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Read all the latest news from Brendan O'Connor MP


April 15, 2016

SUBJECTS: Moody’s warning for our AAA credit rating, unemployment figures, AFL, Road Safety Remuneration Tribunal, ABCC

CHRIS BOWEN, SHADOW TREASURER: I’m delighted to be able to join today a key member of our shadow economics team, Brendon O’Connor. I’ll be making a few remarks about Moody’s, Brendon will talk about unemployment, and then we are happy to take your questions. Today, the Moody’s rating agency delivered a clear and unmistakable warning to Scott Morrison: lift your game.

Let’s be clear, Australia’s AAA credit rating, from our three major ratings agencies are important for Australia. Getting three AAA credit ratings for the first time in our history was an achievement of the Labor government during the global financial crisis. It must be protected. Losing the AAA credit rating would mean that Australia pays more in interest, it would be a blow to confidence, and it would have flow on effects to the ratings of major corporate entities in Australia. Now, very clearly, Moody’s has presented a wake-up call to Scott Morrison – stop playing games, start governing. Moody’s today said ‘Mr Morrisons announcement excluded measures to raise revenue; without such revenue measures, limited spending cuts are unlikely to meaningfully advance the government’s aim of balanced finances by the fiscal year ending June 2021, and government debt will likely continue to climb, a credit negative for Australia’.

We have been saying for a long time now that tough decisions are necessary on revenue and spending. Labor has been leading the debate. We have been leading the debate on high-income superannuation, on tobacco, on negative gearing, on capital gains tax. We have been setting the agenda as the government has flitted from one thought bubble to another – in policy thought bubbles that don’t last until the end of the day.

Moody’s has made clear today that they think that in order to protect the AAA credit rating going forward, the government should adopt a similar approach. Mr Morrison says Australia has no revenue problem, only a spending problem. He and Mr Turnbull appear to be the only sensible people who think that. Even the Premier of New South Wales, Mike Baird, a senior Liberal premier, made the point a couple of weeks ago, that Australia has both a revenue and spending issue. The Budget is looming. Mr Morrison can stop the games. He said before that there were ‘excesses’ in negative gearing, now he says he is not going to do anything about them. He campaigned against changing high income superannuation concessions – it appears the government may be doing something about that – they should just get on and adopt Labor’s agenda. They could pass these measures immediately with Labor’s support. Labor, again, has been setting the agenda.

The government has failed to offer a plan for the Budget or the economy. This year’s Budget deficit has blown out by $33 billion. Debt is $100 billion higher than it was at the last election. We have outlined $100 billion worth of improvements to the Budget bottom line over the next decade. It’s time for Mr Morrison to do the same.

This warning from Moody’s, is just like the warning from CEDA’s roundtable a couple of weeks ago. It’s timely and it must not be ignored. In stark contrast to the Government, two and a half years in, with all the resources of Treasury and the resources of all the bureaucracy, Labor has been announcing clear measures to improve the Budget bottom line, because that is the responsible thing to do. We will protect the credit rating. It is a core responsibility of the Treasurer. It will be the approach I take as Treasurer. It's about time Scott Morrison listened to Moody’s, listened to CEDA, listened to all the commentators, and adopted a similar approach to Labor. I invite Brendan to make a few remarks and then we’re happy to take some questions.

BRENDON O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Thanks very much Chris. Well just going to the unemployment rate, the ABS today has announced the unemployment rate for March this year. There's been a slight improvement in the unemployment rate, a fall to 5.7 per cent, and there's been some improvement in aggregate numbers. However, it is very important to note firstly that whilst there has been a significant increase in part-time jobs, that comes at the expense of the fall of 9,000 full-time jobs. It’s also important to note the fall in the aggregate hours for the month of 17.5 million hours. That is quite a significant fall which explains that we're seeing a growth in part-time work, we're seeing a decline in full-time work, which has been a trend this year – and in fact on record we have the highest under-employment, according to the ABS, of over 1 million Australians looking for more work, but can't find it.

So, these figures. We welcome any improvement to employment numbers, we always do. Anyone who gets a job is a good thing, but this has meant that there’s been many full-time workers losing their jobs. The other point to note is there is still a 74,000 shortfall on the very modest promise this Government set out in terms of growing employment numbers. 74,000 fewer than where they should be on their modest goal of reaching a million jobs in five years, most of which of course is taken up with just natural growth. And the other point to make is this - which should never be forgotten, there are 36,500 more Australians that are lining the unemployment queues today than was the case at the last election.

So, so much more work to be done in the employment space. We are seeing, of course, the steel industry under pressure. We are seeing the automotive parts sector under great strain now that the car makers have made decisions to leave our shores. We are going to see future job losses unfortunately in parts of manufacturing and we don’t see the jobs plan articulated by the government. We do not see them working with business improving confidence, and as Chris has just outlined they do not have an economic plan. They're actually failing Australians in growing the economy, in strengthening the capacity for us to employ more Australians.

BOWEN: Thanks Brendan, over to you.

JOURNALIST: In light of Moody's report, is Labor more likely to increase taxes as a proportion of GDP?

BOWEN: Well we’ve been outlining our plans and we will continue to do so, and when we have seen the Budget, we will obviously then provide further fiscal consolidation updates in terms of the impact of our combined measures, and we will continue to update those. But we need to see the latest Budget update first. Of course the tax to GDP ratio has been going up under this government. But we’ve been making crystal clear to the Australian people our plans, we’ll continue to set the agenda as the government flips from thought bubble to thought bubble - one minute they are against changes to superannuation tax, the next minute they are in favour of them apparently, one minute they are going to do something about excesses in negative gearing, next minute they are running up the white flag and saying those excesses are fine, we can live with those no problem. Fact of the matter is, we’ve been outlining and identifying those areas of the budget which are unsustainable and unfair, and we’ve been outlining our alternative plan to deal with them. We’ll continue to do so.

JOURNALIST: The government also looks to have secured support for abolishing the trucking pay tribunal, do you have any hopes of still saving it?

O’CONNOR: Can I just say in respect of that, this is a Prime Minister looking for an agenda. This is a Prime Minister who has no economic plan, and instead decides to play with the emotions of owner drivers and play with public safety, quite frankly. I’m very happy, and Labor is very happy to consider the Order that was made by the Tribunal, very happy to consider some of the, I think, matters that might need addressing, and I’ve made that clear to all of the peak bodies including Transport Workers Union and the Australian Trucking Association and others.

We’re willing to sit down, and you know a leader would sit down around a table. If Malcolm Turnbull was a leader, he would sit down and talk to all affected parties and seriously listen to the concerns of all of them and come up with a solution. But instead he has sought to play politics with public safety and with the emotions of some owner drivers. And I think that is no leadership at all. And against the body of evidence that has shown there is a correlation between rates of pay and the incidences of fatalities on our roads, it should be the case that any Prime Minister would consider those matters seriously. He has dismissed them out of hand. Malcolm Turnbull knows everything about everything, according to Malcolm.


But the reality is, the bodies of work that have been commissioned, including by this current government, has shown there is that link between deaths on our roads and the rates of pay of truck drivers. This is not just and occupational health and safety matter, this is a public safety matter. Too many truck drivers, too many men, women and children die on our roads. We have an obligation to deal with this matter. No one is suggesting for a moment that this matter improves safety alone or is the only way in which we reduce the likelihood of people dying on the roads but it is one part of a policy response to what has been a high incidence of fatality in this country – when compared with other like countries, is not a great record so we need to do better. What we say to the government is because you don’t like the decision, the idea that you abolish the independent umpire is reckless, disproportionate and arrogant quite frankly. If he was really concerned about some of the matters that have been raised by the truck drivers, just as I am, as Bill Shorten is, as Chris Bowen is, he would be sitting down and working this out as a solution not using it as a political football. We’re open to discussing the order, we’ll oppose the abolition of the tribunal and we say to the Government stop playing games, stop playing with public safety.

JOURNALIST: What’s your reaction to Barnaby Joyce as acting Prime Minister?

BOWEN: Well, we wish Malcolm Turnbull all the best in China and a speedy return. You know, good luck to Barnaby Joyce as Acting Prime Minister but Bill Shorten should be Prime Minister and when he’s absent Tanya Plibersek will make a fine Acting Prime Minister.

O’CONNOR: Indeed, indeed.

JOURNALIST: And do you agree with Malcolm Turnbull that AFL is the most exciting sporting code?

BOWEN: Brendan and I would be on a unity ticket that we’re both AFL fans. I support the Greater Western Sydney Giants. Brendan, who do you go for?

O’CONNOR: Saints!

BOWEN: Sorry about that, apologies –

O’CONNOR: Well, we’ve won a flag.

BOWEN: Robert Menzies said AFL was the greatest winter game invented in the history of the world, and that’s one thing you know perhaps that there could be a wide degree of some support for. Of course, we’re blessed with lots of popular codes of football in Australia. We all love our football –soccer, rugby league is particularly prominent in Sydney, and AFL is a great game as well. Is that comprehensive enough for you?

O’CONNOR: There was an inquiry before Chris, and I’ll just address it, in relation to the ABCC. I want to make this very clear. We don’t support the Bill, but we don’t want any more games by the Prime Minister. We actually procedurally moved when last sitting, to have the Bill debated and dealt with. Now we don’t want to see the game playing that we witnessed last time. We have a position on the Bill that based on empirical evidence, shows during the time of the ABCC, the incidences of fatalities and injuries rose in the construction industry. Productivity was not improved during that time either. The independent agency, the ABS, multi-factor productivity data shows, that the seven years preceding the ABCC’s existence shows the industry was more productive than the seven years of the existence of the ABCC and it’s improved since its abolition.

Also internationally, our productivity in construction is remarkable. It’s19 per cent higher than comparable countries. It’s not true to say this is about productivity. In relation to safety of workers, it appals me that the government doesn’t understand that these matters are of great concern to workers.

Finally some of the provisions in the Bill will remove basic rights for tradies in the construction sector. We don’t want to play around with this. We want this matter dealt with when we go back to Canberra, in the Senate. We will put our position strongly. We’re happy to vote on this. We’re not scared that Malcolm Turnbull wants to run off to an early double-dissolution election. We will deal with this matter and we will put our position unequivocally and we want the game playing to stop from this government.

Thank you.