INTERNATIONAL LABOR CONFERENCE 2018, SYDNEY

February 24, 2018


I join with everyone in acknowledging the traditional owners of the land on which we meet and welcome elders past, present and emerging.

Thank you to the organisers for all your work in putting on this terrific conference.

I want to start by paying tribute to my friend and colleague Wayne Swan. 

There has been no finer advocate, in recent years, of the need to tackle inequality than Wayne Swan.

Wayne really has led the debate about inequality in this country. 

Wayne’s successful stewardship of the Australian economy during the Global Financial Crisis, will never be forgotten by the Australian Labor Party.

Unemployment destroys lives and mass unemployment destroys whole communities

Wayne Swan made sure that Australia avoided that mass unemployment.

Any conversation about inequality must focus on poverty and how to reduce it.

We know that too many Australians are living in poverty, however it is defined.

And we know that the biggest cause of poverty and disadvantage in Australia today is unemployment.

In households where the main breadwinner is unemployed, 60 percent are living below the poverty line. 

Joblessness is the fastest pathway to poverty. 

And people on Newstart are living in poverty.

Newstart Adequacy

We can’t have a conversation about tackling inequality without talking about the adequacy of Newstart.  

Bill Shorten and I have both said on a number of occasions in recent years that Newstart is too low.

Increasing Newstart is the policy leaver most readily available to policy makers to tackle inequality and reduce poverty in Australia. 

And we are not alone in this thinking. 

The Business Council of Australia says that the low rate of Newstart is a barrier to employment.

Chris Richardson from Deloitte Access Economics has said that: “incomes go up over time. The unemployment benefit hasn’t. It just moves with prices, it doesn’t move in line with wages, to the point where it’s now less than two-fifths of the minimum wage.”

And KPMG has said that Newstart Allowance is inadequate and should be increased.

At the last election Labor committed to establishing an independent review into the adequacy of Newstart Allowance. 

An independent review that we think should be done against two primary objectives – alleviating poverty and encouraging work. 

Long-term Unemployment

Shockingly around 65 percent of people on Newstart or close to 472,000 Australians have been unemployed for a year or more.

To put this into perspective if Australia’s long-term unemployed lived in one city it would be larger in population than Newcastle or Canberra.

This is a tragic waste of potential.

And the situation is getting worse, despite an improving labour market.

In 2012 around 340,000 people or about 61 percent of people were on income support for more than a year.

There’s no other way to say it, Australia’s job service system is failing our long-term unemployed.

This is a very serious policy failure and one a future Labor Government will have to address.

Entrenched Disadvantage

Addressing the adequacy and design of income support payments is only part of the equation.

The increased casualisation of the labour market and the emergence of the ‘gig economy’ have created new challenges for the targeting of social security.

Australia has more than a million people who are underemployed.

So we need to consider the appropriate design of Newstart in this labour market as well as adequacy.

A significant body of evidence also emphasises the need to focus on areas of deeply entrenched poverty and social exclusion.

That’s why Labor is committed to developing proposals to address the places of severe disadvantage.

We will do so based on an understanding of the complexity of entrenched disadvantage: that it requires support and investment from before a child is born and in the early years, health and parenting support, early and ongoing education, drug and alcohol and mental health supports and intensive efforts to help people into work.

There’s already some great work being done around the country by tackling disadvantage through a collaborative location based approach.

Logan in Southern Queensland is an area with a high percentage of children who are considered to be developmentally vulnerable and at-risk, and this is closely associated with pockets of deep social disadvantage in the area.

Logan Together arose from the local community as a means to address these issues, and aims to reduce the number of children who are developmentally vulnerable and develop strong and stable families that have adequate access to resources and opportunities.

Of 6,200 vulnerable children in Logan aged 0-4, 3,724, or 60% of them have been reached through Logan Together access programs and Indigenous attendance at kindergarten has increased by 10% between 2015 and 2017.

Pension Age 70

Inequality starts early in life and in its starkest form – leads to shorter life expectancy.

For the last four years, the Abbott-Turnbull Government has sought to increase Australia’s pension age to 70.

And in recent years we’ve seen more and more evidence of the link between life expectancy and inequality. 

Recent research from the United States shows that the richest one percent of American men live 14.6 years longer on average than the poorest one percent of Americans.

Between the years 2001 to 2014 the life expectancy of the richest five percent of Americans increased by roughly three years

For the poorest five percent of Americans there was no increase.  

So we know that life expectancy increases with income.

Here in Australia, we know that increasing the pension age to 70 will especially hurt people living in remote Australia.  

The median age at death for people living in remote in Australia is 73.8 compared to 82.3 for Australians living in major cities.

A stark demonstration of inequality.

Conclusion 

Friends, the Whitlam Government tackled inequality by making universities more accessible, with needs based school funding, by improving equal pay for women, and Medibank.

The Hawke Government tackled inequality with the social wage, Medicare, by reforming family payments to ensure that they provided effective assistance to families in need.

The Keating Government tackled inequality by legislating for native title for First Australians, by creating Working Nation – and addressing the challenge of getting long-term unemployed into work. 

The Rudd Government delivered the most significant increase to the pension – which lifted a million people out of poverty, introduced Australia’s first national paid parental leave scheme, saved Australia from recession during the Global Financial Crisis.

The Gillard Government fought for the National Disability Insurance Scheme, empowering people with disability to transform their lives.  

The lesson is only a Labor Government takes tackling inequality seriously.

Friends, the stakes are high.

The outcome of the debate that we are having now over tackling inequality will reverberate well into the future.

It will determine whether the conservatives vision of trickle down company tax cuts are a greater priority than inclusive growth.  

It will determine whether child born in Australia today will be better or worse off than their parent’s generation.

We have to make sure our economy works for everyone. 

We have to make sure we move to a model of inclusive growth.

That if you’re kid growing up in a disadvantaged community, that your future is brighter than the past. 

Reducing poverty is central to the Labor task.

ENDS