Gavin Marshall (Victoria, Australian Labor Party) 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 the Leader of the Opposition in the Senate (Senator Wong) today relating to inequality in Australia.

It's a debate which I'm very pleased we are now starting to engage in. It's a debate which I think will create an important part of the political discourse over the coming years. It's a debate where both sides of the argument will be able to rely on many statistics to support the propositions that they may put. Indeed, today, Senator Brandis used some of the words and information that the Treasurer has used to simply dismiss the issue of growing inequality in this country by saying there has been some significant employment growth. While I'm not disputing those statistics at the time, they are simply statistics. They do not reflect much of the problem or much of the evidence that is growing for people to see. I'm going to use and quote some statistics to support my proposition that inequality is, in fact, rising. Again, as I understand, there will be other statistics used to support the proposition that it's not.

While we can have these arguments in this place and say, 'Our statistics are better than yours,' politicians in particular—from all parties—ought to be very wary of ignoring what the Australian people are experiencing themselves. I know my colleagues on my side of the chamber and, indeed, colleagues from across the chamber do engage in a very constructive way with the Australian people, and they see some of the inequality that's happening. They get feedback from Australians. It would be to everyone's peril to simply ignore that. Sometimes the feelings and the views of Australians are not exactly demonstrated by the facts and sometimes it is partially misguided. But, on the whole, when I go and talk to Australians and visit different communities, I see—from the very privileged position that I have—growing inequality. I see the wages share of GDP decreasing. I see the profit share of GDP increasing. I'll go to some of those statistical figures in a minute that were prepared by The Australia Institute.

Not only is the share of wages of GDP decreasing; wages themselves are in decline. Wages themselves are going backwards. When you factor in inflation, there are very few examples of wages increasing at all over the last couple of years. We have award reliance in this country increasing and agreement making decreasing. We have employers—and I have experienced this—saying, 'Oh, but we pay the award.' Since when did it become a badge of honour for an employer to say, 'We pay the lowest legal minimum wage we are allowed to by law' and say that this is a badge of honour and something that they should be proud of? Since when did that actually happen in Australia? It's been happening for some time. The reason a lot of those employers are proud of paying the lowest legal minimum wage is that a lot of employers are not paying that and a lot of their competitors are not paying that. We see noncompliance increasing, and the government acknowledges that. The Fair Work Ombudsman now employs around 800 people. It's an insatiable appetite. They cannot keep up with the level of complaints that are being made about wages theft, theft of superannuation and noncompliance with other provisions of employment.

We see at the same time union membership down. I know some people on the other side of this chamber celebrate that fact. I certainly don't because unions, historically in this country and today, play an absolutely essential role in compliance of industrial instruments and wages conditions. Yet we have seen the Fair Work Act restrict the ability of unions to conduct that essential role. We've seen that restricted. We've seen the Fair Work Act restrict the ability of workers themselves to enforce their own entitlements. I think that is something that we will also have to debate quite seriously. My personal view, after being substantially through a Senate inquiry into noncompliance with the Fair Work Act, is that the Fair Work Act is no longer fit for purpose and really needs to be readdressed.

We see agreement making now at an all time low and, as I said, award reliance up. We see housing costs up and people being pushed further and further out, increasing traveling time— (Time expired)

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

It's always a pleasure to follow my colleague Senator Marshall, who is a very reasoned person, in these debates. I welcome his recognition that sometimes the facts and perceptions about the facts don't always align. I think that's been true for both sides of government for the Australian community over many years. What's important is understanding what those facts are, recognising and empathising with the people who are affected, and then deciding how to reach an outcome. What is the outcome that is in the national interest and is in the interest of those people who are affected?

This issue around equality is probably one of the first and foremost differences between those who are on that side of the chamber and those who are on this side of the chamber. It's not because we don't recognise that some people are struggling—both of us do that. We interact with people in our community. The difference is what we are going to do about it. The focus for the government and people on this side of the chamber is: how do we help people get ahead; how do we help people to seize opportunity and to grow a future for themselves and their families?—as opposed to how we can help people to get even, which is the approach that is so often taken by those opposite. That concept of evening out the existing pie can only go so far.

If we look to the ABS, we see that the lowest 20 per cent of households on average receive cash transfers and social services benefits that are worth more than eight times what they pay in taxes. In 2015, the Productivity Commission found that 40 per cent of families pay no net tax after taking into account their transfer payments like the family tax benefit. By contrast, the top 10 per cent of income earners in this country pay almost 50 per cent of the personal income tax received by the government, and the top one per cent pay a staggering 17 per cent of all tax received. So this approach of 'Let's claw from people over there so that we can even it up here,' logically has a finish point. It can only go so far before either they run out or you remove the incentive for people to actually work hard and invest in their own training and personal development, to get jobs and to earn money so they can pay that tax. So that pathway is clearly flawed in the long term.

This government has a different approach. This government is about growing opportunity, about providing the opportunity for people to get jobs so that they can seize opportunity and grow the national wealth. Then everybody can share in a growing national economy. That's why it's great to see that, in June this year alone, some 60,000 jobs were created. In the last financial year, 240,000 jobs, three-quarters of which were full time, were created. That's the highest rate of growth since the GFC. Since this government has been elected, there have been some 700,000 jobs, more than 50 per cent of which have been created. This government is about creating jobs and opportunity, and its policies are working.

In terms of the data around inequality, members opposite have criticised the Treasurer for his comments, but I noted in question time today that they were very happy to quote the HILDA survey. That is the Household, Income and Labour Dynamics in Australia Survey, which has been a long-term, longitudinal study. It's interesting in this debate if we look at the fact that Mr Roger Wilkins, who is the Deputy Director of the Melbourne Institute and responsible for that survey, rejects the notion of growing inequality. He told the Melbourne Institute's Economic and Social Outlook Conference, 'If anything, inequality has been declining.' He went on to cite a whole range of coefficients and facts that prove that inequality has been decreasing. The OECD, more recently, has also acknowledged that inequality has actually fallen in Australia since the global financial crisis, on a number of key inequality measures. And the ratio of income from the top 10 per cent compared to the bottom 10 per cent in Australia is well below the OECD average. That is why this government is committed to growing the pie and providing opportunities. This government is committed to growing the economy and to supporting more and better-paid jobs. It is committed to guaranteeing the essential services that Australians rely on, like Medicare, PBS, school funding and disability services and to putting downward pressure on the rising costs of living, such as electricity— (Time expired)

Kimberley Kitching (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It's interesting that Senator Brandis said, in response to Senator Wong's quoting of the Essential poll, that she is wrong. Really when he says that, he is saying not that Senator Wong is incorrect but that the Australian people are wrong. After all, they were the ones who were surveyed. The tin ear of this government is incredible. Of course, that tin ear is also clattering away in the Treasurer's statement about inequality: 'It's actually got better.'

Returning to the Essential poll that Senator Brandis was able to dismiss so readily, let's take a look. There were 1,805 voters surveyed, and 52 per cent believed economic inequality in Australia is on the rise. Senator Brandis should note that that percentage included 43 per cent of coalition voters. Only 12 per cent agreed with the Treasurer; that is, 12 per cent—plus one Treasurer of Australia—thought inequality was decreasing. So what did the voters prioritise in that Essential poll? They prioritised the improvement of the health system; the improving of housing affordability; the reduction in unemployment; looking after national security and terrorism; dealing with tax avoidance by big companies; and protecting the wages and conditions of workers. But it's not just this Essential poll; it's the International Monetary Fund and the chair of the US Federal Reserve. Like a clarion call, they are warning that inequality threatens prosperity. More than that, as the Leader of the Opposition said a fortnight ago in his speech to the Melbourne Institute: 'Inequality kills hope. It feeds that sense, that resentment, that the deck is stacked against ordinary people, that the fix is in and the deal is done. No-one deserves to feel like this.' JD Vance's memoir, Hillbilly Elegy, explores this feeling of despair. It explores the killing of hope. But one doesn't need to visit Mr Vance's childhood home of Middletown, Ohio; one need only go to the Latrobe Valley or to Western Australia, where the former state Liberal government drove the economy off the cliff, or to other places to know that people are despairing. No-one deserves to feel the emptiness of powerlessness.

Senator Brandis also explained why he believes the Treasury is correct. He talked about jobs—more jobs and better jobs. What a facile response. Workers' share of income is at its lowest level in half a century. A lot more people are working a lot harder for a lot less. Over one million people are underemployed and are working fewer hours than they would like to. More and more Australians are working part time or are casualised, denied a proper income that they can live on. The part-time share of unemployment is 31.9 per cent. This is just 0.1 per cent below the historic high in November last year. This is one of the highest part-time employment rates in the developed world.

The OECD disagrees with the government. The government would have you believe that insecure and part-time jobs lead to something better. The OECD recently concluded that 'non-regular contracts are rarely a stepping stone to better jobs.' Our economy is strongest when it's powered by a skilled, capable and confident working middle class. Our economy is strongest when our society is more equal. The former chief economist of the World Bank, a Nobel Laureate and author of The Price Of Inequality, Joseph Stiglitz, said:

The only true and sustainable prosperity is shared prosperity.

Stiglitz described the US in this way:

For too long, the hardworking and rule-abiding had seen their paychecks shrink or stay the same, while the rule-breakers raked in huge profits and wealth. It made our economy sick and our politics sick, too.

Speaking of sick politics, this government haven't really been able to focus on developing policy and legislation because they're very focused on their internals. In the last 24 hours, we've certainly seen this. But the ALP has been able to develop policy. (Time expired)

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

I was extraordinarily pleased, but not at all surprised, to see that the issue of equality was the first issue raised by the ALP when we returned to parliament after the winter break. Clearly, the ALP and Bill Shorten feel like they have found themselves a winning organising theme to regain office at the next election, but this is a crusade; it is a false crusade. Shorten's inequality crusade appeals to the basest politics of envy—the politics that says someone has to do worse for you to do better. That is the road to political ruin. It is the ultimate embodiment of that Corbyn-esque world of populism and resentment. It appeals to the basest of emotion. I am surprised that the ALP would stoop this low, particularly when those opposite often recall the legacy of the Hawke-Keating years. This message, this slogan, repudiates all that was good in those years. Far be it for me to sing the praises of previous Labor governments, but let's think about that legacy. That legacy placed the primacy of importance on growing the economic pie by unshackling the economy. It floated the dollar, it removed capital controls, it deregulated the financial system, it reduced tariffs, it privatised government owned businesses and it retreated from centralised wage-fixing, and yet all that the opposition has is the rhetoric of inequality. It brings shame upon the legacy of previous Labor governments.

At that stage, Australia went from a position of having a per-capita income level that was around 20th in developed economies to being in the top five. It was a remarkable outcome for a reformist ALP government. But, in contrast, the rhetoric of the policy approach being adopted by the present Labor opposition could not be starker. Quite frankly, shadow Treasurer Chris Bowen should know better. After all, the empirical evidence is perfectly clear. The best way to reduce inequality is to ensure people get jobs. That is exactly what this government has been doing: 240,000 new jobs in the past financial year alone; 175,000 of those full time and more than 700,000 since this government came to power in 2013.

Imposing bigger tax burdens on high-income earners and businesses inevitably lead to less investment, less risk-taking, reduced work effort and, ultimately, fewer jobs. I, too, am going to mention Roger Wilkins, who is the deputy director of the Melbourne Institute and responsible for the HILDA survey. He said that he fears that popular focus on inequality may come at the expense of growth.

I do think this is a risk. I am wary of the debate degenerating into a zero-sum game where people fight over the spoils rather than increasing the spoils. The market-based system has delivered a lot of good stuff for our country and I have a concern this gets neglected.

That is exactly what may happen if we let this debate descend into the rhetoric of inequality and the politics of envy.

The best way to tackle inequality, we know, is to grow the pie. Don't redistribute it, don't cut it differently; grow the pie. The second way to do it is to ensure that essential services like health and education are guaranteed—unlike the politics of envy. We create the jobs of the future—nearly a quarter of a million jobs in the last 12 months. Jobs and growth for the Turnbull government is not a slogan; it is an outcome. Finally, we must consider tackling entrenched disadvantage at the root causes, not by redistributing income—tackling worklessness, tackling homelessness, tackling drug and alcohol addiction and tackling domestic violence, abuse and neglect. These are the issues that this government is focused on as the better path out of poverty traps—that entrenched impoverishedness. Prioritising redistribution over growth is shallow populism and quite to be expected from an opposition that is devoid of ideas.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Hume, your time has expired. I remind you to refer to members of both houses by their correct titles.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I note the contribution from Senator Hume and I also note that later this evening Senator Hume and I will be launching the Parliamentary Friends of Blockchain, which will be a fantastic event that you are all welcome to attend. I think it's important and timely that we are talking about an issue that is as significant as the issue of inequality and the growing nature of inequality in this country. I note the contribution that was made by Senator Marshall. I think it was a very important one. This is an important debate. It's a timely debate. It's a relevant debate. It's a debate where a whole set of statistics are going to be thrown at people. This is not simply going to be a debate about one set of numbers versus another set of numbers. We heard from the Treasurer recently, citing figures relating to the Gini coefficient and trying to make the case as to why inequality is not a problem. Inequality is a problem. It is a real problem and it's a growing problem that people are experiencing in their day-to-day lives and their day-to-day experiences. This isn't one of those cases where politicians take a set of numbers, skew them, play with them and then represent them in a manner that is not genuine.

The day-to-day experiences of Australians across this country is that inequality is real, it's growing and it's getting worse. To note what Senator Hume said, the objective of addressing inequality is not simply to redistribute a shrinking pie. The objective is this: to grow the pie and to share that pie better. They are a dual objective. The work of economist after economist in recent years has demonstrated that one of the ways of achieving economic growth, one of the ways of actually increasing the size of the pie, is to have a better redistributive network and to address this issue of inequality.

I want to touch specifically on some of the issues that have arisen with inequality. In the first question we are here to address and take note of, which Senator Wong asked Senator Brandis, was this quote from Treasurer Scott Morrison: 'Inequality—it's actually gotten better.' Could you hear a more out-of-touch statement! The statistics speak for themselves. It has not gotten better when the top 20 per cent of Australians have such a disproportionately large share of the economy and when the bottom 24 per cent are looking at a four per cent share and a gap that is continuing to grow. When you look at executive bonuses, you have an economic system where a handful of individual Australians have simply grown and increased their own economic status at the expense of everyone else's.

I want to touch on one of the big issues that has happened with inequality. A lot of people in different speeches in this chamber have addressed issues of gender inequality and Indigenous disadvantage, which are huge matters, but there is also an intergenerational challenge here. For a generation of young Australians the growing inequality means they increasingly have to come to an acceptance that it is unlikely they will ever be able to purchase their own home. It is unlikely they are going to have the same kinds of economic security and benefits their parents had. It is likely that the security of work their parents and grandparents were able to enjoy is something they will never be able to enjoy. When you have the median property price in my city of Sydney at a million dollars, it is out of control. To give you a breakdown of what that means: a $1 million house means you need to have a $100,000 deposit on a 90 per cent loan. If you are not fortunate enough to have the start of wealthy parents, an inheritance or equity within your family, the idea that you are practically able to save $100,000 in a reasonable period of time locks you out of the market. Inequality is real and inequality is a problem this Senate needs to address. (Time expired)

Question agreed to.