Government Economic Mismanagement - 16/10/2019

16 October 2019



We've heard from the experts and from my Labor colleagues about the bleak state of the Australian economy. But over in the government's ministerial wing all you hear is sunshine, lollypops and rainbows everywhere because, according to the Prime Minister and the Treasurer, there is nothing to worry about. The best thing the Prime Minister can do is tell us to stop worrying, as if ignoring the facts will make them go away, as if acknowledging the advice of economists will cause an economic downturn. Prime Minister, the cause of an economic downturn in Australia will be your inaction.

The Morrison government has no economic plan. In the 46th Parliament, it has become clear what happens when a government talks about nothing but the previous government for seven years—nothing is what happens. The Morrison government still blames Labor when the economy isn't doing well. This is clearly a political strategy that has worked for them, but it is not an economic plan. Weak growth is the inevitable consequence of a government with a political strategy but no economic plan.

Even with the best advice coming from Treasury, the International Monetary Fund and the Reserve Bank, the Prime Minister chucks his briefing in the wastepaper basket and uses the same old talking points. These are talking points we now know are devoid of any economic plan for Australia, and have been since these guys came to power in 2013. To make it even worse, the outgoing head of the Australian Bureau of Statistics here in Canberra has explained that, by slashing ABS funding by 30 per cent over the last decade, the information we need about the health of our economy will no longer be available. Dr Kalisch has said our economic, labour market and population statistics will be the statistics at risk if there are further cuts to ABS funding over future years. So the Prime Minister, so desperate to keep Australians in the dark about the state of the Australian economy, is trying to make sure we don't even have the high-quality economic data that we need to assess Australian economic growth.

I had the opportunity to question the RBA governor when he appeared before the House Standing Committee on Economics in August. I asked him:

… what levers are available to boost employment and wage growth?

He said:

… the options are fairly clear. The first set of options is monetary policy stimulus, which is what we're doing, and, if needed, we're prepared to do more. As we've discussed, our second set of options are fiscal options. And the third set of options, which are my preferred ones, are creating an environment where businesses want to expand and hire people. That's the menu, and it's up to society, through the parliament, to choose from that menu.

'The options are fairly clear,' the Reserve Bank governor said. The first is monetary stimulus. Well, there isn't much more that the Reserve Bank can do when interest rates are below one per cent for the first time in Australian history. These are record lows. The second is fiscal options. We need to invest, Prime Minister. And the third is creating an environment where businesses want to expand and hire people. The Reserve Bank governor even called it a 'menu'. He couldn't have made it any clearer for the Treasurer and Prime Minister.

But, if that isn't clear enough, the Reserve Bank governor went further. He said, 'Increase wages.' The best way to do this is to increase the wages of public servants, one-third of the workforce that governments have direct control over, with flow-on effects for the wages of millions of Australians who haven't had a wage increase for years. The governor has said that infrastructure spending could help the economy. We all know the Morrison government want an imaginary budget surplus before they spend anything on infrastructure.

This Anti-Poverty Week, people on our side of the House have been talking about the life-changing impact that a properly funded Newstart allowance would have on the lives of over 700,000 Australians. But, if we talk about Newstart in purely economic terms, an increase to Newstart would also stimulate the economy. The Reserve Bank governor said it in the hearing in August. KPMG said it last week. The Business Council supports it. Deloitte said over a year ago that raising Newstart would deliver a prosperity dividend of $4 billion to the Australian economy and 12,000 extra jobs.

Clearly, none of these hard economic facts have swayed the Prime Minister to act to save the Australian economy, so I'll end with this: the latest statistics from the ABS show that we have a youth unemployment rate of almost 12 per cent. That's 295,000 young people who are actively searching for work but coming up short. In rural and regional areas, the rate is even higher. In Greece, the rate of youth unemployment is 33.8 per cent, and guess which economy is weaker than Greece, according to the IMF forecasts released last night? Australia. So I call on the government to step up and do its job.