Andrew Wilkie (Denison, Independent) Share this | Hansard source

This year's budget is not the horror budget of last year. That was in a league all of its own. It was so bad, indeed, that I, along with one other member of the House of Representatives, felt the need to vote against appropriation bills 1 and 2—in effect in an attempt to block supply— because we thought it was important that the government last year go back to the drawing board and redo last year's budget and make it fairer. Regrettably, that was not to be, because the Labor Party and the Greens voted for supply in that case.

That brings me to this year's budget. It is a mixed bag. But, on balance, I am concerned that it is still not fair, that it is not sensibly funded and that it contains very little joy for Tasmania. There is some good news, and I should acknowledge that and applaud the government for that good news. The government's decision not to go ahead with the changes to the indexation of the age pension is a good decision. Mind you, it is a reversal of a bad decision last year. It was always madness to change the indexation of the age pension, which would have resulted in diminished spending power for age pensioners over time. Regrettably, the age pension is inadequate as it is. There was no sense at all in diminishing the buying power over time.

This year's budget did contain a very welcome boost for small business, and that has been very well received in Tasmania—not least because small business really is the backbone of the Tasmanian economy. The childcare boost is also welcome. Clearly we should do whatever we can to assist people to get back into the workforce. But we should also do everything we can to improve the education of our youngsters. I am persuaded that early childhood education is, on balance, good for boys and girls. It has certainly been my experience with my own two little daughters that they benefited greatly from early childhood education. I was very pleased to see in the budget funding confirmed for the Hobart airport runway extension and also the remaining money towards the rebuild of the Royal Hobart Hospital, which is now going ahead and is desperately needed.

I have given credit where it is due to the government. I will now focus areas of great concern. I think the budget is still unfair. It is very helpful to look at the ACOSS assessment of the report, which also highlights the fact that this year's budget fails the fairness test. In fact, ACOSS identifies that when you combine the 2014 budget savings measures with the 2015 budget savings measures there has effectively been a $15 billion cut over the budget and forward estimates from basic services and support. And that is before you add the $80 billion cut to health and education over the next 10 years. Is that fair? Is it necessary? I do not think so. The fact is that we live in a very rich and lucky country. The federal budget in any one year is in the order of $400,000 million. Surely, with good politicians making good decisions, we can adequately look after the people who need to be looked after. We can look after the very young. We can look after students, the unemployed, the sick, the disabled and the aged.

It is all about priorities, and to cut $15 billion out of the coming financial year and the following three years of forward estimates—to cut $80 billion out of health and education over the next 10 years—is not necessary. There is enough money in the federal budget to look after people who need looking after. It is as simple as that. In fact, ACOSS goes on to identify the combined impact of the two budgets to include things such as the $126 million cut from child dental programs, a $1 billion cut in health funding, $6 billion in cuts to family payments, $1 billion in cuts to vital community services, $500 million in cuts to Aboriginal and Torres Strait Islander services and programs and $674 million to be cut from affordable housing and homelessness programs. I could go on.

Yes, we do need to restructure the budget, because we do need to balance it over the long term. The question is: how do we do it? We do not need to cut in those places. I will offer some comments about how we might afford the budget in the future in a little while. There are a few things that really jump out at me—for example, the government's determination to cut family tax benefit part B. This will hammer low-income families and be very, very problematic for single parents. Why do we go after these people? Why do we go after mainly single mums on low incomes? Their children have just turned six, and they are in school. Why do we go after them for budget savings? Surely single mums with young kids are just the sort of people we should be looking after well in this country. And it is not good enough to say that their kids are six, seven, eight or nine so the single mum can go to work, can rejoin the workforce. When you drop the children off at 9 am and you have to pick them up at 3 pm, and you have travel time as well, to and from work, it is very hard to get a well-paying job and a decent employer who will employ you between 9.30 or 10 o'clock in the morning and 2 o'clock or 2.30 in the afternoon. It is hard for these single mums.

I urge the government again to retreat from this determination to cut family tax benefit part B. It is not fair. So, too, the change in the assets for older Australians who are on a part pension is not fair. I believe there need to be changes to make the budget affordable, but by reducing the assets that a part pensioner can have while still receiving a part age pension they have cut too far. The reality is that we live in a very soft economic time. Many age pensioners or partly self-funded retirees have conservative investments. They might be getting only a few per cent interest from the bank on their investment, or from another form of investment. So, they have cut too far, and it will force these people to draw down their savings too fast.

And you get these perverse outcomes. I will quote Jennifer Hewett from the Financial Review earlier in the week. She gives an example:

Those with $600,000 in savings would get a part pension as well as investment income. The combination of both would be roughly equivalent to just getting the full pension of over $34,000. In contrast, if they had only $375,000 in savings, they could get a full pension plus investment income to add up to close to $45,000 in annual income.

So, I think those exact settings have been ill considered. And what about this whole business about double dipping? Let's not forget: there are 80,000 mums out there, or would-be mums, who have forsaken income rises to have workplace paid parental leave arrangements. This is not double dipping; these are people who have negotiated this additional paid parental leave benefit, and the government now wants to take it from them.

And overseas aid: John Howard, to his credit—not something I have said too often—15 years ago committed Australia to the millennium goal of 0.7 per cent of gross national income in foreign development aid.

At the moment it is under half of that and, with the cuts in this budget, by fiscal year 2016-17 it will be down to 0.22 per cent of gross national income in foreign development aid, less than one-third of what John Howard committed to 15 years ago—a cut that is not ethical and is not in Australia's best interest. Our best interest is served by helping countries in our region to be stable and prosperous and to be developed. That will foster security and open up markets.

I have made the point already that I do not think this budget is sensibly funded. The preoccupation of the government in this budget and in last year's budget is all about savings, and there is very little attention to the imperative to increase revenue. So where is the government's interest in superannuation reform? Frankly, rich people do not need a tax break on super. Where is the interest in finally taxing companies who make superprofits? Where is the interest in taxing them effectively? The banks, for example, make superprofits. Why do we not make them pay a bit more tax? These are the sorts of area that this government, or a future government, should be considering to increase revenue, because that is the real problem with our federal budget at the moment—a revenue shortfall. So stop cutting the people that can least afford it and go after the people that can afford to pay a bit more tax.

There is little joy for Tasmania in this budget. Of course, everything that hurts Australians broadly hurts Tasmanians more, because we have a relatively disadvantaged community. We have a higher unemployment rate, we have lower average incomes and we have the added cost of Bass Strait. So everything in this budget that hurts mainlanders hurts Tasmanians more. We will be hurt just as much as everyone else by the $80 billion cut in health and education spending. That is going to take about $2 million out of the Tasmanian budget over the next 10 years. But we have a very small tax base. We have less flexibility in our economy. We have less capacity to deal with these cutbacks. If we think the cutbacks last year and this year are bad, wait till we see the effects over the next 10 years of the $80 billion cut in federal funding for health and education, including the $2 billion cut in Tasmania.

I am disappointed also to see that only half the money is being provided for Tasmania than was promised for our rail upgrade. We were promised $120 million of federal assistance for our railway upgrade, and this budget contains a little under $60 million. Yes, the state government is recklessly cutting back on its contribution, but I think it would be entirely appropriate for the federal government to deliver on its promise.

I would like to see the federal government do more than show interest in the University of Tasmania's $400 million deep restructure. That is the sort of federal assistance that the budget should include because that is exactly the sort of federal assistance that will help Tasmania grow and be less reliant on federal assistance in future.

Tasmania receives a disproportionate amount of money from Canberra for welfare. We receive a disproportionate amount of money in special purpose payments from Canberra because of all the disadvantages we have in our community. If this government wants to wean Tasmania off that sort of federal largesse, that federal assistance, then Canberra should be investing in things in Tasmania that will grow the economy, that will help the community and that will genuinely create jobs—things like the $400 million restructure of the University of Tasmania, so it can realise its full potential, and funding in education in Tasmania. We have a very low school retention rate. The state government has just cut pathway planners in the schools which help kids in school. You cannot grow jobs and you cannot grow an economy unless you have a well-educated population.

In closing, I have given the government credit for some good initiatives in this budget—for example, the boost to small business, the boost to child care, the assistance with Hobart Airport and other things—but it is still not fair. It cuts $15 billion over the next four years from where it is most needed; helping people most in need. The $80 billion cut to the states over the next 10 years is still in the budget. That is unaffordable. It is not fair. It is not sensibly funded. Tassie does not get a fair deal. We are a rich country. We can afford to do it much, much better.

Debate interrupted.

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