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

I wish to make it clear that no government ever wants to have to introduce a difficult budget, but a responsible government realises when it is necessary and acts accordingly. For six years the Labor government engaged in the biggest spending binge in our nation's history. They saddled Australia with a $123 billion deficit and a national debt on the way to reaching $667 billion in 10 years—the fastest deterioration in debt in dollar terms and as a share of GDP in modern Australian history. Every one of Labor's governments since Federation has left Australia's public finances in worse shape than they inherited, but never have we faced conditions as perilous as the conditions we face today. Once again, it falls to a coalition government to clean up Labor's mess and pay off their bill.

We all have to live within our means. Governments are not an exception. Putting government expenditure on a credit card, like the Rudd-Gillard-Rudd governments did, mortgages our future and transfers the economic pain onto our children and grandchildren. I strongly believe that it is immoral to shackle future generations with debt because of the incompetence of Labor governments which cannot keep their economic house in order.

The 2014-15 federal budget makes the tough but necessary decisions to put government finances on a more sustainable footing so that Australians can all share in prosperity and not crushing indebtedness into the future. This budget is a key component of the Abbott government's Economic Action Strategy, and it calls on everyone and every business to contribute, to join or grow the workforce, to boost productivity and to help build a stronger economy with more investment.

This budget takes responsible steps to strengthen our economy, promoting jobs, growth, infrastructure and education. The Infrastructure Growth Package will take the government's transport investment to $50 billion by 2019-20. As a result, total infrastructure investment from Commonwealth, state and local government, as well as the private sector, will build to over $125 billion by 2019-20.

The government are expanding opportunities for more people to study through our reforms to higher education. Australian universities will be able to compete with the best in the world by being given the freedom to innovate, a greater ability to invest in world-class research and the capacity to respond to the needs of students and business. Education is our fourth-largest export after coal, gold and iron ore. Our universities have been held back and are starting to be outdone by our neighbouring countries. Many fewer students are coming to Australia, and therefore billions of dollars annually are being removed from our economy. The government's education plans will see that our universities become competitive with those in the United States and Europe.

I would like to point out that, contrary to the scaremongering by Labor and the Greens, the coalition has not cut any funding to schools. In fact, we have increased funding to schools by $1.2 billion in the forward estimates after Labor snuck it out in the lead-up to the last election so they could hide the true state of their budget. The $80 billion alluded to by Labor was never in their budget. It was a pie-in-the-sky pipedream of funding that Australia could never afford because of Labor's poor and reckless fiscal mismanagement. Labor hid this $80 billion beyond the forward estimates so it never had to be written down in any budget papers and was never committed to by their government. It is disappointing that so many were deceived by these empty promises. Australian schools are $1.3 billion better off under the coalition. We are increasing funding in line with CPI and enrolments after the 2017 school year.

The coalition government is investing in our future health with the world's largest medical research endowment fund, the $20 billion Medical Research Future Fund. This means that Australia can continue to advance world-leading medical research projects, attract and retain first-class researchers like Professor Ian Frazer and deliver improved health and medical outcomes for all Australians.

This government has an earn-or-learn philosophy, where young people with a work capacity will be required to work for the dole. Otherwise, they can choose to learn, studying a now uncapped tertiary education course or undertaking an apprenticeship, which can now be put on HECS, with an additional $5,500 allowed for the tools of their trade. Businesses will receive up to $10,000 for employing workers older than 50 who have been on income support for six months or more, meaning that there will be stronger incentives to hire older workers.

For veterans, the government are delivering on our commitment to fairly index the Defence Force Retirement Benefits Scheme and the Defence Force Retirement and Death Benefits Scheme.

However, the budget repair does require everyone to do their part. Family payments will be changed to target payments to those who need it most. Eligibility will be tightened on family tax benefit part B to those families where their primary income is under $100,000, as opposed to the $150,000 it was previously.

There are no changes to the pension supplement in the 2014-15 budget. The pension supplement will continue to be paid to eligible pensioners. Age pensioners will also continue to receive the energy supplement, formerly the clean energy supplement, even after the carbon tax is scrapped. The coalition government is honouring its commitment to make no changes to the age pension during this term of government. From September 2017, the government will link pension increases to inflation.

There seems to be a lot of speculation and misinformation about the eventual increase to the pension age. It is a sign of a healthy, strong nation that Australians are increasingly living longer lives. An Australian woman born today can expect to live for 85 years, and an Australian male can expect to live for around 81 years. When our pension and welfare system was introduced it was a very different story, with life expectancy of 59 years for women and 52 years for men. This is why we need to take a good look at how to make our age pension system strong for all our futures.

The government understands the challenges facing older Australians. Many seniors have not benefited from a lifetime of superannuation, and for many the age pension is a wage replacement. Changes announced to the age pension will not start until 2017. This is a continuation of the Labor government's policy, which had already increased the pension age to 67 by 1 July 2023. This government will continue this growth and increase the age pension age to 70 by 1 July 2035.

The family home will not be included in the pension means test. All pension assets test and income test thresholds will be fixed for three years from 1 July 2017. Maintaining these thresholds will not lead to any reduction in the rate of the pension. From 1 September 2017, the government will link pension increases only to inflation.

The coalition government is honouring its commitment to self-funded retirees to index income thresholds to the consumer price index for the Commonwealth Seniors Health Card. This means that even more retirees will be eligible for the benefits of the Commonwealth concession card. This change means that modest variations in income will not affect eligibility and will reduce uncertainty for people in this group. The threshold did not increase under the last six years of the Labor government. The Commonwealth Seniors Health Card income test will include the income from superannuation from 1 July 2015. This is in line with the income test already applied for the age pension. All current holders of the Seniors Health Card will be grandfathered, meaning they will not be affected by the change. The benefits of the seniors card currently include and will continue to include lower Pharmaceutical Benefits Scheme medicine costs, lower general practitioner appointment costs and lower out-of-hospital medicine costs.

I wish to make it clear that, with regard to the state and local government concessions, these are provided by state, territory and local governments for state and local services such as public transport, utilities costs and local government rates. The concession amounts vary between each state. Previously, the Commonwealth provided a relatively small proportion—approximately 10 per cent—of the overall funding directly to the states and territories to offset the costs of these concessions. The Commonwealth does not and never has provided the assistance directly to the concession card holders. State and territory concessions are the responsibility of the respective state or territory government. The changes announced in the budget will mean state and territory governments fully fund their concessions in the future. The Victorian state government has already said that they would match the original Commonwealth contribution.

To assist in paying down Labor's deficit and the $1 billion per month we are paying in interest on the debt they left, there will be a three-year temporary budget repair levy. It will, from July 2014, be payable by individuals with a taxable income above $180,000 at a rate of two per cent. The levy will raise an estimated $3.1 billion over the forward estimates period and will ensure higher income Australians contribute to the budget repair.

The coalition is determined to deliver an ambitious infrastructure program. The government will secure funding for additional road infrastructure by reintroducing twice-yearly indexation of fuel to CPI from 1 August 2014. In difficult budget circumstances, this is the responsible way to immediately start building the productivity-boosting roads Australia needs, and this will be linked, and protected by legislation.

The coalition budget will take steps to put health spending growth on a sustainable path. All Australians will need to make a greater contribution to the cost of their own health care. While continuing to support the most vulnerable in the community, government spending must be targeted to those most in need. The reforms this government is making will ensure all Australians have access to world-class health care and affordable medicines. Every dollar of savings from health expenditure reforms in this budget will be invested in a new, capital-protected, Medical Research Future Fund until it reaches $20 billion.

From 1 July 2015, previously bulk-billed patients can expect to contribute $7 towards the cost of standard GP consultations and out-of-hospital pathology and imaging services, meaning not more than $70 per annum in total across all services.

The PBS safety net for all patients will be increased from 1 January 2015. A general patient and their family will now pay an expected $145 more to reach the safety net, after which they can purchase medicine at the concessional rate. A patient with a concession card and their family will pay an expected $61.80 more to reach the safety net, after which they can receive free medicines. Currently, the government spends almost $10 billion a year on providing Australians with medicines on the PBS.

It is quite clear that our government have inherited a budget position that is unsustainable. There is a strong case for change. Health is a key area of spending growth. Health expenditure is currently 4.1 per cent of GDP, but the Productivity Commission recently estimated that, without changes to government policy, over time this would rise to seven per cent.

In particular, high growth in spending on Medicare and public hospitals is projected to place the budget under increasing pressure. Medicare levy and Medicare levy surcharge revenue will not be enough to offset the increasing cost of health care. The combined revenue from these sources is less than 20 per cent of total Commonwealth health spending.

Advances in medical technology mean that demand for medicines and health services is expected to grow for all age groups. Demand is also expected to grow faster, as Australia's ageing population increasingly relies on the health system for care. Between 2010 and 2050, the number of people aged 65 to 84 is expected to more than double and those aged 85 and over to more than quadruple. Given these pressures, government spending on many health programs will continue to grow at an unsustainable rate, unless fundamental changes are made.

I would like to touch on the government's plan for foreign aid. In psychology 'behaviour' is defined as irrational if an action continues to be repeated despite its repeated failure to achieve the desired outcome. On this definition, aspects of our foreign aid budget have, for many years, been irrational.

Despite many millions of dollars in Australian aid to address key development indicators, such as literacy rates, infant mortality, life expectancy and real income per capita, they are in many cases deteriorating. While this has started to turn around in recent years, we have known for decades about our delivery shortcomings. In the light of inherent failures, many advocated for a more interventionist aid policy on our part. While this view may have had popular appeal in the media, it would have had serious adverse implications for our relationship with aid recipients, including Pacific island countries and even Indonesia.

This is why it is vital for our foreign minister to continue her efforts to improve the efficiency of our foreign aid program, realising that success should not be determined on dollars spent, but rather on actual results on the ground.

This budget ensures a sustainable pathway, while ensuring affordability and fairness. Yes, it is a tough budget, but it is the budget that Australia needs. It is the right and responsible action to take if we are to have a stronger, more sustainable future which will benefit all Australians.

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