Gavan O'Connor (Corio, Australian Labor Party, Shadow Minister for Agriculture and Fisheries) Share this | Link to this | Hansard source

This budget represents a wasted opportunity by the Treasurer to lay the best foundation possible for a new wave of prosperity for all Australians. The Treasurer has had his hands in the pockets of ordinary Australians for over 10 years, accumulating massive budget surpluses off the back of their hard work and labour. As the highest-taxing and highest-spending government in Australia’s history, Middle Australia were looking for a budget that would ease the financial pressure on their households, which are reeling from the higher interest rate costs, higher petrol prices, higher private health insurance premiums, higher child-care costs and a higher general cost of living. In this budget, there is little relief from the eternal cost spiral that has eaten so substantially into their standard of living in this age of global prosperity.

The massive budget surpluses generated by their efforts to restructure the Australian economy, making it productive and competitive, have not been returned to Australians when they needed it most. For low- and middle-income earners in Geelong, this budget is an insult—when high-income earners, already great beneficiaries of past budgets, continue to get substantial gains from this Treasurer. Since 2000, tax cuts to a worker on a median income have been just $16 per week. However, tax cuts to workers earning $175,000 per year have been $200 per week. In the land of plenty, how can such a thing be fair?

Australians are not fooled by the appearance of a new prosperity. They know that the rise in asset prices has been built off the back of increasing household debt. They know that household budgets are precariously balanced, dependent on two incomes coming in and vulnerable to even small interest rate rises and substantial shocks like rising oil prices. And they know that they have been even more precariously placed since this government introduced an industrial relations system where family income is exposed to the removal of overtime and penalty rates when new contracts are laid on the table for new employees and, down the line, old employees. On a national basis, amidst apparent prosperity for some, this economy displays some quite fundamental weaknesses that threaten the fabric of Middle Australia and put our future prosperity at risk. At the core of those fundamental weaknesses is the massive increase in Liberal debt.

When the Treasurer and the Prime Minister were in opposition, they made great play of the net foreign debt. At that time, net foreign debt was in the region of $160 billion. Both the Treasurer and the Prime Minister said to the Australian public that that level of net foreign debt was feeding directly into interest rates and was affecting their household budgets. If you accept the logic of that economic argument, how much more pressure are households today under, with net foreign debt in the order of $500 billion and projected to top the $1 trillion mark in coming years? The Treasurer and the Prime Minister cannot have it both ways. Either they were right about their analysis in opposition or they were wrong. If they were right, they have now presided over the most massive increase in net foreign debt and a most significant burden on Australian households through the level of interest rates, following their logic.

But the crisis does not end there. We have seen under this government over the past 10 years a virtual collapse in Australia’s trading performance. No Australian is fooled or is under any illusion. With the rise of economic powers such as India and China, who have now entered a new development phase that has provided the motor for global growth, the commodity boom has been most advantageous in generating this era of Australian prosperity. But Australians know that, without the increase in commodity prices, Australia’s trading performance would have been abysmal compared to its major developed trading partners. That is the sad legacy of the 10 long years of the Howard government. Faced with a potential to lay down the basis for great prosperity in the future, we find after 10 long years that we have a skills crisis in this country. We have a poor trade performance and a net foreign debt that threatens our living standards. There is no infrastructure plan. There is stalling labour productivity and low participation rates in the workforce.

This is the legacy of 10 long years of the Howard government, yet it is in this budget that the Treasurer failed to mention the word ‘productivity’. Nor did he mention regional Australia, where in many instances higher than average growth has kept the national growth level higher than it would otherwise have been. Australia today is mining a river of gold in an international commodities boom that has kept us solvent while we binge on foreign manufactures. But there will be a day of reckoning, when the most favourable terms of trade we now enjoy will decline and there will be no cushion for the hard landing that will inevitably accompany this government’s incompetence and neglect.

The sad fact is that, after 10 long years and enjoying the best terms of trade ever, in the midst of a commodity boom unparalleled in Australia’s history, this Treasurer has squandered Labor’s high-growth legacy. Labor left this coalition government four years of four per cent growth at a time when Labor restructured a rust-bucket economy. Last year growth could only come in at 2.75 per cent and this year is projected to be in the region of 3½ per cent. Despite an unparalleled tax take from a burgeoning global economy and demand generated by that economy, this coalition government has managed to engineer a decline in the level of growth.

This is a budget that really reflects the Treasurer’s political ambitions; it is not one to position Australia for a new wave of productivity and prosperity. The world is changing and the developing countries of China and India, where 85 per cent of humanity resides, are the driving force in this shifting change of fortunes. We are entering a new world era of unprecedented growth and it is estimated that this growth could last over the course of this century, if not beyond. The IMF estimates that in the past two years only about 20 countries in the world have failed to grow richer. Australia’s role in this new world order is very clear. We make up just 0.3 per cent of the world’s population but occupy 5.6 per cent of its landmass and own an even greater share of the world’s mineral resources.

Once our wealth was in sheep, cattle and wheat, but today our wealth comes from mining and ground based resources. Australia is poised to transform its mineral wealth into financial wealth, but its policy makers face key challenges: the first is to ensure that that transition occurs and the second is to distribute the proceeds of wealth equitably among all Australians. The recent budget was indeed a test of both these challenges and the government has failed. The dominant thrust of the recent budget was to use the resources from the minerals boom to put more money in voters’ pockets rather than tackle the many challenges facing this great nation in the 21st century.

Most of the budget handouts were in the form of tax cuts to those already doing well financially—the top 20 per cent of income earners. Indeed, as mentioned before, since 2000 this government has cut taxes paid by a worker on a median wage by just $16 a week, while workers earning $175,000 a year have been given a tax cut of $200 a week. Some of the benefits have come as bigger family benefits, some as tax breaks for older Australians and now we have seen the biggest tax break of all: tax-free super payouts at 60 years of age. But in all of that there was virtually nothing for age pensioners in Geelong: a miserly $1 per week to cope with the rising costs of living that are assaulting those household incomes.

Investing in Australia’s future means looking well beyond the next election, but last week’s federal budget was Christmas in May. It was a blatant attempt to keep buying votes for a bland and tired government that takes with one hand and distributes with the other—it distributes to the wealthy and neglects our future. The real tragedy of this budget is the government’s refusal to use our temporary good fortune to invest in the future. Barely more than one per cent of the $41 billion windfall is allocated to new investment in education and training—only slightly more than the new spending provided for agriculture, fisheries and forestry. Australia is the only developed nation whose public spending on higher education and training is falling. Only 60 per cent of Australians between the ages of 25 and 64 have year 12 equivalent education compared to 80 per cent in countries such as Canada and the USA. Young graduates are working overseas to defer payments of enormous HECS debts, yet advertising private health insurance and funding sports museums have taken precedence over the high-priority areas of expenditure on ordinary Australians.

This budget contains no serious economic reforms. High effective marginal tax rates for middle-income earners are still a big disadvantage to work, the tax act remains more than 9,000 pages long and little is being done to expand child care availability to improve workforce participation. Geelong families are under pressure. High interest rates, courtesy of the Howard government, have increased monthly repayments substantially. Petrol prices have eaten into family budgets. General costs of living have risen and are making it difficult for families to balance their budgets. Now we have a wave of industrial relations measures that threaten the incomes of those families in Middle Australia.

Tax relief was expected, given the $14 billion projected surplus, but once again fundamental disincentives have not been addressed. We welcome the initiative to lift the effective tax-free threshold to $10,000. After all, we had been proposing it for years. However, work incentives for those earning between $10,000 and $20,000 are still very poor indeed. Single-income families with children still face effective marginal tax rates in excess of 80 per cent—that is, if some of those families are earning around $25,000 and then earn an extra $10,000, they would only pocket between $800 and $1,000 of that extra income. The government must tackle these high effective rates and simplify the system.

Kim Beazley made a response to this budget which was pitched to the needs of Middle Australia. We said that we would massively increase assistance in the child-care area, and that is designed specifically to assist families where two incomes have to be earned and workers rely on consistent and convenient child care to support the household budget. Kim Beazley promised to get rid of TAFE fees for the traditional trades—that is, if you do a traditional apprenticeship, you will not pay fees. He offered every Australian student the opportunity to study at specialised trade schools. He announced that a federal Labor government will put in place a new system to protect working Australians from the threat of unfair dismissal. On foreign apprentices, he stated quite categorically that he wanted young Australians to get the training opportunities they deserve, and which the Australian economy so badly needs, ahead of foreign workers. Fast broadband would be made available to every Australian household to ensure that those households have an even chance of sharing in the wealth that is being created in the new economy.

As far as the agriculture sector is concerned, there are real fundamental weaknesses in this budget. I cannot go through them all, but let me highlight some of the most significant in the remaining time available. There is no consistent infrastructure plan for the allocation of resources to rural and regional Australia, according to national priorities that should be set by a national government. There is no attempt in this budget to redirect the research and development resources currently employed to usher in a new wave of productivity in the agriculture sector, which is now seeing some disturbing productivity declines. There is no attempt here to diversify agricultural production into those areas moving up the value added chain to ensure that we create real wealth in regional areas in the long term. There is no alternative fuels policy that could serve as a springboard to regenerate rural and regional Australia. Above all, there is no fundamental addressing of the problems in productivity that we will face in the future, which will come from the poor soils that we have here in Australia. There is an urgent need to regenerate Australian soils and to usher in that new wave of agricultural productivity to sustain regional communities into the future.

This is a government, as we go through agricultural expenditures, that says it is going to spend and then does not do it. In previous budgets the Howard government has talked big but spent little. Of the $7.8 million allocated in last year’s budget for the National Action Plan for Salinity and Water Quality, only $1.9 million was spent. Of the $42.5 million allocated for the Farm Help Program, only $11.2 million was spent. We go through a whole range of programs where moneys have not been spent. We welcome the $500 million water initiative contained in this budget, but inherent in that allocation is the admission of 10 years of failure.

A golden opportunity to put Australia on a sound footing for future prosperity was lost because this Treasurer delivered a budget that he considered would curry some great favour among his colleagues and put him in the Lodge. This is not a budget for Australia’s long-term future. It is not a budget to address the fundamental weaknesses in the economy. It is a politically expedient budget that, at the end of the day, lets Australians down.

Ken Ticehurst (Dobell, Liberal Party) Share this | Link to this | Hansard source

The 2006 budget handed down by the Treasurer represents the greatest investment in Australia’s future, a huge investment in our transport and water infrastructure, our families and our health services, along with major improvements to our taxation and retirement income systems. These practical benefits can only be delivered because of the Howard government’s responsible economic management. The budget is in surplus for the ninth time in 10 years. We have now eliminated the $96 billion of debt that Labor left the Australian government when it left office. This means the Australian government is debt free in net terms. It is able to save over $8 billion each year in interest payments which can now be invested to meet the challenges of the future. Unlike the member for O’Connor’s problems with foreign debt, I can still recall house mortgage rates at 18 per cent and business overdrafts at 23 per cent. Those things are not evident today. These days we do not have interest rates of that level because the foreign debt is not the government debt.

Improvements to tax and family payments in this budget will help middle-income earners in Dobell, particularly those with families, and put more money back into their pockets. From 1 July 2006, all Australian taxpayers will benefit from new personal tax cuts worth $36.7 million. The 30 per cent threshold will rise to $25,001; the 42 per cent tax rate will be cut to 40 per cent, with a $75,001 threshold; and the 47 per cent tax rate will be cut to 45 per cent, with a $150,001 threshold. Central Coast families who rely on the government’s generous family tax payments will be substantially better off as a result of the changes announced in this budget.

The government will move the threshold of the base family tax benefit up to $40,000 from its current $33,361. This means that the maximum payment per child under part A has increased from around $2,400 to $4,200 a year. Families will get to keep more of their earnings before their family assistance payments are affected. This is a very welcome and generous boost. In fact, since 1996 the coalition government has doubled assistance to families through the family tax benefit system. For some Dobell families, the government will also remove the limit on subsidised outside school hours care and family day care places. This will enable an increase of some 25,000 places over the next four years. Also, from 1 July 2006, parents will receive the government’s new child-care rebate which will entail a 30 per cent rebate on out-of-pocket child-care costs of up to $4,000 each year.

Originally, the government offered an extra payment to assist families with four or more children. This payment is now extended to families with three children. This extra payment is paid on top of the family tax benefit. It means an extra $250 per year for families with three children and would be welcomed by those families on the coast who fall into this category.

The budget also provides security for older Australians. The government introduced a $100 utilities allowance in 2005. This allowance has been extended. Pensioners and eligible self-funded retirees in Dobell will receive the important utilities allowance bonus of $102.80. Recipients of the mature age allowance, partner allowance or widow allowance will also be beneficiaries of this allowance bonus. Senior Australians in Dobell will also benefit from improvements in the senior Australian tax offset. They will now pay no tax on their annual income up to $24,867 for a single person and $41,360 for couples. There are many self-funded retirees in Dobell who will benefit from these improved measures. The low-income tax offset will also be increased to $600 per year and will phase out from $25,000—up from the current $21,500.

On the education front, this budget provides $9.3 billion in schools funding, an increase of nine per cent since last year and 158 per cent since 1996. Importantly, this funding provided to the state government has, since 2004, been conditional on the states addressing priorities for higher standards and values, including plain English report cards, publicly available information about the school performance and explicit teaching of values in schools. The New South Wales Iemma Labor government has really let down schools in my electorate of Dobell. Thankfully, the Howard government is countering Labor’s economic mismanagement with record funding and innovative programs, like the $1 billion Investing in Our Schools Program which provides money directly to school communities for important projects identified by the school. Many schools in my electorate have benefited from this program, using the funding for projects including new and improved computer facilities, shade structures and classroom improvements, such as airconditioning. I am delighted that the second round of this program will shortly open for applications.

This budget reflects the government’s unwavering commitment to bettering educational skills and standards in this country. It also reflects our efforts to strengthen vocational training. Australia’s national training system is providing real choice for the 70 per cent of young Australians who do not go directly from school to university as well as for the mature age students. This government has put in place a system of training and apprenticeships which is better than anything Australia has had for a decade.

The budget includes $1.4 billion in innovations to provide vocational education and training, including $537 million to extend the youth allowance to apprenticeships; $350 million for 25 Australian technical colleges; $143 million to improve careers advice; $120 million for tool kits; and $106 million for Commonwealth Trade Learning Scholarships. The total funding for VET has more than doubled since the Australian Labor Party were thrown out of office. This support is delivering results. The total number of new apprenticeships has doubled from 156,700 in 1996 to 397,800 in September 2005. The number of new apprenticeships in traditional trades increased from 120,000 in 1996 to 168,000 in September 2005. Sadly, the Labor Party continue to thwart our efforts for an agile VET system. They have taken every step possible to hinder our plans for Australian technical colleges to be established locally.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

It’s the same in Western Australia.

Ken Ticehurst (Dobell, Liberal Party) Share this | Link to this | Hansard source

But for the ALP shenanigans, the colleges would have been up and running, ready for operation in 2007. Because Labor held up the granting of a licence, it will now not happen until 2008. I understand Western Australia is exactly the same.

Their shenanigans are of course not restricted to vocational education. The New South Wales Premier recently visited the Central Coast and was too occupied with announcements on recycling water—which really were announced weeks before by Malcolm Turnbull—to inspect our schools, our hospitals or our roads. I understand he would not even take five minutes out of his schedule to meet the Central Coast Joint Water Authority, which was actually meeting at the time. If the New South Wales Premier were really interested in solving the water problems on the Central Coast, he would have gone to that meeting. But all he wanted to do was go down for a photoshoot at Mardi Dam. That is all he did.

Unlike the New South Wales Labor government, the Howard government takes the water concerns of the Central Coast and our country very seriously. You can see this in this budget and you can see it in the previous budget. The Australian government has already contributed over $6½ million toward the construction of a pipeline from the Hunter to the Central Coast. This will provide around 20 megalitres of water per day to our area. I am working with council and lobbying my government to secure additional funding for other water projects to further alleviate the coast’s water shortage.

Our local councils and residents are also winners, with the announcement that the Wyong Shire Council and Gosford City Council will receive additional funding of almost $2 million from the Australian government’s successful Roads to Recovery program. Wyong Shire Council will receive an additional $903,000 and Gosford City Council will receive an additional $968,000. The new funding will be paid in advance to the councils in this current financial year, which means that both councils can start work immediately on projects they nominate to meet the demands of our growing population.

Another road announcement that will hugely benefit the Central Coast’s large commuter population is the accelerated widening of the F3 to three lanes in each direction from Cowan to Mount Colah at a total cost of $132 million, with the Australian government contributing $105.8 million towards that project. This section of the F3 operates at or near capacity for up to five hours each day and is stretched further on weekends and holidays. It was originally proposed that this section of the widening would be undertaken in two stages but, thanks to this additional funding, the project completion date will be brought forward by three years to mid-2008. I am now pushing for a tunnel under Pennant Hills Road to link the F3 with the M2 to further assist Central Coast commuters to Sydney.

The government has also been very generous in its budget in relation to health initiatives and it will commit an extra $1.9 million over the next five years to improve mental health services in Australia. Most importantly, the Howard government is providing $538 million to enable people to access GP services, psychiatrists and psychologists under Medicare to allow for improved detection, treatment and, most importantly, management of mental illness.

Another important measure is the $241 million to train more doctors and nurses in our system. With the Central Coast rapidly growing in population, this sort of commitment is vital. It will create 400 new places for medical students and 1,000 extra higher education places for nurses each year. Essentially, this means that more students will have the opportunity to get into medicine if they spend part of their training period in regional areas and it may encourage them to continue in a regional practice.

Hundreds of patients visiting GPs will benefit from the federal budget announcement of higher bulk-billing incentives. This will continue in Dobell. The Australian government’s Medicare initiatives are attracting more and more doctors to the Central Coast. In fact, in the last year, the bulk-billing rate in Dobell has increased by a whopping 7.7 percentage points to just under 80 per cent. One of the medical centres that recently opened on the coast is providing primary health care services to the people of Warnervale. It is also working towards attracting more GPs to the area, especially those with a strong interest in research. The federal government contributed over $523,000 in seed funding for the project in recognition of the innovative model of health care that the new centre is trialling and the urgent need of the Wyong community for primary health care services. I officially opened the centre and have toured the facilities, and it is truly a fantastic initiative.

The budget provides funding to continue higher rebates for GPs in eligible metropolitan areas who bulk-bill Commonwealth concession card holders and children under 16 years. The higher incentives in eligible areas have risen to 7.85. The government has provided funding of $41.6 million to extend the measures over the next two years. This announcement will be very welcome news to families with children under 16 and most older people on the Central Coast. This decision once again demonstrates the Howard government’s commitment to improving and strengthening Medicare and the medical workforce to ensure that all Australians have access to quality, affordable medical care.

The new National Health Call Centre Network is another way this government is relieving pressure on general practice in areas of doctor shortage. Being able to speak with a nurse about your symptoms and finding out what you should do, including seeking medical attention over the phone at any time, will provide peace of mind to people living in isolated areas, especially those with young children and also older people.

There are a few final elements of the budget that I would like to mention. The government’s extension of the carers bonus to recipients of the carers payment and carers allowance has been welcomed in my electorate. This payment is made to our carers who receive carer payment and carer allowance. It offers them $1,000 and $600 respectively at a cost to the budget of $385 million. These bonus payments to carers do not affect their entitlements nor is the bonus payment taxed. We owe a great debt of gratitude to our carers, and the 1,200 carers in Dobell that received this bonus clearly deserve this important extra recognition.

The government’s plan effectively abolishes the tax currently paid on superannuation benefits to people aged 60 and over from 1 July 2007 and has been welcomed by retirees in the area of Dobell. This is a serious plan to simplify and streamline our complex superannuation system and will significantly improve the retirement incomes of Central Coast residents. Under the new system, self-employed people will be able to claim a full deduction for their super contributions and will be eligible for the government’s co-contribution. The budget also delivered some big benefits to small business in terms of tax cuts. Small businesses contribute to around 90 per cent of employment opportunities in my area and it is vital that we support them. A huge cut in business tax of $3.7 billion over the next four years by moving to a 200 per cent diminishing value write-down on eligible business assets will encourage businesses to undertake investment in new plant equipment, to keep pace with new technology and to remain ultracompetitive.

The government has also introduced a range of reforms to simplify the tax system for small business, reducing taxes on small business by $435 million over four years and delivering $40 million worth of changes to simplify fringe benefits tax. Of course, creating an environment in which small business can best operate is one of the best things this government has done for small business. For the first time ever, the Australian economy will grow to $1 trillion in the 2006-07 year. To conclude, this is a great budget for all Central Coast residents. It builds on the 10 years of strong economic management of the Howard government that has seen the elimination of net government debt, a huge fall in unemployment and low inflation. As a result, we have a budget that is providing huge scope for investing in our future. I commend the legislation to the House.

Peter Lindsay (Herbert, Liberal Party) Share this | Link to this | Hansard source

I call the honourable member for Kingsford Smith, who I understand is coming to Herbert for the festival of chamber music.

Peter Garrett (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Reconciliation and the Arts) Share this | Link to this | Hansard source

That is correct, Mr Deputy Speaker Lindsay. I am looking forward to us engaging when I am in Herbert. I welcome the opportunity to speak on Appropriation (Parliamentary Departments) Bill (No. 1) 2006-2007 and associated budget bills. In 2006 the Treasurer had the opportunity to do something big for the future of the country and he failed, I regret to say. Here was the context: this Treasurer was a lucky inheritor of one of the great windfalls of the decade—a mining boom of huge proportions. This Treasurer had the opportunity to invest in the future while addressing some of the pressing and persistent problems of the present: the imminent catastrophe of climate change, the persistent current account deficit, the ongoing decline in manufacturing, the need to invest in knowledge and innovation, the shortage of skills and adequate infrastructure, and the unacceptable state of health and social wellbeing in our Indigenous committees, amongst other things. But on all these counts, where the challenges were clear, the budget did not provide.

The Treasurer seemed to baulk at the gate, in this context unable to see past the short term to the long and unable to eschew the political interest for the national interest. I guess as a precursor to the Treasurer’s possible tilt to be leader and possibly Prime Minister, this budget gives us an insight into the future under Treasurer Costello. I think the House is entitled to ask, on the strength of the document, what kind of future is it? The first thing to say is that, on the basis of the 2006 budget, there is no compassion and no understanding of the scale of the problems that lie ahead. In the past the Treasurer has raised the issue of ageing and the issue of the likely shortages of oil. They are important issues, but they got short shrift here. Unfortunately, it was a surplus budget but a deficit of foresight.

Notwithstanding the portion of tax relief that the budget provided for many Australians and which Labor welcomes, it did not really provide substantial tax reform. And it in no way sets Australia up for a future of sustainable growth where our social, our ecological and our intellectual resources are nurtured and developed. Yet it is those very elements—the social, the environmental, the intellectual—and the economic framework in which they operate that will determine how we best manage the challenges of the future. It is against that consideration that this budget should be judged.

In terms of what the budget aimed to achieve—namely, some semblance of tax reform—the consensus was clear: it failed. The economic commentators and the specialist writers made that observation within 24 hours of sighting the budget papers. In particular, the effective marginal tax rates remain. The tax cuts themselves tend towards favouring the rich and the well-off, and middle and lower income taxpayers, particularly in the $40,000 and above range per year really get about $10 a week. So, in political parlance, this is the budget that brings back the milkshake and the hamburger—if you are on a single income of $50,000 per year, for example, then $9.81 per week is your lot. It is a budget whose tax cuts people saw through: they did not provide the Treasurer with the political bounce that he might have expected from such free spending.

I acknowledge that boomers and retirees will do well, especially well-off retirees, with the proposed superannuation changes—but there is some uncertainty until we have the full detail. Families in some instances also fared better than previously, and Labor acknowledges that as a positive. Yet the tax cuts for middle Australia take place at a time when both interest rate rises and petrol price hikes have the potential to take away much or all of people’s gains. If the citizens of Kingsford Smith get another 0.25 per cent interest rate rise, which is likely, and another two petrol price rises adding 20c a litre, also likely, then if they are on an annual income of about $60,000 with a mortgage of $400,000—that is an average mortgage; many people in Kingsford Smith have mortgages around that level—they will be around $33 a week worse off. So much for the big bonus to taxpayers or the constituents of Kingsford Smith. Of course, if you are on $140,000 a year, under the same scenario you will be $62 better off.

For large numbers of taxpayers, the handouts that Treasurer Costello provided in 2006 were a zero-sum game. This is particularly the case if they are single and earning in the $40,000 per annum range—and there are many single people in that category, a number of whom are my constituents. Of course, for the unemployed, the single low-income taxpayers and those on age pensions this budget does very little. They still make up a large portion of the Australians Mr Costello forgot; they are Mr Costello’s forgotten people. This is the social impact of the budget. It favours the well-off; it provides some minor tax relief, some minor tax cuts; and it leaves the pensioners and the marginalised behind.

What did the budget do for our intellectual capital? Notable in the budget is the fact that, for the first time, spending on defence outstrips spending on education, with defence at $17.9 billion and education at $16.3 billion. This is a telling comparison, all the more so because of the material that was released by the Australian Strategic Policy Institute this week which highlighted a government decision which was not publicised during budget week: to continue three per cent real growth in defence spending—this was a commitment from 2000—for the next five years, thus imposing an extra $10.7 billion cost on the budget. Iraq—a war we should not be in—costs us approximately $400 million a year. More importantly, in terms of providing for the future, it appears on the basis of ASPI’s report that not enough money has been set aside to operate the current equipment that is budgeted for in the budget, notwithstanding the new purchases that are contemplated—and all this at a time when there are actually shortages in person power in our defence forces. But I think there is more to the signal of defence outstripping education, and it is consistent with the government’s underfunding of the tertiary education sector which has been a feature of the Howard government approach to spending on education for the last 10 years. In 2006 there was no extra research funding for universities, which is crucial to the ability of Australians to innovate, to develop and subsequently and, hopefully, to export. The other thing that the budget did not address is our chronic trade performance. And it is only by investment in education, skills and training that we will be able to address that problem.

Nor was the amount devoted to the health budget significant, with some 20 per cent of the total health budget allocated to measures driven by the sale of Medibank Private. But, once again, even with the amount in the coffers, the opportunity to reform the health system—something that health professionals, the health constituency and many other informed commentators have been calling out for for years and years—went missing. Access Economics figures show that the budget provides for spending on health to grow more slowly than government spending in general. This means that spending on health will fall as a percentage of all government spending. I am not arguing, by the way, that we should continue to spend money willy-nilly on health, important as it is. In fact, we should be investing significantly in preventive early intervention—the front end of the health system—as opposed to the back end of the health system. But again, there is no evidence that that was contemplated by the Treasurer.

I might take just a moment to deal with the budget on Indigenous health and acknowledge that $136 million or so was allocated for additional funding. Labor would certainly welcome a number of those initiatives, including initiatives on petrol sniffing and mental health. The mental health initiative comes as part of an earlier COAG announcement. I am particularly pleased to see that there are new health brokerage services and money for health workers—nearly $40 million, which is much needed.

But I think it is worth pointing out in a general way that the current mining boom is an inheritance that Australians now have. It is an uncomfortable truth for us because it is an inheritance that comes from land which Indigenous people travelled over and occupied. I can imagine, as we go through a period of soul-searching about some of the very real problems that Aboriginal communities face, and as we consider both in this parliament and in the public arena what we ought to be doing about these problems and how much we ought to provide for them in terms of resources, that we have not made the connection between the boom in mineral wealth and the fact that it was Aboriginal people’s land.

Again I refer to the Access Economics report that was prepared for the AMA. It found that the government is very slow moving in areas like Aboriginal and Torres Strait Islander health and that extra funding for Aboriginal and Torres Strait Islanders health care is ‘inadequate’. Indeed, in the last budget the AMA had called specifically for around $450 million as an additional spend for Indigenous health, in Indigenous communities which still suffer terribly poor health conditions, particularly in comparison to the remainder of us. The 2005 budget was not forthcoming. This one has provided some additional spending but it will not be sufficient to close the life expectancy gaps. It will not be sufficient to deal with the considerable challenges that Aboriginal communities face on health.

I have to say—and I made this comment on Sorry Day on Friday—that the Prime Minister and his government have been aware of the problems that we have in Indigenous communities and the necessity for us to not only provide for safe communities and provide for due process under law but provide the necessary resources, particularly in preventive health, to grow and to be healthy. I was pleased to see that my colleague in the Senate, Senator Evans, welcomed the opportunity for Labor to work closely with the government in a bipartisan fashion on addressing some of these other, more prominent public issues of sexual violence and assault that we have seen recently. But it is about more than just playing the law and order card, important as proper due process is. To that extent, we certainly will be calling and looking very clearly for the necessary investment not only in political will but in health, in particular—for the resources that are necessary for Indigenous people to pick themselves up and get their health care sorted out for once and for all. It will take a decent period of time.

One other issue that faces us is considerable at this particular point in time, and it is called climate change. Since I have come into the parliament I have spoken on it on a number of occasions. I have been watching with interest the way in which the rhetoric of the government—in particular the Prime Minister and others—has changed over time. Climate change was not a problem five or six years ago, and then it was a problem that we really did not need to manage two or three years ago—it was the fanciful imagination of those who think the environment is worth protecting when they continue to emphasise it. Now it is a clear and present problem which only the establishment of a domestic nuclear power industry can solve in Australia.

More important is the fact that the budget provides absolutely no sense whatsoever that the government ‘gets it’ on this issue. There has been some criticism of previous funding decisions that it has made. The Australian Greenhouse Office virtually no longer exists. Even the meteorological services saw a lessening of income towards them. But, frankly, these are side issues when it comes to actually dealing with our climate change and recognising the necessary suite of measures that a government ought to put in place as a matter of urgency.

In November 2005, the G8 climate conference identified the fact that major investment is needed in energy infrastructure and that there is a need to tackle climate change. That means enhancing private sector investment, establishing goals and time lines for which greenhouse gas emissions are reduced and setting a price signal on the price of carbon, yet the government has done none of that. The budget does not contain any sense whatsoever that the financial and economic risks that Australia is taking by permitting climate change to continue unabated are understood.

The drought of 2003—and I am not saying that it was caused entirely by climate change, but it is very clear from CSIRO modelling that we will see increased and more intense drought periods over the coming decades—cost the country some $13 billion, from memory. I was interested in particular in the report that was done by the business roundtable on climate change, which included companies such as BP, Origin, Insurance Australia Group, Swiss Re, Visy, Westpac and the Australian Conservation Foundation. They identified a number of measures that would be necessary for Australia to take in order to start to address climate change. But nowhere in this budget, nowhere in the policy suite that the government brings forward to us, do we see any of that at all.

To successfully address climate change we need to use the best capacities, the best intelligences, the best innovations and the best education we have at our disposal. We must make substantial investments in learning and skills training, especially in light of the skills shortage that we have, to deal with the clear and present dangers. But the response from Mr Costello in the budget was to not address the particular problem of a skills shortage, which had been identified by the Australian Industry Group and others as being the most pressing need in this budget. It was not addressed at all. The only thing that we have to go on is the fact that there is an industrial relations system which moves, and ultimately in the future will continue to move, against workers to the benefit of employers.

Very quickly, with the time left available to me: in relation to the arts, this budget was again disappointing. The Minister for the Arts and Sport, Rod Kemp, claimed that the spending was $100 million, but if we examine where money was spent and where it came from we discover, in fact, that there was very little new spending or additional spending for the arts in the budget. I would have to say that the amount of funding in the arts is relatively modest, but once you strip out repair and maintenance, and necessary rescues and assistance, the figure is closer to about $10 million.

I believe the arts community and its capacities do wonderful things for this country, not only in enhancing our ideas about ourselves but also in building synergies with the new digital content industries. Expanding our artistic outreach and productivity overseas was let down. In particular, I note that there was no investment or response to the crisis in our film industry. We now have local skilled people being forced to go overseas to work and we have a significant underutilisation of infrastructure, and the budget presented nothing. For small- and medium-sized theatres, again there was nothing. In fact, all the budget did deliver was a $6 million visual artists package, which was a cover for a decision to deny visual artists, including Indigenous artists, resale royalties in this country.

I note that my colleague the member for Fraser is here. He had a private member’s bill in the House earlier this year. He identified in that bill some $25 million in royalties that would be payable to Indigenous artists, and yet we have a figure which is closer to $4 million provided for a very necessary upgrade for arts centres, particularly those in remote areas. That is a completely unacceptable result for the artistic community and a real slap in the face for Indigenous artists. This decision is extremely disappointing.

The final point I want to make is to pick up on something that ex-National Party leader Tim Fischer called for: a dimension in the budget that would refer to community wellbeing. I do not agree with everything that Mr Fischer said, either when he was in this House or subsequently, but he got it right on that one. When are we going to have a budget that reflects the social and environmental indices of health and wellbeing? When are we going to be able to provide the Australian population with a snapshot of where we are at in terms of what we are doing in this national economy and the impact that it is having upon our environment and upon our communities?

That is one of the most important issues that we need to consider, particularly when the warnings of climate change impacts are cascading down on us. It is projected that at least 20 per cent of the waters allocated to the Murray-Darling Basin—which did get a welcome spend of $500 million—will be evaporated as a consequence of climate change. The $500 million, while welcome, will not be sufficient. The fact that we are not starting to budget in those externalities of climate change et al means that the figures that we are looking at do not give us sufficient guidance as to where we need to go with the country in the future.

The public health system continues to buckle, and there is a lack of investment in health, education and public transport. Much was expected of this budget but little was given. Labor has policies in place which more than make up for the omissions of Treasurer Costello. Those policies, outlined by Kim Beazley, include goals for Aussie kids in health, the skills blueprint, connecting the nation and establishing a national broadband network, a fuels blueprint which would deal with the issue of energy security and boosts to child care. All those things would be part of a good and positive Labor budget.

Danna Vale (Hughes, Liberal Party) Share this | Link to this | Hansard source

It is a privilege to speak on the Appropriation Bill (No. 1) 2006-2007 and cognate bills. The coalition government’s first budget, handed down on the evening of 20 August 1996, heralded the start of a significant change in Australia’s economic prosperity. It received headlines as the fair-go budget because measures were taken by people who were mindful of the tough choices that come with economic responsibility and who had the experience that brings a finely honed sense of social awareness.

Now, in 2006, another milestone has been reached. We have now eliminated the $96 billion of net debt that Labor left the Australian people when it was voted out of office in 1996. This budget is in surplus for the ninth time in 10 years, and the government has established a Future Fund which has begun to save for the future. With these savings, the next generation will be able to meet the challenges of their time. Now that the Australian government is debt free in net terms we do not have to collect taxes to pay the government’s interest bill, and we are saving a massive $8 billion per annum in interest payments.

The Treasurer’s 11th budget helps Australian families with practical measures that are also part of the government’s thoughtful and disciplined policy to help keep Australia strong. This plan will further strengthen our economy and address the challenges we face as a nation, such as the ageing of our population. The government’s plan includes initiatives in several policy areas. One is in superannuation. We are building up the nation’s savings and putting Australians in control of their own future. We have provided significant tax cuts. We are rewarding hard work and we are helping Australian parents to raise their families and to maintain the living standards that we have come to enjoy. Our changes to the tax thresholds and adjustments to the marginal tax rates have already been welcomed by the vast majority of working Australians.

We have provided funds for medical research. An important way to strengthen Australia’s economy is to focus on new and emerging industries for the future. We have focused on the defence of Australia. We have a strategy for immediate threats to our region and are ready to take action in our part of the world. Roads are vital for the flow of all kinds of economic activity, and we have invested significantly in building stronger linkages between roads, rail and seaports so that export goods can be moved more effectively and efficiently to strengthen our economy.

After 10 years, the government is working to make sure our economy remains strong and our nation is secure so that Australian families can plan for their futures with confidence. The social concerns of our Australian communities are very close to the hearts of many members in this place, and it gives me great pride to note the outstanding performance of the Australian economy. I say this because, without a strong economic base, no government can do very much for those of its citizens who are in need of social welfare support and special assistance. When an economy is weak and in decline, it is those in the lowest levels of our society who suffer the most. They have no buffer against adversity and are the most vulnerable of our citizens. Good economic policy and good social policy go hand in hand, but good economic policy leads the way and dictates the kind and quality of social welfare that we can provide for our most vulnerable Australians.

And, speaking about our most vulnerable Australians, there are two issues that have been of concern to me for some time. One is the horrendous reality of violence against women and children in Indigenous communities, and the other is the impact of illicit drugs on our society. Firstly, I would like to address the Indigenous issue. There has been extensive media coverage recently about violence in our Indigenous communities, but sadly this is nothing new. In my time here as a member of this House I have spoken on this issue on numerous occasions, including during the mandatory sentencing legislation debate, the Aboriginal and Torres Strait Islander Commission amendment debate and the debate on the Aboriginal and Torres Strait Islander Women’s Task Force on Violence. I used all my time in the appropriation debate in the year 2000 on this tragic issue. In fact, in 2000, in the appropriation debate, I talked about the war zone in Australia today. I noticed only last week that the front page of the Sydney Morning Herald had the headline ‘Not the Third World, just Australia’s war zone’. I continued to note its report on this national disgrace and it motivated me to address this issue once again.

The issue is complex. Contributing factors include the impact of white man’s welfare and the collapse of traditional culture and society, and I refer there to the thought-provoking article by Keith Windschuttle in the Australian dated 23 May 2006. However, as I pointed out in my 2000 appropriation speech, I first read about this war zone for women and children in the report of the Aboriginal and Torres Strait Islander Women’s Task Force on Violence, and I recorded my respect for the courage of the chair of this task force, Professor Boni Robertson of Griffith University, and the Indigenous women who worked with her to bring forth this report. I was particularly moved by an alarming statement in the report which said:

Sexual abuse is an inadequate term for the incidence of horrific sexual offences committed against young boys and girls—

and women—

in a number of Community locations in Queensland …

This important document also pointed out that the incidence of sexual violence in these communities is rising and that it has a direct relationship to negative and deformed male socialisation associated with alcohol and other drug use and, importantly, the influence and prevalence of pornographic videos in these communities. The strong link between violence and pornographic videos and the sexual abuse of Indigenous children has been known for some time. While there are many factors that contribute to violent sexual crime, the widespread availability of these destructive videos is now seen as a trigger for such crime across Australia. According to Boni Robertson, cash-on-delivery orders of $4,000 to $5,000 worth of pornographic videos are known to have been received by remote communities. One community with a history of pornographic video usage is cited in the report as having the highest number of its men in prison for sexual offences.

As I previously pointed out—and it is well worth noting again—the reader of the Boni Robertson report finds it traumatic. It contains a scarifying account of the pain of the daily existence of Australian women and children. It would be utterly unbelievable that something so grotesque and ugly exists anywhere in this beautiful land, except for the fact that the victims of such violence are very real indeed. When I gave this speech in 2000, it fell on deaf ears. Not too many people had heard of the report, or of Boni Robertson and her courage and that of the women in her task force in raising such unpopular issues. In some sections, these women—women of great personal strength and character who were trying to give voice to the voiceless women and children in these remote communities—were condemned for bringing shame upon their own people. Silence is known to be the language of complicity and, unless and until sexual violence amongst our Indigenous women and children is addressed and eradicated, we are all complicit.

However, while there may be nothing quite as powerful as an idea whose time has come, it is timely that the new Minister for Families, Community Services and Indigenous Affairs, the Hon. Mal Brough, has taken a strong stand against this violence. In addressing this issue, he will have my support and the support of the vast majority of the Australian people. The solutions will prove as complex as the problem, but drugs, alcohol and violent pornographic videos are a cocktail for depravity—just ask these women. In seeking solutions, I would say this to the minister: be encouraged and stay strong in your resolve. Please listen to Indigenous women in seeking your solutions; they have something to say and we in this place have been deaf to their cries for far too long.

The other issue I have referred to is the impact of illicit drugs and alcohol upon individuals, especially the young people of our cities, suburbs and country towns across Australia. In our society today, illicit drug use is reaching epidemic proportions. While we are all well aware of the devastation that drugs cause individuals, their families and our community, I fear that their use may soon become endemic. I would focus on two areas of community concern: one is the policy of harm minimisation and the other is a deadly myth about so-called recreational or party drugs.

The policy of harm minimisation is and in recent years has been shown to be fundamentally flawed. It is founded on the belief that it is not necessary to try to prevent drug addiction in our young people by the use of compliance and enforcement. Advocates of harm minimisation, which include state governments, are saying basically that, if you cannot stop someone from using a drug, you should provide safe conditions for them. However, let us be very clear about this. As many families and drug addicts know, there is absolutely no safe way to use an illicit drug. It is of real concern to the many Australians who place a high value on living in a civil society, and on the role of law and order to provide such a society, that this failed policy of harm minimisation subverts our laws that prohibit the possession and selling of illicit substances. Not only is this a dereliction of our duty as elected representatives—because government policy should always support and never subvert the law—it also sends confusing messages to young Australians.

Further, the synthetic drug methadone was introduced to assist those addicted to heroin, in the belief that methadone causes blockading of the brain’s receptors, preventing euphoria and assisting the addict to cease using the drug. This policy has proved to be another abject failure of harm minimisation. Not only has this policy proved ineffective but also the use of methadone has markedly increased. The New South Wales state government has also established a heroin injecting room in Kings Cross. There addicts can inject a deadly drug, which has been obtained illegally, not only with free needles but also free of the fear of arrest or prosecution. As soon as they walk through the front door of the heroin injecting room, the law of our land does not apply to them.

Harm minimisation supporters also propagate the falsehood that somehow the exchange of needles and syringes to drug addicts will reduce the spread of AIDS and hepatitis. The 2002 hepatitis C report funded by the Commonwealth Department of Health and Ageing clearly shows that the infection rate of hepatitis C is rapidly increasing, with up to 836 cases expected in the year 2020. The policy of needle exchange has become needle distribution and is another failed policy from the advocates of harm minimisation.

The 1992-97 New South Wales drug directorate strategy promised that harm minimisation would achieve the following outcomes: firstly, a reduction in the proportion of people, especially young people, who currently use drugs. It has failed and has been shown to have failed. Secondly, it aimed to achieve a reduction in the availability of illegal drugs. Again, it has failed and has been clearly shown to have failed. Thirdly, it aimed to achieve a reduction in the number of drug related property crime and crimes against the person. It has failed here too and has been shown to have been a failure. This policy is not just a miserable failure; in fact, it has also failed the young people of Australia.

New South Wales has the highest use of heroin and the highest crime rate in Australia and the highest use of methadone in the world. When it comes to illicit drugs, the policy of abstinence and appropriate support and rehabilitation for these addicts is the only effective means of dealing with this insidious and evil scourge of our society. We have a lack of rehabilitation facilities within communities all across Australia. I call on our government to address this issue, to review the number of rehabilitation facilities that are available and to do something positive to provide rehabilitation to ease the concern and distress of families and addicts.

Another massive challenge that we are facing is the use and widespread acceptance of the so-called recreational drugs or party drugs, which are poisonous and deadly. These include ecstasy, cocaine and speed and are often favoured over alcohol as the drug of choice for a night out in some sections of our society. Once found only in underground rave parties, these drugs can now be easily bought and sold at any number of city nightclubs, bars and private parties. But while we are all aware of the dangers of these so-called recreational drugs, the laid-back attitude of many young Australians has resulted in the acceptance of these drugs as a normal part of our society. Indeed, regrettably, Australians have become so complacent that we now have the highest use of ecstasy in the world. What does this say about our future?

I was greatly concerned to read a report in the Daily Telegraph on Monday, 22 May this year which revealed that at least one person a fortnight dies in our country after taking ecstasy. The report also included figures from the National Drug and Alcohol Research Centre that showed that the lifetime prevalence of ecstasy use increased from one per cent in 1988 to 7.5 per cent in 2004. However, if I thought that alarming statistic would be enough to convince our drug research organisations that zero tolerance is the only way forward, I was sadly mistaken. I was horrified to read material from the Australian Drug Foundation that provided guidelines for the safe use of ecstasy. These included drinking water regularly to prevent dehydration, wearing loose clothing and taking regular breaks from dancing. However, this very same material clearly states that ecstasy is illegal in Australia. The contradiction is breathtaking.

Similarly, the Australian Drug Foundation also provides information on marijuana. It says:

Currently, there is no evidence that occasional use of small quantities of cannabis causes any permanent health damage.

The question has to be asked forthwith: to a young person, exactly what does ‘small quantities’ mean? How can we honestly allow this type of material to circulate amongst impressionable young people, who look to us for guidance? What kind of message is this sending to young Australians, what kind of confusion is this causing, when it appears in government funded material?

Laws are put in place for the protection of us all. Experience has shown that, where there is no respect for law and order, civil society begins to fragment. We must once again honour the law that says it is illegal to sell or possess illicit drugs and encourage young Australians to understand the real dangers to them and their families and to promote a policy of abstinence. We must give our police officers the confidence to enforce the law and to give our citizens the clear message that illegal drug use is not acceptable, that it is not acceptable for their future or for their future happiness. We must also offer our children a word of hope and educate them about the dangers of drug use.

One person doing a wonderful job on this front in Sutherland shire is a resident by the name of Darren Marton, who launched his No Way antidrug campaign at the Cronulla Sutherland Sharks Leagues Club last Wednesday night. Darren is well placed to comment on substance abuse, having succumbed to the lure of drugs at an early age and gradually ruining a promising career in the sport of rugby league. As a rising young sports star, Darren began smoking cannabis in high school but, as so often happens, progressed to heavier drugs and by his early 20s was addicted to heroin. After a tumultuous decade, which included stints in jail and psychiatric wards, Darren finally experienced the terrors of crystal methamphetamine, more commonly known as ice, in 2004. In 2005, Darren turned his life around and vowed to use his own life experience to educate young people about the consequences of illicit drug use.

I was privileged to attend the launch of the No Way campaign and to see Darren give a deep and moving account of his life. Darren was a gifted young athlete who had the world at his feet. He played junior representative football with the Cronulla Sharks in New South Wales and accepted a scholarship with the Sharks at the age of 16, before losing it all to drugs. Darren hopes to carry his message into schools, community groups and sporting organisations. I would like to pay tribute to the work that Darren is doing, to his courage and determination in giving up drugs and to his commitment to creating a confronting and powerful campaign to warn our precious young Australians of the dangers of drug use. However, Darren should not be alone in his efforts to encourage young people to fulfil their dreams. We all have a duty to educate our young people about the ramifications of drugs, both legal and illegal. This, combined with a zero tolerance approach to illicit drugs, is the only way to go. I congratulate the Treasurer on this excellent budget and I commend these appropriation bills to the House.

Bob McMullan (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Appropriation Bill (No. 1) 2006-2007 and cognate bills. Every weekday morning in my electorate, only a kilometre from here, breakfast is served to the homeless. This particular service has only been operating for a year and has grown from serving breakfast to a handful of people to regularly serving more than 70. Their clients are homeless and, in this weather, many of them are still sleeping rough—sometimes in tents provided by the service in lieu of affordable housing. They stay on after breakfast for counselling and referral. Many of them have complex issues which will need much time and help to resolve. After homelessness, one of the biggest problems seen at this centre is poor dental health—a problem for many other Australians too. Most of their clients have not seen a dentist for years, and this has led to the alarming circumstance in modern Australia where the service has had to modify the food supplied for breakfast as those attending simply cannot eat things like apples. The apples in a large consignment that was recently donated had to be chopped and stewed by staff before they were soft enough for the clients of this support service to eat. They are clearly being adversely affected by the current banana shortage.

The Commonwealth Dental Health Program was introduced to reduce waiting times for Australians such as those to whom I am referring for access to public dental services by giving public patients subsidised access to private dentists. But the present Liberal federal government discontinued its annual funding in 1996. The result is that many Australians—not just those attending this breakfast centre for the homeless—cannot afford adequate dental treatment. We have levels of tooth decay and gum disease that would not be out of place in the Third World. People who cannot afford access to private dentists have to wait for the limited public services on offer. By the time an appointment comes around, decay is often so advanced that the removal of affected teeth is the only option. This is a problem not only of the homeless. Constituents in low-paid work, such as child care and aged care, also complain to me that they cannot afford to visit a dentist and that they are not even eligible to register for an appointment with the public dental scheme.

This experience here in the affluent city of Canberra could be repeated 100 times over around Australia, yet the Howard government refuses to act. It could easily fund a replacement for the national dental scheme which they abolished in 1996. To re-establish such a scheme at 1996 levels would cost approximately $140 million or $150 million per year. The failure to act to meet this crying need highlights the wrong priorities reflected in this budget. When you have $40 billion extra to spend, what you do not do tells more about your values and your priorities than what you choose to do. The Howard government must know about this crisis in dental health. Many coalition members would have similar stories to tell from their electorates. What are they doing? Don’t they know what is happening in their constituencies? Don’t they care, or can’t they persuade the Minister for Health and Ageing, the Treasurer or, most particularly, the Prime Minister to act?

In my local area I want to pose those questions to the member for the adjacent electorate of Eden-Monaro, Mr Gary Nairn, because the issue is at least as bad, if not worse, in Queanbeyan as it is in Canberra. I say to the member for Eden-Monaro: ‘Don’t you know what is going on, don’t you care or won’t the Prime Minister listen to you? Which is it?’ Of course while the crisis in public dental health is reflected so starkly against the $40 billion of new spending in this budget, it is not the only area in which these wrong priorities are reflected. It is just the starkest and the clearest one and the one that has confronted me most directly.

With regard to the homelessness issue that I referred to earlier, the Tenants Union and the ACT Shelter have been running a campaign in my electorate entitled ‘Housing is a human right’. Postcards have been distributed which highlight individual stories, many positive, and the overarching message is that adequate and affordable housing provides a foundation on which people build their lives. Stable housing has been shown to lead to improvements in health, education and access to more job opportunities, yet in this budget there was no extra funding to deal with the homelessness crisis and no extra funding for homeless people with a mental illness. Tax cuts will not help those people who are already homeless.

I use these stories to highlight the character of this budget, a budget of missed opportunities and skewed priorities. It is also a budget characterised by economic risk, but I will come to that later. Having dealt with two examples of the failure of the government to use this budget as an opportunity to begin to repair damage that previous Howard government budget decisions have created, I now wish to turn to an important opportunity for the Howard government to remedy over the next 12 months another of its failings—in this instance, the employment of people with disabilities.

I notice the Minister for Employment and Workplace Relations has convened a task force to encourage employers to employ more people with disabilities. I do not disagree with his doing that, but it is occurring in parallel with the Howard government putting pressure on people with disabilities to rejoin the workforce and there is, of course, great controversy and anxiety about the consequences of the Welfare to Work legislation. But, while all those things are going on, I want to focus on a different aspect of the issue: the abject and continuing failure of the Howard government to get its own house in order with regard to the employment of people with disabilities.

The government’s own statistics show that the number and the proportion of ongoing employees of the federal government with a disability has fallen dramatically since the Howard government came to office. The Public Service Commissioner’s State of the service report shows the number of people with a disability working on an ongoing basis for the Commonwealth has fallen from 7,008 in 1996 to 4,642 in 2005, a fall of more than 30 per cent. In case you think there is some measurement effect, that this is a product of a change in the size or the shape of the Public Service, think again. The proportion of the total ongoing APS employees with a disability has fallen similarly, from 5.4 per cent of the workforce in 1996 to 3.8 per cent over the same period. It is a trend that must be reversed.

This is a scandalous situation. Under this Commonwealth government, the Howard government, which professes concern about the employment of people with disabilities and is an employer of 123,000 people in this category of ongoing APS employees, for every year that it has been in office, except 2003, the number of people with disabilities employed by the Commonwealth has fallen in absolute numbers, and it has fallen as a proportion of Commonwealth employment every year except 2003 when it was flat—5.4 per cent, 5.3 per cent, 5.1 per cent, 4.8 per cent, 4.5 per cent, 4.2 per cent, 4.0 per cent for two years, 3.9 per cent and, in 2005, 3.8 per cent.

What a disastrous performance for a government in support of Australians in need. If the same proportion of Commonwealth employment had been maintained, there would be 2,000 extra people with disabilities employed by the Commonwealth. This is of course a big issue in my town of Canberra because there are a lot of public servants here. But it is also a big issue in Townsville, Darwin, Sydney or Melbourne where there is a very large proportion of Commonwealth public servants and a very large proportion of the sorts of jobs that could well be identified for employment of people with disabilities.

I call on the Howard government to take some measures to turn this around. There is no central program dealing with the question of employment of people with disabilities. It is proposed in this budget that there will be a substantial increase in the number of Commonwealth public servants. The number has been quoted at 7,000. I am not absolutely sure if that is right, but it is of the right order of magnitude. So let us use that proposed increase to fix the problem. Let us start now. I do not object to the Commonwealth government having a task force to encourage employers to employ more people with disabilities—it is a worthwhile goal—but the government should start with themselves.

I say to the government: if you are genuinely concerned about employment for people with disabilities, start employing some. Set up a central program—probably through the Public Service Commission, but I do not care about the structure—to examine suitable job vacancies, to recruit people with disabilities, to assist agencies in their recruitment, to adapt workplaces to suit people with disabilities and to train both the people with disabilities and the people with whom they will work, so that this disastrous trend is reversed. It is clear that a hands-off attitude will only lead to a continuing decline, as it has every year since 1996. It is just not good enough. For individual Australian citizens with a disability and for their families this situation is an ongoing source of anxiety, and it is totally unjustified and totally unnecessary.

In the remaining time available, I want to turn to the economic risk inherent in the short-term focus of this economically complacent budget. From an economic point of view, the problem with this budget is that it is a triumph of politics over economics—a triumph of the short term over the long term. The loose collection of individually welcome hand-outs might enhance the Treasurer’s image but it does not constitute a responsible or appropriate economic package, and I feel it is inherently risky. We now face a situation in which monetary restraint and fiscal stimulus are in conflict. The risk is that it will create the circumstance in which more monetary policy restraint is required to offset the excesses of fiscal policy—that is, it increases the risk of further interest rate increases later in the year.

More fundamentally, the budget reinforces the risk that we are repeating one of the two great economic policy mistakes of the last 30 years. All the attention has been focused on not repeating the great mistake of the eighties—keeping interest rates too high for too long. As a consequence, we are in grave danger of taking our eye off the ball with regard to the real risk—repeating then Treasurer John Howard’s folly of the seventies in frittering away the benefits of a resources boom in a populist rush of consumption spending rather than responsible saving and investment policies.

The Treasurer argues that because the budget is still in surplus it cannot put upward pressure on interest rates. This thesis would fail high school economics. An inappropriate boost to consumption leads to pressure on interest rates. The big risk is that families will lose the benefit of the tax cuts in further interest rate increases by the end of the year. But nothing can hide the risks and wasted opportunities in this budget. A wide range of economic commentators before the budget were pointing to this risk, and since the budget have been referring to it. I want to take such time as I have to refer to some of those. They are not from the traditional Labor contacts; they are from mainstream economic commentators in Australia who have been expressing their concern for some time.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Mr Slipper interjecting

Bob McMullan (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

I am not interested in petty interjections. We see, for example, the ANZ Bank saying that the government have had a massive windfall and they have wasted it. They also say—I will come back to that first point—that the economy is near the point in the cycle where the seeds of previous recessions have been sown. They are the two points I want to refer to. I turn first to the Economics@ANZ Budget Report 2006-07their overview:

The Budget has again benefited from windfall gains ... which boosted the cash available to the Government over the four-year forward estimates period by $51bn. Of this, the Government ... ‘spent’ $46bn.

That certainly will not do anything to diminish the prospects that interest rates might go up. The report goes on:

From a longer term perspective, we would like to have seen more audacious reform, particularly of the personal income tax system, and a willingness to run larger surpluses (as other beneficiaries of the current commodity price boom such as Norway, Canada and New Zealand have been prepared to do).

I also point out that, almost without exception, those other countries enjoying the minerals boom are running trade surpluses while we are running shocking trade deficits. The ANZ review points out that the terms of trade gains—in effect, the minerals boom; it is more complex than that, but to summarise it in these few minutes—have been worth $2,600 per head to each Australian since 1999. It is a massive windfall which we have had the capacity to save and invest but which we have spent.

People crow about budget surpluses—I would always prefer to have a budget surplus; if you can fund all your requirements with a surplus it is a good thing to do, particularly at this stage in the cycle—but the ANZ Bank points out that the projected budget surpluses are smaller than at previous commodity cycle peaks. As a percentage of GDP they are now less than at the previous commodity cycle peaks in the 1970s and the 1990s. So we have the ANZ Bank expressing their serious concerns about the budget.

We had Alan Mitchell from the Australian Financial Review saying:

The government has again disconnected the budget’s automatic stabilisers.

…            …            …

Treasurer Peter Costello will then find it difficult to avoid accepting part of the responsibility for the increase in mortgage and interest rates.

…            …            …

But the current policy combination, which has the government loosening the natural constraints of fiscal policy while the RBA tightens monetary policy, is the opposite of what should be happening. It keeps the exchange rate higher than it would otherwise be, slowing the unwinding of the current account deficit.

What we got was a politically lazy budget that shovelled out the excess revenue on a number of generally worthy, and for the government politically advantageous, projects and handouts.

We had a comment from TD Securities on 15 May 2006. Did the budget put pressure on interest rates? You bet it did. They put aside all of the speculation. Various economists have said yes, no, maybe or it is too early to say. TD Securities have gone to the really authoritative source—that is, how did the money market respond? By 15 May they said that you could see that when the dust settled early on the morning of 10 May the implied yield had risen by 10 to 12 basis points. The market was fully pricing in a 25 basis point interest rate hike on a 12-month time horizon. This is flowing through into the money market. Small businesses are already paying those higher rates. It makes our small businesses less competitive internationally.

In the last point I want to make I wish to quote the ANZ bank again:

The economy is near the point in the cycle where the seeds of previous recessions have been sown ... 1960, 1973, 1981 and 1989.

We are at the point in the cycle which led to decisions which provoked the past four recessions. One of those mistakes is giving away too much of the revenue dividend in spending increases and tax cuts, which is still a very significant risk. In my view, it is economically a very risky budget.

It would be wrong for me to conclude these remarks without acknowledging some welcome local initiatives in the budget, particularly with regard to Old Parliament House and most particularly with regard to the Australian National University. It is belated but proper acknowledgment that this parliament and the federal government have unique responsibilities with regard to the ANU, which cannot receive any state government support. This is a responsibility which this government has not previously acknowledged. I have found it very difficult to get my own party to acknowledge it. So I welcome it being recognised for the first time in a long time in this budget. To conclude: it is hard to be unpopular when you are giving away $40 billion. The opinion polls suggest that the government might have succeeded in doing that, but I doubt it. There are some welcome local and national initiatives. But overall it is a budget of skewed priorities, economic risk and, most of all, missed opportunities.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

At the outset I would like to congratulate the Treasurer of Australia for another example of a responsible and sensible budget that further demonstrates this government’s determination and dedication to the goal of managing Australia’s finances in a way to ensure the best possible lifestyle for Australians from all walks of life.

I think it is widely recognised throughout the world that Australia’s economy is strong and stable and our lifestyle is one of comfort and safety relative to a great many other nations whose citizens face daily hardships, many of which are nonexistent in Australia. We only have to turn on our television sets to see examples of those hardships experienced by citizens in other nations—hardships such as extreme and widespread poverty, war, famine and uncaring governments. The list goes on.

Australians often lose sight of the fact that our welfare system is also extremely generous. Many nations around the world have virtually no welfare system. If you have no job in these countries, if you cannot work due to injury or disability or if you are elderly or too frail to work then, unless you have family to support you, you have very little to fall back on. Unfortunately, as some have suggested, our welfare system may in some people’s eyes be too good. But we must always be mindful of ensuring that we do have a safety net in our society to make sure that less privileged people are able to receive assistance from the rest of the community. It is important that that be seen as a safety net and not as a lifestyle choice.

There are other examples of what makes Australia the great nation it is. We have low interest rates, low unemployment and other things. We have sensible leadership. Prudent spending has been demonstrated by the coalition government over the last 10 years. Australia is a country which many people see as being one of the best run countries economically right throughout the world. In fact, Australia, under the Liberal-National Party government, has become the envy of people right around the globe.

I would also like at this stage to mention that this budget builds on our successive budgets which have had surpluses. We also have in this case reduced taxes once again. We have repaid a debt totally. When we were elected to office in 1996 the government of the day was paying out an enormous amount of money—billions of dollars each year—in interest on government debt. But now, through sound economic management, we have repaid all of that debt, and that means that the government is now able to find the financial wherewithal to be able to improve spending on a whole range of activities which are beneficial and desirable to the Australian population.

While in the budget debate it is always important to mention how great the economic management of this government has been, one of the things about the appropriation debate is that one does get the opportunity to digress and to talk about other issues of great importance to the community. Mr Deputy Speaker Scott, I would at this point like to take the opportunity to congratulate the National Party and the Liberal Party in Queensland, you as the National Party president, the Hon. Warwick Parer as the Liberal Party president, Geoff Greene as the state director of the Liberal Party and Mr Hall, who is the director of the National Party, on the decision that was made yesterday by both state executives, meeting separately, to move towards a merger of the two parties.

Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

Hear, hear!

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Blair for his support. I must say that the person who would be most upset, most concerned, by the decision of the two coalition parties in Queensland to set aside 25 years of self-indulgence will be the Premier of Queensland, Mr Beattie, whose government appears to be losing all of the wheels off the cart. We had the disaster over health. We can barely open a newspaper anywhere in the state without finding out additional problems that the Labor government in Queensland is experiencing.

Let us just place some of the facts before the parliament. I am indebted to the state director of the Liberal Party, Geoff Greene, for this information. The executives of both the Liberal Party and the National Party in Queensland resolved to progress discussions for a possible merger of the two parties under the Liberal Party of Australia Queensland Division constitution. This is the first positive step in the process of discussions that could provide unprecedented unity, giving the Liberal Party the best chance of beating the incompetent and arrogant Beattie Labor government at the next state election. Constitutional changes, if any, will be decided after further talks and ongoing consultation with both organisations and parliamentary wings as well as the rank and file membership. The proposed merger does not mean the creation of a new party.

When one looks at the newspapers around the country, one sees a whole lot of misinformation at work out there. It is important to correct that misinformation. I want to raise some of the questions that have been asked and to give the appropriate responses. The first question is: do merger talks between the Queensland Liberal and National parties mean a new conservative party will be formed? The answer is no. Despite media reports, there is no talk of forming a new conservative party, and the Liberal Party would not be changing its name to ‘The New Liberals’. The merger would not form a new conservative party in Queensland, but rather talks are centring on The Nationals joining the Liberal Party. Discussions with the Queensland National Party leadership will continue to this effect.

People ask: what did the state council of the Liberal Party decide on Sunday? The Queensland Liberal Party state council and The Nationals’ equivalent agreed to support further talks between the two parties on the issue of a merger under the Liberal Party of Australia Queensland Division constitution. The motion passed reads as follows:

State Council congratulates the working party on ongoing discussions with the National Party to date and authorises the working group (President, State Director, Con and Rules Chairman) to continue discussions with the Parliamentary Parties and Federal Party Leadership in regards to the merger of the two parties under the Liberal Party of Australia (Qld Division) Constitution.

People ask: what are the benefits of the Queensland Nationals joining the Liberal Party of Australia Queensland Division? Why is this proposal better than the coalition?

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

You can tell them!

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The obvious answer is that the merger would create the largest political party in Queensland. The member for Banks raises the fact that I have been in the National Party before and I have obviously been a Liberal Party member of parliament since 1993. My personal experience is that the rank and file members of both parties are the same ordinary, decent Australians who want a better life for themselves, for their families and for the community at large. I have had an insight into the fact that there has been a false division for so many years. We have Liberal and National Party members of parliament who work together in the coalition party room, and you mostly would not know who is a Liberal and who is a National. What I am really saying is that, for the last quarter of a century, there has been massive self-indulgence on the part of both the Liberal Party and the National Party whereby at state level they have lost focus, focusing on each other instead of their common enemy, the Labor Party.

The very brave decision by the National Party and the Liberal Party yesterday to move towards a merger in Queensland is something which the conservative voters in Queensland have wanted for so many years and it is a very positive step forward. This merger would create the largest political party in Queensland, and the membership base would provide strength to branches and ensure that the party would be a broad based political party to appeal to both rural and metropolitan voters. It would combine the strength of the National and Liberal parties to create a powerful conservative force which would offer all Queenslanders an alternative government.

Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

Hear, hear!

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Blair once again for his support—and I thank you, Mr Deputy Speaker, for your silent support! Research shows that Queenslanders are more likely to vote for a unified opposition and are looking for an alternative to the disastrous Labor administration. Business groups have also indicated that they would provide greater support for a united, strong party with a clear message, alternative policies and a focus on achieving government. By contrast, the Queensland state coalition agreement is a coalition rather than a merger of the parties and still allows for divisive three-cornered contests.

The next question that people tend to ask is: how will the Liberal Party incorporate the National identity and what are the transition arrangements? It is envisaged that the Liberal Party would undertake constitutional reform agreed between the parties to ensure that rural membership and The Nationals’ regional constituency were fully represented in and enfranchised under the new partnership. The reforms would work to create state electorate councils in six regions—greater Brisbane, the Gold Coast, the Sunshine Coast, North Queensland, Central Queensland and western Queensland, as identified in the coalition attaining government agreement. One vice-president would be elected by each region, and members would be empowered by the creation of SECs with provision for the convening of a party convention and regional policy forums in addition to an annual convention. Transition arrangements would have the National Party leader as leader of the combined party and the Liberal Party leader as deputy, and the shadow cabinet positions would remain unchanged, subject to performance criteria.

Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

Love it.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The member for Blair once again is correct. The new senior vice-president would be the current National Party president. The Liberal Party executive would remain in place for the next three years.

The next question tends to be: would constitutional reform be required? The current Liberal Party of Australia Queensland Division constitution and Queensland National Party constitution allow for these changes. However, a constitutional convention would be called to amend the Liberal Party constitution to enable further changes to take place, and this convention would be open to all party members.

Another question is: is this a takeover? To be honest, it is a merger, and it is an evolutionary rather than a revolutionary concept. It is a genuine partnership between equals which serves the mutual interest of both parties. But, more importantly, it serves the interests of the electors of Queensland and is designed to achieve our highest common goal—attaining government in Queensland. I might add that of course we also want to make sure that the 29 federal members and senators which our merged operation would have will continue to make a positive contribution to conservative government nationally.

One of the things that a lot of people have criticised the current coalition for is its inability to do away with three-cornered contests. Mr Deputy Speaker, you and I have had these discussions; in fact, I think we had this discussion at my home on New Year’s Day. We have had many of these discussions. The great thing about this merger is that the three-cornered contest in the state seats of Broadwater, Mudgeeraba, Hervey Bay and Redlands would be resolved internally under what we call a process of objective assessment. To sum up, that means there would be zero three-cornered contests in Queensland because, after all, the Liberal Party and the National Party would be one party.

I mentioned before that the state shadow ministry would remain in place until the state election, subject to performance criteria. What would happen to the Queensland National senators and members in the federal parliament? Would they sit in the parliament as Liberals? That is a matter which is yet to be discussed and yet to be resolved. My own personal view is that it would be appropriate that we all sit together, because, after all, we would all be members of the same political party. But whether that happens immediately or it happens incrementally is something which will ultimately be determined by the party organisation.

What really is important is that this is an opportunity to create a new future for conservative politics in Queensland. The Liberal Party was formed from the merger of a number of disparate conservative organisations under the leadership of Sir Robert Menzies. That government was elected in coalition with the then Country Party in 1949 and has provided excellent government over many years since that time.

You cannot just assume that the arrangement that you now have will be the best arrangement forever. I want to say how much I admire the courage of the National Party organisation in Queensland, along with its Liberal Party counterpart, on being prepared to put aside a quarter of a century of internecine warfare to say, ‘Enough is enough.’ We have tried everything else. The National Party and the Liberal Party have each sought to blow each other out of the water. That has not worked. In recent years we have had successive Labor governments—Labor governments which, until they appeared to be as incompetent as the Beattie government now is, appeared to be entrenched into state government for a generation.

The National Party and the Liberal Party separately yesterday were prepared to sit down and say: ‘We have to do things better. We have to look beyond the square. We have to achieve something which is going to not only get rid of Mr Beattie but also make a huge contribution to the ongoing conservative government federally.’ We want to say thank you to you, Mr Deputy Speaker Scott, not in your capacity as Deputy Speaker but in your capacity as State President of the Queensland National Party, and also to your Liberal Party counterpart, former Senator the Hon. Warwick Parer, as well as the party organisations.

It is so much easier to simply say, ‘It’s all too hard.’ It is so much easier to walk away. It is so much easier not to, on occasions, offend one’s federal colleagues. It is important to do what is right. We have tried everything else. We are a long way from state government presently in Queensland, even though the Labor Party appears to be joining our campaign with their serial incompetence. But this in fact gives the two parties when merged as one a real opportunity—a real chace—to regain the treasury bench. It will also, of course, remove the occasional disputes which have happened between the two parties in Queensland, which have affected the coalition’s federal performance.

I represent an area of the Sunshine Coast and I am particularly pleased that my electorate has the opportunity to attract a large number of migrants entering Queensland from overseas and also from interstate. A recent Queensland government media release entitled ‘Queensland population grows at double the pace’ noted that Queensland accepted 30,000 new residents through interstate migration in the 12 months to September 2005. On average, that equates to around 2,500 interstate arrivals per month or 577 per week. It is an amazing total. The reason people are moving to Queensland, of course, is I suppose the prospect of a conservative government after the next election in Queensland! Seriously, the reason they are moving is that Queensland has a wonderful lifestyle. We have a wonderful atmosphere, a wonderful ambience and a welcoming population. This movement will continue to grow. Over the last 12-month period there were 17,500 new residents in Queensland who came from overseas. Altogether, this equates to around 913 extra residents who migrate to the sunshine state each week and many of those people move to the Sunshine Coast.

Queensland’s population grew by 75,900 last financial year or 1,459 people each week. I think it is important to recognise that the Australian government has rewarded our state for that growth. There have been sensible allocations outlined in the budget for things such as infrastructure, including much needed roadworks in Northern Australia. The Sunshine Coast will benefit directly from funds under the Roads to Recovery program. The City of Caloundra will receive $781,031, the Shire of Maroochy will receive $1,188,589 and Noosa Shire Council, which is in the electorate of my colleague the honourable member for Fairfax, will receive $517,939. The Roads to Recovery program covers about 85 per cent of Australia’s road network. In November I was able to announce funding in Caloundra and Buderim under the AusLink Black Spot program for 2005-06. These projects were: Mary Street and Arthur Street, Caloundra, for the installation of a roundabout at the intersection, $50,000; Beerburrum Street and Albatross Avenue, Caloundra, for the installation of traffic lights, $75,000; Mons Road and Tanawha Tourist Drive, Buderim, for kerb and channel modification works and a dedicated left-turn lane, $15,000; and Mons Road and Parsons Road, Buderim, to improve sight distance and upgrade lighting and signage, $80,000.

Having said that, I believe it is important that the government continue to recognise the infrastructure needs of the Sunshine Coast. I would like to see funds allocated to upgrade the Bruce Highway to six lanes all the way to the Sunshine Coast. We have, by upgrading the highway to Caboolture to six lanes, removed the worst bottleneck between the Sunshine Coast and Brisbane. I would like to see more spending in that particular area, but the government must always be careful to make sure that it does not spend more than it earns. The Treasurer of Australia has ensured that the government keeps within its means. People these days will not accept deficit budgeting. This government has responsible economic management and I am proud to be a member supporting the government in this place.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

This government trumpets its ‘family friendly’ credentials, yet when you consider the detail of the budget it emerges that the government is anything but. There are three key areas impacting on the families in my electorate of Banks that I wish to address this evening: interest rates, skills shortages and child care. Firstly, I wish to consider the potential for this budget to impact negatively on interest rates. The short-term tax relief contained in this year’s budget is welcome. However, I despair at the lack of foresight to protect Australian families from higher interest rates. This budget clearly does little to put downward pressure on interest rates.

In 2006-07 world economic growth and Australia’s terms of trade remain at their best levels in 30 years. But four years into the global commodities boom, instead of achieving strong trade surpluses, the half-trillion-dollar foreign debt will continue to grow. Australia’s current account deficit has not consistently run at this high level since the 1920s. Since 1996 Australia’s export growth has been the fourth worst of the 30 OECD countries. Export growth has collapsed since 2001, with average growth in export volumes of only 0.6 per cent compared to the 20-year average of 5.9 per cent. As in previous years, the budget promises export growth of seven per cent but delivers only two per cent. Manufacturing exports from this country have not grown substantially since this government won office. This is because of industry policies which scrapped the 140 per cent investment allowances, together with the cuts to CSIRO and tertiary input to industry. There is no doubt that this short-sighted lack of investment in infrastructure will haunt this government.

The government’s persistent failure to deal with the current account deficit exposes Australians to the risk of higher interest rates. To boost productivity we must eradicate the existing capacity restraints. The government has presented no infrastructure plan and, as I have already said, has presented no plan for skilling Australia or assisting Australian families with child-care options. Without a boost in Australia’s competitiveness we will not lift our export performance and we will not reduce our escalating foreign debt.

Labor is not alone in its criticism of the potential impact of increased spending. Since the budget was brought down economists and analysts have consistently criticised the Treasurer on the potential for his budget to impact negatively on interest rates. For example, Alan Mitchell in the Australian Financial Review on 13 May 2006 said:

But it is still the case that the budget is expansionary when, in the absence of the government’s policy intervention, it would have been mildly contractionary. If the RBA finds it necessary to increase interest rates further, these will be rate rises that might have been avoided had the government allowed the automatic stabilisers to work and the budget to tighten naturally.

Mr Mitchell is not alone. Tim Toohey, the chief economist for Goldman Sachs JBWere, told his clients that the budget is ‘incendiary’. Michael Blythe, Chief Economist of the Commonwealth Bank, referred to the ‘upside inflation risks’ of the budget in moving towards another interest rate hike. Jeff Oughton, an economist for the National Australia Bank, said that in the short term the added inflation risks ‘may be enough to push the RBA into further action’. The Sydney Morning Herald and the Age on 13 May 2006 noted:

There’s no getting away from it: Mr Costello could have used the budget to reduce the upward pressure on interest rates. Instead he chose to add to the pressure.

Stephen Koukoulas, chief economist for TD Securities, is quoted by Ross Peake in the Canberra Times on 16 May, and this really sums up the situation the country now finds itself in:

Whether you or I think the budget had a stimulatory effect on interest rates or not, the futures market said ‘yes’.

A National Australia Bank survey on 16 May showed that almost two-thirds of firms expect the Reserve Bank to add at least another quarter of a percentage point to official interest rates in response to the budget. Sadly, almost 9,000 households in my electorate of Banks are directly affected by interest rate rises. This estimation is based on 2001 census figures, and anecdotally I am aware that the figure today will be much higher. Another 11,000 rented households will be indirectly affected as landlords will undoubtedly pass on interest rate increases to their tenants. Yet this government had in its hand the ability to minimise the chances of an interest rate hike.

I will now turn to the matter of the chronic skills shortage facing this country today—a matter not unrelated to productivity issues and the lack of investment in infrastructure that I have already mentioned. I am not the first to have noted that the budget made no mention of education—specifically vocational education—and that in essence reflects the low priority this government gives to education and training. What I find incredible is that not only this side of the House is calling for the government to address our national skills shortage. The government’s friends in business are also publicly expressing their concerns, which is amazing. Peter Hendy of the Australian Chamber of Commerce and Industry agreed, according to an article in the Age of 11 May, that:

‘the number one complaint’ of investors was the skills shortages.

Heather Ridout of the Australian Industry Group said in the same article that ‘it was disappointing that more progress had not been made’. She said:

These areas are required to build the competitiveness of Australian business and to assist in rebalancing the economy as the current minerals boom begins to fade.

This government has consistently failed to address the national skills shortage. It is not a state secret that Australia is projected to need 100,000 tradespeople by 2010; yet all the government has done is to fund redundant technical colleges, which have produced no new tradespeople and, on current projections, will not have produced anywhere near the required 100,000 by 2010. As far as we on this side can ascertain, the Australian technical colleges will be lucky to produce 300 tradespeople by 2010. Why can this government not grasp a simple equation? Why is there a need to create new infrastructure that is not required? Why not increase funding to existing infrastructure so that turnaround time in addressing industry need is radically reduced?

I note that where the country needs infrastructure development the government again has chosen not to act. Recently the shadow minister for education visited Ballina high school to discuss the proposed Lismore-Ballina technical college. Apparently, the government is threatening to take this college away from the local community on the basis of lack of community support. What rubbish! It is patently obvious what this is really about—that is, the government’s extreme workplace agenda. This government is insisting that staff at the technical colleges be offered Australian workplace agreements. The Prime Minister is not interested in choice. It is inexcusable that the funding of these colleges be predicated on how the staff is paid. The government would argue that, in addition to the unnecessary trade colleges, it has increased skilled migration in order to address the skills shortage. Some would argue that it has increased skilled migration excessively at the expense of young people being provided with training support.

The Australian Productivity Commission released a report on 17 May entitled Economic impacts of migration and population growth. One of its findings is that in no way can increased migration be a long-term solution to skills shortage. On page 170, the report states:

... migration policy is only one component of a broader strategy to address skill shortages and accommodate future labour market trends.

A broader strategy is needed. Australia was built on the backs of migrants. We need and must continue to have immigration as part of public policy. But simply increasing skilled migration is no conclusive response to a skills crisis. This response is typical of the government—short-term and catering to the whims of its friends at the big end of town.

Even the ACCI, on page 169 of the productivity report, indicated that, while migration does make a contribution to addressing labour and skills shortages, it is ‘as a part of the combination of initiatives’. I note that, in its submission to the Productivity Commission report, the CFMEU stated:

The CFMEU is of the strong view that migrant labour should not generally be used to remedy skill shortages in the Australian Economy … [the] dominant focus of governments should be on providing quality training to workers who are already in the country.

In its submission the AMWU stated strongly:

Temporary skilled migration is a substitute for capability building through skills training and in the long term reduces productivity by compromising the long term ability of Australia to broaden its skills base.

On page 168 the report identifies the fact that, in the consideration of long-term skill needs, skilled migration and domestic labour supply need to be considered together.

Under the current government, the migration plan is being abused. The Labor Party recently released a plan to tighten the control of skilled migrant visas. This would require employers to show that they are not laying off Australian workers one day and then applying for overseas workers the next. The ACTU has endorsed this plan and has also written to the government to request the establishment of new bodies to certify employer applications for temporary visas. These bodies would include representatives from job and training organisations, local councils, unions and government in order to ensure that employers exhaust all avenues to employ or train Australian workers before receiving approval to bring in overseas workers. The labour movement as a whole is demonstrating that it will work to maximise all opportunities to ensure that this skills crisis is addressed. The shameful neglect of education and training by this government has led us into a national skills crisis.

In this budget there is no new money for TAFE. The overall percentage of the federal budget spent on vocational education and training was further reduced. A program to encourage apprenticeships in rural and regional areas had a $13.7 million cut. A $38.5 million program aimed at getting more women into traditional trades such as construction, automotive engineering and mining was abolished. A $23.2 million program for providing IT skills to low-income older workers was abolished. Overall, the percentage of the national budget spent on vocational education is 0.73 per cent, a drop of 0.2 per cent from the last financial year. The budget projects that this will drop to 0.67 per cent in 2009-10. How can this government expect the Australian people to think that it takes the skills shortage seriously?

We know that 300,000 people, primarily young people, have been turned away from TAFE over the 10 long years of this government. Now the government is allowing apprentices in from overseas and providing business incentives to take them on. These people are sent to regional Australia, where youth unemployment is already too high and wages too low. Worse still are the employment conditions for these apprentices, who must accept whatever wages and conditions are offered. That is not fair on young people and not fair on the overseas apprentices. That is why a federal Labor government will abolish overseas apprenticeship visas.

A federal Labor government will build from within to encourage and support young people to take up apprenticeships which will realistically address the national skills shortage. Labor will get rid of TAFE fees for the traditional trades and set up skills accounts to help families save for training, with an initial deposit of $800 a year for up to four years. Younger students will be encouraged to try their hand at a trade with a trade taster program. We will increase the number of school based apprenticeships and establish a $2,000 trade completion bonus to encourage kids to complete their courses.

The skills crisis in Australia is not simply about the shortfall in the actual number of tradespeople. The ramifications are much broader than that. There are many companies that are not able to increase production despite increased demand for their product because of the lack of skilled workers. This impacts directly on Australia’s productivity.

In this year’s budget, social security represents 41 per cent of expenditure, health 18 per cent, defence 8.13 per cent and education 7.57 per cent. Sadly, it seems that this is the first time that defence spending has been higher than education spending. I am reminded of a tea towel I have in my office in Revesby produced by the Women’s International League for Peace and Freedom. It says, ‘It will be a great day when our schools get all the money they need and the air force has to hold a cake stall to buy a bomber.’ I suspect our education sector will be holding cake stalls for as long as this government is in office.

I wish to turn my attention to the issue concerning families in my electorate, and that is child care. In 2004, I conducted a survey in my electorate on child-care needs. At that time, 87 per cent of local families had difficulty finding child care, 60 per cent of families said there were insufficient child-care hours available and 57 per cent said they were still on waiting lists. The situation has not improved since then. The sad reality is that this comes as no surprise. The government sees child care as a cost for families to bear. Labor believes that child care is a crucial investment to make. The coalition has encouraged and in this budget continues to encourage a market oriented approach, not a family oriented approach. Targeted investment in child care leads to economic growth through increased workforce participation and ultimately productivity.

Figures released on 6 February 2006 by the Australian Institute of Family Studies indicated that there are more than 250,000 women wanting to work but unable to do so because of a lack of suitable child care. Another 16,500 women want to work more hours but are not looking for work due to child-care and family factors. Under this government, child care is hard to find and even harder to afford. Over the last year, child-care fees have increased by 12 per cent, five times the consumer price index.

This is a smoke and mirrors budget. The government has tried to give the appearance of creating child-care places while actually giving up on supply problems. This leaves parents and providers to struggle with the actual problems which plague the system. There is not a single extra child-care place guaranteed in the budget, and the cost issue has once again been ignored. The issue of quality child care does not feature in the government’s thinking at all. Good quality, affordable child care is a prerequisite for those parents who want to work. This government has gone some way to addressing cost issues by subsidising parents, but, as we know, there are many parents who miss out on the child-care subsidy. This includes parents from Arndu St Paul’s Preschool in Oatley. I spoke on 15 February this year about the concerns the preschool had raised with me.

There are many steps this government could take to ensure that child care is more affordable. It has essentially ignored the issue, particularly for those families who are on low incomes. Child care and other family friendly provisions in agreements around Australia are under threat because of the government’s extreme new industrial relations system. Child care and other work related costs are huge barriers to mothers who want to return to work or increase their hours. Without government assistance, they cannot and will not participate in the labour force. This leads to skills shortages, loss of superannuation and other poverty traps for women.

So, to coin a phrase, what are the alternative policies? Labor believes that women and their families must be given financial assistance to remove these barriers so that they are able to return to work. Labor believes that the way of the future is more family friendly workplaces and more family friendly provisions. Labor in government will rebuild a fairer industrial relations system that will guarantee employers and employees the right to negotiate child care and other family friendly provisions in workplace agreements without the threat of prosecution. Labor wants top-quality, affordable child care for all families who need it and believes that child care needs to be a positive education experience for kids as well as supporting working parents.

Labor has already made some practical commitments to help working parents: directing capital funding to new child-care centres on primary school grounds and other community land; providing a single child-care waiting list so that parents can get a place as quickly as possible; better planning regarding the location of child-care centres; and pushing the government to fix the child-care rebate. This budget is a wasted opportunity. It represents careless policy making and implementation versus political expediency.

I will finish with one matter that really grates with me, that is, some of the superannuation changes in this budget will see members of parliament over the age of 60 and others who draw superannuation paying no tax on their superannuation payout. I know that a lot of my colleagues in this place think that is a great thing. I think it is obscene. I should be paying tax on my superannuation irrespective of my age when others in the community are more needy. This shows the priorities of this government. This budget primarily looks after the top end of town and the well-off. They get the bulk of the money.

This is one area where I cannot go without putting my view. I do not need a tax-free superannuation payout over the age of 60, and nor does anyone else in this place. We should be paying tax on that. The Treasurer hails it as one of the greatest reforms. The greatest reforms on superannuation were brought in by former Prime Minister and former Treasurer Mr Keating—and they should be built on by this government. We should not have a government do as they have done in this budget.

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2006-2007 and its cognate bills. This is a budget that will benefit the people in my electorate of Deakin. It is a budget that has been welcomed and applauded by my constituents. This budget must be viewed as part of a well-developed, long-term strategy. It is a mistake to view this in isolation from other budgets. Opposition members tend to say, ‘This budget didn’t include this and didn’t include that,’ but they tend to ignore the previous 10 budgets which have helped to put us in the position that we are in today. This budget reflects a position of national economic stability and prosperity, brought about through the excellent stewardship of the Prime Minister and the Treasurer. This stability and prosperity were barely thought possible 10 years ago when the Howard government took office and inherited $96 billion of government debt.

Now we stand, 10 years on—11 budgets down the track—better able to weather corrections in regional and global financial markets, better able to offer prudent business and income tax reductions and better able to invest in the future of our children. For only the second time since 1901, since Federation, the government is able to say it is free of government foreign debt. No longer are we required to spend approximately $8 billion a year on interest payments—$8 billion that every member of parliament here would dearly love to be spent on various programs and projects in their electorate; money that was being sent overseas; money that was hard-earned by Australian workers. Instead we can now focus on building on the hard work done by all those Australians through the previous 10 budgets and see that $8 billion of savings being spent on programs at the domestic level.

This budget can be boiled down to making things simpler and fairer for all Australians. It will ease the pressure on middle-income Australian families, on those people entering or returning to the workforce and on retirees and superannuants. It will ease the burden on small business and the self-employed. It ensures that a fair day’s work is rewarded with a fair day’s pay. A number of the measures in this budget will make the lives of the people of Deakin easier and fairer—none more so than the proposed changes to the superannuation system.

We heard from the previous speaker, the member for Banks, about his opposition to the superannuation changes that were announced in this budget. That is the first time that I have heard the Australian Labor Party articulate a position on the superannuation changes, and it is one of opposition to them. No longer will the regulations change from year to year and, sometimes, day to day. Rather, this budget proposes a straightforward approach to dealing with people’s superannuation. It provides for tax-free superannuation benefits for people aged 60 and over where these benefits are paid from a taxed fund from 1 July 2007.

The proposal is that if superannuation contributions are taxed on the way in then they will not be taxed on the way out. The people of Deakin planning for retirement will now know exactly how much money they have in their superannuation fund and will be able to prepare accordingly. They will no longer need to pay for financial advice on how their superannuation benefits will be taxed, as they will now be tax exempt. This advice currently ranges in cost from $3,000 to $10,000—a cost that retirees will no longer have to bear. It is a further saving which can be directed towards their retirement income. They will no longer be forced to draw down on their superannuation benefits after the age of 65. Superannuation can be paid out whenever and however a person wishes. This will give retirees more flexibility in how they use their superannuation.

At the other end of the working life spectrum there is good news for those people wanting to train for and join the workforce. Contrary to what has been claimed in previous debates by those opposite, especially by the member for Jagajaga and the Leader of the Opposition, we are providing the resources and the funding to address the national skills shortages. An additional $106 million has been allocated over the next four years to enhance support services for apprentices and their employers through the new apprenticeships centres. The money that has been allocated to these endeavours is building on the money that has already been spent and allocated through previous budgets. It is a further strengthening of and support for vocational education and training in the Australian community.

In my electorate, organisations such as MEGT, based in Ringwood, and the VECCI New Apprenticeships Services, in Mitcham, welcome the increased allocation of resources. These organisations will share in the additional millions being allocated for new apprenticeships centres, taking the total funding allocation to $692 million over four years. If you listened to members on the opposite side of the chamber, you would think that we were spending barely any money at all in the area of apprenticeship training.

In addition to this funding, the budget provides an extra $6 million for the National Skills Shortages Strategy, an important strategy involving a partnership between the government and industry groups to identify current and future skills needs, especially in traditional trades, where we know the problem is acute. Projects that are set to benefit under this funding include streamlining the recognition of the skills of existing workers and attracting new entrants to particular industries and retaining them as part of that workforce. With that in mind, the budget also provides additional financial incentives for employers to undertake new apprenticeships with people enrolled in particular diploma and advanced diploma courses. They will focus on key growth areas, which will include those people wishing to enter the child-care and allied health industries—a welcome encouragement for potential child-care workers wanting to enter the workforce. This, in conjunction with the removal of the cap on federally funded out of school hours and long day care places, will see an increase in the services provided in this area.

The need to address skills shortages has come about because those opposite have discounted the importance of technical and vocational education for a very long time. Their stated purpose for 10 years has been to try to funnel everyone into a tertiary qualification program. The member for Jagajaga barely mentioned the words ‘vocational education’ throughout the entire term that the previous Minister for Education, Science and Training, Brendan Nelson, held the portfolio. She constantly wanted to talk about tertiary education, at the expense of those in technical and vocational education.

The Labor Party accuse the government of turning a blind eye to technical education in this country. In doing so they ignore the fact that spending on vocational and technical education is at record levels. Over the next four years the government will provide total funding of almost $11 billion, including $2½ billion in 2006-07 and $5 billion to support state and territory training systems for the years 2005-08. We now have state government after state government clamouring to get into the technical colleges model. First they opposed our efforts; now we have both the Victorian and the New South Wales state Labor governments wanting to introduce their own versions.

Unlike those opposite, the government have delivered on technical and vocational education. We have increased real funding for technical education by almost 90 per cent. Under Labor in the 1990s the number of places for technical education fell by 120,000, so how can members of the Labor Party stand up here say that we have not addressed the issue of vocational and technical further education? We inherited a shortfall of 120,000 from the Labor Party. Since 1996 the number has grown to a total of 1.7 million enrolments in subsidised vocational education.

I am proud to say that this government’s focus on technical education has resulted in a tangible benefit to the people of Deakin. In my electorate we have one of the Australian technical colleges based at the Ringwood Secondary College, one of the few ATCs that are actually based on the premises of a secondary school. The ATC at Ringwood, along with the automotive manufacturing and technology skills centre at Ringwood—an initiative of this government as well which was opposed by the Bracks government—provide students with trade training in automotive skills. In addition, the ATC provides trade training in commercial cookery and, with the continued funding of this government, it will expand into engineering and manufacturing programs in the near future. So you tell the people of Deakin that we are not spending money, that we are not putting resources out there, when in fact we are. As they drive down Bedford Road, through Ringwood, they can see the ATC at the Ringwood Secondary College. I certainly know that the people in the eastern suburbs are grateful for the federal government’s initiative in that particular area. It is evidence of the government’s commitment to a strategic and considered investment in the reskilling of the Australian workforce to meet the needs of tomorrow.

This is in stark contrast to the Australian Labor Party. The ALP’s policy lacks substance and demonstrates an entire ignorance of Australia’s training system. Just taking one item, Labor’s skills account is nothing more than a cost-shift from the states and the territories. While the Australian government does not own or run a single TAFE, Labor state governments continue to hike up TAFE fees around Australia. The fact is that the Leader of the Opposition fails to guarantee that the states will not continue to increase TAFE fees. So they may actually laud their policy of wanting to reduce TAFE fees, but all the Australian Labor Party are doing is saying that they will eliminate TAFE fees that are set by their counterparts in each of the states. Every state Labor premier has the ability right now to waive those fees if they want to, rather than waiting for the possible emergence of a federal Labor government.

Last year the House of Representatives Standing Committee on Employment and Workplace Relations, which I chaired, brought down a report on increasing workforce participation. I am pleased to see that the general thrust of the report—not the entire report—has been picked up by measures in this budget. For those looking to re-enter the workforce, the budget offers them a way to transition from welfare to work. Fifteen non-government organisations will provide job capacity assessments as part of the Welfare to Work reforms that start on 1 July this year. The Australian government has committed $320 million over three years to the program to assist more than one million Australians to connect to the right support services. In the next 12 months an estimated 370,000 people will receive an assessment, and they will range from job seekers claiming Centrelink payments who have been identified as having barriers to work to involuntary job seekers such as mature age people wanting to get a job.

The job capacity assessment identifies a person’s capacity to work and directly connects them to support or employment services that are appropriate to their needs. This is a further commitment by the government to driving down unemployment and increasing workforce participation. The new system will be an improvement on current arrangements because the assessment will be completed sooner, usually within 10 working days. One job capacity assessment centre will be based in Ringwood in my electorate. It will provide a valuable service to those members of our community who want to make the transition from long-term unemployment to some form of paid work. I am pleased to see that these endeavours are continuing in the eastern suburbs of Melbourne. I note the figures that were released as recently as last week which showed that unemployment in Ringwood now stands at 3.4 per cent, in stark contrast to the highs under the previous Labor government.

We are also reminded of the importance for people of the transition from long-term unemployment to some form of paid work. As Prime Minister Tony Blair stated to the Trades Union Congress when he first got elected, the best start in life that one could give to an individual is a job—that is, for them to have a job, to get on that rung and to see that they too can have a future. The best way to have a future is to have paid employment rather than be handcuffed, as some members would prefer, to the welfare system.

Once people are in the workforce and earning a living, this budget continues to provide greater incentives to remain in paid work through further changes to the tax system and its interconnection with welfare support. In 2000, the new tax system represented a major restructuring of the Australian tax system, with the largest reductions in personal income tax cuts in Australia’s history—amounting to $12 billion per annum. One could have asked, ‘How can we possibly better the $12 billion in tax cuts that were introduced in 2000?’ Since then the government has continued its commitment to tax reform and has provided further reform of personal income tax. In the three financial years since 2001, there has been in excess of $40 billion worth of tax relief. The 2006-07 budget builds on this and provides the largest tax cuts since that new tax system was introduced. From 1 July this year we will be reducing personal income taxes by more than $36 billion over four years. This is giving people back their hard-earned money in personal income tax cuts, changes to the thresholds, the low-income tax offset, changes to the Medicare levy phase-in rates and, of course, the fringe benefits tax rate itself.

Tax brackets for those earning between $25,000 and $75,000 will be consolidated. Those workers will now pay a rate of 30 per cent across the board. Those earning between $75,000 and $150,000 will pay a reduced rate of 40 per cent. Those earning over $150,000 will pay a reduced top marginal rate of 45 per cent. These are incentives for people to get a job, to earn money and to increase their ability to earn more money—whether it be through overtime or other additional work. No longer will there be a disincentive to increasing your income because you fear being popped up into the next tax bracket. It will help to ease the financial pressure on Australian families. Furthermore, financial pressures on Australian families will be eased because there is just under $1 billion to increase the limit for eligibility for family tax benefit part A to $40,000 and allow even more families to receive the maximum rate.

Two weeks ago I had the privilege of hosting a visit to my electorate by the Minister for Defence, my good friend Dr Brendan Nelson. During the visit we dropped in at the barracks of the 4th Combat Engineer Regiment in Ringwood. I know that a lot of members here probably do not realise that I do have an Army regiment in my electorate of Deakin, in the suburbs of Melbourne. This is a unit made up of regular Army and reservist personnel. As the defence minister said during that visit, the recruitment and retention of people of the highest calibre to the Australian Defence Force is of great importance.

To that end, this budget provides $194 million over four years to strategically grow military workforce numbers. It provides for the next pay rise in the workplace remuneration agreement for military personnel. Having seen up close the work that our defence forces undertake, I am pleased to see that pay rates and scales are commensurate with the work being performed. Reserve units such as 4CER in East Ringwood will also benefit from the $180 million allocated to raise a high-readiness Reserve and to enhance the pay and conditions of Reserve personnel. These Reserve units from my electorate have served alongside their full-time counterparts in peace missions in East Timor and Bougainville as well as undertaking humanitarian relief efforts in Indonesia and Pakistan.

In the time that I have available I want to talk about the development of community infrastructure, which has also been included in this budget. Infrastructure is highly in demand in my electorate. As part of the Roads to Recovery program, the government has committed to providing an additional $307 million for local projects which are to be determined by the end of this financial year. It takes our Roads to Recovery funding to $1.78 billion for the financial years 2004-05 to 2008-09. In my electorate, the two municipalities will share in this dividend. The Whitehorse City Council will receive $373,276 under Roads to Recovery, and the Maroondah City Council, covering such areas as Ringwood and Croydon, will receive over $339,000. These funds will go a long way to addressing the congestion and the bottlenecks that are so apparent in city based electorates.

The total figure in this budget for Roads to Recovery in the electorate of Deakin will be in excess of $1.4 million. With the assistance of the federal government, local councils such as those of the cities of Maroondah and Whitehorse are now in a position to address some of the deficiencies in our local roads. It is just a pity that the commitment by this government to roads projects, particularly those that are going to go into the eastern suburbs of Melbourne, was not matched by the transport policy announced by Premier Bracks last week, when he totally ignored the eastern suburbs of Melbourne. He failed to commit money to the Springvale Road grade separation, which is the No. 1 intersection and level crossing in Melbourne. He failed to provide money for the third rail line going through my electorate.

This budget and the money from the federal government will help to ease the pressure of our road congestion in my part of the world. More importantly, the budget is a testament to the prudent economic management and strategic planning skills of the Howard government. It builds on the achievements of previous budgets. It is a budget that is worthy of support. I urge all of those on the other side to support this budget and, in particular, to support the changes to the superannuation system and the adjustments to the tax system outlined by the Treasurer.

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I rise tonight in the debate on the Appropriation Bill (No. 1) 2006-2007 to speak on behalf of all the people in the electorate of Richmond. This budget has failed the people of Richmond, and it has also failed the people of Australia. What is very disappointing about this budget is that it does nothing to address the real issues that people confront in their day-to-day lives. The reality for most people is that the Treasurer’s $10 tax cut has already gone through rising interest rates, through petrol price hikes, through the ever-increasing health insurance premiums and also through cuts to wages and overtime caused by the Howard government’s extreme workplace laws.

It really is a short-sighted budget that does nothing to invest in Australia’s future. It does nothing to shore up our competitiveness on the international stage, it does nothing to address our massive skills crisis, it does nothing to address our shortage of aged care services and it has no national plan to restore our crumbling infrastructure. It also fails to deliver world-class telecommunications services to regional Australia, where they are so desperately needed. This budget does not help parents access decent, affordable child care and it does not help our young people get trained, educated or qualified.

Unfortunately for the people in the electorate of Richmond, the Treasurer does not think that Australians living in regional areas are at all relevant because, in his 4,000-word budget speech, he did not mention the word ‘regional’ even once. That was very disappointing for the many people who actually live in regional Australia. This budget will not fix regional shortages of doctors and nurses, it will not fix the skyrocketing price of petrol and it will not bring our telecommunications services up to scratch.

I want to speak on behalf of all the young people in my electorate who are now facing a future of limited choice because of the Howard government’s lack of vision for the future of Australia. Right now in my electorate, as is the case right across the nation, we are facing a massive skills crisis and businesses are calling out for more skilled workers everywhere. There simply are not enough plumbers, electricians, builders, child-care workers, nurses and other health professionals. The Reserve Bank is sounding alarm bells and has clearly identified this shortage of skilled workers as one of the most significant constraints on the economy and a factor that is putting pressure on inflation and upward pressure on interest rates.

Despite this great demand for skilled labour, we have soaring youth unemployment, particularly within regional areas. Within Richmond, our local teenage unemployment hovers at about 36 per cent. That is an appalling rate. That is one in three young people who are looking for a job and cannot get one. Here is the current situation: we have a skills crisis on one hand and young people who cannot get a job on the other. And the reality is that this situation has come about because for 10 long years the Howard government has refused to properly invest in vocational education and training. In fact, the Howard government has actually decreased spending in this area. Australia is the only developed country in the world that has reduced public investment in university and TAFE since 1996. This situation is nothing short of appalling. Australia’s skills crisis is the result of bad economic management and bad policy by the Howard government.

As reported by the Productivity Commission, recurrent public spending on vocational education and training dropped by 3.1 per cent in 2004. The total number of vocational education and training students decreased by 6.6 per cent between 2000 and 2004. Real government recurrent expenditure per student hour decreased from $20.18 in 2000 to $19.12 in 2004. We know that 300,000 Australians have been turned away from TAFE since 1998, and students are now facing $100,000 university degrees. We used to be called the ‘clever country’, but our Prime Minister’s vision for Australia is not very grand at all. His vision involves importing cheap labour from overseas and stripping workers here of their rights and conditions at work. The Howard government has increased skilled migration by 270,000 since 1996 but has turned away 300,000 Australians from TAFE. The Howard government’s decision to ignore training and education is an extraordinary display of arrogance and incompetence when everyone from the Reserve Bank to the OECD is sounding alarm bells on the dangers of ignoring the skills crisis. It is our young people who are bearing the brunt of this.

In contrast to what we are seeing the Howard government doing, federal Labor are committed to investing in education and vocational education and fixing the skills crisis. Federal Labor will improve the competitiveness of our nation by improving the skills of our young people so they can reach their potential. Federal Labor will invest in schools and vocational education to offer young people better choices and greater opportunities. This will be done through establishing the skills account to cover the cost of up-front TAFE fees for traditional trade apprentices and child-care trainees. We will create more real apprenticeships, and we will offer young people better choice by teaching trades, technology and science in first-class facilities and ridding our schools of outdated workshops. We will encourage more apprentices to finish their training by providing a $2,000 trade completion bonus to the 60,000 traditional apprentices who commence training every year. If that only halves the current drop-out rate it will mean an extra 10,000 qualified tradespeople in our workplaces every year.

The Howard government is indeed so out of touch that it thinks it can address our skills shortage and the youth unemployment with its backward and extreme industrial relations changes. We need to compete with overseas developing economies by addressing our skills crisis and improving the skills of Australian workers. Australian businesses, students and workers deserve a federal government that is serious about addressing our skills crisis and serious about investing in vocational education and training. Instead, the Howard government is not only ignoring the skills crisis but also damaging the job security and conditions of so many locals in Richmond due to its extreme industrial relations changes. Only federal Labor is committed to ripping up these unfair laws and restoring fairness and security to the workplace.

Another major issue in my electorate is child care. The lack of affordable child-care as a result of this government’s short-sighted policies is a huge barrier to improving participation rates in the workforce. Local families are often telling me of the difficulties they have in accessing affordable child care as they are struggling to balance their work and family responsibilities. Without access to decent, affordable child care, women especially are affected, because they simply cannot get back into the workforce. I know of many women who have spoken of the difficulties they are having and how they are limiting the number of children they may have because they know that child care is not available to them.

The message to the federal government could not be clearer: fix the child-care system and fix it now. Families are calling for it, industry groups are calling for it, federal Labor has been calling for it and even one of the Howard government’s own backbenchers has been calling for it. With all of these people calling for it, why do the Treasurer and the Prime Minister not understand what everyone is saying—or are they just refusing to listen to what everyone is saying?

When you look at the 2006 federal budget, it is very clear that the Howard government have not the slightest interest in actually reforming the child-care sector and providing decent, affordable child care. In this budget the Treasurer offered families nothing that will actually lead to a real extra child-care place, nothing to make child care a single cent cheaper and nothing to address the lack of child-care workers. There was also nothing to address the child-care rebate debacle that they have created, with so many families waiting such a long time to get that rebate when they desperately need the money.

Only federal Labor is committed to fixing the child-care crisis—not only because it is important to address the needs of everyday working families, but also to ensure a strong, sustainable national economy. Industry groups and federal Labor agree that Australia’s economy desperately needs more skilled workers and that affordable and accessible child care is crucial to encouraging more skilled people into the workforce.

Federal Labor has a plan for Australia’s future and child care has a central position within this plan. Only federal Labor will address the national shortage of child-care workers by getting rid of TAFE fees and by building 260 new child-care centres on school grounds to remove the dreaded double drop-off that so many parents talk to me about, when they have school age kids and young kids and are having to race all around the place dropping them off, taking up a lot of their time.

Federal Labor will also fund local councils to establish single waiting lists for local child-care centres rather than parents having to be forever phoning different child-care centres finding out if a place is available. Federal Labor will get rid of the red tape so unused, outside school hours, holiday and family day care places can be quickly transferred to where they are needed. Federal Labor is also committed to fixing the child-care rebate so parents can get this rebate earlier, not having to wait months and months and indeed years sometimes to get that rebate. It is only federal Labor that is serious about supporting families and investing in Australia’s future.

Seniors have built this nation and there is no doubt that our elderly were one of the biggest losers in this year’s budget. Within Richmond, 20 per cent of the population is aged 65 years and over. There are a very large number of locals who have been forgotten by the Howard government. The tax cuts, of course, mean nothing for those on fixed incomes, particularly as the cost of living increases so rapidly. What is astounding is that many predict that by the year 2040, 20 per cent of Australia’s population will be aged over 65. That is the situation in Richmond right now and it has to be fixed right now, because there certainly are so many people in that age bracket who are really doing it tough.

I am bitterly disappointed for all the elderly people and families on low incomes who cannot afford to get dental care because of this mean-spirited government. There was nothing in this budget to fix the dental health care crisis. It was indeed the Howard government that ripped $100 million a year out of dental services and axed the Commonwealth Dental Scheme as soon as it came to power. Because of this government, half a million Australians are now waiting months and even years to see a dentist. It is because of this government that there are not enough public dentists to cater for the demand. There are only about 240 public dentists to cater to more than 2.5 million health care card holders, children and the elderly. This compares with more than 3,000 private dentists that treat the rest of the population. There must be federal funding for a Commonwealth dental health scheme. The provision of dental services is the federal government’s responsibility, as contained in the Constitution.

It is often heart-wrenching to hear stories of many of our local elderly people who are in pain, unable to eat or embarrassed because of their dental problems. Julia Morton, an 83-year-old pensioner from South Tweed, gave up waiting years to get her teeth fixed and ended up paying for them herself on her credit card. She said she was lucky she had some help from her family, but she is really worried about other locals, many of whom I have spoken to, who just cannot afford to get the dental work they need. It is not just the dental health of Australians that is at risk. So many studies show that poor dental health impacts on your general health. It can cause very drastic health problems for people as well. It is time that the Howard government stopped trying to pass the buck and showed the national leadership necessary to provide locals with the dental care they urgently need and deserve.

On other health matters, another major concern, particularly for the residents of Richmond, is the Howard government’s constant attacks on the PBS and free prescription medicines. This has indeed put the health of local elderly people at risk. We have recently seen drastic cuts in the number of scripts that have been issued in the past year. This is because the prices are too high, so people who desperately need medicine cannot access it.

The Treasurer also failed in this budget to address the ever-increasing demand for aged care services across Australia, particularly in electorates like Richmond with large elderly populations. Every week I hear from families desperate to find residential aged care for their loved ones. Waiting lists are getting longer and longer. This budget would have been an ideal opportunity to examine the failing bed allocation system, introduce new measures for capital raising to build new facilities and implement recruitment and retention measures to address the severe staff shortages of nurses and care staff in the industry.

But, after 10 long years, the Howard government is still failing to provide sufficient aged care beds for the needs of older Australians who desperately need residential care. According to the government’s own figures, the government falls short of meeting its own target by 381 in our area. The Far North Coast planning region currently has 77 beds for every 1,000 people aged 70 and over. When Labor left government in 1996, there were 92 beds for every 1,000 people aged 70 and over. After a decade of incompetence, the Howard government has turned a surplus of 800 aged care beds in 1996 into a national 3,218-bed shortfall in December 2005. The Howard government must face up to its responsibility to provide adequate numbers of aged care beds.

Richmond in particular also needs more funding for home care and more CACP and EACH packages so that elderly people are able to remain in their homes, which so many of them so desperately want to do. It also needs to address the issue of more beds in nursing homes. Also, we have a very large veteran community in Richmond and there was nothing of any substance in the budget for them. The budget completely failed to tackle many current and pressing issues that are of concern to the veteran community. Another major failing in the budget was that it does nothing to address our crumbling infrastructure. It does nothing to capitalise on Australia’s resources boom and deliver nation-building projects that secure future prosperity for Australia.

The budget does nothing to address the problem of piecemeal delivery of telecommunications services across the nation. I hear from locals literally every day who cannot get high-speed internet connection in the heart of Tweed Heads. This is only minutes from the Gold Coast. The Richmond electorate is full of many frustrated individuals and businesses who are being hit with advertising to sign up to broadband which in reality just does not exist. In many cases, one house in a street will be able to access broadband and the house next door cannot.

A good example is Narelle Walker from Tweed Heads South. Her husband, Brendan, is a federal policeman currently serving with a peacekeeping mission in the Solomon Islands. Despite the fact that Brendan can access broadband in the developing country in which he is serving, in the Solomon Islands, she cannot access it in the heart of Tweed Heads. It is an absolutely appalling situation. That means that Narelle and her children are severely limited in their ability to keep in contact with Brendan. If she were able to get broadband, they could hook up and Narelle and their kids could hear their dad’s voice whenever they wanted to. This situation is appalling. Here is Brendan Walker making huge sacrifices for the good of Australia and it is truly outrageous that they cannot access services they need to keep in touch as a family.

In contrast, federal Labor is serious about nation building through investing in Australia’s infrastructure so that we can be competitive on the world stage. Only federal Labor has the vision to build a broadband information superhighway. This is not just for those in the cities—we will take this broadband out to the regions, where it is desperately needed. Federal Labor has the vision to deliver a national broadband network in partnership with the telecommunications sector. This will be good for families and businesses and it will be crucial to the Australian economy. This super high-speed internet access—25 times faster than the current broadband benchmark—will open up opportunities for families and students and breathe new life into businesses and the Australian economy.

For the Australian economy, superfast broadband would boost the productivity of workplaces so much, as well as laying the foundation for growth for Australia’s digital connect industry. By comprehensively failing to invest in nation-building projects like delivering true broadband, the Prime Minister and the Treasurer are letting Australia slip behind our competitors. It is only federal Labor that will build a national broadband super highway to get us back on the information technology world stage.

We have had a decade of the Howard government continually refusing to invest in the systems that strengthen our nation, our economy and our community, like health, education, training, aged care and infrastructure. Indeed, this budget is no exception. So I am calling on this government to stop looking after its own interests and start listening and addressing the needs of everyday Australians and addressing the needs that people speak to me about every day in Richmond—issues such as addressing our national skills crisis and our soaring youth unemployment. So many people are concerned for their kids’ future and the options available to them, because we want them to be able to stay in regional areas, like in the federal electorate of Richmond.

We also want to see governments actually looking after our elderly and providing them with access to decent, affordable aged care facilities. As I said before, seniors built this nation and worked hard throughout their lives. Many of them defended this nation. And here they are in their older years being abandoned by this government. We need to be providing adequate resources for them. We must ensure that all Australians, not just the wealthy, can get access to health care, dental care and the medicines they need. We also must support our working families with decent, affordable child care. Also, we must invest in our crumbling infrastructure.

These are the kinds of policies that will underpin our nation. It is only through nation building that we can safeguard Australia’s long-term prosperity. It is only through federal Labor, who has a vision in terms of achieving that prosperity, that we can address so many of the concerns that people constantly raise with me. These are the issues that people are talking about day by day, about the opportunities for their kids in the future, about looking after their elderly relatives, about being able to access services like decent broadband or decent health care and about having job security. So many locals have concerns about the impact of the Howard government’s extreme industrial relations changes, how they have impacted on them in their current workplaces and how they are impacting on their family and friends and particularly on their children and their children’s future. They are concerned. They know these extreme workplace changes will impact on their children’s future. (Time expired)

Michael Keenan (Stirling, Liberal Party) Share this | Link to this | Hansard source

I would like to thank the member for Richmond for that contribution. In her speech, she reminded us all about how little there is to attack in this budget and why the Labor Party abandoned their sustained attack after about 40 minutes on the day after the budget was delivered. I am quite thrilled to be able to speak on this budget as it contains many measures that will improve the lives of my constituents in Stirling. This is the 11th budget of this government and the 11th brought down by this Treasurer, and it needs to be seen in that light, as a budget that delivers the dividends of over 10 years of sound economic management.

The generous tax cuts; the radical slashing of taxes on superannuation; the record spending on defence and national security; the massive investments in our road, rail and water infrastructure—none of this would have been possible without the prudent management that has been displayed by the coalition since we came to government in 1996. It would not have been possible to have such a generous 11th budget without having had 10 previous budgets that have steered Australia into its present economic good times. It certainly would not have been possible if the Australian community were still lumbered with Labor’s debt. It would not have been possible if this government succumbed to the cheap populism that has occasionally gripped the desperate Labor Party at various stages throughout the past 10 years. It would not have been possible if our leadership always took the easy road or the popular option, if we decided we did not want to make any waves or we meekly followed polls.

Instead, the leadership of this government has decided to govern in the public interest, to do the difficult things, to tackle the vested interests and to do what is right to improve the lives of my constituents in Stirling. This 11th budget is a continuation of what has come before, and what a budget it is. There is a tax cut for every single Australian. There is a plan that simplifies and slashes taxes on superannuation. There are improvements that encourage businesses to invest and grow. There are benefits for Australian families through increased government assistance. There are benefits for working parents from the removal of the cap on outside school hours care and family day care places.

The people of Stirling know the real and practical benefits that have come out of budget 2006. The Treasurer, the Hon. Peter Costello, recently took time out of his post-budget tour of Western Australia to officially open my new electorate office in Stirling. I am pleased to report that he received a rousing welcome from local community leaders, families and business owners. For the people of Stirling, this budget will go a long way towards helping to resolve a number of important local issues. One of these is broadband black spots, a problem that affects hundreds of homes along the coastline and in other parts of my electorate. Another important local measure is an improvement in road safety. I am pleased to say that the local council, the City of Stirling, will receive double its Roads to Recovery funding under the AusLink program.

Let me discuss these improvements further. The Australian government will provide $3.4 million over four years for the telecommunications consumer representation and research grants program, bringing the total funding allocated since its inception in 1998 to $9.8 million. The consumer representation grants are recognised as a world-leading initiative, supporting consumer organisations to participate in developing communications policy and legislation, as well as providing better information for consumers about their legal rights and the available service options. Solving the problem of broadband black spots is an important local concern for my constituents. Indeed, I regularly receive correspondence about it. The funding that I have outlined above will help address this issue as it targets the supply of and demand for broadband services.

Turning to road safety in my electorate, there is a massive windfall provided in this budget to the City of Stirling. The council’s slice of the AusLink Roads to Recovery pie has been doubled, from $961,000 to $1.9 million. This major funding will see much needed improvements to our local transport network. It will allow the City of Stirling to take a look at what needs doing, assess the community’s priorities and get the relevant projects under way. The Australian government is very aware of the pressures facing local government throughout Australia in providing adequate services to the people and communities for which they are responsible. However, in saying that, I would like to call upon the state Labor government of Western Australia to match this federal commitment to our local roads.

It is sometimes very difficult for anyone in my electorate to work out what the current state government take responsibility for. They seem to do very little, apart from running around, complaining about the Commonwealth and insisting that the federal government fix every local problem. Complaining about the Commonwealth government has a long and glorious history in Western Australia, and often these complaints have been justified. But the current state government take this fine tradition of federalism to a quite ridiculous extent, and I am astonished that they find time to do much else apart from issuing press releases complaining about the federal government. The reality is that the state government have basically abrogated their legitimate responsibilities to the people of Western Australia. Many important projects within our local communities could be fast tracked, but only if the government of Western Australia were prepared to contribute a bigger slice of their massive economic boom to fulfil their duty and take action on their own responsibilities.

The Commonwealth government has increased to $1.67 billion its land transport funding to Western Australia over the past five years of AusLink, the national land transport plan. This includes $323 million to be paid to WA for this financial year. Of the $1.67 billion, $934 million is directed to major land transport construction projects, an increase of 242 per cent compared with the preceding five years. The remainder is for AusLink national network maintenance, local road upgrades and—very importantly for my electorate of Stirling—the elimination of crash black spots. The government has already helped to make the roads in my electorate of Stirling safer, with black spot funding from this year alone targeting dangerous intersections in Karrinyup, Osborne Park, Nollamara and Mirrabooka, and now it is very important that the Western Australian government do its part for our local communities also.

The centrepiece of this budget is a personal income tax cut for every single Australian taxpayer. From 1 July this year, the government will reduce the 47 and 42 per cent rates to 45 and 40 per cent respectively. In addition, the government will increase the tax thresholds so that the 15 per cent rate will apply to up to $25,000 of income, the 30 per cent rate will apply to up to $75,000 of income, the 40 per cent rate will apply to up to $150,000 of income and the 45 per cent rate will apply to income earned beyond that. The fringe benefits tax rate will be cut from 48.5 per cent to 46.5 per cent, bringing it into line with the top marginal rate including the Medicare levy.

The low-income tax offset will be enhanced by increasing it from $235 to $600. It will begin to phase out at $25,000 from 1 July 2006, compared to $21,600 currently. This means that those eligible for the full low-income tax offset will not pay tax until their annual income exceeds $10,000. The Medicare levy low-income phase-in rate will be cut from 20 per cent to 10 per cent, ensuring more low-income taxpayers pay a reduced rate of Medicare levy. Australians who are eligible for the senior Australian tax offset will now pay no tax on annual income up to $24,867 for singles and up to $41,360 for couples. Overall, in percentage terms, the greatest tax cuts have been provided to low-income earners.

These tax changes will ensure that more than 80 per cent of taxpayers face a top marginal rate of 30 per cent or less. This increases the 30 per cent threshold and the low-income tax offset and will provide more incentive for those outside the workforce to re-enter it and for those on part-time work to take on additional hours. Under these new arrangements, a taxpayer will need to earn $121½ thousand to pay an average tax rate of 30 per cent. This is a truly remarkable advance on the days when Australians paid the top rate of tax on earnings over $50,000, a state of affairs that existed merely six years ago. From 1 July this year, the top marginal tax rates will apply to around two per cent of Australian taxpayers. Taxpayers will not reach the highest marginal tax rate until they earn more than three times average weekly earnings. Through previous reforms and this bill, by 1 July this year that threshold will be $150,000.

This package provides $36.7 billion of benefits to taxpayers over the next four years. It will enhance incentives for workforce participation and it will improve Australia’s competitiveness. It will put cash back into the pockets of Australian workers. In my electorate of Stirling, this will mean that more than 50,000 workers on average wages can expect to get $40 in tax savings each month and around 25,000 workers on high salaries can expect to get up to $80 each month. This is a hugely important saving; if there is an extra $40 to $80 in your wallet each month, that is a real benefit. More money in people’s back pockets gives them choices and allows them to start making plans for the future. Workers can choose to put these savings away for a rainy day or they can use them simply to pay the bills. It is a level of relief that will be working throughout the whole Stirling community.

In this debate there has been some talk about bracket creep, but this argument does not stand up to even basic scrutiny. Eighty per cent of Australians are on taxable incomes of $75,000 or less. As people move up in income, they do not go into a higher marginal tax rate. The great bulk of people can move through the income tax range of $25,000 to $75,000—remembering that this is where the great bulk of Australians are—without moving their marginal tax rate. Some contributions have said that these tax cuts might be inflationary and hence will fuel pressure on interest rates. The idea that it is inflationary to give people back some of their own money is clearly ridiculous. It is far better to return a surplus to taxpayers than it is for government to think up more weird and wonderful ways in which to spend people’s money.

There is more to be done with regard to tax in Australia, and many have argued that further taxes are needed in our tax system, but it has been noted by organisations such as the Australian Chamber of Commerce and Industry that these changes in personal income tax are a good start on further tax reform. The Business Council of Australia has also agreed that these changes will improve the personal tax system and provide additional incentives to work and to save. If we look at these tax cuts in the context of what has happened over the past five years, we see that this is just another part of a long-term strategy being implemented by the Howard government. This is the fifth instalment of personal tax cuts, as part of a long-term plan with more room for adjustment and reform in the future.

Small businesses are also big winners from this budget. In my electorate of Stirling we have a thriving small business network. The Stirling Business Association is one of the biggest organisations of its kind in Australia. We have important research and development organisations across many fields, from aviation technology to cancer drug research, in our light industrial areas of Osborne Park and Balcatta. This budget will substantially improve depreciation arrangements by increasing the diminishing value rate for determining depreciation deductions from 150 per cent to 200 per cent. It will cut business taxes by $3.7 billion over the next four years. The effect of this measure will be to provide the equivalent of a 33 per cent increase in the allowable depreciation rate for all eligible assets. This will increase incentives for Australian businesses to invest in new plant and equipment and make it easier to keep pace with new technology and to remain competitive.

Investment is a key element of productivity growth and therefore of economic growth. The increased depreciation rates under the diminishing value method align the depreciation deduction for tax purposes more closely with the actual decline in the economic value of the asset, which will lead to improved resource allocation within the whole economy. This is consistent with the government’s tax policy and strategy of ensuring that the tax system has a minimal effect on the allocation of resources throughout the economy. The measure will apply to assets acquired on or after 10 May this year and includes appropriate integrity measures to ensure assets held prior to that date will not be able to be brought into the new arrangements.

Some of the most important changes in this budget relate to superannuation. Alterations to the superannuation system will encourage people to save for their retirement and increase their retirement incomes. I think everyone will agree that, formerly, super arrangements in Australia have been excessively complicated. The new arrangements will abolish all tax on benefits paid to retirees aged 60 years or over. This is a huge advance on the previous system and will allow people in Stirling new options to retire earlier and to have more disposable income once they do. Because Australians aged 60 and over who have already paid tax on their contributions and earnings will not pay tax on their superannuation benefits the need to disclose superannuation in tax returns will be negated, greatly simplifying the system.

Seniors will also benefit from a utilities allowance—a biannual payment of $102.80 for eligible households. In Stirling this means 2,152 households will receive this additional payment. The utilities allowance has also been included for each self-funded retiree eligible for the seniors concessional allowance as well as for those who receive mature age allowance, partner allowance or widow allowance, meaning there are more than 820 people in Stirling who will be eligible for this payment. This payment will be made by the end of the financial year.

Also set to benefit from this budget are the 2,700 carers in Stirling, a group of people that I believe are amongst the most deserving of some extra help. Carers of people with disabilities—whether those with disabilities are children or older people—make a selfless contribution to our society. In recognition of this, as has been done in the past two budgets, an additional $1,000 will be paid this financial year to the over-100,000 people eligible for the carer payment. This year the $1,000 bonus will also be extended to carers who receive either the wife pension or the veterans’ affairs partner pension.

Other important initiatives in this budget include $152 million to provide care for older patients in public hospitals around Australia; a fairer assets test for age pensioners; and tax relief so that those who are eligible for the senior Australians tax offset will pay no tax on annual income of up to $24,867 for singles and over $41,000 for couples. We will also increase availability of new innovative drugs on the PBS; there is money for more training for doctors and nurses; and there is $1.9 billion to improve services for people with a mental illness, their families and carers.

One of the other areas that will benefit greatly from this budget is our armed services. This budget allows $19.6 billion, or an increase of $1.9 billion on last year’s funding allocation. This is an increase of 37 per cent in real terms since we came to government. A commitment to a real increase in funding of three per cent every year for the next 10 years for the Defence Force means that the budget for Defence is on track to grow to be almost $27 billion by 2015. This will provide the Australian armed services with the ability to plan with certainty and to create a more combat focused, better equipped and more mobile and operationally ready Defence Force, including new air warfare destroyers, large amphibious ships, helicopters and a Joint Strike Fighter. It will give the Australian armed services an enhanced ability to identify and respond to emerging threats through a further $973 million over five years to strengthen Australia’s intelligence capabilities. Events this week have shown that we live in an unpredictable world and an unpredictable region. The Australian people can be justifiably proud of the role their Defence Force plays in defending our freedom and also, importantly, in defending the freedom of others. This budget will enhance that capability.

This budget is one of the biggest for investing in this country for a very long time. It is part of an overarching plan designed to meet the many challenges that lay ahead. It takes the opportunity now to strengthen our economy so that we are ready for future opportunities. It is about making our nation and its people secure. I congratulate the government and the Treasurer for what is an important achievement for the people of Stirling.

Debate (on motion by Mrs Gash) adjourned.