Clare O'Neil (Hotham, Australian Labor Party) Share this | Hansard source

I really appreciate the chance this morning to speak on Appropriation Bill (No. 1) 2015-2016. Australia faces some very significant economic challenges. I want to start by making the simple point that the budget that was delivered a few weeks ago is not the path to solving them. The government—and I note the comments of the member for Ryan, which are consistent with this—speaks ad nauseam about its economic credentials and the ideas about responsible fiscal management. What I would say about this government—and this is one of the consistent themes Labor has been speaking about—is to look at not what they say but what they do.

What do we see when we look at this budget? We see that debt is up, deficit is up, taxes, after all of the rhetoric that goes on, are up. In fact, the tax take as a share of GDP will be higher under the budget that was delivered by Joe Hockey two weeks ago than it has been since John Howard was Prime Minister of this country—higher than any time that Labor was last in government and higher than during the global financial crisis. We see the same thing when we look at unemployment. This is the No. 1 thing Labor is worried about at the moment. We see under this budget that unemployment will continue to rise. This means more Australians who are without jobs. What I see when I look at the budget is that while the rest of the world is seeing some really important signs of recovery from the global financial crisis it seems that Australia is going backwards.

We did see some reactions in the budget to the economic circumstances that Australia faces. But what I see when I look at the critical reforms in that budget is that they are largely short-term measures. The big one that the government has been talking about is the small business tax cuts. To the extent that there is some extra assistance going to small businesses around Australia, I am very much in favour of that. I have 5,000 small businesses that are doing innovative, terrific things right around my electorate of Hotham. I am really proud of the work that those people who are running those businesses do. Something that is going to help them survive the next few years, a period which looks to be a little bit rocky for us economically, is of course going to have my full support. But I am a little bit disturbed that it is the central plank that the government has put forward in its response to the economic challenges facing Australia. When I am talking about some of these economic challenges, I want to describe a couple of things I am worried about when I look at where Australia is at the moment—particularly in the medium to long term. Again, I come back to this point: nothing in the budget went to any of these important challenges.

One of the first points I will mention is about the declining performance of Australia's education system. We know that while Australia, in looking at its economic history, has had lots of elements of luck that has made us a prosperous country, the critical thing that has driven prosperity in recent years has been the ingenuity of Australia's people. In the past, we have seen Australia's system be amongst the handful of the highest performing education systems in the world. But in recent years the tide is turning. We are seeing Australia's performance on education stagnating. We are seeing year 12 retention rates stagnate. We are seeing the performance across the system as basically the same from year to year—in some instances actually declining slightly.

In the context of Australia's stagnation, we see other countries around the world making massive improvements to their education systems. When we look at the PISA scores, which allow us to assess our system compared with others around the world, we see that Australia is going down—and going down quite quickly. When we look at maths and science, for example, the top seven performing systems in the world are Asian education systems. That brings me to my second point about our engagement with Asia and whether we are prepared fully to embrace that enormous opportunity that lies ahead of us in the rising middle class in Asia.

We know that a billion people are going to join the middle class in Asia over the forthcoming decades.

When you look at the tenor of the debate in Australia about the Asian opportunity over the last, say, 25 years, there has been a real sense that it is a fait accompli for us: 'Surely, since we are very close to Asia and we have a lot of people of Asian background living in our country, we are going to see huge economic benefits from this.' But, when you look at the data on how we are tracking in embracing that opportunity, there is a lot of cause for concern. Sure, we are exporting a lot to Asia, but most of what we are exporting is commodities. Deputy Speaker Henderson, despite you and I being in different political parties, I think we would agree that we want to do more than export commodities. We want to export medical devices, we want to export our great ideas, we want to export more of our education services to Asia's middle class.

As another example, only 9 per cent of Australian businesses are reaching out and doing foreign direct investment in Asia. The vast majority of Australian businesses have no interaction with Asia at all. The reason this is concerning is that, when we look at businesses that have done really well in Asia, it is not something that happens quickly. In fact it can take something like 20 years to get a foothold in Asia. The business environment there is so incredibly different. I was in China just a few weeks ago and the economics of business there are just fundamentally different from what we see here in Australia. I am concerned about that and I see it as an economic challenge facing the country.

Climate change is another issue I am very worried about, but we saw, essentially, nothing in the budget. We know that our climate is going to warm somewhere between two and four degrees. At four degrees, life in Australia could be incredibly difficult. Even at two degrees there will be radical changes to the way we live, to the economics of life in Australia. The budget said nothing about that.

That is a bit of a flavour—three big issues, three big challenges I see facing the country, but nothing serious in the budget about any of them. It is for that reason that I see this as a pretty small budget, small in the sense of having a small vision for Australia and of the things that government can do to help us tackle what is ahead. I will talk a little bit later about the things that Labor is beginning to put into the public arena about how we would deal with some of these issues, but first I want to talk about the details of some of the policies in the budget and how they will affect my constituents in Hotham. The frank reality is that a lot of people in Hotham are going to be quite a lot worse off because of what is in this budget. I want the House to take note of that and to understand it.

I represent a wonderful patch of our country in the south-eastern suburbs of Melbourne. Many thousands of families have made their home in Hotham. Some are doing very well; others struggle a great deal. It is those families—the families in my community who are struggling the most—who are being asked to do most of the heavy lifting by this budget. I want to reflect a little bit on the policies that will affect them.

I will start by running through some of the impacts on families in my electorate. The childcare changes in the budget are the ones we have seen the government spruiking the most. All political parties in Australia today agree on something—this is a seismic thing for the nation—that child care is not delivering what we need it to. It is not delivering what families need, it is not delivering us the workforce participation outcomes we want to see and, very importantly, it is not delivering the early learning that will give Australian children the best possible start in life.

Here was an opportunity to take this really important policy area that is so critical to the development of Australia's children and do something really good, make it into a system that really works. But that is not what we saw in the budget. What we saw was some additional funding for families who want to access child care—and that is basically it. Additional funding for families is fantastic, but of course with this government we see that, as they give with one hand, they take with the other. We saw that in changes to two essential programs that support Australian families today, especially Australian families with young children. The first are the changes to the Paid Parental Leave scheme. I was genuinely shocked to see an area where I thought we had finally come to a resolution—government provision of 18 weeks on the minimum wage for Australian parents who are looking after their children during those first critical weeks of their child's life. Labor put that scheme in place and we are incredibly proud of it.

The way the scheme was designed was that there was the 18 weeks minimum and employers could top that up if employees were able to bargain for that. For example, employees at Woolworths and Coles supermarkets had around five or six additional weeks that the employer paid for.

The changes the government has made will mean half of all new mums will lose funding and lose some essential weeks at home in the first weeks of life of their newborn. There is a policy aspect to this which I think is absolutely appalling; it is so short-sighted. The politics of this are awful. The government provides a scheme. It is intended for use with the 18 weeks minimum and employers top it up. And then the government says women who use the scheme in exactly the way it was intended are double dippers who are committing acts of fraud and rorting. The tenor of that debate was absolutely appalling.

The policy outcomes are equally tragic. Most of the developed world provides much longer in paid parental leave than we see in Australia. The United Kingdom provides 39 weeks, Sweden provides 60 weeks and Canada provides 50 weeks. The reason those countries do that is that having a parent at home during the first weeks and months of a child's life is really good for the child's development. That is the reality. The evidence shows us it is very important for infant and maternal health. A longitudinal study of Australian children, one of the only really good longitudinal studies conducted in Australia, shows that mums who spend shorter periods of time at home after the birth of their child are more inclined to experience severe mental distress two years after the birth of their child. So there are long-term impacts and, frankly, long-term costs on the system in restricting the time that mums and, in some cases, dads have at home with their newborns. The government has cut this program claiming that this will save $1 billion. That is very unlikely because the way they have designed the reform fully expects that private employers will scale back on their parental leave, leaving more mums accessing the government scheme. It is bad policy, it was bad politics, and I really do hope the government backtracks and goes back to the old system.

The family tax benefits cuts in the last budget remain in this budget. That will see the lowest income families around Australia some $6,000 worse off a year. The net impact of the Abbott government's so-called families budget is that families will lose about $3 billion overall. That is what we see when we put forward the additional funding for child care but take away family tax benefit and paid parental leave support. I guess that is what a 'families budget' looks like under a coalition government. Besides the new measures in this budget, the most unfair aspects of last year's budget remain in this budget. I really do want the Australian people to understand that this is the same budget as last year but with some additional cuts and some additional unfair policies on top. We will still see average families being $6,000 worse off. We will still see $80 billion being cut from schools and health. We will still see Christopher Pyne's mad idea of $100,000 university degrees. We will still see a $5 increase in the cost of medicine. We will still see cuts to the SBS and the ABC. We will still see cuts to community legal services.

There are really only two things that have been reversed in this budget, and I think Labor has done a terrific job in tackling some of these issues. The first one is the indexation change to pensions. That would have seen pensioners $80 worse off in a decade than they otherwise would have been. Again, we see a bunch of other nasties for our pensioners. These include a lift in the retirement age to 70; $1.3 billion in cuts to pensioner concessions; $20 million in cuts to dementia initiatives; the axing of the dementia supplement; and the $900 seniors supplement with which a lot of pensioners pay their electricity bills and take care of a lot of other essentials.

The second aspect is the GP tax, the $7 co-payment which was so concerning. I think we have gone through three or four iterations of what policy is going to be put in place there.

Instead of putting in place an up-front payment the government is doing this via the back door by freezing Medicare benefits for four years unless doctors charge their patients additional funding. The upshot of all this is that it is the lowest income Australian families who are bearing the brunt of the government's proposals. NATSEM modelling has looked at how the two budgets affect Australian families. NATSEM is one of the most widely respected institutions that does modelling in Australia, and it says:

The results clearly demonstrate that low income families with children are the main family group to be adversely impacted by policy changes since the last election.

This is sad. It is unfair that low-income families are the ones who are bearing the brunt, and a lot of those people will be my constituents in Hotham. I condemn the budget on that basis.

See this speech in context