Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Hansard source

I will go to it. I am glad you have jumped in here; you might learn something. The decision to abolish the exit tax on superannuation will affect very few people when it comes in. They do not have enough in their super accounts to pass the threshold of $130,000, which is an indexed amount. The big cost is the tax free status of the lump sums or annuities taken by people turning 60, with the reasonable benefit limit abolished.

There are a number of key questions that this government have to answer before we can have a sensible debate on these initiatives. They claim that it is a significant change to the superannuation system, but we want to know the answers to these questions: will it disproportionately benefit the very wealthy? Will it lead to a different tax status for retirees over 60 continuing to work and those below 60? Will it lead to increases in consumption and therefore add to inflationary pressures? Could it result in people blowing the lump sum and coming back to claim the aged pension? If it does, it is hardly a strategy to reduce the cost to the budget of an ageing population.

The public deserves honest and open answers to these questions. Notwithstanding the government’s claim that this is the most significant policy change to superannuation in 20 years, it is staggering that the government has refused to detail the costings for the various elements of the proposal. The aggregate of $6.2 billion does not even appear in the budget bottom line.

Not only should the detailed costings be revealed, but we need to have the proposals run through the intergenerational model to determine both the income distribution and the cost implications over the 40-year time frame. The Assistant Treasurer has claimed that over the long term the pension and health costs to the nation will fall due to this policy. What is that claim based on?

The truth is that the imperative for superannuation in this country still remains to lift the adequacy on contributions above nine per cent. One way to do it is to reduce or abolish the contributions tax, as advocated and advanced by Labor over recent years. Clearly, abolition costs more than the government’s announced policy. But, again, it is worth considering a significant down payment on abolition of the contributions tax as an alternative. The $2.3 billion in the first full year of costings of this proposal would essentially halve the contributions tax, on rough calculations.

So I ask the question: did the government consider this as an alternative? Senator Minchin certainly has. Has this alternative been modelled for its intergenerational impact? If so, produce the results and let us have a real debate. If not, let us do the modelling but consider all of the options. Cutting the contributions tax would be the equivalent of lifting the compulsory nine per cent contribution with no cost to either employer or employee. It also represents real tax reform in relation to future, not present, earnings; it is a tax cut that goes to savings; and it is non-inflationary.

We welcome in this budget the commitment to water and to the Murray. But, once again, it is an initiative coming three years late. In 2003 Labor proposed and funded Riverbank, a government corporation to secure long-term funding for much needed investment in Australia’s water resources—another wasted opportunity. Just think: had the government adopted the plan then, imagine how this year’s budget could have built on it.

This budget has also abandoned our regions and neglected to invest in their sustainable future. There was not one mention of regions in the Treasurer’s speech. He visits them only for photo opportunities; he is not committed to them. But this comes as no surprise to people in regional Australia. The Howard government have neglected the regions for 10 years. Their approach is clear: they see ‘no clear rationale or constitutional basis for Commonwealth involvement in regional development’.

I have outlined on previous occasions our commitment and approach to regional development. Our approach is not just about the ‘what’ of what governments can deliver but about ‘how’ they deliver it. It is about a commitment to a whole-of-government approach and to deliver economic, social and environmental sustainability to the regions. We will restore leadership in regional development and ensure that there is effective coordination between all levels of government and their departments. We recognise the need for a restored Commonwealth leadership role, but also one that encourages a location-responsive approach to regional development.

The budget failed to address the infrastructure challenges facing our nation. The commitment that is being made to roads is long overdue and highlights the neglect by this government of our national highways for over 10 years. But whilst roads are an important part of national infrastructure, it is equally vital that our regions have access to affordable broadband. This will enable them to expand their business opportunities, to diversify their industries and to connect our children with the educational opportunities as our next generation in the workplace.

But this budget was silent on improvements to its flawed strategy to sell Telstra and connect the nation—in particular, on any effective plan to connect our regions with quality telecommunications. The Leader of the Opposition, on the other hand, in his response the other night committed Labor to build a national broadband network in a joint venture with the telecommunications sector. For the first time millions of Australians would have access to super fast broadband internet, 25 times faster than the current broadband benchmark.

Labor has consistently put forward positive and constructive budgetary proposals that would benefit all Australians. It is true that I have spoken today not just to condemn the budget for its wasted opportunity but also to demonstrate what Labor proposes as an alternative—real and constructive alternatives, a better way to allocate the nation’s resources and a better way to invest in our hard earned prosperity.

In addition to the issues that I have already raised, I will mention the proposals that we have already announced: Labor’s blueprint for children’s health—Goals for Aussie Kids; Australian skills blueprint; Labor’s Building Australia—infrastructure and investment blueprint; Labor’s Australian fuels blueprint; our commitment to connecting the nation; and our boost to child care. These are initiatives which have been outlined by the Leader of the Opposition and shadow ministers both prior and in response to this budget. As I said at the beginning, budgets are about choices. Labor would make very different choices from the government—choices that would be better for families, communities and the nation. In presenting those alternatives, we believe that in turn the Australian people will make a different choice at the next election.

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