Transcript - Government's Economic Policy [Parliament House Doorstop]



SUBJECT/S: The Government’s Economic Policy, Inequality, Minimum Wage, Foreign Investment

WAYNE SWAN: [A freeze on the minimum wage] is just a recipe for growing inequality and political polarisation. This is a government of the one percent, by the one percent, for the one percent. Right around the world there is a recognition that the economic policy of this Government and other conservatives that we should give tax cuts to the rich and wage cuts to low and middle income earners is a recipe for economic failure. And as I said before, political polarisation, I'm just stunned. So we have a government giving a $50 billion unfunded tax cut to some of the wealthiest and biggest companies in the country advocating at home a freeze to the minimum wage and supporting cuts to penalty rates. So what's their policy? Higher tax cuts for the rich and lower wages for everybody else. A government of the one percent, by the one percent, for the one percent.

REPORTER: Talk us through Labor's submission to the Fairwork Commission and what you'll be pushing for.

SWAN: Well we've always supported a strong minimum wage. We've also given discretion to the commission to decide what that is given the economic circumstances but at the moment given how weak wage growth has been I think there is an argument for a strong increase in the minimum wage. The biggest problem in the Australian economy is weak and anaemic consumption and low levels of demand. What we need is a boost to public investment and a decent increase in the minimum wage. Both those factors would increase demand and drive our economy. What we’re seeing from the conservatives at the moment is wage cuts which lead to lower growth and higher unemployment.

REPORTER: Will you be willing to flex some legislative muscle if the Fairwork Commission does heed your calls?

SWAN: Well we're in opposition, what we can do is outline an alternative economic policy and we have. Our vigorous opposition the unfunded $50 billion corporate tax cut for large multinational companies is money which could well be spent boosting demand elsewhere in the economy particularly through investment in infrastructure. And what we also need is to see that people get a fair go in the wage system. Real wages in this country are not increasing, profit share is going up, the wage share is going down, we've got to turn that around. So the Government's recipe is to have more of the same. This Government has a recipe for the rich getting richer, the middle class getting hollowed out and greater armies of working poor, that’s what they stand for.

REPORTER: Do you think that as Sally McManus suggests neo-liberalism is dead?

SWAN: There is no question it has failed and discredited. I've been making this point for a long time, going back many years. Neo-liberalism is [has] failed there is no question about that. You've got bodies like the IMF who've buried it and cremated it. So when the IMF can see the failure of neo-liberalism and Malcolm Turnbull can't, it says something about the nature of this Government. They suffer from a blindness of affluence. If you wanted me to sum up what was wrong with this Government they don't walk in the same shopping aisles as average Australian’s. They are comprised of an elite group of people some of whom are very wealthy like the Prime Minister and they have not got a clue how average Australian's live and work.

REPORTER: So what kind of taste in the mouth, we're reading in the Oz this morning that Treasury has done some modelling on perhaps letting foreign owned companies invest a hundred million dollars in Australia without scrutiny essentially, what sort of taste does that leave in the mouth? 

SWAN: A very sour one and a very bitter one. If that is a proposal which has come from the Treasury the then it's simply lost the plot.