Matt Williams (Hindmarsh, Liberal Party) Share this | Hansard source

I note with interest the member for Moreton's comments about education, and being a former teacher he will know that we have a massive challenge on our hands to restore Australia's education system to a better level. Whether it is the World Economic Forum's Global Competitiveness Report, that says we are going backwards in the quality of primary education from the 12th to the 22nd for the years of 2007-08 to 2013-14, or the quality of the system, or the quality of maths and science or the availability of research and training services. The member for Moreton, as all members in this chamber do, realises that there are challenges to be faced with the education system.

But what the member for Moreton failed to acknowledge was the increase in education spending by this government over the next four years. As we know, for the next four years it will increase by 34 per cent—around $4.6 billion. These are year-on-year increases—more money to the states. This is something that is factual and cannot be denied by those perpetrating the myths on the other side of this House.

But let me go back a few steps to why we are in this situation that we are today. This is because Labor has left a mess; a mess of deficit and debt. The five largest deficits in Australian history—$123 billion of deficits—and a debt reaching out to $6 or $7 billion. Importantly, this equates to a billion dollars in interest repayments a year. If you think about what these interest repayments could do: they could purchase or build a new small hospital, build around six new schools, more social infrastructure and they could help community services to go out to the grassroots and communities making their lives better.

Why are we in this mess? Let us just have a look at our spending. A number of years ago we had $272 billion worth of spending. Last year it was $409 billion, and it is only increasing. The Commission of Audit made some very valid points about the increase in expenditure for major programs, and I just want to run through a few: Medicare benefits are currently $19 billion and going up by 7.1 per cent; hospitals are going from $14 billion to $38 billion over the next 10 years; pharmaceutical benefits are growing by 5.4 per cent; the age pension is going from $40 billion, rising by 6.2 per cent; aged care, again a similar increase, doubling over the next 10 years; schools funding is growing; and higher education is growing.

We are funding some of these commitments over the four years, as we all know. So this is the challenge we have—this is the challenge we all face—whether it be on our side or the other side, whether it be in the state, federal or local government: we have spending commitments that we must fulfil going forward.

I will just go back to our government spending increases and compare them to other countries. The IMF Country Report of February 2014 had Australia increasing in real terms between 2012 and 2018 by 16 per cent. That is equivalent to Korea and higher than the US. It is higher than Canada, Sweden and New Zealand. Germany was at five per cent and one of our neighbours and great trading partners, Japan, is at three per cent, and the Netherlands is at one per cent. This is significant: we have a real structural challenge at hand and we need a solution. We need to have a mature debate about this.

So let's have this debate. Let's have a sophisticated approach to this. Let's have a look at solutions to these problems that we face. The member for Moreton, in his maiden speech, referred to Paul Keating. Paul Keating and the former Labor governments took some of the structural challenges in our economy head-on. He made some bold reforms and made some courageous decisions. We long for when Labor will come to the party again on that front. We know we have an ageing population and demographic challenges. This is what we face ahead of us.

Let me now turn to the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and the debt repair levy. We all know that there has to be a contribution from everyone in our society to help manage the finances going forward so we have sustainable finances and sustainable health care, education, social services and pensions—the list goes on. We are asking for a contribution from higher income earners, and I note with interest an article in today's Australian about a family in Sydney. They made some valid points. They realise that sacrifices need to be made. They understand that some tough decisions have to be made so that this country is better for the next generation.

This is where we are coming from: making our country and our budget sustainable for future generations so we do not leave the debt to our children, and that we do not have to make the cuts that the South Australian Labor government are having to make on services. As people say in South Australia, 'The government is broke.' They do not have any money to spend and so everything is cutting back. Everyone is facing the cuts.

We just heard from the high commissioner in Britain about the measures in the UK and how that nation is getting back on track after some tough measures were taken. There is more private investment and the economy is growing again because of the tough decisions the Conservatives had to make in the UK. They have private sector investment, they have job creation and an economy growing at around three per cent.

I will just return to this family, 'It is okay to contribute more,' and they are in favour of the government making tough calls. Out there, the people are saying, 'We realise that Labor left a mess. We realise they left the budget in a poor state. They were an incompetent government, fighting amongst themselves for six years: changing leaders and not managing the execution of policy properly and the mistakes that came with that.' And now they are paying, and the Australian public is paying. We are all paying for Labor's poor government. The Australian public made that decision at the ballot box with overwhelming support for a change.

Let me return to the debt repair levy. It is on high-income earners, which makes Australia's marginal personal tax rate one of the highest in the world. And let's have a look at our welfare payments that provide a good safety net across the board—whether it is the child care rebate or other money for child care. The top 10 per cent of taxpayers contribute around 50 per cent of the tax to government revenues. We can all see that Australia is a generous society in the way we have our tax system set up. Everyone is making a contribution equivalent to their income capacity.

Without these measures in the budget we would not be able to do what we are doing to get the finances back on track. We would have debts spiralling out to around $3 billion a month, and that means further cuts and further harsh measures going forward. We would not be able to build the roads for the 21st century—and it is great to have the Minister for Infrastructure and Regional Development here tonight, because he has been a key member of our government in producing some great initiatives to build the roads that we need.

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