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Monday, 18 February 2008
Page: 502

Mr BUTLER (1:36 PM) —I am honoured to rise today to address the House as the new member for Port Adelaide. While doubtless some of my colleagues, including the member for Bass, will feel obliged to protest, the simple, objective truth of the matter is that there is no better electorate in the country for a Labor Party MP to represent. The community of Port Adelaide is a fiercely proud and tribal group, characteristics best epitomised by our famous football teams. As with all other major port communities in the nation, its history is built heavily on the struggles and achievements that took place on the waterfront and in the families which supported those workers. The local Aboriginal people, the Kaurna people, continue to have a strong attachment to the area and I pay respect to their elders and that continuing attachment.

I also have the honour today of formally taking over the reins from Rod Sawford in representing Port Adelaide. Rod’s passionate style of representation of his community and of his favourite policy area, education, was a credit to him. I wish him, Aldona and their family all the best for the future. It is impossible to take this mantle without feeling the heavy presence of Mick Young standing over your shoulder. Twenty years on from Mick’s retirement as the member for Port Adelaide, his name is still recalled with deep affection and respect at almost every meeting and event that I attend. I am acutely aware that I have big shoes to fill.

This House sits at a time of significant economic challenge. It is timely, therefore, to say something about the former government’s economic management credentials. One of the most exciting things about 2007 was the way in which our party reclaimed its economic management mantle, a mantle earned through the hard work of economic reform through the Hawke and Keating years. Those were serious reforms and set the nation up for the 16 years of uninterrupted growth that we have experienced to date. By contrast, the former government assessed that it was simply able to surf the wave of the best terms of trade our nation has enjoyed in decades and a once in a generation mining boom. Even with those blessings, however, the former government oversaw a profound unbalancing of the economy. Australia is now one of the most heavily indebted nations in the developed world. The member for Higgins yielded the economic reins with foreign debt tipping around $600 billion—or about 60 per cent—of GDP, a percentage matched by only one or two developed countries in the world.

The current account deficit remains stuck at six per cent of GDP. Without the amazing terms of trade we currently enjoy, it would be much higher. It is interesting to compare that record with a similar economy, Canada, which 10 years ago, had a current account deficit stuck at around three per cent. By contrast with Australia, Canada has, through the resources boom, been able to turn that deficit into a surplus.

The former government leaves a legacy to Australia of a $5 billion deficit every month, which we are forced to service through one of the highest interest rate regimes in the developed world and a seemingly ever-appreciating dollar. Fortunately, this sloppy approach by the former government to our long-term economic health is salvaged somewhat by the national savings base of more than $1 trillion underwritten by the Hawke-Keating decision to create compulsory occupational superannuation.

Our current inflationary pressures are a further legacy of the former government. For some time now, the quarterly CPI figures have masked a two-tiered dynamic at play with consumer prices. While the prices of essential items were increasing by four per cent to six per cent per year, the member for Higgins hid behind a CPI figure that has been depressed by a continuing decline in the price of many discretionary items such as new cars, consumer electronics and the like. While that is a boon for consumers with spare dollars in their pockets, pensioners and low-paid workers must spend their money on the essentials of life.

The ABS figures for calendar year 2007 reveal how difficult that is. During those 12 months, rents rose by 6.4 per cent, health costs by over four per cent, vegetables by 8.6 per cent, bread by 8.8 per cent, milk by 10.1 per cent, education costs by over four per cent and transportation costs by 5.6 per cent. The former government also fiddled while Australia slipped into one of the worst housing affordability crises in the developed world. From 2000 to 2005, residential property prices in the developed world rose by over US$30 trillion. That increase, equivalent to about 100 per cent of the combined GDP of those countries, represents the biggest asset bubble in human history. Australia’s price increases were right at the top of that table. By 2005, Australia’s price-rent ratio was 70 per cent higher than the 25-year average to 2000, an increase in the ratio that far outstripped other overheated property markets such as the UK and the US. Logic and experience dictate that a price-rent ratio so far removed from the historical average will see rents rise, prices fall, the market stagnate or a combination of all three. Other than periodically injecting a bit more froth into the housing bubble, the former government did nothing to confront this looming crisis. The Rudd Labor government, by contrast, has a plan to make housing more affordable for all Australians.

The inflationary pressures now buffeting Australian households are, as the Reserve Bank has reminded us time and time again, a product of well-known capacity constraints in the economy. In spite of swimming in the highest tax receipts in Australia’s history, the member for Higgins will be written into the history books as the Treasurer who neglected to renew Australia’s infrastructure. Instead of putting together a serious plan to deal with skills shortages, the former government played games and squandered scarce training dollars in the pursuit of ideological dogma. It is well known that increases in labour supply in recent decades have overwhelmingly come from increases in female work participation rates.

Under the Howard-Costello government, Australia’s female participation rate became stuck at levels 10 per cent lower than those seen in Canada and Britain and 15 per cent lower than those seen in Scandinavia. Government has a leading role to play in lifting the participation rate by those extra percentage points. Instead, we remain one of only two OECD countries without paid maternity leave. The last decade saw us fall to the back of the pack whereas we once led the way in providing high-quality, affordable child care for working families.

The former government continually ignored community calls for a better balance in this country between work and the other parts of our lives. I was privileged in recent years to chair Barbara Pocock’s Centre for Work and Life at the University of South Australia. The work of that centre, and others like it, clearly shows that there is a way we can continue to have a productive economy while still allowing Australians to enjoy family and leisure time. The Rudd Labor government’s commitment to these issues will help bring more women into the workforce and help clear one of the key capacity constraints driving inflation and restraining growth.

Many of the sins of the former government I have described were sins of laziness. More egregious a sin, however, was the steps taken by the former government to exacerbate a creeping growth in economic inequality in this country. The long boom has seen an explosion of low-paid jobs. About half of all new jobs created in the 1990s paid less than $300 per week gross and almost 90 per cent paid less than $500. In the same period, the real weekly earnings of the lower paid ABS occupational categories—for example, sales and clerical workers and elementary service workers—declined by 14 per cent.

In their submissions to the annual national wage case, the former government tried to depress the wages of low-paid workers even further. In the decade to 2006, the minimum wage moved by an average of $14.70 each year before tax if you were full time. The former government submissions, if successful, would have seen those modest increases limited to $9.70. Combined with the now repudiated Work Choices laws, this represented a fundamental challenge to the postwar economic consensus that guaranteed all Australians a fair share of the nation’s growing productivity and wealth, a consensus enshrined not so much in the tax transfer system, as was the case in Europe and the UK, but in the wages system—a compact described by academics as ‘the workers’ welfare state’.

The implication by the former government that low-paid workers were somehow not contributing to the nation’s growing productivity was an insult. In the early 1990s, for example, a typical commercial cleaner in the Adelaide CBD would have been allocated a three-hour shift to clean one floor of a major building. Now that same cleaner will probably be required to clean two floors and would be lucky if their shift had not been reduced to two hours.

Although paid work had come to be taken in the postwar period as a guarantee against poverty, the Howard years saw the re-emergence of sizeable numbers of wage workers officially classified as living in poverty. NATSEM has estimated that 27 per cent of adults who now live in poverty earn a wage. The Smith Family has reported that fully 45 per cent of Australians living in poverty live in a household that includes a wage earner. If there is one thing only that I could do in my time in this place it would be to get a better deal for low-paid workers in Australia.

While the former government provided no leadership in this area, there are exciting examples available from the Blair and Clinton governments. Those governments deployed a mix of modest increases to the minimum wage combined with significant tax credits. An overemphasis on tax credits, however, involves an effective subsidy to employers who continue to pay low wages. I believe that we should reassert the right of workers in Australia to receive a wage that enables them to live in modest comfort. That wage should be benchmarked to the needs of an individual, with the family tax benefit system left to deal with the needs of dependants.

I was privileged to serve over the past several years as a member of the South Australian Social Inclusion Board. While the concept of social inclusion has existed in Europe for a few decades, it is relatively new to politics in the English-speaking world. Tony Blair established the Social Exclusion Unit early in his prime ministership, and Mike Rann led the way in importing the approach to Australia. As is the case with so many cutting edge global policy innovations, the idea of a multidimensional approach to serious disadvantage completely eluded the former government. The results of such an approach, however, are on the record.

South Australia’s Social Inclusion Initiative has seen our state reduce its homeless numbers—the only jurisdiction to do so. I chaired significant parts of our state’s review of our mental health system. The resulting report by the Social Inclusion Board has been overwhelmingly adopted by the Rann government and will see the most sweeping changes in our treatment of mental health issues in a generation. As well as the capacity to deal with seemingly intractable issues of disadvantage, the social inclusion model brings a new approach to government policy development and service delivery. Our experience shows that solutions to serious disadvantage usually cross departmental and ministerial boundaries—boundaries that are too often jealously guarded. The Social Inclusion Initiative has made steady progress to a model of joined up policy development and service delivery, and I am tremendously excited by the commitment of the Deputy Prime Minister to take this initiative to a national level.

The election of a new government also brings an opportunity for Australia to reposition itself within the international community. Labor’s approach to international relations rests on the three pillars of our alliance with the United States, our engagement with Asia and our participation in the forums of the United Nations. This approach reflects a rationalist concept of international relations which I strongly support: a middle ground between the realism of bilateral relations with great powers and the liberal internationalism enshrined in the UN. In an increasingly globalised international environment, the time of the English school of rationalist thinking on international relations has come—the thinking of writers such as Hedley Bull and Martin Wight. The rationalists recognised the reality that ours is a system of autonomous states that pursue their own interests. They also saw, however, that an international community of those states had emerged which could, in many instances, be reconciled with those interests.

I am a strong believer in an activist international community that is willing to exercise influence and, if need be, power to prevent systematic abuses of human rights. As the son of someone sent to Vietnam at a young age to fight in a highly contested example of such intervention, I am acutely aware of the dangers of that approach. Such interventions must be supported by a consensus of the international community and not just a few powerful players, and the intervention must be based on a plan that is achievable and time-bound and that is not simply likely to create different problems.

A well-known South Australian sports commentator once said, ‘Fortune favours the lucky,’ and I have certainly had my share of luck over the years. I will never forget the opportunities I received in working for the Liquor, Hospitality and Miscellaneous Union for the past 15 years. I got to work with some of the hardest working but most poorly rewarded members of our community: cleaners, hospital workers, childcare workers, workers in aged care and disabilities, hospitality and tourism workers and people working in a range of manufacturing sectors.

At 26 I withdrew my candidacy for a traditional Labor seat in the state parliament to take on the role of Secretary of the LHMU, a decision I have not once regretted. As well as the opportunity to continue to work daily with those workers, I was given the experience of managing a budget of $7 million to $8 million and 60 staff and dealing with employers that ranged from small community based childcare centres to some of the biggest companies operating in this country. To all those South Australians who have been a part of the LHMU in those years, and particularly to the delegates, staff and officials, I say my first thanks. They are noble and brave people.

For their mentoring and support, I thank Jeff Lawrence, who will be a great ACTU secretary, and his inspirational successor, Louise Tarrant. At a national level I would also like to thank Brian Daley, Helen Creed and Michael Crosby for their advice and friendship. Locally, I made too many friends at the ‘Misos’ to name, but I would like to mention my most recent leadership group of Chris Field, Sharon Holmes and David Di Troia, who I am very pleased to have succeed me as secretary, as well as my friend and PA for 14 years, Katerina Mesidis, who I will miss terribly.

I also received great support from many different unions in South Australia, none more so than from the Australian Services Union, with which I enjoyed a close friendship for all that time. My oldest friend in the party is Patrick Conlon, who has one of the sharpest minds I have ever encountered and without whom I would likely not have taken this rather challenging, and some might say questionable, lifestyle choice. I have also benefited from the close support over many years of Penny Wong and Jay Weatherill, among many others, and all of us learned about national politics if not quite at the knee of Nick Bolkus then at the barbecues of Nick Bolkus. I have learned an enormous amount from Don Farrell, who is soon to join us elsewhere in this building. His dignified and strategic approach to politics is an asset to our party.

One is nothing in this place without great staff. Already I have wonderful support from Julie, Lisa, Christine, Dung and Tim; but I would like particularly to thank David Gray, who has long been something of an adviser to me and who I am glad has joined me in my new career. I have also been lucky to have a wonderfully supportive family. My late grandmother knew my great-grandfather and my great-great-grandfather, who were both Tory premiers of South Australia. I think she had resolved that it was time for a change in our family’s political leanings. My mother raised my brother and me, and I never ceased to be amazed at her capacity to show us such unending love while having to keep all those balls in the air. I have enjoyed a great friendship with my father, David, and my siblings, Dan, Victoria, Rowan and Lydia, and have greatly appreciated the advice and companionship of my stepfather, Kevin.

The most important people in my life, though, are my wife, Suzanne, and my two gorgeous children, Ellie and Isaac. Suzanne and I have been best friends since we were teenagers, and I cannot imagine, and dread, what type of person I would be without us having been side by side all those years. While I have great hopes for what I can achieve in this place, my heart will always be back in Adelaide with them. I thank the House for its attention.