Ewen Jones (Herbert, Liberal Party) Share this | Hansard source

If I could quickly address the member for Wakefield, he should be very careful who he calls a liar in this place. He spent a fair bit of time talking about dental and I would like to ask whether the axing of the Chronic Disease Dental Scheme was taken to an election. No, it was not. Was getting rid of means testing of the private health insurance rebate taken to an election in 2007? You were in government. You did not take it in 2007. I always like to think that when the facts change I change my mind—I do not know what you do. When Bob Hawke won in 1983 he basically junked his entire election platform because the circumstances around the budget had changed completely. So he changed his mind.

On a personal note, I would like to wish Alby Schultz a speedy recovery. If the old saying that only the good die young holds any truth, Alby is good for another 30 or 40 years. So if he keeps his chin up and makes sure he does what Gloria says, he will not get into any trouble.

I also note that the shadow minister prefers to go on television as opposed to turning up to the second reading debate. I think that shows where her priorities lie.

We went to the election with a four-pillar promise: that we would axe the bad taxes which we have done, that we would stop the boats and there has been only one successful boat arrival this year, that we would build the roads and the infrastructure of the 21st century and over $800 billion of environmental approvals have been given and over $150 billion of infrastructure has started, and we said we would fix the budget mess.

Behind social security, health is the biggest spend in the budget. The federal government will spend $68 billion this year alone as its contribution to health in this country and that figure will rise to $79 billion by 2017-18. Each state and territory government has significant expenditure on health as well. To that end, we spend over $150 billion a year on the health of our nation. We are a First World nation and we expect and demand high-quality, cutting-edge medical treatment. The issue is, though, while technology and robotics make things in general circulation cheaper and more available, quite often when it comes to health it makes it very expensive. What we have to do, as a government and as a people, is pay for it. Private health insurance forms a very large part of that process.

This bill pauses the income thresholds which determine the tiers for the Medicare levy surcharge. It also amends the Australian government rebate on private health insurance at 2014-15 levels for three years. This will be done by pausing the indexation arrangements under the Private Health Insurance Act 2007. I voted against Labor's means testing of the private health insurance rebate; in fact, I railed against it because it should be about choice. Labor went to the 2007 election stating emphatically that there would be no change to private health insurance rebates, but they changed their mind and tried repeatedly until the Greens and the crossbenchers provided support to get it through. We said we would reverse it as soon as the budget position enabled it. I am personally disappointed that we are not at that place at the moment where we can drive private health insurance memberships and choice in treatment further. But, faced with the budgetary position we inherited from the previous government, we are not able to make those sorts of decisions.

No matter what part of the budget you choose, we are under pressure financially. I am personally sick and tired of the argument about emergency. We face growing debt and, even if you disagree with our projected gross debt figure of $667 billion, we face a situation where the previous government handed down budget deficits totalling $195 billion. So whether you choose to engage in any level of argument over the numbers or projections, the base line number of $195 billion cannot be argued.

Additionally, both sides agree that running surplus budgets is a good and desirable thing to do. Everyone around Australia will understand that if you have no debt you can spend all your money. Everyone around Australia will understand that if you have a lot of debt, your spending capacity is reduced. So, when you are faced with a debt and you are a company, you have to consider options. You can either to pull your head in and try to save as much as possible or you can spend and stimulate to try to generate the sales required to make money to pull you out of debt.

The second option is what this parliament decided to do when faced by the global financial crisis in 2008-09. Incidentally, that is also what the Howard government did when faced with the Asian financial crisis of 2001 and it worked

We went into deficit during the Asian financial crisis by $6 billion for that year, but we came out of it strongly.

The thing is you can only spend so much before it becomes counterproductive. Our political opponents will always say that Australia's gross debt to GDP ratio is comparatively low when compared to world standards. That is 100 per cent correct. But debt is more than just a comparison; you have to be able to service it and then pay it down. That is where the problem starts and ends. What we have in this country is a small population and, therefore, we have low holdings of cash. Places like Japan have massive debt to GDP rates but they also have massive national savings. The more debt we carry the more we are exposed to accidents overseas. What do we do if we get hit by another GFC? How will we pull out of that one when we have rising debt now? That is what you have to look at and that is what you have to look for—the next issue, the next problem or the next opportunity.

I have never had a problem with debt, but debt must have a purpose; it must produce a return. That is why, after backing the first round of the stimulus, the coalition walked away from the second round of stimulus. The Rudd government then continued to borrow and spend to create that stimulus. Unfortunately, some of the stimulus was still being rolled out long after the emergency had subsided. Remember, the Asian financial crisis stimulus by the Howard government resulted in a budget deficit of $6 billion and lasted one year. All this time the then government—the Howard government—was still projecting downward trends on our overall gross debt situation.

Which brings me to this bill: it will result in savings to the budget of nearly $600 million over the forward estimates. That is a massive amount of money. But if you contextualise it with the overall spend by the federal government alone of some $280 billion over the same period, you will see that we are only playing at the edges of our debt problems. This bill represents a saving of 2.14 per cent over the forward estimates. That is all. So why do it at all? Because the budget has to be fixed and that is the business we are in. This government is in the fixing business and we all must play a part. My Grandma Jones would always say, 'Look after your pennies, laddie, and the pounds will take care of themselves.' The problem with fixing something though is that, invariably, it costs money. That money comes out of your pocket. It does not come out of your gross income; it comes out of your net income, it comes out of your cash. It does not grow on some magic tree in the backyard, as my kids seem to believe; it comes out of your pocket no matter the case.

It is like when you are moving into a new house. You have just purchased it and you love it, but as soon as you move in problems appear: the downstairs toilet leaks, a couple of windows will not open and the interior needs a repaint. You can continue to live with them or you can fix them. Me? I fix them. Sure I know it will cost money, but if I do it now the cost will be lower over time. Again, the thing to remember here is that I have purchased this house and owe a tonne of money on it. The debt is already there and has to be serviced. The extra bits have to be done and they have to be financed. That financing comes out of my pocket, my net income. It hurts and it hurts now. I will have to adjust my lifestyle accordingly because I cannot simply go and get another credit card to pay for it. They will probably lend it to you, they will probably give you the money, but sooner or later you have to pay it back. Does that make me a bad financial manager? I do not think so. What it does is make me a realist. The ultimate goal of any person who takes out a mortgage is to not have to pay it anymore. That should be the goal of our parliament and our gross debt standing: to be able to get it down to that stage where we are debt free because if we are debt free, we have options. What we handed over to Labor in 2007 was not without its problems, and I admit that. It was not without its structural problems, and we have to address those as well. But what we handed over was a clean set of books, and if we do not address that now we are in for all sorts of strife.

This $599 million will go into an offset account. You will hear the others say it is not even going into debt reduction; the $20 billion medical research future fund is an offset account. It will not only assist with providing money for research but it will also work as an offset account against our overall debt position. It is just the same as having your mortgage, your living account and that sort of stuff. It is your net position that you have to watch for; it is the overall debt position. The money goes into that $20 billion sovereign health fund that will work towards providing cures and research into medical research around this country, which will help us into the future with things like diabetes type 1, things like arthritis, things like heart disease and things like all of those cancers that we have to deal with on a daily basis. We can be that smart country—we are that smart country—and we want to be able to provide that sort of thing.

But the way we are with the budget at the moment it is like one side of this parliament, our side of the parliament, is saying, 'We've got to remember "A stitch in time saves nine,"' whereas the other side of the parliament seems to be saying, 'Let her rip!' We just have to try to understand where we are coming from here. I understand where we come from; I understand there are different philosophical positions. I am happy with that, and I can live with people's philosophical positions. I heard the member for Blair in here last week telling me that people on that side also ran businesses, and he ran his business for 20 years and invariably it was very successful. But I bet he did not risk it by continuing to borrow and I bet he ran his business at a profit, because that is what you have to do. If you do not have money in the bank you cannot do anything. That is what we have to do—that is, address the basic issue here of financial management. At the end of the day, health, education—no matter what it is, it comes down to economics; it comes down to who is going to pay for it and how. That is what it comes down to.

So while I admit this is a massive amount of money that this saving will be for the person in the street to get their head around—$599 billion—when you consider it over the forward estimates of $280 billion worth of spend, we are not talking about a massive percentage of saving here. What we are talking about is putting the money somewhere where it will be safe, somewhere where it cannot be taken into the future and somewhere where it will be used for medical research and for the benefit of all Australians.

I will not be supporting the amendment, but I do support Minister Dutton. I support what he is trying to do here and I support the Treasurer, Joe Hockey. I do support what they are trying to do with our budget situation. So while I will not be supporting the amendment, I will be supporting the bill.

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