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Wednesday, 23 May 2018
Page: 4386


Mr CHAMPION (Wakefield) (17:29): That was a fine contribution by my colleague the member for Canberra. I don't think I could quite match it, though I do like the member for Ryan and commiserate with her, as I think all members do. Politics is a tough life, and even tougher when your protege seeks to replace you. It's a pretty cruel act, even if you take gender right out of it. It's a bit of a dog act, isn't it, to do a deal with someone, to be their protege, to accept their support and advice and all the rest of it, and then turn on them come preselection time. It's not a very good entry into this place, and I suspect—

Ms Brodtmann interjecting

Mr CHAMPION: Yes, it does. It will cost the young man in the long term, I suspect, when he comes to this place. He'll come with that hanging around his neck.

But I really want to talk about taxation and about wages, the two things in this budget that really tell you about the government's way of doing things, their priorities in doing things and their approach in doing things. This is a contest of values, and, of course, we've got the government's values, which are to play political games with people's taxes and political games with the nation's fiscal strategy. The government—and we've made this clear through the amendment to the second reading motion for the Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018—can have the tax cuts for 1 July 2018 sail through this place, if only they split the bill. They can split the bill and have the tax cuts for 1 July 2018. Indeed, they could adopt Labor's plan and have increased tax cuts for 1 July 2018 without delay, without political games and without any problems, and then we can properly debate stages 2 and 3 and their impact on the budget. Of the $140 billion of costs that the Treasurer refers to in question time, we know that most of those costs lie over the medium term in stages 2 and 3, so why not split the bill, have the tax cuts secured for 1 July 2018 and have all those other tax cuts properly debated in this House and not delivered on the never-never like this government would have us do?

There are important reasons for this. Basically, we haven't been given the full picture by the government about their taxes. We don't know the full implications of those on higher incomes or on the fiscal strategy. We do know that the government's plan to deliver flatter taxes will mostly benefit those on high incomes—and you don't need to believe me.

Ms Brodtmann interjecting

Mr CHAMPION: Yes, who would have thought this government wants to deliver for people on higher incomes!

But we know that this budget is built on some other issues. It's not just about the sorts of games they're playing on taxes—pretty pathetic games in question time, trying to turn this into a choice for Labor. It's not a choice for Labor; it's a choice for the government to split the bill and have it sail through this House. Then consumers and taxpayers and everybody else, including small business, will have certainty. Arguably one of the most important things that we can do for the public and for small business is to have that certainty out there. But of course the government won't split the bills. They'll try and play this ham-fisted political game and, of course, that will have an impact on the real economy.

The other area which I think this budget has issues with is wages policy. And we know this because the government's own budget papers, Budget Paper No. 1, actually talks about it. It says:

While wage growth remains subdued, it is expected to strengthen as growth in the economy picks up to an above-potential pace and spare capacity in the labour market is absorbed.

But then later it says:

Domestically, there are key uncertainties around the strength of the pick-up in non-mining business investment and the degree of spare capacity in the labour market. There are also risks around future household consumption and saving behaviour.

That's why Moody's have said:

… uncertainty persists on whether wages growth will pick up significantly enough to support revenues.

Of course, the Commonwealth Bank says:

Wages are the key to many parts of the economic and policy story at the moment. A sustainable improvement in the Budget bottom line is difficult to achieve without the revenue flow from higher wages.

So this budget is built on the presumption of wages growth, but this government is doing everything in its power to send a message not just to employers but to workers as well that they shouldn't ask for a pay rise. We've had the government's support for penalty rate cuts for hospitality and retail workers.

Ms Collins: And more to come on 1 July.

Mr CHAMPION: And more to come on 1 July, as my colleague points out. We've had a sort of witch-hunt on trade union officials and now the rather bizarre spectacle of one blackmail charge after another on union officials—blackmail charges for asking for pay rises. It is quite extraordinary when you think about it. It's a pretty 17th or 18th century approach to industrial relations. Of course they've fallen over time and time again, but of course that sends a message. If you're putting trade union officials in the dock all the time, that sends a message to workers. I don't think you can expect a retail worker or hospitality worker on a casual income to march into the boss's office and say, 'I want a pay rise.' It doesn't exactly provoke militancy in the workplace.

Of course, we've had Paul Keating today in the Fin Review writing about what is a very big problem, I think. He says:

What is concerning many people is the possibility that one of the key drivers of a market economy—the link between real wages growth and the growth in labour productivity—may have lost its magic.

He goes on to ask rhetorically:

Are we living in a new world where the structure of the economy has changed, where the bargaining position of workers has declined—and declined to such an extent, that they can no longer secure the benefits of their own productivity?

That is a pretty critical question, because we have a budget, on one hand, built on the expectation of wages growth accelerating from a miserable 1.9 per cent to 3½ per cent, yet the policy drivers are not promoting that. I would disagree with the former Prime Minister in this respect: I don't think it's some magical thing. I don't think that this is something that's a product just of the economy itself. This is a product of this government and the policy decisions this government is making about wages. On one hand, there are heroic assumptions about wages growth, and then, on the other, you've got this situation where the government is sending this message to every small business: 'Cut penalty rates.' It's sending this message to the public through its policy: 'Don't ask for a pay rise.' There was an Age article the other day about wages called 'Stuck in the mud', and one of the things it said was that 1.3 million workers in retail—think about the effects of this on the real economy—have had a real wage cut of 0.4 per cent. Those 1.3 million workers have had a real wage cut. Of course, we know that's what penalty rate cuts do to hospitality workers. We know that that echoes through the economy. We have problems with out and out wages theft. We have a problem with superannuation theft.

In the seat of Mayo, I'm no fan of the Nick Xenophon team—I think most members understand that from my previous utterances—but I can tell you I'm profoundly unimpressed with the Downer dynasty now popping its head up. I'm not against political families. I'm not against politicians' kids seeking political careers, but they've only ever had one idea: the Liberal Party and cutting wages. Georgina Downer, when she was living in Melbourne and working for the IPA, said on David Speers's program, 'The minimum wage itself is very well for people who already have a job, but it actually represents quite an obstacle'—

Ms Henderson: Point of order. My point of order is that I would ask the member to return to the subject of the bill in debate. He's not doing that at the moment.

The DEPUTY SPEAKER ( Mr S Georganas ): I thank the member for Corangamite for her advice. I'm listening carefully to the member for Wakefield—

Mr Champion interjecting

The DEPUTY SPEAKER: who hasn't been given the call yet, but will be in a moment. I'm listening very carefully to ensure that he does keep within the discussion of the bill. The member for Wakefield.

Mr CHAMPION: Well, the bill relates to the government's fiscal strategy, and its fiscal strategy relates to wages. I'm just relating all the matters in the economy. Tax cuts relate to wages and the budget assumptions are based on wages growth. Of course, you have a candidate in Mayo who doesn't believe in any wages growth and doesn't like the minimum wage. I'll finish the quote. In her own words:

… Australians who are out there looking for work and might not be able to get jobs because employers aren't able to afford them because of these artificially high wages that are set by the Fair Work Commission.

That's a quote

Ms Henderson: Point of order.

The DEPUTY SPEAKER: Before you make the point of order, I've been listening very carefully. There is a slight connection, a broad connection—a connection that I have to say is throwing out the bone. I take your point of order.

Ms Henderson: At the risk of stretching the friendship, I would just remind the member that he should not be defying the chair and he should maintain his debate to the subject nature of the bill/

The DEPUTY SPEAKER: The point of order is taken. The member for Wakefield will return to the bill.

Mr CHAMPION: Let me assure the House I'm not friends with the member of the Corangamite. I'll be doing all I can to see her replaced by the Labor candidate in Cox or Corangamite or anywhere else.

The DEPUTY SPEAKER: I ask the member for Wakefield to stick to the subject.

Mr CHAMPION: What she believes in is a magical world where the budget predicts higher wages but government policy acts against it. You can't do that. It's a fiction and a fraud on the public. The member for Corangamite should know this. This is why she gets up and protests when we talk about the fact that their candidates want to neck the minimum wage.

What was the approach of the government to the minimum wage and the Fair Work Commission? Zero—that's what they want. They want to back employers in, they want zero wages growth at the minimum end and they want to hand out billions of dollars and wreck the country's finances by this irresponsible Reaganesque tax cut on the one hand. They want to cut services to schools and hospitals, and then they want to build their budget on heroic assumptions about wages. Don't just believe me; it's also the Commonwealth Bank, Moody's and Saul Eslake. The area I think is questionable is the forecast for wages growth in the final two years of the forward estimates period and, obviously, what that does for personal income tax. You come in here and talk about bracket creep, but it's hard to get bracket creep in your economy if there are no wage rises, and you're doing everything you can—

Ms Collins: They're only talking about bracket creep at the high end.

Mr CHAMPION: Yes, bracket creep at the high end. Bracket creep for bankers is what they're interested in, not for workers. So we have this situation and it's a real problem.

Later on in the government's own budget it talks about the international outlook. If I can find it—I did leave myself some things. This is the problem with the modern economy, and the member for Corangamite should listen to this:

Labour market conditions are tightening, especially in Japan, Germany and the United States—unemployment rates are at multi-decade lows.

Despite stronger labour markets and a pick-up in overall economic performance, wage growth and inflation have remained largely subdued.

Why is it subdued? I'll tell you. In America it's subdued because they'll never give the working man or woman a pay rise. That's why it's subdued. If you try and organise in a trade union over there you get busted. You lose your job. That's what happens. Union activists are regularly sacked. In this country we have a situation where exactly the same things are happening. People are getting stuck into the minimum wage and getting stuck into penalty rates. This is a matter of government policy, with the anti-trade union rhetoric of those opposite. Yet they have the temerity and gall to build their budget forecasts on some magical lift in wages growth. Well, it's not going to happen for ordinary working people unless government policy supports it. That's why we need a Labor government.