Andrew Leigh

Today I spoke in Parliament on inequality in Australia and the unfairness of the government's Budget.

PRIVATE MEMBERS BUSINESS

Monday, 23 June 2014

Mr Leigh: I move that this House:

(1) recognises that:

(a) since 1975, earnings at the 90th percentile have risen three times faster than earnings at the 10th percentile; and

(b) since 1980, the top 1 per cent income share has doubled, and the top 0.1 per cent income share has tripled; and

(c) overall, inequality in Australia is now higher than it has been in three-quarters of a century;

(2) notes that:

(a) analysis by NATSEM (which the Prime Minister once described as 'the most reputable and authoritative modelling organisation in Australia') shows that the 2014-15 budget will redistribute income from lower-income households to higher-income households;

(b) by 2017-18, NATSEM analysis suggests that the budget will cause:

   (i) across all households, a 2.2 per cent drop in disposable incomes in the bottom quintile, and an 0.2 per cent rise in disposable incomes in the top quintile;

   (ii) among couples with children, a 6.6 per cent drop in disposable incomes of households in the poorest quintile; and

   (iii) among single parents, a 10.8 per cent drop in disposable incomes of households in the poorest quintile; and

(3) calls upon the Government to rethink a budget that not only breaks promises and produces higher deficit figures than in the Pre-election Economic and Fiscal Outlook 2014, but also fails the 'fair go test' by hurting low and middle income families.

One of the great challenges of politics is to put yourself in the shoes of others. In the framing of this budget I really question whether the government has been able to do that. If the Prime Minister and the Treasurer had placed themselves in the shoes of the poorest sole parents in Australia, it is doubtful they would be taking away one-tenth of the income of those families.

If they had placed themselves in the shoes of people like the vulnerable young Australians I met recently in Devonport, a part of Australia where unemployment is nearly twice the national average, I doubt they would be thinking it was reasonable that young, jobless people in high unemployment areas should sleep in their cars or on the streets for six months before they get unemployment benefits.

It appears to me that the Treasurer, with his strong understanding of how to invest his own money, is unable to put himself in the shoes of a pensioner who is ignorant of financial matters and who would therefore be hurt when the government strips away financial advice protections. I do not see any evidence that the government has been able to put itself in the shoes of people living on a low-lying Pacific atoll, who will be hurt by climate change as sea levels rise. I also worry that so many members of the government have not been able to think about how a same-sex attracted young person might feel as they attend weddings, knowing that they themselves are not able to enjoy the same ceremonies. While this budget has received criticism for breaking promises and for increasing the deficit, the real reason that I think Australians are condemning this budget is that it fails the 'fair go' test.

Over the last generation, Australian inequality has risen markedly. We have seen earnings of the top 10th go up three times faster than earnings for the bottom 10th. The Prime Minister's No. 1 business adviser and climate change sceptic, Maurice Newman, thinks that there is a wages problem in Australia. But his concern is not about CEO pay, which has gone up twice as fast as the pay of average workers; it is about the minimum wage, which is rising slower than average wages. Then there is the claim about a wages break-out that was given a lie last year, when wages for the first time in many years grew more slowly than inflation.

A recent report, put together by Australia 21, The Australia Institute and the ANU, Advance Australia fair, was sparked off by work that I had done inBattlers and Billionaires, in telling a story of inequality in Australia. The report brought together a range of people to discuss the problem of inequality and what to do about it. To me, it was particularly striking to hear John Hewson, former leader of the Liberal Party, at the launch talking about the great inequity that was at the heart of this budget.

When Australians see a government which is willing to give $50,000 to millionaire families to have a child, which is going to raise the non-concessional superannuation cap from $150,000 to $180,000, a measure that will surely benefit, almost entirely, millionaires, and which sees its priority the repeal of the minerals resource rent tax, as beneficiaries will be mostly mining billionaires, they wonder why the government is giving so much to those at the top after a generation of rising inequality. They worry deeply about the impact on those at the bottom. Vulnerable Australians are being hit by the withdrawal of legal aid. They are suffering from the government's attempts to strip financial protections away from pensioners—a measure that will surely be good for bankers, but will almost certainly be bad for battlers.

Through this budget, we have seen the analysis carried out by NATSEM, which Prime Minister Tony Abbott once described as:

… the most reputable and authoritative modelling organisation in Australia.

The Prime Minister's No. 1 modeller says that the budget is redistributing income. It is not redistributing, as the Australian social safety net has traditionally done, and as has been supported by both sides of the House, from those who have the most and who have benefited the most over the past generation to the most vulnerable. No. It is redistributing from the bottom to the top. This budget is Robin Hood in reverse. It is a 'sheriff of Nottingham' budget, which takes away from those in the bottom quintile and which, by 2017-18, will see a 0.2 per cent rise for the top but a 2.2 per cent rise for the bottom. It is an unfair budget, the most unfair in many a generation.