House debates
Thursday, 13 February 2014
Bills
Tax Bonus for Working Australians Repeal Bill 2013; Second Reading
11:19 am
Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source
I will return to the substance of my speech and to the point I was making which was Dr Henry's testimony at Senate estimates. I will repeat the key quote which was:
In the first six months of 2009, in the immediate aftermath of the shock waves occasioned by the collapse of Lehman Brothers, the Australian mining industry shed 15.2 per cent of its employees. Had every industry in Australia behaved in the same way, our unemployment rate would have increased from 4.6 per cent to 19 per cent in six months. Mining investment collapsed; mining output collapsed. So the Australian mining industry had quite a deep recession while the Australian economy did not have a recession. Suggestions that the Australian mining industry saved the Australian economy from recession are curious, to say the least.
That was the testimony of Dr Henry in 2010. It provides a direct rebuttal to any claim that the mining industry or the Chinese stimulus package saved Australia during the GFC. It was the combined efforts of the Reserve Bank's monetary easing and very direct action from the last Labor government in terms of its stimulus package. This stimulus package covered both payments to low- and middle-income Australians to provide immediate stimulus and over $28 billion in direct government investment in schools, housing, energy efficiency, community infrastructure and roads, and support to small business. This was vital because it provided a two-stage stimulation process. It ensured that we avoided the recession and it was incredibly important. This vital investment meant that we saved 200,000 jobs during the GFC.
I will turn to some of the very worthy initiatives in the global financial crisis stimulus package. One I want to particularly draw attention to is the $5.6 billion social housing initiative. This was the largest commitment by any government in Australia to social housing and was a key component of the stimulus package. More than 19,000 new social housing dwellings are to be built under this initiative and around 80,000 dwellings have already benefited from repairs and maintenance.
This is incredibly important because social housing is an often neglected part of infrastructure in this country. Social housing should not just be for the most marginalised in this country. It should be for low-income workers who need access to cheaper and more affordable housing, as the private housing rental market can be quite expensive and, even at low interest rates, homeownership is often out of reach for many people. We cannot underestimate the importance of social housing. This was a vital part of Labor's economic stimulus package that saved Australia during the GFC and, most importantly, avoided the scourge of mass unemployment. I listened to the comments of the member for Hotham who talked about the cancer of youth unemployment and said it is a scourge in Europe. It is important to note that we avoided this in Australia and I am proud of Labor's contribution.
I turn to the effect of the stimulus package on my electorate of Charlton. Under the nation-building economic stimulus plan, over $450 million was invested in education in the Hunter region, including over $100 million in schools in the electorate of Charlton. Some of these schools had not seen infrastructure investment in decades, some for 50 years. I am proud of this investment. I have visited these school—government schools, Catholic schools and independent schools—and they are all grateful for this infrastructure. When I talk with principals, teachers and parents, they cannot speak too highly of this infrastructure and say that through this stimulus package they got magnificent new facilities such as state-of-the-art classrooms, libraries and halls.
This was a bonus of the expenditure. The key purpose of the expenditure was to keep the Australian construction industry in work when there was a massive decline in private residential investment. The statistics show very clearly that in 2009 and early 2010, as private sector investment in the construction industry tanked, that gap was filled by government investment in the Building the Education Revolution program. I have personal experience of it. My brother is a concreter and his job was saved by work on this program during this period.
Coalition MPs have been happy to mock and attack this investment, but they have been equally happy to attend openings of school halls and other infrastructure and to have their photos taken. This investment shows a clear difference between Labor's priorities and values and the coalition's priorities and values. Labor is proud to have initiated the biggest investment in education in Australia's history, while the coalition voted against it and continues to denigrate this historic investment.
I talked about social housing at the national level. In Charlton, $45.7 million was spent on social housing, with more than 485 public houses being upgraded or undergoing repairs and more than 160 new social housing dwellings being built.
I turn to the efforts of those opposite to draw the $900 stimulus cheques into their theme of the age of entitlement. They maintain these cheques were part of the age of entitlement, the cancer eating Australia. There are two facts in this debate: first, $900 stimulus cheques were a vital part of getting Australia through the GFC. Without that immediate cash injection, there would have been rising unemployment and a much weakened economy which would likely have gone into recession. Second, I cannot suffer the hypocrisy of those opposite condemning the age of entitlement when their official policy is a $5½ billion paid parental leave scheme, a ridiculous scheme. It is a scheme of not middle-class entitlement but of upper-class entitlement.
The notion that a businesswoman on $150,00 a year should be paid $75,000 to have six months off work to have a baby, while a checkout operator in a shopping complex in Charlton, an aged-care nurse or childcare worker on $30,000 a year would only receive $15,000 is offensive. It is a joke and it is inequitable. All Australian women having children should be entitled to the same level of assistance from taxpayers. To say high-income earners should receive $75,000 while low-income workers, the bedrock of our community—our aged-care nurses, our childcare workers, our retail workers—should receive as little as $10,000 is offensive to Australian people.
This is symptomatic of the debate in which this government do not support low-income workers. We have seen their attacks on penalty rates and award conditions and trying to blame workers for the massive job losses under Prime Minister Abbott. Up to 250,000 jobs will go in the automotive industry and other industries that depend on the automotive industry. Their response is to attack workers and say workers should not be paid as much as they are being paid, yet the coalition plan to pay business executives $75,000 to have children.
This is part of the debate about which priorities should be set for the economy. Is the economy's first priority to serve the great mass of Australian people? The Labor government's response during the GFC was a great example of timely, temporary and targeted action to save the country. This response was held up as a model for the rest of the world by every serious economic commentator, including John Quiggin in Australia and Joseph Stiglitz in the United States. This response was seconded by the IMF and applauded by the OECD as a great model for the rest of the world. The naysayers on the other side confessed to sleeping through the votes after consuming a couple of bottles of wine with friends. These are the facts of the debate and I am proud to be part of the Labor Party. We stood up for Australian workers through the GFC and rejected mass unemployment, supported workers and fought unemployment every step of the way as we had seen what unemployment does to society. That is why I am proud of the Labor government's stimulus package and am grateful for the opportunity to make a contribution to this debate.
11:29 am
Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source
Back in February 2009, we were in this place in the early hours of the morning—actually the evening of the 4th and the morning of 5th—
Mr Conroy interjecting—
The member opposite was not there, so I will enlighten him on that. I was here at 4.24 in the morning on the 5th and was prepared to deliver a speech about the Tax Bonus for Working Australians Bill 2009, which the Rudd government was trying to implement. I never got to deliver that speech because the Treasurer came in, along with the member for Grayndler, and did his piece and guillotined the debate.
Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source
At least you were awake.
Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source
I think the member should withdraw that interjection. He cannot speak about the facts because he was not here then. If he is talking about members who have made gigs of themselves in this place for the reasons that he is saying our Prime Minister did, he should have a close look at himself and at his fellow colleagues.
As I said, it was 4.24 am when the Treasurer got to his feet to guillotine the debate just before I was about to make my speech. It was obviously disappointing to be denied the chance to speak at an important moment for the last parliament. In many respects, this was the moment when the nation's finances began to get out of control under Labor. I have found that speech and I would like to quote from it because I think it is relevant to this Tax Bonus for Working Australians Repeal Bill. It gives me a chance to get it on the record because I have not had the chance since then.
One part of that speech read: 'The second reason was that I had beliefs, standards and values that I developed over my lifetime and I wanted to make sure that I could live by those in this place and I could achieve positive results that are the best for my electorate and for the people of Australia. This second reason is why I have to oppose this package. The ink is barely dry on the legislation paper and we have been asked to vote on this legislation and support it without proper scrutiny, like it is going to be the economic saviour of this country. Prime Minister Rudd thinks just because it is his package and he is a self-professed economic genius that we the opposition should roll over like a dead dog and say, "Yes, yes, yes, this will save Australia."'
I also had in that speech: 'The basic reason the world is experiencing a global financial crisis is debt. World banks are in debt, business is in debt, people are in debt. The world has borrowed too much. Despite all this debt, the government, through the Nation Building and Jobs Plan we have been discussing through the night, is planning to burden the country with a level of debt not seen in this century. In fact, in the fine print of the legislation, the government seeks to obtain the power to increase government debt to $200 billion—$9,500 of debt for every Australian, a level of debt never seen before; this from a government which inherited a $22 billion surplus. There has to be a point when this government will realise that it is irresponsible to keep fighting debt with more debt. It is a contradiction in terms, reckless, morally abject and economically irresponsible.' How could this country wish to still have that ceiling of $200 billion, but as we know it has gone way above that due to the reckless spending of the previous government.
Also from that speech: 'The Prime Minister would like us to believe that he has been approaching this financial crisis from the ideological high ground. The Prime Minister's approach has nothing to do with ideology; it has all been about political strategy. In his recent essay, the Prime Minister portrays himself as an ideological warrior, a far-seeing, anti-neoliberal leader ahead of the curve. This is quite a change of ideological position. Twelve months ago, our Prime Minister was waging a war on inflation, with his Treasurer now infamously claiming that the inflation genie was out of the bottle. In this budget year, Kevin Rudd was busy implementing expenditure cuts. The Prime Minister was desperate for us to believe he was the model economic conservative. During this time we, the coalition, were warning of the pending economic slowdown. We stressed maintaining growth and jobs was the main priority. Fast forward to February 2009 and our Prime Minister has become a born-again economic Keynesian. Make no mistake, this is a political strategy not an ideological or an economic one. Perhaps a more consistent approach from the Prime Minister would have led to a better response to the global financial crisis.'
Back to 2014, and today the coalition government are dealing with the legacy of many of the decisions made in haste in 2009, which have resulted in record levels of debt for this country. In fact, as MYEFO showed in December, in the absence of any policy changes from what we have inherited, the budget will not return to surplus within the 10-year medium-term projections, with gross debt at this time projected to increase to $667 billion. This government have inherited a record debt.
It is in this context that tough decisions have to be made. But perhaps we should start with an easy decision and stop sending of $900 cheques to dead people. More than 21,000 cheques have been mailed to dead people since the Tax Bonus for Working Australians Act was passed by the Labor government in 2009 and until recently the tax commissioner was still sending them out. In fact, during the last financial year some 15,000 cheques were issued, totalling around $13 million of borrowed money.
As I have mentioned before in the House, I recall during the Rudd period a talkback caller to 6PR in Perth whose name was Charlie. He won the title of talkback caller of the day. The subject he spoke about was on what he had spent his $900 of stimulus money and he had spent it at the brothels. I remember the Treasurer on that night five years ago saying, 'Our tax bonuses are targeted at people most likely to spend.' I guess Charlie would have agreed with him. He used the stimulus money in other forms of stimulus. That is the sort of waste that occurred as it was handed out. It was of course the former Treasurer, the member for Lilley, who embarked on this policy as a splurge against the GFC and sent out $900 cheques to working Australians earning less than $80,000; $600 cheques to those in the $80,000 to $90,000 range; and $250 to those in the $90,000 to $100,000 range. This was part of the rushed and poorly thought through package of stimulus measures that included the $2.4 billion roof insulation scheme, now tragically the subject of a judicial inquiry.
The coalition raised concerns about both these measures but all we got back was vitriol. The Treasurer labelled concerns about his schemes as 'blind ideology'. Time has passed and I think the Australian people can see that it was the Treasurer who was sailing in the dark during the global financial crisis. Given that the stimulus to the economy is no longer required and time has moved on since the GFC, the government clearly considers that further payments are not warranted.
The bill repeals the Tax Bonus for Working Australians Act 2009 to ensure that the Commissioner of Taxation does not make any further tax bonus payments while also making consequential amendments to the taxation law as a result of the repeal of the tax bonus act. As outlined in the explanatory memorandum provided by the minister under the current law, the commissioner must continue to honour all tax bonus entitlements by reissuing lost or stale cheques and by making new payments as a result of an entitlement of which the commissioner has only recently become aware because of a request for an amended assessment of income tax. I know that in my previous office we were delivered some $900 cheques from one of the constituents. They were sent to his property because there had been some overseas 457 workers who had left the country. He returned those cheques to our office and we forwarded them to the Treasury.
Under this new legislation, the commissioner will not be able to make any new tax payments, however he will retain the power to undertake compliance action with respect to the past claims and, where necessary, undertake recovery action in respect of overpayments. One of the consequential amendments required will be to the Income Tax Assessment Act 1997 to remove an income tax exemption in respect of the tax bonus and to remove from the checklist of tax exemptions the tax exemption for payments of the tax bonus. These amendments will be delayed until 1 July 2016 to accommodate late payments allowed to continue by the former government and a period of review for taxpayers. The expected saving of $0.25 million, or $250,000, on an underlying cash basis over the forward estimates may well seem small compared to Labor's $667 billion gross debt legacy—and I heard the member for Fraser talking about it before as being slightly more than the salary of a member of this place—but that is just the part the Labor Party do not get. It is only $250,000, he said, but there are many people in Australia who would think that $250,000 is a lot of money and that it should not be wasted recklessly by governments, and his belittling of the amount of money that this bill will actually save is a common feature of the Labor Party's approach to fiscal control.
This bill is about engendering a culture of saving rather than a culture of waste. This scheme has cost the nation $7.7 billion already in borrowed government money. That is a legacy of the Labor government to the future generations which will have to pay back the entire amount plus the interest being spent. This government is indicating by this bill that it will be treating taxpayers' money with respect and making sure all expenditures are justified.
This is of course the government's mandate. During the 2013 federal election, the government made a commitment to end waste, and this bill is part of delivering on that commitment. The government is delivering on its commitment to stop the boats after Labor's failed border protection policies resulted in a blow-out of at least $6.6 billion of borrowed money. The government has streamlined its operations by closing a number of departments and agency taskforces which were costing the taxpayer more in borrowed money. The government is reducing the size of the public service through natural attrition to ensure a leaner, more effective government for the Australian people. As promised, the government will deliver a cost-effective NBN for the Australian people which will upgrade the areas of need first. And the government has undertaken its Commission of Audit, as promised, to identify further savings to get Australia's budget position back on track. And we will all be interested in what the Commission of Audit finds and I predict it will reveal more examples of the culture of waste of the Labor government.
That waste came from a number of failures and I will give you some of those examples. Some of the waste came from profligacy. The $100,000 fake carbon tax kitchen is a case in point. Some of the waste came from mismanagement. The Australia network tender debacle led to the government having to pay $2 million in compensation to Sky News. Some of the waste came from incompetence. The previous government paid $350 per set top box when Harvey Norman sells them for $168, almost half the cost. The mining tax policy disaster, which sparked the downfall of former Prime Minister Kevin Rudd, resulted in the department having to spend $30,000 on a consultancy firm to work out how it could be compliant.
Some of the waste came from the dodgy payments to Labor mates, with a donation of $10 million of taxpayers' money to the unions to train union leaders, noted in the 2012-13 budget. We know that by 2012 Fair Work Australia had had to spend more than $1.8 million on outside legal and accounting advice for its investigation into the rorting of HSU funds including $1.3 million on external legal advice, $100,000 on external accounting advice and $430,000 on KPMG's review of the investigation.
And the examples continue. Of course some of the waste came from Labor's inability to govern itself. There was $1.3 million in payments following the political assassination of Kevin Rudd on 24 June 2010. There were so many failures it is lucky they were able to be documented in the Little Book of Labor Waste put together by the member for Mayo. They were prime examples of the waste that was dealt out by that government.
The coalition is determined to make sure that we end that waste and this bill is the start of that process. It will draw a line in the sand and indicate to the Australian public that we are determined to make sure as a government that we are responsible. We hold taxpayers' money in the highest regard and we will continue to ensure that we find the best way to get the economy back on track and to make sure that the taxpayers of Australia have confidence in the government.
11:43 am
Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source
In my remarks today I want to reflect on some of the contributions that have been made to date in this debate and say that I am alarmed at what is being suggested by those who are members of the government. It sounds like their plan for the next three years whilst they are the government is to introduce austerity measures. They may call the exercise the 'commission of cuts', they may call it trying to get the budget back in the black, they may talk about how this is important for taxpayers, but what they are really talking about is austerity. They are talking about cutting vital government funding in key areas of our community to try to get the budget back. What we have seen of this crisis in the last three to five years as it has rolled out in other economies around the world is that austerity does not work.
When the global financial crisis hit in Australia, whether we were representatives, in business or local constituents, we had the right to be a little bit miffed, a little bit frustrated by developments because we were going along wel
As a country we were doing well and overseas factors—a financial system in the United States—triggered the global financial crisis. So at the time the government of the day, the Labor government, really had three choices. They could take on a Keynesian economic approach, which was to spend and to stimulate, and that is exactly what they did. They could do nothing—just sit back and wait to see how the markets reacted. That would have seen job losses and businesses close in the private enterprise sector, and that would have put pressure on the community. But that chain reaction of job losses and of businesses closing would have been slower than what we would have seen if austerity were introduced, which is what a number of countries around the world did. When the global financial crisis hit, governments around the world—not ours but others—cut government spending. What that did was purely and simply to deepen the recession.
Our economy is robust, but it does have a cause and effect nature. If you take money out of one section of the economy it will have an effect on the other. Our economy is made up of a mix of public and private; we cannot ignore the fact that governments are a major part of our economy. I am always of the view, and it is a Keynesian view, that when private enterprise stumbles, when there is a problem overseas that affects our economy, government needs to step in. A short debt, a short spend or a stimulus package can stop businesses and industries closing and stop people losing their jobs. It is not a bandaid solution; it is an investment to ensure that our economy, robust and delicate at the same time, can survive and chart its way through this course.
We heard the government—and they did this when they were in opposition, quite often popping up in my electorate—trash talking the economy, saying that debt was bad, in front of the very businesses that owed their survival to the stimulus package that Labor introduced. They were standing out the front saying, 'This business is under threat because of government debt.' It could not be further from the truth. The businesses that Joe Hockey stood out the front of and countless opposition shadow ministers stood out the front of kept their doors open because people had money to spend. They had money. They had stimulus. They had cheques that those opposite are so concerned about to spend in these stores.
The other criticism that we have heard about the program that was introduced is that in some very few cases the cheques went to the wrong people. Some mistakes were made. I find it quite hypocritical for those opposite to suggest that this idea of sending cheques out to be spent was a really bad Labor idea. Sadly, Labor did not invent it. The previous government, the Howard government, quite famously sent cheques out to people and said, 'Spend—go forth!' But there was no criticism from those opposite that maybe a few people accidentally got the wrong cheque. No program is perfect. There are always going to be those rare examples. But the benefit of the stimulus package at the time it arrived—the idea or the principle behind it—saved Australia from falling into recession, as we saw elsewhere.
The difference between what the Howard government did and what the Gillard-Rudd governments did was the timing. I strongly believe that in times of boom a government should pull back its injection of funding into the economy. It needs to be sustainable funding. I will never argue against that. In times of boom we need sustainable, long-term funding programs, but you do not send out cheques for people to spend when the economy is doing well. That is the time to save and the time to bank. But when our economy hits a downturn like a global financial crisis, that is the time you need your government to step in and send these cheques out to get instant injections of funding into the economy.
It may sound like $900 here and $900 there, as though it does not have a big effect, but it does. When I was out in my local community talking to people about how these cheques helped them and what they were able to do with them, the cost-of-living pressures were something we often talked about. It is not unusual in my electorate to talk about cost-of-living pressures and how support from the government has helped. Roughly 30 per cent of households in the Bendigo electorate are surviving on less than $600 a week, a further 20 per cent less than $800 a week. These are the working poor and we know that when you give working people and people on low incomes extra money in their pocket they go out and spend it. It could be on anything but they spend it locally. One of the big campaigns that everybody seems to be in agreement on is 'buy local'. Buying local supports local business and that is exactly what this stimulus program was designed to do.
I was talking to Fiona from Eaglehawk who works in the community sector. She works with the Eaglehawk Community House and she stated that every cent went towards helping those most in need. It was really valuable to families in the area. Some used it to pay off that bill, which meant that they then had some money to spend on other items, other needs that they had. Some bought schoolbooks that they needed for their children. Some went out and bought a luxury item that they had not had for years. And where did they buy them but from their local businesses, keeping people employed in small businesses in our community.
Kate is 41, a single mum with three children. She had recently separated from her partner and had to move into a rental property and this stimulus package allowed her to get the extra items she needed. It allowed her to set up a house. And where did she buy these things? Again, from local scores in our local community, keeping people employed in small businesses. Carmel, a pensioner from Bendigo, says she was going downhill. She is surviving on a pension. She tried her best to save money for a rainy day when she got sick. The fact is that on the pension you cannot and Carmel did get sick. But then the stimulus cheque arrived and she went, 'Wow, I can pay my medical bills.' Barry from Golden Square used it to pay for the necessities to get through. Using these payments, as I have said, does help people pay off the bills. It did help them get the things they needed to get through day-to-day life. It allowed them to get back up on their feet and then spend what disposable income they had in their local businesses and stores. Another angle where this stimulus package was needed was not just the economy but also the social and economic advantage and how it helped people get through a tough period.
The knock-on effect that it had helped Bendigo businesses and industry get through a tough period, and then our place in the Australian economy helped Australia get through a tough period. Small businesses in the electorate talked about how they had an increase in sales when these stimulus cheques arrived. People bought the things they otherwise could not afford. We all talk about how small business is the backbone of this economy and the major employer today, and this package helped them stay alive. This package meant that we spent our dollars locally, whether it was on hardware, books or going out for a meal. All of these small businesses were able to survive. It was not the plasma screen TVs; they were bought during the Howard era. With this stimulus package people were able to spend dollars in the Australian economy, thus keeping jobs here in Australia.
We have heard other speakers, particularly on this side of the House, speak to the merits of spending and the merits of getting in there early and stimulating the economy to make sure we buffer ourselves against what is happening globally. That is what a smart, sensible government does when it is not fearful of the word 'debt'.
And let us focus on debt because over and over again over the last five years those in the Liberal Party and in the coalition have tried to beat us up about the word 'debt'. Debt is only a problem when your economy is booming. Debt is not a problem when there is no boom going on in the economy. Spending now to ensure that industry survives for later is smart business. Talk to anybody in business. They invest in themselves, and it is the same principle for the Australian government. Whether it be through infrastructure or an early stimulus program like this, government should invest in the Australian economy, in Australian businesses and in ourselves. Debt is not a bad word. It shows that we are actually investing. Everybody has a mortgage. Everybody spends to then pay it back. Every business, if it wants to grow, will spend and get itself into debt. The payback plan is what matters.
When you look at the debt level of Australia, our debt compared to other nations is low. That is the critical thing about the fear campaign of the other side. They are not being honest about the debt levels in Australia compared to other countries in the OECD. When I say that debt is not a bad word, we have to understand the intricate involvement of the word 'debt'. If you want to invest and grow the economy like we saw under the previous Labor government, you actually need to invest and work out the program, working with business and industry to ensure that, as the economy and receipts grow, debt is paid down.
The alternative to not stimulating the economy and instead doing nothing is, as I have flagged, austerity. Austerity is a problem. Cutting government spending does not solve debt. It does not solve growth problems. These cuts actually compound a recession that has been caused by the private sector. We know that austerity is on the way. All the talk from this government is that they are going to cut and cut everywhere. Whether it be school funding or small business support, when there are fewer dollars in the economy, the private sector will start to fail. We are not through this global financial crisis yet. The short-term, three- or five-year headline 'We got the country out of debt' is just not going to happen. We know that from what we have seen elsewhere. The obsession with getting Australia out of debt has become a fixation of the government and this fixation will see further pain in our community. I know that, if the cuts they are proposing around education or the changes to small business come in, it will cause big problems for my community. I am concerned about the austerity plan ahead.
11:58 am
David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source
I am very pleased to be able speak today on the Tax Bonus for Working Australians Repeal Bill 2013. It is very important that this legislation is passed, because it is a piece of legislation which helps to address the very poor fiscal situation that the current government has been left with by the previous one. But I think it is important, before getting into the detail of this specific bill, to just reflect on the context, because really the context is very simple. That context is: you cannot consistently spend more money than you have. Whether you run a government, a household or a business, you cannot consistently spend more money than you have. If your income is $60,000 a year and you consistently spend more than $60,000 year, you are going to get into trouble. If you are a small business turning over, say, $2 million a year and you consistently have costs of more than $2 million a year, you are going to get into trouble. Equally, if you are a government and you consistently, time after time after time, spend more than you take in then you are going to get into trouble.
Of course, the Labor Party has not actually delivered a surplus budget since 1989. That is a long time ago. That represents about 13 years of Labor government management of the budget in which a deficit position is what occurred. If it happened once or twice you might say, 'Well, that was a reaction to a particular set of circumstances; it was something that needed to be done to respond to external factors,' but when it happens every year for 13 years, it is not a response to particular circumstances; it is just a way of life. And that is the way of life that the Labor Party has put in place when it has had control of the treasury bench. That is unsustainable and certainly not something we can continue with.
The bill before us today is an important piece of legislation because it stops $900 cheques being paid to people under a program that was created to address a situation five years ago. So, remarkably, under the previous government, they were still paying $900 cheques to people to address an economic situation which occurred some five years ago.
I have noticed that members opposite have made some comments to the effect that these are not large amounts of money and that it is only a few million dollars here and a few million dollars there, but certainly, in my experience of life—and, I am certain, in the experience of life of most Australians—millions of dollars are a lot of money. And it is the Australian people's money, because that money has been generated by their enterprise and hard work, whether as pay-as-you-go tax payments, company tax, capital gains tax or any of the other ways in which Australians contribute revenue to this government. The government does not create that money; the people do. The people create the money. And it is incumbent upon the government to treat every dollar of the taxpayers' money with respect. That did not occur under the Labor government and this particular program is quite symptomatic of that failure.
One of the extraordinary things in this program is that a large number of payments have actually been sent to people who are in fact overseas. Again, it is very difficult to stimulate the Australian economy if you are not actually inside the Australian economy. We have seen 16,000 stimulus payments totalling about $40 million sent to people who are not even here—not even in the country. It is very difficult for those people to stimulate the economy, given that they are away from our shores. There is a similar situation in relation to dead people. So $18 million has been paid to people who are in fact deceased, under this program. Again, it is very difficult for those recipients to stimulate the economy!
It does concern me when the response from the other side is: 'These are small amounts of money in the scheme of things; this is a manageable issue.' Well, it is not manageable at all. It is a significant problem. It is completely unacceptable for the federal government to have such disregard for the funds of the taxpayers of Australia, and it has to stop. That is why the passage of this legislation is so important, because it will stop any further cheques being issued under a program that was designed for circumstances that were in place some five years ago.
I think that this program is symptomatic of Labor's budget management in general. In the six years of the Rudd, Gillard and Rudd governments, some hundreds of billions of dollars of debt were run up. We know that is the case. That is the situation we now find ourselves confronted with. We also know though, after MYEFO, that, on the current course, the current financial year deficit is on track to be some $47 billion and, over the next four years, there will be total deficits of $123 billion over the forward estimates period—an extraordinary amount of money, especially when that is on top of the very substantial debts of hundreds of billions of dollars that had been built up in the preceding years. It is so bad, in fact, that, at the end of 10 years, if we simply followed the strategy that Labor had in place for the Australian economy and more particularly for the budget of the federal government, we would have gross debt of $667 billion. That is an extraordinary amount of money, and I think it actually means that we have to introduce a new word into the discussion of fiscal balances in Australia. The word is 'trillion', because $667 billion is two-thirds of $1 trillion. So the trajectory set under Labor, if nothing changes, is for a gross debt of some two-thirds of $1 trillion within a decade—$667 billion. That is completely unacceptable to the Australian people, and is certainly not something that this government will allow to occur. It is very important that we pass this bill as a clear message that there is new management in town, and it has respect for the taxpayers of Australia.
It is worth reflecting on how we got here. How did we get to this situation? You do wonder how a government could get the finances of the country into such an extraordinary situation. Sometimes you should look at the very large programs and sometimes at the small programs because those small programs demonstrate an attitude and a way of thinking about the budget. They also demonstrate that the previous government did not regard the money within the federal budget as dollars that must be protected because they had been created by the hard work of ordinary Australians, but rather as money to, frankly, be thrown around as the government saw fit.
We saw a big budget blow-out of more than $6 billion in the border protection area—a failed humanitarian policy and, certainly, a failed financial policy. The blow-out under the previous government was $6 billion. On the theme of large amounts and smaller amounts, we should never forget that the previous government, as part of its supposed border protection policy, spent $2.1 million of Australian taxpayers' money on a shameful advertising campaign promoting its border protection policies. You may recall, Deputy Speaker, much of that money was spent on advertising on FM country radio stations and in suburban newspapers, many of which I suspect are not widely read by people smugglers, and yet the previous government was very willing to hand over that taxpayer money for its own political purpose, which is an outrage.
The BER scheme has of course been well documented. There was extraordinary wastage there. I think the BER scheme really shows the lack of attention to operational detail that we saw in the previous government. They had a press release led strategy, when running a significant government program is about the detail, hard work and making sure that you get value for the taxpayer. We did not see that at all in the procurement processes in the BER scheme which were, frankly, all over the place and wasted an extraordinary amount of money.
The NBN is another example of appalling financial management under the previous government. The strategic review that was recently completed identified a huge amount of wastage on Labor's watch. Way behind schedule and way over the budget is never a good combination, and that is what we saw time and time again with the NBN. We have seen tens of millions of dollars spent advertising the NBN to people who cannot get it because it is not available. We have seen money spent on advertising the NBN saying that it is free when it is not and have seen, frankly, extraordinarily irresponsible carriage of public policy in that area.
Live export is another example. You will recall that the previous government, in what can only be described as a knee-jerk reaction, basically ended the live export industry overnight in response to media reports. Unsurprisingly, that had a disastrous impact on the people working in that industry, many of whom are from electorates in northern Australia. The thinking in the previous government was, 'They are obviously not very happy about this and this hasn't quite worked out how we thought it might, so let's put in place an assistance package.' That assistance package cost $100 million. If the knee-jerk policy had not been put in place in the first place, there would not have been any requirement for that $100 million assistance package. But it was required because the policies of the previous government were very much about managing the daily news and the media cycle, as opposed to doing the substantive work, which is what real government is about.
One of my colleagues mentioned set-top boxes a little earlier. I know a little bit about set-top boxes and I can tell you that you can buy them for a lot less than $350. That is what the government paid for them. They spent $67 million on this program, and that wasted literally tens of millions of dollars. The pink batts scheme cost close to $3 billion. There is a whole series of other programs, and I hesitate to raise them because they are such sad reminders of another time, but I think it is important that we commemorate names like GroceryWatch, Fuelwatch, Green Loans, Green Start and the solar homes program in this House.
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Cash for clunkers.
David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source
Cash for clunkers indeed. The member for Kooyong brings my attention to that tremendously ineffective and expensive program. So there was a whole series of extraordinarily bad programs. Some were very big and some smaller, but all were consistent because all of them showed a lack of regard for taxpayer funds.
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Pink batts.
David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source
Of course, close to $3 billion was spent on the pink batts program. The legislation we are considering today will stop the issuance of cheques under the $900 program. That is exactly as it should be. This relates to a program which is more than five years old. If the average Australian were aware that the government was still mailing $900 cheques to people under this program, they would be absolutely outraged—and so they should be. It is therefore extremely important that we do pass this legislation and repeal this bad practice which is in place now.
The current government has been faced with some very difficult fiscal circumstances, given the waste of the previous government, but addressing those issues is what we need to do and will do. Repealing this legislation is an important step in that.
12:14 pm
Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source
Members of the public who are listening to this debate on the Tax Bonus for Working Australians Repeal Bill 2013 could be forgiven for thinking it was going on in a parallel universe. They could be forgiven for thinking that this is not a country that is now celebrating its 23rd year of consecutive growth. That is something that we celebrate. No one government can take credit for that. The reforms of the Hawke-Keating governments, the Howard government, and the Gillard and Rudd governments all contributed, together with the thousands of businesses and workers around the country who contributed to ensuring that Australia now is enjoys its 23rd year of consecutive growth.
Our policy performances and our success as an economy over the last five years are more impressive when you look at what has gone on around the rest of the world. This is the parallel universe that the Liberal Party occupies and seeks to deny. Our economy is nearly 13 per cent larger today than it was in 2007 when Labor came to office, whereas around the world many advanced economies are still smaller than they were prior to the global financial crisis. While other economies screeched to a halt Australia's per person GDP skyrocketed from 17th in the world to eighth in the world, and we occupy 12th place in the overall international league table when it comes to the size of our economy. We are one of only seven nations in the world that can lay claim to having a AAA credit rating from all of the major credit agencies.
While Europe and most of the European economies are struggling under an unemployment rate of around 11.7 per cent, we here in Australia enjoy an unemployment rate of nearly half that, although those on the government benches are doing their bit to ensure that we no longer are able to enjoy that success. Over 960,000 jobs were created over the period that Labor was in office at the same time that a staggering 27 million jobs were lost around the world.
All of this did not happen by accident, as previous speakers on our side have said in the course of this debate. The former government acted decisively and put three things into place. We stopped the run on the banks here in Australia by securing bank deposits. It is why Australian banks were still able to meet all of their obligations and Australian consumers felt confident about the security of their bank deposits. We put in place an Economic Security Strategy—round about $10.4 billion, designed to strengthen the Australian economy in the face of the meltdown that was going on in the rest of the world. It included lump sum payments to pensioners, because we knew that every additional dollar given to pensioners would likely be spent and stimulate the economy. We put support payments in place for low- and middle-income owners. We invested money in the homebuyers market by putting in place $1.5 billion to help over 150,000 first homebuyers. We invested around $187 million in creating 56,000 new training places over the course of 2008-09 alone.
In addition to this, the third limb of the package was the Nation Building and Jobs Plan of $42 billion, effectively bringing forward the infrastructure spend that any normal government would have put in place over one to 2½ decades—bringing forward the spend in a concentrated period of time to ensure that we kept the economy ticking over and, critically, the building and construction part of the economy ticking over.
Building the Education Revolution, for example, saw over 9,500 building projects going on in schools right around the country. Those on the opposite side of the House criticise this program, but they were breaking their legs to get down to the school halls, the science labs, the libraries and the upgraded facilities to ensure that they could be there cutting the ribbon and taking credit for these programs. They then came here and bagged those very same initiatives.
More than 20,000 new social housing and defence housing projects were put in place to stimulate the home construction part of the economy, while $950 in cash payments to eligible families, single workers, students and drought affected farmers were also put in place to stimulate the economy. There were of course tax breaks to business and funding for local infrastructure and road projects—all critical parts of this three-pronged strategy to ensure that the Australian economy did not follow the path of the rest of the world into recession and in some countries depression.
What was happening around the rest of the world? In the United States, over 8.8 million jobs were lost, $19.2 trillion was lost in household wealth, and real GDP fell by more than five per cent. They are lumbering now under a budget deficit of in excess of $1.4 trillion. In the EU we are still seeing the GFC being played out. Greece has an unemployment rate of nearly 27 per cent and the Greek GDP fell by almost seven per cent. They have had to be bailed out with an over 110-billion euros loan from the EU. In Ireland we saw the banks lose an estimated 100 billion euros and we have seen unemployment rise by 10 per cent. This is just a snapshot of what has gone on around the rest of the world whilst Australia has had this remarkable experience of ensuring its 23rd year of consecutive growth.
It is often said that if you dodge a bullet you don't feel the pain and in many respects that has been the experience of the Australian economy. We dodged the bullet—not by accident but through decisive action by the government. So it is the job of the incoming government to try and rewrite history. That is exactly what they are trying to do—trying to rewrite history to deny the fact that the global financial crisis ever existed and to argue that the proper course of action for a government would have been to do absolutely nothing. We reject this.
We condemn the fact that the Prime Minister, then the Leader of the Opposition, actually slept through the critical debates and the critical legislation that put in place the three-pronged strategy that I have spoken about. So interested was he in what was going on in the Australian economy at the time that he could not even be bothered to turn up to the parliament, could not be bothered to turn up and engage in the legislative debate. That is right: he slept through it, so interested was he in what was going on with the economy at the time. It does stick in our craws slightly when we engage in this debate today to be given lectures by those opposite on what the proper course of action was to put in place when the rest of the world was going through a financial meltdown. They argued then that we should have done nothing; they now argue that everything we did was wrong while secretly, back in their own electorates, they took credit for many of the initiatives that were put in place by the former government.
Of course it does not end there. In obtaining control of the treasury bench they have set themselves on the path of a number of wars. We have seen the beginnings of a culture war, but we are also seeing the Treasurer puff himself up and launch his own very special war on entitlements. The age of entitlements is over we are told. He is trying to convince us that it is not what you get but what you give that matters. Whether you are a worker who is struggling to meet your cost-of-living challenges or whether you are a business struggling to compete as the big changes occur in the national and international economies, we are being told by the Treasurer, in his war on entitlements, that we have all got to tighten our belts.
There are only two problems with that: the first problem is that it is not the right message you want to send to the economy when we are seeing a global contraction; the second, and probably bigger, problem I have with the Treasurer's war on entitlements is that unfortunately the Prime Minister did not get the memo. He was more than happy to stick up his hand and claim his entitlement to his wedding allowance, as were many others on the other side of the House. He was not alone in this: the member for Canning engaged in a taxpayer funded real estate tour of North Queensland and Senator Brandis was more than willing to stick up his hand for his entitlements to build his personal library collection. And of course there is the $4.4 billion paid maternity leave scheme.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
The member for Throsby will take his seat.
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
I want to ask the member for Throsby whether he is proud of the member for Lalor's and the member for Isaac's record—
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
Are you suggesting an intervention?
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
It is an intervention—
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
Are you calling for an intervention?
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Yes.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
Do you want to ask the member for Throsby a question?
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Yes, I do.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
Do you accept the question, Member for Throsby?
Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source
I would be happy to answer a question from the member for Kooyong if he asked the right question, but those opposite never ask the right question, Mr Deputy Speaker, so I decline—
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
Does the member for Throsby accept—you decline?
Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source
I decline; I do not accept this because they never ask the right question. They are full of stunts but they never ask the right question.
So when we heard the Treasurer launch his war on entitlements—he has got his gaze fixed on many within the community, but it is a one-eyed gaze—he did not, for example, include the mining industry. In fact, one of his first acts in coming back into government was to give some of the wealthiest in our community a tax cut while providing a tax hike for those in our community who can afford it the least. That is right, we saw people with superannuation account balances well in excess of $2 million get a tax cut while those who are earning less than $38,000 a year get a tax hike. In fact, if you want a tax cut under this government you have to ensure that your name is George or that you own a mining company.
So when we hear those opposite launch their war on entitlements, we know it is wrong by our economy. We also know that it is actually a war on the entitlements of those who can afford it the least while those opposite give a free pass to those who can—and I do not begrudge them for one moment but, frankly, if you are going to give a tax cut, the tax cut should be given to those who are in most need. I argue that that has not been the act of this government.
We believe that we should be putting in place the sorts of policies that have ensured that Australia, unlike any other nation on earth, has enjoyed its 23rd consecutive year of growth. We believe in putting in place these sorts of policies. It is not an end in itself; it is like listening to the diatribe of those opposite about the importance of budget surpluses. You do not have to be a Rhodes scholar to understand that, if your policy is to have a budget surplus no matter what the circumstances, your policy is committed to taxing Australians more than you need to. That is what it means. If you are committed to delivering a budget surplus no matter what the circumstances, you are committed to taxing Australians more than you need to. It is not an accident—
Mr Frydenberg interjecting—
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
I hope the intervention is not for the sake of hearing the sound of your own voice, Parliamentary Secretary.
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Not at all.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
And I hope you are not leading the member for Bass astray and just taking up the time of the member for Throsby. And I am making sure that you are not using this House as your plaything to hear, once again, the sound of your own voice. Parliamentary Secretary, have you a point of order?
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Yes.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
What is your point of order?
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
A question to the member for Throsby.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
I think you have already had an intervention. I do not know whether there can be two interventions in the one address.
Mr Frydenberg interjecting—
The clerk says there can. What is your question?
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
The member for Throsby referred to debt and deficit. I would like him to tell the House the last time the Labor Party produced a budget surplus.
Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source
Do you accept the intervention?
Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source
No, I do not. And given the time—unless the member is moving an extension of time, and I understand that he probably is not, I believe you are right, Mr Deputy Speaker: it was merely a device to run down the clock because they did not like what they were hearing.
12:29 pm
Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source
What we have just heard from the member for Throsby on this Tax Bonus for Working Australians Repeal Bill 2013 is an exemplar of revisionist history. The people considered both the actual history, the economic history, of our country from 2008 to 2013 and what we just heard from the member for Throsby and they cast their judgement on 7 September last year. They highlighted the version of history that they believed. Deputy Speaker, I would argue that, if you were to do a word association test with the average Australian using the words 'government waste' as the cue, the most common responses would be 'pink batts', 'school halls' and '$900 cheques'. Those are emblematic failures of the Labor government from 2008 to 2013 and they are evidence of Labor's callous disregard for taxpayer dollars. It was a period of our political history characterised by extravagance in relation to the spending of taxpayer dollars and by a total lack of evidence based policy making. I will go into the reasons for that shortly.
It was clear to Australians on 7 September last year, having cast their eye back over the previous six years of Labor and Labor-Greens government, that the bonfire of Labor vanities was fuelled by an endless supply of borrowed money. As Kenny Rogers used to say, 'There'll be time enough for counting when the dealing's done.' The counting of Labor's time in government tells a very sad story indeed.
I heard the member for McMahon earlier talk of Labor's economic record as a source of great pride, a record to celebrate. He was followed by the member for Hotham, who made the extraordinary statement: 'Labor left the budget in excellent shape.' Let's consider that record. Between 2008-09 and 2012-13, Labor delivered deficits totalling $191 billion. The 2012-14 MYEFO forecasts deficits to 2016-17 of a further $123 billion unless urgent corrective action is taken. Because of Labor, the net debt figure for this financial year is forecast to be $192 billion, rising to $280 billion in 2016-17. The Treasurer has said repeatedly that, unless we do something, peak debt is forecast to rise within a decade to $667 billion. Cast your mind back to where that debt was when they took power in 2007—zero. Debt is projected to rise, unless we do something, to $667 billion, two-thirds of $1 trillion. We pay $12 billion in interest payments on that debt each year—a huge, recurring opportunity cost. I would love to be getting some of that $12 billion in my electorate of Bass and putting it towards the many unmet needs in my community. But, sadly, every year $12 billion goes in interest payments because of that debt.
The member for Hotham earlier trotted out the usual Labor talking points, comparisons of Australia's debt with those of European countries. But reasonable people around this country will ask the obvious question: why are we benchmarking ourselves against European countries that have been spending unsustainably for decades, European countries with debt-to-GDP ratios above 100 per cent? Why is that the test that Australia seeks to set for itself in terms of its economic performance? Why doesn't Labor ever talk about the speed of growth of our debt since 2007? If you compared the speed of growth of our debt with those of some of our competitor countries, you would get a far more valuable benchmark in terms of how our economy has travelled in the last six years. The reason they do not is that it is a most unflattering comparison and it highlights the extent to which Labor breached the people's trust.
Why don't members opposite ever benchmark our economic performance against Australia's economic health at the time that they won the 2007 election? Why don't they reveal, for example, that under the Howard government the Australian economy grew at an average annual rate of 3.6 per cent, compared to the average annual growth rate under Rudd-Gillard-Rudd of 2.5 per cent; or that real GDP per capita grew at an average annual rate of 2.3 per cent, compared to the average annual rate under Labor of 0.7 per cent? Why don't they reveal that Howard and Costello delivered an average surplus of just over $8 billion and surpluses averaging 0.9 per cent of GDP? Surpluses are something which the member for Throsby was unwilling to comment on. When asked, 'When was the last time that Labor delivered a surplus?' he refused to answer that very simple question. What chutzpah by the member for McMahon and his colleagues earlier today to suggest that we should somehow celebrate Labor's achievement. Why would we want to celebrate the fastest deterioration in debt in modern Australian history?
I noted also that the member for McMahon and every other Labor speaker so far this morning extensively quoted Professor Joseph Stiglitz in relation to Labor's stimulus package. They omitted some important detail on their economist of choice. In 2005 Professor Stiglitz co-authored a book with a gentleman called Andrew Charlton. Charlton, of course, went on to become former Prime Minister Kevin Rudd's senior economic adviser during his first stint as Prime Minister. The book they co-authored was titled Fair Trade for All: HowTrade Can Promote Development. When I did some searching on Professor Stiglitz, I came across an article by Michael Stutchbury in The Australian on 17 November 2009. He attributed Mr Rudd's breathless attack on neo-liberalism in The Monthly as drawing heavily on Mr Charlton's mentor, Joseph Stiglitz. Stutchbury said:
Stiglitz has made his fabulous career by highlighting the reasons why markets don't always work. Now he famously claims that the global financial crisis will be for global capitalism and free markets what the fall of the Berlin Wall was for communism 20 years ago.
Yet, for Australia, the Stiglitz critique is of little use. … it's in our interest for China and India to become more, not less, pro-market.
The member for McMahon and the others opposite might wish to reveal whether their passionate referencing of Professor Stiglitz reflects their own belief in the end of capitalism and free markets. That would be an extraordinary position for any sensible person to take—and I know the member for Throsby would never take that position—much less someone who professes to be the alternative Treasurer of this country.
The Stiglitz disciples might explain why we should be proud of Labor's $900 cheques, which they claim were designed to deal with the global financial crisis. Are they seriously suggesting that we should continue to issue these cheques in response to what was, let's face it, a relatively short-lived global event with only a modest impact on Australia, and that happened years ago? Are they seriously suggesting we should celebrate policy decisions by Labor that have put our economy and our budget in such difficulty? Consider, for example, how the NBN morphed into the mess confronting Australia today. When the private sector knocked back Mr Rudd's $4 billion broadband thought bubble, he said, 'No trouble; we'll fund it from taxpayer money at 10 times the cost.' And who can forget that famous Tony Jones-Senator Conroy interview on Lateline, where the minister admitted he had no business case to rely on before entering negotiations with the telcos on what was a multibillion-dollar spendathon with taxpayers' money? What extraordinary dysfunction!
The tax bonus for working Australians is another example of wanton profligacy that is straight out of the drunken sailor playbook. It is a GFC stimulus measure from Labor that keeps on giving, 4½ years after the initial payments in 2009. Most sensible commentators on the GFC will tell you that it was a relatively short-lived event that had only a modest impact on Australia. Those opposite are keen on quoting Professor Stiglitz's views on the GFC; let's consider the analysis of someone less connected to key figures in the former Labor government.
The member for Bendigo said, 'The GFC is not over yet,' as a means of justifying continuing with these $900 cheques. Let's look at what Reserve Bank Governor Glenn Stevens said about this:
The whole crisis—
and he was referring here to the global financial crisis—
was very much a North Atlantic crisis. It was really only a global crisis for six or eight weeks …
Certainly by 2009 the unemployment figures as they came through were reinforcing the fact that GFC impacts on Australia were relatively modest and that the need for stimulus had passed. But the Labor government continued to use the GFC as a crutch—a prop—for wasteful spending.
The coalition made a commitment to end this waste during the 2013 federal election, and this repeal bill partly delivers on that commitment. We made this promise on the logical basis that stimulus to the economy in 2013-14 is no longer required. We are acting to make absolutely sure that further tax bonus payments cannot be made by the ATO by repealing the tax bonus act.
And there are so many reasons why we should repeal this bill. A lot of the $900 cheques have not been issued yet and, unlike those opposite, we believe that even one unnecessary $900 cheque is one too many. The last thing we want is to add even one more dollar of pressure on a budget that is unsustainable and that we inherited from those opposite. As I said earlier, MYEFO has forecast $123 billion worth of cumulative deficits over the forward estimates and $667 billion of peak debt unless we take action now. That is why we must end these unnecessary payments, 480,000 of which—and in excess of $400 million—were made following the original payment of stimulus cheques from July 2009 to the present time. The total amount borrowed by the government to spend on stimulus payments to date with these cheques is estimated to be in the order of $7.7 billion.
I know that for many of those opposite, the words 'million' and 'billion' are loosely interchangeable, but let us put some context around those dollars. If you consider that it costs about a billion dollars to build a new teaching hospital, that is the equivalent of about eight new teaching hospitals around our country—one for every state and territory. It is potentially a new Royal Hobart Hospital or a new Launceston General Hospital in Tasmania. It costs around $50 million for a new school, so $7.7 billion is about 150 new schools around the country. That is the opportunity cost of wasteful spending. Imagine if we could also save the $12 billion in interest payments it costs taxpayers to service our debt? Against those benchmarks of $1 billion for a new teaching hospital and $50 million for a new school we could certainly do a lot.
Despite eminent commentary, the 'age of entitlement' has not yet ended. To the contrary, Labor's entitlement legacy lives on in this misplaced tax bonus: inflated, ill-conceived in terms of its implementation and still turning up in people's post boxes. When $900 stimulus payments turn up in people's letterboxes four years after the GFC it begs the obvious question: 'If I am still receiving stimulus cheques from Labor today when they are no longer in office and when I don't need it, what else have they wasted my hard-earned taxes on?' Pink batts come to mind, as do the Julia Gillard memorial halls.
'Stimulus payment' is a euphemism for a Labor government that was 'drowning, not waving'; clueless in terms of critically assessing the actual measurable negative impact of the GFC on an economy that was perfectly capable of absorbing economic shocks. No surprises as to why that was the case, because the economy was cushioned by the economic legacy of the Howard government—its fiscal constraint and sound budgetary management.
The $900 stimulus payments did of course stimulate Australia's international aid effort: Millions of cheques were mailed out in 2012-13, including to foreign backpackers who had been in the country during 2007-08. And for those recipients the 'Lucky Country' had a cheque attached: 'Thanks for coming, please come back, and here's a lazy $900 from the taxpayer to tide you over.' Cheques also went to dead people, at least 21,000 of them.
And so we see landmines in Labor policy, including this one, which has extended beyond their life in office. And we see complexities: the 'just terms' clause of the Constitution could provide the basis of a challenge on the grounds that those yet to receive the payment could sue the Commonwealth if the government halts the scheme, because the stimulus cheque could be regarded as property under section 51 of the Constitution and that would have to be acquired by the Commonwealth on just terms.
The Treasurer is right: no matter what roadblocks are put in front of us, we will get rid of this bill. In the high court of common sense and public opinion 'just terms' would see this Labor stimulus cheque fiasco end with the swift passage— (Time expired)
12:45 pm
Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source
I rise to speak on the Tax Bonus for Working Australians Repeal Bill 2013. This bill will ensure that the Commissioner of Taxation does not make any further tax bonus payments or, as they are more commonly referred to, $900 stimulus cheques. These payments were designed to provide stimulus to the Australian economy at the height of the global financial crisis. In opposition, the coalition opposed the payments on the grounds that the package was poorly targeted, ineffective in supporting employment and unaffordable. And were they right? They were right. The total amount of borrowed government money spent on stimulus payments to date is estimated to be around $7.7 billion. Let me repeat that: $7.7 billion of borrowed money. I would hate to think how many taxpayer dollars we are spending on interest just servicing that portion of the debt. That is $7.7 billion, plus interest, that our children and our children's children will have to find. If you combine that with the debt left by the Queensland state Labor government, that is an enormous amount of money for the five people in my family.
Since the introduction of the stimulus cheques, more than 21,000 payments have been made to dead people, totalling more than $18 million. This includes the payment of 40 stimulus cheques to deceased individuals so far this financial year. Since its introduction, more than 16,000 stimulus payments have been sent directly to taxpayers living overseas, totalling around $14 million. While that is great for France, Spain, England or wherever our citizens decide to reside, it is not great for Australia.
In my electorate of Hinkler, fruit and vegetable growers are continuing to receive stimulus cheques for backpackers they employed years ago who are no longer even in the country. As an example, a gentleman named Craig van Rooyen, the owner of Sweet Sensations on the outskirts of Bundaberg, employs up to 35 backpackers a day, depending on the crop, through the Working Holiday visa program. He grows lychees, macadamias and mangoes. He has previously grown strawberries and bananas. Mr van Rooyen is of South African descent but he has managed to pick up the Australian vernacular. When my office informed him of this bill's introduction to parliament his response was, 'It's about bloody time.' He said he forwarded stimulus cheques on to backpackers if he knew they were still in the country, as he was satisfied that at least they would spend the money in this nation, but he continues to receive the cheques for people who left the country years ago. These he does not forward on. His position on this matter is shared by many growers across the Hinkler electorate.
This emergency economic stimulus is no longer warranted, so it makes absolutely no sense for the ATO to keep administering the cheques. More than 480,000 payments totalling more than $400 million were made over the financial years following the original payment of stimulus cheques—that is, 4½ years on from the GFC. Stopping the cheques now will save taxpayers an estimated $250,000 over the forward estimates. During the 2013 federal election, the coalition made a commitment to end Labor's waste, and this repeal bill delivers on that commitment. We are doing what we said we would do.
But Labor waste was not confined to stimulus cheques; it extends far beyond that. For example, Labor wasted $67 million on administering a program to install set-top boxes in people's homes for an average of $350 each, even though Harvey Norman offers customers the same deal for $168. How many of those are now in operation? I would suggest: very few. Government bureaucrats sold two billiard tables for $6,000 and then promptly stumped up $100,000 to investigate whether the sale was good value. Departments purchased gold-plated coffee machines for $15,000 each. Senate estimates revealed Labor spent $8.5 million on advertising the schoolkids bonus scheme, which was an automatic payment. In mid-2013, just one of the 28 GP superclinics promised during the previous election was operational. Labor was spending $440,000 a month to maintain an empty detention centre in Tasmania. A dozen climate change bureaucrats left taxpayers with a $1,700 bill for one dinner. The Department of Parliamentary Services spent about $2.4 million on training that included advice on how to get a good night's sleep. I hope that was successful.
We come to the famous school halls. I worked on many of the BER projects. I saw probably over a hundred of these projects rolled out across the state. I will give an example of the absolutely ridiculous amount of administration that went with it. In Western Queensland, I went to a BER project where the building did not look exactly the way it should have looked. I spoke to the builder and the builder said, 'If we walk around the back you'll see why it's been changed and shortened.' There was a camphor laurel tree. For those who know anything about camphor laurel, it is a noxious weed. However, instead of knocking the tree over, they built around it, so the building got smaller and became less value for money. There is currently a program around independent public schools. If that program were in place, can you imagine the school principal and the school board accepting those changes from a contractor? Even though the rollout was terribly managed for BER projects, it was a huge investment in infrastructure. We could have had much better value for taxpayers' money if that program were in place—if you had local content, local principals and local people making decisions in the best interests of their school. That is what should have happened. The projects that I saw that were delayed, the ones that were run by private schools, were far more beneficial. They got more building, they got more equipment and they more things inside the building. It was much greater. It has been suggested that the Independent Public Schools program would have helped with this infrastructure spend.
Then we get to the famous home insulation scheme.
Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source
Infamous!
Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source
Infamous! How could you possibly not make the connection between a roof full of alfoil and live wiring in a house which is five, 10, 15, 20 or up to 50 years old? Even with no technical knowledge, how could you not make the connection that it was dangerous? How could you not make the connection that it could cause a fire?
It has been an absolute tragedy for that project to pull up because of the deaths of young workers, a number of which were in Queensland. It is right, fair and just that we should do an investigation into that matter, and I hope we get to the bottom of it.
Possibly the two biggest program failures in Australian history have, of course, been the National Broadband Network and the Strategic Indigenous Housing and Infrastructure Project—NBN and SIHIP, as they are known. The rollout of the National Broadband Network is currently two years behind schedule, with final completion due 11 years later than promised by Kevin Rudd. The cost to taxpayers of completing the NBN under Labor's plan has blown out to $73 billion.
Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source
Mr Deputy Speaker, I raise a point of order on relevance. I have been very patient. Normally with a tax bill a lot of latitude is given to speakers, but it is very difficult to see how these completely unrelated programs are relevant to any tax bill or the matter under consideration.
Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source
I give the call to the member for Hinkler and he will be relevant to the bill.
Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source
Thank you, Mr Deputy Speaker. But this bill is about repairing Labor's waste, and it is great to set some examples. These are examples that we are aware of and they need to be known to the Australian people. I think it is important that we demonstrate what they are and we continue on that path.
In my region of Hinkler, people were told that they would be connected to the National Broadband Network by Christmas, would you believe? After six years, they would have it in four months. It was a ridiculous outcome. Our plan to use a mix of technologies will save taxpayers $32 billion, keep monthly bills lower and deliver the NBN to all Australians, four years sooner than under Labor's plan. The average household bill will be $72 per month compared with $139 per month under Labor's plan.
SIHIP was also out of control under Labor. In its first year the scheme was double over budget and had failed to deliver a single house. There was no transparency in expenditure. As an ,example the Labor government spent $42 million on consultants on house design in the Northern Territory, only to ignore the advice they received. Targets were only met because the Labor government continually lowered the bar on building standards. Much of the work was what is referred to as 'fix and make safe', instead of the complete renovations that were promised.
In 2006, before the scheme started, 75 per cent of Indigenous people lived in overcrowded dwellings. In 2011, despite the government spending $1.7 billion on Indigenous housing, the figure remained at 75 per cent. Quick fixes were the hallmark of the Rudd and Gillard governments. They threw money at problems, but the only results they delivered were more debt and deficit.
The Mid-Year Economic and Fiscal Outlook released in December last year forecast a $47 billion deficit in 2013-14 and $123 billion worth of cumulative deficits over the forward estimates. So, despite the Rudd and Gillard governments asking Australians to pay 43 new or increased taxes in 2013-14 alone, they spent $47 billion more than they earned. Under Labor, real government spending grew at around 3.5 per cent over the five years from 2007-08 to 2012-13 and is expected to grow further to 3.7 per cent over the medium term.
If we were to retain the policies we inherited, the budget would not return to surplus within the 10-year medium-term projections, with gross debt on issue increasing to $667 billion. For those mums and dads who are listening to this speech, in simple terms it means this: if you continue to spend more than you earn, and you fill your credit card and you fill the credit card that is sent to you in the mail, you will eventually have to pay the money back and there will be very, very difficult decisions. We are getting on with those decisions.
Politicians talk about debt and deficit and use fancy terminology like 'horizontal fiscal equalisation'. But at the end of the day Australians just want to know that they are getting a fair go. They want to know that we, their elected representatives, are spending their hard-earned money wisely to deliver the services and infrastructure that they need. Under Labor, Australia was living beyond its means. We were spending more than we earned, year after year after year, leaving future generations with a massive credit card bill. That is not sustainable.
This bill, to put an end to the $900 stimulus cheques, is another step towards prudent and responsible budget management. The adults are in the room and they are back in charge.
12:56 pm
Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source
I rise to speak on the Tax Bonus for Working Australians Repeal Bill 2013. All of us in this House—my colleagues on this side of the House—view debt very seriously. They view taxpayers' money very seriously. As someone who is a small business owner, someone who has built a small business from scratch, I know a lot about debt as well. I do know that when you front up to the bank to borrow money, you actually have to be able to prove that you can pay it back, that you can make your commitments. That is what we have always had to do as a business. Every time we have borrowed money we have had to demonstrate very clearly to the bank that we could actually pay off what we borrowed and that we had the capacity to pay it off.
But when I sat here, as many of my colleagues did, from 2007-08 and we watched the decisions made by the Labor government of the day, I had no words. I sat on the other side of the chamber and I could not believe the decisions that were being made. But, more importantly, I could not believe the ease with which debt was being committed to. Taxpayers' dollars were being committed, and what was being done with them—without appropriate scrutiny, without accountability and even, in some instances, without any form of regulation—was a bit like a free-for-all. There was almost an air of desperation around the government at the time. It was actually appalling to sit in this chamber and watch the announcements parade in. There was almost an air of excitement about what was going to be announced next. But what we did not see—and what appalled me as a small business person who had had to borrow and demonstrate how we were going to pay debts off—was how it was going to be paid off. We never ever saw that, and I sat here day after day after day waiting to hear the plan as to how this was going to be paid off. How was the government going to generate surpluses to pay off the debt and deficit for things like $900 stimulus cheques? I never ever heard it. We are still waiting for that. We have waited for so long that we have now had a change of government—and what we are looking at is that if we do not make tough decisions, and the right decisions, then in the medium term the debt will be $667 billion.
But there is another side to this. I have sat still and listened to what Labor have said since the election and since the release of the MYEFO figures. I think we need to keep a tab on what else is being promised, what else the Labor government historically and now Labor opposition said they would do if they were in government, because the $667 billion is just the minor end of the deal if they were in government. If you have continuous spending, with no concern and no plan to pay it back, you cannot run a business, let alone a household, and certainly not the Australian economy. But that is what we have seen and that is what would still be happening if there had not been a change of government. Where was the plan? I saw so many of them, one after the other, come into this place and with great excitement talk about how they were going to spend taxpayers' money next. I looked for the plan as to how it would be paid off, and the thing that dismayed me most is that I realised that this is about intergenerational debt.
Each successive government should come into this place with the idea of leaving the condition of the parliament and the condition of the country better than what they found it. But that is not what we have inherited. We know that Labor inherited surpluses and savings when they came to government. That gave them the flexibility to make decisions about how they would spend it. Then they decided that they would accumulate the amount of debt and deficit that we see today—literally, they were out of control. We need to take every single measure that we can to reduce that. Even in the way we allocate our spending and in the scrutiny we apply to what we do, there will be a far different approach from what Labor had. That is what people right around Australia, and particularly in my electorate, are expecting. That is what they voted for. They voted for those who could be in charge of the budget, for those who would make good decisions, and certainly not decisions like this one we are debating: the $900 cheques that were just handed out. We have also heard about the length of time that these cheques have been running—long after the stimulus package itself.
Being a farmer and someone from rural and regional Australia, I was very interested that there were claims made at the time about the various measures that might have kept Australia out of technical recession. When I looked at the figures, it was the agricultural exports that kept us out of technical recession, but I never heard anything about that from the other side of politics. Labor never ever acknowledged that. They claimed that it was because of a range of their measures, but when you looked at the figures you saw that it was the agricultural exports—the people in our rural and regional areas just toughing it out, day after day, doing what they do best. We know that they are some of the best producers of food and fibre in the world. They just kept at it right throughout that global financial crisis and kept Australia out of technical recession. But I never heard that from the other side of this House.
This measure was just one of so many wasteful spending measures decided on by the Labor government. There were verdicts left, right and centre about how well this was spent. The other side has had a lot to say, but I have looked at what was said by some others and I saw an article from The Australian entitled 'Damning verdict on the stimulus'. The article was written by Adam Creighton and it included discussion about the $8 billion worth of cheques and comments by Mr Tony Makin, an Australian economics professor. There were also comments from a Treasury official that showed Australians on average spent only an extra dollar of their $900 windfall. I remember hearing at the time in this place that this was supposed to be the biggest stimulus for the retail sector. If the people receiving the cheques only spent a dollar of it at the time, where was the stimulus for the retail sector that was meant to happen? The article quotes the authors of a paper saying:
The effect of the fiscal transfer on the change in household consumption expenditures is insignificant and quantitatively small—the average household spent less than 0.2 per cent of the income windfall.
So there have been a range of people who have had a look at the stimulus; it is not just what is being said on this side of the House.
We saw money literally flying out the doors. Much has been said by my colleagues about where that money went. We saw $2.5 billion spent on the pink batts program, and we saw what happened with that. There was inappropriate planning; there was a lack of accountability. We saw a similar thing with the school halls program, and a lot has been said about that and the types of projects that were built. Like my colleagues, I had people come to see me about the obscene waste and the fact that they were not allowed to build what their school actually needed. We also saw money wasted going into GP superclinics, with all sorts of promises. This was taxpayers' dollars. What I could never get over when I looked across the chamber was that it was almost like it was somebody else's money and it just did not matter where it went or how it went. It was somebody else's money, somehow, and no responsibility was taken for how it was spent. Well, I take it really seriously and my colleagues on this side take it extremely seriously, which is why we are committed to the measures we are taking. When I saw the ridiculous waste of GroceryWatch, I just thought, 'What the?' When I went out in my communities throughout the south-west, people would say to me, 'What is going on?' It was same with the Fuelwatch idea, and everything from Green Start to solar homes—it was like there was money just flying out the door.
I will go back to where I started. What bothered me most was that there was no plan from Labor to pay any of this off. Right up until the election, we did not see a plan to pay off any of this. It was on the never-never, on the tick, someone else's problem, and now we see exactly where that has led us as a nation. I look around my electorate—like my colleagues do in theirs—and imagine what I could do with the interest bill alone, of $10 billion a year. Imagine the good programs and projects that we could all be doing with the interest. Look at health; look at ageing—there are so many areas where there are people in need, and yet we see this extraordinary and dreadful waste. I can recall the dismay that I felt as I looked across at the faces on the government side. I never saw one ounce of accountability on any face; no sense of responsibility at all. It was somebody else's money and it did not matter. Well, it matters to us. That is why we will take the measures necessary, and this is one of them.
1:09 pm
Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source
I rise today to support the Tax Bonus for Working Australians Repeal Bill 2013. This bill repeals the Tax Bonus for Working Australians Act (No. 2) 2009, the tax bonus act. That act was responsible for the millions of what were commonly referred to as $900 stimulus cheques. Hundreds of thousands of those payments were made after the GFC had passed, and common sense tells me that we do not need to be borrowing money to give to taxpayers to stimulate an economy after the danger has passed.
The cheques were first handed out after the 2007-08 financial year to Australians who paid tax during that income year, and they were designed to stimulate the Australian economy during the global financial crisis—we all get that. In total, the Australian government had to borrow $7.7 billion to make these payments. I will say that again: $7.7 billion of borrowed money to make these payments. Most payments were made in 2009. However, in true Labor style—they are Australia's waste-creation gold medallists—over 480,000 payments, totalling $400 million, were made after the GFC, and they still continue to be handed out today.
Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source
Shame!
Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source
It is a shame. It is an absolute disgrace. There is a stimulus package to oil the Australian economy during tough economic times, and then there is plain, unadulterated incompetence, gladhanding and—dare I say it—electoral pork-barrelling. The Tax Bonus for Working Australians Act miraculously managed to do both at the same time.
Let us look at the other ways Labor have wasted the taxpayers' hard-earned dollars by handing out cheques where it was impossible for them to stimulate the Australian economy. Last year—four years after the global financial crisis—15,000 cheques were handed out, totalling $13 million of borrowed money. It just does not make sense to me. Over 16,000 stimulus cheques have been sent directly to taxpayers living overseas. I do not know about you, Mr Deputy Speaker, but I do not understand how sending cheques overseas is going to stimulate the Australian economy. That is around $14 million Labor borrowed to stimulate our economy, and they sent it overseas. It just does not make sense. I suppose it was the global financial crisis—'Think global, act local,' they say on that side—but this might be taking it a little bit too far. We all know that Kevin Rudd thought he was the Prime Minister of the entire world, but really he was just the Prime Minister of Australia, and he was sending cheques to all these people living overseas.
You would think that would be it, but there is more and it gets worse. Here we are, years on from the GFC, and we are still handing out $900 stimulus cheques to people who have passed away. The Labor Party just do not seem to get it. Dead men do not tell tales and dead men do not splurge at Myer sales. The Labor Party still have not come up with a plausible explanation for this particular act of administrative incompetence. Why would they be sending cheques to people who have passed away? I would absolutely love to hear a plausible explanation of how they could possibly do that and think that it is okay. The Rudd-Gillard government made over 21,000 payments to people who had passed away, which represents more than $1.8 million of borrowed money that was sent to people who had passed away. It just does not make sense. But there is some good news. The coalition is here to put a stop to this waste—to put a stop to the abysmal waste and mindless spending of other people's money that became a hallmark of the former administration.
The bill deals with just one example of Labor's waste, and unfortunately it represents only a small portion of the taxpayer dollars that they wasted. The release of the Mid-Year Economic and Fiscal Outlook in December last year ruled off the legacy of the former Labor government. The MYEFO forecast a $47 billion deficit in 2013-14—a $47 billion deficit—and $123 billion worth of cumulative deficit over the forward estimates. It is just unbelievable. We have the Labor Party to thank for this debt. We have the Labor Party to thank for the fact that, if the coalition had not formed government, the budget would not have returned to surplus for at least another 10 years.
Thankfully, the coalition did form government. Thankfully, the adults are now in charge. Thankfully, we are ending the waste. This is our first repeal bill to sort out the mess that Labor has left behind. We are doing what we said before the election that we would do, and that is to end the waste and return the budget to surplus. I made a promise to my electorate, a promise to the people of Solomon, to end the waste of their hard-earned tax dollars. That is exactly what I am doing, standing here today in support of the Tax Bonus for Working Australians Repeal Bill 2013.
The budget this government has inherited is simply unsustainable. We must act quickly but responsibly, and that is exactly what we are doing. Responsible governments know what they are spending and what their financial liabilities are. The Rudd government started this stimulus program having no idea how much they would be handing out, and, quite frankly, it shows, because five years later we are still handing out these cheques. As a responsible government, the coalition will be ending the waste by halting programs that are unsustainable and uncalculated.
The Labor government spent $14 million stimulating the Australian economy, as I said, by sending money overseas. I am sure that my constituents in Darwin and Palmerston could think of much better ways to stimulate the Australian economy with $14 million. How about spending it here, for starters? Spending $14 million in Australia is a pretty good way to start stimulating the economy, isn't it?
That $14 million could have been spent on the extensions of Tiger Brennan Drive, the highway in Darwin. The Labor government had previously committed $70 million to that project, then they removed it in the 2013 budget, thinking no-one would notice. But we noticed. Territorians are smarter than the Labor Party think they are, and they demanded that their funding be reinstated.
So I had Minister Bishop visit my electorate. On behalf of the coalition, we committed to that project and to bringing forward the funding so that the works on Tiger Brennan Drive could begin this financial year. And that is what it did. Thanks to the coalition government, Tiger Brennan Drive is being expanded right now, as we speak.
I know someone else who might have liked the $14 million. That was the Jingili BMX Club. They were promised $1 million by the Labor government in 2009 or 2010, and it was only in the lead-up to the 2013 election that the Labor candidate re-announced those same funds and the club actually received the funds to build their all-weather track, allowing our local BMX riders to get through the wet season.
Today I have talked about a number of examples of the waste that the Labor government bestowed on the Australian people, so I am proud to be able to speak to this first piece of repeal legislation. I understand that many pieces of legislation are going to be repealed, which is going to stop the waste and mismanagement that the Labor Party bestowed on us in the last six years.
1:20 pm
Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source
I rise to speak on the Tax Bonus for Working Australians Repeal Bill 2013. This bill repeals the Tax Bonus for Working Australians Act (No. 2) 2009, commonly known as the tax bonus act, to ensure that the Commissioner of Taxation does not make any further tax bonus payments, which were commonly known as the $900 stimulus cheques. It may come as a surprise to many people listening to the debate here in parliament today to discover that those $900 cheques, which were designed to stimulate the economy back in 2009, are still being given out today, and they are still being given out with borrowed money. This bill brings this sad period of waste, this reckless spending, to an end.
In fact, if we look through some of the numbers, we find out that in the last financial year, 2012-13, the previous Labor government sent out 15,000 additional $900 cheques. Where did they get the money from? They borrowed every cent. So to save us from the GFC back in 2009, this Labor government, while still borrowing money, was still sending out $900 cheques in 2012-13, and they sent out no less than 15,000 of them.
Going back to those original $900 cheques, it is worthwhile considering what they were actually spent on. I found an interesting section in one of the local papers from Cairns. They went around the CBD at the time the cheques were being given out and asked locals what they were going to spend their $900 on. I will quote a few of the responses.
Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source
My constituents.
Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source
Constituents of the good member for Leichhardt here. One responder said: 'I'll be spending it on the ladies, high-class ladies. That is how I will roll.' That is where one of the $900 amounts went. Another one said, 'Tattoos. I'll spend my $900 on tattoos straightaway.' Hell, yes. That will get the money straight back in the economy. Another said, 'Tattoos and guitar stuff. I will also shower my wife with gifts.' But there were a few that were a bit more prudent. One said, 'I'll be paying off my credit card and paying off my electricity bill.' Another said, 'I don't know. I'll probably put it into my other savings account and I will save it.' So this was an extremely poorly targeted stimulus program. It was an awful lot of spending but very little true stimulus to the Australian economy. I think Professor Sinclair Davidson put it best as he put down the idea of the theory behind what the former Labor government did. He said:
The classic argument for fiscal stimulus presumes that the central cause of our current economic problems is this: We, the people and our government, are not doing nearly enough borrowing and spending on consumer goods. The government must step in force us all to borrow and spend more. This diagnosis is tragically comic once said aloud.
He went on to Australianise the comment, outlining the previous Labor government's idea of why they brought these so-called $900 cheques in. He said that this is the theory, the problem that the government identified, that Australians had not been borrowing and spending enough on alcohol, pokies, tobacco and prostitutes and there had not been nearly enough purchasing of plasma televisions. Therefore the government had to step in, borrow money and ensure that more consumer spending occurred in these areas.
This was the true premise of what the previous Labor government did. But what they neglected, and what every single speaker on this bill on the opposition side has failed to mention, is that all the money was borrowed and it has to be paid back at some time by future generations. In the meantime, until that debt is paid back, we have to service the interest. There might have been some excuse for so-called stimulating the economy for a short period of time if the previous Labor government had been able to bring the government budget quickly back into surplus. Maybe there is an argument about short-term stimulus spending. But that argument can only be valid if it is a short period of time, the debt is repaid and the budget returns to balance or into surplus. But this is not what happened under the previous government. Despite the promises, despite the rhetoric that the budget would be returning to surplus, despite the comments we saw of the former Treasurer standing at the dispatch box promising that the budget would return to surplus, this nation now faces the situation that, unless there is a change of policy by the new coalition government, unless we change tack and introduce policies to clean up the mess of the previous Labor government, in four years time this nation will be in debt to the tune of $667 billion. What that does is put the burden on future generations and onto our kids and perhaps even our grandchildren not only to service that interest but to continue sometime in the future to pay the debt off. Just think: if nothing is done and that debt blows out to that $667 billion then we as a nation are going to have to face an interest bill repayment of close to $30 billion a year, over $2 billion a month—two thousand million dollars every month of our nation's wealth will simply go to service interest on the debt that has been racked up by the policies of the previous Labor government. And that has an opportunity cost. We can only wonder at the cost of that. That means higher taxes and lower government services, all because of the debt that the previous government racked up.
The great excuse for the previous Labor government racking up this enormous debt was that they saved the nation from the GFC and they saved all these jobs. The only problem is the number of unemployed people. The unemployment queues today are over 220,000 people longer than they were when the previous government came to office. We can fill the MCG twice with the additional number of people that are unemployed today than there were when the previous Labor government came to office. That is the mess we are in. While we also had these so-called stimulus programs, the previous Labor government gave us the carbon tax and the mining tax. They wrapped up our entrepreneurs and our small business sector, the true creators of our nation's jobs, in red and green tape. In our important building and construction sector, they abolished the commission that we had, the cop on the beat. Everything that they were doing in practical terms had the opposite of a stimulus effect on the economy. The true way to stimulate an economy is to take the shackles off the small business community.
Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source
Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the member will have leave to continue his remarks.