Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

The 2012-13 budget handed down earlier this month by Treasurer the Hon. Wayne Swan is a responsible budget and a fair budget. It is a budget which reflects good management of the Australian economy through some very difficult times—difficult times which many overseas countries are still grappling with. We are currently seeing that in the Greek elections—new elections are going to be held on 17 June. We saw it only a few days ago when Tomislav Nikolic was elected as the new President of Serbia. We saw it in France when Francois Hollande was elected as the new President of France, also not long ago. And we saw it in Italy, when Mario Monti replaced Silvio Berlusconi as Prime Minister of Italy. We are seeing it in many other countries, where the pressure of governments to cope with their struggling economies is causing them serious difficulties. More recently we saw it in the USA, when JP Morgan incurred a loss of some $2 billion; although, even that figure is still under scrutiny.

These are indeed difficult times, which the Gillard government has steered the Australian economy successfully through with relatively minimal impact on Australian life. In some respects that has been a problem for the government, because many people who do not have the good fortune to be able to travel overseas have not been able to see for themselves just how difficult life has become over the past three years in many of the countries that in the past we thought were doing very well.

Again that is also reflected in: unemployment rates in this country, which have dropped below five per cent—I believe the figure is around 4.9 per cent at the moment; interest rates of 3.75 per cent—three per cent lower than when this government came to office; and a budget that is projected to be back in surplus, as promised, in 2012-13.

It is in that context that the budget was indeed framed. And it is a budget which ensures that all Australians share in Australia's mineral wealth; mineral wealth which most Australians do not share in and have not shared in for too long; and mineral wealth from which most of the profits end up offshore. This budget sets out to address this inequity; an inequity which has resulted in what some describe as a patchwork economy—an economy where some sectors are doing very well, others are doing okay and some are struggling. It is those sectors, the ones that are struggling, that this budget provides the greatest assistance to. I want to talk about some of that assistance and, in particular, how it relates to my own electorate of Makin.

In Makin, 8,900 local families are expected to receive a total of $410 a year for each child in primary school and $820 a year for each child in high school, totalling $9.4 million worth of assistance to those families as a result of the school kids bonus payment. That payment will replace the education tax refund. So it is not effectively a new payment; it is a payment that in my own local area some 1,600 families did not access last year. They did not access it either because they were not aware of their entitlement to it or they were not able to produce the receipts. For all the criticism that has been made of that particular payment by members opposite, say it is one measure that I not only strongly support but believe makes absolute sense.

For anyone to suggest that you can send your child to school, whether it is to primary or high school, for less than $400 or $800 for the secondary school child is absolute nonsense. To suggest that you need to have receipts to prove that you have incurred that kind of expense is also a nonsense. Quite frankly, this is the way it should have been from the start, and I congratulate the government for in fact changing the process, which now means that everyone who should be entitled to those funds gets them.

With respect to these benefits, more than 11,000 local families in Makin will receive an increase of up to $600 in their family tax benefit part A payments. That increase will flow from 1 July 2013. There will be a supplementary allowance to help with the cost of living for 7,921 local young people currently receiving allowances—single parents and unemployed—by providing cash payments to help meet the costs of essential services like electricity, gas and water. Singles will receive a supplementary allowance of $210 while couples will receive $350.

I am also pleased to see that only this morning legislation was introduced into the House establishing a National Children's Commissioner within the Australian Human Rights Commission. I think that is a good and very welcome move regarding our responsibility in ensuring that children are protected.

Approximately 55,000 people in Makin will receive a tax cut as of 1 July. Around 46,000 taxpayers will receive a tax cut of at least $300 and, due to the tripling of the tax-free threshold, 4,000 local residents will pay no tax at all. Those numbers apply again to the electorate of Makin, which I represent.

As a result of Labor's tax cuts for low- and middle-income earners, the average wage earner in Makin now pays approximately $1200 less in tax than in 2007-08. From July, Labor will put up to $500 into the superannuation accounts of 23,700 local workers earning up to $37,000. From October, local dads and other partners in Makin will be able to apply for Labor's new Dad and Partner Pay Scheme, which begins in January 2013 and is being debated in the House right now.

I would now like to turn to small business. As a result of having been involved in small business, it is an area that I have not only had a long time personal interest in but one where this side of the House is often criticised by members opposite for not providing enough support. Nothing could be further from the truth. With respect to small business, having been a small business operator since the time I left school prior to coming into this place, I understand the difficulties that small business operators face. I understand the sacrifices they make. I understand the risks they take, and I also understand how hard they work—often without any breaks, no paid holidays; without paid sick leave and without any form of work cover. In that respect, I very much welcome the announcements made by the Treasurer in respect of small business, where $6,500 will be provided as an instant asset write-off and up to $5,000 upfront motor vehicle depreciation allowance will also be provided. For companies earning under $2 million, the provision of up to $1 million of lost carry-back will also be a very welcome measure.

Last month I had the privilege of formally opening the new premises of Savill Packaging in my electorate of Makin. Savill Packaging provides catering and packaging products. It is a family-owned business which was established 30 years ago in 1982. On 20 April, its new premises at Langford Street, Pooraka, were officially opened, although they had been operating there for some months. I was asked to participate in the official opening and to address those present. It was a terrific opportunity for me to speak not only to Geoff Phillips and his team, who run Savill Packaging, but also to numerous other local businesspeople who equally run small or medium-sized businesses. It has given me a tremendous insight into the things which are important to those businesses and how they are coping under the difficult economic circumstances which so many others face, and what they are doing to overcome the difficulties they confront.

Savill Packaging ought to be commended in every sense of the word. It started 30 years ago employing two or three people and has now grown to employ 25 people, all of whom are locals. These kinds of companies keep local economies ticking over—locals who live, work and recreate in the area and who understand the area and depend on the 2.7 million small or medium-sized businesses around Australia for their employment. Small and medium-sized businesses in this country form the biggest individual employment sector and it is important that governments understand that. That is why the measures introduced by the government in the budget are going to be very welcome. I also acknowledge that Savill Packaging not only employ local people but also care about the future—many of their products are what we would now refer to as 'environmentally friendly'. They are a great example of people who work hard but care about the local community and the local people within it. I commend them for what they have done to date and wish them well for their future operations.

There are a range of matters in this budget which are going to be important for communities around Australia. The one area on which I want to comment is the commitment of $1 billion over four years to the National Disability Insurance Scheme. As has been said by others in this place, from the middle of next year select launch sites around the country will begin servicing people with disability. From the middle of 2014, some 20,000 people will be supported as a result of this program. The National Disability Insurance Scheme is long overdue and, I know, is supported by members on both sides of the House. Last month, along with members from both sides of the House, I attended a rally in Adelaide in support of the National Disability Insurance Scheme. We heard and saw firsthand the families and people who will benefit from the investment of money into this scheme. I believe that, if those of us who attended the rally were not convinced of the need for the scheme, we never will be. Quite frankly, not only is it long overdue but our neglect of people with disabilities has gone on for too long and it is time for governments at all levels to do whatever they can to ensure that the lives of people with a disability and their families are given greater assistance. I also welcome the $3.7 billion of funding towards aged care in Australia. Again, like disability, it is an area that has been neglected for far too long. It is an area where the demands on families have exceeded the ability of many families to cope with them. I frequently talk to people in this sector. It is an area that I am personally familiar with because my father spent the last few years of his life in a nursing home. I saw the care that he required during that period—care that my brothers and sister and I were able to support him with but which, in many cases, is simply not there. There may not be the family network support to assist the person in need, and so we rely on a system to provide that support, a system that has been straining under the weight of demands: financial demands and more general demands and, in many cases, not even having sufficient staff. The $3.7 billion of funding will not only provide better care for people in nursing homes; it will also ensure that more of those people remain in their own homes.

Lastly, I want to comment on a matter that I was somewhat disappointed with: that we were not able to fund our overseas aid commitment that was committed to last year to the level that I would have liked. The total overseas aid budget has risen by $300 million, and I acknowledge that. It went from $4.9 billion to $5.2 billion. In dollar terms, that is the largest aid budget in Australia's history and, at 0.35 per cent of gross national income, the highest proportion since 1985. There is continued growth and, in three years, we will be the sixth largest donor in the OECD, up from 10th largest today. We are on track to reach $7.7 billion, or 0.5 per cent of gross national income, by 2016-17. Whilst I would like to have seen more money put into that area, I acknowledge the additional funds that have been committed. (Time expired)

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

Hope, reward and opportunity—they may be three small words but their meaning represents values far greater. Hope reward and opportunity: this is what our country needs right now and this is what the coalition can deliver to the people of Australia. The Australia that I know is one with hope for every young person to be rewarded for their efforts with endless opportunities for their future, and an Australia that allows any young person with the desire to achieve and the hard work to go with it to enjoy a comfortable life. That is the Australian dream.

To maintain this dream we need a nation not afraid to be bold in its vision and a government that can foster such a society. It is for this reason that I rise to speak today, because the coalition has a vision and a strong plan for Australia's future: a plan to restore hope, reward and opportunity. The coalition has a strong plan that will see Australians have confidence in their economy, confidence in their government and confidence in their future—a strong plan that will see the carbon tax and the mining tax abolished and swift action to reduce the overbearing cost of living and ease the burden on Australians.

The coalition has a proven fiscal record. In my lifetime, the coalition has delivered 10 budget surpluses while Labor has delivered 10 budget deficits. We know that just as families need to live on their means so too do governments. In the coalition, we are governed by a belief that governments do not have any money of their own: they only have the people's money held in trust, and this money should be used wisely and sufficiently. We respect taxpayers' money, which is why a coalition government will eliminate government waste and mismanagement. We will boost productivity, deliver lower and simpler taxation and improve public finances.

Our vision for the future is for an even better Australia: one with secure jobs and a healthy small business sector, and one which looks after its most vulnerable with a hand-up instead of a handout. The coalition will provide practical and real environmental action to protect our irreplaceable natural environment, in stark contrast to Labor's carbon tax, which is little more than socialism masquerading as environmentalism. We will implement real measures, sensible measures. We will take genuine action by introducing incentives to boost renewable energy use and reduce emissions from the oldest and most inefficient power stations. We will go about this in a way that protects jobs and energy security while keeping electricity prices in check. We will invest $100 million each year for one million solar energy homes by 2020 and will support initiatives to plant 20 million trees in available public spaces. We will establish an emissions reduction fund to support the reduction of carbon dioxide emissions from business and industry. Through the fund, we will support 140 million tonnes of abatement per annum by 2020 to meet our target of a five per cent reduction. All of this will be done with carrots instead of a heavy-handed stick.

As a nation we have a responsibility to provide a security net for our most vulnerable and in need. In this vein, a coalition government will make a strong investment in mental health. We will put forward $1.5 billion for a mental health plan that will establish 20 early psychosis prevention and intervention centres with 800 beds for acute and subacute care, as well as an additional 60 headspace sites providing young people with support and services for mental health and general wellbeing.

The coalition will also build a strong future with a hand-up for Australian families. Our paid maternity plan will provide real support for families with 26 weeks of paid parental leave at full replacement wage. We recognise the need for a plan to tackle the challenges that lie ahead, to manage our population, productivity and workforce participation. The coalition's plan is about genuine assistance to enable women to remain in the workforce if they so choose.

The coalition will also provide a hand-up for our health system. We will build a stronger health system by handing power back to communities. Australians do not want their money being wasted on layers of bureaucracy. Australians would be best served by those on the ground—the doctors and nurses who know our hospitals best—those professionals who are the ones best placed to make day-to-day decisions to maximise the responsiveness and efficiency of our hospitals. These professionals will be part of community boards filled with community representatives who have real financial, managerial and medical experience.

The coalition will give a kick start to the future of infrastructure by declaring the coalition government's priorities publicly within 12 months of taking office and, in consultation with the states, announcing construction timetables. We will have the Productivity Commission examine possible means to get more private funding into high-priority infrastructure projects.

A division having been called in the House of Representatives—

Sitting suspended from 10:23 to 10:35

As I was saying, a coalition government will have the Productivity Commission examine possible means to get more private funding into high-priority infrastructure projects and a coalition government will task Infrastructure Australia with preparing a rolling 15-year national infrastructure plan with designated priorities based on a publicised cost-benefit analysis.

We believe in a stronger economy built on an efficient government, not on waste and mismanagement. This is why a coalition government would establish a once-in-a-generation commission of audit of all government—all arms of agencies of government—to ensure that there is no waste and no mismanagement, to ensure that taxpayers are getting the best value for their hard earned dollars.

A coalition government would waste no time in getting started on the job ahead. On day one, we would order the carbon tax repealed. Within a month, the commission of audit would be making government more efficient. Within three months, the parliament would be dealing with the carbon tax, the mining tax and border protection legislation. It will take a coalition government, a government from this side of the chamber, with a proven track record on balancing budgets, to implement these programs.

We on this side of the House will not simply wait around for this bad government to pass. Already the coalition has begun work. In fact, the coalition's deregulation task force has already started work to meet its goal of identifying $1 billion worth of red tape that can be cut per annum. We will restore hope and reward. Australians need hope. They need hope when they open their mail to find that their electricity costs have gone up again. They have gone up 66 per cent since Labor took office. They need hope when they see their gas prices have gone up 39 per cent and that their education and health costs have gone up 25 per cent since Labor took office.

Seventy years ago yesterday, the forefather of this side of the House, Sir Robert Menzies, spoke of the forgotten people. I believe the people of Australia have once again been forgotten by a Labor government, and they have no hope that this Labor government is fighting for them. It is little wonder that Australians feel this way. Under this Labor government they have been hit with 26 new and increased taxes. The costs of living are increasing for everyday Australians. Home ownership is less affordable. Interest rates have been going up and wages have declined. Real household wealth has declined, net job availability has declined and productivity has stagnated. This does not paint a good picture for the future of Australia.

Despite its 26 new grabs at families' back pockets, this Labor government has delivered the four biggest budget deficits in Australian history, with a $44 billion deficit this year alone. This is a government that has turned a $20 billion surplus into $174 billion of accumulated deficits. It has turned $70 billion of net assets into what is climbing to a record $144.9 billion of net debt. It has managed to tally up daily interest bills of $22 million. And now it wants to increase Australia's debt ceiling to $300 billion, almost four times higher than it was in 2008. This government wants to increase the limit on Australia's credit card so that it can continue to rack up an interest bill and a debt burden that will be carried across generations of Australians to come. Now we are looking down the barrel of the world's biggest carbon tax. On 1 July this year the carbon tax will push up prices, including the costs of everyday essentials—electricity, groceries, and health care—for all Australian families. This great big new tax will push up electricity prices by 10 per cent immediately. How many Australian jobs will suffer because of this great big new tax? How many businesses will feel the pain as their overheads increase and their ability to employ, prosper and create wealth is once again diminished by this incompetent Labor government?

There is a better way. We need a government that will scrap unnecessary taxes, cut wasteful spending and reduce the tax burden on business. We need a government that is guided by the belief that governments do not have any money of their own; they only have the people's money held in trust. We need a government that is prepared to restore hope, reward and opportunity. We need a government that understands that a hand up is better than a handout. We need a government that understands that opportunity is always better than subsidy. We need a government that understands that all Australians should have freedom of choice. We need a government that rewards hard work instead of penalising it. These are the fundamental principles that will always guide us as Liberals. They are the principles that the Labor Party will never understand. While we will always believe that Australians know how to spend their money better than anyone else, the Labor Party believes that the government knows better than the people. It will always be driven by a desire to spend more and more of Australian's hard earned tax dollars.

Let us look at Labor's record. We have seen constant examples of waste and mismanagement from a government that refuses to rein in its spending on poorly planned and executed programs. Over the past four years we have seen a program giving away set-top boxes at $700 each—something that could have been purchased and installed commercially for less than half the price—we have seen $1 billion spent on installing pink batts in homes and another $1 billion to pull them out again, and we have seen the blatant disregard for taxpayers' money that was the school hall rip-offs. Now we are seeing broken promises from the Labor government. We have seen in this cook-the-books budget broken promises on foreign aid spending, broken promises on company tax cuts, broken promises on Defence Force funding and of course the biggest broken promise of them all: the carbon tax. Australians deserve better.

The debt that this Labor government has accrued in just a few short years has a generation of Australians destined to spend their entire working lives repaying it. This Labor government has left my generation to carry the burden of its reckless decisions. We will carry that burden for the course of our working lives. It is clear that this Labor government has forgotten the people of Australia and what they want.

The locals in my community have a fair expectation that their government should take the pressure off in budgets, that their government should facilitate a prosperous economy that has increasing job opportunities, that their government should live within its means as they have to—not on the credit card—and that their government should value their money and deliver better services and infrastructure. Australians want a government that can deliver an economic strategy that builds a stronger Australia, with a broad based economy that reduces cost-of-living pressures and creates secure jobs. A coalition government will do just this. A coalition government will value the hard earned dollars of the Australian people.

Our country will face challenges in the future. My generation will carry the debt burden of Labor. My generation will see the challenges of an ageing population, where we will inevitably have a greater burden on government drawing from a smaller tax base. We will face the challenge of a post-mining-boom economy. As a nation we must meet these challenges from a position of strength. We must take advantage of the opportunities we have now. To meet these challenges we need to grow the productive capacity of the economy; we need to see more Australians earning higher real wages.

It is here that we see the fundamental philosophical divide in our nation. While Labor still believes that it can tax a nation into prosperity, we Liberals know the exact opposite to be true. As the great forefather of the Liberal tradition in this country, Sir Robert Menzies, said, 'We are a tax reduction party'. Menzies understood, as the coalition does today, that 'tax reductions would be the best of all incentives to increase effort, earnings and production.'

As I said in my first speech in this place, it is the Liberal side of politics that is the side of opportunity. We are the party based on encouragement rather than subsidy and on a hand up rather than a handout. It is because of these philosophical beliefs that we will always fight for lower taxes, smaller and more efficient government and the individual's right to choose. (Time expired)

Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

For the entire time we have been in government, the opposition, aided and abetted by the right-wing media and commentariat, have pursued an agenda of maliciously discrediting Labor's economic management. At times the nature and scale of the misinformation coming from the other side has been such as to make any independent observer wonder if they are actually talking about the same economy as the rest of us. Today, as we debate the current Treasurer's fifth budget, I want to take some time to set the record straight about the federal Labor Party's economic record.

First let's look at some longer term trends. Since 1984 Australians have benefited from economic performance that has been better than that of most other major countries in the world. Using one very basic measure, according to the OECD, our gross domestic product increased 133 per cent between 1984 and 2011, compared to an average increase for the seven largest OECD economies of just 78 per cent. In 1983-84, again according to the OECD figures, our unemployment rate was 9.6 per cent, compared to an average for the seven major OECD countries of 7.3 per cent. By 2010-11, our rate had dropped substantially to 5.1 per cent, below the seven-country OECD average of 7.9 per cent.

These are just a couple of indicators of an impressive economic performance over the past 28 years. Of course, for 17 of those 28 years Labor treasurers were custodians of our economy. During that time, two of those treasurers were independently recognised as the world's best, winning Euromoney magazine's prestigious Treasurer of the Year Award—Paul Keating in 1984 and the current Treasurer, the member for Lilley, in 2011. Those opposite like to designate the former member for Higgins as the greatest Treasurer this country has ever had. The trouble is that is only their opinion. It is clearly not one shared by Euromoney, which never saw fit to bestow its Treasurer of the Year Award on Mr Costello. As I have said, two Labor treasurers have been the recipients of this highly respected award, but no Liberal or coalition Treasurer has ever warranted this recognition by one of the world's leading financial journals. Those opposite also like to anoint Mr Costello as the longest-serving Treasurer in Australian history, but we all know longevity of service is not necessarily a measure of competence or ability. After all, Colonel Gaddafi was the longest serving Libyan head of state, Hosni Mubarak was the longest serving Egyptian head of state in 150 years and Robert Mugabe is the longest serving president of Zimbabwe and still in office.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

They were all bad, though.

Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Yes. But of course there are exceptions, I remind the member for Hinkler—not least the current member for Bendigo! But I digress from my main point, which is that the only two Australian treasurers who have been independently recognised for their achievements in managing this nation's economy are from the Labor Party.

I turn now to some more recent comparisons. Despite all the claims from the opposition, real interest rates have been lower under Labor since 2007 than they were under the coalition. According to the analysis of the Australian Bureau of Statistics and figures from the Parliamentary Library, real housing interest rates averaged 4.6 per cent during the term of the Howard government, compared to 4.2 per cent since 2007 under Labor. Big business is paying less under Labor as well. The real interest rate for large business loans has fallen from 4.6 per cent to 3.5 per cent.

The number of people unemployed increased during the 11 years of the former Howard government by an average of 6.3 per cent a year, but it has fallen by five per cent a year since Labor came to office in 2007. Within those figures, the increase in the number of long-term unemployed fell from 25.1 per cent a year to 17.3 per cent. Under Labor, the increase in the notoriously difficult categories of young and mature age unemployed has seen a modest but welcome slowing down. Teenage unemployment under the Howard government increased at an average of 22.8 per cent, and this has fallen to 21.6 per cent under Labor, while the increase in mature age unemployed has slowed from 4.1 per cent to 3.1 per cent.

To be fair for a moment, there is no doubt that Australia's economy did improve in the latter years of the Howard government—indeed, dare I say it, while Mr Costello was Treasurer. But it is hard not to preside over a flourishing economy when you are riding on the back of a commodities boom. There is no escaping the fact that it was Paul Keating's stewardship of the economy that laid the foundation for the relatively good economic conditions Australia experienced under the latter half of the former Howard government.

Speaking of commodities, what did the country's longest serving Treasurer do with the proceeds of the previous resources boom? He squandered them—he squandered them away on tax cuts and handouts that were so big that the International Monetary Fund warned him that his last budgets were fuelling inflation and the Reserve Bank of Australia had to raise interest rates 10 times to try to contain the damage. According to respected Australian economist Saul Eslake, the last four Costello budgets were a lost opportunity in nation building. Mr Eslake told the ABC in 2008:

It also would have been possible to set funds aside for future tax reform, for rebuilding the nation's water supply, dealing with the Murray-Darling Basin problems, dealing with climate change and the like, as well as for spending on infrastructure and education and hospitals.

Mr Costello likes to take personal credit for establishing Australia's Future Fund. We must of course acknowledge his hand in this, but the purpose of that fund has nothing to do with nation building. It is specifically earmarked to pay for the unfunded superannuation of federal civil servants that will become due in coming years. In fact there is an argument that the money to meet these superannuation liabilities should not be in the Future Fund at all but should have been invested through the various Australian government superannuation schemes that have the liabilities. Nonetheless Mr Costello did set up the Future Fund structured in 2006, but it took a Labor government and a Labor Treasurer to set aside money for future nation building.

In 2008, in the midst of the developing global financial crisis, Labor Treasurer Wayne Swan established three funds which are now under the stewardship of the Future Fund: the Building Australia Fund to improve and develop major infrastructure such as roads, rail, ports and broadband; the Health and Hospitals Fund to provide increasing spending on hospitals, medical equipment and other health facilities; and the Education Investment Fund to provide capital investment in higher education and vocational education and training. At the end of March this year the values of these funds were $6.7 billion for the Building Australia Fund, $3.9 billion for the Health and Hospitals Fund and $4.6 billion for the Education Investment Fund. These funds represent a substantial allocation of current government income to investment in this country's future and its future infrastructure and it was a Labor government that followed the advice of economists like Saul Eslake in funding these nation building initiatives.

When the worst economic crisis in more than 80 years hit in 2008, it was a Labor government that took early and decisive action to mitigate its worse effects. It was the unwillingness of governments to take effective action that contributed to the severity of the global recession in the 1930s, but the investment spending by Labor from 2008 stimulated economic activity and kept firms in business and people in jobs. The results are clear to see. We have the lowest debt and deficit of all major advanced economies; we have the lowest unemployment rate of all major advanced economies; we are the only major advanced economy to avoid a recession. Labor's response to the crisis was endorsed by international bodies such as the International Monetary Fund, the OECD and countless economic experts such as Nobel prize winning Professor Joseph Stiglitz. He told ABC's 7.30 Report :

... what your government did was exactly right. So Australia had the shortest and shallowest of the downturns of the advanced industrial countries.

The opposition—aided and abetted by a partisan right-wing media—are still desperately trying to make out that Australia has a runaway debt problem. How much you can borrow responsibly can depend on how much you earn and your ability to pay the interest and repay the loan—just like when you take out a mortgage to buy your own home. Australia has borrowed a very small amount compared to its annual income and compared to major economies such as the United States and the United Kingdom—who are borrowing 60 to 70 per cent of their annual income—and Japan, who is borrowing even more.

If there was any concern about Australia's level of debt, our credit rating would have been downgraded like that of Greece, France and other European countries. This has not happened and Australia is still a AAA-rated credit risk. After this year's budget statement all three major rating agencies reconfirmed our AAA status with a stable outlook for the future. We are now one of just eight countries in the world with such a rating. I would remind the House that the opposition voted against Labor's stimulus package and against virtually every other piece of economic legislation in the past five years. Let us recall some of the forecasts from the opposition's leadership team. In February 2009, the Leader of the Opposition said, 'I think what we're going to get is massive debt and a deep recession.' In April 2009, the member for Goldstein said, 'The recession will be deeper and longer because of the misguided spending.' And Senator Joyce's prediction in March 2009, 'We're heading towards a recession,' was about as accurate as former IBM chairman Tom Watson's forecast:

I think there is a world market for maybe five computers.

There can be no doubt that, if the opposition had been in charge of Australia's economy over the past five years, we would have been in a downward spiral of lower incomes, lost jobs and reduced services.

This year's budget will ensure Australia retains its status as one of the world's strongest economies; it embodies everything that I and many of my colleagues on this side of the House entered politics for. It will spread the benefits of the current resources boom by delivering much-needed new financial relief to families and businesses under pressure. It will return to a surplus, as promised, to provide a buffer in the face of uncertain global conditions, and it will give the Reserve Bank room to cut interest rates further if it needs to. It will protect low- and middle-income Australians and our community's most vulnerable with reforms like the historic first steps towards the National Disability Insurance Scheme, aged-care reform and a blitz on dental waiting lists. It delivers a surplus through targeted and responsible savings, while still protecting the front-line services Australians rely on, as well as helping less well off families with cost-of-living pressures.

The budget will deliver much-needed cost-of-living relief to thousands of central Victorian households in my electorate of Bendigo. For many of my constituents—as in other areas of the country—electricity, rent, mortgages and the cost of groceries and petrol are putting serious pressure on household budgets. Among those to benefit are 12,000 local families who will receive an increase of up to $600 in family tax benefit part A payments from 1 July 2013. More than 10,000 families in central Victoria are expected to share automatically in a total of $10.6 million of assistance through the new schoolkids bonus payments, without the need to keep receipts and submit claims. And about 11,000 local young people, single parents and the unemployed who currently receive allowances to meet the costs of essential services like electricity, gas and water will receive a new supplementary allowance of $210 for singles and $350 for couples. In addition, from 2012-13, there will be tax cuts for all taxpayers earning up to $80,000, including a tripling of the tax-free threshold and increases in the pension.

These new measures are good for families, for students and for low-income Australians because they will help them make ends meet and get ahead in their lives. They are good for the central Victorian economy because people will have more to spend on local retail, manufacturing and other businesses that risk being left behind because of the high dollar.

In summary, this is yet another responsible budget from a first-class Labor Treasurer, and it follows the heritage of world-class, responsible economic management that the Labor Party has delivered to this country over the past three decades. I commend it to the House.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

The Treasurer's opened his budget speech by saying that, over the next four years, Australia would enjoy surpluses and that they were:

… a powerful endorsement of our economy, resilience of our people, and success of our policies.

I think that is a sweeping assertion that is unlikely to be fulfilled this year, much less in the following three years. Why do I say this? Because of the appalling performance of the government since it came to office. There is no certainty that any of its targets will be met. Just look at the deficits for the last four years alone. The blowout of this year's deficit from $23 billion to $44 billion means more borrowing and more debt for future generations to repay. All of this is despite the fact that in real terms the government is experiencing the fastest growth in revenue since the mid-eighties. It is not as though it is being constrained on the income earned. This is the fourth Labor deficit in four years, and those four deficits together now total $174 billion. As I said, this 2011-12 budget deficit has blown out in three stages—from $12 billion to $23 billion to $37 billion to $44 billion—and the end of the year has not yet come. It may even go further.

It simply proves the inability of the government to reach even modest targets. Why should we then believe that it is capable of delivering a $1.5 billion surplus next year? Worse than that, the surplus that is promised is contrived. It is a fudge. In fact, the overall 2012 budget is $26 billion worse off in cumulative terms than last year's budget. So, against this incredibly poor performance, we are asked to believe that everything is sweetness and light and we will come out into the Elysian fields of a surplus in 2012-13. Even if this surplus is legitimate, it is going to make precious little by way of a dent in the government's debt, which will reach $145 billion in 2013-14. In comparative terms that is as bad as the Keating debt of $96 billion which he left the Howard government. This government will probably leave an Abbott government somewhere in the order of $140 billion to $150 billion in debt. It took the Howard government eight years to pay it off. I imagine that $145 billion would take even longer.

People reading or listening to this speech may say, 'How does that affect me?' It means that the government has to borrow to support this debt and that means it is spending $8 billion a year, or around $22 million a day in interest payments alone. Think what that $8 billion could do for hospitals, or the disabled, or improvements to our national highways, or pensioners on the breadline—and we have plenty of those at present. People tell me they are down to one meal a day. That really makes me angry. All these areas are constrained because of poor management and the profligate spending of the government.

After all that, the so-called surplus still remains a mirage. I will explain a few examples of that. This financial year we will spend $6.2 billion on roads but next year, when you would think there would be at least the same sort of demand if not slightly more, we are only going to spend $2.6 billion. Obviously, the figures have been moved from one year into the other. Why would you not be spending around $4½ billion per year? Put yourself in the situation of a main roads planner or engineer, someone who works for the RTA or the main roads departments in the states. How do you think they plan with $6.2 billion in one year and $2.6 billion the next year and so on? It would be like being on a roller-coaster. Little wonder we have this stop-start mentality on roads like the Pacific Highway and the Bruce Highway.

There are other examples of this. With local government payments, $1.1 billion is being brought forward to this year and that will mean a lesser deficit, or this wafer-thin surplus that the government is planning for next year

Queensland will also receive $1.4 billion in disaster relief this year. There will be allocations of $1.8 billion for infrastructure and $1.4 billion for compensation for pensioners and welfare beneficiaries as an offset for the carbon tax. Another example of doctoring the budget is in the coal sector. Payments will go from $220 million this year right down to $10 million next year and back up again to $250 million the next year. That is so blatant that it is farcical. It is obvious the government has resorted to these accountancy tricks and money shuffles to manufacture the appearance of a wafer-thin surplus of $1.5 billion for 2012-13.

If the government really believed it could deliver a surplus, why is it moving to increase the Commonwealth debt limit from $250 billion to $300 billion? That is four times the level of 2008, which was not that long ago. If the government genuinely expected a series of surpluses, why in heaven's name would that be necessary? In fact, it has buried this proposal in Appropriation Bill (No. 2) 2012-2013 to avoid any proper scrutiny and a specific vote on the debt limit. When the Treasurer was challenged about this, his glib throwaway line was, 'It's no big deal.' We are borrowing $50 billion and lifting our limit to $300 billion and it is no big deal. I think that is emblematic of the attitude of the government to financial control. It would seem that the government is embarrassed about its debt levels. It does not seem to care how much worse they get—so much so that the Treasurer did not even mention his plan to raise the debt limit in his budget speech. Why wouldn't you mention it? There was not even a mention.

And so it was with the carbon tax, the tax that dares not speak its name, the tax that every one of the government's senior ministers assiduously avoids, a tax that is barely five weeks away. To soften the impact, we have had this cash splash, which many members on the other side have spoken about as if it was some great act of generosity to pensioners and low-income earners. It is not. It is an offset and it is a one-year offset, but those electricity bills, gas bills, transport bills and all the other things will be there to haunt them in subsequent years.

Let me move to small business, because this is an incredibly important sector in my electorate of Hinkler. I know the government's negative attitude resonates strongly in my small businesses, amongst shopkeepers and in tourist attractions in Bundaberg, Hervey Bay and Bargara. Shop closures are a testament to the fact that there is a weakness in the availability of the disposable dollar. When people will not go out for dinner or will not go out to coffee lounges, you know there is something seriously wrong in the community. It is also reflected in the fall in tourism. Some motels tell me these are the worst periods since the economic downturn, the GFC. In their worst years they have had occupancies as low as 30 per cent. So a lot of tourists have either shortened their holidays or deferred them. In a place like Hervey Bay or Bargara, that is the bread and butter of the community.

The Prime Minister herself said on 14 March:

If you are against cutting company tax, you are against economic growth. If you are against economic growth, then you are against jobs.

Yet, two months after that statement, she reneged on the promise to drop one per cent off the company tax rate and saved herself a notional $4.8 billion. I would have liked to see some of that $4.8 billion in my electorate, to help businesses and to get industry to a vibrant level again.

We should also recognise that, while there will be some compensation for pensioners and low-income earners, there will be no carbon tax concessions for small businesses, who are already seeing the effects of the carbon tax in their electricity, gas and transport costs. The councils in my area are deeply disturbed by the drop in business and the lack of opportunities for new business. This budget gives them very little hope.

I was pleased to see one thing in today's media. The Cassowary Coast, which was going to be charged a carbon tax offset of $1 billion for cleaning up the rubbish in its local tip, will now have a 12-month period of concession, a window of opportunity, in which to do that. But, at the end of that time, councils who have rubbish tips that give rise to emissions will be penalised on an ongoing basis.

In the minutes that remain for me to speak, I would like to talk about the Bruce Highway. Nothing could have more starkly demonstrated its vulnerability than the floods last year. It was cut off many times, in four, five, six or seven places. You cannot have that in the main artery from Brisbane to North Queensland and, in particular, the areas that have not been receiving attention, from Cooroy to Cairns. This lifeline connecting all the major provincial cities in the most decentralised state in the Commonwealth is a ramshackle roadway. Quite apart from the bodgie spending on roads in the current financial year and the next financial year—as I pointed out before, there is only $2.6 billion going into next year's funding—there is no new money going into the Bruce Highway in this budget. There is no new money. The neglect is there for all to see.

When the state's Traveston dam was on the agenda, section B of the highway, from Cooroy to Curra, went ahead at a frenetic pace. But, when the dam was aborted, the whole thing slowed down. I want to see that picked up again. I want to see the road to Gympie completed, I want to see the Gympie bypass completed and then I want to see the road upgraded from Gympie all the way through to Apple Tree Creek near Childers. This is very important not just for the people who live in that area, not just for safety and not just for tourism but simply for commercial facilitation.

No, this was not a good budget. No-one should be taking pride in it. (Time expired)

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I would like to congratulate the Deputy Prime Minister and Treasurer on the budget he delivered in the House two weeks ago. This budget is astoundingly good on so many levels and will help not only the nation but also communities like the ones I represent out in Western Sydney. Despite economic conditions that have seen government revenues fall by $150 billion, the Treasurer was able to put together a budget that delivered a surplus on time, as promised. Although the Treasurer faced an imperative to find savings in the budget, he managed to achieve this while continuing to share the benefits of Australia's mining boom. While there will be those who will paint a picture of the economic landscape as being worse than it actually is, draped in doom and gloom—arguing this mainly because of their political priorities rather than based on what the nation needs—the economic reality is somewhat different. The greatest economic challenge Australia is facing comes from the relative strength of the Australian dollar fuelled by the growth of the resources sector. The dollar's strength in recent times has dampened Australia's export earnings, increased the cost-of-living pressures and also made it difficult for manufacturing. Labor understands the pressure many families are facing and that is why it is important we delivered a budget that was both responsible and supportive. Returning the budget to surplus provides a buffer in uncertain global economic times and gives the Reserve Bank room to cut interest rates, a theme or an issue that I would like to come back to later in this contribution.

It is worth bearing in mind that interest rates now are lower than at any time under the previous government and that a family on a $300,000 mortgage is paying around $3,000 a year less in repayments. Commenting on the merits of achieving a surplus, the International Monetary Fund said:

In the case of Australia, we welcome the authorities’ commitment to return to a budget surplus by 2012-13 to rebuild fiscal buffers, putting Commonwealth government finances in a stronger position to deal with shocks and long-term pressures from an ageing population and rising health-care costs. With little evidence of inflationary pressure, the RBA cut its policy rate by 50 basis points last week to support demand.

That was the IMF.

While we are delivering a surplus through targeted and responsible savings, we are protecting the frontline services Australians rely on as well as helping families with cost-of-living pressures. The budget ensures that the benefits to our strong economy of the mining boom are shared with all Australians to help them meet these cost-of-living pressures. I endorse the measures announced by the Treasurer in the budget aimed at helping families, understanding full well the relief it will provide to them.

There are a great number of measures in the budget that will provide real assistance to families living in the Chifley electorate. Fifteen thousand, one hundred and fifty local families in Chifley are expected to receive a total of $410 a year for each child in primary school and $820 a year for each child in high school. The schoolkids bonus that has been announced as part of the budget will replace the education tax refund from 1 January 2013 and will be paid to families of about 26,650 local kids in school. Under the existing system, 2,450 families in Chifley have not been claiming what they are entitled to, mainly because they could not afford the upfront costs involved in educating their children or, in some cases, they have not had access to accountants who can help them with this type of refund. Under this new system, there is no need to keep receipts for vital education resources; it will be paid automatically into the bank accounts of eligible families.

In my electorate I know that this money will be used where it is most needed. Representing one of the lowest SES electorates in the country, I was quite frankly offended at suggestions that families would waste this money on plasma TVs. It is an offensive suggestion that families that want the money to be able to help their children with their school costs would be frittering this money away, and I find it hard to believe that the Leader of the Opposition could really be so out of touch in making those statements. I can certainly tell him that there are many families, not only in the electorate that I am proud to represent but right around Australia, who are holding out for this payment. Changes to the family tax benefit part A, which will flow from 1 July next year, will provide families with much-needed relief, with more than 19,000 families in Chifley receiving up to a $600 increase in their family tax benefit payments.

The cost pressures that affect most families in Chifley are the rising utility prices and, for those most vulnerable—the unemployed, students, parents on income support with young children—those pressures are hard to absorb. In Chifley, we are delivering vital assistance through this federal government to help with the cost of living and this will be provided to 17,240 local young people, single parents and the unemployed who are currently receiving allowances, and we will be doing this by providing cash payments to help them meet the cost of their essential services like electricity, gas and water. Singles will receive a supplementary allowance of $210 and couples will receive $350, with the first payment commencing March 2013.

Chifley has a large number of vulnerable families and there are large numbers of children whose parents have never completed school. UnitingCare Burnside runs a tremendous program in Bidwell known as HIPPY, which stands for the Home Interaction Program for Parents and Youngsters. I have had a chance to visit that program and I have seen with my own eyes the great benefits that this program provides. This two-year program helps parents and carers take an active role in their children's education and provides access to a tutor and practical learning activities and materials. In order that this program be expanded to assist additional families in need, the government committed a further $55.7 million to ensure that Australia's most vulnerable children are better prepared to start school.

I was also delighted to see the government commit its share of funding to build a National Disability Insurance Scheme. I advocated for this scheme over the past two years and I applaud the Gillard government's investment of $1 billion over the next four years. From the middle of next year selected launch sites around the country will begin serving people with a disability, expected to number 20,000 by 2014. This is a significant social reform delivered by a Labor government in the same tradition as Medicare and paid parental leave. In my electorate of Chifley, groups like the Endeavour Foundation, which I have had the pleasure of visiting, have welcomed this NDIS initiative and they, along with a number of other groups, have been vocal champions of the NDIS. I thank Kathy Breen and Ed Mason from the Endeavour Foundation for their passionate advocacy in our local area for this initiative. Many families in Chifley will also welcome the $500 million boost to dental health. This will deliver a blitz to reduce public waiting lists where people are waiting for dental health care assistance. It will also tackle workforce shortages in dental health.

I am disappointed, however, that more credit has not been given to the crucial reform the government has announced for aged care. A new $3.7 billion funding commitment towards aged-care reform will see more in-home care and support so that people can live independently longer and will not be forced to sell the family home to pay a bond. Again, when I speak about this with many residents in my electorate of Chifley, they welcome it. Most people, rightly, share a concern and a desire to see that their parents, as they age, have quality, accessible care for the years ahead. With an ageing population expected to increase enormously in the coming years and life expectancy continuing to increase, the existing aged-care system would not be able to cope with the demand. That is why it is important that we develop new support services to allow people to live at home for longer.

While this budget has been unapologetically family focused, we have not forgotten that small business is feeling the pressure of a patchwork economy. The Treasurer announced a measure to allow companies to carry back tax losses by providing a tax benefit of up to $300,000 per year. Businesses are currently able to carry forward their tax losses to offset future profits and reduce future tax liabilities. About 110,000 small businesses across the country will be able to benefit from this and they will be able to carry back their losses, offset past profits and get a refund of tax previously paid on those profits.

From 1 July 2012 the 10,000 or so small businesses in Chifley can expect additional benefits. For example, the government will deliver tax breaks for small business such as an increase in the instant asset write-off threshold to $6,500. For those businesses seeking to purchase new vehicles—for example, tradies wanting to purchase a new ute—they will be able to write-off $5,000 from that purchase. Again, 10,000 businesses in Chifley will take advantage of these measures.

Not only is this budget, as I have indicated before, family friendly but it is business friendly. The measures I referred to a few moments ago are quite obvious. The economic climate we are promoting has higher growth and is beating most advanced economies, with inflation contained and unemployment down to 4.9 per cent. By way of contrast I put this to the chamber: imagine the type of political discourse in this country if we were to be experiencing an unemployment rate equalling that of Spain right now—20 per cent unemployment compared to 4.9 per cent in Australia. Our unemployment rate is phenomenal. The economic conditions we have provided are tremendous. On top of that the assistance that I have mentioned earlier in this speech that is being provided to families provides a further important platform for economic growth and is of potential benefit to the retail sector. It is worth bearing in mind that, when the GFC hit, when the financial system froze, when mistrust and risk aversion began to choke our economy, this government provided vital economic stimulus through fiscal policy. With conditions exceptionally better, now is the time to pare back that spending. That is what this budget does.

With the economy strong, especially relative to the subdued conditions affecting other economies, the time is now right for further investment and development—and it is right that we focus on monetary policy and what it can do to drive further growth. When we focus on monetary policy, we naturally need to focus on the actions of the Reserve Bank of Australia. I often have businesses, small and large, smaller businesses and major corporates, tell me that they are wanting to invest and that they are ready to invest but that finance is hard to come by and they believe interest rates are way higher than they should be. I have raised this previously and I say it again: my view is that the RBA effectively has a sleeper hold on the economy. They are moving too slowly on the issue of interest rates. They should be moving to reduce rates. Businesses of all sizes are saying that this is the right thing to do.

This week I wrote in the Daily Telegraph that I thought it important the Reserve Bank recognises this demand. Given that our economy is strong relative to many parts of the world, this is, as I have said, the time for us to provide that interest rate cut for businesses, particularly those on the eastern seaboard of Australia, to enable them to take advantage of economic opportunities now. What I am most worried about is that the RBA will be slow on this issue of interest rates and only move when it is absolutely forced to.

Inflation is contained, as I have said. The IMF recognises that as well. Why the Reserve Bank walks with clay feet on this issue astounds many, particularly in business. Cutting interest rates would provide a shot in the arm for confidence, it would provide a platform for investment and it would help the economy drive further growth. Why we would be holding back further cuts is a source of bewilderment for many. There have been calls for the Reserve Bank to broaden and balance out its view—rather than just having an absolute driving focus on inflation, it should look at employment too.

A division having been called in the House of Representatives

Before the break I was mentioning the room to move to reduce interest rates, particularly when you compare what is happening overseas—Canada: interest rate one per cent; the UK and US: half and 0.25 per cent respectively. We certainly have the opportunity with our cash rate at 3.75 per cent to move below that and be able to provide the impetus and the confidence for business to invest further. We know we have $450 billion in the investment pipeline but, again, it is about both sides of our continent being able to flex their industrial muscle, for the benefit of the nation.

This budget does ensure we go to surplus, does pare back fiscal policy at a time when the conditions warrant it and does provide support for business and for families. We will now ensure our focus on monetary policy remains there and, given that those other economic conditions are ripe, time is ripe too for further cuts in those rates to benefit business and drive further economic growth. I commend this budget to the House and certainly commend it to the residents and businesses of the Chifley electorate I am proud to represent.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to take this opportunity to speak on Appropriation Bill (No. 1) 2012-13 and associated bills. Governments are best judged by the relationship they build with the people they represent. Good governments are those that have earned the trust of the electorate. Good governments are those that do what they say. Good governments are those that put the interests of the nation ahead of politics of the day. On every available test, this government fails.

This government has lost the trust of the Australian people. This government is pathologically incapable of implementing what it promises—and even when it tries it gets things wrong. If there is a choice between principle and short-term political advantage, this government will pick political expediency and spin every time. There is no better example of this government's failings than the budget that is before us today. Make no mistake, this is one of the worst budgets this nation has ever seen. Driven by cheap politics, this budget has been drafted like an advertising campaign for a discount warehouse. Forget the economics but find the 10-second grab. Forget the interests of the nation but find a simplistic plausible message—right or wrong.

Lo and behold, this Treasurer and this Prime Minister have come up with 'a surplus'. Sounds good. The focus groups will like it. But they made it happen by creative accounting: bring forward handouts here; defer a submariner defence project there—and throw in some free steak knives for good measure. No messy principles to get in the way of this budget. Just focus groups and spin. This government has all the direction of a runaway train and all the integrity of a former HSU official.

It would be entertaining from our side of Australia's political debate if not for the simple fact that it is our country we are talking about. I echo the words of the member for Goldstein: this federal budget has sunk like a stone with the people of Australia. For the people of Australia and the constituents of Ryan, this budget is one of cooked books, broken promises and direct attacks on the fiscal bottom line of all Australians. They are not bothering to investigate the details of this unbelievable budget because they do not want to know the extent to which this budget will impact upon them.

Australians have disengaged with this budget because this Gillard Labor government stopped engaging with them many years ago. They stopped listening to Australians, and with the formation of the minority government in 2010 they stopped listening even to themselves. When the Prime Minister said: 'There will be no carbon tax under a government I lead,' Australians took her words at face value. Unfortunately from 1 July 2012 Australians will be lumped with the world's biggest carbon tax, the world's only economy-wide carbon tax and a deceit of the highest magnitude. Apart from the many calls my office has received from constituents expressing their hopes of a replication of the Queensland election result at a federal level, my office has received only one call—one call—from someone inquiring about the actual details of a budget proposal announced on 8 May.

The main issue with these appropriation bills is that the facts, figures and forecasts announced by the Treasurer are inexact. The current Gillard-Swan government has predicted a manufactured surplus out of thin air. As many members on this side of the House have noted, they have completely cooked the books and have created what many commentators have called the fudge-it budget. I ask the government: why is the true cost of what you plan not revealed in the budget estimates? Why has the government not truly accounted for the $50 billion-plus cost of the National Broadband Network? Why has the government not truly accounted for the $10 billion they plan to spend on the Clean Energy Fund? Where is the funding for the many billions of dollars they plan to spend on new submarines? Why, instead of truly cracking down on spending, have they merely deferred spending into the forward estimates, which will in turn increase the cost of these projects?

The only way the Treasurer has been able to claim a budget surplus for next year is by omitting the accurate operational costs of the NBN and by bringing forward two programs into the 2011-12 year—the 'back to school' payments and Commonwealth grants to local government—which would cancel the Treasurer's $1.5 billion surplus completely.

Similarly, if as Mr Swan claims this is to be his first budget surplus of many—a laughable claim—why did the Gillard government announce that it will increase Australia's debt ceiling from $250 billion to $300 billion, a debt ceiling four times higher than it was in 2008, only four years ago? The government's estimated deficit for 2011-12 from 18 months ago has blown out from $12 billion to $44 billion—and, somehow, they expect Australians to believe that a government spending $100 billion more per year than it was four years ago, a government borrowing more than $100 million per day and a government that has accrued the highest ever net debt of $145 billion will magically achieve a forecast surplus for the 2012-13 year.

These are the questions that must be answered openly and honestly by the Treasurer so that Australian families can be confident of the stability of the Australian economy and how it will affect their future. Australian families can rely on strong economic management from the coalition, unlike the bribes and deceitful creative accounting that we get from the Treasurer.

Fundamentally, it is the individual that must make his own way while knowing that he is supported by the rest of his community and, indeed, supported by his government. This is why we have important safety nets to support those in need, from Medicare to free state education, and that is why we believe in vocational and tertiary education to support the long-term Australian economy.

The Labor Party try to claim that they are the friends and defenders of workers. They may claim that, but what they cannot claim is that they are the friends and defenders of the aspirational class. They do not support those Australians who dream of bigger and better things, of working hard at their job, of being successful and of one day achieving their dreams for themselves and their families. The coalition believes in a hand up, not a hand out. May I remind the Labor Party that it is the aspirational 'class' of Australians who are being attacked in this budget. If you are successful in the mining industry, you are slugged with a tax. If you are fortunate enough to be able to save the taxpayer money by taking out private health insurance, they are taking away your rebate. And, if you suffer from a disability, the government does not have the resolve or the empathy to support you.

The Productivity Commission recommended that, over the forward estimates, the federal government should commit $4 billion to the rollout of the National Disability Insurance Scheme. Instead, they have only allocated $1 billion, and they have not indicated where the bulk of those funds will come from. The coalition is a big supporter of the NDIS and we, like all Australians, understand that if you refuse to properly fund your promises it is as good as breaking your word. Sounds familiar!

Every member of this House recognises that Australia has an ageing population and that we must devise an appropriate policy that deals with the consequences of such an ageing population. Australians will require more and more funds to ensure that they will have a comfortable retirement. Let me remind this government: Australians do not retire at 50; they do not stop planning for their retirement at 50. Yet this budget has no relief for seniors over 50 who do want to do the right thing and plan for their ultimate retirement. In particular, it will now be more difficult for self-funded retirees because this Labor government is reducing the higher tax concession for contributions of high-income earners and deferring higher concessional contributions caps for the over-50s with less than $500,000 in superannuation. Therefore, the cap for concession contributions will be $25,000 and there will be no relief given for seniors over 50.

The Treasurer has been very quiet about the other ways this budget neglects older Australians. Not only does this budget penalise Australians who are in fact planning for their retirement; it also penalises seniors who are trying to get back into the workforce. Successive governments have identified the inherent discrimination against older Australians evident in the Australian labour market, yet this Gillard government is abandoning the mature age worker tax offset. This measure previously supported mature age workers to remain in the workforce in the form of a $500 tax offset, but unfortunately it is now being phased out from 1 July 2012. The Treasurer has also broken another election promise by abandoning More Help for Mature Age Workers and is transferring $66.9 million in lip-service funding. The government have tried to focus on the $1,000 that they plan to give to employers who take on a mature-age worker over 50 years of age for just three months, but they plan to give these funds to only 10,000 businesses, meaning only 10,000 employees and only a $10 million bandaid solution to endemic problems in the labour market. On the other hand, the coalition has a policy that is truly designed to move older Australians from welfare to work. The coalition will pay $3,250 to an employer who takes on a mature-age worker who is on an existing welfare payment so long as they employ that person for more than six months. With $10 million that is supposed to be directed at employing older Australians, how do the government propose to spend the other $56.9 million? Well, $4.7 million will be used to operate the Advisory Panel on Positive Ageing so that they are able to conduct another talkfest—another discussion about legislation. Clearly this money has been allocated to talking about the problem of discrimination, not fixing the problem.

The Gillard government attempts to claim by evidencing policies including the carbon tax that it is a forward-looking government and that it is worried about devising policies for the benefit of future generations of Australians. Well, there is one elephant in the room that the government is not talking about and that demonstrates why this government is failing in this regard: the lack of commitment to research funding. Last year around this time the Treasurer tried to gauge the opinion of Australians about a $400 million cut to medical research before budget time. Australia was fortunate that the Gillard government, for the first time, listened to the incensed reaction from the medical community. I spoke in the House on 21 May of the enormous benefits that even a $26 million annual increase in funding for dementia research could have for the future health of Australians. This would be a small budget item.

Australians need a government that takes responsible action. We do not need more taxes and we do not deserve more empty promises and political tricks. This budget for 2012-13 is one of the most heinous political tricks that Australian families have ever seen—a budget designed to cover up gross economic mismanagement and attempt to hide the disastrous effect of the many taxes they have introduced and plan to introduce in the future. The main message from the budget is: never, ever underestimate the incompetence of the Australian Labor Party.

Nobel-Prize-winning economist Milton Friedman once said:

Most of the energy of political work is devoted to correcting the effects of mismanagement of government.

Should the coalition be elected by Australians at the next federal election, this will certainly ring true as we try to unravel the damage that the Labor Party has inflicted on Australians. The Australian people know that the coalition will leave them in a better position. They know which party will leave families better off. When it comes to sensible economic management and market reform, the coalition has a track record of achievement—a track record built upon by the shadow Treasurer and a track record which gives hope, reward and opportunity to Australian families who have been so badly let down by this sad and tired Labor government. Many, many Australians looked to this government with hope and expectation. Many, many Australians voted for the members opposite. Yet the tragedy for those people and for all Australians is that this government has let them down so badly. I am not someone who believes that this government deliberately lied during the last election. However, I do believe, as so many Australians believe, that this government sees promises as mere words. It sees integrity as an obstacle and the national interest as subservient to its political interest. Yet it seems genuinely at a loss to understand why Australians get angry when they are treated so shabbily. So is it too much to expect honesty and integrity from the government of this nation?

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

One of Australia's more serious journalists, Lenore Taylor, commented in the Sydney Morning Herald of 12-13 May:

… Abbott is so confident he delivered only generalities. He said his aim was to grow the economy, which is laudable, but the only policy he advanced to do this was the abolition of the carbon tax, and his criticism that the government had no plan for growth was a little undermined by the fact that the economy is forecast to grow by 3 per cent or more for the next three years.

He said he would deliver bigger surpluses, which would also be a very good thing, but it's unclear how that fits with his support for new family payments which add at least $1 billion a year to the budget bottom line, while also abolishing the mining tax.

She went on to say that his only positive idea was to encourage Asian languages and all he was going to do was talk to a few people in state governments. There was no estimate of the costs and no appraisal of how we would train the number of teachers required et cetera. Similarly, the Sydney Morning Herald in its editorial commented:

The other negative was the opposition's reply to the budget. Tony Abbott continued the tactic he used last year, offering not a detailed alternative program but a comprehensive rubbishing of the Prime Minister.

It then demolished again his concept in regard to language.

We are fortunate that there are some independent commentators beyond the rhetoric that we have heard from those opposite in regard to the Australian economy and the budget. The IMF, while speaking of a fragile and vulnerable international picture, commended this government and the manner in which the economy as a whole is progressing. We have very timely comments from the OECD. Its Economic Outlook of May 2012 comments:

Australia’s economic fundamentals remain strong, with our economy expected to grow more strongly than every single major advanced economy over the next two years.

This is contrasted with a 'fragile recovery in many other advanced economies'. It went on to provide a litany of statistics to evidence that. Similarly the OECD's Better Life Index ranked the 34 member countries on categories like housing, jobs, education, health, environment and work balance, and Australia's cumulative rank rises to No. 1 according to the OECD website, even advancing in front of Norway, which by any standards, because of its oil and gas, has been a leader in economic advances in recent decades.

So we have the OECD and the IMF commenting, and there are some statistics out there. From the parliamentary briefing paper on the budget we note that last year's averages for this country were GDP growth of three per cent, unemployment of 5.25 per cent throughout the whole year, and inflation of 1.25 per cent. These figures cannot be produced by any other advanced economy in the world. While the Labor government has been in power, 27 million jobs have disappeared internationally. What is the reality in this country? The creation of 800,000 jobs. I note the recent index in the Sydney Morning Herald of 69,100 extra jobs since April. We note that there are 22,000 a month to 13 May.

These are the realities out there. We can contrast them with other situations around the world. We can look back to when Australia's unemployment rate was 5.2 per cent—as you know, it is lower now—and at that time the rate in the United States was 8.3 per cent, the UK 8.2 per cent, Canada 7.2 per cent, Germany 5.7 per cent et cetera. Whether you look at the most extreme examples in Europe—such as Spain, with 52 per cent of its under-25 population unemployed—or at countries that are regarded as reasonably well holding the line, Australia's picture is very strong.

We have had those opposite say that the mining industry should not be taxed and that there is class warfare involved. I want to briefly digress to talk about some other realities in this country. I heard the member for Brisbane saying, 'Oh, how dreadful it is. They are starting to talk about class war. This hasn't happened for so long.' Perhaps it is worth putting on the record some realities that have occurred in this country. I refer to Dissent magazine of autumn/winter 2012. It notes:

Over the five years from 2005 the net real worth of the household wealth of the lowest quintile increased by 4 per cent or $1,000, the third quintile increased by 11 per cent or $44,000 and the top quintile increased by $192,000.

These are statistics that can be investigated, analysed and questioned but, quite frankly, they are correct. The same article continued:

For Australia, the key finding was that the richest 1 per cent of Australians doubled their share of national income from 4.8 per cent in 1980 to 8.8 per cent in 2008. Furthermore, the incomes of "the richest 0.1 per cent rose from 1 per cent to 3 per cent [of national income] …"

At the same time, the top marginal rates of income tax, of course, dropped. That was from an OECD report. In that same article, journalist Kenneth Davidson made the point on the ABS figures about the overall situation of the Australian people, that during the course of the government household net worth was $720,000 in 2010, up 14 per cent from 2005. So we have a picture of a very successful economy overall, but within that a degree of inequity growing in this country. I strongly support measures in this budget which go towards the question of reducing the tax concession for superannuation contributions, changes to the net medical expenses tax offset et cetera. These are measures which go to equity.

And similarly with regard to the mining tax, when this was first suggested there was a degree of opposition in the electorate, but those opposite know that since then there has been an explanation of what it is doing for the Australian people. I will be very surprised if Clive Palmer is endorsed as a candidate in this next election, despite all the billboards and despite all the bucks. Quite frankly, they know that one of the things they are carrying very heavily in a climate that is largely going their way is their association with the big end of town.

If we talk of what has happened in this country because of the mining boom, I note that Professor Gregory at the Centre of Economic Policy Research noted that it has been so important in the growth in living standards and terms of trade in this country, and that the overall living standards of Australians as compared to the United States between 1959 and 2003 were 92 per cent and are now 215 per cent—a 25 per cent improvement in the condition of the Australian people overall.

Very importantly, I have heard some references to the question of interest rates now leading to a $3,000 reduction in people's payments per year on a loan of $300,000. We can contrast that with overseas patterns. In the United States, large numbers of people are going into negative mortgages. Their properties are now worth less than the mortgages that they hold. That is the reality internationally.

We had to put this budget in context with regard to what is happening around the world. The opposition would like to say, 'Oh, some of you are not as happy as you should be, despite the latest survey by the OECD'. However, one would think that this economy was not affected by the international financial crisis. One would think that nothing had happened. One would think that revenues for the government with regard to taxation take had not been severely impacted upon. They do not think it happened! They think that either it did not happen or nothing should have been done. I have more respect, quite frankly, for Paul Volcker, the former chairman of the US Federal Reserve. He thinks that there was a financial crisis in this world. He thinks that Lehman Bros actually did collapse. In an article by James Macdonald in the London Review of Books, Paul Volcker said that incidents such as this existed:

By the time Goldman itself went public in 1999 its capital had swelled to more than $6 billion, almost exclusively through internal growth. Going public allowed a further exponential leap in capital and profits. But such growth could not be fuelled simply through the traditional business of investment banking: it involved taking ever greater risks with the firm's own capital. In 1970 Goldman's assets were 6.5 times its capital. By the 2000s this had risen to 30 times, and like most other investment banks, Goldman was essentially operating as a hedge fund for its own account, while simultaneously providing services for its clients.

In the real world there was an international economic crisis and there was a government in this country which decided that employing people was worthwhile, that it was beneficial that people went to work each day, that people who were doing traineeships and apprenticeships could finish them, that building supply companies could survive and that people could go into shops and try to keep retail surviving.

They suggest that it is the end of Western civilisation that government debt has increased. It is still exponentially below all other First World developed countries, and yet this government has in that period made sure that people were in employment. And they do not seem to think that this is in important issue, that people keep jobs.

On the other side, Volcker, in the New York Review of Books of 24 November last gave an analysis of what had happened with regard to the United States and what had caused this crisis. He was well cognisant of the impact it was having on Western economies. He said:

It should be clear that among the causes of the recent financial crisis was an unjustified faith in rational expectations, market efficiencies, and the techniques of modern finance. That faith was stoked in part by the huge financial rewards that enabled the extremes of borrowing, the economic imbalances, and the pretenses and assurances of the credit-rating agencies to persist so long. A relaxed approach by regulators and legislators reflected the new financial zeitgeist.

This government has persevered to ensure that there is employment and that industry can still function.

I said the other night that I feel some sorrow for the shadow Treasurer, Mr Hockey, the member for North Sydney, because we have seen from the opposition consistent calls for a balanced budget and consistent denunciation of government spending. I have heard only three speeches by those opposite during the course of this debate. The previous contribution from the member for Ryan, Mrs Prentice, went down the same road. She was advocating increased expenditure. She complained about the disability initiatives of this government—legendary, the first time this has happened, despite decades of talk—and that the Productivity Commission said we should have put $4 billion into the scheme. She said it was lamentable that we were putting only $1 billion in this year. So there is another $3 billion which Mr Hockey is going to have to find. She went on to complain that dementia research was not being supported strongly enough and that older Australians were not getting enough assistance with employment. That is the kind of pattern we have from those opposite. We know that the opposition leader and his shadow Treasurer have not enunciated any measures. Besides sacking public servants, their only other initiative is to increase spending; impliedly, by putting money into Asian education.

The member for Brisbane was lamenting the fact that Co.As.It, the Italian welfare organisation in Brisbane, did not get money. And last night we had a very elucidating contribution from the member for Kalgoorlie about the need to fund cane toad restrictions. We are hearing from all of them how we can spend more money, how we can make sure that taxpayers are funding these kinds of proposals—because it is really nice to pretend we are going to fund all these things—while saying that government expenditure is too low.

I want to talk about HIPPY, the Home Interaction Program for Parents and Youngsters. I know that my electorate is well aware of the figures, the tens of thousands of people who are assisted by other government financial measures. HIPPY is a program which tries to ensure that parents who are disconnected from the education system can help their children get used to going to school. This government is devoting $56 million to that. I met last week with Macarthur Diversity Services, a defunded organisation operating in Claymore, an area with 86 per cent public housing, a median age of 20 and low educational accomplishments. They say very clearly that 56 per cent of their students have graduated, that 125 families were affected, that 11 of the parents became tutors—one of the concepts is that parents are helped and brought into the system to become tutors—and that 80 per cent of the tutors got jobs. I very much commend that government initiative in the budget.

Overall, we know that large numbers of Australians are assisted by a variety of taxation measures, by the schoolkids bonus—and those opposite oppose that. They are hinting that they do not like this or that, but we really have not had any thorough comments from the shadow Treasurer as to where the reductions they are allegedly going to accomplish are to occur.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Driving around my electorate of Riverina, the third largest by size in New South Wales and the 14th biggest in Australia, has given me plenty of thinking time in recent months. This is because the mobile telephone coverage is not what it ought to be and certainly not even what it once was. I was once able to name all Riverina's mobile coverage black spots and they included but were not limited to Murrulebale north of Marrar, Tooma near Tumbarumba and pockets around Gundagai, Borambola, Grong Grong, Humula, Sebastopol, Tallimba and Tarcutta.

Happily, a new tower has been erected at Mangoplah, which was one of the problem districts, and this will be officially opened on Wednesday, 6 June. Unfortunately, in recent months Riverina mobile coverage elsewhere has deteriorated to the extent that if you get just a few kilometres away from a built-up area you lose reception. Because of the drastic loss of coverage, instead of being able to use my hands-free phone whilst driving, I have to wait until I am in a town to retrieve messages and return calls. This is a great inconvenience. I say this because, at the same time, this government is pumping $37 billion of borrowed money into a broadband network we cannot afford. Mobile services across regional Australia are going from bad to worse. While it is merely an inconvenience for me, for many others it is a safety issue, and that is deeply concerning.

Many of the calls of complaint to my office lately have suggested that country mobile services are being downgraded as part of a strategy for people to get on board the new technology rollout, which might be all right for those fortunate enough to be in the designated areas for the first phase but is tough luck for those who are not. Telstra officials have admitted to me that the mobile coverage in the Riverina is not as good as it ought to be, and the corporation's commitment to my region has not, I feel, been strengthened by the fact that the general manager for Riverina-Murray, based in Albury-Wodonga, has been replaced by someone looking after a far bigger area and working out of Canberra.

This has everything to do with Appropriation Bill (No. 1) 2012-13 and related bills before the House because huge money is going into ripping out the copper wire network, which has served us well, to be replaced by optical fibre, when wireless technology would have done the job and funding could have—and I would argue, should have—been given to installing telecommunications towers to serve regional and remote communities.

The government has resorted to accounting tricks and money shuffles to manufacture the appearance of a wafer-thin budget surplus of $1.5 billion in 2012-13. But the appearance of a surplus is really just an illusion. Whilst the Treasurer and Prime Minister tell us that budget 2012 was a tough budget, the reality is that Labor is spending money at an unprecedented rate and its economic malaise is hurting Australia, particularly regional Australia. It is hurting families and hurting Australian workers and it will continue to do so for generations to come. Indeed, it would take Labor 96 years to pay off $144 billion of net debt, based on the Treasurer's tiny surplus announced in his 8 May budget.

Budget 2012 delivered Australia the world's biggest carbon tax, a record debt ceiling of $300 billion, a record net debt of $145 billion, higher unemployment and Labor's fourth massive deficit in four years. Labor inherited $70 billion of Commonwealth assets and a $20 billion surplus from sound fiscal management by the coalition yet has produced the four biggest deficits in Australia's history.

In the past four years, Labor has delivered cumulative record deficits of $174 billion, and interest payments on Labor's debt alone are set to reach $8 billion per year by 2015-16, and that equates to $22 million a day on interest payments. As a fuel outlet proprietor from Narrandera said to me yesterday, 'Our great-grandchildren will still be paying off Labor's waste.' The blow-out in this year's deficit, from $23 billion to $44 billion, means more borrowing and more debt which future generations will have to pay. All of this is in spite of, in real terms, the government experiencing the fastest growth in revenue since the 1980s.

Five days before the last election, the Prime Minister promised that there would be no carbon tax under the government she led. Therefore, it is not surprising that this tax is not wanted by the Australian public. There was no need for the government to waste $1 million commissioning a report to be told this. It would have known this from the start if it was actually listening to the Australian people. But Labor has not listened to the people; instead it takes its cues from the Greens. The result is that people stopped listening to Labor a long time ago. An election cannot come soon enough.

The carbon tax is going to send energy bills soaring. The Independent Pricing and Regulatory Tribunal hearing into the draft increase of 16 per cent was told that the prices needed to go higher, with Australian Power & Gas wanting prices to increase by 25 per cent. Energy companies will need to increase prices to cover infrastructure upgrades, and the additional cost of the carbon tax is making things worse. It is natural that a company passes on its costs to the consumer, but in this case it is the government imposing the cost, unnecessarily, on the Australian public in the first place.

Wagga Wagga City Council—and, moreover, the hardworking residents, families and ratepayers of that fine city—has been declared among eight councils on Labor's hit list of the 248 so-called biggest polluters. How a regional council based in a city of 63,000 people, good people, can be considered a dirty polluter is beyond belief. That residents will be slugged with annual carbon tax bills of $660,000 plus—that is the amount in the first year, and it will only increase—just for taking their rubbish to the Gregadoo Waste Management Centre would be laughable if it were not so serious. That money would be far better spent on fixing potholes, buying library books or on maintaining the city's beautiful open parks and gardens than sending it offshore to Bolivia, Nigeria or Russia to buy carbon credits courtesy of some nonexistent carbon sink. Now we find out from Senate estimates on Monday that Coolamon Shire Council and Griffith City Council are also in Labor's carbon-tax crosshairs. There are 112 councils in total in Labor's sights, 79 per cent of which are in regional Australia. There are eight that the Clean Energy Regulator wrote to last month and they are included in the initial list of 248 entities to pay the tax. There are also another 104 councils that may be liable to pay the tax.

While the government is giving councils a 12-month reprieve and is assisting them to determine how much methane over 40 to 60 years is likely to be emitted from waste decomposition, it cannot give them any advice as to what the price of those emissions might be in 33 years time. The government does not even know what the price will be in three years time. The key thing here is that you get to charge for waste disposal only once, when it is dropped off, but the liability will be with you for 40 to 60 years. As the 7 May editorial in the Wagga Wagga newspaper, the Daily Advertiser, declared:

Wagga City Council is being forced to pay $23 per tonne carbon tax. What a load of rot! This climate change nonsense is now totally out of control.

  …   …   …

Really, there is no need for this tax.

  …   …   …

For heaven's sake, just what is the federal government thinking?

Well written!

This government has also wasted money on the tangling bureaucracy which surrounds the set-top box program. Almost a quarter of the $308 million to put set-top boxes in pensioners' homes was spent on administration. The cost to the government of having a set-top box installed is about $350 per box. Harvey Norman in Wagga Wagga can do this for $99. It could install three boxes for less than the cost of one of the government's boxes. Disturbingly, the government also appears to be being charged for work that is not completed by contractors. I have a constituent who recently had a set-top box installed in his home by two contractors. On completing the installation they laid out equipment which they claimed was a safety check and then had him sign a job form. At the time his wife was gravely ill and he was in the process of taking her to the hospital, so he did not pay too much attention to what he was signing. He informed me that the contractors laid out an aerial and cable and took photos of these, and he was concerned that the government was being rorted by contractors who were charging for services and equipment which had never been supplied nor installed.

My constituent was also concerned about the way in which the ease of installation and explanation is portrayed in the television advertisements yet when he asked to be shown how to use the new system he was told, 'You'll work it out'. Where is the accountability for these services being rendered? What safeguards are in place to ensure taxpayers are paying only for what is being carried out? Furthermore, my constituent felt too scared for me to name him in this speech for fear of having a brick thrown through his window. He believes that many elderly people feel they have no choice but to sign the forms, no matter what they say, as the contractors make them feel intimidated and if they do not sign they will take the set-top box away. However, it is not only the set-top box program that has been problematic for people in the Riverina. With the digital switchover, many residents who currently receive a perfect analogue signal will be left with a bad or no digital reception.

One constituent, Marie Chilton from Book Book, is having a great deal of difficulty sorting out television for the digital switchover. She had a contractor come to install a set-top box but was advised that she had no signal whatsoever and would have to get a satellite dish. As there is no assistance for the purchase of a satellite dish Mrs Chilton will face the cost of this herself. Additionally, she rents the property and therefore cannot claim the tax back that homeowners can get. Her landlord refuses to pay to install the satellite dish. I have written to the Minister for Broadband, Communications and the Digital Economy on Mrs Chilton's behalf and was advised by his staff that she may—and I reiterate 'may'—qualify for assistance with the installation of a satellite dish but will have to cover the cost of the dish herself. Mrs Chilton does not understand why the government would spend all this money switching over when she currently receives all the channels perfectly via analogue, yet she is facing so many hassles to switch to digital. This is another example of this Labor government not considering the impact of its actions on regional Australians and senior Australians.

That said, Riverina secured nearly $17.5 million in health infrastructure funding despite what was a tough federal budget—the toughest federal budget in a quarter of a century. The Griffith Community Private Hospital development was allocated the $11.388 million it needed for the project and Hillston's multipurpose service redevelopment received $6 million. I know how much this will mean for those communities who worked so hard to ensure their submissions were successful. Having updated decent facilities in centres in the western Riverina also eases the pressure on Wagga Wagga Base Hospital, which gained $55.1 million in last year's budget as the major health facility in our region. I acknowledge the local health funding. However, the budget was not otherwise friendly for regional Australia. Labor has stripped $5.5 billion from defence, which, considering that Wagga Wagga is a tri-service city, is sure to have an impact. The cuts ensure that as a percentage of gross domestic product spending on defence is now at its lowest level since 1938—the year before World War II began. Twenty Army major capital facilities projects have been delayed by up to three years, including the construction of Kapooka's working accommodation. There is the removal of recreational leave travel for single members over the age of 21. They were entitled to go back to their next of kin once or twice a year but that has now been cut. They cannot travel back to see their next of kin, because Labor cannot stop spending. The gap year program for Air Force, Army and Navy, to give young people leaving year 12 the opportunity to go into the military for 12 months, has been axed. There is a 10 per cent reduction in Army Reserve training salaries—so 10 per cent of our Army Reserve is being cut. What will that do to our regional communities and to our men and women who do so much to help serve their nation?

Labor has badly let down the disability sector, giving just $1 billion over four years to start the National Disability Insurance Scheme, when the Productivity Commission said $3.9 billion was needed. Whilst Labor members might say that Labor is doing everything it can and that the coalition is doing nothing, the National Disability Insurance Scheme does have bipartisan support. I was the first federal parliamentarian in New South Wales to sign up to the program.

Ms Rishworth interjecting—

The member for Kingston can complain all she likes, but there is bipartisan support—and to go down that path of using the most vulnerable members in the community is absolutely shameful. These people absolutely need security on their funding and they will receive it, as there is bipartisan support.

The government has deferred $941 million of vital Murray-Darling Basin infrastructure money to 2015-16. Yet money for buybacks is still very much on the table. I just had a group of schoolchildren from St Patrick's Primary School at Griffith visit, and one thing the adults accompanying those children wanted to know was what this government is going to do with the Murray-Darling Basin. I have to say that I do not know. This government does not recognise the fact that farmers grow the food to feed this nation. These people know how to use water very economically. They need the water to be able to grow the food to sustain our nation and other nations into the future, but they are being hit hard every which way they go. This government has not provided the sort of money it needs to for vital infrastructure which would put environmental water back into the system. But no—this government just continues to buy back water from the productive farmers and take money away, which is nothing short of theft.

In this budget, spending on roads is the lowest it has been in a decade, and that is just shameful. Aged care will cost a whole lot more thanks to this budget—which, overall, is a figure-fixing exercise in order to produce an illusionary budget surplus. I question Labor's claim of achieving a surplus when Labor has increased the Commonwealth's borrowings limit by $50 billion to $300 billion. It is like a bank overdraft. Anyone in business and anyone who has ever run a small business knows that you should not spend beyond your capacity to pay back your debts. But, unfortunately, not many on the Labor side have actually ever run a business. They have never grasped that you need to actually make money to be able to pay your debts, because a lot of them are, unfortunately, people straight from the unions—union hacks—and they have no idea about how to run a business and therefore they have no idea as to how to end up with a black line on the bottom of their profit and loss statement. And that shows, because all we ever seem to get is a red line on the bottom of Labor's budget.

There is no business acumen in this reckless and wasteful Labor government. This budget has badly let down regional Australia. It has badly let down Australia as a whole. Unfortunately, our defence and our security will be the poorer because of this budget, as will small business—and families certainly will be because of the impending carbon tax, which is only a little more than a month away. That is going to have a very harmful effect on people's ability to meet the high cost-of-living pressures into the future.

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

I do not support the amendment to these bills moved by the member for North Sydney, but I do speak in support of Appropriation Bill (No. 1) 2012-2013, Appropriation Bill (No. 2) 2012-2013, Appropriation (Parliamentary Departments) Bill (No. 1) 2012-2013, Appropriation Bill (No. 5) 2011-2012 and Appropriation Bill (No. 6) 2011-2012, as moved by the Treasurer. These appropriation bills build on Labor's election commitments made at the 2010 election and provide much needed assistance and services not only to the constituents of Deakin but to everyone across our great nation of Australia.

Since the last budget debate here in May last year I have opened 15 new Building the Education Revolution Primary Schools for the 21st Century projects in my electorate of Deakin. In addition to that, another two were opened with representation in the electorate and we have also opened a new trade training centre. For most of these schools, especially in the government and Catholic sectors, this was the first major spending on infrastructure for many decades—and for some of them the first since they were built. For anyone who doubts the benefits of the Building the Education Revolution I have a simple challenge: get out there and have a look. Have a chat to the school principal and to the teachers. Talk to the school community and see the difference that the $16 billion that we invested in education has made to our nation's primary schools.

Although I have often spoken about the opening of BER buildings at many schools in my electorate, I have not completed that task in full as yet, due to time limitations in this place. So I will list for the House the schools that have opened their BER buildings in the last year in Deakin. We have Livingstone Primary School in Vermont South, Blackburn Lake Primary School, Rangeview Primary School in Mitcham, Antonio Park Primary School in Mitcham, Nunawading Christian College Primary School, Croydon Special Development School, Ringwood Heights Primary School, Weeden Heights Primary School in Vermont South, Dorset Primary School in Croydon, St Phillips School in Blackburn North, Heathmont East Primary School, St Timothy's School in Vermont, Tinternvale Primary School in Ringwood East, Vermont South Special School, Mullum Primary School in Ringwood, Vermont Primary School and Yarra Valley Grammar School.

These local state government, Catholic and independent sector schools have built brand new functional buildings that have helped to bring their schools into the 21st century. Some have done absolute wonders with existing spaces and some have started from scratch. But, in particular, it must be noted that these buildings were done with thought—and that is a good thing. It meant that there were not mistakes made due to rushing headfirst into a new building project. Most of the problems, though not all, were sorted out at the design stage—and, of course, in construction there are always problems that come along that are unplanned for. But, in every case, these new learning and activity spaces have made the school better for students and their teachers, and I think they have helped to encourage a sense of pride and ownership in the wider school community—after all, it is an asset that they get to keep and use.

These buildings utilise modern designs and have features such as passive heating and cooling and especially modern interiors. I am always particularly taken by the amount of light in these new BER buildings—which of course is natural and not artificial light. I think open teaching and meeting spaces certainly suit the way that our children are taught in schools these days—to the point where many old schools are knocking walls down between classrooms. I think that is certainly a change from the time that many of us were at that level of schooling.

Three of these buildings were the local Maroondah template, which was designed specifically for schools in my area. That was designed for schools that did not qualify for the Victorian state government's full-size building template. It allowed schools to get a larger building and allowed schools to be able to do refurbishments on top of their building. Looking at recently built school halls already around the area and adapting the design to fit the BER guidelines, schools like Ringwood Heights, Rangeview Primary and Dorset Primary were able to get a full-size indoor facility. In the case of both Ringwood Heights and Dorset Primary that was instead of a half-size facility, and in the case of Rangeview and Dorset Primary, they both got to do extra works—whether that involved refurbishment of existing administration wings or classrooms. So they really got two projects for the price of one. There are only 10 such buildings in Victoria, with eight of them either in or near the electorate of Deakin. I think they are a great result. They show how work between the federal government and the state government and the community of those schools has achieved a fantastic result for those schools in the electorate. There are many more schools in Deakin that are awaiting their official openings. Last time I counted, there were about 10 still to be officially opened. As far as I understand, they are all operating, with the exception of one which still has some planning issues. I look forward to informing the House of these openings in the near future.

It should never be forgotten that the Liberal Party, and their partners the Nationals, opposed these wonderful local projects and voted against the funding in this very place in 2009. If the Liberal and National parties had had their way, these buildings would never have been built and schools in Deakin would have been worse off to the tune of $80 million in infrastructure. I have highlighted these BER projects, as they show how Labor in government has delivered and continues to deliver for our local community in Deakin. These projects have made a real difference to the quality of and access to education and training right across the electorate.

This year we have continued our proud record of delivering better access to education for our community by introducing the schoolkids bonus, a payment made to families who receive Family Tax Benefit Part A. At $410 per year per primary student and $820 per year per secondary student, the schoolkids bonus will replace the education tax refund. Unlike the education tax refund, the schoolkids bonus does not require receipts for eligible items to be kept and then claimed at the end of the year on a tax return. The education tax refund was introduced by Labor as a key measure to help families nationwide cover the costs involved in educating their children. Although it was a great measure, it did not completely hit the mark. It is estimated that 1,150 families in my electorate of Deakin have not claimed the education tax refund for the 2010-11 financial year despite being qualified to do so and that a further 3,800 families have not claimed the full amount available. The schoolkids bonus extends the education tax refund concept and provides more money to families with children at school. It will help to cover the almost never-ending stream of expenses that arise from educational activities.

Meanwhile, as good as this Labor initiative to introduce the schoolkids bonus is, in Victoria the Baillieu Liberal government, with no regard to the cost of starting a child at primary or secondary school, has just cut back the education maintenance allowance for local schools. So some parents might see what has been given with one hand being taken away by another. That is not under our control here in federal parliament, but I can say, from a federal government perspective, that we are doing a great thing for families with children in school—not only in Victoria but right across Australia.

It is estimated that over one million Australian families will benefit from this change to the education tax refund and they can look forward to receiving their upfront payments from 20 June this year. Just as we saw with the BER program, the Liberal Party voted against the schoolkids bonus program in this parliament. I think that is because they do not care about the cost-of-living pressures that families across the country are facing—not only when it comes to education but with all the other day-to-day bills households accrue.

This budget will also deliver, through Family Tax Benefit Part A, an increase of between $100 and $600 per year from July 2013 to further assist families with the costs of raising children. At least 1.1 million families will receive at least an extra $300 per year as a result of this increase to the maximum rate of the Family Tax Benefit Part A. Another 460,000 families across Australia will receive at least an extra $100 per year from this measure.

This budget has many benefits for local families and it also has benefits for small business. As we in this place know, some of the proceeds of the government's minerals resource rent tax were going to provide a tax cut for businesses. But this could not happen without the support of either the Liberal and National parties or the Greens in this current parliament. I and many others still cannot believe that the Liberal Party would oppose a cut in company tax rates. I really do wonder who they actually represent—other than themselves. The Leader of the Opposition's company tax policy is to put a 1.7 per cent extra tax on the 3,000 biggest companies in Australia to fund paid maternity leave at a rate of up to $75,000 for six months. W e hear a lot about the impact of carbon pricing, but that impact is nowhere near the magnitude, when it comes to its impact on business, of the opposition's proposed 1.7 per cent tax increase. That will have a huge impact . Whereas we proposed tax cuts, the Liberals were proposing tax increases on business. Because we were unable to get that measure through parliament, this budget introduces a loss carryback scheme in place of those company tax cuts that will allow companies to carry back losses of up to $1 million against tax that they have already paid. The instant asset write-off for small business for items up to $6,500 each commences on 1 July this year and can be accessed not only by those who have companies but also by sole traders, partnerships and trusts. In total, over 2.7 million small businesses Australia wide will be able to take advantage of this tax break.

In the time remaining I must also mention the improvements that this government is making to superannuation for Australian workers. Superannuation is a subject I have spoken about at length in this place, and I will continue to do so. Although superannuation is now taken as a workplace right, I am old enough to remember when it was a workplace privilege. When I started full-time work in 1982, superannuation was generally only for government employees or for management in private industry. Fortunately times have changed, but it took a lot of effort to get that change. If you were not in one of those groups, you generally got nothing in the way of super.

Although I was fortunate to be in an industry that started paying super in 1985, it was at a very low rate. The majority of the population had to wait until the Keating Labor government passed the Superannuation Guarantee Act in 1992. When that came in the standard was three percent, whereas now the standard is nine percent. It took an awful lot of incremental increases to finally build up to that nine percent. The Gillard government has now introduced measures to increase the superannuation rate from nine percent to 12 percent, again through incremental increases, over the next seven years. It will not be until 2019 that we get to the 12 percent super guarantee for workers in Australia.

Another important change to super is that workers earning up to $37,000 per annum will effectively pay no tax on their super contributions from 1 July this year. This change will provide for higher retirement balances for full-time workers on or near the minimum wage and for many part-time and casual workers. It is often forgotten when we talk about super and the balances peoplemight have at retirement and how they can use those funds that many people will never get to that satisfactory level, for all sorts of reasons. Some people spend many years out of the workforce; some people will miss out on super because they work in low-paying jobs; there is unemployment; and there are all sorts of reasons that mean that when a person hits retirement age they will not have what we regard as an average expected balance and therefore income from their super savings.

The changes we are making now are long-term changes. They will take a long time to work through the system for the benefit of every working person in Australia. That is a great thing. As I say, it takes a long time but taking away the tax disincentive for the very lowest income earners is one of the best measures in this budget. It will certainly impact very positively on many people I know of in my electorate of Deakin who do part-time work, who do not have big incomes. I am sure it will make their lives in the future a whole lot better, as it will for low-income earners right across the country. I commend these bills—but not the second reading amendment—to the House.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise to support the amendment to the motion that Appropriation Bill (No. 1) be read a second time. It is an incredibly important amendment because it goes to the heart of transparency in how the nation's finances are handled. We especially need transparency at the moment.

Before I go into the specifics of the amendment, I would like to spend some time talking about the budget. We have global economic uncertainty, especially with the uncertainty of whether the Eurozone will hold together or not, and we have ongoing political turmoil, with changes of government and changes of view about how austerity measures should be dealt with. Here in Australia we needed in this budget an economic plan—some vision, some leadership, a way forward. We needed a demonstration that, in particular, the Treasurer knew what the hell he was doing. Sadly, what we got was no such statement, no such vision, no such leadership. We got a budget which offered no plan, more debt and continued on the path to delivering, come 1 July, the carbon tax.

I would like to look first at what the budget did for my electorate of Wannon. The No. 1 issue at the moment in the electorate of Wannon—it has been for some time—is how we can get more money from federal, state and local governments into our road infrastructure. There has been a road infrastructure deficit now for some years, and we need to get funding to address that deficit. what did this budget do to help in that regard? Sadly, road funding will be cut from $6.2 billion in 2011-12 to $2.6 billion in 2012-13. That is a $3.6 billion shortfall. It is a key infrastructure demand—something which will drive productivity and help this nation deliver its goods and services to export markets to make sure that our domestic economy functions coherently and increases productivity, and what has the government done in this important area? It has cut its spending by $3.6 billion.

We see that impact more specifically when it comes to how the Western Highway will be funded. The Western Highway will not get the full amount of funding that had been promised to it each year for the next four years. Instead the books have been cooked. I understand that there have been some environmental planning issues which have led to some delays, but that does not mean that the Treasurer should cook the books so he delivers less funding next year to deliver his surplus and then puts extra funding in the outlying two years to help him achieve his wafer-thin surplus. It demonstrates quite clearly that the Treasurer has cooked the books when it comes to delivering his surplus, and we are highly unlikely to see it. As a matter of fact, if history dictates anything, we are definitely not going to see it. As we saw with the blow-out in the deficit in the last budget, which totalled over $20 billion, it seems almost impossible that the Treasurer can hang on to this wafer-thin, $1.5 billion surplus which he has announced for the coming financial year.

On that point, we also need to ask—and this is what the amendment we are debating today goes to the heart of: if the Treasurer is determined to deliver his wafer-slim surplus, why is he asking for an extra $50 billion credit limit to be placed on the nation's credit card? Why is he asking for that borrowing limit to be raised from $250 billion to $300 billion? It just does not pass the common sense test. It does not pass the pub test. If you are telling people you are going to deliver a surplus, why then would you be also saying, 'Oh, we need to sneak through this little increase in our credit card limit'? And this 'little increase' is $50 billion. Something just does not stack up, and I think we all know what does not stack up. It is the Treasurer's ability to deliver a budget which will achieve what it sets out to do and which shows any sort of vision for this country.

We also see, despite the predicted growth rates, that unemployment is set to rise to 5.5 per cent. Last year's budget promised 500,000 new jobs over two years, but the government now expects to miss its target by 300,000 jobs. So once again it is hard not to be just a little bit cynical. We have a commitment to achieving 500,000 new jobs in the last budget and yet already, one year later, that target is going to be missed by 300,000 jobs. It does make it hard to believe the Treasurer when he says that we will get a surplus out of the next financial year. It makes it extremely hard to believe.

The other thing which makes the budget fairly dubious and raises a level of cynicism—that raises a level of mistrust, with how it has been cobbled together and what it sets out to achieve—is that we are assured that the carbon price—with no mention of the carbon tax, of course, but the carbon price—will only impact the 500 largest emitters. Yet, at the same time, it then goes on to explain what assistance would be offered to families to help them cope with the price increases from the tax that will not speak its name, the carbon tax—or the carbon price, whichever way we want to define it. So once again there is an inconsistency which has to raise a level of cynicism. It really has to make one wonder whether this Treasurer has any credibility whatsoever. Assistance to cope with the carbon price to families is clearly laid out within the budget yet the overarching statement is that the carbon tax will only impact on the 500 big emitters.

If there is a message that comes out of this budget, and if I could very humbly provide some advice to the Treasurer, it is that you need to get a consistency in your messaging. Otherwise, people are going to grow more and more cynical about what you are trying to achieve. I think that has been clearly established. We have a budget where the government is saying, 'This is what we are saying, but this is what the result will be.' What is being said does not fit with what the results or the outcomes are. It is a real tragedy that that is the case, because at this time, more than at any time, at least since the GFC and before it, the Asian financial crisis, we needed a clear economic statement—a clear economic message—which showed the way forward for this nation.

We have set out a vision as to how we would increase the productivity of our capital, how we would increase the productivity of our labour and how we would deal with the ongoing stormy seas which are surrounding us, especially the stormy seas surrounding Europe. But this budget does not do this. What does it do instead? It engrains the carbon tax. In my electorate of Wannon, that means extra cost to our dairy farmers; extra cost to our beef producers; extra cost to our land producers; extra cost to our manufacturers, large and small; extra cost to local government, especially when it comes to waste disposal. On that point, it adds not only extra cost but also extra confusion, because none of the people who manage waste fill in my electorate have been able to get a clear idea from this government as to how the carbon tax will work in this area.

With this budget we get record debt. We get a ceiling of $300 billion—four times what it was in 2008. We also get a level of net debt which is increasing to $144.9 billion. It is important to pause and think about what this means. It means that the government will be spending over $8 billion a year, or around $22 million a day, on interest payments alone. Just stop for a minute and think what could be done with that $8 billion. We could make serious headway with the National Disability Insurance Scheme. We could start to address the infrastructure deficit which is beginning to hurt regional and rural Australia in particular. Eight billion dollars is a lot of money. That is $22 million a day. That money could be put to productive use. Instead, it will be put towards paying off interest. Let us not forget that in 2007, when Kevin Rudd came to power, that level of debt was zero. The books were actually showing a positive position. That is the turnaround. Since 2007, $8 billion a year in interest payments has been incurred.

In conclusion, I think that this budget showed once again that what this country needs is an election. We have a government which does not know how to run the government's finances. We have a parliament which is beset by issues and problems of its own making. What the Australian people need is an election, so that we can get on and decide what is the economic vision that this country needs and set about delivering that economic vision so that people—especially people in my communities—do not continue to have the worries and the economic concerns which this government is placing upon them. (Time expired)

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

Order! The debate is adjourned and the resumption of the debate will be made an order of the day at a later time this afternoon.

Sitting suspended from 12 : 54 to 15 : 57