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

I have received a letter from the honourable member for North Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government’s lack of a plan to ease the cost of living pressures on Australian families.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

It is not three years since the election of this Labor government, and at that time nearly three years ago the member for Griffith as the Leader of the Opposition and all the members of the Labor Party pledged to the Australian people that they would ease the burden of a rising cost of living. They gave a solemn promise to the Australian people that they would do something to reduce the cost of fuel, the cost of groceries and the cost of doing everyday banking. The Labor Party promised that they would do something to make life easier for Australian families facing rising costs, in particular rising everyday costs. The Labor Party believed at that time that the rising cost of living could be addressed by setting up websites: Fuelwatch to address the rising cost of fuel, GroceryWatch to address the rising costs of groceries and vegetables and ‘Bank Switch’ to address the rising cost of banking. If only it were so easy—if only you could simply set up a website and in so doing ease the burden of a rising cost of living.

At the same time as the Labor Party failed in their endeavours they also and most significantly did not understand that their very own actions—the very deliberations of a government to increase the tax burden on individual goods—would cause the price of those goods to rise and have a flow-on impact on the everyday cost of living. So, when this government in the 2008 budget, and without any global financial crisis, introduced a new tax on alcohol, the price of alcohol went up. When they introduced a higher tax on motor vehicles, the cost of motor vehicles went up. When they took a baseball bat to private health insurance, the cost of health care went up. They did not understand the fundamental principle that, when a government increases the tax, the prices of goods rise.

The Labor Party’s solemn commitment to the Australian people to ease the burden of the cost of living was broken. It was broken to the great cost of everyday Australians and, as the Leader of the Opposition explained during question time today, those everyday costs of living have risen significantly and well above inflation over the last three years. Electricity is up 34 per cent. Gas is up 26 per cent. Water and sewerage—everyday services—are up 29 per cent. You would think that with Medicare, a universal health program, health care would be free. But it is not. Everyone knows that you have to pay for dental services, for some pharmaceuticals, for optical services and even for hospital care, and under the Labor Party the cost of health care has risen by up to 18 per cent. Education—the on-costs, school uniforms and all the things that are associated with the everyday challenge of education—is up 17 per cent. The price of bread is up 12 per cent, and that is a staple that every Australian household needs. Even rent is up 17 per cent over the last three years. You would say to yourself, ‘Prices do rise.’ The fact is that Australia had a significant economic downturn in those three years and inflation came down, yet these everyday prices kept rising. The Labor Party in government does not understand the link between their own actions as a government and rising prices.

Let me give you another simple example of the rising cost of living. The everyday challenges for most Australians do not seem to be taken into account, and I am talking particularly about those people in Sydney, Melbourne and, increasingly, Brisbane who have to pay everyday tolls. I calculated that a person living in Riverstone in central-western Sydney going to work each day in the Sydney CBD has to pay $15.83 one way to go to work in the morning and $11.83 to go home. That is $28 a day, $138 a week and up to $7,000 a year in tolls to go to work for someone living in Western Sydney. That is not taken into account when those in the Labor Party talk about easing the burden of the cost of living. It was in April of this year that the Treasurer said, and I apologise for the grammar here:

… this Government has had very much a cost of living agenda in place for working families.

In July he said:

We will do everything as we go forward to ensure we minimise those cost-of-living pressures …

But there is a challenge. There is the challenge of the government’s taxes, none being more significant than the looming dark shadow of a carbon tax, which this government did not have the courage to tell the Australian people about just a few weeks ago, before the election—a carbon tax that will apply to electricity; electricity that has already risen significantly and will continue to rise significantly in the absence of a carbon tax. That burden, which is faced by every business, which is faced by every household, which is faced by every pensioner, which is faced by every parent, will increase everyday costs of living in a most dramatic fashion.

On top of that, on top of the cost of carbon, and on top of the increasing burden of taxation, the Labor Party is going to create an environment where interest rates will rise—and rise they will. Most respected market analysts will say there is a broad expectation that interest rates will rise by around one per cent over the next 12 months. Interest rates rise primarily because the Reserve Bank is trying to address the challenge of inflation. Inflation is affected by expansionary fiscal settings, and this government have had the most dramatic expansion of fiscal policy in Australian history. In addressing the challenge of the global financial crisis, the government gives these sanctimonious lectures about how it is now engaging in the greatest fiscal consolidation in modern Australian history—but they are doing so because they have had the greatest fiscal expansion in modern Australian history. They are saying that they are coming down the biggest mountain in the world not because they climbed the biggest mountain in the world but because they are smart. Well, they are not smart.

With a budget deficit in excess of $50 billion last year and a budget deficit in excess of $40 billion this year, and a budget deficit next year, and if you believe Access Economics—and I tend to, because there are some heroic assumptions in the budget about the ongoing value of commodities—this government is going to deliver to a generation of Australians a burden of debt that will put upward pressure on interest rates for Australian families for as far as the eye can see. When you are running an economy at full capacity—and the coalition has; we did it before and we will do it again—the challenge for a government is to get into surplus as quickly as possible to minimise the public sector demand and to allow the private sector to flourish, to allow capital to be invested, and to ease the burden and costs associated with much needed debt that is going to fund the expansion of the private sector.

Lots of commentators over the last two years have given the coalition, and me in particular, a rather lengthy soliloquy about the relationship between government debt and the need for the government to go into significant debt to save the Australian economy. The coalition said during the election campaign, and we say going forward, the great challenge for Australia during these times is to get the budget to surplus as quickly as possible and to start to pay down Labor’s debt. Once you pay down Labor’s debt, you can take away from the everyday Australian the burden of paying that debt but, more significantly, there is no need for businesses to compete with that debt. Every business out there, every home borrower out there, is faced with a challenge. The challenge is this federal government borrowing $100 million a day in competition with small business, in competition with farmers, in competition with everyday Australians. If you are a bank, and cash is sacred, who are you going to lend to? Are you going to lend to a AAA rated government, or are you going to increase the cost of borrowings and lend to small businesses and homeowners, and have increases in the cost of credit cards and mobile phone? What are you going to do?

When someone is competing for much needed money, the challenge is for the government to get out of the way. That helps to make funds cheaper. This is something this government does not understand. It is basic economics. When the economy is running at full capacity, when we are meeting head-on the challenges of growth and the expansion of the demand out of China and India and other places, the great challenge is doing the hard yards. You cannot set up a website to ease the cost of living. That is rubbish. It is a sanctimonious and irrelevant solution, and now they know it, after three years. You can only ease the burden of the cost of living by doing hard yards, making hard decisions. This coalition had the courage, this year, to lay down in graphic detail more than $45 billion of savings out of the budget—hard savings, politically difficult savings, but we did it because we know that you have to be prepared to do the hard yards—in order to get the budget back to surplus; to pay off, again, Labor’s debt and get the cost of living burden off the back of everyday Australians.

The Treasurer, old china, is very fond of spinning and twisting and turning. Haven’t we seen that dramatically with his explanation of the carbon tax? The IMF said in its report, released today:

As the recovery proceeds, we recommend saving stronger-than-anticipated revenue to help avoid potential overheating from the mining boom.

Well what does that say? The IMF goes on:

The increased supply of sovereign debt worldwide could eventually put significant upward pressure on funding costs.

This is the IMF and they are sending a clear warning. There are great challenges with the United States, the United Kingdom, Europe and other countries having record levels of sovereign debt. There is only so much money in the world. Australia relies on that money because we cannot fund ourselves. When you have a government accessing that limited pool of money in competition with small businesses, farmers and everyday Australians the cost of money goes up. If small businesses and manufacturers get the money, they increase the costs of the goods they produce in Australia, and that flows directly into higher electricity and water prices, higher school fees, higher healthcare costs and higher everyday expenses.

The Labor Party do not care because they do not understand that their reckless spending is putting upward pressure on interest rates and that their reckless indifference to the hard yards that are necessary to properly manage an economy is making life harder for everyday Australians, not easier. The coalition are prepared to do the hard yards because we understand the basic principles of the costs of living. The Labor Party are reckless and indifferent to the interests of the Australian people.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The cost of living pressures for Australian families are real and for many families they can be tough pressures to bear. The shadow Treasurer is concerned about our plans to deal with these pressures, and I would like to address his MPI in good faith not just by outlining just the headline numbers in abstract detachment but by looking at how the government’s plan delivers and supports diverse Australian families. In doing this it is important to address some issues about what the government has done and also address some of what the shadow Treasurer said are the problems.

I will look at the education rebates that Labor are offering, the tax cuts that we have implemented, the dental investment we have provided to families and children, the family tax benefits and the jobs that we have created. Of course, it would be remiss not to look at some of the mistakes that the coalition have offered up: their Woolworths tax, their specious debt arguments, their inability to have costings without black holes and their failure to recognise the cost of inaction on climate change.

I think it is important to always relate the debates in this place to the lives of people outside this place. For instance, let us take a family in Fremantle—call them the Browns. The Browns are a single-income couple where the breadwinner is earning a bit over the average weekly ordinary full-time wage. As a result of our last budget, the Brown’s real disposable income has increased by $3,300. I remind the shadow Treasurer that someone on $50,000 is now paying $1,750 less tax than they did in 2007-08—that is 18 per cent less tax.

Let us also take the Black family who live in my own home town of Moonee Ponds. They are a dual-income household with children, where one parent is on average weekly ordinary time earnings and the other parent is perhaps working part time and getting about half of that weekly wage. As a result of the last budget delivered by this government, the Black’s real disposable income has increased by $5,624. I go to real numbers in this MPI because that is what makes a difference to families trying to balance budgets.

In addition to the tax cuts for the Black family—for the third consecutive year, I should add—their disposable income has also been boosted by the government’s assistance to families for the costs of education, child care and dental care. For example, the education tax refund helps families with children undertaking primary or secondary school studies to meet the real costs of school expenses. Because the Gillard government is extending the education tax refund to school uniforms, the Blacks will be able to claim up to 50 per cent of the cost of uniforms incurred from 1 July 2011. This relieves pressure on the family budget being dedicated to their children’s schooling.

This family might also be a family with teenagers who need to have their teeth checked. This government is supporting families to improve the dental health of teenagers by providing a voucher worth $157 in 2010 to eligible teenagers to assist with the cost of a preventative dental health check. Since this plan was implemented on 1 July 2008, I am pleased to report to the House that the Medicare Teen Dental Plan has provided 850,000 teenagers with the opportunity to receive a preventative dental health check.

Given that the Black family are entitled to family tax benefit A, they are able to ease the cost of living pressures by claiming the 50 per cent refundable tax offset every year up to $750 for each child undertaking primary schooling. That is a refund of $375 per child per year. If their children are teenagers, there is a 50 per cent refundable tax offset of up to $1,500 for each child undertaking secondary schooling. That is a refund of $750 per child per year.

The family tax benefits are part of our plan to relieve the costs of living pressures on families and I think it is important for the opposition to recall our 2 August 2010 campaign commitment to increase the family tax benefit part A by up to $4,000 per teenager aged 16 to 18 to help families meet the cost of older children and encourage more teenagers to stay at school. In total, the forward estimates confirm this is a $595 million investment in easing the cost of living pressures, which is what this MPI is concerned with.

If this family chooses to have another child in a spirit of adventure and family building, as a result of our recent commitments dad will be provided with two weeks dedicated paid paternity leave as a new father, which will be paid at the national minimum wage of about $570 a week. This is going to help with not just the Black’s family budget for the new cot, the new mattress and the invariable costs that come from shopping at Baby Bunting but the living pressures that will come in the form of irreplaceable time with the newborn child. When the Black’s new child needs to be sent to the local creche so that Mrs Black can get back to doing a few days work to help with the income, Labor’s childcare rebate kicks in to help the family budget.

The government increased the childcare rebate from July 2008 from 30 per cent to 50 per cent of out-of-pocket childcare expenses, providing families with the ability to claim up to $7,500 per child per year towards their childcare costs, and we have also made this rebate payable on a more frequent basis. Indeed, if the Black family had had the unfortunate outcome of living under the former coalition government, they would have had to wait a year to get this rebate. Of course, as we know, children grow very quickly in their early years. Just when you have bought them one set of clothes they seem to have grown to the next size. So timely payments assist young families, and there will be about 800,000 families eligible for this rebate.

Now we come to my third family, the Purple family. The Purples are a pensioner couple who, after the last budget brought down by this government, have seen their real disposable income increase by 8.1 per cent, or about $2,030 over the year. To deliver for seniors such as this family, on 7 August we announced a commitment to an improved work bonus for age pensioners choosing to do part-time work and we also are providing $4,000 worth of training to support mature age workers in the workplace. I do not know whether that would be of interest to the coalition. Despite the challenges of the global financial crisis, with families such as these pensioners in mind, I believe that we actually stay true to our core values—that is, we have delivered an historic increase in the age pension and we did so in the teeth of the most difficult global financial circumstances since the Great Depression. From 20 September 2009 single pensioners have received an increase in their payments of $32.50 per week and for couple pensioners there is an extra $10.15 combined. Including the pension rise and the improved indexation arrangements, whilst we have been in office we have actually delivered increases of around $115 per fortnight for singles and $97 per fortnight for couples combined. From 1 July the maximum pension payment payable to single pensioners, including supplements and indexation, has increased by 19.5 per cent, well above the increases of the cost of living. For couple pensioners there has been an increase of 10 per cent, well above the increases.

In stating these numbers, I do not pretend that life is easy for pensioners—not at all. But, in putting forward the numbers for all of these families, what I do recognise is that in terms of real money—and what matters to families at the end of the day is the money to pay the bills and to enjoy the pleasures of life, to have holidays and to be able to buy presents for their families—this government is a pragmatic government which has been getting on with real and tangible outcomes for millions of Australians.

Of course, whilst we can talk about the tax cuts, the rebates, the dental investment and the family tax benefits improvements, there is one thing which is most important in helping to deal with the pressures of the cost of living; it is called a job. No-one should suggest that any form of state assistance is the substitute for the merits of a job. Since coming to office, the foundation of this government’s plan to address the cost of living for Australian families has been to ensure they have a job and have some control over their own lives. Our economic stimulus package has been praised internationally as the best the world saw during the GFC. The stimulus was of course all about protecting jobs and creating new work. Those opposite, including the shadow Treasurer, oppose this vital job focused package. Instead of doing their utmost to ensure that the families I have been talking about were households of work and wages, our opponents sitting on the other side of the House were prepared to stand by with what, regrettably, I have to characterise as a ham-fisted, do-nothing, hands-off, leave-us-alone approach.

The stimulus in the economic circumstances that have been given to this country is paying dividends today. We have seen the creation of 53,100 new full-time jobs in the last month alone. In the past 12 months we have created 349,700 jobs and we have presided over 567,000 jobs since we came into office in November 2007. What is encouraging is the broadening of growth as the economy makes a smooth transition from the support of the stimulus to a recovery in private demand. This means of course that labour demands will continue. Household consumption has risen 1.6 per cent in the last quarter. Building investment and engineering construction are strengthening remarkably. So, if the Browns’ single breadwinner is working on a construction site, his or her job security and professional aspects are definitely enhanced. If the family living in Moonee Ponds have a small corner store—and many do—they will welcome the news that other households in Moonee Ponds are likely to be increasing their spending at the corner store—more turnover at the retail counter.

As I have mentioned the cash register, I might add at this point that if those opposite had been elected last month all the families that I have spoken about, and millions of other Australian families, would shortly be experiencing the sharp end of the opposition leader’s hastily thought-out thought bubble, the coalition’s Woolies and Coles tax, with his plan to increase the tax on big business masquerading as a parental leave scheme. I understand that there are many in the opposition who were uneasy about promoting this plan and quietly hoped the idea would go away. Now, in the reflective time in opposition, they perhaps have a chance to make a silly idea see the dustbin of history.

But you cannot talk about the cost of living without talking about the cost of living in retirement. That is why our government is passionately committed to promoting reform in our already enviable superannuation system. I spoke today in question time about the need and the national good of moving from nine to 12 per cent in superannuation. I do believe and I predict, perhaps somewhat foolhardily, that the opposition will eventually come on board and there will be a time in the future in this place when the opposition will say—perhaps when they win an election once the nine to 12 per cent has been implemented—that this is a good idea and there will be bipartisanship. All I say is: let us take the agony and the tears out of a position which will inevitably be adopted by the opposition and move on, and let us fight about what is genuinely disagreed upon rather than simply having a policy vacuum on superannuation versus a set of meritorious ideas.

And another meritorious idea is the idea of Labor’s MySuper election commitment.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

More people sacked from small business!

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The member for Goldstein is yet again arguing in the face of progress. At least he is consistent. MySuper offers a generic and standardised super savings product that will return more to retirees—some of us will be retirees soon and some of us a bit later—and, in doing so, will improve this country’s national savings pool. Safe, low-cost and simple superannuation solutions are essential to help Australia’s retirement savings. By 2050 one in four Australians will have reached retirement age, compared to one in seven today. You do not get a bill in the post, but Australians are currently paying $85 a month on average in superannuation fees, which is more than the average person’s monthly mobile bill. We need to have the offer of low-cost superannuation products for people who cannot afford and who do not seek to have high-priced superannuation products.

It is our intention to allow super funds to offer simple, low cost superannuation products called MySuper, from 1 July 2013. This will be a new default superannuation product with no unnecessary fees or charges and with simple features to make it easy to compare fund performance. This benefit for a 30-year-old worker on average wages would lift their retirement savings by $40,000. When we talk about superannuation and if we want to relieve cost of living pressures, we need a bigger national savings pool. I think the opportunities of moving from nine to 12 per cent, the doubling of the concessional cap, the improvements for low income earners and the extension of the SG from 70- to 74-year-olds will help build a national savings pool. A national savings pool is one of the competitive advantages of Australia in the global economy. This whole House should get behind that rather than having the point-scoring debates about the cost of living that the opposition have tendered in this MPI.

I would also suggest in closing that, if we want to talk about the cost of living, there is a cost of inaction on climate change which has been recognised in the Stern report. There is a cost to inaction. Just as well there is a cost to an $11 billion hole in the funding policies of those opposite. We keep hearing about debt. Let us just put some facts on the line. We are the envy of the world in our government debt situation. Our peak debt will be six per cent of GDP in 2011 and 2012. Our budget returns to surplus in 2012-13. I do not think the opposition is happy about that. I think they resent that Labor is able to return it surplus. We are doing much better than the rest of the world in international net debt for the government sector, and I think we have the plan for the cost of living—(Time expired)

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

In March 2008, several months before Lehman Bros collapsed, we saw Australian consumers cut their spending when the government was still increasing interest rates. People had no sense of what was coming, yet, several months before Lehman Bros collapsed, we saw typical Australians cut spending. In fact, the savings rate went from minus four per cent to plus four per cent in those six months. Average working Australians had an instinct: they felt exposed. They had an instinct about the problems that were brewing. A lot of it was contained within the cost-of-living pressures that they were starting to face. If we fast forward to today, 2010, we are starting to see a similar phenomenon. Today, consumers are again showing renewed signs of caution about the economic outlook, preferring to pay down debt rather than ramp up their spending or build new homes.

The official figures for the last two months have confirmed a significant drop in consumer sentiment and dwelling starts. Yet, we have just heard the contribution from the member for Maribyrnong, which I think you could best paraphrase as ‘They’ve never had it so good’. There is litany of expenses by this government—spending, spending and spending. The member never mentioned the fact that $100 million a day is being borrowed to pay for all of that spending and that someone has to pay for the $100 million—and that is the taxpayer of Australia. He did not mention the costs that people are incurring. He just mentioned the money that the government is spending, spending and spending.

The fact of the matter is that Australians are not convinced that the northern hemisphere countries have weathered the financial crisis—we would not know it in this House from the lack of reference over many months to what is going on in Europe and the United States and whether we need to take some precautions as a consequence. Australians do not trust the pollyanna view that the government has for the next four years—a view that the government has pedalled for months. Australians are feeling exposed. There is an anxiety in the community. A lot of it is borne out of cost-of-living pressures that everyday Australians are facing. This was the issue at the election. People were trying to make a judgment about who would best manage their circumstances, and for the first time since 1940 they actually eliminated the majority of a first-term government. They took that big step. You find in countries everywhere in the world that people’s instinct is to give a government a second chance. It is true in Australia; it is true in most countries around the world. Not since 1940 have we seen what has happened in this country, and it happened because people were concerned about the cost-of-living pressures that they were facing.

A family might sense that the future holds some risks. They might have some concerns. They might not be able to articulate them but they can sense them, and they think the government has no plan to deal with these circumstances—that is what they are sensing; that is their fear. What do they do? They stop spending. They pay off their credit card. They pay down their debt. That is what they are doing now. Again, instinctively, people are out there doing that. They are cutting their spending and they are spending wisely. That is happening amongst most households in Australia at the present time, and the official figures are confirming that. It is no different at a country level. This is not rocket science. If you sense that the future holds some risks then you should pay down the country’s debt, you should cut spending, you should spend wisely and you should live within the country’s means. But what are we seeing? A government with a pollyanna view.

This is a government so inexperienced in handling money, in running the shop, that they are more obsessed with spin than with substance. They are more obsessed with trying to kid people into what is going on and more obsessed with creating what I think are pseudo budget surpluses in the out years. Just this week Access Economics said that 2012-13 will be five minutes of fiscal sunshine before the budget slumps back to a $1.8 billion deficit in 2013-14. Access expects softer export prices, arguing that mining companies will boost their production levels to meet the spurt in Asian demand. What they are seeing and predicting is a supply response. It is something that we have talked about for months. During my 18 years in agriculture, I saw it again and again: a supply response to higher prices which was never anticipated. People always underestimated the supply response and the speed of that response. If they had bothered to talk to the mining companies, they would know that there are many thousands of new mines around the world awaiting the infrastructure to take those resources into China and India. If we do not at this point in time capture some of that, we will miss much of the opportunity that the budget predicts will occur.

But all of that new mining will create a supply response that will reduce the price of resources, which will mean that we will never have a hope of producing the sorts of surpluses the government has predicted. Access Economics warned that if the subsequent drop in commodity prices was much bigger than Treasury was expecting the budget was a ‘house of cards’. Have you heard that before? How often have we heard that? They said it would be a ‘house of cards, an accident waiting to happen’. They also said:

The return to surplus trumpeted in the official forecasts is a pure punt that China and India will keep growing faster than the world’s miners will keep digging deeper.

How astute is that. We have a situation where Australia faces many vulnerabilities, yet we have a pollyanna government that is blind to what is really going on.

The response of so many Australian households—paying down debt, cutting spending and spending wisely—is primarily why Australia got through the global financial crisis in such good shape compared with other industrialised countries. It was our having no debt, massive reserves, four per cent unemployment and a 12-month pipeline of projects that kept us going until the crisis was in fact pretty much over. Combined with the 4¼ per cent response by the Reserve Bank, which is the normal measure you take to increase demand, we had exchange rate flexibility—it dropped to 60 cents in the dollar and then went back up again later on—and, because of the 60 cents in the dollar collapse, we had the highest trade surplus in our history in 2009.

And what did the government do? They panicked. Not only did they have an early stimulus, which we supported in 2008, sensibly, for confidence reasons. By 2009, they had committed $42 billion. They panicked. By the time the budget passed through this chamber the crisis was over. And what has that $42 billion done? It has done what my colleague the member for North Sydney said again and again: it has put pressure on interest rates and it has created a problem for small business, where there are 330,000 fewer people employed today in small business than there were before this crisis. How good is that? Australia is built on small business; it is the innovative centre of Australia. Big business has outsourced innovation to small business. We have 330,000 fewer people employed in small business that we had three years ago. This is a failure of this government; it is why people are feeling vulnerable.

And this government is not for turning. They have spent and spent to the $42 billion. The targets they chose were political targets—school targets, a school in every electorate. They chose pink batts for homes in every electorate, green loans in every electorate and community infrastructure programs. All of these things have turned to custard. This government has made error after error and misjudgement after misjudgement. They have been concerned primarily with saving their political skin—to ensure that spin beats substance every day of the week. They have produced a $54 billion deficit. This is the sort of reckless spending has put so much pressure on the cost of living for families, and this must stop. (Time expired)

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

Order! The honourable member’s time has expired. I call the minister.

Julie Collins (Franklin, Australian Labor Party, Parliamentary Secretary for Community Services) Share this | Link to this | Hansard source

I am the parliamentary secretary.

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

Under the Ministers of State Act all parliamentary secretaries are sworn in as ministers. Twelve ministers are deemed to be parliamentary secretaries, or designated as such, and the balance are officially called ministers. The term was correct.

Julie Collins (Franklin, Australian Labor Party, Parliamentary Secretary for Community Services) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. This government recognises the cost-of-living pressures facing Australians across the country and across the community. In my own electorate I met every day throughout the last three years with families, pensioners and people on disability support pensions who are facing cost-of-living pressures. But we have addressed this through tax cuts, stimulus payments, emergency relief assistance, financial management services and pension reform. We have supported and we will continue to support Australians dealing with financial pressure, whether they are families, singles, pensioners or carers.

We understand the financial pressures that families face: balancing the budget, having to deal with the cost of groceries, petrol, car maintenance, energy costs and utilities costs amongst a raft of other expenses. Then there are the increased costs of mortgages and rent. Obviously housing costs are an issue. But to help them through the global financial crisis we have provided stimulus payments to families, pensioners, carers and self-funded retirees. During the global financial crisis we also made substantial increases in our investments in the emergency relief funding and financial management programs.

But there really is no greater pressure on the cost of living than unemployment. Jobs are important, and it was the Labor government’s economic stimulus plan that protected the jobs of 200,000 Australians and saved the Australian economy from the worst global recession since the Great Depression. The response to this of those opposite was to sack public servants.

The Gillard government has also delivered tax cuts every year for the past three years for all taxpayers. Compared with when we came to government in 2007, someone now on $20,000 is paying $750 less tax each year. That is 50 per cent less tax for someone on $20,000. A person on $50,000 is now paying $1,750 less tax each year, which is 18 per cent less tax. If you are on $80,000 a year, you are paying $1,550 less tax, which is eight per cent less tax. Also, to make the taxation system simpler, we are introducing a standard tax deduction for work related expenses. A standard deduction of $500 will be available to taxpayers from 1 July 2012, and we will increase it to $1,000 from 1 July 2013. For those taxpayers, it will mean less time doing taxes and more time with families. Also, for 6.4 million Australians, it could mean a larger tax return. That is money back in the pockets of Australian families.

As we heard today in question time, the Gillard government is also delivering the first national paid parental leave scheme, giving parents more time at home with their babies and reducing the financial pressure on new families. The scheme will be operational from 1 January 2011 and will provide around 148,000 new parents each year with 18 weeks of parental leave pay at the federal minimum wage, which is currently around $570 per week. That is a total of over $10,000 for families.

I am pleased to remind the House and those opposite that, as the minister for families said today in question time, applications for the first national paid parental leave scheme will be accepted from tomorrow so people can start applying for that paid parental leave. We also know that those opposite sat on their hands for 11 long years in government and did absolutely nothing about introducing a paid parental leave scheme. It was interesting indeed to hear in the last few months that they suddenly changed their view on paid parental leave and decided to pay for it with their great new tax on everything.

We do understand the cost of raising a family, but we also understand that it extends well beyond the first few months of parenthood. That is why we are also helping families with the cost of child care. Federal Labor increased the childcare rebate from 30 per cent to 50 per cent. We have increased the maximum annual rebate by almost 72 per cent, from $4,350 per year to $7,500 per year. We are also paying the rebate more frequently so it arrives as parents pay their bills. We also announced that we would increase that frequency so that people can have that money on a more regular basis.

I am very proud to be part of a government that has delivered for more than three million Australian pensioners as part of our historic pension reform. In my electorate of Franklin there are more than 16,500 pensioners and I understand the financial pressures they face. We reformed the pension system for the first time in its 100-year history to provide better support for pensioners, carers and disability support pensioners now and into the future as they deal with the costs of living. This government, as we have heard, is delivering increases in pension payments of around $115 per fortnight for singles and $97 per fortnight for couples combined since we came to government. That is around 2.1 million age pensioners, 764,000 disability support pensioners and over 167,000 carer recipients who have benefited from this pension increase.

Our new indexation arrangements have also ensured that they will keep pace with the cost of living. Our new pensioner living cost index and our pension reforms have ensured that the pension has increased by more than it would have otherwise because every indexation since September last year has occurred under the new indexation arrangements. By contrast, we know that the coalition ignored the inadequacy of the pension and the needs of pensioners for 11 long years whilst they were in government. In fact, worse than that, we know that Tony Abbott and the cabinet of the former coalition government actually—

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

Order! The parliamentary secretary should refer to the Leader of the Opposition by his title, not by his name.

Julie Collins (Franklin, Australian Labor Party, Parliamentary Secretary for Community Services) Share this | Link to this | Hansard source

I am sorry, Mr Deputy Speaker. The Leader of the Opposition and the former coalition government made an active decision to reject the proposal to increase pension rates. They actively chose not to increase the pension—shame! After more than a decade of inaction by the Liberal Party, it took a federal Labor government to overhaul the pension system to make it more adequate and more sustainable for those age and disability pensioners, carers and veterans who depend on it.

We also know that when it comes to raising a family there are education costs. We introduced the education tax refund. Obviously the opposition thought this was such a good idea that they included changes to it in their own election campaign, which was very interesting. It was introduced by a Labor government, helping around 1.3 million families to meet the costs of their children’s education, like laptops and textbooks. Of course, we announced that we are now expanding it to include school uniforms. Eligible families can claim a 50 per cent tax refund on their education expenses up to $780 for each primary school child and over $1,500 for each high school student.

We have heard about the Medicare Teen Dental Plan, under which more than 800,000 preventative dental checks have been undertaken. We have also heard about the increases we announced during the election campaign for the family tax benefit for teenagers aged 16 to 18. Can I say that, as a parent of a teenage daughter who is 16, I understand these costs and I understand that they increase as children get older. Under the new measure, the new maximum rate for FTB A for 16- to 18-year-olds will increase by $208 per fortnight. That is just over $6,000 per year. This is the same rate that currently applies to 13- to 15-year-olds and the eligibility conditions are the same.

We know that families and pensioners cannot trust the opposition. We know that during the election campaign they told us they wanted to increase the cost of living for low- and middle-income families through a tax on companies that own our supermarkets and our petrol stations so they could fund paid parental leave for high-income earners. We know all this. We heard it all during the election campaign. Those opposite do not understand the pressures that Australian families face. We know that they voted against our tax bonus for working Australians. We know that they voted against our stimulus package. We know that they voted against that package that protected and saved jobs during the global financial crisis and we know that, if they had their way, Australia would now be in recession and thousands of families would have faced unemployment, would be without a job and would be unable to pay their bills. While the opposition keeps playing their negative fear and scare campaign politics with serious issues like the cost of living, we want to continue to deliver real results—protecting jobs and providing proper support for Australian families, pensioners, carers and those in our local communities.

In closing I want to touch on the interest rates issue. We know that those opposite keep running this fear campaign on interest rates, but what we also know is that while those opposite were in government there were 10 interest rate rises in a row. We know that interest rates are now lower than when they left office in 2007 and we know that people are now paying less in mortgage interest rates. A family with a $300,000 loan is currently paying $236 a month, or over $2,800 per year, less than in November 2007. I am very pleased that we are addressing the cost of living for families. We do have a plan to continue to do that and I am pleased to be part of a government that has that plan.

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

What we have seen in the course of this matter of public importance is a government in denial. We have seen it through this debate and we have seen it right through this week: denial about their debt and deficit, denial about the impact of their mining tax, denial about the impact of their planned carbon tax on the cost of living of Australians. We have seen it right through the course of this MPI. But Australians know the price of Labor. The price of Labor—of debt and deficit and higher taxes—is always borne by the Australian community. As the shadow Treasurer rightly pointed out, three years ago the Labor Party, in opposition, promised to ease the burden on the cost of living. All that has happened in their period of government has been increases right across the board in cost-of-living pressures.

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

Order! It being 4.30 pm the matter is interrupted. Pursuant to standing order 17, I lay on the table my warrant nominating the honourable member for Chisholm to be a member of the Speaker’s panel to assist the chair when requested to do so by the Speaker or Deputy Speaker. I propose the question:

That the House do now adjourn.