Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Appropriation Bill (No. 1) 2009-2010 is the appropriation bill for the biggest-spending government since World War II. At the back of the budget papers is set out in detail, as a percentage of gross domestic product, the scale of this budget in comparison with others. This budget represents 28.6 per cent of GDP. That is larger than the Hawke budget of 1984-85. It is significantly larger than the budgets in the early seventies of the Whitlam government which represented around 19 to 22 per cent of GDP. So the Rudd government has passed Gough Whitlam’s government and is the biggest-spending peacetime government in Australian history at 28.6 per cent of the economy. This is at a time when the recession that Australia is in is arguably not as deep as the 1990 recession, the early eighties recession or the 1970s recession. In fact, in the early 1990s, unemployment was higher for longer than is projected to be the case in this economic downturn, yet this government has gone into a deeper deficit and greater expenditure than any previous Australian government.

This leaves us with a record debt. The record debt comes about because the government is now spending far more money than it collects. In the coming year, the government will spend $57 billion more than it will receive, and it is intending to follow that course for some years to come. This is a government without any fiscal restraint. This is a government that does not know how to control its spending. That is because the government has no economic plan to get us through these difficult days.

Australia will perform better during this economic downturn because it went into it in better economic shape than it has previously. Australia went into this economic downturn with zero government debt. In fact, the government had significant net savings, particularly in the Future Fund where it had in excess of $50 billion. The government went into this downturn with unemployment at a little over four per cent, with a budget surplus in excess of one per cent of GDP and with growing and improving Chinese demand for Australia’s resources. Of course, that has come off. But, having said that, Australia is in far better shape today than it may have been if the government of the coalition had followed previous governments and engaged in expenditure practices and reckless spending initiatives on a scale that other governments had followed before it. For example, this government in this year has increased its expenditure by 13½ per cent. In one year this government has increased its expenditure by 13½ per cent. Only the Whitlam government has come close to matching this. When the Whitlam government came in, it went on an expenditure binge on a significant scale. It could never reach the highs of the Rudd government as a percentage of GDP, but it gave it a good shake. In 1974-75, it increased government expenditure by nearly 20 per cent, and in the following year, 1975-76, it increased it by 15.7 per cent.

I refer Australians to a table on page 6, chapter 10, of the budget papers. They amount to more than a thousand pages and make gripping reading. That table clearly indicates that the average increase in government expenditure has been roughly in excess of two per cent since 1970-71 and well in excess of two per cent in many cases. Sometimes, that increase in expenditure has been closely linked to individual initiatives, but the Rudd government says that it is going to increase expenditure across the board this year by 13.5 per cent and the next year by 3.9 per cent, and then it is going to go into a period of fiscal rectitude that would bring a grin to the face of the most mean spirited chief financial officer or accountant out there that may still be breathing. After the next election, the Rudd government is going to go from being the biggest-spending government in modern Australian history to being the most fiscally prudent government in modern Australian history. What does that mean? It means that after the next election this government is going to deliver on its so-called strategy to bring the continuing budget deficit into surplus. So after the next election this government says in these budget papers that it is going to start to restrain its spending. It is going to show the fiscal restraint that it has not, to date, shown any indication of being able to achieve. Bear in mind, Mr Speaker, that the growth in expenditure in 2006-07, which was the last full budget year of the Howard government, was 2½ per cent. In 2007-08, it rose to 3.8 per cent. Some may say, ‘Well, that was an election year.’ Some might also point out, legitimately, that since the day Mr Rudd was elected Prime Minister he has committed $10 million an hour in new expenditure—new initiatives. Above and beyond pensions, defence, Medicare and all the day-to-day expenses of running the nation, the Prime Minister has committed $124 billion, averaging out at around $10 million an hour, since the moment the Australian people elected him Prime Minister; yet the government believes that after the next election it will show fiscal restraint.

In fact, the government’s strategy is such that they say that when the economy recovers—and I will get to that in a moment—they promise to hold real growth in spending to two per cent a year until the budget returns to surplus. That is, they are going to show the sort of restraint—two per cent a year—that they have not been able to show to date. Having a fleeting glance at the budget papers, you can see, when you go through the individual portfolios, that the government would be embarking on an ambitious agenda of spending restraint should they go down that path. For example, the average annual growth in defence is projected to be 3.9 per cent; in public order and safety, the government say that real growth will be 2½ per cent over the next few years; in education it is impossible to work out what the real growth will be in expenditure because this year it has increased by 28.6 per cent, but they are going to show an increase of no more than two per cent after the next election; in health, with an ageing population, with greater health demands and with all the challenges in health, they say that the government are going to hold expenditure increases to two per cent; and in social security and welfare it is 1.7 per cent. We have not even talked about environment, climate change and the challenges of disease, viruses and war. All of that needs to be taken into account. The government expect the Australian people to treat this budget document as fact and see that it represents a strategy to recovery. It is a strategy to recovery that fails to take into account the tsunami of expectations in the Henry review of taxation and the tsunami of expectations in the National Health and Hospitals Reform Commission report. I might add that the Prime Minister said that, if the hospitals are not fixed by the middle of 2009, he will have a referendum to take over the hospitals from the states. Of course, there is nothing in the budget papers about the potential cost of doing that. If the Prime Minister thinks that he can take over the entire hospital system without injecting one dollar of extra money into it, why would you hand it over? Why would the Australian people believe it?

The challenge in all of this is that, deficit after deficit after deficit, year after year of the government spending more money than it receives, year after year of the government borrowing money to fund its day-to-day activities and year after year of paying interest on that deficit, you get the debt. The debt is meant to be somewhere between $190 billion net debt and $315 billion gross debt, depending on the years and on whatever measurement the Prime Minister and the Treasurer tend to agree on on the day. The bottom line is that the Australian people have to pay. The Australian people will have a massive debt burden. If you take the $188 billion net debt figure, rubbery though it is, that is a $9,000 debt that Australia did not have 18 months ago for every man, woman and child. Of that $9,000 debt, roughly $6,000 is because of expenditure and spending decisions by the Rudd government. So how are people going to feel? They receive their cheque for $900 on the one hand and then they get a bill for $9,000, plus interest, on the other. The good news is that you only pay $500 a year in interest on that $9,000—roughly, taking an average over the term.

So how are Australians meant to be able to repay that $9,000? The government expect that they will show spending discipline, that they will repay all of that money by being more careful with expenditure than they have shown to date by being more prudent with expenditure than any previous government has been over a similar electoral cycle, and—this is the clanger; this is the ‘Babe Ruth hit out of the ground’—they expect the Australian people to believe that they are going to have economic growth that is faster and goes for longer than any other consecutive period in memory. So we are going to come out of this like a rocket—whoosh, straight out—even though the International Monetary Fund says this is going to be a long and protracted challenge and the Reserve Bank of Australia says it is going to be a long and slow recovery. The government expects the Australian people to believe that we are going to come out of this faster than anyone else, in better shape than anyone else and that they are going to pay off this debt sometime into the future.

But wait—there is more. Australia has reflected carefully on the fact that on budget night, for the first time in memory, the Treasurer stood at this box, spoke to the Australian people and did not have the courage to say what the deficit would be, let alone the debt. What interests me is that he would be the first Treasurer in Australian history—and I say this with absolute conviction—to stand at the dispatch box, deliver a budget speech and not mention tax cuts. These are tax cuts that are in the budget paper, $18 billion of tax cuts: ‘Oops, I forgot to mention them.’ Why? That is a good question. Why would the Treasurer stand here and deliver a budget with $18 billion of tax cuts but forget to mention them? This is one of the questions that will need to be answered over the next few days. We have a Treasurer who is delivering tax cuts and at the same time talking about the tough measures in the budget. He says that we have to do the hard yards to get the budget into surplus. How does this all stack up? It is a confused message. If we know one thing about the Labor Party in government it is that it is very good at messaging. It does not want to confuse people. You cannot talk about it being a tough budget but in the same breath mention tax cuts. You cannot talk about a plan to get the budget back into surplus, based on ambitious assumptions, and at the same time say that you are going to deliver $18 billion in tax cuts.

How does all this stack up? The fundamental point is that it does not stack up. Not only has the government spent all of the windfall of prudent economic management over the last 10 years, not only has it spent the proceeds of a mining boom, not only has it handed out cheques for $900; the government’s plan for recovery is fundamentally flawed because it cannot deliver on its spending restraint. The government cannot deliver on the economic growth forecasts. It cannot deliver on its projected revenue expectations over the next few years and its so-called plan to pay off Australia’s debt.

Do you know what the cost will be, Mr Speaker? The cost will be unemployment and jobs. The government says that unemployment will peak at around 8½ per cent. The fact of the matter is that it may well be higher. But all of the money that has been spent to date, including just over $22 billion in cash handouts, is the equivalent of what the government says is its nation-building agenda over the next six years. All the cash handed out by the government in the last six months is roughly the equivalent amount of money it says will be the basis of nation building over the next six years—that is, $22 billion to $23 billion. That infrastructure is the government’s great white hope. That is what the government says will deliver that rocket-like recovery in the economy over the next few years. This is the biggest spending government in Australia’s history. What is of even greater concern to the coalition is that there is no plan to get Australia out of this mess. The more the government sells its confused message the more that Australians worry that we are heading into a deep, dark place without any chance of an emergency rescue.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

This is a nation-building budget. It supports jobs now and delivers the investments needed to strengthen the economy for the future. In my remarks on these appropriation bills I will be speaking to my particular areas of responsibility, for housing and housing affordability, and to some of the special measures in the budget which are of particular benefit to Australian women, in my role as Minister for the Status of Women.

An historic $22 billion will be spent on infrastructure around the country—on road, public transport, clean energy and university infrastructure. Many of the projects outlined in the budget papers are in or very near my electorate and will have benefits for many of my constituents, including the extra $100 million for a state-of-the-art cancer centre at Royal Prince Alfred Hospital at Camperdown, which comes on top of the $50 million already allocated for this lighthouse project. The centre will be a wonderful benefit not just to the people in my electorate. Australians certainly from all over New South Wales and perhaps from other parts of the country will be able to travel to Sydney to get the integrated cancer treatment and support that this new facility will offer. There is also $70 million for the Garvan Institute at St Vincent’s Hospital, which was a part of my electorate until recently. Many of the constituents I have are still reliant on St Vincent’s Hospital, and the Garvan Institute in particular does wonderful work not just for the people of Sydney but internationally. The institute is internationally renowned for its marvellous work.

In the area of education $48 million has been allocated to the College of Fine Arts in Paddington, which is also now outside my electorate but many of its students are residents in my electorate of Sydney. Certainly having the fine arts college in Paddington really contributes to the life and vibrancy of that suburb. An investment of $50,000 to $200,000 has been allocated to each of the schools in my electorate from the Building the Education Revolution package, which is exciting. In the first funding round announcements I have heard of the success of Annandale North Public School, Annandale Public School, Balmain Public School, Birchgrove Public School, Bourke Street Public School, Cleveland Street Intensive English High School, Forest Lodge Public School, Fort Street Public School, Father John Therry Catholic Primary School, Glebe Public School, the International Grammar School, Lord Howe Island Central School—Lord Howe Island experienced some very bad weather recently and the SES was needed there—Newtown High School of the Performing Arts, Newtown North Public School, Newtown Public School, Our Lady of Mount Carmel Primary School, which is celebrating its 150th anniversary, Rozelle Public School, Sydney Grammar School, Sydney Secondary College Balmain campus, Sydney Secondary College Blackwell Bay campus, St Brendan’s School, St James Primary School, St Mary’s Cathedral School, St Mary’s School and St Scholastica’s College. All of those schools were successful in the first round of funding from the Building the Education Revolution. I am very excited about the extra investment those schools will see benefiting their students but also benefiting their local communities.

The budget also delivered on tax cuts that were announced in last year’s budget, keeping our commitment to hardworking Australians. There will be a significant boost to small business by increasing from 30 per cent to 50 per cent the investment allowance for eligible assets, giving small business owners the confidence to invest in their businesses. We have heard a lot of anecdotal reports of businesses making investments in, for example, new transport and so on, which benefits not just the particular business itself but the suppliers of the goods from our local areas.

We have also delivered on pension reform. This is something that the opposition were very quick to embrace once they became the opposition. They had 12 years in government to deliver reform in this area but they were always too mean to do it. We have delivered an extra $32.49 per week for full-rate age, disability support, widow, carer and veterans pensioners, with couples receiving an extra $10.14. It is interesting also that, as well as never taking the opportunity to increase the age pension during their time in government, the opposition, when they became the opposition, as well as jumping on the bandwagon, saying that the age pension should be increased, did not just ignore the fact that they had had 12 years in which to do it but also excluded a vast number of pensioners. They agreed that there was work needed as to age pensioners but missed out disability pensioners, carers, veterans and other pensioners in their initial proposals. As well as pensions—which I will go back to in a little more detail later—500,000 carers around Australia will receive a new permanent carer supplement of $600 per annum to help them meet the significant financial challenges that they face. This is a much better approach than the one-off bonuses that were paid under the previous government on occasion, if the mood was there. This is something that carers can count on in the future.

The extension of the first home owner boost is the most significant new measure in my portfolio and it comes on the back of the terrific success of the first home owner boost. The first home owner boost has not just meant tens of thousands of young Australians are able to buy a home of their own when previously they had given up on the dream of home ownership; it also means work for tradespeople right across Australia. I see a lot of new developments and a lot of new building going on. I talk to builders and I talk to developers and they tell me that the first homeowners market, a negligible part of their work previously, has become a substantial part of their work. It varies, obviously, from state to state and from development to development. In many instances, they say, it is around 50 per cent—the lowest I have heard is now around 30 per cent—of their work and, up higher, 60 to 70 per cent of homes are being sold to first home buyers.

Of course, that has meant that the type of stock that is being built is different to what builders were building a few years ago. If you had a look at what builders were building a few years ago, you would have often seen four-bedroom homes with two bathrooms and a media room—large homes, typically aimed at homebuyers who had been in the market for some time and perhaps had older children or teenagers in the family. They are good homes for developers to build, because there is a higher profit margin in each house when you are building those larger homes. What we are seeing today is builders and developers really cutting their cloth to suit the market that is there at the moment. We are seeing more modest homes on smaller blocks of land, but they are a terrific way for someone to get into the housing market. They are a great way for someone who wants to buy a home of their own but is modest in their requirements to get into the housing market to pay off the bulk of that property and then think about something larger when their family begins to grow or their children are older.

The first home owner boost is staging down. We were concerned that ending the boost suddenly would have had difficult consequences for developers and builders and would have potentially caused a rush towards the end of the period. So this staging down militates against those two outcomes. It is also worth remembering that there will be an ongoing building effect from the first home owner boost beyond 31 December, when it ends, because people will sign their contracts on 31 December and they then have 26 weeks for those homes to be built. So there will still be building generated by the first home owner boost beyond the notional end date of the boost.

As well as that new measure, there are several other important ongoing commitments within the budget, including $4.95 billion over four years for the National Affordable Housing Agreement and $2.01 billion over four years for the National Partnership Agreement on Remote Indigenous Housing to address overcrowding, homelessness, poor housing conditions and housing shortages. Some of the worst housing conditions, some of the worst overcrowding, is in Indigenous communities, particularly remote communities, and it is absolutely critical to our Closing the Gap targets that we address these issues of poor housing conditions and overcrowding. We have also set aside $525.6 million over four years for the National Partnership Agreement on Homelessness, including $125.6 million for A Place to Call Home. A Place to Call Home, as you would recall, Madam Deputy Speaker, was a program that we went to the last election with, that we have now funded and that we are working with the states to deliver. Instead of homeless Australians moving into crisis accommodation and then moving on to transitional or medium-term accommodation and finally, perhaps, if they are lucky, getting longer term support through affordable private rental or public housing, A Place to Call Home places people who have been homeless immediately into the home that they will stay in for the long term. They get the support they need to stay in that property. For a victim of domestic violence it might be additional support workers to help with the needs of her kids and the counselling and support that is needed for her to re-establish her life. For people who perhaps have become homeless because of mental illness, it might be the personal support workers that they need to stabilise their condition and remain housed. Those houses then join the general pool of public housing in the state.

We have seen families moving into these A Place to Call Home properties already, as we have with our National Rental Affordability Scheme. The figure for the out-years for the National Rental Affordability Scheme is $1.04 billion. This is a scheme where, because of its initial 10-year commitment—each incentive is active for 10 years—the figures will change from year to year for the out-years of the National Rental Affordability Scheme.

I have had the fantastic pleasure of visiting the first tenants in the National Rental Affordability Scheme in many locations around Australia—people who are moving into these homes. One family that I visited in Leumeah had been living with the fellow’s mum for about three years. They were a couple with two young sons aged 11 and 13 when I met them. It was a two-bedroom property. The boys shared a room. They were so proud of their room. They took me to their room and showed me their DVDs and sporting trophies; both of them are great young sportsmen. These properties through the National Rental Affordability Scheme were purchased by St George Community Housing in an existing development of about 150 units. St George bought about 50 units. Nobody could tell which were the National Rental Affordability Scheme properties; they shared all the same facilities as the other units in that complex. They certainly did not have any of the social difficulties or social stigma that we see in some of the large broadacre housing estates that were built 30 to 50 years ago. I cannot tell you how relieved this family were to finally have a place of their own. We turned up and there were rows of beautifully neat shoes, one next to the other, outside the door. I think I was possibly the first person who had ever walked on their carpet in shoes, they felt pride in the preciousness of having their own place so strongly. There is also the $459.8 million for the Housing Affordability Fund. It has been terrific to go and look at the sorts of proposals that have been funded under the Housing Affordability Fund and will continue to be.

Of course, Madam Deputy Speaker, the ongoing work that we are doing in social housing is more critical than ever now because of the jobs that it generates and the housing that it provides at a time when people, particularly in the private rental market, are experiencing great difficulties, as you would have seen on the front page of the Daily Telegraph today. We have set aside $6 billion to build 20,000 new units of public housing around the country and $400 million for repairs and maintenance. I opened the first of the new public housing dwellings in Yennora on the weekend. The builders there told me that 52 separate tradespeople had worked on that property, including three apprentices. One of their apprentices had been put on because of the stimulus package work that they had got. It is a terrific outcome for them and it was a terrific outcome for the family that were moving into that new property as well. Jobs have been the main focus of this budget, as well as the social housing stimulus package. They have been a very important deciding factor in all of the investments that have been made.

Because of my role as the Minister for the Status of Women, I want to conclude by speaking a little bit about some of the measures that are of particular interest to Australian women. The historic investment of $731 million over five years for a comprehensive paid parental leave scheme is something that has been welcomed around the country. It is extraordinary. I must say that in my role as minister I have received curious questions about our lack of a paid maternity leave scheme from women’s ministers from other countries in international fora. This is a scheme whose time has well and truly come. The paid parental leave scheme will apply to births and adoptions after 1 January 2011.

It is interesting if you look at who already had paid parental leave—or paid maternity leave in this case. Approximately half of all women who were employed already had some access to paid maternity or parental leave as part of arrangements negotiated with their employers, either in the public sector or in some private sector jobs. But, if you look at who was getting that leave, you see that less than a quarter of women on very low wages were eligible for that type of leave, whereas about three-quarters of women on high wages were eligible. It was terrific that many Australian women had already benefited from these schemes, but disproportionately, of course, it was women who had been on higher incomes in the lead-up to the births. In fact, the lowest level of access to paid parental leave was generally in areas that were female dominated, lower skilled and highly casualised. Of course, our scheme will be a huge benefit to those women in particular. Also, of course, about 74 per cent of full-time employees had access to paid parental leave, compared with only 32 per cent of part-time employees. That, again, is an area where it is very important to see change.

Our scheme, of course, will also help self-employed parents, contractors and casual workers. It involves—as you know, Madam Deputy Speaker—18 weeks paid leave at the federal minimum wage, which is currently $543.78 per week. That period of leave can be shared by both parents. There is an income test of $150,000 on the primary carer’s adjusted taxable income in the previous financial year. Some families will choose to stay on the current arrangements and receive the baby bonus and a family tax benefit because, of course, by changing to paid parental leave the family will miss out on the baby bonus and family tax benefit B during that 18-week period. Families will be able to choose between those two options.

It is also worth reminding people that there will be a review in a couple of years time about whether paid paternity leave is also something that should be a feature of the Australian system and whether employers should contribute continuing payments for superannuation. We know that women are retiring with less superannuation than men—generally for baby boomers it is about half. There is something that we need to do over the long term to reduce that discrepancy. The reform to the pensions has made a huge difference there. About three-quarters of people on single age pension are women. The increase to the single age pension is going to make a huge difference to those living on it, many of whom are women. Also, two-thirds of carer payment recipients are women, so the changes to pensions and to those benefits will have an ongoing effect that will reduce poverty in areas that are particularly female dominated.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Two weeks ago, Australians witnessed the tale of two budgets. Over in Western Australia, where I come from, the Liberal-National government delivered a responsible budget with a budget surplus. It also introduced initiatives to support business, initiatives like a break from payroll tax over the next couple of years. So we were able to witness what a Liberal-National government can do in delivering a responsible budget in difficult economic times. Over here in Canberra, the Rudd government achieved what had previously been thought impossible. Its budget made even the Whitlam government look fiscally responsible. I know that Labor is about rewriting Labor Party history, but this—making the Whitlam government look fiscally responsible—was an extraordinary way to do it.

This government has certainly made history. In just 18 months, it has caused the biggest budget turnaround in Australian history. It took the budget from a $22 billion surplus to a deficit of $58 billion. That is the largest budget turnaround in living memory. And that will be legacy of this government: the fact that it lost control of the public finances just 18 months into its first term. The Rudd government has outspent all other governments that have gone before it. Government spending is now 29 per cent of GDP, making this the biggest spending government in at least 50 years. On the question of debt, it has now run up the largest debt of any federal government in living memory.

But you would not have known this from budget night, because on budget night the government was desperately trying to hide from the Australian people the extent of the budget deficit and the extent of the mountain of debt that it will build up over the next few years. That is why the government has gone into overdrive in its spin, avoiding saying that the budget has a $58 billion deficit and that public debt will hit at least $300 billion.

We know that the budget deficit is the difference between what the federal government spends and the revenues that it receives in a particular year. When revenue exceeds spending, we have a budget surplus; when spending exceeds revenue, we have a deficit. The former coalition government delivered surplus after surplus in its budgets, ensuring that our spending did not exceed our revenue. It is called ‘living within your means’ and the Australian people understand that you have to live within your means.

In fact, the Labor government used to believe in living within your means. Back 12 months ago, the Treasurer assured the Australian public that there would be a budget surplus of $22 billion in 2008-09. He assured the Australian people that revenues would exceed spending. The Australian people believed him, because in the lead-up to the last election the Prime Minister, then Leader of the Opposition, told the Australian public that he was an economic conservative and that he believed in budget surpluses. In fact, to drive home the point, he took out very expensive advertisements to tell the Australian people what we now know to be a lie: that he was an economic conservative absolutely committed to budget surpluses and that he believed in budget surpluses, the bigger the better. Yet at the first sign of trouble, all fiscal responsibility has been thrown to the wind.

It was quite concerning that on budget night the Treasurer was not able to utter the phrase ‘$58 billion in deficit’. The whole point of a budget is to inform people of the state of the national finances and to provide forecasts and projections of what lies ahead. But not once in his 30-minute address to the people of Australia did the Treasurer tell them what they needed to know about the state of the budget: that it was in deficit to the tune of $58 billion. The Treasurer also could not bring himself to state the level of debt, whether net debt, gross debt or peak debt. He could not—he would not—nominate the figure of debt. And he certainly avoided being caught on camera saying that the unemployment figure was likely to reach one million. People have long memories. They recall that the last time one million Australians were unemployed was the last time that Labor was in government federally. Then Prime Minister Keating ran up a $96 billion debt. People were astounded by the size of that debt and by the fact that a million people were unemployed.

This government has made that pale by comparison—pale into insignificance. The debt is not $96 billion; the unemployment figure is certainly likely to reach more than a million. But as for the debt figure, this is where it becomes quite curious. Having noticed that the Treasurer would not say the level of debt to which this government has committed the Australian people, we thought that perhaps the Prime Minister, who so often says he is ‘levelling with the Australian people’, would be honest enough to tell the Australian people the level of debt that this government has consigned us to. But it reached such farcical levels that it has almost become comical, ridiculous, the extent to which the Prime Minister and the Treasurer went to avoid telling the Australian people the level of debt to which they have committed each and every person in this country.

I think it is worth reading into Hansard the interview on Lateline on 19 May 2009. The Prime Minister was speaking to the Australian public on the ABC about the level of debt that Labor had managed to run up in just 18 months in government. The interviewer asked:

What’s the peak figure of the projected public debt in terms of tens or hundreds of billions of dollars in the coming years? What’s the peak figure?

The Prime Minister was asked for a figure. The Prime Minister:

Well, these are clearly outlined in the Budget papers and they’re usually expressed in terms of a percentage of GDP. We peak, in around about 2013, at about 13.8 per cent of GDP.

The interviewer:

How much of that is in tens of billions or hundreds of billions of dollars; how much is that?

The interviewer, Tony Jones, was asking the Prime Minister to level with the Australian people and give them the figure. How much debt has this government assigned to the Australian people? We know that it is a mountain of debt. Say the figure. The Prime Minister:

Well, let me step back in terms of the elements of this. First of all, 70 per cent of our overall position here is determined by a $214-billion collapse in tax revenue. That’s one slice of it.

The interviewer:

OK. I understand - we understand that. So what is the figure of peak debt in hundreds of billions of dollars? What is the actual figure?

It was a very straightforward and simple question. By this stage the viewers must have been sitting on the edge of their chairs waiting to hear the Prime Minister say how much debt this country was going to accumulate under the Rudd Labor government. The answer:

Well, Tony, I’m about to come to that when I go to constituent parts. About $214-billion comes from a collapse in tax revenue and that is happening right across all the advanced economies across the world—

Blah, blah, blah it goes on.

… Then you go to the remaining third of it, which is made up of what we’re investing in infrastructure and other forms of temporary stimulus. And of that remaining one third of our total borrowings, the largest proportion is made up through infrastructure investment and the smallest proportion is made up through other forms of temporary stimulus. Put that altogether …

At this point the interviewer interrupts again.

But all I’m asking for is one figure.

The Prime Minister, not to be outdone:

Well, I’m about to come to that, Tony. I’m taking you to the constituent parts. Put all that together and you’ll see clearly outlined in the Budget papers that we’re aiming to a gross figure of 13.8, which comes out at about $300 (billion). The Liberals have said about $275 (billion) and then they’ve failed to nominate or to support $22-billion of savings in the Budget, which makes our positions virtually identical. That’s the point I was making.

No, the point the Prime Minister was making is that he was too ashamed to admit to the Australian public that the figure he was grappling for was $300 billion. It did not get any better. The interviewer then said:

That figure is $300-billion, is that right?

What does the Prime Minister do?

As I said before, 13.8 per cent of GDP as described accurately in the Budget papers. There’s nothing new about that.

The interviewer put it so specifically:

TONY JONES: Is there a political spin rule which says the Prime Minister must not say that figure? Because it seems very hard to get you to say $300-billion.

The Prime Minister gave another evasive, prevaricating answer—refusing to say the words ‘$300 billion’. It was farcical. It certainly did not behove a Prime Minister of this country to be so prevaricating in his answer—and effectively mislead the Australian people and be so contemptuous of their intelligence. People understand the figure of $300 billion. Why was the Prime Minister avoiding any opportunity to have him say those words?

Apart from the fact that he confused net debt with gross debt and apart from the fact that the figures that he gave to the interviewer were not the accurate figures in the budget—apart from all that—this was an appalling example of evasiveness, dishonesty and not levelling with the Australian people. It continued all week to the point where the Prime Minister has made himself the subject of ridicule, not only amongst cartoonists but also amongst more serious-minded journalists in this country.

That brings us to the point. The fact is that the Rudd government inherited the best economic conditions of any incoming government in the history of federal politics. There was no government debt—absolutely no national public debt on the part of the federal government. That is because the previous coalition government had paid it off—every single cent. It took us 10 years to pay off $96 billion. We know the government already has in place a facility to borrow $200 billion and we know that the Prime Minister is now admitting to a figure of $300 billion in government debt, but has the government given us any idea of how it intends to pay back that $300 billion, let alone the interest that will accrue on it? We have not heard the Treasurer admit to the amount of interest.

It was rather interesting last week to read an analysis by the respected financial expert Ross Greenwood. This is what he wrote:

$200 billion is $200,000 million. The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of 20 years.

Now here’s where it gets scary … really scary.

The repayments on $200 billion come to more than one and a quarter billion dollars—every month—for 20 years. It works out we—as taxpayers—will be repaying $15.4 billion in interest and principal every year … $733 for every man woman and child - every year.

That is just the interest.

The total interest bill over the 20 years is—get this—$108 billion.

Ross Greenwood goes on to say:

And remember, this is a Government that just 18 months ago had NO debt … NO debt. In fact it had enough money to create the Future Fund to pay the future liabilities of public servants’ superannuation … and it had enough to stick $20 billion into the Building Australia Fund last year …

So in 18 months not only has the government racked up the largest debt in living memory but the interest repayments on that debt, according to Ross Greenwood, are $108 billion over 20 years. That is money that will not go to schools, hospitals, roads and infrastructure. When you drive the country into debt and borrow $300 billion, interest accrues and the interest has to be paid back year after year and the principal has to be paid back. And who is going to pay it back? The government does not have any money of its own. The government gets the money from the taxpayers, so the taxpayers of Australia will be paying for this government’s profligacy and for the fact that this government has spent more than it earned, that this government has borrowed to go into debt and that this government has no plan, no exit strategy and no idea how to get the country back on an even keel, how to get the budget back into surplus or how to pay off that debt.

In the budget papers there were some simply unbelievable assumptions that the government asked us to make. First of all they said they were going to return the budget to surplus on the following assumption: no government will undertake any new spending until 2017. That is simply unbelievable, but that is the assumption the government wants us to make The second assumption is that there will be an unprecedented run of growth at 4½ per cent for at least two years and a projection of above-trend growth for another four consecutive years. These are, at best, the most optimistic figures that anybody is putting forward, and a fiscally conservative government would be looking at options that are achievable, not the wildest options that you can come up with. There have been only two periods in the last 50 years where growth of 4½ per cent has been maintained, and that has only ever been for two years at a time. So the assumptions that we are being asked to make—that there will be no new government spending until 2017 from a government that has spent billions of dollars since it was first elected and that growth will be above historic levels for the next six years or more—make the plan to return this budget to surplus just a fantasy. The Australian people know that and, had it not been for the government’s ridiculous spin in refusing to say $300 billion of debt and a $58 billion deficit, this government should not be standing here delivering a budget of this kind in this environment.

There are some other areas of great concern where the coalition have said that this is not the way to bring the budget back into surplus. One of those is private health insurance. Private health insurance is part of the private health system. We need a strong private health system in this country to keep the public health system strong. We need to ensure that there is a balance between private health and public health. The public health system on its own could not cope if all the people in private health insurance went into public health. The people most affected would be the lower income people, those in the lowest socioeconomic levels in Australian society. They would be negatively affected by an imbalance between private health insurance and public health. Private health insurance is so important because it keeps people in private health, yet for ideological reasons this government chose to attack private health insurance rebates as a means of coming up with savings. It tells you that this government’s priorities are all wrong. This government’s priorities are about ideology, not about sensible, reasoned, logical budget planning. This government will go down in history as the biggest spending one, as the government that has driven the country into the biggest debt that this country has ever seen. (Time expired)

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Listening to the speech by the Deputy Leader of the Opposition makes me wonder why they do not make her shadow Treasurer—oh, I’m sorry. They tried that already! This is a forward-looking federal budget that seeks to stimulate the economy to preserve jobs.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. I wonder if it is necessary for the member for Wills to be so venal and personal.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

It is not a point of order.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

It also sets out to address the unsustainable spending from the previous government. The current apocalyptic argument that the opposition is running on debt levels is a cynical political ploy to instil fear in the electorate, and this at a time when the economic imperative is to generate confidence, not fear, in the community and business, which the government has already endeavoured to achieve with the stimulus packages we introduced.

It is important to consider both the budget deficit and net debt figures as a percentage of GDP, as this exposes the hysteria being peddled by the opposition. Even after accounting for revenue downgrades, the government’s financial position remains one of the strongest in the world. Our projected levels of net debt are lower than any of the advanced major economies, with a forecast peak of 13.8 per cent of GDP in 2013-14 compared with an estimated 81 per cent of GDP for the 25 largest advanced economies collectively—that is to say, 13 per cent compared with over 80 per cent. The projected net debt for the United States and the United Kingdom is 83 per cent of GDP in 2014, while Japan has forecast net debt of 136 per cent of GDP in 2014. Furthermore, net debt in Australia is projected to fall back to 3.7 per cent of GDP by the end of the medium-term projections in 2019-20.

The budget deficit for 2009-10 of $56.7 billion represents 4.9 per cent of GDP, which is less than half the collective deficit of 10.9 per cent for the major advanced economies and much smaller than the 8.8 per cent of GDP collective deficit for all advanced economies. A natural recovery in revenues and spending restraint is expected to see the budget return to surplus by 2015-16.

This budget builds on the objective of restoring confidence and preserving jobs, with targeted infrastructure spending, while also delivering economic justice, with a paid parental leave scheme and a substantial increase in pension payments. A $22 billion investment in nation-building infrastructure is, I think, the centrepiece of the 2009-10 budget. It includes $4.6 billion to improve nine metropolitan rail networks in six of Australia’s major cities, including $3.2 billion towards a rail link from West Werribee to Southern Cross station and $40 million towards the east-west rail tunnel linking Footscray to the CBD. There is a $4.5 billion investment in the Clean Energy Initiative to assist Australia’s transition to a low-carbon economy and to help us build the jobs of the future. It includes up to four large-scale solar electricity generation projects. There is $1.5 billion in recurrent funding for universities and students, including $491 million over four years to uncap the number of public university places from 2012, which, I think, is a terrific measure. This will facilitate an increase in places from next year, with an extra 50,000 students commencing university courses by 2013. There is also $394 million of new funding over four years to encourage greater participation by low-income students in higher education, along with greater support for lower-income students.

The government has found room, under difficult economic circumstances, to deliver an increase to pension payments for singles of $32.49 per week and there is a $10.14 per week combined increase for couples. This is a significant initiative; it is very relevant to my own electorate. In my budget reply speech last year I spoke of the financial plight of pensioners and I detailed the concerns and efforts of the Moreland Seniors Action Group, amongst others.

The infrastructure spending in education also fits in well with speeches that I made in parliament last year, particularly the need to give priority to disadvantaged young Australians in accessing a university education in order to address skills shortages rather than trying to meet our skills needs by increasing the number of skilled migrants.

The spending on rail infrastructure will also address the neglect by the previous government and reverse what I think is essentially backward thinking by National Party transport ministers, who invariably take the view that the Commonwealth government should not support urban public transport.

The federal budget of 2009-10 is working in tandem with the Reserve Bank of Australia and monetary policy by running a counter-cyclical budget deficit to support aggregate demand in the economy. It is a responsible policy response to allow the budget balance to adjust to short-term movements in the economic cycle and not undertake a slash-and-burn approach that would offset this adjustment and be inherently pro-cyclical and make the economic downturn worse. If we adopt a pro-cyclical approach—if we engage in slash and burn—this would exacerbate the impact of the global recession on the Australian economy; it would lead to a greater loss in output, it would lead to unemployment and it would lead in the medium term to a higher budget deficit.

The measures outlined in the budget are consistent with the commitment by G20 countries to deliver the fiscal stimulus necessary to restore growth. The most effective fiscal stimulus measures are those that provide the largest boost to aggregate demand when it is most needed and they include measures to stimulate household, business and infrastructure spending.

Spending on infrastructure not only has a multiplier effect on economic output but also improves the productive capacity of the economy in the longer term. The OECD has found that Australia’s fiscal stimulus measures are among the most effective in the OECD in terms of stimulating economic activity and supporting employment. It has found that the first phase of Australia’s fiscal stimulus provided an immediate and significant boost to household incomes, which contributed to retail sales growth. It has also found that the second phase of fiscal stimulus, which focused on infrastructure investments, could be implemented within a relatively short timeframe while the third phase, which was outlined in this budget, moves to major economic infrastructure projects. It further found that Australia’s fiscal stimulus measures are expected to have a substantial impact on economic output and employment by boosting GDP and reducing the forecast peak in the unemployment rate. This is in stark contrast to the record on fiscal policy of the previous government, which, despite numerous warnings from the Reserve Bank, continued to run a pro-cyclical budgetary policy that fanned inflation and pushed against the best efforts of the Reserve Bank and monetary policy to contain inflationary pressures.

As I have mentioned in the parliament before, of the $334 billion budget windfall delivered by the resources boom during the period from 2004 to 2007, $314 billion—that is, nearly all of it—had been matched by increased spending for tax cuts. The writer George Megalogenis reported on the previous government’s record as follows:

What is clear with hindsight is that the Coalition wrote cheques to the electorate that would bounce once the mining boom turned to bust.

A study by the Weekend Australian revealed that a dramatic shift occurred in the tax mix between 2003-04 and 2007-08 whereby both company tax and capital gains tax collections surged, but not permanently. When the global recession hit, revenue collections from these sources collapsed to their pre-boom levels leaving a $20 billion hole in the federal revenue base.

In total, there has been $173 billion worth of downward revisions over four years to 2011-12, equivalent to 14 per cent of total taxation receipts. Company taxation and capital gains tax account for around $90 billion and around $30 billion respectively of these revisions. Adding an estimate of the downward revision for the newly included year of 2012-13 takes the downward revisions across the five years of forward estimates to around $210 billion.

The surge in revenue in the minerals boom was squandered by the coalition in unsustainable handouts between 2004 and 2007, leaving what has been described as a structural deficit. Along with a foreign debt legacy of $658 billion, or around 60 per cent of GDP, the Liberal Party today has the political gall to be pontificating about debt, having left Australia exposed to economic imbalances of persistent current account deficits, heavy net external indebtedness and an elevated household debt-to-income burden. The member for Higgins is speaking in the public domain about how you do not need to wait for a financial crisis to fund infrastructure and then, remarkably, stating that this is the ongoing business of government. This is truly remarkable given his record—his lack of courage in standing up when he was Treasurer to Prime Minister Howard. In the biography on John Howard’s prime ministership, the member for Higgins revealed that the 2001 business activity statement simplification exercise in response to a small business outcry was nothing more than window dressing, but the member for Higgins failed utterly to curb the middle-class welfare and various election bribes the former Prime Minister Howard engaged in after 2002. I again quote George Megalogenis:

Howard and Costello took middle-class welfare to absurd heights to win the 2004 election. In that year, they drove the handout line—

by which Mr Megalogenis means the proportion of the nation’s income derived from government payments—

past 16 per cent for the first time on record.

Treasury papers show that from 2002-03 onwards the structural budget balance deteriorated, moving into structural deficit in 2006-07. All the while, the individual indebtedness of Australians and Australia’s national foreign indebtedness blew out—skyrocketed. In those years, we had a profligate Prime Minister and a lily-livered Treasurer. Mr Howard’s statement that Prime Minister Rudd should be thanking him every night for the economy he, Mr Rudd, inherited is, frankly, just laughable. There were no fewer than 20 separate warnings about capacity constraints driving inflationary pressures from the Reserve Bank over the period 2004 to 2007, but these warnings went unheeded by the former Treasurer. His legacy was an infrastructure shortfall during the resources boom, while presiding over an extravagant growth in Commonwealth grants. For example, in 2004 there were 12,000 grants totalling $729 million but, by 2007, there were 49,000 grants worth more than $4.5 billion, more than five times as much.

The increase in real spending over the four years to June 2008 was the biggest four-year increase since the aftermath of the 1990s recession but occurred at a time when savings were required to mitigate the overheating economy or where spending should have been targeted to address skills shortages, lack of capacity and infrastructure constraints. The former Treasurer was either incapable or unwilling to rein in the spending of his Prime Minister and other ministers. The Liberals and their doctrine of trickle-down economics gave us Work Choices; yet, paradoxically, they were profligate in government spending and failed to address the fundamental weaknesses in fiscal policy and the economy at large.

By contrast, the Labor government is driven by a sense of fairness. It is uncluttered by obsolete doctrines that have caused this economic downturn and that brought hardship upon productive businesses, workers and families. The government has brought down a budget which aims to restore government finances to sustainable levels in the long term and promote a culture where Australians understand that welfare should be directed to those in genuine need, rather than splashed around as a political bribe. This government is delivering practical and appropriate measures through fiscal policy which, in conjunction with monetary policy, seeks to promote economic recovery in Australia.

I return to three areas of the budget which I am particularly enthusiastic about and which I have spoken about and campaigned for in recent times. The increase for single pensioners and pensioner couples—$32.49 per week for single rate pensioners and $10.14 for couples—is something which I referred to in my speech on the appropriations last year. I pointed out the efforts of Gino Iannazzo and Vic Guarino, representatives of the Moreland Seniors Action Group, who did a lot of campaigning about this issue last year. I talked about the way in which pensioners had lost spending power since the introduction of the GST and, in particular, how they had been losing spending power in the course of the last three years. The government also introduced more assistance for carers at a total cost of $1.8 billion over five years. I need to bring to the attention of the House the fact that the Moreland Seniors Action Group and others have spoken to me about the budget increase for couples and expressed concern about whether this increase will be adequate for them. I have also mentioned in the House previously that I think we should be looking to lift the couples rate relative to the singles rate. I know that the increase in the singles rate is motivated by compassion, is well meaning and is motivated by concern for the present circumstances of single pensioners, but I think the fact that two can live more cheaply than one makes this a more desirable household formation which should not be penalised.

I think the community would have fewer problems of loneliness and isolation and a more efficient use of housing and other resources if we had fewer single-pensioner households and more pensioners living together or with family and friends who could provide them with financial and emotional support—and, let me add, vice versa. It cannot be said too often that many grandparents and great-grandparents are important sources of mentoring, childminding and other support which adds value to families and communities. So I think this is an area where we need to get the right policy outcome, and I do not think that it is satisfactory if we have a situation where there is a financial disincentive for pensioners to do anything other than live alone. I do not think it is good for people to live alone. I think that companionship, support and the pooling of physical, financial and emotional resources is a good thing and that people caring for each other and sharing the load is a good thing. I would like to see—and I note that the Moreland Seniors Action Group and others in my electorate have also said to me that they would like to see—the couples pension rate approach that of the singles rate rather than having these things get further and further apart.

I also want to draw attention to the funding for the urban public transport projects. I mentioned earlier the $3.2 billion towards a rail link from West Werribee to Southern Cross Station and $40 million towards the east-west rail tunnel linking Footscray to the CBD of Melbourne. This is something that I mentioned in parliament last year and I supported the work of the activist group GetUp, which has been campaigning for spending on urban public transport for a variety of reasons. It is regrettable that the previous government was not prepared to invest in urban public transport. The history of the other side has been that the National Party has always had the transport portfolio and the National Party minister has never supported funding for urban public transport. This is regrettable. There are very serious problems of congestion in our major cities—Brisbane, Sydney, Melbourne and others—and to address those problems adequately requires substantial infrastructure investment. I am delighted to see that this budget includes those measures.

I also wish to support the amount of money which is being put into increased university places. I think the idea that we can have an extra 50,000 students commencing university courses by 2013 is terrific. In conclusion, this is a nation-building budget which lays the foundations for a stronger and more prosperous future.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Link to this | Hansard source

This budget we are debating in the parliament is a budget of debt and deficit. It is a budget most notable for its wheel spinning and word spinning. About the most accurate thing that the Treasurer had to say on budget night was that we do indeed need to steel ourselves for the future. What he did not add was that this is a budget that risks stealing our future, and this is why the opposition parties have sought to shine a light on what is in the budget, as this government and its members find it difficult to actually talk about the facts.

A budget is ordinarily a statement of our financial position. That is the most basic thing that a budget does. Yet what is quite remarkable is that on budget night that was the last thing the Treasurer wanted to talk about. He did not want to talk about some of those downright frightening figures, to be honest with you, that are captured in this budget document. You have seen Labor members so indoctrinated with the word spinning and the political game playing that has characterised this government so comprehensively after only a year and a half that they could not actually come to the dispatch box and speak about what is in the budget and what it amounts to in terms of a financial statement and a financial position for our nation.

For those who are interested, let me just share some very basic facts. After this Labor spending spree—an unprecedented spending spree over the last 18 months—this budget anticipates one million people being out of work by 2010-11, record budget deficits of $58 billion and a new, never before visited, stratospheric amount of net Commonwealth debt of $188 billion by 2012-13. These are the key statistics that could not be mentioned on budget night, and so deep has the indoctrination gone that even this morning a Labor member, the member for Petrie, when asked about the deficit that is in the budget—a key figure, a bottom-line, crucial piece of information—found herself unable to describe what it was. ‘I don’t know the budget deficit figure,’ she said. ‘I don’t know the deficit figure.’ She was asked, ‘What is the deficit figure?’ ‘I don’t know the deficit figure’ was her answer. So deep has this Labor indoctrination gone that not only are they not allowed to talk about the budget deficit but clearly they are not allowed to think about it or even remember it.

It is a key economic statistic that gives the Australian community a sense of where our financial position is as a nation and the frightening trajectory that it has been put on by this recklessly spending Rudd Labor government. So these crucial pieces of information do give us an insight into the future, a future that will see us going into red ink in amounts and depths we have never visited before. As we hear Labor members in this parliament talk about the budget, we do not hear them talking about that budget outcome, that net position. You hear attacks on the former Howard government—almost like they are living in the past. You hear this rhetoric about plans for this and plans for that. We heard a lot about reforms in the lead-up to the election, but we knew that Labor reform actually meant spending more money. Where to now for those reform undertakings that Labor gave the electorate when there is not the surplus or savings legacy gifted to them by the former Howard-Costello government?

The budget really takes Australia from being alert and quite anxious about our economic future and the competency of the Rudd government to manage this economy into a time when we need to be genuinely alarmed about the deterioration of our national finances and what that means for the future prospects of our nation and Australian citizens. It is so frightening that the Treasurer could not even talk about some of those key economic statistics that give us a snapshot of just where we are.

Instead we hear a lot of other numbers being bandied around—and I will touch on some of those. For those people who follow sport, think about the key statistics that you see for the players. You could say that Prime Minister Rudd was a high-order draft pick who promised much. He did not have a lot of form to go by, but he was happy to claim credit for the good performance of those around him and say that it was all his handiwork and then offer himself to the Australian people. When you see this Prime Minister’s player profile, you recognise that he does not go in for the hard balls. He does not go in and make the hard decisions. He is, in sporting parlance, a receiver. He has received the savings and surpluses of the former Howard government and has patted himself on the back even though he opposed those savings and surplus measures every step of the way. I remember his speech on the GST, in which he urged us not to venture into flowery rhetoric. He referred to it as ‘fundamental injustice day’—so prone is our Prime Minister to flowery rhetoric and overblown statements.

The Prime Minister is a receiver. He has received the financial circumstances that our nation and the Howard-Costello government worked hard to achieve. He has grabbed that legacy of savings and surplus with both hands, despite his opposition, and has gone about spending it as quickly as he could. So the fruits of that sound economic management represent the opportunities gifted to the Rudd government to apply those resources that others have worked so hard to make available. The Prime Minister has not only applied those resources but has swallowed them whole. He has grabbed them with both hands and swallowed them whole. We have seen a binge of spending ever since the Rudd government came into power.

The member for Wills spoke at length about the impact of the mining boom. He was critical that the Howard government had overseen an era of such prosperity. He referred to George Megalogenis’s article but did not go so far as to mention that journalist’s conclusion that capital and business had not been taxed enough. It was interesting that the member for Wills left that little conclusion out when he spoke about those figures. But he failed to say that the Rudd government is simply spending those proceeds which were overseen, nurtured and supported in the Howard-Costello years. The Labor government have not only spent the proceeds from that boom but have committed to spending the proceeds of booms to come—and this is what is so worrying. In the budget figures, they anticipate an era of herculean economic growth to get us out of the debt and deficit spiral that the Rudd Labor government have put us in. They anticipate a rate of growth that would be unprecedented and quite remarkable in Australia’s economic history, a rate of growth that would leave behind other periods of growth as if they were not really trying. These incredibly optimistic assertions—and that is being as kind as we can be—are what Labor offer as a way out of the debt and deficit hole they have put the nation and the Australian community into. And they assume that we will bounce back brighter and bolder than we were previously.

I have listened to successive Labor members being critical of the recent extended period of growth overseen by the coalition under then Prime Minister Howard and then Treasurer Costello. They have been critical of that time and the opportunity to invest those funds. The Labor Party are putting out a confusing message to the Australian public. Wheel spinning and word spinning have become what the Labor government are best known for. They have a plan, strategy and language designed to protect their short-term political interest but no plan for the nation, no coherent strategy for carrying the nation forward.

But we are seeing spending. Some two-thirds of the projected deficits and the accumulating debt that result from them are the result of new spending announcements by Prime Minister Rudd and his recklessly spending Labor government. I have heard that this government have committed to some $10 million of new spending every hour since they were elected. This is extraordinary. On some of the things they claim great credit for in their stimulus package the coalition has put forward a very coherent and prudent alternative strategy. Instead we have this spendathon, this cash splash, which is making Australians increasingly aware that the Rudd government is looking a bit like a payday lender: you might get your $900 in the short term—and most people would be pleased about that—but the debt and deficit that result from these spending commitments will see interest rates attacking every Australian to the tune of about $500 a year. That is just to pay the interest on the debt and deficit that the Rudd Labor government have accumulated. Isn’t that interesting—$900 now and $500 a year in interest payments for as far as the eye can see? For this government, that amounts to an economic strategy!

I hope this government reflects on some of the things that it is saying. It talks about, and is a very self-congratulatory about, its plan for infrastructure, as if this has never happened before. Labor members are keen to refer to the Australian newspaper. But let us have a look at some of the work that is in the Australian. On May 13, there is very insightful and analytical work by Lenore Taylor in which she talks about just what the composition of the so-called nation-building and infrastructure showpiece of the budget is. She quite rightly points out that the vast majority of its resources is a result of the coalition government’s work and Labor is simply spending it. And then the Rudd government, through the Deputy Prime Minister and others, have the gall to attack coalition members for participating in activities that relate to the spending of the surplus and savings from the coalition’s time in government, as if we are somehow not worthy or deserving of being involved. This is quite remarkable. They are spending money that has been worked hard for and prudently managed by the former government and contributed to by the enterprise and thoughtfulness of the Australian community. Coalition members have every right to do this. In fact, there is a moral duty for coalition members to be involved in the application of those funds, because that is where the hard work was done to make those resources available.

So this is the story that we are getting from the Labor Party: everything is sweet and hunky-dory but they will not dare talk about what the key financial statistics tell us about where the nation is at and the direction in which we are heading. There is the spin of wheels and words. There is great talk and the re-announcement of projects. They announce them again and then there is another announcement with a slight nuancing of the language—and that substitutes for forward-looking, sound and coherent government strategy.

This is a budget where the consequences, the only sure thing that we can absolutely recognise, are debt and deficit in proportions we have never seen before; where the Treasurer rightly urges us to steel ourselves while he and the rest of the Rudd government are stealing our future; and where reform is being retreated from because, in Labor’s eyes, reform is always about spending more money.

Now that they have spent all that the coalition left them in surplus and savings and have plunged us into a new era of debt and deficit, they are wondering where their money is going to come from. We know where it is going to come from; it is going to come from the Australian public. We know that, long after the Rudd government has been written off by history as the cruellest experiment after the Whitlam era, the Australian people will still be carrying its financial legacy. As young people enter the workforce they will face the risk of bracket creep, because that is how the Rudd government wants to increase its revenues; changes to their superannuation so that there is a lack of certainty about how to plan for retirement; and a Rudd Labor government that is so hostile to incentives that employee share ownership schemes are under attack—one of the very mechanisms that best align employers’ and employees’ interests in seeing the success of the company. Those young people know that they will work harder, and they will have to work harder for the Commonwealth to generate the income to start paying for the interest and, I hope, so that we can again get to a point where the Commonwealth is net debt free.

When the charts come out after the budget, those pie charts with different colours that give you an idea of where the money is coming from and where the money is going, there will be two new wedges on those pie charts. On the income side, you will see debt and deficit—how we will not be paying our own way, as is the case here. We are living today by creating financial burdens for the future. That will be the new wedge on the income side. On the expenditure side, you will see the big social security, health and defence wedges and then you will see a new big wedge. That will be interest rates, that will be debt servicing and that will be an enormous impost on the budget year in, year out, for as far as the eye can see.

Then we will be told that that was all a product of investment in infrastructure. Well, hooey to that. That is completely false, it is a lie, and I think the Australian public are realising that the more they see the photo opportunities at these choreographed events where people in hard hats revisit the same site over and over again to re-announce the same project over and over again. People will look back and say, ‘Under the Howard-Costello government, the AusLink 2 program that the National and Liberal parties put in place envisaged $31 billion of road and rail infrastructure over five years.’ And then they will look at this Rudd budget and see road and rail infrastructure—their big nation-building plans—at $26 billion over six years. So we are actually seeing a reduction in effort on those key pieces of infrastructure that the Labor Party hold up as the centrepiece of this budget, a reduction in effort in those key areas that go to building productive infrastructure for our economy and help to improve our prospects for the future.

But you will also hear stories about the discipline that has gone into choosing which projects have been successful and which have not. Infrastructure Australia, a very credible and talented group of people genuinely working, I believe, in the national interest, brought forward their recommendations only to find the budget has inclusions that they have never considered and exclusions for which there is no explanation and no justification. We have heard that embarrassing story where the transport minister in South Australia, the day after the budget, was asked just what the extension of the O-Bahn was all about. It was of the order of $61 million, if I remember correctly. He was like, ‘Ah, er, um,’ a bit like a Labor member being asked what the deficit is: either he never knew or he had been told not to know. What we clearly know is that that reaction hardly represents a commitment to a project that has been developed through analysis and objective assessment. So that project has popped up. It may well be worthwhile; we just do not know.

Where is the transparency? Where is the objectivity? Where is the evidence based decision-making? How does a project fall out of the sky, appear in a capital works agenda that has supposedly been nuanced and analysed to within an inch of its life, and then pop up in the budget, when the key proponent, the state government to whom that money has been allocated, does not know the first thing about it? How rigorous is that? And what of the rest of the projects? What of the commitments that Sir Rod Eddington, through his work in Victoria, identified as key priorities that are not funded in this budget? There is one close to me, the Frankston bypass. It was recommended—not a cent. We are not sure why that is. There is no explanation, no undertaking to provide a transparent justification. It was just left out and then others were put in.

At a time when we have already seen a forward agenda that envisages funding commitments but does not actually provide for them, just where is that money going to come from? Is this the end of infrastructure investment under the Rudd government, under their so-called disciplined ‘no more than two per cent growth in expenditure’ plan? Where are all the rest of the resources coming from? Is this a statement in time, and now all the Infrastructure Australia people can do something else with their time, energy and resources? We just do not know.

So much for transparency and openness. We do not know just what is happening with those infrastructure projects, after hearing up hill and down dale that these were the centrepiece of the recent Rudd budget—even though they represent a reduction in effort of $5 billion in terms of the forward commitments over a longer period of time. These are just some of the many mysteries we are faced with in this budget.

There is another thing we need to touch on in terms of my own portfolio responsibilities. Many in this place share a great commitment to sustainability, but Australians with that interest will be left scratching their heads, because the Rudd government once again has rebadged existing programs and moved money around like the pea and thimbles trick, not only because they want you to guess where the money actually is but because they want you to believe it is under each of the thimbles. These programs, about 10 of them at least, have been axed or wound back under this budget. Some of them had not survived one year. They had not progressed past the political spin of an announcement. The only tangible outcome from some of these sustainability related programs were press releases. We will come back to this topic, along with just how wisely some of the money is being spent, particularly given the growing concern and in some cases outright outrage about how some of the building the education revolution funding is being used.

But for those that really want to have a look at this budget, just think about it for what it is. It is a budget that commits our nation to a debt and deficit strategy that we have never seen before, where red ink is there for as far as the eye can see. Its strongest and most common element is its wheel spinning and word spinning, where the mantras are being trotted out over and over again but they dare not speak about the true financial position that this budget puts us in, nor the trajectory that it puts us on. The Treasurer was right when he said in this budget, ‘We need to steel ourselves’, because under this budget the Rudd Labor government is stealing our future. And I, for one, am not prepared to see it given away.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I rise in support of the Appropriation Bill (No. 1) 2009-2010 and the Appropriation (Parliamentary Departments) Bill (No. 1) 2009. Unlike the member for Dunkley, I realise that we need a budget with nation building for recovery as its centrepiece. We need an economy that is stimulated and helps cushion Australia from the full impact of the global recession while also laying the foundation for a strong and more prosperous future, a budget that realises that we need to build, and build upon infrastructure. Unfortunately the previous government did not do this.

On a national level, this is a budget that focuses on supporting jobs today by building the infrastructure we need tomorrow. We are committing to a historic $22 billion investment in national infrastructure including $4.6 billion to improve rail networks across Australia; $3.4 billion to upgrade highways across the country; $3.2 billion for public hospital infrastructure, modern cancer services and medical researchers. Part of this will be used for the Peter MacCallum Institute in Victoria, and that is a great boost for our state. There is $1.5 billion for new solar technologies including up to four large-scale solar generation projects; and $399 million to expand port infrastructure to boost Australia’s exports; and $4.7 billion to start building the national broadband network, improving vital communications infrastructure. These various infrastructure projects were all left off the agenda by the previous Howard government. Since coming to office this government has made nation-building infrastructure a top investment priority. The budget reinforces our commitment to investing in significant infrastructure that will provide increased productivity and underpin future economic growth.

This budget also addresses two important social issues by increasing pension payments and introducing a historic paid parental leave scheme. Both are things, I think, that our government can be truly proud of. We all know that many seniors in our community do it tough. I have spoken to countless seniors in my electorate about the weekly struggles they face to get by on a pension particularly those on a single pension. This budget recognises the fact that people in the community who are getting on in age deserve support from their government as they approach their twilight years. These are the people who have seen us through some of our darkest hours and we should support them in their old age.

Under our reforms single pensioners will receive an increase of up to $32.49 a week and couples $10.14 per week combined. This means that the total assistance for single pensions will increase from $304.90 per week to $336.68 per week. For pensioner couples it will increase from $497.36 per week to $507.50 per week. All of Chisholm’s age pensioners, disability pensioners, carers and veteran income support recipients will benefit from these increases, and I have had many thank my office for this increase. This will make a significant difference to the lives of some 20,000 pensioners that live in my electorate. When combined with the one-off lump sum payment provided to pensioners in December last year, the increase in payments represents the government’s unprecedented support for pensioners. I am very proud to be part of a government that listens to the community when it comes to issues such as pension reforms, and welcome the extra support provided to pensioners in this budget.

Self-funded retirees, again, a large group in my electorate, will also benefit from the budget. We recognise the fact that self-funded retirees have had their income severely affected by the global recession, perhaps more than any other demographic, and they have worn the brunt of the global financial crisis. Therefore, from 1 July 2009 the government will have the minimum amounts self-funded retirees have to draw down from their account based pensions halved for 2009-10. This extends the drawdown relief provided by the government for 2008-09, recognising the impact of the global recession. This change will assist pensioners’ account balances to recover from capital losses associated with the global recession. It will reduce the need for self-funded retirees to sell assets at a loss in order to meet the minimum withdrawal requirement in 2009-10.

In order to prepare Australians for future economic and social challenges this government has taken the historic step of delivering a paid parental leave scheme. This is a scheme that will make a genuine difference to young families across Australia. I know what it is like to juggle the demands of working and having a new baby. This combination of work and family life is difficult to manage and I believe it is imperative that the government do what it can to support families handle these competing demands. Admittedly, I did not have to forgo salary when I had my children as I was still working in the parliament but, having worked on many paid parental leave schemes in enterprise bargains throughout the finance sector, I know the great benefit they have delivered to many and it is terrific that we have now done it for all.

As of 1 January 2010 the scheme will provide the primary care giver with 18 weeks post-natal leave paid at the adult federal minimum wage. It will be a particular benefit to low- and middle-income families where mums have been left out of the picture for far too long. This scheme brings us into line with other advanced nations. It is responsible and sustainable reform and has been broadly welcomed by the community, and I am proud to offer my support to such an important initiative and commend all those who struggled so long to see it happen.

This government is committed to rebuilding and modernising Australia’s education system. After years of neglect by the previous government, this budget includes $1.5 billion in recurrent funding for universities and students, with $491 million being committed over four years to uncap the number of public university places from 2012. This means that anyone who is eligible for a place of their choice can secure one. Additionally, $394 million of new funding will encourage greater participation of low-income students in higher education. These two funding measures adhere to the notion that all Australians deserve the best possible education outcome.

Within my electorate of Chisholm this is greatly welcomed. Indeed, Chisholm could be described as a very large university town. It includes Monash University, Deakin University’s Melbourne campus, the Box Hill Institute of TAFE and the Chadstone campus of GippsTAFE. Last week I was privileged to be joined by the Prime Minister and the Deputy Prime Minister for a tour of the Chadstone campus of GippsTAFE. I am sure that a whole lot of people were looking at the news and wondering what I was doing at the Gippsland TAFE, but the Gippsland TAFE have an amazing little facility in my electorate at Chadstone. It used to be owned by the SEC—it was where you did your linesman training. I was joined there by the Prime Minister and the Deputy Prime Minister when we announced that GippsTAFE would be receiving funding of $16.2 million for redevelopment under the Education Investment Fund. This was exceptionally warmly received by GippsTAFE, who have struggled for many years to have the site recognised and to have this funding. Indeed, when we came and said that the funding was coming and that the Prime Minister was coming to visit, I do not think that I have seen happier people than all those involved at GippsTAFE.

The funding will provide new training facilities at the campus which will be used to help train workers to build the $43 billion National Broadband Network. It will become one of a series of technical colleges across the country with specialty facilities to provide training for NBN workers. This means GippsTAFE will support some of the, on average, 25,000 jobs each year it will take to construct the National Broadband Network over the next eight years. I was speaking with some of the younger workers at GippsTAFE last week and they were genuinely thrilled that the government is providing such support to young job seekers looking to secure apprenticeships. At the GippsTAFE they are training apprentices and also providing pre-apprenticeship training. In Victoria, they are also training everyone from the Northern Territory. It is a vital part of the power generation system that our great nation relies upon.

The GippsTAFE’s redevelopment is one of 31 projects funded in the budget as part of the $934 million round 2 funding from the Education Investment Fund. This fund represents this government’s commitment to tertiary education. The site will be transformed. It will be transformed into part of education into the 21st century. It will not only play a key role in delivering a sustainable future through training and research but also act as a demonstration site for new and emerging technologies. It will also go on doing its great work of teaching people to be linesmen.

The budget also includes $1 billion in recurrent funds for research and innovation, which includes $512 million to support researchers across our universities. Included in this funding is $8 billion for a new biological lab at Monash University. Monash has benefited greatly in recent times from this government’s commitment to higher education research and innovation, and it is truly thankful. It was successful under round 1 of the education investment announced in December last year when it received $89.9 million to build the New Horizons Centre, which will bring together disparate science and engineering expertise in a new world-class research facility. This is a fantastic project that will see the university cement its place as one of the country’s most important educational institutions. It will develop the Clayton Innovation Precinct into the most significant technology and innovation hub in the Southern Hemisphere. The $8 million announced in the budget will support a new laboratory within the Australian Regenerative Medicine Institute and will be established as a partner of the European Molecular Biology Laboratory. The EMBL, as it is known, is a world-leading research organisation supported by 20 European member states and five major laboratories in Germany, France, Italy and the UK. I was recently privileged to be at the opening of ARMI, where this great research is going on, and to see the groundbreaking work that is happening there.

Australia became an Associate Member of EMBL in March 2008 and this will be the first partner laboratory to be established outside of Europe. It is a great honour indeed. As a former Monash student, I am glad to see the institution continue to thrive and for the government to support such a significant project. Monash is not just a very large institution in my electorate but also one of the largest employers. It is a great facility and we need to continue to fund it to do the great work that it does.

This budget sees $3.2 billion committed from the Health and Hospital Fund to invest in hospital and medical research infrastructure. This funding includes $1.5 billion over seven years to expand and modernise key public hospital infrastructure, $1.3 billion over six years to modernise cancer services and $430 million over six years in supporting cooperative research precincts. The Monash Health Research Precinct is in my electorate and will be receiving $71 million over three years to build new research facilities. The precinct is in partnership with the Monash Institute of Medical Research, Prince Henry’s Institute and Southern Health. It unites the largest healthcare services provider in Victoria with two leading Australian medical research institutions. It is committed to fostering the translation of basic research knowledge into clinical practice. The new facility will train Monash students and work with the Deakin School of Medicine to provide translational and clinical research opportunities. It is a major investment that will increase the research capacity and capability of the precinct. It is a great recognition of what a terrific area we have—Monash University and Monash Medical Centre working in combination for the betterment of our country.

Embedded in the budget is important reform that signals a change in the direction of our treatment of asylum seekers. I welcome the government’s decision to abolish the arbitrary 45-day rule that resulted in some 40 per cent of the community based asylum seekers living in dire poverty. The former Howard government introduced legislation where all asylum seekers who had not applied for protection visas within 45 days of arrival in Australia were denied the right to work and were therefore given a bridging visa E with no work rights. These visas deny work rights and access to medical services to individuals and families, many of whom are later determined to be refugees with genuine protection needs. Under the changes announced in the budget, a fair and more flexible arrangement will be put in place which recognises that people who have complied with Australia’s immigration requirements should not be deprived of permission to work. We have put many people into the community and literally forced them to starve or rely on charity. I have campaigned long and hard with many in my electorate to see this great new measure happen and I welcome the fact that the government has seen its merits.

This decision recognises and supports the human rights of those on bridging visa E to access work rights and medical services while their visa application is processed. You might think that that is a short time frame, but I know one family has been living in these dire straits for over nine years. Fewer protection visitor applications will be reliant on friends, families or charitable organisations for support while waiting for their application to be considered. They just want the right to work. This announcement will ease the burden on local charities and community stakeholders who commit huge resources to assisting people forced into a limbo situation where they can live in Australia but are not permitted to work. I have witnessed firsthand the problems this rule has imposed upon asylum seekers in my electorate and I welcome this new stance, which stands in stark contrast to the unfair and inhumane policy advocated over so many years by the previous government. I would like to put on the record my incredible thanks to the Hotham Mission and the Asylum Seeker Project, and many other churches in my electorate, which have literally housed, fed and supported these people through many years of trying to have their asylum recognised.

This is a budget that supports jobs and delivers the important investment needed to strengthen the economy for the future. It invests in nation-building infrastructure—road, metro rail, ports, clean energy and universities. It delivers a fair go for pensioners and a sustainable pension system and introduces for the first time a paid parental leave scheme. With the worst global recession since the Great Depression wiping $210 billion from the government’s revenue, we have been forced to prioritise and make the hard choices necessary to chart the course back to surplus. Despite some decisions not being popular, we are putting the national economic interests first to ensure Australia emerges from the global downturn in the strongest shape possible.

I am impressed by the reaction to the budget within my electorate. Many see this as doing great things and this is on top of the money we are all obviously giving to our primary schools. All of the primary schools in my electorate are exceptionally grateful for the BER money that is coming for the first time and recognising the need to build within the infrastructure within our primary school community. It comes on top of great work we have been doing within our secondary schools and it redresses many of the wrongs created by the previous government. I am impressed at the way this difficult budget has been delivered and I commend the bills to the House.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.