Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) to questions without notice asked by Senator Gallagher and Senator Walsh today.

Another day and more shocking new figures about the state of the Australian economy under this government—a government that went to the election promising the Australian people that it would deliver a strong economy and rising living standards. Month after month after month we see that those promises to the Australian people are broken by this government. This is a government that says that it prides itself on being strong economic managers. Those opposite say that the difference between them and this side of the chamber is they can deliver good economic management. Well, where is it? Month after month we try to find signs that under this government's stewardship the Australian economy is in good shape, as it promised it would deliver. But month after month we see more and more figures showing how much the Australian economy is floundering as a result of this government's lack of leadership.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

It's growing!

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

Let's have a look at the figures that have come out today. Today, the new figures show that economic growth in this country went backwards compared to the last quarter. I take Senator Scarr's interjection where he says that the economy is growing. The latest figures show economic growth went backwards compared to the last quarter. Annual growth is only at 1.7 per cent—barely growing at all. It still has a one in front of it, well below the government's forecast of 2.75 per cent. This government's last budget was predicated on an assumption that the economy would grow at the rate of 2.75 per cent over this financial year. It is currently running at 1.7 per cent.

The tax cuts that this government went to the election on were the centrepiece of this government's economic agenda. They were the thing that was going to get the economy moving, according to the government. Now we have the Australian Bureau of Statistics saying that the reduction to tax payable did not translate to a rise in discretionary spending or, to put in plain language, the tax cuts didn't work! The tax cuts have not got people spending money in the way that the government said that they would do, and that's reflected in the poor retail figures we see; that's reflected in a whole range of other data that shows how badly the economy is performing under this government.

That is, of course, backed up by wages, where under this government's stewardship we have wages growing at the lowest rate we have seen in Australian history. Since records began on this subject decades ago, we have never seen wages growing so poorly as they are right now under this government. It's no wonder then that the Reserve Bank has recently just made the point that lower wage rises have become the new normal. That is what the Australian people have got to thank this government for: six years of office, in its third term, and it has delivered a new normal when it comes to wages—and that is lower wage rises. Congratulations! I hope you're all giving yourselves a pat on the back, you good economic managers! You people who said that you needed to win the election to keep the economy strong, give yourselves a pat on the back! You have delivered a new normal, being lower wage rises.

That is not really any surprise, because we have had the Leader of the Government in the Senate, Minister Cormann, as the Minister for Finance for the last six years. The entire time this government has been in office, Minister Cormann has held the purse strings as the Minister for Finance. What he has got to show for it is economic growth going backwards compared to the last quarter, tax cuts that aren't working and the worst wages growth on record. I think Minister Cormann would be quite okay with all that, because we know that he was caught out on film saying that keeping the wages low in this country is a deliberate design feature of the government's economic policy. What kind of politician would actually get into office to deliberately keep wages low? That is the kind of attitude we have from this government, and we all know on this side of the house that that is what this government is about.

Today, Minister Cormann was asked questions about this. You would think that on another day when we have poor economic data coming out about this government you might see humility from this government. But no, not from Minister Cormann and not from this Liberal-National government, who said that it would keep the economy strong. They don't know the meaning of the word humility. Rather than being a bit humble, we see more arrogance from this government in saying, 'Everything is going hunky-dory; everything is going swimmingly; everything is going really, really well in the Australian economy.' In fact, they might as well say that Australians have never had it so good! How arrogant! How arrogant of this government that won an election, to its great surprise, and is now presiding over poor economic growth, tax cuts that aren't working and the lowest wages growth that we have ever seen. (Time expired)

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

The one thing I have learned in my over five months here is, when the Labor Party talks about economic data, you should always go to the original document and read what the actual facts say. The facts of the matter are—

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Does that apply to Angus Taylor too?

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I'll take the interjection from—

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Rookie error!

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Order! Please continue, Senator Carr—I mean Senator Scarr.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Carr's has perhaps a different philosophical bent! Household disposable income has in fact increased in this country by 2.5 per cent—the fastest quarterly rise in a decade—with the ABS saying it was driven by a decline in income tax payable and interest paid on dwellings as well as continued rises in the compensation of employees. That is what the ABS has said. It is not what Senator Watt has said but what the ABS has said. I'll say it again: it was driven by a decline in income tax payable and interest paid on dwellings as well as continued rises in the compensation of employees. As Senator Cormann said, it is up to the Australian people how they decide to spend or save their tax cuts. At least this side of the chamber gave them the choice. We gave them tax cuts so they could make the decision as to what was in the best interests of their families and their households. We gave them the choice.

Let me quote what Mr Philip Lowe, Governor of the Reserve Bank of Australia, said in a press release just yesterday:

The US-China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty.

As Senator Cormann has frequently said in this place, this economy is facing difficult international issues that are not of its making. Notwithstanding that, and notwithstanding the fact that countries like Germany, the United Kingdom, South Korea and Singapore have all experienced negative economic growth this year, Australia is still producing positive economic growth. Notwithstanding those headwinds, there is still positive economic growth. We have maintained our AAA credit rating, and we're one of only 10 economies around the world to do that—an outstanding performance.

What are other people saying, other than those on the other side of the chamber in the opposition? Standard & Poor's said recently that the outlook for the Australian economy is sound. Deloitte said that the Australian economy is picking up with momentum. The IMF and the OECD are forecasting Australia to grow faster than any other G7 nation in 2020. The Reserve Bank of Australia has said that the economy has reached a gentle turning point.

To go on, in terms of the Reserve Bank of Australia's commentary:

The central scenario is for growth to pick up gradually to around 3 per cent in 2021. The low level of interest rates, recent tax cuts—

opposed by those opposite—

ongoing spending on infrastructure, the upswing in housing prices and a brighter outlook for the resources sector should all support growth.

So it is a positive story and Australia is doing remarkably well, notwithstanding the headwinds on an international basis.

What else did we hear today during question time? The Canberra bubble is alive and well. Earlier today, eight out of 12 Queensland senators supported the legislation in relation to repairing the medevac scheme—eight out of 12 senators representing the will of the Queensland people. We heard their voices loud and clear at the last election. We went to that election with a promise that we would deliver those amendments to the scheme. We delivered those today, and today we can go back to the constituents of Queensland and say, 'Job done.' Eight out of 12 Queensland senators supported that legislation. We will remind Queenslanders that four out of 12 Queensland senators did not—three from the Australian Labor Party and one from the Greens.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator Scarr, I remind you that the motion to take note was on questions about the economy asked of Senator Cormann by Senators Gallagher and Walsh. I appreciate that it is a wide-ranging debate, but you do need to be speaking in broad terms, as you were in the beginning, about the economy. Please continue.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I am happy to end my contribution by noting how sound a position the Australian economy is in, given the headwinds it's facing.

Louise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) Share this | Link to this | Hansard source

I rise to also take note of questions on the economy asked of Senator Cormann by Senator Gallagher and Senator Walsh. Time and time again we come into this place to talk to the government about the economy, and they pretend over and over again that everything is rosy. Senator Scarr has pointed the finger at the economic headwinds internationally, but time and time again we do not see an adequate response from this government, neither in the way they answer questions nor in the way they manage the economy. They come into this place without a plan to manage the Australian economy and deal with these headwinds.

Just this week, media reporting on the Australian Industry Group's Performance of manufacturing index has painted a very stark picture of the Australian economy, highlighting the lack of direction from the Morrison government to boost the economy. This is my own portfolio area. In manufacturing you can see the overall economic slowdown flowing down into different sectors of the economy. It shows that Australian manufacturing is indeed contracting. It is no longer growing; it is displaying its weakest performance since 2016. It shows a weakening in building materials, wood, furniture, metal products, machinery and equipment; and paper printing, textiles, clothing and paper. It also shows, very troublingly, a drop in employment and wages.

The Morrison government claimed that the economy would improve in the next quarter. When Senator Cormann answered questions on the economy in question time today, he never adequately reflected on the negative state of the economy—where and why the economy is in difficulty—because he wants to continue saying that things are rosy. He wants to continue to believe that our economy does not need government leadership and government intervention. He simply ignores the parlous state of the Australian economy.

But we can see that real growth figures are well below average, well below forecasts and well below what is needed to get wages growing again in our nation. Weak growth like this is inevitable. It is an absolute consequence of a government that has only a political strategy and not an economic plan. This government has ignored repeated calls, not only from the opposition but also from the Reserve Bank and other industry players, for a proportionate and measured stimulus that will support the economy. These calls have come from the Reserve Bank, the business community, economists and experts, and indeed from the Labor Party.

When it put forward its mediocre package on infrastructure, the government pretended that this was the kind of stimulus it was prepared to put forward. This is not an adequate economic stimulus for our economy. It does not meet the test that the experts are calling for. It's high time that Senator Cormann, when answering questions in this place on the economy, or failing to answer those questions, held his own government to account—Minister Frydenberg and Prime Minister Morrison. Every time he comes in here, it is without a comprehensive plan to support our floundering economy, boost wages and lift productivity. When the government comes in here and answers questions on the economy, there is simply nothing that it speaks to that even touches the sides of dealing with the real issues around boosting wages, lifting productivity and boosting the state of the Australian economy. As we head towards Christmas, we see very weak results in the nation's manufacturing sector. The order books and wages are down. There is a faster rate of contraction— (Time expired)

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

I always find it interesting, when it comes to the economy, that it's never a New South Wales senator who asks a question, because the last time the Labor Party was in power in New South Wales the economy did nothing but tank. It continued to plummet to the bottom of all rankings, and it's taken a Liberal-National government in New South Wales to bring it back up. I did enjoy, though, the very first part of Senator Walsh's question, when she said that, during the September quarter, the economy has grown. I think, ultimately, she could've stopped there, but for some reason the Labor Party has a pathological need to talk our economy down. They're determined to see the negative in everything.

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

Just facts.

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

Senator Watt comes in with the interjections and the smiles across the chamber, but really all he's looking for is to see the negative in anything—talking down the economy, talking down business, talking down all the states and all the work that's being done, even in his beloved northern Australia, with all of the work that the fabulous Minister Canavan is doing to support northern Australia. We can do that work because we have an outstanding economic record. Managing the economy is what this government does best.

But let's talk about the fact that it is the 29th consecutive quarter of annual economic growth. This is despite a raft of challenges. Senator Scarr was talking about some of the international headwinds, but we also need to consider the ongoing international trade tensions. We have two of the largest economies in the world currently in a stand-off, and this is obviously having an impact globally. We are in the centre of that, with considerable trading partners in both of them. It is therefore important that we walk an incredibly tight rope, and that is being done incredibly effectively by the Morrison government.

We also see a housing market downturn. This is turning around, but that is something that's occurred particularly in the major centres. But, of course, one of the other significant impacts on our economy, something that I'm not sure those opposite fully understand, is the drought. As Senator McKenzie so eloquently explained, never, prior to their new-found love of farming and drought, were those words so very frequently uttered by anyone opposite. The drought is having a direct impact on our economy, but this would be worse with $387 billion worth of new taxes, which, as far as anyone can work out, are still Labor policy. No-one really knows; we're not quite sure. I think the opposition leader is too busy looking over his shoulder at the member for Maribyrnong, who I think wants his old job back. The Australian people and the economy have dodged a bullet by avoiding a Labor government.

But what does the strong economy mean for everyday Australians? Talking about the drought, I'd just like to take a moment to look at some of the drought initiatives that, because of our economic position, we have been able to implement. Since the budget, there has been an additional $355 million to step up our drought response, and the latest announcement will triple this to more than $1 billion since the election as well as more than $1 billion in new interest-free loans. What does this mean for farmers? It means that the farm household allowance can now be extended to support four years in every 10, not just four years over a lifetime. We've also seen an ability to relax the off-farm income, offsetting it and increasing the cap to $100,000. This is ensuring that people are able to stay on their farms and keep food on the table as they endure one of the worst droughts in our history—in the last decade and century. If you also look at what's happened recently with the terrible bushfires, unlike those opposite we have been able to offer an assistance package, in line with the states, of $48.25 million. That's a bushfire recovery package that's only possible because of a strong economy.

Those opposite and Senator Watt—who, unfortunately, is no longer here—would fully understand the levy that had to be implemented to pay for the natural disaster recovery in Queensland because the government, under Labor, could not afford the package. That's not how it is over here. Whereas you guys opposite took drugs off the PBS because you couldn't afford to list any more, over here we are listing one new drug every day, and that's how everyday Australians are benefiting from a strong economy. (Time expired)

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Senator Hughes, I remind you it is not appropriate to refer to the fact that senators may have left the chamber.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Today Senator Cormann has been asked questions about slow economic growth, about low household spending, about low wages growth and about an economy that is in trouble, and his answers can basically be summarised as: 'Everything's going fine. There's nothing to see here, and the economy is working just fine, thank you very much.' How insulting to the people who are doing it tough under this government's so-called economic leadership. How insulting to the people who are depending on this government to come up with an economic plan and a strong economy. How insulting to the people who listened to the government three months ago, when we saw the last set of figures of slow economic growth and when people were told by this government that things would improve next time. This is next time, and things haven't improved and that is a big problem for the people who are depending on this government to deliver a stronger economy.

The economy is not working fine for everyday Australians. The economy is not working just fine for the 1.9 million Australians who are looking for work or for more work. It is not working fine for those hardworking Australians who haven't had a decent pay rise under this government and who haven't had a decent pay rise in seven years. And the economy is not working just fine for the parents who are making tough decisions about whether to pay their bills or whether to pay their rent and making tough decisions at this time of year about whether they might be able to afford to take the family out or whether they need to save that money to spend it on Christmas presents for their children.

The Prime Minister has said that the harder you work, the better you do. People are working hard. People are working as hard as they can and, actually, it is this government that is asleep at the wheel. Let's take a look at this government's record on the economy, because their record is nothing short of lazy. During their seven years in power, this third-term government has been overseeing the worst economic performance since the global financial crisis. Let's not forget that Prime Minister Scott Morrison was the Treasurer for three years, and he is all over this economic outcome for the country. What we've seen under this government is declining living standards. We've seen household debt at record highs. Let's think about what that means for people. That means that people are struggling, they're doing it tough and they're very much at risk of going under. Under this government, we've got 1.9 million Australians who are underemployed or unemployed, at the same time as this government is proposing cuts to Newstart. We've got business investment at its lowest since the 1990s recession. We've got wages that are growing at just one-sixth the pace of profits. Along with this government's extraordinary economic management record, we've got a doubling of gross national debt, which has hit $400 billion for the first time in our history. And the most recent record is yet another quarter of slow economic growth—just 0.4 per cent in the last quarter.

Let's think about this government's record on wages. This government's record on wage growth is the worst ever of any government, and it doesn't seem like it's going to be getting any better. The governor of the Reserve Bank says that wages growth is subdued and is expected to remain at its current rate for some time yet. That statement is not very good news for the millions of Australians who are waiting for a wage rise and waiting for this economy to pick up so they can do better for their families and do better in their communities. This weak wage growth, of course, is contributing to Australia's economy woes because, when people can't get the wages they need, they can't spend in their local community, and the economy slows even further. That's the pattern we've got under this government. This is a government that has no plan except to tell struggling Australians they should just work harder.

Question agreed to.