Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Hansard source

I rise today to speak on the appropriation bills currently before the House. This budget confirms the worst for ordinary working Australians, it confirms the worst for families already battling to make ends meet, and it confirms the worst for people on the age pension, the disability support pension and the carer payment. It confirms the worst for our young people trying to find work in an ever-changing economy. It also confirms the worst for all Australians who believe in a fair, tolerant and compassionate Australia.

In this budget the Abbott government has revealed to the Australian people their plans for our country: savage cuts to our existing safety net, the roll-back of social and economic reforms like the Gonski school funding and an attack on the core pillars of the Australian way of life.

The budget is made up of cruel measures from a government that can only be described as cruel. They have shocked many, many people and they have broken promises—the lot of them. The impact of this budget on social and economic disadvantage will be far-reaching and hard-hitting. It will also have implications for the investments we make in the future—the future opportunities that we would like to see for our people.

Over the last 100 years a social contract in this country has taken shape. It is based on the pillars of the Australian way of life—access to universal health care and education, a fair and secure pension system, support for people who cannot work due to disability or caring responsibilities, and support for people when they need help to get into work.

This social contract did not just magically appear. It took more than a century to get to where we are today. Successive Labor governments have led the way in strengthening it over the years, making it fairer and more inclusive for all. We have developed a very different approach to the approach of Europe or the United States, and Australians are rightly proud of our smart, fair and uniquely Australian approach. Shamefully, not only does this budget disregard the government's responsibility to maintain and further strengthen these pillars of the Australian way of life, it goes out of its way to tear those pillars down.

Australia's economy is strong. We have low inflation, low interest rates and net debt well below comparable countries. We have AAA credit ratings from all three credit rating agencies. And since the election all we have heard from the government is false claims that Australia's spending on welfare is out of control. We have heard senior ministers cry that Australia is on the same path as countries like Greece or Spain. These claims are just not true.

Earlier this year, independent analysis from NATSEM found that in the last 12 years Australia's welfare spending has, in fact, decreased as a share of total expenditure. Treasury's Intergenerational Report 2010 shows that welfare spending as a proportion of GDP will remain steady over the next three decades. None of this is to say we cannot do things better but it does confirm the current budget's whole platform is based entirely on a lie.

One of the glaring examples is the $7 Medicare co-payment. In the prebudget sell, the government proclaimed that the current universal health system is too expensive and requires a greater patient contribution in order to help prepare the budget bottom line. Yet the budget reveals that not one dollar of the Medicare co-payment will go towards the budget bottom line—nor will it be returned to recurrent health spending. The co-payment will undermine universal health care in our country and, as many health experts have said, co-payments will not increase efficiency. They will hurt the poor and the sick the most.

This budget is a savage attack on ordinary Australians families. It includes cuts of $7.5 billion to family payments. For the first time since Peter Costello introduced them, this budget contains no family impact analysis in the budget papers.

In the last fortnight, expert analysis from independent modelling agency NATSEM has put to shame the government's claims that the burden of this budget is shared by everyone. Overwhelmingly, analysis has demonstrated that those at the bottom are hit the hardest, while those at the top are spared. NATSEM found that around 1.2 million families will be on average $3,000 a year worse off by 2017-18. In contrast, the top 20 per cent of households will have either no impact or a negligible positive impact. Low-income couples with children and single parents will suffer the most.

This budget is also incredibly bad policy. Because of this budget, single-parent families are faced with a huge disincentive to work. This budget creates a new single-parent supplement, which single parents will get when they are kicked off family tax benefit B when their youngest child turns six. This measure actively discourages single parents from work. Once a single parent earns just one dollar more than $48,000 a year, they will lose this supplement completely. These single parents will pay an effective marginal tax rate of around 80 per cent for every dollar they earn above $48,000, taking home just 20c of each of the extra dollars they earn. According to NATSEM, if a single parent's income increases from $45,000 to $50,000 a year, their disposable income will increase by just $1,706. NATSEM has described this as a 'sudden-death drop'.

The impacts of the budget get worse and worse over the next four years. By 2016, a couple with a single income of $65,000 and two school-aged children will lose over $6,000 a year. Six thousand dollars a year is going to come out of the pockets of these single-income families on budgets of around $65,000. That is around 10 per cent of their entire family budget. Nationals Senator Ron Boswell summed it up pretty well yesterday when he remarked to the media, 'There's an equity problem that's falling on the low-income earners more so than the high-income earners.' What an understatement! National Party members and senators certainly should be protesting much louder than that. Many of the low and single-income families hit hardest in this budget live in country and regional Australia.

This budget also makes savage cuts to pensions. All of the people on the age pension, the disability support pension, the carer payment, bereavement allowance, the parenting payment single and the wife, widow and veterans pensions are going to have their pensions cut. The government's decision to increase the pension age to 70 was made on the run, without any evidence and without any policy case. It will disproportionately hurt low-income earners who do not have much superannuation, women and those in manual jobs like labourers and nurses.

Yesterday in this House, senior members of the government—the Prime Minister, the Treasurer and the Minister for Social Services—repeated the falsehood that this budget does not make cuts to the pension. Australians know this is not true. The changes to pension indexation arrangements in this budget are a cut. They are a very direct cut to the living standards of Australia's 3.2 million pensioners. That is how many pensioners will have their pensions cut.

The pension is benchmarked to wages for a reason. It is so that pensioners' standard of living keeps pace with the standard of living of the working population more broadly. John Howard knew that; that is why he legislated for it. If this Prime Minister's indexation arrangements had been in place for the last four years, pensioners would today be around $1,500 worse off each year. That is what this pension cut means in real money. This is a cut in anyone's language and it is about as big a broken promise as you can find. It is clear that the Prime Minister's only plan for older Australians is to make them to work longer and retire with less. And the short-sightedness does not end there.

The Abbott government's policies will see more people reliant on the pension in the future. How else can you explain its decision to abolish the low-income super contribution—a measure that reduces the tax burden for 3.6 million Australians who earn $37,000 or less a year, two-thirds of whom are women? How else can you explain the government's decision to further delay the increase in superannuation from nine to 12 per cent and, at the same time, reverse the proposed changes that we made to the top, to tax earnings over $100,000?

Another cruel cut to pensioners in this budget, one which is relevant to the appropriation bills we are discussing, is the Prime Minister's decision to cut the Commonwealth's $1.3 billion contribution to concessions for pensioners and seniors. Because of this coalition government, the National Partnership Agreement on concessions will be axed from 1 July this year. These cuts will start in just 34 days. This is yet another attack on so many pensioners, who will have their concessions cut for public transport, electricity, water bills, council rates—and the list goes on. You can add that to the $80 billion in cuts this government has made to health and education.

The changes in the budget to Newstart and young people are the most brutal and cruel measures of all. The government is sentencing our young people to potentially an endless cycle of poverty—six months without any support at all, with no explanation of how our young people are supposed to house and feed themselves during these extended periods of time. On top of these cruel measures, there are cuts of around $130 million a year to programs like the youth education programs, including Youth Connections, even at a time when youth unemployment is so much higher than the general unemployment rate, at a time when we need to provide more support for our young people.

Over the last two terms of government, when we were in government, we saw a renewed focus on social investment: the National Disability Insurance Scheme, better schools reform, the development of a comprehensive framework for closing the gap between Indigenous and non-Indigenous Australians. These were all important investments in our people. If we are to make sure that every Australian can participate fully in our ever-changing economy, we have to make sure that we target our investment in people to those who need it most and where we will get the best value. We need to step outside the neo-liberal view of welfare that those opposite hold and take an integrated view of social and economic policies, to make sure that social policy contributes to our future prosperity in the way that previous Labor governments have made sure it would. Then, of course, we will be able to develop a comprehensive set of policies that support our modern economy and the people within it.

I have spent so much time since the budget with people in Tasmania, South Australia and Victoria talking to pensioners and families and young people about the impact that this budget will have on them. I have spent time with compassionate, hardworking, smart people who want to spend time helping those who are disadvantaged. I have spent time with hundreds of age pensioners who are now very afraid for their future and who are upset about having been betrayed by this Prime Minister. The message they had for this government was loud and clear: this budget is based on broken promises and lies. It seeks to destroy the smart, fair and compassionate Australia that they know and love.

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