Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

On this side of the chamber we made a commitment to the Australian people to reduce the tumescent pile of government waste built up by the previous government. The Tax Bonus for Working Australians Repeal Bill 2013 is just one of the many measures the coalition government are taking to reduce waste and get the budget back on track so we can spend money on infrastructure and vital projects that impact real Australians, rather than just paying off the previous government's enormous deficit legacy.

The original Tax Bonus for Working Australians Act (No. 2) 2009—or, rather, tax bonus for working Australians, overseas workers, overseas students and deceased people—was designed as part of the Rudd government's excessive $95 billion stimulus package. A stimulus is defined as something that arouses activity or energy in someone or something; a spur or an incentive. The tax bonus was part of a short-term stimulus package designed, supposedly, to flow quickly into the economy, 'saving' it from recession. Not only did the Rudd government's stimulus packages flow into the economy far slower than intended; there was no sunset clause on the tax bonus bill, meaning no end date.

This bill really should not be controversial. Given that the original bill was proposed by the Rudd government on the pretence that it was purely to stimulate the economy at the time of the global financial crisis, and that economic stimulation is no longer required, the government considers that further payments are therefore not warranted. This is simply a measure of good housekeeping.

While it is hard for Australia to ever forget the sheer volume of debt left to future generations by the previous government, allow me to quickly summarise. The Mid-Year Economic and Fiscal Outlook in December last year forecast a $47 billion deficit in 2013-14 and $123 billion worth of cumulative deficits over the forward estimates. The budget position since the Pre-Election Economic and Fiscal Outlook released in August 2013 has deteriorated by $68 billion over the forward estimates. The financial situation that the government has inherited is simply unsustainable.

This is just one of the many measures this coalition government is taking to address waste left over from the previous Labor government. While the original bill was intended to give a tax bonus to individuals earning less than $80,000 in the 2007-08 financial year, in reality in the last financial year, 2012-13, 15,000 cheques were issued, totalling around $13 million in borrowed money. Since its introduction, more than 16,000 stimulus payments have been sent directly to taxpayers living overseas, totalling $14 million. More than 21,000 payments have been made to deceased taxpayers, totalling more than $18 million. That is $18 million to people who have no capacity to stimulate any economy! And this includes the payment of 40 stimulus cheques to deceased individuals this financial year. The total amount of borrowed government money spent on stimulus payments to date is estimated to be around $7.7 billion.

Mr Craig Van Rooyen, a fruit farm owner in my home state of Queensland, said to The Courier Mail that he was appalled to find that the government was still mailing stimulus payments to foreign backpackers who worked on his fruit farm four years ago. It is shameful to know that under this policy the previous government was sending money to non-Australian residents while they are not even in the country, supposedly to stimulate our economy. Mr Van Rooyen stated that the previous government had been a reckless spender of Australian taxpayers' money. I agree with Mr Van Rooyen. Labor continued to treat taxpayers' money with complete disregard, leaving a massive debt for our children's future. On 7 September last year the Australian people voted, with resounding support, for a party committed to treating their money with respect.

Those opposite love to beat their chests, boasting that it was their 'champion of economic management' that saved Australia from the worst of the global financial crisis. However, many experts argue there is no proof that the stimulus saved the economy. More likely, it was factors such as the financial services sector remaining strong and watched over by a good regulator—there were no bank failures, a key difference to events in the Northern Hemisphere; or that the Australian dollar fell rapidly as the crisis took hold, helping local employers, including exporters; or that the Reserve Bank cut interest rates more aggressively than at any other time in recent history—from September 2008 to April 2009 the bank drove the cash rate down from 7.25 per cent to three per cent; or even that the Chinese leaders approved an extraordinary stimulus of their own—in November 2008 they promised to spend US$586 billion, about seven per cent of gross domestic product, across two years, and throughout 2009 this helped reverse a drop in demand for Australian commodities, including iron ore and coal. All of these factors are pushed to the background in the narrative from Labor.

We should note that this bill repeals only one part of Labor's reckless stimulus package. No-one could forget the pink batts disaster and the school halls shambles. Indeed, what happened to GroceryWatch and cash for clunkers? You would think that, when Labor decided to spend $95 billion of borrowed money on a stimulus package, they would provide a substantial analysis of the program. However, when a reporter asked for such an analysis in early 2012 under freedom of information law, they were told that no such documentation even existed. Shamefully, Labor's $900 package saw the average household spent just $1 extra on non-durable goods in the week they received the $900 bonus. Was it a coincidence that, at the same time as Labor's $900 cheques were being sent out, electrical stores saw an increase in imported flat screen TV sales?

While Deloitte Access Economics advised that spending too much on a stimulus package and keeping an economy from recession is a lesser evil than spending too little on a stimulus package and seeing the nation's economy fail, they noted that, if you choose to do so, there is still the possibility of winding it back. However, the Labor government simply did not do that, which is why we are speaking on this bill today.

There is, of course, an annual interest account for this stimulus. It is the interest expense on about $95 billion in borrowings, which is approximately $4 billion a year. This adds to the Commonwealth's interest bill for the last financial year, which was $14.2 billion. Australia's debt left by the previous Labor government is on track to reach well over 11 per cent of GDP. There is an inherent problem with many governments around the world when they continue to spend big even though they are no longer getting the big rises in income we took for granted before the global financial crisis. During the last six years, the previous Labor government perpetuated this expectation of entitlement, repeatedly coming up with new, expensive handouts Australia simply could not afford.

The Treasurer has said that the coalition government recognises that it is high time the age of entitlement came to a close. More than six million Australians now live off government benefits or salaries, with only another six million Australians working full time in the private sector to pay for them. There are anecdotes highlighting individuals' expectations of entitlement, such as the reports of a couple who wanted frequent flyer points for being evacuated from Cairo on a government-chartered rescue flight. There was also the person who rang the Department of Foreign Affairs and Trade's emergency service to ask, 'Could DFAT feed my dogs while I'm away?'

Labor recklessly kept erupting with billions of dollars worth of new bonuses, assistance packages and schemes it could not pay for, and reprehensibly left future generations of Australians to foot the bill. As the coalition often says—but it is rarely appreciated by those opposite—it is the taxpayers' money, not the government's money, and that is a reality that we as members of parliament should never forget.

If the Labor government's waste were only on areas of economic stimulation, then perhaps there would be a case for forgiving them. But, unfortunately, widespread waste is the never-ending legacy of the last government. We pay for it day by day, month by month and year by year. It cuts ruthlessly through our ability to deliver services and it hurts the most vulnerable in our society. It is a legacy that consistently demonstrates how incompetent the last government was, and the tragedy is that they just do not care. How disgraceful is that? The Labor government laughed off the 'road to Greece' warnings, instead riding on Australia's luck of being propped up by incredibly high prices for our minerals, which in turn depend on the still-high growth of China. The coalition government heeds these warnings and is responding. This repeal bill is one such response.

At the core of this government's responsibility is the overriding obligation to value and care for the taxpayers' money. This coalition government recognises that everyone has to live within their means, whether it is a company, whether it is a family, whether it is an individual or whether it is a government. The coalition pledged to the Australian people that that is what the coalition government is going to do, and our budget preparations reflect a government that lives within its means. I commend this bill to the House.

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