Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Attorney General (Senator Brandis) to a question without notice asked by Senator Ketter today relating to the economy.

The groundbreaking work that has been released today by accounting giant PricewaterhouseCoopers shows very clearly that one in every five dollars of national income is produced by just 10 locations in the country out of some 2,214 nationally. Despite that, and despite Senator Ketter asking very clearly for Senator Brandis to respond to the fact that this demonstrates a definite inequality in our country and has led to a slowdown in economic growth in our country, Senator Brandis, as with many of the answers he gives in this place, instead tried to put his head in the sand and pretend everything is rosy. Everything is all right, despite all of the findings that have come out in this PricewaterhouseCoopers report.

Not only has PricewaterhouseCoopers identified that economic growth is coming from less than 0.5 per cent of our nation's landmass; on top of that, we have had the report of the Australian Council of Social Service today, which clearly shows that inequality in this country is higher than the OECD average, and particularly that it is higher in many of the regions. We know from this report that there are certain parts of this country where one-third of Australians are in recession.

Despite Senator Ketter asking Senator Brandis to address the very specific question which comes out of the PricewaterhouseCoopers report, what we got from Senator Brandis was some diatribe about building approvals being higher and that we have the fastest economic growth rate. We know very clearly that our economic growth has slowed. Senator Brandis knows our economic growth has slowed. The annual growth rate in this country has in fact declined from some three per cent in the year to March last year to only 2.3 per cent now. We also know that Australian incomes are down—including, of course, the incomes of cleaners in this place. This government is cutting the wages of cleaners who clean our Parliament House offices. We know that business confidence is down, that consumer confidence is down and that wages growth has slumped, while unemployment is up.

Despite all of that and despite the findings of the PricewaterhouseCoopers report, Senator Brandis very clearly chose to put his head in the sand and pluck out a few positive stats that he found in his notes as a means of trying somehow to discredit the findings of this very important, groundbreaking report. Two important reports have been released, by PricewaterhouseCoopers and ACOSS, and both of them point to the same outcome, and that is a growing inequality in this country—a growing inequality that this government does not seem to want to do anything about.

Unlike the government, Labor have a plan to address growing inequality, because we believe in lifting people out of poverty and ensuring that we live in a society that is based on the principle of equality. That is why our leader, Bill Shorten, in his budget reply speech, promised to invest in nation-building infrastructure. We know if we invest in nation-building infrastructure, especially in our regions, in our cities, in those areas of disadvantage, those issues of economic decline can be addressed, those issues that the PricewaterhouseCoopers report and the ACOSS report specifically refer to. They are areas that are the biggest losers, such as Nanango in Queensland and the La Trobe Valley in Victoria, which ranked very badly in their report. We can help in their transition to a clean-energy future.

These are the kinds of forward-thinking ideas that a government should be looking at. It is these kinds of reports—the PricewaterhouseCoopers and ACOSS reports—that the government should be scrutinising, looking at in detail, and making policy recommendations to its cabinet to ensure it addresses it—that is if it believes in a country where everyone gets to share in the wealth and profits of it not just those few at the top who are identified in these reports. That is shameful of this government. (Time expired)

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I would suggest to Senator Singh that she have a look at that report and have a look at the graph in that report showing the proportion of GDP concentrated in just 10 locations. You will see, if you look at that report and the graph, that most of the 'badness' in the report occurred in the years of the Labor government. Even the dysfunction shown in recent times is the rollover, the follow-up, from the Labor Party. So before the Labor Party misread—perhaps deliberately—these reports, they should understand that it was their party that caused this problem.

Why did the progress, the economic growth, in rural and regional Australia fall during the time of the Labor government? The first thing I can point to is the ban on live-cattle exports, the most disastrous, stupid, uninformed and ill-researched decision that any government has made for as long as I have been here and I suspect even longer. That one decision—made overnight, by the Gillard government and Senator Ludwig when he was the minister for agriculture—decimated rural and regional Australia, particularly in the north of Australia, where beef cattle and live exports were so important. The industry was not doing too badly, and then—overnight—by a decision of the Labor government the income to that very significant industry in the north was stopped. As a result of that—in addition to suicides—the economic growth of those parts of rural and regional Australia has plummeted. You can thank the Labor Party and the Rudd-Gillard-Rudd governments for that.

So before you get up and look at these reports, Senator Singh, I suggest you study them and understand that most of the things you complain about occurred during the time of the Labor government. If you have a look at the graph—and I invite you to do that—you will see that during the latter Howard years the increase in rural economies was much better. It is only in the Labor years that rural economies have gone backwards.

Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

It's not true! It's actually 2014.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Have a look at the thing. Your government was there from 2007 to 2013—economies do not change overnight. That is the rollover from the Labor government. As Senator Brandis quite rightly said, in recent times the Australian economy has been growing faster than any other economy in the Western world. Things are starting to come right. But it was during the Labor years that this problem came about.

I thought the Labor Party might have taken note, today, of the schools-funding issue. They have an MPI about it, later today. I do not know what anyone is going to talk about at the MPI because, as Senator Brandis and Senator Birmingham quite clearly said, there will be no such funding cuts, and funding of state schools is a matter for state governments. Even Mr Weatherill, the Labor Premier of South Australia, understands that.

Senator Wright asked during her question whether we had an emotional attachment to state schools. I always, in this chamber, very proudly say—unlike, I suspect, most of the Greens political party—I did all of my schooling in a state school and finished my high school in a state school. In fact, as my wife often reminds me, I liked my state school so much that we bought a house just opposite it—and we continue to live there. So we do have an emotional attachment to state schools, Senator Wright. I suspect most of the senators in the Greens political party went to private schools and would not understand state schools at all.

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

I also rise to speak in relation to responses given by Senator Brandis to questions that I asked. I asked a question about whether PricewaterhouseCoopers was correct when it said that more than one-third of Australia is in recession. Senator Brandis, in his response, chose to discuss what he considered to be the real facts, which I considered to be quite a selective representation of some of the economic indicators.

He did take time to make reference to the NAB monthly business survey and he talked about that being up on the 12-month figures. He was highly selective in quoting those figures. In the time the current government has been in office that particular index has been down by 75 per cent and we have seen wages growth slumping to the lowest level in two decades, at 2.3 per cent, to March 2015.

The questions I asked of Senator Brandis went to income inequality and concentration within the economy. I was very disappointed to hear the answers from Senator Brandis because, as Senator Singh has indicated, he has his head in the sand when it comes to these particular issues. When I asked about the concentration of the national income in just 10 of 2,214 locations in Australia, he advised rather glibly that, when one looks at the PwC report, the concentration is found to be in CBDs. He said, 'That is what we would expect to see.'

However, when you look at the commentary from the researcher, Mr Tyson, he identifies that, from a social and equity point of view, there are challenges and potential conflicts that arise from this concentration of the economy in particular areas. He talks about the consequence being that governments should increasingly focus on, for example, public transport to link some of the CBDs with suburbs where there are powerhouse locations of innovation—for instance, the greater Sydney area.

But this is an area where this government have been found wanting again, because they abolished the Major Cities Unit in 2013 and they are slashing infrastructure spending across the country by 11.2 per cent over the next four years. When it comes to looking at the issue of inequality in the economy, this is a government which are absolutely disinterested.

We should be interested in this particular issue because there have been studies that show that rising inequality has an impact on growth. There is IMF research to the effect that there are economic downsides to inequality. Raising the income share of the poorest 20 per cent of the population increases growth by as much as 0.38 percentage points over five years. By contrast, increasing the income share of the richest 20 per cent by one per cent decreases growth by 0.08 percentage points. When we see the response from this government one could almost assume that they are continuing to apply the trickle-down economic model. We can see that this particular approach has failed the people of Australia.

Senator Singh made reference to the report from ACOSS which was released today. One of the concerns that I have in looking at that report is that ACOSS has identified a number of the structures we have had in Australia which have been a retardant to inequality over a period of time. When one looks at those—the taxation system, the system of minimum wages that we have in Australia and our income support systems—one can see that these are all things which have been inhibitors of inequality. These are all of the things that this government is seeking to attack. Time does not allow me to talk about that, but this government is looking at higher inequality, and Labor will always be the party that stands— (Time expired)

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

This is all a bit embarrassing for the Labor Party today. We have a shadow Treasurer who does not understand or does not know what the tax-free threshold is. We have a former Treasurer who is still in the parliament who was responsible for racking up $240 billion in debt in six years when we did not have a recession. Now we are left with the legacy of that. But now it is starting to make sense because the Labor Party could not read a simple chart that was included in today's major business newspaper along with the report that they are trumpeting here as some kind of scandal.

Both Senator Ketter and Senator Singh have said it is a shock-horror scandal that 30 per cent of locations—actually 'ABS statistical area 2' is the designation they have used in this report—are in recession at the moment. You would think when you heard a stat like that—it is a pretty unusual stat; it is not something commonly referred to—you might think, 'Is that high or low relative to normal times?' There is actually, helpfully, a chart which answers that for them in The Financial Review. They do not have to read the report; it is there in the Financial Review article online. It is right there. The data very helpfully goes back to financial year 2002. It shows that the peak of areas in recession was under the Labor government. It was just slightly higher. Under the Labor government in the financial year 2011, there were more locations in recession than there are today. It also shows, going back over that 12-year period, usually something more than one-fifth of locations are in recession at any one time. That is what you would expect in a dynamic economy. Things change, markets change, prices change, and some areas do it tougher than others. Our job is to have a proper, seamless and flexible economy and policies in place to help those adjustments occur. That is always the case.

It was actually much, much lower under the Howard government. The Howard government had between 20 per cent and 30 per cent of areas in recession. It increased after the global financial crisis. Under the Labor government, it increased to over 30 per cent. I am not necessarily trying to blame the Labor Party for that like these guys are stupidly doing to us. I am not saying it is all their fault, because obviously there were other things that impacted on our economy at those times. Clearly, since those times, we have not been able to grow as strong an economy as we would like. We have moderate growth and an increasing amount of growth, but we still have more work to do.

The other really embarrassing thing is that those opposite have tried to hang so much off this graph. As you would expect, because we have not finished financial year 2015, the data in this report finishes in the last financial year. It has data only up to the last financial year. That means that those opposite are trying to pass judgement on nine months of the Abbott-Truss newly elected coalition government from September 2013 through to mid-2014. That is the only period in that time when the Abbott government was in power. There was no budget delivered by this government in that time; the then budget was the former government's budget. Their whole argument today hangs off nine months of the Abbott-Truss government, based on a comparative chart which shows that things were better under the last coalition government than when Labor were last in government. Now they are trying to say 'shock, horror, scandal' to the entire country.

It just shows that these guys are running out of ideas. They are running out of ideas. They are running out of arguments. They do not quite know what to do since the budget came down. They were scatter brained, all over the place, today in question time, with different questions on different topics, and they chose this topic because it was the only one in the newspaper that they thought they could give a run. It is embarrassing for them.

The notion that somehow one in five dollars comes from 10 locations is, again, apparently 'shock, horror'. That has increased over the last 12 years. Sometimes I do not think the Labor Party can read y axes, because it is not zero in this chart; it has increased from 16.5 to 17.9 over the last 12 years—a massive, massive change.

The other thing to take away from that is that of course it is concentrated, because the population in Australia is concentrated. Two-thirds of Australians live in capital cities, but only around a fifth of them—at least, in those 10 locations—are producing the wealth. So, they are actually underperforming. Our capital cities are not punching above their weight, because we all know that most of our export dollars and most of the wealth in this country is generated in regional areas, where only one-third of the Australian population lives. All our iron exports, all our coal, all our agricultural products and most of our tourism assets are actually in regional areas, and they are what produce the wealth for this country.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to take note of Senator Brandis's answers to questions asked by Senator Ketter in question time today on the important subject of the rising inequality we are seeing across the country, as outlined in reports by both PwC and ACOSS. I will just pick up on a couple of things that Senator Canavan said. He said that the questions from Labor senators this afternoon were embarrassing for the Labor Party. The Labor Party will always fight inequality when we see it, and the report released today shows that there is rising inequality across the country—and it is not just in the PwC report; it is also in the ACOSS report which was released this morning.

Rather than sheeting home the blame, which is what Senator Canavan just accused Senator Ketter of, Senator Ketter asked two very factual questions of Senator Brandis this afternoon. They were (1) whether the claim that more than one-third of Australia is in recession was correct, which I do not think was answered by Senator Brandis; and (2) whether it is true that every one in five dollars of national income is produced in just 10 of 214 locations in Australia. Again, I do not think that question was answered by Senator Brandis either. In terms of the answer that was provided, there were some areas with which I agreed—the fact that it is good that we are seeing economic growth across the country. Even if that growth is slow, it is a positive.

But I think any responsible government opening the paper today and seeing the news story about the PwC report, which as I understand it is going to be released tomorrow, would look at this very closely and as a government say, 'Okay, what do we need to do about this? If some parts of the country are doing well but others are clearly not doing well—indeed, a third of the country, in PwC's terms, is experiencing recession—as the government of Australia what we do about this?'

That is the point made by the ACOSS report, which claims that some elements of the social compact—that is, policies around full employment, universal access to public education, wage regulation, progressive income taxes and a well-targeted social security safety net—are key areas which address inequality in a country. It is these areas which seem to be 'unravelling', to quote the ACOSS report. It is also these areas which are under attack from this government, which does not lead us on this side of the chamber to believe that there is a serious plan to address the rising inequality in the country. As my colleague Andrew Leigh often says, central to tackling inequality is maintaining a sense of pride in our egalitarian ethos—that is, that we all work together to ensure that all citizens of Australia are treated equally.

In his answer, Senator Brandis said it is the policies of this government that will address these issues. But, when we look at the policies of this government, we see the cuts to schools and health funding, the attacks on pensioners—pitting pensioners against pensioners; that is what is contained in this budget, where we have pensioners having to justify their pension against other those of other pensioners—and cuts to services like homelessness services and community legal services. These are all services that ensure that we do have that egalitarian ethos, that we have fair wages for work performed. These are all central to the social compact that is being consistently undermined by this government.

Senator Brandis can pretend this is not his problem. Senator Canavan can say that it is everyone else's problem, 'It's the previous government's problem.' But the reality is that we are seeing rising inequality in this country, and it is not clear that there is a plan from the government to address it. Those on this side of the chamber will always stand up and draw matters like this to the attention of the chamber when they occur.

Question agreed to.