Peter Hendy (Eden-Monaro, Liberal Party) Share this | Hansard source

I rise in support of the five appropriation bills before the House. It gives me an opportunity to speak about the government's plan for jobs and to build a strong and prosperous economy. These bills are the core of the budget that was delivered two weeks ago. Some may disagree, but the fact that the budget is still a matter for debate and remains a key national focus is a good thing. Normally budgets recede very quickly from the public debate. Sometimes they disappear within a matter of a couple of days. The fact that this one is still front page news means that the media and the Australian community regard it as important to debate economic issues and the state of the Australian economy. As an economist, I think that is a good thing. As the member for Eden-Monaro seeking to implement good policy on behalf of my constituents, I also think it is a good thing. I first worked in the federal Treasury 30 years ago and I am probably one of the few people in Australia who has read every federal budget for the last 30 years. This budget is one of the most purposeful and strong budgets I have seen for 30 years. It is a true watershed in the economic management of this country.

The Rudd-Gillard-Rudd governments' six years of chaos, waste and mismanagement delivered higher taxes, record boat arrivals and debt and deficit as far as the eye can see. Labor's debt is already costing us about $1 billion a month in net interest payments, and that is borrowed money. No country can go on paying the mortgage from the credit card. One billion a month, or basically $12 billion a year, would be better spent on what the people need. It would fund, say, more than 10 new base hospitals a year—that is year on year. I would prefer it if we did not spend that on interest but on health, education or social services, the sorts of things that the people of Eden-Monaro want.

The problem is that if we do not fix the problem now it will worsen. It would rise to $2.8 billion a month in 10 years time. This is the problem that Labor left us. You cannot keep borrowing on the credit card to pay the interest on the mortgage. You cannot keep paying interest on the interest. We are pushing on and, in the absence of any alternative, we expect parliament to support our plan, otherwise the situation will just get much worse in the future. The tough decisions we are taking now are necessary to avoid even tougher decisions having to be made in the future. Under Labor, the jobless queues grew by over 200,000, a stark contrast to the growth in jobs of more than 250,000 under the Howard government.

The measures outlined in the budget are absolutely necessary to secure Australia's economic future. The budget outlines a clear plan—in fact, the only plan—that will address Labor's debt and deficit disaster. Instead of having Labor's deficit of over $30 billion in financial year 2017-18, it comes in at under $3 billion. We have taken, up front, a lot of tough but vital decisions for the country's future.

Let's remember the problem that the government is trying to fix. When the coalition last left office in 2007, Australia had a $20 billion surplus and $50 billion in the bank, but over six years Labor squandered this and ran up five record deficits and a further $123 billion in projected deficits and gross debt headed towards $667 billion. Now the Labor Party is desperately trying to scare people by spreading untruths about the budget. For example, they will not tell you that funding for schools and hospitals increases each and every year under our budget and that the rate of the pension will continue to go up twice a year, every year.

I want to address a few issues that have been part of the debate in the last fortnight. There have been ridiculous claims about so-called cuts to education and health spending. Nothing would be further from the truth. The budget does not cut funding for health. Annual federal assistance to the states for public hospitals will increase by more than nine per cent every year for the next three years and by more than six per cent in the 4th year. This is a 40 per cent increase over the next four years. We are increasing funding for states to run public hospitals by more than $5 billion or 36 per cent from $13.8 billion in 2013-14 to $18.9 billion in 2017-18. Overall, annual health spending will increase by more than $10 billion or 16 per cent from $64.5 billion in 2013-14 to $74.8 billion in 2017-18. The government is also putting the growth in health spending on a more sustainable trajectory from 2017-18, but every year it will continue to grow.

Let me also say a few words about GP co-payments. From 1 July 2015, previously bulk billed patients will contribute $7 towards the cost of standard GP consultations. Ten years ago, we were spending $8 billion a year on Medicare; today we are spending $20 billion. So we are asking everyone to make a modest contribution to ensure that Medicare is sustainable for the long term. A strong safety net will be put in place. Concession cardholders and children under 16 will only pay the contribution for the first 10 visits each year. The government will not waste this money. Every dollar of savings in health expenditure in the budget will be re-invested back into the Medical Research Future Fund. But there is a very important point to make here. The government is not introducing a co-payment as much as re-introducing it. Prime Minister Bob Hawke actually introduced it in the 1991 budget. He and his health minister, Brian Howe, fully supported it. Someone else who has supported it is the member for Fraser, who also happens to be the shadow Assistant Treasurer. He is supposedly the brains trust for the Labor Party's economic team. When he was studying for his PhD, which he got in 2004—not that long ago—he argued in relation to a co-payment that, to quote from a 14 April 2003 article in the Sydney Morning Herald:

A just doctor's fee will aid the needy but deter the frivolous.

This article is worth quoting at length. He said:

But there's a better way of operating a health system, and the change should hardly hurt at all. As economists have shown, the ideal model involves a small co-payment—not enough to put a dent in your weekly budget, but enough to make you think twice before you call the doc. And the idea is hardly radical. Countries with a co-paying public health system include Austria, Belgium, Finland, France, Germany, Greece, Iceland, Ireland, Italy, the Netherlands, Norway, Portugal and Sweden.

He went on to say:

In 1991 Australia introduced the perfect co-payment system—$2.50 …

He further wrote:

Converting the 1991-92 scheme into today's money would be equivalent to $3.50.

That was in 2003. One would say that 10 years after that article was written the figure might be, say, $7. What a coincidence. Finally, he wrote about our co-payment:

It would be enough to deter the GP visits but not enough to limit genuine preventative care. Everyone, including pensioners, should pay.

The Shadow Assistant Treasurer says that he no longer supports this policy and that he was a naive university student back when he wrote those comments. He does himself a disservice. For my sins, I have also done a PhD. Can I tell the House that a PhD usually involves a minimum of four years research where you grapple with the subject day after day, coming to grips with every argument, every nuance and every alternative argument. And after four years you come to a considered decision. It would appear that in the space of four weeks the shadow minister has dumped four years of careful consideration. Political expediency will do that to you.

Let me now turn to education. Commonwealth funding for our schools will continue to increase each and every year. Students and schools will benefit from the government's record funding investment of $64.5 billion over the next four years. We are putting in place other reforms to improve the quality of teaching, because money is not the only answer to better schools. From 2013-14 to 2017-18, total Commonwealth funding to all schools in Australia will have increased by 34 per cent, a $4.6 billion increase. This is over $1.2 billion more than Labor would have spent over the next four years. From 2018 there will be a stable and sustainable system for schools funding based on the CPI plus growth in school enrolments. But every year schools funding will continue to go up and up.

Our proposed deregulation of universities will ensure that Australia's higher education system is not left behind by global competition. Our goal is to ensure Australia has one of the very best higher education systems. Our higher education reforms expand opportunities for students. For the very first time, alternative pathways to higher education are provided by providing direct financial support to all students studying diplomas, advanced diplomas and associate degree courses. This will open up higher education to around 80,000 more students by 2018.

Finally, let me make some comments about Labor's scare campaign. Even if you are prepared to swallow their rhetoric, you have to ask the salient question: if they are saying we have cut $80 billion out of health and education funding then please tell us where on earth is Labor going to find the $80 billion to meet such fantastic election promises? Are they going to make $80 billion in expenditure cuts? Are they going to raise $80 billion in further taxation? Or are they going to simply raise $80 billion in increased borrowings? That is the question for the Leader of the Opposition and his team. The time is fast running out when they can hide behind rhetoric.

I listened very carefully to the Leader of the Opposition's and the shadow Treasurer's speeches in reply to the budget. Neither offered any alternative plans to deal with Australia's debt and deficit problems. Indeed, they are in complete denial. We know they are opposed to most things proposed by the government. A week or so back, the Treasurer produced a detailed list of $40 million in budget repair measures that Labor is opposing in the Senate. Since then, the deputy opposition leader has reconfirmed that the Labor Party will meet a 0.5 per cent of gross national income target on foreign aid. That will be a trifling $16 billion in additional expenditure over four years. Where is that money coming from? At the National Press Club the shadow Treasurer rabbited on about the innovative world of crowdsource financing. I can tell the shadow Treasurer: that is not going to fix the debt situation hurtling towards $667 billion or $25,000 for each man, woman and child in the country.

The fact that Labor does not admit that there is a debt and deficit problem is mind-boggling. They have learnt nothing from the chaos in the last six years. They still have not realised that the fundamental reason they lost government after only two terms is that the people of Australia did not trust them with control over the budget and the economy. Until they accept that, they will simply be a destructive force in our polity and not a positive one working in the national interest.

In conclusion, let me say: the government is making decisions that repair the budget, strengthen the economy and prepare Australia for the long-term challenges before us. As I said earlier, these bills are part of the recovery plan to put the budget back on track and to reverse the growth in unemployment. I support the bills before the House.

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