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

The 2015-16 budget has been well received across the Australian community and in my electorate of Eden-Monaro. As a former chief executive of the Australian Chamber of Commerce and Industry, I know that one way to judge a budget is to look at the consumer confidence statistics in the weeks following its announcement. Across Australia, I note that consumer confidence has risen in a meaningful way. Confidence is on the rise again. As the Treasurer has noted, the latest Westpac-Melbourne Institute index of consumer sentiment jumped by 6.4 per cent in the month of May. The index is now in positive territory, with more optimists than pessimists, and at its highest level since January 2014.

Westpac's chief economist, Bill Evans, said:

This is a very strong result … It is the highest level of the index since January last year.

He went on to say:

Clearly, the two driving forces behind this boost have been the federal budget and the interest rate cut which the Reserve Bank delivered in the first week in May.

He added:

Whilst undoubtedly positive, the impact of the rate cut is likely to have been dominated by the response to the budget.

Further, he said:

The surge in the index this year represents the first time we have had a strong result in May since 2007.

The Westpac chief economist concluded:

The 6.4 per cent lift in the index is comparable with the boost to confidence from the generous budgets of the Howard-Costello era, where the index surged by 7.5 per cent (2007); 8.1 per cent (2005) and 5.3 per cent (2001).

Similarly, the ANZ-Roy Morgan consumer confidence index jumped 3.6 per cent in the week after the budget, putting the index above its long-run average level and at the highest level in around six months—since early November 2014. Confidence was up a cumulative 5.4 per cent over the previous fortnight. The ANZ chief economist, Warren Hogan said:

The initial positive reaction of Australians to last week’s budget is great news for the economic outlook … consumer sentiment has risen in both the lead-up to and the immediate period after budget night. The 3.6 per cent weekly rise … indicates to us that the budget impact has been strongly positive. This suggests to us that Australians believe the government has got the mix of medium-term fiscal consolidation and short-term support for the economy about right. We tend to agree …

I know that this is being reflected across my electorate of Eden-Monaro. Since the budget, I have been crisscrossing the 29,000 square kilometres of my electorate—that is equivalent in size to the European country of Belgium—to find out what they think. In the week since budget day I have had listening posts or other engagements in Queanbeyan, Bredbo, Bega, Moruya, Bingie, Merimbula, Jerangle, Tathra, Narooma, Dalmeny and Frogs Hollow. That is a good cross-section of the electorate and I have met hundreds of people. What I have found is a good reaction to the soundness of the budget. There is a recognition that it is a pragmatic way to proceed given the enormous constraints and roadblocks caused by the unthinking Senate led by the ALP and the Greens. There is a general recognition that, while in last year's budget we may have tried to bite off more than we could chew, this budget is taking the path to fiscal improvement—admittedly, more slowly—in a constructive way that gets us measured progress.

In a macro-economic sense what I can note is this: we inherited a deficit of $48 billion; the deficit for the budget year is now estimated to be $35 billion and is forecast to reduce each and every year to below $7 billion over the next four years. Over four years this means that we will have reduced the $123 billion of deficits inherited from Labor by over $40 billion to $82 billion over four years. Because of our efforts, the deficit reduces each and every year on average by about a half a percentage point of GDP.

For those of my constituents who are concerned that we may be dropping the ball on fixing the budget, can I say that you should not believe everything you read in newspapers and hear on radio and television. In fact, the budget explicitly contains a credible path back to surplus. I understand that the Prime Minister and Treasurer are reluctant to give the firm commitment of getting back to surplus in five years time, in 2019-20, with surpluses projected over the remainder of the medium terms, as it actually says on page 1-8 of Budget Paper No. 1.

The debacle of the Gillard-Rudd years and the member for Lilley, former Treasurer Swan, claiming on hundreds of occasions that they were getting back to surplus—or had in fact actually delivered a surplus—when in fact they were just blowing out the deficit by evermore billions of dollars is not something we as a government want to repeat. The Prime Minister and Treasurer are obviously wary of the curse of Lilley. However, as a mere backbencher, I feel I can point to the budget papers and say that, on the basis of all that is known today, the Treasury experts are predicting a surplus in 2019-20, five years from now. With such a surplus we can actually start paying down some of Labor's debt.

Turning to other aspects of the budget, I know that there is particular enthusiasm in my electorate for the small business and jobs package. Small businesses provide 4.5 million Australians with their jobs. They provide four in 10 jobs in the private sector, six in 10 in construction and eight in 10 in agriculture, and they provide a large number of the jobs in rural electorates such as mine. The budget cuts the small business company tax rate to the lowest in almost 50 years, since 1967, and for two years we are giving all small businesses an immediate tax deduction on any asset they could buy costing up to $20,000. This will benefit more than 95 per cent of all Australian businesses.

As our economy changes, the role of our small businesses will be even more important. That is why the $5.5 billion Growing Jobs and Small Business package will provide major incentives for businesses to invest, hire and grow. In addition, the package includes $375 million aimed particularly at improving opportunities for Australians to get a job and reaching out to disengaged youth. In detail: from 1 July 2015, all small businesses, whether they are incorporated or not, will receive a tax cut. From 1 July 2015, the government will cut the company tax rate for incorporated businesses with annual turnover of up to $2 million by 1.5 percentage points to 28.5 per cent. From 1 July 2015, the government will also provide a five per cent tax discount to unincorporated businesses with annual turnover of up to $2 million. From budget night until 30 June 2017, small businesses will also be able to immediately deduct every asset they acquire that is valued up to $20,000 for tax purposes; currently, the threshold sits at $1,000. These are measures that should help the more than 11,600 small businesses in my electorate and the people who work for them.

The childcare package has also been commented on favourably in my electorate. Its principal component is the $4.4 billion Jobs for Families package which will deliver a childcare system that is simpler, more affordable, more flexible and more accessible. Our objective is to help parents who want to work and parents who want to work more. This package will provide parents with greater choice when it comes to balancing work and family. Families on incomes of between $65,000 and $170,000 using child care in 2017 will be around $30 a week better off.

There is also direct program spending in Eden-Monaro from the 2015 budget. Some $300 million is to be spent in my electorate over the next few years. That includes $161 million for the South East Regional Hospital in Bega and $95 million to $100 million on the NBN rollout that is occurring right now across the electorate. In addition, there is at least another $46 million in funding for explicit projects like the Port of Eden redevelopment and moneys for road expenditures like those for the Princes Highway on the Far South Coast and $25 million for the Queanbeyan bypass. There is also money for repairing bridges in Bombala and Broulee.

Further, there is $5 million for the nationally famous Bega Cheese Factory. This is part of the $50 million Manufacturing Transition Program. The Commonwealth government's contribution to the program is accompanied by over $200 million in investment by Australian manufacturers. In all, 19 businesses will receive between $1 million and $5 million to improve their competitiveness by investing in new capital equipment and plant improvements. The program seeks to encourage Australian manufacturers to invest in more sophisticated and knowledge-intensive manufacturing. This will create high-value jobs in areas where the greatest economic opportunities exist. The $50 million Manufacturing Transition Program fulfils an election commitment to ensure a secure future for manufacturing in Australia by focusing on areas of competitive strength. It provides the structural and strategic support necessary to give manufacturers the confidence to back themselves and to carve out their place in a changing global environment.

The $5 million for the Bega Cheese Factory is to assist the company to expand its plant in Bega to include a state-of-the-art lactoferrin production facility. Overall, this is a $21 million project that will increase jobs in the Bega district. It will enhance export opportunities in Asia, particularly China and Japan. Lactoferrin is a milk by-product that enhances the nutritional value of infant formula and other medically prescribed food. It is also used in pharmaceuticals. It is a great project for Bega and Eden-Monaro.

I cannot end this speech without directly referring to the Leader of the Opposition's address-in-reply to the budget. So what are the alternatives? Let me tell you about Labor's budget black hole. Labor have a budget black hole of more than $58 billion. Before the Leader of the Opposition's budget-in-reply speech Labor faced a $52 billion budget black hole. By 8 pm that Thursday night, that hole had grown to $58.6 billion. Labor are blocking $17.2 billion worth of government savings and revenue measures, including more than $5 billion of their own savings. Labor are also calling on the government to restore $31 billion in savings that have already been banked, including spending an additional $18 billion in foreign aid.

Labor would deliver higher debt and higher deficit. They have no constructive plan for Australia and, if they were ever elected to government, there will be a very high price to pay for Australian families. For example, Labor have returned to their failed carbon tax policy. Labor say that it will bring back their failed carbon tax—a tax which belted up household costs by some $600 a year without cleaning up the environment. Labor want their tax on electricity and they will not give up on the past.

So you have got a very clear contrast between a coalition government which wants to help business and jobs and Labor, who want to hurt business and jobs by increasing tax. The coalition government got rid of the failed carbon tax and, in its place, our Direct Action is set to achieve and exceed the bipartisan cuts to emissions. Labor will bring back the carbon tax; they will reopen the people-smugglers' opportunities, threatening lives and billions of dollars in uncontrolled expenditure on detention centres; and, at the first sign of rising mineral commodity prices, you can bet they will raise the proposition of a new mining tax, despite their denials.

One of the other things you can count on with Labor, by their own admission, is that they will raid your super if you give them half a chance. Their latest thought bubble is a big new tax on superannuation and retirees. The shadow Treasurer has confirmed that Labor will fix the superannuation system with a big new tax. Before the 2007 election, Kevin Rudd said that there would be no change to super—'not one jot, not one tittle'—and he broke his word. In fact, Labor increased superannuation taxation by various raids on thresholds by just short of $9 billion over that six-year period. And now they are at it again. Labor will always revert to form with big new taxes, because it has no idea about how to manage taxpayers' money.

Under the coalition government, your superannuation savings are safe. Under Labor, your superannuation savings will be treated as a piggy bank to be raided. They are also talking about attacking negative gearing. Self-funded retirees should be very fearful.

On 24 April this year, I received an email from the ALP national secretary, George Wright, which said that I was randomly selected to help the ALP in its year of ideas. What an embarrassment for Labor. This is what he said:

Friend—

2015 is the year that Labor puts forward our ideas to the Australian community … I hope you take this chance to let us know what you think our policies and priorities should be.

George Wright, Labor National Secretary.

I will tell you what you should do: you should pass this budget in full because it is a plan for Australia and it is a plan for Australian jobs.

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