Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

This is the first federal Labor budget to be debated in this parliament for just over a decade. It is a very significant achievement, setting a new direction for this nation. I congratulate the Treasurer, the Minister for Finance and Deregulation, the Prime Minister and everyone else who has worked on it. It is apparent to all that it is the product of a great deal of hard work. It has accomplished and will accomplish a great deal. I think its two most outstanding characteristics were these. First, it has honoured our election commitments and kept faith with the Australian people. This is no minor matter. We cannot afford to have a situation where there is a lack of trust between governments and citizens. Citizens need to be able to rely on governments and their elected representatives keeping their word and honouring their promises. Over the years there has been something of an erosion of trust between electors and their elected representatives. John Howard’s tricky division of election promises into core promises, which he kept, and non-core promises, which he did not, helped fuel voter cynicism and alienation from the democratic process. So it is important that this budget is keeping Labor’s election promises. In doing so, it is helping to build trust and confidence in Australia’s political process and institutions.

The other prominent feature of this budget is that it puts downward pressure on inflation and interest rates. Twelve interest rate rises in a row have hammered homebuyers and small business and it has to stop. The budget has produced a record surplus, so the government is playing its part. This is an economically responsible, fiscally conservative budget. I was astonished to hear the budget reply from the Leader of the Opposition on the Thursday night after the budget had been delivered. He announced billions of dollars in spending promises and tax cuts but did not announce any savings measures to pay for them. All night I waited. The next day I waited. All last week I waited. I am still waiting for the opposition leader and the shadow Treasurer to announce the proposals to fund these measures. I have waited in vain. We heard nothing. It is incredible. Those on the other side of the House, who have lectured us for years about our alleged fiscal irresponsibility, who, over and over again, talk about their reputation for sound economic management, have proposed a budget alternative with billions of dollars in unfunded spending promises. Their reputation for sound economic management took a bit of a beating in the last parliament as a consequence of all the interest rates rises. Nevertheless, it was a remarkable thing to see them abandon the terrain completely. They seem to have lost all interest in arguing with Labor as to who is the more economically responsible. It is quite astonishing.

In the time I have to speak on the budget I want to discuss two very important issues which have been very prominent in the post-budget debate. The first concerns pensions and retirement incomes. For a number of years, I have been of the view that pensioners need more support than they are getting. I have no doubt that they were dudded over the GST. The essential feature of the GST was a rise in consumption taxes made up for by a reduction in income taxes. This is okay for people who are in the workforce but very tough on people who have retired and for whom it is too late to go back into the workforce to earn new money. The compensation for the GST which pensioners and retirees received tended to be one-off compensation, whereas the GST goes on forever. The second problem for pensioners and retirees is that there has been a real spike in the cost of living during the past year. The cost of food has skyrocketed. Visits to the supermarket are now a matter of fear and trepidation. Each time you go, the price has gone up on something. The cost of petrol has skyrocketed—I will have more to say about this issue later. Electricity is up. Water is up. Pharmaceuticals are up. The fact is that the pension simply is not keeping pace with these things.

Last week I met with Mr Gino Iannazzo and Mr Vic Guarino, representatives of the Moreland Seniors Action Group. They said to me that pensioners have lost spending power since the introduction of the GST, especially in the last three years. The present pension is $273 per week for singles and $228 per week for each member of a pensioner couple. They say this is simply not enough to make ends meet. They point out that according to the Australian Bureau of Statistics in February this year full-time adult ordinary time earnings averaged $1,123 a week. For each member of a pensioner couple to get 25 per cent of average weekly earnings, which is what the public thinks pensioners get, their pension would need to rise from $228 to $281 per week—that is, a $53 per week increase. They remarked to me that the government had set the means test limit for the baby bonus at $150,000 per annum, which is, I believe, $2,885 per week. In other words, you can earn 10 times the amount a pensioner receives before you are considered too wealthy to warrant government support by way of the baby bonus and other family payments. I have had similar concerns expressed to me by other seniors groups, such as the Greek Elderly Citizens of Moreland, Italian pensioners clubs, and individual pensioners and retirees.

I welcome the fact that both the Prime Minister and the Treasurer have acknowledged that pensioners are struggling. I further welcome the fact that the government is carrying out a review of the adequacy of pension payments. In March the Prime Minister indicated that government would be examining ways to deliver increased financial security to seniors. I look forward to that review and, more importantly, to action to address the present financial plight of pensioners.

On the weekend, the Prime Minister told the Victorian Labor state conference that Treasury secretary Ken Henry is preparing a report on how we can confront the long-term interrelated challenges of our tax, welfare and retirement income systems, which will include a review of aged pensions. It is due in February 2009.

I may be at odds with some pensioners and their representatives who want the focus to be on lifting the single rate of pension. I do not know how well known this is but, up until September 1963, there was only one rate of pension paid to singles and couples alike. At that time, an extra 10 shillings a week was introduced to compensate single pensioners for the extra expenses they incur. I do not doubt for a minute that single pensioners have more expenses, but I think it is unfortunate that the present arrangement effectively penalises married pensioner couples and introduces a financial disincentive for single pensioners to do anything other than live alone. I do not think this arrangement is good for single pensioners, I do not think it is good for married pensioners and I do not think it is good for the community. The community would have fewer problems of isolation and loneliness and more efficient use of housing and other resources if we had fewer single pensioner households and more pensioners living together or with other family or friends who could provide them with financial and emotional support—and, let me add, vice versa. It cannot be said too often that many grandparents and great-grandparents are important sources of mentoring, child minding and other support which adds value to family and community.

I want to conclude this part of the discussion by pointing out that the budget did contain measures which will benefit seniors. The budget is committing $5.2 billion in additional funding for seniors. That is 3½ times the amount pledged by the previous government in the 2007-08 budget. The implementation of our election commitments in this budget provides an average additional annual benefit of $400 for age pensioners and seniors. An age pensioners and seniors bonus of $500, benefiting some 2.7 million seniors, will be paid before the end of the current financial year—by 30 June 2008. These bonuses come on top of an increase in the utility allowance from $107.20 a year to $500 a year. The first quarterly instalment was paid out to age pensioners and seniors in March.

These important financial measures come on top of an extension to the telephone allowance, new dental funding for concession card holders and petrol vouchers for volunteers who use their own transport. The Australian government is providing $50 million over four years to implement a national plan to help seniors with their travel costs. It is working with state and territory governments to provide funding to ensure seniors card holders can access travel concessions on public transport anywhere in Australia. Reciprocal transport concessions will help older Australians who like to travel to visit their families and see the country. Currently, when many state government seniors card holders travel interstate they cannot access local public transport concessions because their home state card is not recognised. The government recognises the frustrations experienced by older Australians and does not believe that transport concession entitlements should stop at state borders. These national reciprocal transport arrangements are expected to be in place by 1 January next year, subject to agreement by the state and territory governments.

Another important measure is that Australian government concession cards will now remain valid during short-term overseas travel from 1 July this year. Under this change, concession cards will no longer be cancelled when cardholders leave Australia for holidays or other short-term absences. This will apply to holders of the pensioner concession card, health care card and Commonwealth seniors health card. Presently people cannot retain a concession card issued by the Australian government while overseas. Cards are cancelled from the date the cardholder leaves Australia and have to be renewed upon return. I believe that introducing portability of concession cards will reduce the administrative burden for customers and the cost attached to cancelling and reissuing cards.

I now want to turn to the issue of petrol prices. They have been heading skywards since 2004, which is deeply ironic since some of the cheerleaders for the invasion of Iraq, including some members opposite, were telling us that invading Iraq would bring petrol prices down. We heard that going into Iraq would give us a petrol price of $20 a barrel. It is now $130 a barrel. I notice that the renowned Nobel laureate Professor Joseph Stiglitz has said that it would be reasonable to attribute something like US$35 a barrel of the US$80 a barrel increase which has happened since the start of the war to the invasion of Iraq.

I support the measures taken by the government to have the ACCC scrutinise the pricing policies of the oil companies more closely. The previous government failed to do so. It was too close to the oil companies. But the Prime Minister has also said these measures will impact on petrol prices at the margin, and he is right about that. Their impact will be beneficial, but it will not be dramatic.

I also support the announcement that Labor’s tax review will include an examination of the impact of the GST on petrol taxes. This is an issue which I have raised publicly a number of times over the years. The more the price of petrol rises, the more tax the government gets courtesy of the GST. I welcome this matter coming under scrutiny. The previous government ignored it. They were content to rake in the revenue. But I believe that the real issue with petrol is not about a few cents a litre in tax here or a few cents a litre in better competition there, but how we in Australia transition out of petrol altogether. It is high time we did. There is no future in petrol. It has three strikes against it. Firstly, the price is destined to keep going up as it gets scarcer. This means more hardship for motorists year in, year out. Secondly, Australia is importing more of it every year. This is bad for our balance of payments and bad for our national independence. My parliamentary colleague the member for Eden-Monaro, who has a wealth of military experience, has described this as a national security issue. He is right.

Thirdly, petrol is a major source of greenhouse gas emissions. Australia has committed to reducing greenhouse gas emissions by 60 per cent by the year 2050. How are we going to do this if we do not make serious inroads concerning the carbon emissions from cars, trucks et cetera? Public transport is part of the answer, but clearly we need to transition out of petrol and into alternative fuels, and I regret that we have not done much more of this in the past 10 or 20 years. This problem has been coming—it has been looming—for quite some time. It is not as if it is all too hard—that the alternatives do not exist.

I am going to talk about the Ford Australian manufactured dedicated LPG vehicle in a bit of detail. I do not do this because I am some kind of spruiker for Ford; I would cheerfully do it for anyone who manufactured a dedicated LPG vehicle in Australia. Indeed, I am critical of Ford for not having done more to promote this car rather than its petrol engine ones. But I will talk about this car in order to ram home the point that viable alternatives to petrol vehicles are here right now and all of us—public policymakers, car companies, fuel companies and consumers—should be engaged in a mass exodus to embrace them. Ford started manufacturing dedicated LPG vehicles at its Campbellfield plant back in 2000. Since then it has sold 70,000 of them. Back in November 2000, I wrote to the then Special Minister of State urging an investigation into their suitability as fleet vehicles. These vehicles emit 20 per cent less greenhouse gases than petrol vehicles and 80 per cent less toxic air emissions.

There have been some improvements in petrol engines since then, but the Sydney Morning Herald of 31 March this year reported that LPG cars’ greenhouse emissions are still about 15 per cent less than those of petrol cars. Back in 2000, the margin between the petrol and the LPG Ford Falcon was $798. Motorists could recoup their initial investment within a year of average motoring or 15,000 to 20,000 kilometres. Since then, the price differential has moved to around $1,400 but, given that private buyers get $1,000 government subsidy, the actual cost is around $400. Given that petrol is about $1.50 a litre and LPG is around 60c a litre, a lot of motorists would frankly recover that $400 in a matter of weeks. So I am mystified as to why Ford does not promote the LPG vehicles more, and I am mystified as to why more motorists do not buy them, whether as new or second-hand cars. I do declare an interest here: I drive one of these cars. But, as I have told the parliament before, I can attest to its performance, to its reliability, to its safety and to the fact that service stations all over Australia sell LPG; so you do not run out of gas unless you pay absolutely no attention whatsoever to the fuel gauge.

Of course, LPG is not the only alternative, and over time it is not the best one. We need to move to cars with much lower carbon emissions altogether. We have buses running on natural gas, and Australia has an abundance of natural gas reserves. We should be doing more with these wonderful resources to meet Australia’s own energy and vehicle fuel needs. We should be putting into place the natural gas distribution infrastructure and the vehicle design to make this happen. We have also got dual fuel electric cars on the market—like the Toyota Prius. These vehicles show the way forward. I welcome the commitment in the budget to the development of low-emissions vehicles through the $500 million Green Car Innovation Fund. This fund will ensure Australia plays a leading role in the global development of green car technology.

We need to transition out of petrol and into alternative fuels, and this will achieve three things: it will cut the cost of motoring for hard pressed motorists, it will give Australia energy independence so we no longer have to pay whatever the OPEC countries think we should, and it will reduce our carbon emissions and help save the planet. It really is a no-brainer. Going on the way that we have been is just crazy. Transitioning out of petrol will be good for motorists, good for the current account and good for the environment. In promoting the use of LPG, we have got something which has a strong refuelling network and is well established in the taxi industry. We have abundant supplies of LPG, with these supplies forecast to increase over the course of the next 20 years.

I also think that we need to look at using our huge gas reserves to produce liquid based transport fuels. We have something like 140 trillion cubic feet of offshore gas reserves that, using current technology, could be transformed into what amounts to a limitless supply of transport fuel which is well and truly commercially viable and would remain viable even if there were a fall in the oil price—which I regard as highly unlikely. We should be taking advantage of these riches to insure Australia against physical supply shocks and give this nation genuine energy independence. Natural gas in vehicles gives us good results in terms of the environment. Per unit of energy it contains less carbon than any other fossil fuel and produces lower carbon dioxide emissions. It also gives us good health outcomes in terms of respiratory illness, asthma and the like. It has less particulate pollution than that which is attributed to standard vehicle emissions. Furthermore, natural gas does not have problems for surrounding ecosystems should an accident occur. If a natural gas leak occurs as a result of an accident, it dissipates into the atmosphere and does not disturb surrounding ecosystems or people.

So for all those reasons I believe this is the right way to go, and this is where the focus of our efforts and energies as a nation ought to be. Again, I strongly support the budget—it is the way forward for Australia. I congratulate those involved in its preparation on the effort and energy they have put into bringing it down. (Time expired)

See this speech in context