Federal treasurer Scott Morrison says low rates of wages growth have opened the door to the “politics of envy” in Australia, accusing the opposition of indulging in “neo-socialism” in a keynote speech in Sydney.
Morrison argued that open economic policies that had supported Australian growth risked being “overwhelmed by the rebirthing of failed left wing economic policies, offering false promises to people who have been caught in the transition of our economies in the post GFC period”.
“These forces are real. Whether it is Bill Shorten’s New ‘Red’ Labor in Australia, the most left wing Labor Party we have seen in generations, Jeremy Corbyn in the UK or Bernie Sanders in the US,” Morrison said at his annual Bloomberg address.
Protectionist policies are also a feature of US President Donald Trump’s economic policies, although the treasurer did not mention him. This week Trump was reported to have repeatedly asked his chief of staff to bring him options for tariffs on imports.
In a sign that the government is now aiming to up the stakes on economic policy, Morrison said opposition leader Bill Shorten was leading a “New Red Labor”.
“The reason for the rise in neo-socialism and protectionism is the frustration still being felt on wages growth,” Morrison said.
“Flat wages growth has opened the door to the politics of envy. The opportunism of Bill Shorten’s New Red Labor has embraced these forces to form a new flat earth economic alliance.
“Whilst the improvements we are seeing in our economy are welcome, they are of limited comfort so far to households who have not yet seen this translate into an improvement in their incomes.”
The government is keenly aware of the political risks from low wages growth, a phenomenon seen in advanced economies around the world despite high rates of employment. Morrison shared a chart showing a core element of the Coalition’s current economic policy — preserving the tax to GDP ratio — indicating this is likely to be a key pillar of its economic platform ahead of the next election.
Economic management is a traditional strength for the Coalition, and although economic data has been improving through 2017, private sector wages growth remains at record lows and below the headline rate of inflation. Coalition support continues to lag Labor on a two-party preferred basis by between 4 and 6 points in published polling, which would see the government lose power if realised in an election.