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Monday, 12 November 2018
Page: 7677


Senator McALLISTER (New South WalesDeputy Opposition Whip in the Senate) (10:48): I want to thank all my colleagues for their useful contributions to this debate on the Productivity Commission Amendment (Addressing Inequality) Bill 2017. This is a debate we should have more often. It's a shame that, at a time of income stagnation and rising inequality, globally and here, this is one of the few real opportunities that the Senate has been given to debate these issues, and it's only doing so because there is a private senator's bill before us, not because of a government bill to address these issues. Where is the government's legislation addressing income stagnation? What is their plan to address living conditions for Australians? What is their plan to tackle the cost of living? I'm not sure and I don't actually think they know either.

Over the course of this debate, colleagues opposite have spent some time explaining why they don't think it is necessary to have the Productivity Commission regularly and routinely examine inequality as part of its work. I want to review some of these comments because this debate has been on foot for some time and a lot has changed in the intervening period. One senator said:

I am thankful for the opportunity this private senator's bill provides me to speak a little about the Turnbull coalition government's program to reduce income inequality in this country. One of the coalition's flagship policies is of course the enterprise tax plan.

That was in February this year. There are three things clearly wrong with this statement: it's no longer the Turnbull government, they don't have a program to reduce income inequality, and the enterprise tax plan is no longer one of the coalition's flagship policies.

A number of those opposite, during the course of the debate, spoke about their preference for reducing the cost of living for average Australians rather than addressing questions of distribution. One senator opposite said:

First and foremost, this government is tackling the cost-of-living pressures on Australian households. … On the energy front, the National Energy Guarantee, unveiled by the Minister for the Environment and Energy in October last year, will further ease cost-of-living pressures on Australian households, with expected savings of up to $400 per year on their energy bills.

There is another problem with that statement, because, of course, there is now no National Energy Guarantee. The government's figures of $400-a-year savings were always a bit rubbery. Now, however, they're entirely hypothetical. It appears the only climate or energy policy this government has is Direct Action, and that is a policy that should have expired along with the Abbott government. The only policy they have to reduce electricity prices was to have Minister Angus Taylor ask power retailers to do it—to ask nicely. As he found out last week, that is a strategy that doesn't work. Power retailers have refused to provide the lower rates by 1 January as demanded by the minister.

Despite the absence of any program to address inequality or the cost of living pressures or wage stagnation, a number of those opposite opposed the bill on the basis that it was better to take action rather than commission another report. One senator said:

Directing the Productivity Commission to undertake this analysis and provide a report to government is going to do nothing, other than allow us to line the shelves in our offices with yet another report that may well never see the light of day, that will just gather dust and that will not make a jot of difference to the lives of those people we're talking about now.

That sentiment fundamentally misunderstands the nature of policy development. Reports shouldn't line shelves and gather dust. That's not why we commission reports. They should be read. They should be understood. They should be used to inform decision-making. Yes, action is important, but so is understanding the problem. Perhaps this explains some of the struggles that the Abbott-Turnbull-Morrison government have had in developing coherent policies: they don't value or understand evidence, and, as a consequence, they are unable to move in an organised way through cogent decision-making.

It is encouraging to see that the Productivity Commission has in fact already undertaken some of the work outlined in this bill. In August this year, the PC released a research paper on rising inequality. It's a useful first look at inequality that I don't think has been properly digested by Canberra. What does the report tell us about the state of inequality in Australia? It tells us that inequality has been rising over the last 30 years. It tells us that our progressive tax and transfer system has been a substantial factor in reducing inequality, typically lowering income inequality by around 30 per cent, and that government-funded services like health, education and public housing have an additional equalising effect. This is a positive story about how the role of government can deliver for Australians. Sound monetary, economic and social policies can and do reduce inequality. We know we have the levers we need to make change.

However, the PC report also tells us a story of persistent and entrenched inequality and disadvantage. Shockingly, despite 27 years of uninterrupted economic growth, the poverty rate hasn't decreased. That's nothing to pat ourselves on the back about. We've had 27 years of economic growth as a country, and what have we done for the poorest Australians? Not a great deal. According to the report, around three per cent of Australians are living in continuous poverty. Some Australians move in and out, but there is a core group of around 700,000 people that are in continuous poverty. I invite those opposite to consider what that might actually be like. The commission has, in fact, reported that poverty in Australia is increasing. This is essential information that governments need for assessing the state of inequality in Australia, and that is the point of this bill—to require the PC to regularly produce this information and to ensure that when they are doing their other work they have regard to the impact of other decisions on inequality in our society.

What is it that the PC recommends we do about inequality? During his address to the National Press Club about the report, the commissioner didn't talk about corporate tax reform as a solution to inequality and entrenched disadvantage; instead, he noted the very low rates of income growth. He talked about productivity growth and pointed to three key areas from the Productivity Commission's Shifting the dial report last year. These areas were higher workforce participation and personal wellbeing, through preventing chronic disease; more adaptable workforce skills, through practical improvements to secondary and tertiary teaching; and reducing the number and complexity of overly restrictive planning and zoning restrictions, to make it cheaper and easier to live and work in our congested cities. Those are ideas for economic reform that we don't hear spoken about here.

Despite the fact that our premier economic institution raises these, advances them, it is of no interest, apparently, to those opposite, who continue to hang onto the outdated policy prescriptions they worked up in the mid-1980s and are unable to let go of. None of those opposite mentioned any of these issues in their contributions. Senator McGrath suggested that we need to open up property investment for those in poverty and that tax concessions for property investment were really critical in addressing disadvantage. What nonsense. You'd be laughing if it weren't so offensive to the 700,000 people living in continuous poverty.

There's not just a moral imperative to take serious action in addressing poverty and inequality. It is also likely to have an impact on our economic performance. That is something the Productivity Commission would be asked to consider through its work as a result of the passage of this bill. There is no fixed divide between social and economic policy. It is a porous relationship. When we all do well together our economy does well also. Back in 2012, the BCA, the ACTU and ACOSS released a joint statement and they committed to work collaboratively to support Australians disadvantaged in the labour market. This statement made the argument that there was a level of income support required for jobseekers to allow them to live decently and respond to job opportunities, and below a certain level of income it impedes jobseekers' ability to get into work. It didn't just make the social argument; it made the economic argument too. It said that in doing so we would provide employers with access to workers who had the skills they needed in the workforce.

More recently, that's been built upon by a Deloitte and ACOSS report. It looked at the economic impact of raising the Newstart rate by about $75 a week. They estimate that the immediate stimulus provided by a decision of that kind would produce an additional 12,000 jobs in the first year. Reforms in social policy can have a direct impact on the economic outcomes of a community. Equally, economic reforms can affect social outcomes—for example, people's health and wellbeing and their ability to participate meaningfully in their community.

What would a comprehensive response to poverty from a federal government look like? You'd start with action to address income. It's not reasonable that so many people who are working still don't have enough money to feed their families. I went out to Foodbank's warehouse recently in Glendenning. They make the point that of the people they help each month they're not just helping the unemployed and the homeless; their large-scale survey suggests that 20 per cent of people who are in part-time or casual work experienced issues accessing food in the last year. This is not because people are failing to manage their budgets or just need a little bit more advice about income management. There is a working poor, people going to work who cannot feed their families.

And the payment system needs to be examined. In the case of Newstart, we will conduct a root-and-branch review of the payment system, should we form government, because we know that the rate is too low. We also need to undertake action to improve services. The Productivity Commission has made it very clear that services like health and education—those universal services—make a great deal of difference in ameliorating inequality in this country. That's why Labor, should we form government, are planning a very significant investment in public education, putting back all the money recommended by Mr Gonski and ripped out by the government over the past five years from our schools. That's why we're committing to make preschool available to all three-year-olds and four-year-olds. And it's why we continue to believe that Medicare needs to be funded properly and that the attacks on Medicare need to stop.

These universal services may not be enough for families who are in deep structural poverty. The literature suggests that exposure to poverty in childhood damages a child's development, their future productive capacity and their life prospects more generally. It has economic costs for our society, but surely the moral cost is much greater. Government already run a range of early-intervention programs delivered in the home to support those families. The question is: are we doing enough? As the Productivity Commission has made clear, there is a group of people for whom poverty is an unending reality, and we need to come to grips with it as a society. Unfortunately this is not a challenge that seems to be of interest to the government. The coalition came to power with a very limited set of fixations. They're fixated on unions and on working people's organisations, they're fixated on delivering tax cuts to very big businesses and they're fixated on stopping action on climate change. They struggle to find enthusiasm for any issue that doesn't involve their ideological obsessions, and unfortunately that is most issues. That's why this government find themselves without any plan whatsoever to address income stagnation. That's why they find themselves without any plan to attack poverty.

Having the Productivity Commission report regularly on inequality, as proposed in this bill, will drag these issues back onto the table, because that is where they belong. Australians are facing the very real consequences of policy inaction. Income inequality—sustained poverty—creates a multitude of barriers that affect people's living standards, affect their social participation and extract an enormous human cost. It's clear that the government have no real interest in addressing those concerns. When they do talk about welfare, their focus is on punitive measures. They are focused on monitoring payments and overpayments, chasing up debts from extremely financially disadvantaged groups, and income management. There's no thoughtful discussion about tackling disadvantage. There's no thoughtful discussion about the social and economic benefits that come from investing in our poorest people. This is a missed opportunity—a missed opportunity in social policy as well as a missed economic opportunity. It should be a priority of the government to address this issue. Instead, they choose to simply engage in a war of words.

There's no more hiding behind rhetoric about what past Labor governments may or may not have done. The government have been in power for five years, and their inaction is having serious consequences. Poverty isn't a force of nature; it's not something that exists in isolation. It is forced on people by social and economic structures that inflict harm, and it affects our most vulnerable. Overwhelmingly, it is children and the elderly who bear the brunt of food insecurity and income inequality. Just today we've had reports that the government is nearly halving the funding for Foodbank, our largest food organisation, which nationally provides emergency relief to on-the-ground charities, reaching thousands and thousands of vulnerable Australian families. We should be doing more, not less, to support these people. Addressing poverty in Australia should be core business—a key priority for this parliament and a key priority for the government. But that's not the case. We need to change our institutional arrangements so that now and forever these issues cannot be ignored. I commend this bill to the Senate.

The PRESIDENT: The question is that the bill be read a second time.