Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister explain why an engineer earning $90,000 a year who is married to a police officer earning $90,000 a year, and with a young child, should have to face a cost of living impact of $944 because of the carbon tax, but receive compensation of only six dollars; and now should be hit with a means test on their private health insurance rebate, costing them at least $315 extra a year? With families feeling the pressures of cost of living rises right now, why is the Prime Minister deliberately making a bad situation worse?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

When you are engaged in major reform, when you accept the obligations which come with running your economy in the interests of working people, when you accept the obligations that come with needing to cost policies and work through your budget so that you can return it to surplus, you have to make choices. As a government we stand by the choices we have made. They have not all been easy choices, but there is no magic money tree; there is nothing that enables you to go around promising that you will make changes but then not have to make the figures add up. I understand that is the approach of the opposition, which is why they now need to cut $70 billion away from the services that families rely on. I ask the member for Herbert to contemplate what that would mean for families in his electorate.

In terms of the government's policy decisions, we have made sure that carbon pricing will change our economy at the least possible cost. We have made sure that the Australians who need our assistance the most will get that assistance—people like pensioners, who will see increases in their pension that are above and beyond what they will need to deal with the average impact of carbon pricing. Workers who earn less than $80,000 a year will get a tax cut, many of them a cut of $300, and a million people will come out of the tax system as a result of changes in the tax-free threshold. We have made those choices because we think that is the fair way of implementing change. The alternative is to come up with a scheme, like the opposition has, which would impose on every Australian family a cost of $1,300 a year. I ask the member for Herbert to contemplate how the families in his electorate, particularly the ones who are doing it the most tough, could stump up $1,300 a year.

In relation to the private health insurance rebate, we have made choices too. We have made the choice that, in making sure that there is fairness in the system, it is right to not ask people who are on lower incomes to subsidise the private health insurance of people on higher incomes. We have made a choice to ensure that we have money available to keep funding the healthcare costs which continue to grow in our nation while of course we return the budget to surplus. On the other side, unfairness is their policy watchword; blowing the budget is second on the list.