Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Hansard source

I rise to speak on this curiously named bill, the Labor 2013-14 Budget Savings (Measures No.1) Bill 2014. The bill seeks to amend the Clean Energy (Income Tax Rates Amendments) Act 2011, to amend the Clean Energy (Tax Laws Amendments) Act 2011 and to repeal Labor's planned personal income tax cuts for low- and middle-income earners. Those tax cuts would have been as follows. They would have seen: the tax-free threshold rise from $18,200 to $19,400; the second personal marginal tax rate rise from 32.5 per cent to 33 per cent; the maximum value of the low-income tax offset fall from $445 to $300; the low-income tax offset withdrawal rate fall from 1.5 per cent to one per cent; and the taxable income threshold below which a person may receive a low-income tax offset rise from $66,667 to $67,000. These tax cuts would have provided real help to low- and middle-income earners across my electorate of Blair and south-east Queensland.

These are the families that have borne the brunt of the Abbott government's cruel and unfair cuts and increased taxes. These are families that in significant numbers believed the promise of the then opposition leader prior to the 2013 election. On 6 September 2013—these are his words, not mine—he said there would be 'no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS'. On 6 August 2013 he said, 'Taxes will always be lower under a coalition government.' One of my personal favourites is what he said on 22 August 2011: 'There should be no new tax collection without an election.' He seems to have forgotten that one whilst occupying the Treasury benches. The low- and middle-income families in my electorate could be forgiven for taking him at his word. Fortunately, they did not take his candidate at his word too much, and I was re-elected.

After all these years, we have seen across two budgets the coalition parties and the Abbott government break the sanctity of those promises. Do not forget he told the Australian public on 22 August 2011, 'It is an absolute principle of democracy that governments should not and must not say one thing before an election and do the opposite afterwards.' That did not survive MYEFO in 2013 and it certainly did not survive the May 2014 budget. It was a principle that was broken pretty quickly by this government, who said one thing before an election and did precisely the opposite thereafter.

Families in my electorate watched in horror as we saw the Abbott government increase taxes and cut services, just as the Campbell Newman LNP government did in Queensland, and look what happened to them—turfed out after one term, despite their record majority of 79 seats out of 89. The Abbott government ripped away funds from the states for local schools and hospitals—$30 billion on one count for schools and $50 billion for the public hospital and health system. This budget continues that. Those opposite want to make families pay more for their kids' medicine and when they take kids to the GP. That is their policy; that is their commitment. One of their proposals was to freeze the family tax benefit payments, eroding help provided for the family budget, or cut family tax benefit part B entirely when youngsters turn six years of age. This bill abolishes tax cuts for those same families whilst blaming us for it, as I have heard speakers from the Treasury benches say. It is a real trick to be able to get a broken promise together with a cunning stunt in the one speech and in one piece of legislation. At the start of the Treasurer's second reading speech, I notice that he was blaming us for this legislation. It is not true. I do not think too many people in my electorate believe much of what the Abbott government has to say, because their attitude towards the Prime Minister is akin to the attitude they took to former Queensland Premier Campbell Newman.

I think the government have a truth deficit, not a budget deficit, in many ways. They have lost the capacity to understand what fairness is. Broken promises have been a real problem for the government, and they have hurt people. People know it, the government know it and their backbenchers in marginal seats know it. Since the 2014 budget, when they have done what they call their listening posts—what we call our mobile offices—they would have heard that message loud and clear. No doubt the endless focus groups at Liberal and National Party headquarters would have told them the same. Certainly the Prime Minister knows it and the Treasurer knows it. Just prior to the 2015-16 budget being handed down, the Prime Minister told radio 3AW in Melbourne:

My determination is to ensure that this Budget is fair. That is my determination …. I don't want anyone to say that this is an unfair Budget.

Simply, they knew very much that the 2014 budget was unfair. This unfairness continues, because the cuts continue. In my portfolio areas, the cuts have continued in aged care and in Indigenous affairs. Over $40 million has been cut from the Workforce Development Fund, over $20 million has been cut from dementia assistance and $145.6 million has been cut from Indigenous affairs. The unfairness continues.

It is interesting, because again and again we hear the Abbott government refusing to accept this unfairness and excoriating the National Centre for Social and Economic Modelling, NATSEM, at the University of Canberra. Who can forget the Prime Minister previously praising that centre as the most reputable modelling organisation in Australia? The coalition proudly boasts that some of its pre-2013 election commitments were 'modelled independently by NATSEM, Australia's foremost social policy modelling consultant'. NATSEM's credentials are accepted across the political spectrum by us and by those opposite. Following the 2014-15 budget, NATSEM analysed its financial impact on a range of families and reported as follows:

The burden on families for 2014-15 falls most heavily on low and middle income families with children. The impact on high income families with children is smaller in dollar terms and percent change terms.

It is quite clear that NATSEM's modelling and its conclusion destroyed any claim about fairness in the first budget. NATSEM went on to say:

The results clearly demonstrate that low income families with children are the main family group to be impacted by this budget. The budget impact is relatively moderate in 2014-15 but becomes more significant by 2017-18.

NATSEM modelling also showed:

Low income couples with children (bottom 20 per cent) are worse off by around 6.6 per cent while single parents are worse off by around 10.8 per cent on average.

NATSEM found that 15 of the 16 electorates hit hardest by the first Abbott budget were held by Labor, with low- and middle-income families in Western Sydney and the outer suburbs of Melbourne overwhelmingly worse off. My electorate of Blair did not escape. NATSEM found that the first Abbott budget would leave families in my electorate worse off by about $406 a year. The impact was more severe in neighbouring electorates, even in the electorate of Wright, which wraps around the bottom part of Ipswich, where families would be worse off to the tune of $439 a year.

The government must have held its breath waiting for NATSEM's modelling and its verdict on their second budget. They were pretty disappointed, and you could see the way in which they attacked NATSEM, which torpedoed the budget with respect to fairness. On the 2015 budget, NATSEM found:

The burden on families for 2014-15 falls most heavily on low and middle income families with children. The impact on high income families with children is smaller in dollar terms and percent change terms … In percentage terms, the impact is clearly felt by the low income families more than high income families.

The modelling across electorates was very similar. In their modelling, Family 1, for example, is a sole parent family with an income of $55,000 and two kids, one at primary school and one at high school. Across the forward estimates in the 2015-16 budget to 2018-19, the Abbott government's cuts and taxes will see Family 1 lose $20,647. By 2018-19, the weekly impact of the Abbott government's 2015-16 budget on Family 1, based on decisions they made previously as well, will be a loss of $117.46. Family 2 is a couple with a single income of $75,000 and two kids, again, one in primary school and the other in high school. Across the forward estimates the Abbott government's cuts and taxes will see Family 2 lose $6,049. By 2018-19, the weekly impact of the Abbott government on Family 2 will be a loss of $38.75. Family 3 is a couple with a dual income of $120,000 and two kids, both in high school. Across the forward estimates, the cuts and taxes will see Family 3 lose $11,575. By 2018-19, the loss will be $62.92 a week. This is the impact of these two budgets on families, and it worsens across the forward estimates. There is no peak and respite: just pain. NATSEM stated:

… low income families with children are the main family group to be adversely impacted by policy changes since the last election. The budget impact is relatively moderate in 2015‐16 but becomes more significant in the outyears.

So the Abbott government's claims to fairness lie utterly in tatters—or dead, buried and cremated, to use of the Prime Minister's favourite phrases.

For most of the last two years, and while in opposition, the coalition gave pushed a hysterical bombast of a budget emergency and a debt and deficit disaster, at every opportunity comparing our economy to that of Greece. That ridiculous rhetoric has vanished in the 2015-16 budget. It is instructive to note that the 2015-16 budget has more debt and deficit. Taxes go up. There is more spending. There is higher unemployment. And it is all there in the budget papers. They reveal at least $3.9 billion of new taxes and increased taxes and charges. Tax receipts will rise each and every year across the forward estimates of the 2015-16 budget. The Abbott government now taxes the Australian public at a higher rate than at any time since the Howard government.

Let us compare tax to GDP. Over Labor's last period in government, tax receipts averaged 20.8 per cent of GDP. Under the Abbott government, tax receipts average 22.6 per cent of GDP, across the forward estimates. Alan Kohler, writing in Business Spectator on 20 May 2015, put the lie to the fiction of the coalition being a low-taxing, small government administration. He dismissed this as:

Spin. The 2015-16 deficit will be $6 billion less than this year because taxes increase by $20 billion because of bracket creep, and spending by $14 billion, making this the biggest taxing and biggest spending government since the GFC. Before that you have to go back to the previous coalition government.

That previous coalition government was the big-taxing, big-spending Howard government. Page 317 of budget paper No. 2 reveals that the Abbott government has doubled the deficit, from $17.1 billion to $35.1 billion, in the last 12 months. They doubled the deficit. Of the government's claims to have inherited $48 billion deficit, Mr Kohler, again writing in the Business Spectator, said:

Spin. At least $10 billion of the 2013-14 deficit came from decisions of the Abbott government, including the $8.8 billion capital injection to the Reserve Bank.

In terms of debt, budget paper No. 1 estimates the net debt at $285.8 billion in 2015-16, which is 17.3 per cent of GDP, the highest in Australia's history. The budget papers estimate net debt to peak at $313.4 billion in 2016-17, which is 18 per cent of GDP—incidentally, some $9 billion more than estimated in last year's MYEFO.

Put simply, net debt under the coalition government continues to grow in nominal terms each and every year across the forward estimates. The spending increases in this budget are another coalition myth buster. The former Labor government keep spending growth at an average of 1.3 per cent in the four years following the global financial crisis. Under the coalition government, spending growth averages 1.8 per cent across the forward estimates. The government has broken its promise to save as much as it spends. Coalition members should have a look at the budget papers because they do not understand what they are talking about. The budget papers reveal a very different story to the spin that this government is presenting about its own last two budgets.

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