HOUSE OF REPRESENTATIVES, 7 OCTOBER 2020
In 2009, the coalition launched their so-called debt truck. It had on the side of it the figure at which debt was then projected to peak—$315 billion. That's a third of projected peak debt under the Liberals today.
If they were being honest then with this budget they would have launched their very own 'debt road train'. What does Australia get for $1 trillion—1 with 12 zeros after it?
We don't get the solutions to the economic problems that predated coronavirus. Last year productivity was going backwards. Wage growth was among the worst on record. We had problems in retail spending, in construction. New car sales were down. Business investment was in the doldrums. So from this budget we need some big aspirations. When Curtin and Chifley sat down towards the end of World War II and thought about what the postwar era needed, they didn't say, 'Let's put the place back together the way it was in 1939.' And similarly today our aspiration should be higher than the economy of 2019.
Last year we were in the Morrison stagnation. This year we're in the Morrison recession. We need to do better than both. We need to recognise that COVID-19 has been a huge hit to human capital. Of course, it's got the physical health impact, but it's got the mental health impact as well. It's hurt education, particularly among disadvantaged students who have gone from being three years behind to, perhaps, four years behind. In workplaces we've seen what economists call ‘automation forcing’, as firms have invested in machines, displacing workers and potentially making it harder to get unemployment back down again.
The right response to these challenges would've been to invest in education. Labor's always recognised that technology and education have to go together. Two of my favourite economists, Claudia Goldin and Lawrence Katz, say you can think about inequality as being like a race between education and technology. When you have them both running ahead you get growth with equity. When technology advances ahead of education then the gap widens. Low-skilled workers get left behind. That's a real risk for Australia, not just because of the automation forcing that I talked about before but because we've had our test scores going backwards under PISA. We've had a halving in the number of apprenticeships and traineeships. We've had a recapping of university places. It's harder than it used to be for a talented young person to win a spot at university.
What we've seen out of this budget is huge incentive for capital investment, an instant asset write-off which is going to cost the budget some $27 billion. The fact is that if you do that without investing in skills then you risk leaving workers behind. The workers who are going to be most at risk of being left behind are the over 35s. They're seeing their JobKeeper cut. They're seeing JobSeeker going back to $40 a day after the end of this year. They're seeing young workers who come with a wage subsidy for their employer. Fifty-four per cent of jobs are vulnerable to automation. There's a real risk that under this budget older workers will be left behind. Between now and the end of the year 160,000 people are forecast to lose their jobs, yet JobKeeper is being cut. One trillion dollars and there's no plan for tackling insecure work, very little for child care, nothing substantial for climate change.
The women's economic package is pretty much what you'd expect from a Prime Minister who names his chooks after former Prime Minister's wives. This is a government that's delivered sports rorts, reef rorts, Helloworld, Paladin, robodebt, 'DividendKeeper', 'BonusKeeper' and 'WaterGate'. So it's not surprising that Australians don't trust them not to engage in further pork-barrelling. Hope is not a plan. Despite over $1 trillion of debt, the 2020 budget doesn't set up Australia for a productive and egalitarian future.
Authorised by Paul Erickson, ALP, Canberra.