MOTIONS – Cost of Living

Senator Bilyk has just highlighted something I wanted to touch on, and that is the problem of wishful thinking. I completely recognise the hard work our childcare workers and those in the industry do. It’s a very tough job and a very important job, as Senator Bilyk said. The problem is, we’d all like to give people a pay rise, we’d all like to see people’s wages go up, but if we just increase wages without combining it with increased productivity and better outcomes for our economy we get one thing. We get a certain thing when we push wage rises without corresponding productivity improvements, and that one thing is called inflation, and that’s what everybody is afflicted with right now. So, you give these wage increases, but not very long after that it’s all eaten up in the fact that that childcare worker with the higher wage suddenly faces a 30 per cent increase in their grocery bills, suddenly faces thousands of dollars more on his or her mortgage repayments. So it’s great to have wishful thinking, but it would be better for everybody if we could focus on what really can improve the lives of Australians, and it takes hard work. It cannot just be handouts. That’s not a sustainable way of building a strong economy. That goes to the heart of my question today to Minister Gallagher. I mentioned that the government’s economic agenda, as Senator Bilyk just outlined, seems to be based just on handouts and on more and more government spending and subsidies, and not on actually improving the underlying performance of our economy, which is the
only sustainable way to deliver real increases in the standard of living of Australians over time. The finance minister could not answer my very simple question about how much productivity has fallen under her government. She didn’t have the answer to that. I hope that was more because she was embarrassed about the answer than that she didn’t know it, but I have the answer here. The figures came out just last week. The national accounts showed that, on the basis of GDP per hour worked—basically, all the economic output we make divided by how many hours people work; it’s a measure of productivity—that figure has fallen 6.3 per cent in just two years. As I say, the finance minister didn’t know, apparently, the productivity performance of her own government. She seemed to know a lot about the productivity performance of the previous coalition government. She was saying that that was poor and that it wasn’t very high. That’s all she wanted to focus on. She didn’t have the exact numbers. I’ve actually compared them and, yes, our productivity performance has been somewhat slow for a decade or so, but, in the 8½ years that the coalition government were in power, on an annual basis, that GDP per hour figure grew at an annual rate of 1.3 per cent. That is relatively low compared to other periods in our history, but it still grew, and it grew at a reasonable rate—1.3 per cent—helping to support wage increases without a breakout of inflation in that 8½ years. As I mentioned, during the two years we’ve been under this government, productivity has actually declined. It has gone backwards. On an annualised basis, productivity has gone backwards by 2.9 per cent. Under the coalition, it went up by 1.3 per cent. Under this government, productivity has fallen by 2.9 per cent on an annual basis. That is why we’re getting this inflation. When you look at it on an industry basis, you start to see the picture emerging of what is going on in our economy.
I admit that these industry figures are only available for one year of this government. They will be out later this year for the first two years of this government. In the first year of this government, mining productivity fell by four per cent, and electricity, gas and water productivity fell by 7.2 per cent. So, when you get your energy bills, that’s one of the reasons they’re going up. We’re spending more money—there are more subsidies going into wind and solar factories—and we’re getting less or the same output, so productivity is reduced by seven per cent. That’s why your bills have to go up. That’s why you’re paying more. Wholesale trade productivity, which would be dominated by our food and groceries trade, has fallen by 11 per cent. That’s why you’re paying more when you go to the checkout. I should have used the other figures. Under the coalition, that grew by 2.2 per cent on an annual basis. Going back to the energy situation, it was flatlining under the coalition but has fallen by seven per cent under the Labor Party. Real estate productivity has fallen by five per cent. Finance has fallen by 2½ per cent. Again, there were positive or neutral figures under the coalition but massive falls in the first year of this government, making housing and rent more expensive, making interest rates higher and making banks having to charge you more as well. This is why we’re getting poorer at a record rate. During the first two years of this government, our standard of
living and our real wages have gone back to levels that we haven’t seen since 2011. They’re not taking this seriously enough. They’ve got to get serious about it. They’ve got to stop blaming the RBA and start doing the hard work of lifting our nation’s productivity and making our standard of living higher again.