Stephen Jones - Transcript - Sky News - Tuesday, 30 July

SUBJECTS: HILDA Report; Superannuation Guarantee Levy; Banking Royal Commission recommendations.


SUBJECTS: HILDA Report; Superannuation Guarantee Levy; Banking Royal Commission recommendations.
KIERAN GILBERT: Joining us now for a discussion of the politics of the day is the Shadow Assistant Treasurer and Shadow Assistant Minister for Financial Services, Stephen Jones. Let's start with the HILDA Report, the housing income data study, which basically looks across decades. This shows that eight years ago households on a median income are better off than they are today.
STEPHEN JONES: That's right. There's been a 10% increase in poverty. Looking at the household sector, people are saying to us that they don't feel like they're any better off and the HILDA data explains why. When you look at some of the data and put together the picture around the workforce and what's on going there, it's quite clear Australians are spending longer getting to work, they’re spending longer at work and they're taking less money home.
GILBERT: They’re hardly flying. It must be frustrating, even more now, that the election was lost in this context, because obviously people are feeling it if their real incomes have declined across the last decade.
JONES: This is a real challenge for the Government because they haven't got a policy which is going to turn things around. There's no wages policy. In fact, every single one of their policies is geared towards making it harder for people to fix these problems. Spending longer getting to work, spending longer at work and taking less home is not a recipe for a strong economy.
ANNELISE NIELSEN: One of the interesting things I found at the survey, which is really quite comprehensive with 17,000 people, was that it's not making the case for compulsory superannuation. They're saying 30 per cent of people who are on the Age Pension rely on that for 90 per cent of their household income and that superannuation isn't helping them. Is this not making the case to get rid of compulsory superannuation?
JONES: It's absolutely not and the counterfactual is what would it look like if those people didn't have some superannuation, however modest it is, at the moment in their retirement savings. They would be well and truly below the poverty line. That's the counterfactual and I think what we're looking at here is we've got a long tail of people. When you entered the workforce, you had compulsory superannuation, probably approaching 9 per cent, but the people who are retiring today and the people who have been retiring over the footprint of this survey probably had very modest contributions over the course of their working life, somewhere between 4, 5 and 6 per cent. We've got a long tail to work through. It will be exactly the wrong response if we said what we've got to do is act on compulsory superannuation or wind back the legislated increase.
GILBERT: The author of the HILDA report was making that very case. She's saying that there's no argument to increase it to 12 per cent given the data that Annaliese pointed out.
JONES: I respectfully disagree. Like I said, the counterfactual is these people would be worse off in their retirement because they would have no savings.
NIELSEN: They would have a better standard of living while they're still earning money. It's back in their pocket and then they can put that into things like a home, or paying for power bills and things that are really essential.
JONES: I actually don't agree with that. If you look at what's happened, particularly over the last five years, where superannuation contributions have been frozen at 9.5 per cent. We haven't seen wages going through the roof over that period of time and if you look at the legislated increase, a very modest 2.5 per cent kicking in from 2021, less than the annual rate of wage increases that the Governance itself expects. I think if we freeze or stop wage increases what we're going to see is people not only won't get the superannuation increases, but they'll get no further increases in their wages. That's not a recipe for working Australians. That's certainly not a recipe for turning around flagging household spending.
GILBERT: What's the key, beyond the retirement income, to boost household incomes, to boost productivity and to boost the share of company profits going to people's pay packets?
JONES: Workers need a wage rise immediately. Australia needs a wage rise. Every leading economist is saying that wages are flat. The only way that we're going to get a stimulus to household spending is if we get more money into people's pockets. We need a wages strategy from this government. We simply don't have one. On productivity, we've got to be looking at the rate of capital accumulation. Don't have enough businesses starting up, we don't have enough investment in in productivity enhancing technology, we have basically flat lined in those areas. We shouldn't be looking to just cutting into workers’ wages and conditions. We need to be looking at the things that are really going to boost productivity from a governmental point of view, a wages policy, plus an infrastructure policy.
GILBERT: When you talk about a wages policy, what do you mean? The vast bulk of wages are set by the private sector.
JONES: The Government has got a role to play in this. The Government is a big employer in and of its own right so it can be leading by example. The Government is a very influential contributor to national wage case decisions of the Fair Work Commission. They can be sending very clear messages through all of the levers that they have to pull down on to say Australia needs a pay rise, this is what it should look like, we're going to lead by providing that to our own workers and we think the rest of the economy should be following suit.
NIELSEN: Labor has been quite concertedly pushing the case for enacting the Banking Royal Commission recommendations and accusing the Government of delaying it. There are only about 40 recommendations that the Government would be responsible for out of those 76 and a lot of those do have to go to some kind of consultation. We've seen them going through the regulators. Is this not good news that they've managed to put through the unfair contract provisions for insurance this week?
JONES: Poor old Josh Frydenberg. He struggled to get five when questioned on this in Question Time yesterday. Seventy-six recommendations and he wants a pat on the back today because he's going to introduce a bill that could have been done before the last election to include unfair contracts into insurance contracts. There are 15 recommendations in the chapter on insurance and he's going to move on one of them. It's 176 days today since the Royal Commission handed down its report. He's moving on one in the insurance chapter and five across all of the recommendations. The Government is dragging its feet and Labor will be keeping them to account on each and every one of those recommendations.
GILBERT: Some of them they won't adopt. Quite clearly, the Government has already indicated that they’re not going to adopt the mortgage broker recommendations.
JONES: That's one. That leaves us another 75.
GIBLERT: In that context, though, there are going to be some that they won't be adopting from Commissioner Hayne’s recommendations.
JONES: Let's go to some of the specifics. We're talking about insurance, they’re going to move on one of the 15 recommendations. It would have been pretty simple for them to have introduced a bill last week or this week, to make hawking of insurance products illegal. The Commission recommended it, the Government said that they would implement it, Labor introduced a Private Member's Bill on it. The Government is still dragging its feet. Let's look at funeral Insurance. Absolutely damning evidence before the Royal Commission. A recommendation to knock those sort of dodgy products off. The Government said that it would accept it. It's done absolutely nothing. We've been playing political parlour games for the last two weeks, dragging their heels on implementing these recommendations because they don't believe in them.
NIELSEN: Insurance hawking provisions are an excellent example, because that's one where they put it back onto the regulator. They want ASIC to take action on it. We've seen ASIC start a consultation period about it. Do they need to be having a consultation period or should the Government just get on and do it?
JONES: This is the Government's job. They were elected to do a job. The Treasurer's got a job to do, the rest of his frontbench has got a job to do they shouldn't be handballing all of these things through to ASIC, to APRA and the other regulators. The regulators have a role. Their powers need to be beefed up, but the Government can implement immediately and act on these two things. There's two challenges for them for the next month; let's get a bill into Parliament on hawking and let's get a bill into Parliament on the other insurances chapters. They'll have our full support.