Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

I rise to speak on the appropriations bill being debated before us today. We in opposition will of course support the passage of these bills through parliament. We have got a bit of history with oppositions playing games with supply on this side of the chamber. While it was before my time in the House, there are still a few sore feelings on our side of the chamber.

The budget that these appropriations are built on is bad for Melbourne's west, bad for our society and bad for our nation.

Mr Deputy Speaker, my friends on the other side of the chamber would like you to believe that they are the saviours of a 'budget emergency' that is infecting the Australian economy. The truth is that the Australian economy and the Australian federal budget are both in good shape, and they were left that way by the previous Labor government. When the global financial crisis hit in 2008, Labor devised an economic stimulus package that was deemed by Nobel Prize winning economist Joseph Stiglitz to be amongst the best in the world. That is why in Australia we call it the global financial crisis rather than the great recession, as they do in the United States and the United Kingdom, because, thanks to the Labor government at the time, we did not experience a prolonged recession as other countries in the developed world did.

During this period, we did incur budget deficits, but once the crisis was over the deficit was steadily reduced to $180 billion in prudent savings and taxes on those who could afford them—for example, the mining and carbon tax. By the 2012-13 financial year, the deficit in that year's budget was $18.8 billion or nearly 1.2 per cent of GDP, less than a quarter of the 4.9 per cent average for advanced economies in that year. That budget added to an overall debt of $191.5 billion or 12.1 per cent of Australia's GDP. This figure was small by international standards—less than one sixth of the 74.7 per cent of GDP that is the average for advanced economies around the world.

This was a strong economic record. It was enough to secure our AAA credit rating and a stable outlook from all three credit agencies, putting Australia's budget in the company of the 10 strongest in the world. In this context, it is just not credible for the Abbott government to take these objective figures, these facts, and claim that there is a 'budget emergency'. But as the truth of stable economic management did not fit the political narrative of the Abbott opposition, they pursued a policy of pointing at the total debt figures and shouting 'emergency' over and over again in order to create one out of thin air. Once in government, they then sought to inflate the deficit to $68 billion—doubling the deficit in six months through a combination of spending decisions and a change in the economic assumptions underpinning budget calculations. It was political spin, not fiscal policy, which led to the deficit that we see before us today.

The Abbott government has used this confected budget emergency as a justification for the budget currently before us, containing some of the harshest cuts in Australian history. We have all heard over and over again the Prime Minister's mantra before the last election of 'no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS'. The then opposition leader also repeatedly assured Australians that taxes would always be lower under a coalition government. But in this budget, handed down within the first 12 months of the Abbott government, the coalition has broken every single one of these promises, except for the GST—and we know that one is in the mail.

Let us look at some of the ways in which the budget has broken the promises that the Abbott opposition made before the election. Starting with changes to the tax system, as these are the changes that will directly hit the hip-pockets of those in Melbourne's west, the loss of the schoolkids bonus means that Australian families will lose $410 for every primary school student and $820 for every secondary school student every year. The freezing of family tax benefits A and B for two years is likely to leave the average Australian family worse off by thousands of dollars a year. Moreover, family tax benefit B has been restricted, available now only to families with children under six and with earnings of under $100,000 in family income. When justifying this change to the entitlement to family payments to the National Press Club, the Treasurer made a vague reference to the fact that 'your children do grow up'. Maybe they do, but they do not get cheaper.

Next are the two areas in the budget where the Abbott government's ideological agenda is most plain to see—health and education. The introduction of a $7 GP tax marks the biggest assault on Medicare since the Fraser era. Let us be clear: this tax is not being used to make up a shortfall in healthcare funding. The bulk of the funding instead goes to medical research—a worthy cause, true, but this is a tax designed as a disincentive for people to go to the doctor. If Australians cannot go to the doctor without a credit card as well as a Medicare card then health care in this nation is not free. It is not just the $7 GP tax either. GPs who bulk bill concession cardholders and children will be losing a $6 incentive payment per patient. With the loss of $11 per patient in total—the $6 plus the $5 for the GP tax—if they continue to bulk bill, GPs will not be able to wear this overall shortfall.

The Australian Medical Association warns that small medical practices will lose up to 25 per cent of their income if they continue to bulk bill in the context created by this budget. There will be a significant incentive then for GPs to additionally increase fees, considering that they will already have mechanisms in place to charge Australians for their visits anyway. And when Australians leave the doctor, life will continue to be expensive with a $5 increase in medicines under the Pharmaceutical Benefits Scheme. There are also significant cuts to health programs around Australia, including the axing of Medicare Locals, $390 million from dental services and $360 million from the abolition of the National Preventive Health Agency. This is not delayed pain. These funding cuts will have an immediate impact, with 1, 200 hospital beds around Australia affected from this July.

But the Abbott government have not just attacked our health system in this budget; they have also broken their promise of 'no cuts to education'. Some of the most significant changes in this budget are the cuts to our schools and the higher education system. With all these broken promises, it should not be surprising that the Gonski reforms will no longer be delivered, despite the Prime Minister promising he would do no such thing, despite promising that Labor and Liberal were on a 'unity ticket' when it came to education and despite the Prime Minister's statement, 'We will make sure that no school is worse off.'

In this budget, we will see the indexation for school funding stripped back from six per cent to 2.5 per cent. That is more than $6.5 billion ripped from our schools over the next five years. Most significantly, the allocation of this funding removes the needs based funding distribution model at the heart of the Gonski reforms. This funding model meant that school funding was targeted towards the kids that needed it most. It focused funding on schools with particular student needs, such as students from lower socioeconomic backgrounds, Indigenous backgrounds, non-English speaking backgrounds and students with disabilities. The schools of Melbourne's west would have disproportionately benefited from these changes. They would have received the funding that they deserved to give the best quality education to the kids of Melbourne's west. Now, however, we see a budget that has not only slashed the amount of education funding but erased the needs based distribution model that was the cornerstone of the Gonski reforms.

The most ideological budget changes, however, are those applying to the university sector. If you are a student starting university after 14 May this year, you are going to enter a system where the market, not merit, determines whether you go to university. The deregulation of university fees will allow universities to set the fees charged for courses according to demand. The Abbott government is combining this with a $1.1 billion cut in funding for Commonwealth supported places. Universities have already admitted that they do not know how much degrees will cost now that they can charge what they like for them. The chair of Universities Australia, Professor Sandra Harding, was on the radio last week saying exactly this:

Universities therefore are being asked to set fees in an unprecedented market environment... we have to have a stab and make a decision about what we think the market might bear...

The result is a predicted rise in university costs of up to 30 per cent across the board and undoubtedly more for prestigious courses such as law and medicine. Postgraduate students already pay over $110,000 and $250,000 at Melbourne University for these degrees. With demand for the courses still high, there is no reason that other universities will not charge similar amounts. Amidst all this doom and gloom, it is good to know the Abbott government found room to expand the school chaplaincy program to $250 million over five years. I will let you draw your own conclusions about the Abbott government's priorities in this respect.

Pensioners too will feel the sting of the budget before us today. Despite promising clearly before the election 'no changes to pensions', the Abbott government has betrayed pensioners by bringing in a new indexation system for pensions. Instead of tying pension rises to average male weekly earnings, the pension will be indexed to inflation, leading to a decrease in the pension over time. There has also been a freeze to the means-test thresholds on all pensions. This means fewer of our pensioners will be able to continue to receive the pension.

To add to the pain, the seniors supplement has been taken away from Commonwealth seniors health card holders. The Abbott government is also making it more difficult to qualify for the Commonwealth seniors health card by including untaxed superannuation income in the income test. These changes will result in pensioners paying an additional $876 for singles and $1,320 for couples per year.

The Prime Minister has left few promises unbroken from his time in opposition, even his promises to make no cuts to the SBS and our beloved Aunty. The Bananas will not be receiving new pyjamas anytime soon, with a $43.5 million in 'efficiency savings' cut from the ABC and SBS. And they may not be receiving a pay cheque either after the ABC and SBS efficiency study forecast for next year reports. The ABC and SBS have tightly controlled budgets. They will not be able to wear significant cuts to their funding. ABC Managing Director Mark Scott has stated this emphatically, warning that these cuts will lead to job losses at the ABC and an overall reduction in services. We know from Mr Scott's evidence today before Senate estimates that this threatens some of our children's beloved figures such Peppa Pig. If the parliament thinks that university students were poorly behaved protesting the Abbott government's cuts, they have not seen what toddlers are capable of doing.

Commuters, too, should feel betrayed by this year's budget. The indexation of the fuel excise in line with inflation will hit Australian families to the tune of $2.2 billion a year. This increase is being justified for investment in the many road projects included in the budget. But the budget has also slashed all the previous Labor government's investments in public transport, redirecting this money for building roads. This means no money for Melbourne metro, which is crucial to increasing capacity for the train system in Melbourne's west as it grows into the future. This is despite the fact the Melbourne metro was ranked by Infrastructure Australia, an independent body, as a 'shovel-ready' project and the most important infrastructure priority for the state of Victoria. It is only one of the many public transport projects across the nation that have been cancelled as a result of this budget. As the member for Grayndler so brilliantly put it: under this budget, families will not only have to drive more, but they will have to pay more to do so.

What does this all mean for my community in Melbourne's west? Well, in Gellibrand, the cuts will hurt and they will hurt right across the community. Thousands of residents will be impacted by the changes to the Newstart allowance. We will have almost 17,000 pensioners hurt by the changes to the pension indexation and other cuts to concessions for pensioners. The impact on health in our community will be significant. Apart from the potential closure of the Macedon Ranges and North Western Melbourne Medicare Local, which funds important preventative health programs like the Sons of the West men's health program that I am currently participating in, we will also see significant cuts to our hospitals. An estimated $58 million will be cut from hospitals in the west, including Western Hospital in Footscray, Williamstown Hospital and Sunshine Hospital. The hit to local families via the GP tax will be approximately $6.3 million.

The Abbott government has been spruiking the proposed equality of the budget, and argued that we are all doing the 'heavy lifting' together. But economic modelling from both NATSEM and ANU demonstrate that the bulk of the budget burden falls disproportionately on the less well off. It is true that an individual on three times the average wage will be hit by an additional $1,492 a year, which is less than one per cent of their disposable income. But the impact of the Abbott Government's budget cuts will have a far greater impact on less well-off families on $95,000 a year, cutting about five per cent of their income.

Cruellest of all are the cuts affecting our unemployed youth, who are already suffering through one of the toughest job markets in recent years. Youth unemployment in Melbourne's west is currently at over 13 per cent. That is a figure significantly higher than most other areas of Melbourne and the nation. An unemployed young person facing this unfriendly job market, however, will lose $6,944 a year from an income of $13,273. That is over 50 per cent of their income. A person cannot absorb that sort of reduction in income without making drastic changes to their life.

So while the Abbott Government may argue the purpose of the budget is to reducing debt and deficit, and to all share in the pain together, if you look at the detail the real truth is easy to see. This is a budget aimed at creating a crueller, colder and more unequal Australia in line with Tony Abbott's vision of smaller government. It is a budget that uses the concocted justification of a 'budget emergency' to end universal health care, create a US style higher education system, and destroy the safety net in place for us all. Australians did not vote for this, and they do not want it.

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