Speech to the Australian Parliament, House of Representatives, Federation Chamber

Wednesday 26 May 2021

Second Reading Speech

Appropriation Bill (No. 1) 2021-2022, Appropriation Bill (No. 2) 2021-2022, Appropriation (Parliamentary Departments) Bill (No. 1) 2021-2022

Mr DAVID SMITH (Bean) (16:50): The Labor Party won't be opposing the Appropriation Bill (No. 1) 2021-2022 and the related bills, but we do wish to highlight areas where this budget does not meet our national need or that of my electorate of Bean. I know the Prime Minister recently quoted from Talking Heads, in a moment almost as weird as the former prime minister John Howard professing a love for Bob Dylan—the music, not the lyrics. This government really is the Phil Collins of governments; it has an invisible touch. It doesn't hold a hose, it doesn't hold a syringe and it can't build quarantine facilities. It can let close to $100 billion walk out the door in this budget without addressing systemic issues with aged care and early childhood education. It's best work, like JobKeeper, is cover versions with a limited shelf life.

It is a budget that is part political fix—covering up the cracks of eight years of neglect and eight years of cuts, and designed to get this tired government to an election. It is part missed opportunity, with $100 billion spent with little reform, little wage growth or productivity growth to go with it and no vision or plan to drive such productivity. And it's part generational irresponsibility—loading up future generations with a debt burden that doesn't transform our energy network, build our national infrastructure, invest in our universities and world-leading research, or drive investment in climate action and well-paid skilled jobs. And it's part wrong priorities—a lack of priority towards addressing affordable housing, long-term underemployment, and job uncertainty, and even the most basic requirement to invest in our national culture and technology institutions. We weren't left with a plan or a vision to build a better Bean community or, indeed, to build a more prosperous nation. We were left with an invisible touch.

Indeed, the government itself seems reluctant—even embarrassed—to get out there and sell this budget. It's like they know already to disbelieve the litany of announcements after the experience of JobMaker last year. They even forgot to rattle their jewellery on budget night. You could feel the disbelief coming in the air that night and it was clearly not a moment that they had been waiting for all their life. Perhaps I'm a touch harsh. I promise not to quote from 'Sussudio'. Sure, there have been a couple of valid and genuine attempts to sell these bills in the chamber but none have dealt with that fairytale on wages growth that the government has been running in their budget predictions now for the last eight years. Year after year, the budget predictions on wages growth have been wrong and never in the favour of workers and working families. This budget makes it pretty clear that Australians won't be expecting wages growth; in fact, they'll be going backwards over the forward estimates while the cost of living increases. Those in Bean have had little to no increase in take-home pay now for a long time. Indeed, over eight long years of coalition rule, real wages have grown at less than one per cent per year. We shouldn't be surprised by this, as former finance minister Mathias Cormann admitted in 2019 that low wages growth is a design feature of coalition economic policy, and it is clear that this remains the case. None of the funding for aged care or child care is linked to the provision of ongoing higher-pay outcomes for the low-paid workers across these critical sectors or addressing the workforce gaps. There are limited retention payments to a small part of the aged-care workforce, but that doesn't substitute for appropriate pay increases across the sector.

Where the government could lead by example with their own workforce, the outcomes have been consistently low across government service. Those in the Public Service know this all too well. We have seen protracted bargaining, little progress on real wage growth and a focus on the big four consultancies and labour hire firms over the in-house policy and program capability of the Public Service. The budget papers themselves 'bell the cat' on wage growth. For what they're worth, the major economic parameters say that, for the 2020-21 financial year, the consumer price index will be up 3.5 per cent while, comparatively, the wage price index will rise by a mere 1.25 per cent. That's a wage cut for many workers across our economy, and this trend is set to continue until the lofty distant period of 2024-25, when we might finally see wage growth at a mere 0.5 per cent larger than CPI.

However, if we cast our mind back to the Treasurer's opening line of the 2019 budget, words that aged like the finest home brand milk, 'The economy is back in the black,' we find how reliable this government is with economic projections and estimates. The reality is that you can't trust the government on wages. They are the

most underwhelming of barbecues, all sizzle and no sausage. If the government wanted to do something for wages, we would have seen initiatives across the board.

Where could they have started? They could have started with our own staff. Unfortunately, that is a group that knows firsthand the reality of a policy to limit wage growth and provide conditions that improve work culture—or try to. Bargaining representatives have worked in good faith to attempt to deliver a fair enterprise agreement for our staff over the last 18 months. Following the defeat of the government's last agreement offer, the first 'no' vote since 2003, delegates on all sides returned to the bargaining table to try and find a way forward. They gave clear advice back to the government on what the sticking points were, but, unsurprisingly, the government took little notice of that feedback and put up an enterprise agreement that has few significant changes from what was offered in December. Indeed, it's likely to have a lower wage outcome.

Too many government members praise their staff to camera, yet won't support a better deal on wages and conditions. The government's offer to be voted on next week is pretty much the same meal ticket, with a couple of peas on the side. In a clear indictment of the government's proposed EA, there were few employee representatives from the bargaining committee that were willing for the new offer to even go to a vote. If any member of this chamber takes the time to read what has been put to staff, they will see that it fails to offer a salary adjustment to all staff in years 1, 2 or 3 that, according to forecasts, keeps up with inflation. And it fails to provide any certainty about what their remuneration will be in years 2 and 3. It puts no floor in a floating wage price index.

Our staff aren't asking for significant pay increases but rather for a basic floor in their salary and a wage that roughly keeps pace with inflation and recognises their exceptional skill set. Yet this is how the government leads by example as an employer. When a government nickels and dimes their own workforce, you know what they want to do with the broader workforce. I add my voice and call on other MPs to join me in stating that our staff, regardless of their side of politics, deserve better.

More broadly, if we are interested in lifting wages, we need to also extract greater value from our existing resources, particularly our most valuable resource—our people—and to recognise these efforts through relevant support in wage cases and agreements. Labor's plan for high productivity starts with skills training. Rather than relying on recruiting overseas, we should boost the training and higher education sector, with TAFE and our universities at its centre, to accredit more Australians for jobs that will provide security and long-term careers. And we must start the repair job across our higher education sector.

At least 17,000 jobs at universities have been lost because of the decision to prevent universities getting JobKeeper and not provide appropriate support, despite the catastrophic consequence of COVID for revenue from international education. Hundreds of jobs have been lost in our region alone. We're talking about world-leading researchers, lecturers and tutors who've lost their jobs, but also many other workers—admin staff, maintenance staff, everyone who keeps a university up and running, and the small businesses that are part of the economic ecology of a healthy university campus. They've all got families and bills to pay. Those issues are set to continue as international student revenue continues to dry up and support from the government falls by a further 10 per cent in the next few years. Because of the government's decisions, universities have been forced to abolish and merge courses and cut faculties across the country in areas such as neuroscience, engineering, maths and Asian languages—areas that will be essential to Australia in coming years and decades. And there is no clear plan for this workforce beyond university, despite the critical role they are capable of playing.

Instead of building back better from COVID-19, this budget is leaving us without the skills and research we need to drive growth and productivity and to prepare for the jobs of the future. We know that universities and skills investment drive economic growth. Before the COVID-19 pandemic, international education was Australia’s fourth largest export industry, contributing almost $38 billion in export earnings to the economy every year and supporting over a quarter of a million jobs across the Australian economy. In the ACT, this is worth more than$1 billion alone. Every dollar invested in higher education research and development is linked to a $5 return to GDP. Every dollar invested in university, teaching and scholarships by government contributes $3 of additional taxation revenue.

In the 2020 budget, the government provided $1 billion to partly cover the impact of falling international student revenue. But, this year, the government cut that funding despite the fact that a consequence of the federal government mismanagement of the vaccine rollout and quarantine means we still have no idea when international students will be able to safely return. They cut that funding. Indeed, the international student model may now

be broken. Emergency funding to support research also ended after a year while the universities are still clearly in the grips of crisis.

Another area of missed opportunity in the budget was child care. Not only was the opportunity to fundamentally and permanently reform child care missed but the approach to only provide increased subsidies for families with more than one child in the system has created confusion for families as to whether the reforms will leave them better off at all. As a result, hundreds of thousands of Australian families will miss out.

By contrast, Labor's plan would help more than 90 per cent of families in this country as well as provide support for out-of-school-hours care and vacation care, areas that won't benefit from the Morrison government's changes. Our plan doesn't wait until you have a second or third child in care for you to get any benefit. Unlike the government's policy, our plan helps every child get more support and access to early education. We note that we need structural reform to help people get into the workforce, and we know that we need children to access quality early education. Both measures drive participation, productivity and long-term national prosperity.

Unsurprisingly the government did not address housing affordability or homelessness in any meaningful way. Instead, they have introduced further measures that will push housing prices higher. Housing affordability and access to social housing are twin policy challenges here in the ACT, and leadership on this policy area is needed. Labor's policy will also create jobs and, at its core, transform lives. Across the nation, this initiative will build homes for women and children fleeing domestic and family violence and older women on low incomes who are at risk of homelessness. It will also provide accommodation for veterans experiencing or at risk of homelessness. We know that one in 10 homeless Australians are veterans. Importantly, we'll provide much needed funding for the repair, maintenance and improvement of housing in remote Indigenous communities. As Denita Wawn, the CEO of Master Builders Australia, said:

Last year when the country was in the grip of the pandemic and the economy was locked down, Master Builders in conjunction with the CFMEU, called for a $10 billion social housing stimulus fund …

The Opposition Leader and the Shadow Minister for Housing and Homelessness have listened. We applaud the Opposition's $10 billion social and affordable housing fund.

I should note that the budget does have some limited infrastructure spending in Canberra, most of it being reheated announcements. But, again, this government won't properly invest in institutions like the National Archives of Australia, despite numerous government reviews. Indeed, the National Archives of Australia is being forced into crowdfunding to do its essential work.

We're not going to hold up this appropriations bill, but we should see it not just in light of the holes in the budget that was handed down two weeks ago but in the context of those eight years of missed opportunities, mismanagement and political fixes and the failures in this last 18 months on quarantine and now the vaccination rollout. It's enough of the invisible touch.

Ends.