The lessons of Michigan, Ohio & Pennsylvania

Bill Shorten

There is indeed an urgent need for the government and the parliament to address rising inequality and division in Australia. In that vein, this is undoubtedly a lesson to be learned from the recent US election. I appreciate that, whilst our two nations share common values and ideals, we are not the United States. Three decades ago we took a different economic direction. We went a different way. The United States chose Reaganism and trickle-down economics; Australia chose Hawke and Keating and the Accord.

In Australia we believe in a minimum wage that is a living wage, a wage that rises regularly and prevents poverty, not sustains it. We believe a university education should be earned on merit, not determined by one's income or by the income of one's parents. It is why Labor governments keep university affordable. We believe Australians who work hard their whole lives deserve dignity in retirement. It is why Labor built universal superannuation and why we always fight for a fair go for pensioners. We believe that the health of any one of us matters to all of us. It is why we created Medicare and why we will fight to protect it.

The numbers tell the story about addressing inequality and division. In 1985 the minimum wage in Australia was A$5.66 an hour; in 2015 it had risen to A$17.29 per hour, an increase of 11.2 per cent in real terms. In the United States in 1985 the minimum wage was US$3.35 an hour; in 2015 it was US$7.25 an hour, a decrease in real terms of 21 per cent. In the last 20 years the proportion of our population aged 25 to 34 earning a tertiary degree grew by almost 90 per cent, but it increased by just 30 per cent in the United States. Australia's middle class holds 40 per cent of our national wealth; the American middle class holds just 19 per cent of theirs.*

The Australian model is one of a decent safety net and a strong middle class, and it steered Australia through the global financial crisis. The member for Lilley presided over an economy that did not just weather the world storm; it grew. This was not in spite of Labor's belief in inclusive prosperity but because of it. After the GFC we reinvested in productivity and social equity through the National Disability Insurance Scheme, empowering an extra 470,000 Australians living with disability, and their carers, to participate in our growing economy. The Australian model grows national wealth through productivity, skills, permanent migration, and trade and investment, underpinned by a strong safety net of a fair minimum wage, compulsory superannuation, Medicare, the NDIS and the pension.

We can never be complacent or arrogant about what we have built, and we should acknowledge that all sides of politics have previously made a contribution to the Australian story. But economic change is never even, and it is always hard. We must recognise that there are real challenges in our economy right now. Living standards are two per cent lower than when Labor left office. Most jobs being lost are full-time jobs; most jobs being created are part-time jobs. Productivity is at a standstill; wages growth is flatlining; insecure work is on the rise. More and more Australians worry about being offshored, outsourced, contracted out or downsized. Income inequality is at a disturbing 70-year high. Childcare costs are devouring the wages of working parents. Our tax system continues to disproportionately favour the wealthy individuals and multinational companies who can afford the advice to avoid paying their fair share. Next time, for the first time ever, homeowners will be in the minority, because a generation have been locked out of the market by tax concessions for speculators.

Our regions are all too often missing out on local jobs in the regions. People in Gladstone, Townsville and Mackay listen to this government talk about massive headline growth and they wonder why it has not delivered for them. People in Gove and Geelong, the Hunter and the suburbs of Perth work their last shifts as their factories and refineries close; yet all they hear is this Prime Minister talking about exciting times. People in Elizabeth and Broadmeadows and North-Western Tasmania see the government puff its chest out about creating jobs and they wonder why so many people in their own community cannot find work. From mining towns to manufacturing suburbs and regional Australia people are hungry for recognition, hungry for Australia's leaders to recognise that the economy is not working in the interests of ordinary Australians. In this place we should never discount or dismiss the difficulties of people who are struggling—the more than 700,000 Australians who cannot find a single hour of paid work a week, and the more than a million Australians who regularly record that they would like more hours of work by simply cannot obtain them. There are the 800,000 of our fellow Australians on the disability pension, marginalised and blamed rather than supported into work.

We should not be surprised that in our own country Australians doing it tough are furious when they see workers brought in on 457 visas and exploited to undercut Australian wages—dodgy operators bringing people in to work as cabinetmakers, cooks, carpenters, electricians and motor mechanics and paying them, in some cases, $10 an hour or less. We need to recognise that where economic change is fast and uncertain, where economic growth is concentrated in the hands of a few, where there is a widening gap in incomes and opportunities, rewarding the top end and leaving the rest behind, these are the conditions for demagogues and the breeding ground for the politics of blame, of us versus them.

We are not yet at the point of the United States, but unless action is taken it is the direction in which we are heading. This is not the time to aggravate inequality and division with cuts to working- and middle-class families and a $50 billion giveaway to multinational companies, with $17,000 tax cuts plus for millionaires thrown in for good measure. This is no time, also, to appease those who peddle prejudice by giving into their demands.

Where ever there is a vacuum in leadership, it will be filled by extremism. But Labor will not be retreating. We will not lower ourselves to the politics of fear. We will not play the race card; we will not weaken protections against hate speech; we will not marginalise the poor, the sick and the vulnerable for a grubby political dividend. We give more credit to Australians than that. We think more of this country and what we can achieve and where we can go. This is not the time for weasel words; it is the time for policies that put people first. It is time to prioritise the first home buyers and to put the great Australian dream of housing affordability back into the reach of working- and middle-class families. It is time to stand up for Australian jobs. It is time to crack down on employers using and abusing our visa system to import and exploit cheap labour. It is time to invest in our schools. It is time to back public TAFE and Australian apprentices. It is time to get nation-building projects like high-speed rail up and going and to put Australians to work on these projects. It is time to protect Medicare, because every Australian should be able to see a doctor when they are sick and be able to afford the medicine that makes them better.

Labor does not believe in a world of trade agreements which do not deliver the blue-collar jobs for those hurt by these agreements. We cannot be a parliament that protects the banks during the GFC but denies a royal commission to the victims of banking scandals in these circumstances. We cannot allow corporate donors to exert their influence on election campaigns without transparency, accountability and election-funding reform. This government should not and cannot subsidise private health providers exclusively while cutting Medicare and our hospital funding. All this does is concentrate power in the hands of the wealthy few and guarantee that more and more people are left behind.

My party will heed the lessons we saw in Detroit, Michigan and Ohio, Pennsylvania. Labor will deliver an economy that serves and includes working- and middle-class people. Labor will buy Australian, build Australian and employ Australian. We will never leave people behind.


Bill Shorten is the Leader of the Federal Labor Opposition. This speech was delivered as a matter of public importance in the Commonwealth Parliament on 10 November 2016, following the election of President Donald Trump in the United States.


* For the latest and most precise data on wealth inequality in Australia, see the Evatt report: The Wealth of the Nation: Current Data on the Distribution of Wealth in Australia.