Hollie Hughes (NSW, Liberal Party) Share this | Hansard source

It's something you might want to have a really good listen to, Senator Pratt. We're actually focused on the key issue of securing employment. Just look at the Morrison government's recent record on jobs. It makes for fantastic reading: employment grew by 1.9 per cent through the year to January 2020, which is almost double the OECD average and compares to the 0.7 per cent when we came to office. The last three months of jobs data have beaten median market expectations with around 800,000 jobs created. On average, over the past 12 months, a record 74.5 per cent of the population aged 15 to 64 had a job, which the RBA governor said was, 'Fantastic.' There are more people in jobs and fewer people on welfare, pushing welfare dependency to its lowest level in 30 years, with 100,000 fewer working-age people on welfare over the past year.

The December quartile retail trade volumes increased by half a per cent, beating median market expectations. It's the fastest increase since the June quarter 2018. This followed the largest increase in household disposable income in a decade in the September quarter 2019, following the government's low- and middle-income tax offsets, putting money back into the pockets of Australians, which boosted income by $4.5 billion in the quarter. December also saw a trade surplus for a record 24 consecutive months, bringing the trade balance to $67.6 billion in 2019—a record high.

The housing market continues to strengthen, with house prices up 5.2 per cent over the year. The value of new housing loans is up by 14 per cent over the year to December 2019—the biggest increase in almost three years and above market expectations. Building approvals are also up by 2.7 per cent over the year, with the RBA expecting residential construction to support activity by the end of this year. The number of owner-occupied loan commitments to first home buyers increased by 6.2 per cent in December to be 21.3 per cent higher through the year. First home buyers now make up 34.9 per cent of total owner-occupier loans—well above the 10-year average.

On 7 February the RBA Governor noted: 'Loan arrear rates are coming down. The number of people who have problems with their personal debt is coming down.' So it looks like balance sheets are in a better position across a range of dimensions. This improvement is supported by the introduction of the government's low and middle income tax offset, with more than $6 billion already paid out to more than 8 million taxpayers. Then there is the impressive wage growth. It's expected to gradually pick up across the forward estimates, supported by ongoing employment growth. Wages, as measured by the wage price index, rose by 2.2 per cent through the year to the December quarter. Real wages grew by 0.4 per cent through the year to the December quarter, slightly lower than the 20-year average; however, over the past ten years growth in the WPI has usually outpaced CPI.

Compensation of employees was up five per cent in through-the-year terms in the September quarter, compared to 3.5 per cent in the September quarter 2013. In Australia, as in other advanced economies, the response of wages to improving labour market conditions has been slower and more muted than in past cycles, but this is partly explained by lower inflation expectations and spare capacity in the labour market, as indicated by broader measures of labour underutilisation. Strong employment growth has also drawn people into the labour market who were not previously looking for work.

Going forward, wage growth will be supported by the key drivers of wages: spare capacity in the labour market, inflation and labour productivity. Spare capacity in the labour market is being reduced, with employment increasing by 247,400 people during the 12 months to January 2020. Inflation is likely to pick up and be within the RBA's target band by the June quarter of 2021. Wage growth is expected to pick up in through-the-year terms to 2.5 per cent to the June quarter of 2020 and the June quarter of 2021. In the projection years, wage growth is projected to pick up to be a further 2¾ per cent in 2022 and three per cent in 2023 as spare capacity is reduced. The WPI grew by 2.2 per cent through the year to the December quarter 2019, up from 1.9 per cent through the year to the June quarter 2017. Average earnings on a national accounts basis, another measure of wage growth which is calculated as the total compensation of employees divided by total employees, increased by 0.7 per cent in the September quarter 2019 to be 2.9 per cent higher through the year. Total compensation of employees increased by 1.1 per cent in the September quarter to be five per cent higher through the year. Total company profits increased by 1.7 per cent to 11.1 per cent higher through the year.

Spare capacity in the labour market is an important factor influencing wage growth, as are consumer price investments. The unemployment rate was 5.3 per cent in January 2020, down from a recent peak of 6.4 per cent in October 2014. In the December quarter, the trend means that CPI, a measure of underlying inflation, increased by 0.4 per cent to be 1.6 per cent higher through the year. I realise that there are a lot of numbers here, but I hope particularly for Senator O'Neill's sake that she is taking a great deal of note of them.

The Mid-Year Economic and Fiscal Outlook forecasts for wage growth are consistent with the broad consensus among economists for a pick-up in wage growth. Treasury's projections of economic parameters, including wage growth, from 2021-22 onwards are determined by medium-term methodology introduced in the 2014-15 budget.

But wait. The economic measures of living standards provide even more encouraging news. Household disposable income, as measured by the ABS in the national accounts, increased by 5.1 per cent through the year to September. Strong growth in household disposable income in the September quarter was driven by a decline in income tax payable due to the introduction of the low and middle income tax offset. The WPI grew at a faster rate than all of the selected living cost indexes over the year to the December quarter, with the pensioner and beneficiary living cost index rising by 1.8 per cent. CPI rose by 1.8 per cent through the year, and real household disposable income rose by 3.2 per cent through to September 2019. Real household disposable income is calculated by deflating nominal household disposable income by the household final consumption expenditure deflator. In contrast, the real wage, seasonally adjusted, increased by 0.4 per cent through the year to the December quarter.

Australia's labour market remains sound, with employment growth above its long-run average and the participation rate close to a recent record high. Since September 2013, more than 1.5 million jobs have been created, and labour force participation is around record high levels. Through the year, jobs growth to January 2020 was 1.9 per cent—stronger than the OECD average. This compares with growth of 0.7 per cent recorded in September 2013. Employment increased by 13,500 people in January 2020 to be 247,400 persons higher over the past year. Around 239,800 jobs have been created every year on average since September 2013.

Employment growth has remained consistently above the 10-year average for the past three years. Almost 60 per cent of employment growth over the past year has been in full-time jobs; 2018-19 was the strongest financial year for full-time jobs growth in 11 years. Over 80 per cent of these jobs created in 2018-19 were full-time. The participation rate has increased to 66.1 per cent in January 2020, remaining close to its record high of 66.2 per cent in August 2019, compared with the 64.9 per cent recorded in September 2013. Additionally, a record high of almost three-quarters of Australians aged between 15 and 64 have a job. More than 890,000 females have found employment since September 2013, representing 59 per cent of the more than 1.5 million jobs created. In fact, female employment has increased by over 183,000 in the last 12 months, with more than two-thirds of these jobs being full-time. Rising female participation has driven the participation rate higher. The female participation rate set a record high of 61.5 per cent in January 2020.

But the good news just keeps on coming. The gender pay gap is at a record low. Older Australians are also benefitting from stronger labour market conditions. Workforce participation for those aged 65 and over is also around a record high. The underemployment rate is the number of employed persons who want to work more hours as a share of the labour force and is a complementary measure of spare capacity in the labour market in addition to the unemployment rate. Employment is forecast to expand over the forecast horizon, underpinned by a pick-up in economic activity. Employment is forecast to grow at 1¾ per cent through the year to the June quarter 2020 and the June quarter 2021.

There have been 1.5 million jobs created since the election of the coalition government in 2013. The minimum wage has increased every year since 2013 at the rate of at least 2.4 per cent. The real minimum wage under Labor was cut twice between 2007 and 2013—a sad fact that provided even more evidence of the need for the repairs and reforms of the coalition that have produced such stunning results for the Australian people.