Intergenerational Inequality
Ms WELLS (Lilley) (12:45): I rise today on a matter of great importance to my home state of Queensland in the best country in the world and the greatest nation on earth—that is, the fate of the NRL grand final in 2021. We are all still reeling over the decision for the 2020 grand final to go to the Sydney Cricket Ground, a decision that could modestly be described as a travesty. Now we hear that the fate of the 2021 grand final is at stake because delays and mismanagement of the New South Wales government mean that the stadium will not be ready in time. This is a disaster, but it's one that Queenslanders are here to help with.
We should bring the NRL 2021 grand final to Suncorp Stadium, the spiritual home of rugby league, because if you want something done right, you should give it to Queenslanders. I posit that the only reason southern teams don't want this is cowardice. If you think that you can win it only when you play at home then I ask the question: have you ever truly won it? I call upon New South Wales to relinquish their hold on the 2021 grand final and send it to the spiritual home of rugby league, Suncorp Stadium.
I also rise today to speak about the lethargy of this budget in addressing the significant policy challenges of our coming generations. Economic growth has been slow for a decade, Australia's population is ageing and climate change looms. The burden of these changes falls mainly on the young. Young people face real concerns about housing affordability, stagnating wealth and incomes, and future budget pressures. It is a wonderfully conservative idea to carry on about the Left redistributing wealth when they themselves actively seek to redistribute it in the other direction.
Under neoliberal policies of deregulation, privatisation and austerity, our living standards have declined sharply. People have lost jobs. People have lost benefits. People have lost much of the safety net that used to make these losses less frightening. They see a future for their kids that looks even more foreboding than their precarious present.
Millennials are earning, when you adjust for inflation, about 20 per cent less than our parents did at the same age. Younger Australians are much less likely to own a home than their parents were at the same age. Homeownership rates for 30-year-olds fell from 65 per cent in 1981 to 45 per cent in 2016. The wealth of households under 35 has barely moved since 2004. Poorer younger Australians have gone even further backwards. Youth unemployment is around double the national average, and in my home state of Queensland it is as high as 25 per cent in the regions.
This week the Grattan Institute has confirmed with fresh figures that the cost of housing is contributing to the rising gap between rich and poor. It is making the gap between disposable household incomes bigger. It is making the gap between net household wealth bigger. And it's making the gap between any prosperity in our prospective futures much bigger.
Amid this growing inequality we have witnessed the rise of the Davos class—a hyperconnected network of banking, tech and media billionaires, elected leaders who are cosy with those interests, and influencer celebrities who make the whole palaver seem unbearably glamorous. For too many Australians, success is a party to which they are not invited. They know in their hearts that this rising wealth and power is linked to their growing debts and powerlessness.
So that's the problem. That is the storm of circumstances which this budget stood to address and those are the circumstances that formed the landscape upon which the election was fought. Where did we land? A budget where mincing management triumphed over reform, and an election where fear triumphed over hope. The coalition called Labor's reform agenda an age war and stoked retiree anger directed at policies designed to address intergenerational inequality. They did other things too.
It would be wrong to allow intergenerational inequality to be pushed off the agenda on the basis of the election result. Progress does not move in a straight line; it zigs and zags. The concerns faced by young Australians are real, and they will remain. As we stand here in the new term of the parliament of 2019, these problems loom as some of the largest unaddressed policy voids in our country, affecting our largest generation.
As I said in my first speech, this year is remarkable because it is the first year where more Australians are born after 1980 than before. It's such a bold statistic that I usually have to say it twice: there are now more Australians born after 1980 than before. Millennials are also older than you realise. The oldest millennials are already pushing 40. The youngest are out of high school or even out of uni, depending on where you draw the birth line.
What we all have in common is that we all came of age in the shadow of the global financial crisis. Economists can tell us what happened to previous generations who came of age in recessions. The generation that came of age during the Great Depression endured a protracted period of economic stagnation that prevented them from finding their economic feet. But that was followed by a period of jump-started economic growth that lasted for the second half of their working lives in the 1950s and 1960s. They had an opportunity to catch up. Where is that boom for millennials going to come from? Not this year's budget.
I've got quite a few problems with this year's budget, but in order to stay tightly relevant to millennials today I am going to speak about just two: the failures to address rising inequality with respect to housing and wages. During the Howard government years, policies were introduced that put the cost of owning a home out of reach for an entire generation in major capital cities. The Howard government introduced capital gains tax concessions leading Australians to shift their wealth into property investment at a far higher rate than the vast majority of the rest of the world. The concept of million-dollar homes was until very recently seen as the top echelon of housing. Now it is the median price in the largest city in Australia. Housing prices have increased from four times the median income in the nineties to seven times the median income now. It's eight times in Sydney.
Housing markets are crucial to the divided fortunes of the younger and older generations. At the height of the property boom, the average capital gain for a regular house in Sydney was higher than the average annual earnings. In other words, for a lot of workers, their houses earned more than they did. High house prices make it substantially harder for young people to save for a deposit. There is a lot of chat getting around about smashed avocadoes, but the truth is that if millennials dialled back the avocado toast to spend only what our parents spent on eating out, it would still take between 100 and 113 years to save a twenty per cent deposit on the median home, depending on where you are. Brunch has become a convenient scapegoat for structural inequality.
So what's the government's plan? There were no new measures in the budget this year for first home buyers or owners. None. We will only overcome this policy paralysis when we are brave enough to challenge the cognitive dissonance that characterises our national thinking: we want house prices to continue to rise at the same time that we want young people to get a foot on the housing ladder. The figure lying at the heart of this dynamic is $8 billion per year—the annual subsidy the federal government now provides to the private housing market. As federal representatives, we owe any annual funding commitment of $8 billion per year the provision of our scrutiny. We should assure ourselves that there is no better way the budget can spend this money to improve housing affordability for all Australians.
Concerning wages growth, the assumptions made by the government in this budget are wildly flattering. The government would have us believe that the labour market will stay as it is now, but our employers will all want to pay us more. In reality, economic pressures on young people have been exacerbated by wage stagnation and rising underemployment. If this is the new normal, we will bear witness to a new generation moving through adulthood with lower incomes than the generations before it.
Three backbench Liberal MPs wrote that the government's foreshadowed IR reforms would boost productivity, create more good jobs, lift wages and boost international competitiveness—all at once. Everyone will have 'control over their destiny'. To me, it looks like people throwing away the umbrella in a rainstorm because they themselves aren't getting wet. Conservatives and business lobbyists claim the current system is union dominated, but union membership, union activity and enterprise agreement coverage have all declined dramatically. Where unions are absent, wage theft and the erosion of employee protections are rife, and ethical businesses that comply with the law are placed at a competitive disadvantage.
The problem has not been an absence of productivity growth; our productivity can be always improved. But real wages are already far behind what productivity growth is occurring. The bigger problem is the failure to share the benefits of productivity growth. International evidence is clear that stronger worker rights and collective bargaining also tend to result in a better distribution of income, both among workers and between workers and firms. In other words, better worker rights lead to a larger economic pie that gets more evenly distributed. We could look to Germany, Sweden, the Netherlands and Japan—places where collective bargaining is accepted and even nurtured as a healthy, positive economic feature. Countries with more collaborative and balanced IR systems are eating our lunch in international competition, as my old bosses used to say. The solution to that challenge cannot be to suppress wages even further or disempower and fragment workers even more.
Generation-on-generation progress in living standards has been the happy dividend of Australia's strong economic performance since the Second World War. On average—and I will address intergenerational inequality at another opportunity—children could expect to be substantially healthier, wealthier and better housed than their parents at the same age. This generational progress can no longer be taken for granted. Our Australian covenant of trust that one generation will look after the next stands to fall. Every generation faces its unique challenges, but letting this generation fall behind the others would surely be a legacy that none of us would be proud of.
These fundamental questions should be addressed by any federal budget, and they weren't. In this new parliamentary term it is dispiriting to witness a government acting like the dogs who caught the car rather than getting down to work on these problems. Many Australians have rage fatigue and moral exhaustion from the election and from watching the state of affairs abroad in Trump's America and in the mess of Brexit. It hurts to see the young and the vulnerable in a vice grip and to see the things that we have fought for sabotaged. Most days, I am approached by someone who feels dismayed at what has become of us.
In my first speech I spoke about being galvanised through the resistance. But I want to spend these last moments here talking about what it means to be the opposition. You oppose something by standing up to it but also by being its opposite. It means being compassionate and inclusive where they are cold and exclusionary. It means being committed to accuracy and precision where they are sloppy with the truth and the facts or, when it comes to climate change, at total war with them. It also means preserving your greatest effort for the true battles over the course of our future—battles like this one—and preserving the memory of how people before us have opposed and resisted and won.
Progress does not move in a straight line. It zigs and zags. We do not have every answer. In this global climate of rising inequality, there are questions not yet asked waiting for us in the near recesses of the future. What our constituents ask of us is that they can know what to expect of us in the face of future dilemmas that no-one anticipates yet. Here is where I stand. Intergenerational inequality is immoral, and it is a crisis looming upon our nation. I'm restless with the task of solutions not yet started.
