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

I rise to speak on the Labor 2013-14 Budget Savings (Measures No. 1) Bill 2014, on taxation policy, and on the 2015 budget. Let me start by relating a relatively bizarre incident that occurred last month. On 24 April this year I received an email from the ALP National Secretary, George Wright. He wrote that I was randomly selected to help the ALP in its year of ideas. In fact it is worth quoting the email verbatim. I says:

Friend

2015 is the year Labor puts forward our ideas to the Australian community.

We want to hear from as many people as possible to get views from as broad a section of the community as possible.

That's why you've been randomly selected to participate in this survey about your values and priorities. Could you please take this survey and let us know what's important to you?

I hope you take this chance to let us know what you think our policies and priorities should be.

Thanks for taking the time to make sure we do a better job of developing the policies that will make Australia a fairer, better country.

George Wright

Labor National Secretary

I am much obliged to Mr Wright for asking me for my views. I am surprised that Labor admits that I have a legitimate contribution to make, given the slanderous things their candidate, the former member for Eden-Monaro, has had to say about me while hypocritically claiming he will not indulge in personal attacks. He might ludicrously label me an 'ideological extremist'—me of all people. Obviously, the national secretary of his party thinks differently, treats me as a friend and values my ideas! Indeed, what an embarrassment for Labor. They have to turn to Liberal party members of parliament to get some ideas.

I am happy to help them. They should sign on to the government's agenda, and help pass the budget in full. They should vote for this bill that seeks to repair the budget problems they imposed on the Australian people. As the Treasurer said in his second reading speech, this bill repeals the second round of carbon tax related personal income tax cuts that are due to start on 1 July 2015, because that is what the Labor party promised prior to the last election as a budget savings measure to help repair the budget. However, since the election they have failed to keep their promise to the Australian people. We are now introducing legislation to allow the Labor Party to keep its promise to Australian people to fix the budget. The cost to the budget for the second round of personal income tax cuts has increased from $1.5 billion to $2.2 billion over the current forward estimates period to 30 June 2018.

The government's 2015 budget has been a well-received budget across the Australian community and in my electorate of Eden-Monaro. Since the budget, I have been crisscrossing the 29,000 square kilometres of my electorate—that is an area equivalent to a European country like Belgium—to find out what my constituents think. In the week or so 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 an unthinking Senate, led by the ALP and the Greens. There is a general recognition that, while last year's budget might have tried to bite off more than we could chew, it is understood that this budget is taking the path to fiscal improvement, admittedly more slowly, in a constructive way that gets us measured progress.

In a macroeconomic 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 it 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. Because of our efforts, the deficit reduces each and every year on average by around 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: you should not believe everything you read in the newspapers and hear on the radio or TV. 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 term, as it says on page 1-8 of Budget Paper No. 1. The debacle of Gillard, Rudd 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 ever more billions of dollars, is not something we want to repeat. They are concerned about 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 now, the Treasury experts are predicting a surplus in 2019-20, five years from now. With such a surplus, we can start paying down Labor's debt.

Let me tell you about Labor's budget black hole. Labor has 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, but, by 8 pm that Thursday night, that hole had grown to $58.6 billion. Labor is blocking $17.2 billion worth of government savings and revenue measures, including more than $5 billion of their own savings. Labor is 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 deficits.

As former New South Wales Labor Treasurer Michael Costa wrote in The Daily Telegraph a few days ago, on 26 May, the Leader of the Opposition's:

… refusal to acknowledge let alone deal with the budget deficit and emerging debt burden, which the Rudd government was largely responsible for, is a clear example of the consequence of union and special-interest politics.

It's tragic that the party of Hawke and Keating which did so much to liberalise and economically reform the Australian economy has now embraced kindergarten Keynesianism and the infantile ideology of anti-neoliberalism.

Mr Costa could not have been more accurate. Labor are indulging in 'kindergarten Keynesianism'. In my view, kindergarten Keynesianism is when the left takes the most simplistic interpretation of what the great economist John Maynard Keynes said about economic policy and turns the solution to every social, cultural and economic issue facing the nation into a simple recipe of spending more and more taxpayers' money. It is nonsensical and a complete travesty of what the great man actually proposed. They have no constructive plan for Australia and, if they are ever elected to government again, there will be a very high price for Australian families.

For example, Labor has returned to its failed carbon tax policy. Labor says it will bring back its failed carbon tax, a tax which belted up household costs by some $600 a year without cleaning up the environment. Labor wants its tax on electricity and will not give up on the past. So you have a very clear contrast between the coalition government, which wants to help business and jobs, and Labor, which wants to hurt business and jobs by increasing taxes like the carbon tax. The coalition government got rid of the failed carbon tax and, in its place, our Direct Action Plan is set to achieve and exceed the bipartisan cuts to emissions on targets. Labor will bring back the carbon tax and reopen the people smugglers' opportunities, threatening lives and billions of dollars in uncontrolled expenditure on detention centres. At the first sign of rising mineral commodity prices, you can bet that Labor will return to the mining tax as well, despite its 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. Retirees are threatened by a multi-pronged attack to their retirement savings by the Australian Labor Party. As of the latest census, there are some 43,984 people over the age of 55 in my electorate. That is 32.5 per cent of the population of Eden-Monaro, and compares to only 25.6 per cent for the nation as a whole. So Labor's attack on retirees is a dagger at the heart of the incomes of a sizeable proportion of the people I represent in this parliament. What is the threat? Two weeks ago, Labor's shadow Treasurer confirmed that Labor will 'fix' the superannuation system with a big new tax. But first a little history lesson. I remind the House that Kevin Rudd, before the 2007 election, said that there would be no change to super—'not one jot, not one tittle'—and they broke their word. In fact, they increased taxation on super by just short of $9 billion. In particular, Labor sought to add a new tax on earnings on super above $100,000. After all that, in 2013 they promised that for five years they would not make any changes to super. In fact, that was a promise by the then Labor Treasurer, who is now the Labor shadow Treasurer, the member for McMahon. And now they are at it again. In 2015, amongst other proposals, Labor has announced that they would reduce their previous policy of a $100,000 income threshold to a new tax on super above just $75,000. This will affect, by some estimates, more than 300,000 retirees. They have also said that they would not index those thresholds, affecting thousands more Australians as the years pass by and inflation brings the effective threshold down every year in real dollar terms.

So much for the 2013 promise of a five-year moratorium on changes! However, that promise of no new changes did not end in 2013. The Leader of the Opposition, as recently as 22 April this year, said:

… these are the final and the only changes Labor will make to the tax treatment of superannuation.

Sounds like a strong assurance, doesn't it? But, less than one month later, in May this year, the shadow Treasurer at the Press Club said:

… what we have flagged is that we are still doing work on other aspects of superannuation policy.

So there is obviously more to come. Indeed, they are also explicitly flagging attacking the negative gearing that thousands of retirees rely on. On 22 April this year it was reported in The Sydney Morning Herald that, in a speech the previous day at the National Press Club, the Labor shadow Treasurer stated that it would be 'irresponsible to rule out going to the next election with changes to, for example, negative gearing'.

What might Labor be planning? We do not have to go far, as they have been doing media interviews to float their impending policy. Journalist Troy Bramston of The Australian newspaper reported on 22 May this year, only a couple of weeks ago, that the New South Wales branch of the Labor Party—indeed, the shadow Treasurer's own branch of the Labor Party—was having internal discussions about an $8 billion hit to the negative gearing of investors in Australia. That $8 billion hit would be in the realm of the $9 billion they hit superannuation for in their last term of government. Labor have made a calculated gamble based on an appeal to the politics of envy to target these retirees to fund the vote-buying spree that the Leader of the Opposition announced in his budget-in-reply speech. It is cynical and disreputable. It is not about good policy. The government recognises that superannuation is the hard-earned saving of Australians, and not a piggy bank to raid as a desperate measure to fix Labor's budget black hole. That is why we on this side of the House have committed to no adverse or unexpected changes to superannuation this term. I say to the retirees in Eden-Monaro: you cannot trust your savings with Labor.

May I say in conclusion that the coalition government's 2015 budget is a 'have-a-go' budget. It delivers for families, for small business and for our economy. The budget is the next step in our economic plan for jobs, for growth and for opportunity. It is a responsible budget. It is measured and fair. It cuts taxes and will create jobs, and it delivers a responsible path back to surplus. The Labor Party should abandon its negative campaign and support our policies, including this bill. That is the one big idea they should adopt for their so-called year of ideas.

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