Government needs to face up to challenges in economy - Speech, House of Representatives

HOUSE OF REPRESENTATIVES, 22 OCTOBER 2019

Twenty-seven-year-old Robert Chang delivers food for work but it is his second job. He works long shifts as a postie and, after he's finished that, he works about 13 hours over the weekend for Uber Eats, delivering meals in south-west Sydney. He told the ABC:

'I am pretty much just no-lifing it—work, eat, sleep, rinse, repeat.'

That is reality for many Australians in the modern economy. We know what the other side is going to say over this. We know they will say there are no problems in the Australian economy, because the Prime Minister told their party room today that, unless you're facing down a nuclear Holocaust, things are doing alright. So, unless you're in the middle of the Cuban Missile Crisis, no complaining. They will tell us on this side that we are irresponsible to point out the challenges in the Australian economy. But the fact is it is irresponsible not to warn of the storm clouds gathering on the horizon.

The Australian economy today faces five big challenges: productivity, growth, jobs, wages and inequality. I will go through them in turn. Productivity is the engine of the economy and it has basically stalled under this government according to its own Productivity Commission. After a generation in which labour productivity had run at about two per cent, it's fallen most recently to 0.2 per cent, just one tenth of its previous level. The Productivity Commission calls the results 'troubling' and 'mediocre'. In fact, productivity is going backwards in farming, in mining, in construction, in transport and in retail. In those sectors, workers are producing less per hour than they were the year before. The Productivity Commission often talks about capital deepening but now it has had to come up with a new term to describe what's going on under this government—capital shallowing.

Treasury's own research finds that Australia is producing fewer start-ups and there is less job mobility. The Harvard Atlas of Economic Complexity found we are frighteningly undiversified. If you look through its rankings: Morocco, 90th; Uganda, 91st; Senegal, 92nd; Australia 93rd. The fact is we have too many eggs in too few economic baskets. And then there is growth. GDP per capita growth over the past four quarters has gone as follows: minus 0.13 per cent; minus 0.23 per cent—that's a per capita recession; 0.08 per cent; 0.04 per cent. If you add those together, you get a negative number. Over the last year, GDP per capita has bone backwards. Total output in the Australian economy per person has shrunk, not grown. But you won't hear that from the Treasurer. From the Treasurer, you will hear talk of 29 years of interrupted economic growth. What he means by that is he wants to take credit for population growth. This government is happy to demonise migrants any day of the week but underpinning their economic message is the fact that the population is growing. That's not much help to the Australians who are seeing their living standards falling.

It's not just the headline growth figure. We've had disappointing figures on new car sales, building approvals and retail sales. The Treasurer promised a cash splash in July and August, but all we got was a retail trickle. When you have bond yields up, the gold price up and the cash rate at the historically low level of 0.75 per cent, you know you've got a serious growth problem. The fact is that no-one believes the government's heroic growth forecasts in their last budget. The IMF doesn't believe them, Deloitte doesn't believe them and Australian families at their kitchen tables know what's happening. We've got collapsing confidence and weak economic growth—the direct consequence of a lacklustre, rudderless government.

When it comes to good news, the Prime Minister will shout it across the chamber. When it comes to bad news, he's quieter than Osher at a wedding ceremony. The fact is that Australians are relying on the Reserve Bank to support the economy. As Greg Jericho pointed out, if you're relying on monetary policy but you have no fiscal policy, it's a bit like swimming with one arm: it's twice as hard and the chances of drowning are twice as large. Many Australians are feeling like there is more month than money when they do their household finances.

When it comes to jobs, the government likes to pat itself on the back, again for population growth and the employment numbers that come with that. But, if you compare our unemployment rate with that of Britain or New Zealand or Germany or the United States, you'll find our unemployment rate is at least a percentage point higher. In the United States, they have now got unemployment at three-point-something, but under this government it's always been five-point-something. That means that there are hundreds of thousands of Australians who would have a job if we had those countries' unemployment rates -- but don't have a job under the Liberals.

Right now, for every available job, there are four people looking for work. In South Australia, there are nine jobseekers for every job opening. In Tasmania, there are 14 jobseekers for every job opening. Anglicare Australia has shown that the share of jobs available to someone with no qualifications and no experience has fallen from 22 per cent in 2006 to just 10 per cent today. If we had lower unemployment, it would be harder for employers to indulge in sexist or racist prejudices. We'd see more Indigenous Australians and more people with disabilities in work, because they are often the last people to be hired.

We have a wages slump today. Australian wages have been in the doldrums throughout the period the government's been in office. Over the last six years, real wages have grown just 0.7 per cent a year. In the six years before that, they grew at 1.8 per cent a year, and that was a period spanning the global financial crisis. We've got wage theft, penalty rate cuts, public sector wage caps, slow productivity and declining unionisation contributing to the lousy wage outcomes in this country, to the worst wage growth on record, and it's under this government.

Finally, we've got the challenge of inequality. According to ACOSS, more than one in six children are living in poverty. We had a report today, on the front of one of our newspapers, showing that two million Australians can't afford dental care. A report by Alviss and St Vincent de Paul found that the rate of electricity disconnections has gone up as many Australians deal with the fact that the Morrison government doesn't have an energy policy. Wealth inequality peaked in 2017-18, but we know the Australian Bureau of Statistics were pressured to make it a good media story, creating a false narrative of so-called ‘stable inequality’. The fact is, putting a big pair of rose-tinted glasses on inequality doesn't change what many Australians feel today. It doesn't change the fact that many Australians recognise that inequality is rising under this government.

As the Prime Minister won't listen to the experts, I hope we can get him to listen to himself. In the Prime Minister's first speech in 2008 he said:

... the storm clouds are gathering. We must cast our eyes forward and embrace a new round of economic reforms.

Now his approach seems to be: 'Storm clouds? What storm clouds? Let's just close our eyes and hope for the best.' If the economy were strong, you know full well that the Liberals would be claiming credit. But, when the economy is struggling, they won't take responsibility.

Rather than getting the economy going again, all we have is finger pointing, blame shifting and wedge politics. They won't boost productivity, they won't raise wages, they won't lower unemployment, they won't boost growth and they won't fight poverty. What is the point of the Morrison government?

I will close with the story of Peter Cooney. Peter is a 58-year-old bloke from Perth who had to quit his job to care for his mum when she got sick. He soon found himself caring for both his mother and his sister, who died within 10 months of one another. After their deaths, the former brick paver was unable to get a job. He's facing off against too many other applicants. He has no work and, thanks to the meagre rate of Newstart, essentially nowhere to live. He often sleeps in his car. When Peter was asked about the government's favourite talking point, 'The best form of welfare is a job,' his response was:

Well, I'm quite happy, if they can find me a job, I'd rather be working. But unfortunately, with my qualifications and my age, it's not so easy.

This is a man who used to manage a hotel in Cairns. He’s a man who has worked as a brick paver. He’s a man who quit his job to care for his relatives, who did the right thing by his own family, but doesn't have a government who will do the right thing by him.

Peter is just one of thousands of Australians who are asking that question: what is the point of the Morrison Government?

ENDS

Authorised by  Paul Erickson, ALP, Canberra.


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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.