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 failure to deal with cost of living pressures on Australia's families in the budget.

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

At 7.30 last night the Treasurer rose to his feet to deliver his budget speech. His opening words were, 'This is a Labor budget.' Well, most Australians turned off at 7.31, as soon as he said that. Why? Because being a true Labor budget it delivered bigger debt, bigger deficits and bigger spin. The deficits in this budget, the stuff that really matters to Australians today, are growing. The budget deficit this year has grown in the last six months from $42 billion to nearly $50 billion. That means the government is borrowing $135 million every day just to fund the deficit. The budget deficit for next year, which is the appropriation bill that this House is going to vote on, is actually growing from $12 billion to $22.6 billion.

The Treasurer expects us to believe the fairytale story and for the Australian people to accept—with this year's budget deficit situation deteriorating because of external circumstances and the government's increase in its own expenditure, and next year's budget deficit increasing, including increased government expenditure—the only budget narrative the government had today, and that is that in two years time they will bring the budget back into surplus. That is the only narrative they had in this place today—to promise something that they promised last year, to promise something that they promised the year before. But the difference is that with the Labor Party it is 50 per cent promise, 50 per cent excuse. The debt of Australia, the net debt of the government, is now $106.6 billion—in dollar terms, the highest of all time. It is a deterioration in the net debt figure from $94 billion. Buried deep in the budget papers we have now discovered that the government is going to ask the parliament to increase the amount of debt issuance to $250 billion in gross terms. Of course, they are going to use the excuse of Basel III to maintain what will be since World War II the largest debt issuance in our modern history.

What does this all mean? For everyday Australians it means that the interest on the Labor Party debt will increase to $18 million a day every day for the next four years. It means that by the fourth year of this budget, interest will rise to $7½ billion. And the government expect us to believe the fairytale story that somehow they are going to bring the budget back to surplus with fiscal discipline. They sold and spun in the budget speech last night $22 billion of so-called savings. Ignore the fact that a third of that was tax increases. Even so, $22 billion, and now people are becoming more aware that the government is spending $19 billion of that $22 billion. But most intriguingly, and this is where the rubber hits the road, next year—in the year when we have stronger economic growth, where we have unemployment dropping to 4.5 per cent, where the government is running a bigger budget deficit—in that year the government is going to spend $2.2 billion more than it is saving. These much lauded savings that are going to bring the budget whirring back to surplus, in the budget where the rubber hits the road they are spending $2.2 billion more, and it is not even an election year. Growth is going up to four per cent but employment growth is actually slowing.

If we cut through the spin of this incompetent Treasurer, what we can recognise is that he is desperate to get adulation. He talks about the emotion of putting together a budget, how he is sleepless at night about the difficulty and challenges associated with the Australian economy, an Australian economy that he lauds as the best in the world. Yet he is so sleepless, he is so lost, he is suffering such insomnia.

Employment growth is slowing even though this government is desperate to spin half a million jobs being created over the next two years. That is an employment growth rate of just 2.2 per cent. It is less than the last three years of the Howard government at three per cent and, what is more, it is less than the last 12 months of this government itself, which had employment growth of three per cent, with 320,000 jobs created in the last calendar year. And somehow they think that it is a momentous achievement for them to be in the business of overseeing an economy creating half a million jobs in two years when the same economy created 320,000 jobs in the last 12 months.

On inflation, what I think was quite alarming was that last night, when you dig deep into the budget, the core inflation figures indicate that inflation is going up to three per cent, the top of the Reserve Bank band, by June 2013. Currently it is 2.25 per cent. We are in an environment where the Reserve Bank has clearly indicated it is going to take action. I want to make it perfectly clear to the Australian people and this parliament that Wayne Swan and Julia Gillard are going to own every interest rate increase from here on. They are going to be responsible for making life harder for everyday Australians and not easier. They had the chance in this budget. They had the opportunity to make the hard yards, and they failed that test because they lack courage. They talk courage but they display no courage. They talk surplus but they deliver deficit. They talk net debt as a negative and now they are going to deliver a significant increase in net debt.

This is a government that has never met its budget targets. I say to you why, Mr Deputy Speaker. It is because this government does not have internal discipline. They lack the processes for actually making hard decisions, as illustrated by the fact that they leaked $400 million in cuts in medical research and did not proceed with it. They leaked that they were going to cut childcare benefits and then did not proceed with it. What did they do? They cut families by $2 billion. It is something I said to the Leader of the Opposition in the lock-up: I cannot believe this government is reducing the real increases in the family tax benefit for families on $45,000 a year. Why would they do it?

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

It is a supplement.

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

He says it is a supplement. It is not real money: is that it, sunshine? It is not real money. Two billion dollars is not real money. Somehow it is in your budget, so either it is real money and it is really going to affect Australians or, as the member for Lindsay would say, it is not real money. I say to you, sir, that Australian families are struggling, and particularly in your electorate of Lindsay. Your budget is indifferent to the plight of your people. Your budget is ignorant of the fact that everyday Australians are struggling: they are finding it harder to pay for higher electricity bills, for higher mortgage repayments, for higher fruit and vegetable prices, for higher petrol prices. This is a government that is overseeing a deterioration in the living standards of middle Australia. And why? Because of their own fiscal recklessness.

There is one figure set that illustrates this more graphically than any other. It is the fact that since Labor was elected the Public Service in Canberra has increased by 20,000 employees. Last night in the so-called tough budget the government increased the size of the Public Service by a further 1,100 employees, including 200 in the Department of Prime Minister and Cabinet alone and 55 in the Department of the Treasury. So at that time, when they are talking tough and expecting Australians to cut their cloth, this is a government that is going on a binge, a binge that is based on politics and not policy. Of course, in the budget there are reflections of their policy failures, which Australian families are now paying for. The $1.2 billion blow-out in the computers in schools program grew a further $200 million in last night's budget to $1.4 billion. The government's failed border protection policy has grown out by an additional $1.75 billion, and I suspect we will hear more about the growing bill for their failed border protection policies. What about the $111 million that is going to have to be spent mopping up the failed pink batts policy? How about that one, Mr Deputy Speaker? Of course this all reflects the fact that the Labor Party cannot rein in its spending. The Treasurer keeps talking about spending growth. He is working off a very high base because of course the government went for the credit card during the financial crisis, handing out $900 cheques, building school halls, installing pink batts, putting solar panels on roofs—they did it all. They smoked the credit card at the moment when Australia could not afford to have an excessive fiscal stimulus. It turns out that Australia gets a silver medal, or maybe even a bronze medal, for the biggest fiscal stimulus in the world as a percentage of GDP, and now we are paying a heavy price for it.

At no time in the forward estimates—and wasn't the Treasurer caught out by this today!—or at any time has the government's expenditure as a percentage of GDP been as low as it was in the last year of the Howard government. The Treasurer says that we were a profligate government—

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

You were.

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

yet nowhere in all of the budget figures at any time does the Labor Party ever get to the 22.9 per cent of GDP of the coalition in its last year. Then, belatedly, in a defensive mood, the Treasurer comes into this place and says, 'Oh, well, look at the average of the coalition. We are less than that.' So I looked at the average of the Labor Party so that we can compare apples with apples. Under the coalition on average over all of that period, including the very difficult period when we had negative growth during the Asian financial crisis, the coalition's percentage increased significantly, as it does when the economy comes down—the percentage of government expenditure rises as a percentage of GDP—but on average the Labor Party has been spending 24.6 per cent of GDP and the coalition just 24.03 per cent. When you add in the revenue and expenditure associated with the carbon tax at $26 a tonne—boom, boom! It all goes.

Do you know what, Mr Deputy Speaker? This is the challenge for the government: assuming there are no major new policy initiatives over the next two years, assuming the carbon tax is not going to have any impact on the budget, assuming there are no other challenges ahead, assuming that the terms of trade will remain at the highest level in 150 years, assuming that old Penny Wong can control the Prime Minister as she claimed to do. My goodness, what a mud wrestle! Senator Penny Wong claimed that she was going to control the Prime Minister's excessive demands for spending. I say to you: this mob will never deliver a budget surplus. This mob will never have the courage to deliver a budget surplus and, as the member for Longman said so vividly earlier, in question time, in his entire lifetime Labor have never delivered a budget surplus. Even though he was conceived in a surplus he was delivered in a deficit. It just goes to show what a celebration it was when Labor last delivered a budget surplus, and when Labor delivers a surplus again we will all give a good cheer and have a great party.

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

I listened carefully to the shadow Treasurer's speech. I think he has missed a lot of what happened in the budget last night, so I am pleased to assist and to be a torchlight of clarity in this matter of public importance debate. I am pleased to switch on the lights.

Australia is experiencing an economy in transition. We need to get our policy settings right. We on this side of the House understand that our economy is changing, and we need to make sure that government policies change to assist Australians to prosper from the transition of our economy. There are transformative forces at work in our world. On this side we understand the growth in the emergence of Asia. We understand that our population is growing older. We understand that information is king in the modern era and that the information pipeline is going to be a fundamental driver of economic organisation. We understand that, along with the high commodities prices in the mineral boom, we are also expanding as a services economy. We also understand that we need to change to a low-pollution economy.

This budget is an attempt to get away from sound bite style policy, which is, tragically, so beloved of the opposition. It is a search for systemic ways to make our nation more sustainable, more innovative and indeed more competitive. It is to help us make the transition into a digital economy, a low-pollution economy and an economy which can spread the benefits of the mining boom throughout all parts of this nation. After all, if the global phenomena of climate change and the global financial crisis have taught us anything at all it is this: everything and everyone is connected and change is not optional; it is inevitable. That is why this budget is so important. That is why Treasurer Swan's fourth budget is such a very good one. It is a statement of purpose, and the purpose is to secure our future his budget endeavours to tackle the cost of living issues and it builds upon Treasurer Swan's previous three budgets. Let us go through some of the contributions of the government to tackling the cost of living. People are paying lower taxes. Someone on $50,000 a year is paying $1,750, or 18 per cent, less tax than in 2007-08. The tax to GDP ratio—a statistic which was cleverly, selectively and disingenuously ignored by the opposition spokesperson who just gave us his contribution—has dropped from 23½ per cent in the last year of the Howard-Costello regime, when we came to office, to 20.3 per cent in 2009-10.

Since September 2009 we have tackled the cost of living pressure on pensioners by increasing the age pension. It is up $128 a fortnight for single pensioners and around $116 for pensioner couples. We have developed the education tax refund. This is where families can claim up to 50 per cent of their education costs, up to $397 per year, for every child in primary school and up to $794 for each child in secondary school. There are over one million families and 1.7 million children who have already benefited from this education tax refund. We have also extended the education tax refund to school uniforms. Parents now will be able to claim up to 50 per cent of the cost of uniforms incurred from 1 July 2011—yet again helping with the cost of living pressures.

In this budget we were pleased to announce the increase of $4,200 to families who are receiving family tax benefit A. We have committed to increasing it up to $4,200 a year per teenager to help families meet the costs of older children still at school and to encourage more teenagers to stay at school. From 1 January 2012 we will increase the maximum payment rate of family tax benefit A by around $160 per fortnight for teenagers who are aged between 16 and 19 years who are in school or studying for an equivalent vocational qualification. This is going to benefit 650,000 teenagers turning 16 over the next five years.

But of course the best way to deal with the cost of living is to ensure that people have a job. Having a decent job is the best way to deal with cost of living pressures. Since 2007, under the stewardship of our Treasurer, we have overseen the creation of 700,000 new jobs, in mining, retail, health and the skilled trades. That is 550 jobs a day, every day, since Labor took office. And now there are over 440,000 Australians in training or apprenticeships. They are getting real training for careers in construction, automotive, furnishing, tourism, plumbing and hairdressing. We will increase the number of apprenticeships over the next three years by another 50,000. Liberal policy, I am afraid to report to the House, is to cut $2 billion from training and to sack 80,000 trainees.

When we look at this cost of living debate and what this budget contributes, we need to further put the facts in black and white. If you have got children in child care, you will get the choice of claiming childcare payments more regularly—getting the money in your pocket and off the bill you have. As I said, if you have children at school, you will be able to claim for their school uniforms. If your children are teenagers, we are increasing the family tax benefit payment by about $160 per fortnight. Also, importantly, if you are one of 50,000 single parents, tax rates will be cut by up to 20c in the dollar. If you want some training, to obtain a higher wage, as I have said, we are creating 130,000 training spots. If you want to be an apprentice, or if you have a teenage son or daughter who wants to be one, we will give more support for people to complete their training, through mentoring guidance and allowing good apprentices to get their qualifications quickly. If you are a tradesperson or a small business, if you are buying a new ute or car which is necessary for the business, you will be able to claim $5,000 back in tax. That is real help in terms of the cost of living.

If you are a low-income earner, you will get more in your pay packet each week through the advance payment of the low-income tax offset. If you are finding it tough to get a job, there will be 35,000 wage subsidies for the very long-term unemployed job seekers, to help them get a job, and 30,000 training places for single and teenage parents, to help them get the skills they need. Importantly—and dear to my heart—if you have the challenges and the financial costs which arise from having a disabled child in the school system, we will be contributing $200 million to the special schools and the school systems of various states in order to better support disabled children getting an education. If you are worried about your local hospital, there is $3.4 billion for emergency departments and elective surgery. There is $613 million for new medicines and making immunisation more affordable. If there is a teacher in your family, or you are a family that places a lot of value on the quality of your child's teacher, there is $425 million to reward our top performing teachers across the country.

This is a real list of things which go to the day-to-day lives, the lived experience, of people in the suburbs and regions of Australia. But I would not want the House just to take my word for the benefits of this budget. I will quote David Koch, who is a very well-known commentator. He said in today's paper—and it is a fair assessment:

The overriding theme is that if you don’t have a job, or if you earn a comfortable income, there are no more easy Government handouts.

Perhaps that is what is worrying the opposition. Kochie also said:

Compared with the rest of the world we are an economic miracle. Economic growth will be reasonable (after the hiccup of the natural disasters), inflation on target, unemployment falling and—

despite the Chicken Little prognostications of those opposite—

Government debt tiny compared with the rest of the world.

Kochie could be viewed to be a commentator for the government, but he is not. He is independent, as I know the shadow Treasurer thinks. If Kochie were not sufficiently convincing and compelling, CommSec Chief Economist Craig James, who is hardly a member of the Marxist international, said:

Overall, it is a smart Budget, right for the times and challenges ahead.

Meanwhile, the ratings agency Moody's, who are hardly Green Left Weekly, have reconfirmed our AAA rating and said:

… Moody's notes that Australia's government debt remains amongst the lowest of all AAA-rated governments.

The chief economist of UBS, Scott Haslem said:

The bias towards reduced spending over new taxes to offset revenue shortfalls is commendable.

UBS says that what the government has done is commendable. Heather Ridout of the Australian Industry Group has said:

We believe this budget is very solid on the fundamentals. It makes a solid investment in skills … I think it will take pressure off interest rates in the longer term.

But again it does not stop there with the commentary. On Bloomberg, it says:

Australia's government will end 23 years of spending growth to ease inflation from the biggest mining investment boom in the nation's history.

But of course the opposition would not rate CommSec, they would not rate UBS, they would not rate Kochie, they would not rate Bloomberg, because they do not agree with their view of the world.

I think it is important, when we are having a debate about who is doing the best in terms of the budget, that we understand that this budget is not formed in isolation. Politics is not a one-horse race; it is a two-horse race. We have to see what the opposition would do. We all remember last year when the Leader of the Opposition got up and gave a speech and made some political points and, at the end, said, 'By the way, the shadow Treasurer will deal with the costings in our propositions at the Press Club next Wednesday.' So we all waited with bated breath—what would the shadow Treasurer say the following Wednesday at the National Press Club? Unfortunately, he got up and said nothing. He said, 'Actually, that is the shadow finance minister's job.' So what we have is sort of the opposition equivalent of the Three Stooges: 'It was not me; it is him.' 'No, it is not me; it is the other person.'

The more important point is not even the gaffe of last year. The issue is this: good budgets are not centrally just about politics and parties. They have to be about good policy; they have to be about the future. So we need to have a good-faith debate here. This budget week is not just a test of the government; it is a test of the opposition. If the Liberal-National Party coalition have real alternatives that they truly believe in, they should set them out. They should set out their alternatives—anything less than that is absolutely wasting the opportunity.

On the issue of getting the budget back into the black, the shadow Treasurer made some rather garrulous comments on 4 May and again on 6 May—indeed on any day that you talk to him. But on 4 May and 6 May he made it clear that he could get the budget back into the black by next year. When in Australian politics will there be any accountability for the comments of the shadow Treasurer? We all know that it took the Leader of the National Party to slap him down over his motormouth comments on trusts, when the shadow Treasurer said that trusts should be taxed in the same way as companies. It did not take long for the red warning light in the National Party bunker to go beep, beep, beep. And I have no doubt that the Trussinator was on the phone saying, 'This is not coalition policy.' I could just hear the Nationals going: 'Oh my god! The moose is loose; he is out again and he is making policy on the run'.

I think that what we need to do here is to make sure. Perhaps we need a little bit of National Party iron rigour— the wheaty hand in the glove—saying to Joe Hockey, 'Mate, what is our policy? What is our plan? What are we going to do? It is all right for us to bag the government—okay, that is one thing. What are we going to do?' All we have is their costings from the election and we all remember the $11 billion black hole. Tony Abbott fronted up, ran around the 36-hour—

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

Order! The Assistant Treasurer ought to refer to other honourable members by their titles.

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

Indeed. The Leader of the Opposition, which he was then and thankfully still is now, was running around on a 36-hour New South Wales law and order binge, where he was clearly submitting himself as the candidate for premier in the state election. But he did say, 'We have $50 billion in savings up our sleeves, in our gear.' But after the election, when they were forced to demonstrate at least some degree of financial rigour, there was an $11 billion costings black hole. Indeed when we were dealing with the floods package—very necessary to help with the reconstruction of terribly flood affected areas—they said, 'We can find cuts,' and we all know how that descended into farce. The shadow foreign minister told the shadow leader, 'You are not cutting foreign aid,' when in fact the opposition leader was trying to use One Nation's policy on cutting foreign aid. Of course we do not talk about the war now, do we?

Returning to what is most important: I have submitted to this House today what we are doing to tackle cost of living pressures. I have submitted that this is a budget about getting us back into black by 2012-13. This is a budget which is about creating more jobs and spreading the benefits of the mining boom across all of the economy. We are an economy in transition; we need good policies in this country. But the challenge tomorrow night for the opposition is saying, 'If we do not like what you are doing, what is our plan?' The challenge for them is to demonstrate that they will not just keep this economy in deficit, unlike yesterday's capable Swan budget.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

The government's 2011 federal budget is an absolute shambles. There is no plan; there is no vision; there are no solutions. The Treasurer told us at the beginning of his budget speech that it was a Labor budget with Labor values. Budgets that are a shambles, without a plan and without a vision are Labor values. That is what Labor budgets are all about. If, perchance, the economic circumstances improve, Labor have no idea how to deal with it. When tough decisions need to be made to reduce government expenditure, they disguise the expenditure with the traditional Labor value, the traditional Labor way of fixing problems: new taxes.

We hear a lot about $22 billion worth of so-called savings in this budget, but a third of that amount is actually new taxes. And the great big new carbon tax is not to be seen or heard of in this budget. It is the tax we dare not speak of, except of course when it comes to funding the promotion campaign—the campaign for the tax that is not even mentioned in the budget.

We all know that this budget will do nothing to deal with the problems of struggling families. Labor's extra spending means greater pressure on interest rates and the near certainty of extra interest rate rises this year. Inflation is on the march, but the budget does nothing to halt that advance. And over everything is the threat of the carbon tax, which hangs like a sword over the heads of every family, every small business and every community across the nation. This Labor budget is all about a return to Labor's core values, with attacks on the people Labor always hate. Bring out the old class prejudices again—an assault on people who care for their own welfare by taking out private health insurance, one of Labor's pet hates, and on families who save up so that they can fund in advance their children's university fees, also on Labor's hit list. And what about single-income families, how they have been assaulted in this budget with removal of the dependent spouse rebate and the changes to the family tax benefits? All of this makes it more and more difficult for a family to decide that one of the parents will stay home to raise the children. Indeed, in future, under Labor's plan, the single-income family will become a thing of the past. It seems that is also one of Labor's core values.

The other thing about Labor budgets is all the overgrown rhetoric—grand statements, commitments about the biggest this, the biggest that, the largest programs of all kinds—but when you search through it all you find the numbers are not real. There is a $2.2 billion mental health strategy but they do not bother to mention the mental health programs they have axed to help fund it. They do not bother to mention that some of this is just restoring money they have taken away from programs like headspace. It is a big headline. That is what they are interested in. The absolute classic at this has always been the minister for infrastructure. When you read his press statements they always say 'the biggest road project of all times'. He has been well and truly caught out with his statements in relation to the Pacific Highway—a big banner headline 'More funding for the Pacific Highway':

The Gillard government is prepared to increase its investment in this road by $1 billion as a part of the 2011-12 budget.

Then he goes on to talk about what this extra funding will achieve. He makes it clear that there is an extra $1 billion in the budget for the Pacific Highway. He tried to defend himself in question time today when the member for Cowper quite rightly pointed out that this is not $1 billion extra for the Pacific Highway. This is not $1 billion worth of new money. He said the member for Cowper should go back and read budget paper No. 2, which has all the details about this item. Let us go to page 267 of budget paper No. 2 and remember that Minister Albanese is claiming he is providing $1 billion of extra money for the Pacific Highway. Page 267 says of this $1.02 billion:

Of the contribution, $700 million has been previously provisioned for in the budget.

So of the $1.02 billion, $700 million has been previously provisioned. It is not new money at all. It is re-announcing the same money which was announced previously. He did acknowledge that of the rest, $270 million was in fact money which has been taken off other projects in New South Wales. So $970 million at least of this money is not new money at all. The next thing he went on to say was that this money was going to deliver us a better Pacific Highway but if you read his press statement, he says:

This extra funding will complete necessary detailed planning for the remaining sections of the highway.

Detailed planning! It is not as though the minister went off on his own path on this one. That is also repeated in the budget document—a whole billion dollars spent on planning. Planning! They go even further by saying that if this money is matched by the New South Wales government further construction might be able to begin. They are waiting for the New South Wales government to put up the money to actually build the road. Yet the minister is trying to take credit for it all. However, he has caught himself out again because in 2009, when announcing the new N1 road network in Australia, he said that the Commonwealth would pick up 100 per cent of the cost of building the Pacific Highway. He was letting the New South Wales government off their traditional fifty-fifty share. It seems that the old destitute, hopeless Labor government in New South Wales was to be let off making any contributions, but the moment they have been relieved of office he expects the new incoming coalition government to pick up 50 per cent of the funding. So if there is going to be one centimetre of bitumen provided to the Pacific Highway in addition to what is planned as a result of this budget the minister says it has to be provided by New South Wales. This is the brave new investment. This is the new regional policy the Independents have been so willing to embrace. They are so quick to mouth the Labor rhetoric about new increased expenditure in the region.

The regions are going to get another 100 bureaucrats in the regional development department but they are not going to get any significant new expenditure. There is another announcement about $4.4 billion over 10 years but nearly all of that money is dependent upon there being a mining tax, and what a lose-lose situation this is for regional Australia. If you do not have a mining tax, you do not get any of the money that has been promised to the Independents and others for regional projects, but if you do get the mining tax, you lose the jobs, the investment and the initiative that is necessary in regional communities to make them grow. This is Labor's lose-lose regional development policy. What they offered to the Independents and what is in this budget is less than what would have been delivered by a coalition government had we been elected. It is less, but for the Independents Labor tries to bulk it up by bringing in the traditional funding out of other portfolios, concentrating it all in a regional bucket and making it into a large number. Is anyone suggesting that there would not have been hospital funding—extensions, construction—if this new bucket had not been created? Of course, regional areas would have got something of a share. Are you suggesting there would not have been money for regional roads if it were not for this new bucket? All that has happened is that the titles on projects have been changed but there is no serious new money available for regional communities.

What regional communities will have to pay is a heavier share of the burden, the changes to the fringe benefits tax, because country people have to travel further than people in the city. The tradies and the others who need their vehicles to travel around are now going to have the fringe benefits tax concessions cut. Those sorts of things will adversely affect regional areas.

Look at the agriculture budget. What a sad and sorry sight that is. While Minister Albanese has scores of pages of press releases, there are only two pages for the whole of the department of agriculture because there is nothing there. Another $32 billion has been taken away from it and there is no new expenditure on quarantine. This budget strategy has utterly failed. It has utterly failed regional Australians. It will deliver nothing for our communities. A government who can think nothing more than to introduce these costs is truly delivering on Labor values. (Time expired)

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I rise with great interest in being able to contribute to this matter of public importance debate, although I find it somewhat hypocritical that the member for North Sydney would come forward and draw attention to one of the biggest contradictions in the budget response he has led for the opposition. As anyone who has followed any of the interviews that the member for North Sydney has given over the last 24 hours would know, the contradiction is that, on the one hand, he wants to tell everybody that the budget handed down last night was too savage and ripped away at the heart of so-called middle-class welfare, as people out there say, but, on the other hand, he wants to tell us that it was not nearly savage enough. It is somewhat confusing and somewhat hypocritical but the member for North Sydney will get his opportunity, through his leader, tomorrow night to spell out in clear detail exactly what this confused position will ultimately mean for the Australian people.

I saw that the member for North Sydney raised the issue of cost-of-living pressures. I note that the issue of cost of living pressures has been raised with him on numerous occasions over the last couple of weeks in relation to specific measures that the government has indicated will provide relief to families from those cost of living pressures. On each occasion that any of these initiatives have been put to the member for North Sydney, he has failed to commit himself and his party to supporting these measures to provide relief to those families facing these pressures. On each occasion when he has been asked whether or not he supports the government's initiatives the best he could do was to fail to agree to support the government's initiatives and respond by saying the following, which I quote from Australian Agenda on 4 May:

At this stage the best support the Government can give is to get the budget back to surplus as soon as possible and take some of the upward pressure off interest rates.

Then on 8 May on the Insiders program he was asked the question again. I think it was Barrie Cassidy who tried to pin him down on whether or not he would support these measures which would provide relief to families. Once again, he refused to confirm that he would support those measures and the best he could come up with was to say:

If you want to take pressure off families, if you want to take upward pressure off interest rates, you have to get back to surplus as quickly as possible.

We agree that you have to get back to surplus as quickly as possible. That is why the budget that the Treasurer handed down last night charted out a pathway for a return to surplus in 2012-13. I know we have heard from the member for North Sydney that he thinks that somehow he is going to deliver a surplus sooner and I guess we will all see whether or not that is possible when his leader comes forward and sets out his party's plans tomorrow night. I think we all wait with bated breath to see that fiscal consolidation. That clearly would be the fastest fiscal consolidation known to man if that were to be achieved, but we will wait and see exactly how he intends to achieve that.

So we have the member for North Sydney out there raising issues of concern about the cost of living pressures. I note that he has failed to acknowledge any of the measures and we will see tomorrow night whether he supports the measures that this government is proposing to ease those cost-of-living pressures. There are many. If you have children in child care, for example, apart from having benefitted from the increase in the childcare tax rebate from 30 per cent to 50 per cent that this government introduced—

Barry Haase (Durack, Liberal Party) Share this | Link to this | Hansard source

You want to freeze it.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The member opposite is so confused about these matters that he somehow thinks that this has something to do with family payments. I will come to the family payments in a minute, but I am talking about the childcare tax rebate. We increased the rebate from 30 per cent to 50 per cent for out-of-pocket expenses. In addition to that, in this budget we are now providing families with a greater capacity to access those benefits sooner and in a more timely fashion. Those are the sorts of things you do if you want to relieve some of these cost of living pressures on families.

The member opposite wanted to buy into the debate over family payments and the family tax benefit. I am sure that the member would be much more supportive of our proposition than the member for North Sydney has been. It is a proposition that seeks to provide parents with family tax benefit relief if they have teenage children who are continuing high school. This is one of the anachronisms of the system. It is antiquated, it is old fashioned and it reflects a time when not as many children went on to study in years 11 and 12. As we know, more and more young people are doing that and we encourage that because ultimately it will increase workforce participation, it will give those kids a better chance of getting a job and in the end they will end up with better income. We encourage this, but the pressure that families have been feeling has been acute. That is why we have been committed to delivering an increase in the funding that is available through the family tax benefit for parents with teenage kids. For some families that will mean an improvement of up to $4,000 a year. It is a significant improvement that will relieve those cost of living pressures.

You do not hear anything on that today from the opposition, but we did hear something on this point from the shadow Treasurer the other day when he came out and said it was 'curious.' As the Minister for Families, Housing, Community Services and Indigenous Affairs indicated today, his position has become curiouser, curiouser and curiouser. Unfortunately, he is so confused about it that none of us know where he stands on this issue. I tell you what, this government will be proceeding with this reform. It will put more money in the pockets of families as they try to help their kids go on to higher studies. n addition to that, we have expanded the availability of the education tax refund and one of the eligible items will now be school uniforms. This will provide relief to families who are facing cost of living pressures. In addition to that, if you are an apprentice, you will have the benefit of obtaining higher bonuses and more access to mentoring. If you are a tradie or a small business, you will have access to the new instant write-off up to $5,000, and we have expanded that to include utes and other motor vehicles used by tradies and other small businesses. In addition to that, we have invested a considerable amount of money in schools for children with disabilities which will help families already stressed and under financial pressure because of all the pressures they face raising children with disabilities. They will now have access to more assistance in their schools as a result of these measures.

These are the very real and tangible things that were outlined in last night's budget by the government that will relieve some of those cost of living pressures. They build upon a record of a government that have delivered many improvements that have assisted with the cost of living pressures. We could mention the $46.7 million worth of tax cuts between 2008-09 and 2011-12, the $3 billion to establish the education tax refund, the $1.6 million that was the enhancement in the childcare tax rebate, not to mention our historic reforms to the pension—increasing the rate of the pension by $128 per fortnight for singles and $116 per fortnight for couples.

During this debate, we have had some discussion about interest rates and the opposition say that they believe the best thing you can do for families is to take pressure off interest rates. The best thing you can do to take pressure off interest rates is to not oppose the savings measures in this budget. The Leader of the Opposition has already indicated they will block the $3 billion. Every savings measure those opposite block will put more pressure on interest rates. They will put more cost-of-living pressures on the very people whom this government are determined to help. We will secure the passage of this budget through the parliament because it is important that we do that to deliver relief from cost-of-living pressures. Every time the opposition want to block the $3 billion worth of measures, they will be hurting the people who need relief.

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

The saddest thing about that 10-minute self-congratulation from the Parliamentary Secretary to the Treasurer is that he truly believes what he was given to say. This budget delivered last night fails on almost every ground, and that is rare. It is a budget that fails in substance. It is a budget that betrays the Australian people. It is a budget that knowingly increases the cost-of-living pressures that Australian families and small businesses face. Before last night's budget, Australian families and small businesses knew for sure that cost-of-living pressures, which have increased in recent months and years, would increase again thanks to the carbon tax. They did not know that before the election, but they knew it for sure last night thanks to the Prime Minister's backflip. They now know for sure, following last night's budget and the failure of the Treasurer, that that will be matched with increases in interest rates which will increase even further cost-of-living pressures.

The government's failure on the budget has been identified by commentators here in Canberra and right across Australia. Alan Kohler described it as a budget on a 'wing and a prayer'. You do not need to take our word for it. For those backbenchers opposite, that respected economic commentator also said:

Any decent CFO would be embarrassed by this budget. There has been an $8 billion blow-out in this year's deficit since the Mid-Year Economic and Fiscal Review last November, a $10 billion blow-out in next year's deficit. The return to surplus the year after, requiring a $26 billion turnaround in the bottom line in 12 months, simply ignores what is happening and plugging in the same economic parameters for 2012-13 as before.

Robert Gottliebson, whom colleagues quoted in question time, made similar points.

A lot has been said quite rightly about debt. With this government, we know that the level of net government debt in dollar terms is going to be incredibly high, north of $100 billion. In 1996 when we won government from those opposite, we inherited a $96 billion debt. The Australian public are acutely aware of the cost of debt. They are acutely aware that the interest payments needed to service that debt is money that cannot be spent on day-to-day programs. They are acutely aware that the higher the level of net government debt the more pressure on interest rates. They are absolutely aware of that which is why it is like extracting teeth to get this Treasurer to name the figure for which he is responsible. Today he stated that figure. He mumbled it out. Do not take my word for the fact that this is a deceitful Treasurer; take the word of the former finance minister, who has written in his book and has belled the cat on the fact that this tactic, first in 2009, of not mentioning the budget deficit figure in the budget speech and trying to conceal the dollar figure of net government debt by referring only to the percentage of GDP was, in fact, a deliberate tactic. He has written about it in his book. What he said—and I would like those opposite to do what they normally do and howl interjections, because you will be interjecting against your own former colleague—was:

Their—

former Prime Minister, Kevin Rudd, and the Treasurer, Wayne Swan—

understandable concern about handing a political weapon to their opponents—

in naming this figure—

was more than offset by the ridicule that this apparent attempt to deny reality invited.

It was an attempt to deny reality. That tells us a couple of things about this dishonest Treasurer. The public have had many examples over the last three or four years of where this government cannot be trusted. When we see the Treasurer refuse to name that figure, he is doing so to deliberately conceal it from the Australian people. He mumbled it out in question time today, but last night when interviewed on Sky Agenda we had the incredible spectacle where he was asked by David Speers about the level of net government debt. David Speers said: 'What sort of peak debt are we now looking at?' The Treasurer responded: 'The peak of net debt will be 7.2 per cent in 2011-12.' David Speers asked: 'But how many in dollar terms? How much in dollar terms?' Wayne Swan replied: 'Well it's relatively modest,' and listen to this, 'I haven't got the figure on me at the moment.'

This Treasurer would have you believe that he is so incompetent that he does not know the dollar figure of the net debt for which he is responsible in the budget he has just delivered to parliament. In the contest between telling the truth and concealing the level of that debt from the public he would have you believe that he has no idea—and my friend and colleague with me at the table would agree, we think he has mostly no idea. But even we cannot accept that he would not know that figure, if only for the reason that we know from the exhibit released last week, the book of the former finance minister, that this was a deliberate tactic to conceal the level of the debt. The Treasurer even knowing that still ploughs on, like some sort of out-of-control lawn mower over wet grass, with the same inane, ridiculous strategy thinking that the Australian people will somehow be prevented from knowing that net government debt will peak at $107 billion. We even had the finance minister today, again, on Adelaide radio try and refuse to reveal the figure. She could only do it for a couple of answers and we had to ask the Treasurer today to state the figure.

The $107 billion—the $106 billion and some change in the Treasurer's view—is the most generous construction that can be put on it. That is, of course—as my friend the member for Groom knows, having been a minister in the previous government—the level of debt, but is not the level of fiscal deterioration. This government did not start with a debt position; it started with savings. In fact, it started in 2007-08 with $44 billion in the bank. This is like having a credit card with $44 billion in it and ready to go before you rack-up a dollar of debt. It is a $150 billion deterioration.

I was looking through the Treasurer's first budget. Every budget speech from the Treasurer has had some element of deception. We had temporary deficits one year; remember? In his first budget, when you look down at the same table that lists the level of net government debt—on page 10.8 in this year's budget for those opposite—you would not have guessed that what was projected for this time, 2011-12, was $106 billion, but in savings, not debt. He has managed to transpose the whole show.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to speak this afternoon in this matter of public importance debate about the cost of living, and it is very good to see that the opposition has decided to play catch-up in today's MPI because yesterday they certainly had no interest in the economy or budget settings and the way that it impacts on ordinary Australians. They had no interest in the way that this government is responding to the cost-of-living pressures that face Australians. They had no questions to ask and, frankly, today's efforts by the opposition in question time were not terribly much better.

This afternoon there is apparently a newfound interest in these issues from the other side of the chamber. Those of us on this side are extremely happy to talk about the way that this government is responding to the real needs of Australians through this budget and how we have responded to it since coming to office. Let us have a look at some of the practical measures that this government has been responsible for. In skills and training we have been ensuring that skills and training opportunities for young people in electorates such as mine are available to ensure that they have productive working lives and to enable them to meet living expenses. In my electorate of La Trobe the most recent commitments made in last night's budget mean that around 2,500 apprentices in my electorate alone will be able to benefit from Labor's investment in apprenticeships, which will enable more people in my electorate to ultimately get skilled jobs. Our commitments in relation to families with children have been fairly significant since coming to office and were expanded upon in yesterday's budget. We are providing families with children with the support that they need through increases to family tax benefit part A. Around 5,000 families in my electorate are affected by this commitment. They will receive an extra $4,200 per child aged between 16 and 19 years old. I am sure that those 5,000 local families will appreciate the meaningful and practical effects of our commitment to responding to their cost-of-living pressures.

During its term of office the Howard government certainly talked the talk of supporting pensioners and older Australians, but it took this government, in its first term and against the backdrop of a global financial crisis, to make a meaningful commitment to pensioners in real and financial terms. We have supported pensioners with a historic increase in the pension. Since September 2009 we have increased the age pension by $128 per fortnight for singles and $116 per fortnight for couples. We have also delivered an improved pension work bonus so that age pensioners can hold onto an extra $125 per week of their income from work. These are practical measures, real measures, things that the Howard government refused to do during more than a decade in office.

Meaningfully, since coming to office we have provided tax cuts three years in a row—$46.7 billion in cuts. We have also committed $1.25 billion in this budget to delivering up to $300 more in the low income tax offset during the year. We established a $300 billion education tax rebate and in this year's budget we have extended that rebate by $460 million to cover school uniforms. Again, this is something the Howard government, during a decade in office, had absolutely no interest in pursuing.

We have increased the childcare rebate, by $1.6 billion, from 30 per cent to 50 per cent of out-of-pocket expenses. We have made the childcare rebate more flexible to allow families to access those benefits sooner and we have implemented a historic Paid Parental Leave scheme so that parents can be supported after the birth of a child. We have also committed nearly half a billion dollars under the Teen Dental Plan. These policies and reforms run right across areas from childcare to education, taxation, pensions, superannuation and skills development. They are meaningful measures that are tangible to ordinary Australians, and certainly to members of my electorate.

With the announcements made in yesterday's budget, Australians will know that we have increased our already significant commitments to boosting employment and making sure that all Australians are given an opportunity to participate in work and take home an income. We on this side of the chamber know that these are things that respond to cost-of-living pressures. They are things which give options to working people, pensioners, families with children and to young people looking to develop skills and ensure they have a meaningful job and career. They are things which give them the opportunity to meet cost-of-living pressures. In addition to doing all of these things in the context of the financial crisis and the natural disasters around the country, which have had a significant impact on our budget measures, we understand the need to make significant and transformative economic changes. That is why our budget will ensure that there are settings in place to put downward pressure on inflation. We are investing in our workforce. We are investing in infrastructure. I notice that in this matter of public importance discussion the Leader of the Nationals declined to mention any significant means by which those on the other side of the House would contribute to our national infrastructure development and the jobs associated with any such development.

We know that the most important thing for Australian families, for all Australians and for the future of our country is ensuring that more Australians than ever have the security and dignity of work. That is why we acted swiftly to protect 200,000 jobs in the face of the global financial crisis, an event which seems to have escaped the opposition's interest and has been excised from their collective memory. Our commitment to ensuring the security and dignity of work for working Australians is reflected in our proudest achievement in government: the creation of over 750,000 jobs since coming to office. It is also why we have the settings in place for the economy to generate around 500,000 new jobs within the next couple of years. This sets the opposition in stark contrast to us. They made no effort to support our efforts to stimulate the economy in the face of the global financial crisis. Jobs were at the bottom of their list of priorities.

The opposition was asleep at the wheel during the last resources boom. We are not and we will not be. We are determined to ensure that the minerals resource rental tax will give all Australians a better share in the proceeds that come from our mineral wealth. This is something which will ensure that all Australians can profit from those mineral wealth gains, that there is a level of equity for Australians and that we can support significant programs into the future.

Despite all these things, the opposition are yet to present anything constructive or positive which would indicate how they would respond to the cost-of-living pressures which they are seemingly concerned about today—though perhaps not tomorrow, because they were certainly not interested in them yesterday during question time. On the one hand, the opposition assert that they will restore the budget to surplus by next year; on the other hand, they continue with their boundless spending commitments. I know that those spending commitments were made with gay abandon in my electorate during the last federal election campaign. There were a variety of election 'commitments' made by the former Liberal member for La Trobe which were not included in the costings of the coalition prior to the election. There were more than $80 million worth of election commitments in my electorate alone. This indicates the level of fiscal responsibility that runs right the way down from the leaders of the coalition to their individual members and candidates in local elections. Given that the opposition will make a swifter return to surplus while making these spending commitments, and not saying what their spending cuts are likely to be, presumably someone on the other side has the colour copier out, because the only way they can achieve those two ends is to start printing money. e know what happened the last time they tried to achieve spending cuts at the same time as making their election commitments. We know that there was an $11 billion black hole that was independently verified and tested. We know that the opposition has form when it comes to inaccurate representations of their economic commitments, and I certainly expect that to be the case tomorrow night.

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

Order! The discussion is now concluded.