Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Hansard source

Thank you Madam Speaker. Let us talk, too, about this debt which the interjector just raised. If you look at MYEFO—I call it 'Joe's-EFO' by the way, because I think it well and truly is his—compared to the pre-election fiscal outlook, what you see is a government that came to government in September last year and began increasing its spending. In fact, the debt level increased by a factor of two.

It did that for two reasons: firstly, because the Treasurer began spending—he actually increased spending by $10 billion in that period. Ten billion dollars! While talking about debt, while talking about this disaster that he had to fix, he actually set about making it worse. And then he changed the assumptions so that it looked much worse—so that between the pre-election fiscal outlook in September and MYEFO in December the debt level doubled on paper.

In reality it went up anyway because there was real spending in there and the reversal of some tax increases to high-super earners as well. So he did a few things, but basically he doubled the debt between PEFO and MYEFO. And then he extrapolated that, and then he said that if the government went on holidays for five years and did nothing that in five years' time the increased debt—which he created—would be even bigger.

Then people come into this chamber and use these fictional figures that have been created by the Treasurer to defend the most savage cuts that we have seen—by their own account—in decades. These are the most savage cuts that we have seen to average families and low-income earners in decades and they are on the basis of faked, fudged figures—and I am being incredibly polite in using that language.

And for all the cuts they are making—for the cuts to pensions, the cuts to education and the cuts to health; the cuts that make a single-income family on $50,000 a year $5,000 worse off—there is not an improvement in the bottom line. The rationale for doing it, which was to improve the bottom line, has not been delivered. Rather than improve the bottom line, which they claim is the great reason for all this stuff, they have actually spent the money elsewhere. They have spent $20 billion on a Rolls-Royce paid parental leave scheme. They have given $9 billion back to mining companies. If they manage to repeal the carbon price they are giving billions of dollars back to the biggest industries in this country. They have given back whatever money they have cut from the lowest and most vulnerable people in this country to the people who need it least.

This is a sham, and every time one of them gets up in this House and talks about how it is a tough budget because it needed to be, I urge them—seriously, if they have any consciences at all and if they care about truth and honesty at all—actually to go back and have a look at the figures and prove for themselves that these cuts did not result—did not result!—in an improvement in Australia's fiscal position. In fact, it is worse.

This particular bill is the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014, even though it does not repair the budget, because whatever money they get they will spend elsewhere and make it slightly worse. We could change that title perhaps to Tax Laws Amendment (Temporary Budget Damage) Bill—I do not know. It does not matter much; there is so much fraud in this. This bill raises the top tax threshold by two per cent for a period of three years—again, something that the government swore blind that they would not do before the election but they did. But it was seemingly drafted in such a rapid and incompetent way that there are loopholes in this that you can drive freight trains through. You can drive freight trains through the loopholes in this.

For a start, it is nine months before the fringe benefits tax rate rises to match—nine months. So that is not quite the first year, but nine months of the first year being really easy for anyone on over $180,000 to adjust which bit of their salary comes in their pay packet and which part comes through salary sacrificing to bring their salary back below $180,000 and avoid this altogether. In fact, if members really want to know how this is likely to work, there is a great article by Nassim Khadem in The Sydney Morning Herald on 16 May which gives a page and a half of quite small writing on how not to pay the debt levy if you are on over $180,000 a year. There is a nine-month loophole in this. We also know, of course, that people on higher salaries who have more disposable income also have a whole range of other ways to reduce their taxes. So this is a short-term levy for the better off, those earning above $180,000, with loopholes you can drive a freight train through.

I am hoping that in the budget papers, in the calculations that Treasury made, they understood how many people earning over $180,000 would manage to avoid paying this; otherwise, there will be another hole in the budget, and the debt and deficit position that the government claims to be trying to fix will be worse again under this government. Nevertheless, it is a fig leaf of a policy, while cutting savagely from the lower end—up to $5,000 from a family with two children on a single income of about $50,000. This levy is a relatively modest rise in the tax for a temporary period.

I would like to talk about a few other things in this budget as well, just to get to the level of the fraud that is in this. Pensions are an absolute example of this. To pretend that reducing the indexation—

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