05 February 2018

I rise to speak on this private senator's bill, the Productivity Commission Amendment (Addressing Inequality) Bill 2017, and from the outset I'd like to welcome all senators back. It's good to be here. I'd like to also commend my colleague Senator McAllister for her tireless efforts in producing this bill. Primarily this bill seeks to require, among other things, the Productivity Commission to undertake research on inequality and its effects on the Australian economy and community and to report to the minister, and to mitigate the negative effects of inequality on the Australian economy and the Australian community.

This bill is a simple yet powerful measure that will ensure that the Australian government, by way of the Productivity Commission, has an easily accessible institution to measure inequality in our country. Many might ask why the Productivity Commission is best suited to perform this function. The Productivity Commission is more than just an advisory body. Its work sets the national agenda and provides a basis for substantial changeas seen, for instance, with the reliance by the FWC on the Productivity Commission's report into last year's despicable penalty rates decision. As stands, the Productivity Commission is not required to take inequality into account. Although its enabling legislation currently requires it to have regard to a wide variety of factors, such as the need to promote regional development and to ensure that development is ecologically sustainable, there is no reference to inequality.

This is a problem because there is an emerging consensus that increasing inequality not only has social justice implications but also has macroeconomic consequences. Inequality restricts access to social, economic and other opportunities, which limits intergenerational mobility and imposes society-wide cost through lost economic opportunities.

Inequality influences patterns of consumption and demand in ways that restricts economic growth. This bill aims to correct this by expanding the Productivity Commission's mandate to explicitly include consideration of inequality. It does this by requiring the Productivity Commission to consider the importance of mitigating the negative impacts of inequality on the Australian economy and the Australian community when exercising its functions and requiring the Productivity Commission to produce a report on the extent of inequality and its effects on the Australian economy every five years on the same timetable as the Intergenerational report.

In determining the merits behind this bill I would like to inform the Senate of some alarming trends currently faced by our nation. Australia's inequality level is the challenge of our time. Inequality in Australia is at a 75-year high. Wealth is growing more quickly at the top. Over the past four decades, real earnings for the top 10 per cent have risen nearly four times faster than they have for the bottom 10 per cent, and the trend of increasing inequality will continue unless we arrest it. Extreme levels of inequality are incompatible with how we as a nation see ourselves. Almost three-quarters of Australians agree the differences in income are too high. Australia doesn't have the extremes of inequality that we see in other countries such as the US, but it is below the OECD average. Two and a half million Australians live below the poverty line. Inequality is a drag on economic growth and a destabilising force. The OECD has estimated that, from 1985 to 2005, inequality reduced growth amongst member states by almost five per cent. Rising inequality in leading nations has been named as one of the drivers of the financial crisis. High wealth concentration was a destabilising factor in extremely deregulated financial markets.

We should talk more about inequality and we should do so armed with the numbers. An inequality report would do three things. One, it would establish measures for economic inequality in different dimensions such as geography, gender and age of inequality. The government can't respond effectively if the problem is not measured, and the community may remain unaware of the extent to which inequality is connected to social and other outcomes. Two, access the effects of economic inequality on the economy and on individuals. 'How mobile we are?' and 'How is inequality affecting people's life chances?' You only have to look in the remote regions of the Northern Territory and the remote regions of Australia to see how people struggle. Accessing the effects of existing government programs on economic inequality is a critical part of the policy development cycle. And, it would access personal struggles with inequalityin particular, as I said, in the Northern Territory. Two of the poorest regions in the Territory also have very high inequality. These are the vast regions that encircle the Darwin area, called Daly, Tiwi, West Arnhem and the East Arnhem regions. Of course, there are regions with varying income levels that also have relatively low inequality ratiosfor example, the region of Molonglo in South Canberra.

The target to halve the gap, I have to talk about the gap in child mortality, by 2018 was certainly not on track last year, and the target to close the gap in life expectancy by 2031 is not on track. Interestingly enough, we're coming up to then report on Closing the gap next week in terms of life expectancy, health and education for First Nations People in this country. The attendance rate for non-Indigenous students remains steady at 93.1 per cent, but progress will need to accelerate for that target to be met.

Halving the gap in employment by 2018 is not on track. As our shadow finance minister, Jim Chalmers, outlined in his recent book, Changing Jobs: The Fair Go in the New Machine Age, it's certainly a remarkable achievement that Australia has maintained a record quarter-century of uninterrupted economic growth, especially when this period contained the greatest global downturn since the Great Depression.

However, the gains of this growth are increasingly flowing to the top end of town and we see this way too often, madam deputy speaker. In the Northern Territory, as a Senator for the Northern Territory, I travel to our remote regions and our towns. Equality is absolutely necessary in terms of transportation and access. At this time of year, with the wet season, half of the Northern Territory is impacted quite dramatically with heavy flooding, as we've seen with the evacuation of residents from the Daly River region last week to Darwin. Huge thanks, obviously, to the Northern Territory Emergency Service, Red Cross and other personnel involved with the evacuation. Again, the measuring of inequality is certainly quite critical for the constituents of ours in the Northern Territory and the remote regions of Australia.

I am certainly confident that this bill is a step in the right direction.

I commend the bill to the Senate.

Watch my speech here.