Dennis Jensen (Tangney, Liberal Party) Share this | Hansard source

This would mean that we would have 16 unbroken years of deficits—the longest stretch of deficits since World War II. Labor's waste and mismanagement while in government included a cost blow-out of at least $29 billion with the National Broadband Network and the disastrous pink batts program, which cost $2.8 billion and, most tragically, four lives. Days lost to strikes more than doubled. Under Labor the number of unemployed increased by over 200,000, and the unemployment rate jumped from 4.4 to 5.7 per cent.

They broke a pre-election promise and introduced the world's largest carbon tax. In its first year the carbon tax was a $7.6 billion hit to the economy. When the $900 stimulus cheques were sent around, 27,000 Australians who were living overseas received them, including 21,000 deceased persons. Cheques to dead people: it really is indicative of pump prime economics! The only real stimulus occurring from stimulus economics is at the ballot box, and even that is not sustained or sustainable.

Labor's failed border protection policies resulted in 50,000 illegal arrivals on more than 800 boats, causing a cost blow-out of more than $11 billion. Tragically this also resulted in over 1,100 drownings at sea. Labor introduced more than 20,000 new or amended regulations, creating new red tape for business. I remember the proud boast about how much legislation they were putting through parliament. This place is supposed to be about putting quality legislation through and not just putting quantity through.

During the six years Labor held government household health costs increased by 35 per cent, education costs increased by 39 per cent, gas prices increased by 71 per cent, water and sewage prices increased by 79 per cent and electricity prices increased by 101 per cent. Investment in defence fell to 1.56 per cent of GDP in 2012-13. This was the lowest level of defence funding since 1938. The 10.5 per cent cut was also the biggest since the Korean conflict. Under Labor, hospital waiting times for elective surgery grew from 34 to 36 days. They promised 64 GP super clinics but delivered only 33.

When Labor came to office they inherited a surplus of $20 billion, with no net debt and $45 billion in the bank. In Labor's five budgets from 2008-09 to 2012-13 they delivered $191 billion of budget deficits. Their deficits have reversed Australia's strong position of having no net debt. Labor effectively chaired the fastest deterioration of the Australian government's debt position in modern Australian history. This was largely because of Labor's spending problem—not because of a revenue problem. Labor increased spending sharply over its six budgets, including increases of 16 per cent, or $44 billion, and almost seven per cent, or $21 billion, in its first two budgets alone. Over Labor's five budgets government spending increased by over 50 per cent, or $137 billion.

Since the coalition came to power, we have worked tirelessly to fix the problems inherited from Labor. We, the coalition, believe in being an agile and nimble government. This is clearly evident in what we have achieved and the work that we have done since entering government. We are actively repairing the mess left by Labor and returning the budget to a strong and sustainable position. However, the reality is that our social services bill represents almost a third of the Commonwealth budget, and it is increasing faster than any other area of government. Without further restraint our welfare bill is expected to grow from $149 billion in 2014-15 to $277 billion in 2025-26. It is evident from these figures that we need to restrain the growth in welfare and continue to fix the mess left by Labor.

Although significant savings in the Social Services portfolio have been secured, it is imperative that we continue with our efforts to spend our social services budget more effectively in order to reduce long-term pressures. This must be done so that we can better support those who need it most, ensuring also that Australia's social security safety net is sustainable for future generations. The government has proposed four measures in the Social Services Legislation Amendment (Budget Repair) Bill 2015 in order to achieve this.

The first measure, in schedule 1, will tighten proportionality requirements for pensioners from 1 January 2017. This measure will reduce the amount of time a full pension is paid to pensioners absent from Australia from 26 to six weeks. After this period, payment will be adjusted according to the length of the pensioner's working life residence. This measure will also treat all people who have spent less than 35 years of their working life in Australia the same, whether they were born in Australia or overseas. Those who have spent more than 35 years of their working life in Australia remain unaffected.

This measure does not impact on the length of the portability period. The age pension and a limited number of other pensions will continue to be payable overseas indefinitely. Only the amount they receive after a six-week absence will change. Those who have spent fewer than 35 years of their working life in Australia will see their pensions reduced once they spend more than six weeks outside Australia. The amount the payment is reduced by is based on the proportion of their working life spent in Australia. This measure will continue to reinforce and strengthen the residence based nature of Australia's social security system. After a six-week absence, payment will be adjusted according to the length of time a person has resided in Australia during their working life.

The coalition has made this change because we believe a person's retirement costs should be fairly distributed between the countries a person has spent most of their working life in. Our expectation is that a person will be eligible to receive a pension from the country in which they have spent a proportion of their working life in. Australia now has 30 international social security agreements around the world to support people living and working in more than one country. These agreements generally allow Australian residents to maximise their income by helping them claim payments from other countries where they have spent part of their working life.

Under measures 2 and 3, the government will also cease the pensioner education supplement and the education entry payment, saving Australian taxpayers around $300 million over the forward estimates. In spite of its name, the pensioner education supplement is not available to people receiving the age pension. It assists students with the ongoing costs of full-time or part-time study. The most common payment type for people receiving this is the parenting payment single, at 43 per cent, followed by the disability support pension, at 41 per cent, and the carer payment, at nine per cent. As at the end of September 2015, PES provided fortnightly payments to around 46,000 people. The education entry payment is a lump sum payment paid once a year to eligible recipients, removing financial barriers to education by providing financial assistance for study entry payment. In 2014-15, around 83,000 recipients received an EEP lump sum payment of $208.

Originally, these payments were introduced to assist long-term income support recipients who had been out of the workforce for a long period of time. The payments helped recipients improve or rebuild their skills to be more competitive in the labour market. However, since the introduction of these payments, several other policies have been introduced to reduce the length of time that income support recipients, including single parents who have the capacity to work, remain out of the workforce. These policy changes include varied eligibility and participation requirements for parenting payment, as we recognise that, as children age, their parents' capacity to work increases. We have also made changes to the assessment and eligibility criteria for payments for people with a reduced capacity to work, requiring these people to work, or look for work, in line with their capacity. The coalition has created more appropriate channels for government funded study and training assistance for income support recipients. These include the Higher Education Loan Program and the FEE-HELP and VET FEE-HELP tuition loan programs through employment service providers.

Ceasing these two payments will help reduce the number of payment supplements and is consistent with the recommendations of the McClure review of welfare. McClure's review highlighted 20 main payment types and 53 payment supplements that resulted in a complex income support system.

Measure 4 will reintroduce elements of the 2014 budget savings to maintain the income-free areas and means test thresholds for all working-age allowances. Parenting payment single and student payments, including student bank limits, will also be maintained and not indexed for three years. Pausing indexation will allow us to realise budget savings and help slow the growth in social security expenditure.

We, the government, believe that these are sensible measures that will help us back to a surplus. They will also allow us to continue to fix the budget mess we inherited from Labor. These changes will help achieve long-term sustainability of the payments system, while ensuring Australia has a targeted, means-tested income support system that provides financial assistance for those most in need, all the while encouraging self-provision.

After signing into law the social security amendments of 1961, John Kennedy said:

The Social Security program plays an important part in providing for families, children, and older persons in times of stress.

But he added this:

But it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision.

If we want to remain an agile and innovative government, we need to regularly assess the measures we take and evaluate their success. It is important that we continue to find a better way and the best way forward, learning from our predecessors' mistakes, growing from our past attempts and, therefore, providing the Australian people with solutions and measures that achieve long-term sustainability.

It is important that we acknowledge changes that have occurred, not just in the Australian government or our coalition policies but also in our working habits, living standards and population. Our world continues to become more globalised and interdependent. It is important that our policies reflect this. This bill does that by updating pension measures, removing out-of-date education related payments and acknowledging that more appropriate channels of government funded study assistance are available. We are able to drive the government back into surplus and clean up the economic mess that we inherited from Labor.

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