr Morrison has indicated that low wage growth is a big challenge, but I understand he told Bloomberg that he was committed to ensuring workers took home more money each week. He said that he is looking to increase the pay packets of workers and to increase household income. That is a laudable objective. We do not dispute that it is a great idea for workers to receive more money in their pay packets, because of the obvious fact, noted on so many occasions, that low-income workers in particular end up spending most of what they earn, and that in turn is a benefit to the economy and a benefit to small business, who end up being the beneficiaries of that spending in the economy. He said that the biggest challenge we have is to ensure that what Australians are earning every week is increasing. Having said that, one scratches one's head to understand how a massive $1.4 billion cut to Australian families is going any way towards increasing the amount of spending that is going to occur in the economy. It might be a very short-term and short-sighted budget measure which perhaps the coalition can boast about in certain quarters, but, when it comes to doing something about addressing our economic issues on a legitimate basis, this particular measure is, as I said, in the category of economic vandalism.

Mr Morrison talked about the fact that the benefit of the penalty rate cut decision of the Fair Work Commission was that workers would be able to earn more if workplaces were open as opposed to closed because the bosses were struggling to earn a profit, but I talk to people who work in the retail industry. As you know, Mr Acting Deputy President Back, I was a union official in the shop assistants union for many years. At that time my members indicated to me that they knew that retailers did not staff their stores with any degree of generosity. They would staff a store to the absolute minimum that is required to meet the workload at that time, and even then there were skeleton staff levels in place. So we know that in retail in particular, which is an area that I can speak about with some degree of authority, those cuts to penalty rates are going to be absorbed into company profits. That is where they are going to go. They are not going to go into the pockets of workers who are working extra hours; they are going to go straight into company profits. I hear those opposite saying, 'Company profits going up—that's actually a good thing and that's going to lead to more workers being employed if businesses are more profitable.' If that were the case, why is it that we have company profits at an all-time high? I understand that, as at the fourth quarter of 2016, that was the situation—company profits were at an all-time high at an average of $77.773 billion—and yet at the same time we had the issue of record low wages growth. There is something wrong with the theorem under which the coalition is operating if they think that increased corporate profits necessarily translate into wages growth in more jobs. They have to look at the empirical evidence, as my friend Senator Roberts would say. The empirical evidence says that the linkage between profits and wage growth and employment is broken. We are in a new paradigm, so we need to have another look at that.

We also know that Reserve Bank Governor, Mr Lowe, last month warned that record high household debt and record low wage rises were limiting consumer spending and hurting the national economy. Once again I ask the question: how is it going to be the case that these cuts to family tax benefits of $1.4 billion, roughly, taken out of the budgets of Australian families, are going to assist with consumer spending and how is that going to assist the national economy? I also note that many economists have predicted that the small increase in wage growth that we experienced last month is going to do little to increase consumer spending, which many businesses rely on. This is not highfalutin economic theory; a lot of this is common sense. This is something that one would have thought otherwise rational people within the coalition would be looking at, but there seems to be an ideological agenda at play and common sense is not coming into the equation. There is a set of twisted priorities which is working its way through into government policy.

The $1.4 billion cut from families was actually a 2014 budget measure. It is something that has come back. They regurgitated it after the unfair 2014 budget measures were, in many senses, seen off three years ago. By freezing the current family tax benefit rates for two years means that 1½ million families will be worse off and more than two million children will be worse off. I have to ask the question: what does this government have against the children of Australia when families are struggling as it is to meet the cost of living? Here we see further pressure being piled upon working families by this government. Almost 600,000 of these families are on the maximum rate of family tax benefit part A, which means that their household income is less than $52,000 per year. Unfair cuts are hitting these people again and again.

We know that this low wage growth is an issue. When I was in Gladstone and Mount Morgan in Queensland last week, I met with workers and unions and I saw firsthand how this government's decision to support the cuts to penalty rates, which are piled on top of the cuts, will affect them. It is going to be devastating to these people. Not only is it an unfair situation; it is lunacy when it comes to economic policy and trying to stimulate our economy, lift wages growth and get growth up generally within the economy. I ask the coalition to think about putting themselves in the shoes of a single-income family right now. Those people are literally struggling to make ends meet as it is. Today's bill only compounds the problem with $1.4 billion being ripped out of the pockets of low-income families.

Let's look at the history of these cuts that were first introduced in the 2014 budget. Let's remember: that budget became synonymous with unfairness and twisted priorities. It was a budget written by a gentleman who told young Australians to get a better job if they wanted to buy a house. He was also the Treasurer, as I recall, who formed the conclusion that poor people did not drive cars and so were not affected by the costs of running motor vehicles. This was a budget cut that was endorsed back then by our current Prime Minister, who has said that parents could just shell out for their child's first home. So we remain opposed to this 2014 budget measure. It is, I think, an indictment of this government.

The proposed freeze to indexation of the family tax benefit means that those payments will not keep pace with the cost of living for two years, so that will just pile extra pressure on households. The truth is that this government's vision for Australia's future is about ripping up the basic social contract in this country. We are not a nation of lifters and leaners, no matter what the former Treasurer, Mr Hockey, said. We are a generous and compassionate country that deeply values fairness, and Labor will continue to defend the lowest paid workers in this country, many of whom are going to be affected by the proposed cuts to the family tax benefit.

In concluding my remarks, I want to talk about those that are actually in favour of these cuts. In particular, I would like to draw attention to the One Nation party. We know that One Nation votes with the Liberals at least 87 per cent of the time. We know that during the Western Australian election campaign Senator Hanson sold Queenslanders out by trying to reduce our share of the GST. For a party that claims to stand up for battlers they are doing a fantastic job of selling them out. In fact, they have done such a great job of selling out Queenslanders that two weeks ago our local newspaper, The Courier Mail, featured a full-page expose on One Nation's unsuccessful foray into Western Australia. Make no mistake, the people who will be impacted by these cuts are the very same people who vote for One Nation. In fact, One Nation is fast becoming a haven for those in the far right of the LNP. 'Don't worry,' they say to each other, 'we'll pass these measures with One Nation, so we can hide behind their banner and each other.' When it comes to getting a fair go, Queenslanders are getting a raw deal under this LNP-One Nation coalition in the Senate. Workers are getting a $77-a-week pay cut while big business is getting a $50 billion tax cut. What I would say to both One Nation and the LNP is: stop selling out the battlers, do the right thing, stand up against these harsh cuts and stand up for Queenslanders.