Richard Marles (Corio, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | Link to this | Hansard source

I rise to speak in relation to the appropriation bill, which is a bill pursuant to the 2014-15 federal budget, which is a budget of broken promises. It is a budget that will put in place a co-payment for every person who seeks to go to a doctor in circumstances where, before the election, the now Prime Minister assured the Australian people that Medicare would not be touched. This is a budget that puts in place significant changes to the pension, which will see those people born after 1965 working through to the age of 70 and which will see those people on pensions suffer a reduction in the way in which their pensions are indexed going forward—and all of this occurred in circumstances where the now Prime Minister assured the Australian people before the election that he would not touch pensions. This is a budget that puts in place new taxes—the petrol tax, the deficit levy tax—in circumstances where the Prime Minister said, prior to the election to the Australian people, that his would be a government that would not increase taxes and would not introduce new taxes; instead he would reduce taxes and get rid of taxes. But what we have in this bill is a budget of new taxes. This is a budget which will see a cut—an $80 billion cut—to hospitals and to schools around Australia in circumstances where the Prime Minister assured us before the election that his would be a government that would not seek cuts to health and to education.

These are broken promises made by a Prime Minister who, before the last election, asked the Australian people, on more than any other issue, to judge him by the value of his word. He would be different. His would be a government of no excuses, and his would be a government that would be predictable and that people could be assured would reflect the promises and the statements that he made before the election. It has been a rude awakening for the Australian people to see the first Abbott budget, and to see the way in which this government is going about its business in complete flagrant denial of the undertakings that it made to the Australian people prior to the last election.

In relation to the specific portfolio area of immigration I want to make two brief points. We in the Labor Party and in the opposition are very concerned about the bringing to an end the non-contributory parent visa. For so many migrant families in Australia this is a very important class of visa that gives them hope that they will be able to bring their parents to Australia for the remaining years of their parents' lives. It is a significant issue for these communities. It also means that Australia on the international playing field, if you like, competing for skilled labour with other countries such as Canada, the US and Britain where visas of this kind do exist, will find itself at a disadvantage because of the absence of a non-contributory parent visa here in Australia. It is a matter of enormous concern. It has been raised with me and I know with many members of the Labor caucus by many people within the migrant communities of Australia. It is certainly a matter about which we will seek to hold the government to account.

Another key measure that was announced in the context of the budget by the immigration minister was the creation of the Australian Border Force. This we broadly see as a positive step forward. We remain concerned—and we have placed our concerns on the record—about needing to ensure that this does not result in a reduction in staffing within the Public Service, and in the broader context of this budget that is a legitimate concern. That said, there is merit in having a single badge meet people who come to Australia's border. This is an idea that had been conceived of during Labor's time in office. The then Minister for Home Affairs, Jason Clare, last July spoke about this in a speech whilst he was the minister, so it is a measure we in Labor broadly accept.

In the time remaining I want to focus significantly on the way in which this budget will affect my electorate of Corio, based as it is on Geelong. In Geelong we had a difficult beginning of the year which followed a very difficult decision last year. The two main economic pillars of Geelong's private sector economy as we speak on this day would be Alcoa and the Ford Motor Company. Both have within the last 12 months or so announced that they will be closing up shop in Geelong. Point Henry will close in two stages—through the middle of this year and at the end of this year—so by 1 January next year Point Henry will not be operating as an aluminium smelter. Ford have announced that they will be closing their manufacturing operations in 2016, albeit they will continue their product and design development activities within Australia and within Geelong beyond that.

In those circumstances it is really important that a community like Geelong is provided with transition assistance to help it get through what will be a very difficult economic shock. On the day that Ford made its decision last year to cease making cars in Australia and in Geelong from 2016 the then Labor government put in place the lion's share of funding for the Geelong Region Innovation and Investment Fund, which is now a $25 million fund with contributions from Ford itself and from the state government. Indeed, the fund is now larger than that, with a subsequent contribution from Alcoa, which I will come to in a moment. That money was put forward by the then Labor government on the very day that Ford made its decision.

On the same day the then Labor government also made clear that workers at Ford would be put in stream 3 job assistance for their ongoing future. This basically is amongst the highest forms of job placement assistance that can be provided by the federal government and it allows those workers in a practical sense to be funded to retrain and be case managed so that they can transition as quickly as possible into new employment. The reason they were classified as stream 3—rather than being individually assessed, which would be business as usual—is that it was accepted that the very fact of a large number of people coming onto the labour market at one time is of itself a disadvantage that those workers would need to deal with. Classifying them in this way before 2016 came about enables those workers to go about the business of reskilling themselves and repositioning themselves for the jobs of Geelong's future.

When Alcoa made its decision in February of this year, no such decision was made by the new federal government, the Abbott government, in relation to providing money that is guaranteed for Geelong, for its transition in a private sector economy post Alcoa. And there was no money in the budget for that either.

Similarly those workers at Alcoa remain in limbo about how they will be assessed and what stream they will be placed in. So what monies they can access for future training is uncertain, which means they are basically not accessing future training. Indeed, Alcoa, the company itself, has had to come and put money—not leveraged any public money—into the Geelong Region Innovation and Investment Fund. Alcoa is having to put up a $2,000 voucher, as it were, per employee for them to do that retraining, and that is fundamentally a job that government should have done. In that respect the budget that was announced by the Abbott government failed Geelong.

At that time, what we also saw in the budget was a significant attack on the safety net, just at a time when so many people in Geelong would be needing to rely on the safety net. I mentioned the $7 co-payment to visit a doctor. What that means for a doctor who is operating in Geelong is that if they do not collect that co-payment then they will have their own scheduled rate reduced by $5, and if they get an incentive payment in relation to bulk billing—which they do in Geelong; an additional $9, by being a part of regional Australia—they will miss out on that as well. Fourteen dollars off the scheduled fee that they would be able to charge is being removed. In circumstances where nearly 79 per cent of medical attendances in Geelong are bulk-billed, this represents an enormous attack in relation to the way Medicare operates in in Geelong, and it will simply create a situation where it is not commercial for a doctor to establish themselves in low socioeconomic places such as Newcomb and Whittington or Norlane and Corio.

I mentioned earlier that the pension is being eroded. Family payments are also being eroded. The petrol tax is being increased. The petrol tax being increased is also of significance to Geelong, being a regional area where people use their cars more. We have a situation where people under 30 will be required to spend six months without any assistance whatsoever before they can receive Newstart allowance. Youth Connections, a matter I have spoken about in this place before, is also being cut, and that will significantly impact young people in Geelong and their ability to become work ready.

I want to spend a moment talking about the effects that this budget will have in deregulating the university sector and what that means for our university in Geelong, Deakin University. Where you find a strong regional city in this country, you will find a strong regional university, and Deakin University is most certainly that for Geelong. Deakin University has provided a wonderful service to the people of Geelong in a very accessible way, and in the same breath it has been able to build up its research capability, which is fundamental to transitioning Geelong to undertaking higher-tech manufacturing in the future.

Carbon Revolution, which is a much applauded company, has grown out of the research effort of Deakin University. They are now making carbon fibre car wheels and selling them to car companies around the world.

It is a great example of a company that, in the not-too-distant future, will be employing hundreds of people—ex-Ford workers among them. That is the benefit of the research function at Deakin University for a place like Geelong.

Yet what this budget does to Deakin is essentially demand it make a decision about whether or not it will continue to be the accessible university it has been and charge its current fees, or continue its research function and, in order to facilitate and fund those activities, increase its fees. If it does that, by definition you will see people who are currently going to Deakin from Geelong needing to travel to Ballarat or Footscray in order to undertake higher education, which is a really unsatisfactory situation. It is an appalling situation to put Deakin University in and it does enormous damage to Geelong.

Land 400 is a major Defence project which was articulated within the Defence capability plan as it was last enunciated by the then Labor government. This is a project which has been deferred by the current Abbott government and was not in the budget either. Land 400 represents the best opportunity to engage in automotive production of some kind in Australia. It was something the people of Geelong had been really keen to bid for—but right now it is not in the budget.

When you look at all these things from the perspective of Geelong it is hard not to feel that this is a government which, through this budget, has cut Geelong loose. It has done all of that while also having included in the budget the Paid Parental Leave scheme which will see $50,000 cheques paid to people earning up to $1 million and more. That says everything about how this budget has failed the people of Geelong.

Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

I rise to speak on the budget Appropriation Bill (No. 1) 2014-15 and related bills. The previous government left behind a fiscal train wreck. It lost control of the budget and lacked the strength of leadership to fix the yawning structural deficit it created. It lacked the strength to rein in the reckless spending of the last six years of government. There is no doubt that the coalition was in no small part elected to clean up this mess—to repair the budget and get government back to living within its means.

The budget brought down by Joe Hockey is totally consistent with that task. This budget puts Australia back on a sustainable path. It dramatically reduces Labor's record debt and deficit while at the same time reducing the overall tax burden by something in the order of $5.7 billion. It is also a budget that invests heavily in infrastructure and, most importantly, it is a budget which backs our strengths—those things which, as a country, we do as well as anyone and better than most. We are very deliberately looking to back our strengths as a country rather than do the sorts of things we have seen in the last few years where, in the middle of the biggest mining boom in our history, we saw a carbon tax introduced; and not happy with that, a mining tax was introduced as well. It is not just the taxes: it is the mountain of regulation which surrounds those taxes which has added a multibillion-dollar burden to the operation of those businesses. In many cases it has now made us a lot less competitive—in fact, uncompetitive—in some world markets in things we have historically been world leaders in.

It now takes two years longer than it did in 2007 to get an approval for a large LNG project. That means something in the order of $30-$40 million a month has been added to the cost of projects of that order with nothing to be gained. It is dead money. It is hundreds of millions of dollars of disadvantage compared with projects in other parts of the world.

In fact, the leaders of some of those companies have said to me that it is now cheaper to build a new train of gas, a greenfields train of gas, in Canada than it is to build a brownfields train of gas in Australia. That is a most disgraceful legacy, a job destroying legacy, a legacy for the Labor government which goes to our inability now even to compete in some areas that we have historically been world leaders. That is what we are doing in backing our strengths. That is what we are doing in getting the government back living within its means.

In this instance, we have seen the former government borrowing $100 million a day in the financial market. That is what it took to build up hundreds of billions of dollars of debt. When a government does that it is a lot of money each day that is coming out of the financial markets. As a consequence, there are so many small businesses in Australia which have not been able to acquire simple finance to rollover their mortgages—especially small and medium businesses. They are the ones that have been affected. That is why there are 500,000 fewer jobs in small business than there were six years ago. Over half a million, 512,000, people have lost their jobs in small business—and those opposite just wipe their hands of it. They criticise a budget which is seeking to put some resilience back into small business, to put some profitability back into small business and to get the government away from competing with small business in the financial market.

I have so many small businesses in my electorate who could not refinance a simple mortgage of $180,000 or $250,000 simply to roll it over. Their financial institution would say, 'We haven't got money for you; go and find it somewhere else.' The doors have closed on so many businesses—not because they were unprofitable, not because they were not going to see through the difficult times, but because they just could not get the finance to rollover their financial instrument. That is a direct consequence and it leads to jobs. Those opposite endlessly talk about jobs, but they have destroyed over half a million jobs in small business. Small business is the engine room of our economy. It is the innovation centre of our economy. All along, big business has outsourced innovation to small and medium business. That is how our system works. It has been undermined, constrained and, in many ways, destroyed in so many areas over the last few years.

To be sure, it is a tough budget and there are unpopular measures. But, like the Costello budget of 1996, it represents a major turning point. The fact of the matter is that, if we did not act now, it would be much worse later. The spending profile that existed when we took over will change if we get the support of those opposite or those Independents in the Senate. If we are able to change the current policy framework, what is coming down the line—which will be much more damaging than what we confront today—will not eventuate. What I mean by that is that, if you extrapolate the spending programs they accelerate. Let's assume 3½ per cent growth, which is half a per cent higher than trend growth. If you go off into the future for 10 years at 3½ per cent and you maintain the existing spending programs that have been put in place, the gap widens. It widens from something like $250 billion to $667 billion.

That is what we are dealing with. That is why there is an urgency about doing something now and why we have gone to structural changes in the budget—structural changes in health, structural changes in education, structural changes in welfare—all things which will progressively put some common sense back into those spending programs. And it is not just common sense. It is a sustainable capacity to continue to deliver things like Medicare, high-quality education and the sorts of assistance and the safety net that Australians deserve, those who are unable to look after themselves or achieve an acceptable standard of living. We want to be able to sustain those sorts of policy measures.

But what we took over, what we inherited from the last six years of Labor government, has been a budgetary situation which would have blown out with a debt reaching $667 billion within 10 years. It would have meant not $1 billion a month in repayments but $3 billion a month in repayments, and this would be untenable. We could not afford the spending programs. If you had been this House for the last three years in particular, what we saw in the last year also, I think, was a government convinced that it would not win the last election. As a consequence, there was an obsession with planting policy time bombs across so many areas.

Look at it. The $80 billion they talked about for health and education was never sustainable. For the forward estimates for Labor last year, they had modest increases in all of those areas, and then there was an explosion of cost from 2016 onwards after the next election. This was deliberate political strategy from a group that thought they would not win, that they would not have to find the money, that this would put us in the position we are in today having to defend tough measures. It was a callous strategy, an objectionable approach by those opposite—pure politics—and not looking after the interests of the nation. They were not doing things in the nation's best interest, but playing politics with the budget. What has happened was deliberate. The blow-out that is going to come to the nation if we do not do something about it now, was conceived and executed by those opposite for crass political purposes. They tried to set us up with these fiscal time bombs down the track we have seen.

We are going to address the situation. They created this problem but we take responsibility for fixing it up. We were elected. People knew there was a mess. Of course people find it difficult after several years of debt-fuelled reckless spending—everyone puts their hand out, everyone gets whatever they want. You have an opportunity in business? We will give you some but government money. You have a problem in business? We will give you some government money. Got a problem in the community—not a problem; sign another cheque and pay for it by borrowing money. All of us could borrow money tomorrow and create jobs for a little while. We could put a new deck on the house. We could paint the house. We could do things. We could go to the top restaurants. We could spend money and create jobs, but after a while the $200,000 we borrowed has to be paid back. It is no different for this community. The reckless spending and the borrowing of the last few years and the built-in spending increases which far exceed even above-trend growth for the economy, are of such an order that we need the measures that have been taken in this budget.

But the thing with the structural changes is that they will affect spending levels gradually over time. They will bring them back into order. It is not a king hit on the community. The other point is that when you rein in government spending so that small business can get some finance to grow their business and stay in business, you create a situation where you have got to replace the government spending with other activity, with robust growth in the private sector.

So this government has sought to do two things: on the one hand, to live within our means as a government but on the other hand, to open up opportunities for the private sector in a way that was diminishing at such a rapid rate. We want to open up opportunities for small business in particular—to get small business back in business. We want to reduce the taxes—to get rid of the carbon tax, reduce corporate tax by 1½ per cent and remove all of these problems with big projects. We want to get rid of the mining tax, streamline the approval processes, get some efficiency back into those processes and ensure that we can, in the future, compete effectively in these areas. There is such a magnificent opportunity emerging in the countries around us, countries that will have an explosion of the middle class from 600 million to something in the order of 3 billion not in 100 years, not in 50 years, but in the next 25 to 30 years. If we get ourselves lean, hungry, competitive and knowledge based then we will capture so much of that opportunity. The next 30 years can be spectacular for Australia but we have to—as a community, as businesses and as governments—look to that future. We have to get ourselves into condition so that we are like an elite athlete, ready to take advantage of the opportunities being presented to us.

In that regard we have sought to open Australia for business. It is why we have very aggressively sought to conclude the free trade agreements with Korea and Japan—agreements that the last government failed to bring to conclusion in six years. We have done so many things for business to restore some predictability, certainty and stability so that, as a country, we can take advantage of the spectacular opportunity that is emerging on our doorstep. It will not necessarily fall into our lap. We have to earn it, but we are so well placed. If we treat our neighbours with respect and get ourselves into great shape we can have a wonderful future for ourselves, our kids and our grandchildren.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on Appropriation Bill (No.1) 2014-2015 and related bills. On Saturday the front page of the Bendigo Advertiser had a photo of a grade 4 Camp Hill Primary School student. She was holding a letter—a letter to the Prime Minister challenging him on the federal budget. In her letter she wrote:

We are absolutely shocked by your actions. We think that you are being so unfair and disgrace.

These are the words of a young Camp Hill Primary School student. She is upset about the co-payment. She is upset about the Prime Minister's treatment of asylum seekers and the policy on them. I agree with so much of what Rachael Hamilton had to say.

This is an unfair budget. It is a budget that targets regional Victorians and Bendigo. Central Victorians will be hit hard by a number of broken promises, cruel cuts and unfair increases in almost every aspect of country and rural Victorians' lives. This budget shows that Tony Abbott and his Liberal government do not actually care about the people of Bendigo and central Victoria. Yes, there is some good funding for local projects. Some of the projects that the community has been advocating for for a long time have been funded. It is good to see there is funding for the Ravenswood interchange upgrade. It is good to see there is funding for the Pall Mall RSL museum planning project. It is good to see there is funding for community projects like the Kyneton Community Park and small projects such as the Huntly historical society. But Bendigo was a marginal seat at the last election and the government did throw whatever they could at it to try to win the seat; so it is not surprising that some local projects did get funded.

However, the funding for these projects does not make up for the harsh cuts and tax increases that will hit the vulnerable in our community the hardest. The heart of this budget is designed to tear down everything that makes our community strong. It attacks the most vulnerable in our community: our age pensioners, our unemployed, the young, families and the poor. There is an issue of equity within this budget. Days after the budget, as part of my 'A Day in Your Shoes' program, I spent the morning with Country Cob bakery in Kyneton. It was an interesting case study: this budget will affect each of the people working there in a different way. We were talking to the chef who has worked at the Country Cob for about 10 years. He was particularly concerned about the GP co-payment. Not that long ago his wife needed a heart transplant. All he could think of on budget night, when they were talking about the $7 co-payment, was how, every day after the transplant, they went to the doctor. All he could think was, 'Will I have to have $7?'

Imagine him having to find the $7 to pay the co-payment when all he wanted to be concerned about was his wife's health and getting her to her appointment.

He said that another major concern is the increase in the fuel tax. For them, living in a country area, driving from Woodend to Kyneton, driving the kids around as required, petrol is a big expense in their budget. Any increase would hit them hard. We pay more for petrol in the regions. On one Saturday in the electorate, petrol in Woodend was as much as $1.65. When you drove up the road, the petrol was $1.55. By the time you got to Bendigo, it was $1.45—a 20c difference on the same day in one electorate. The petrol tax will just compound this effect.

When I spoke to another member of the Country Cob Bakery staff, a single mum, she said that was very concerned about the changes to her payments. She has a young teenage daughter and is concerned about losing the schoolkids bonus and about how she is going to ensure that her young girl continues to get an education. She is concerned about the cuts to Gonski and what that means for the public school which her daughter goes to. She is concerned that her daughter may not have access to a trades training centre—another funding cut by this government since it was elected.

I also spoke to the two apprentices working at the Country Cob Bakery. Their major concern with the budget was the announced cuts to the tools program. It was of particular concern for the mature-aged apprentice who, at the age of 30, decided to take up an apprenticeship in pastry-making. She already pays her own way. She pays her own rent—she does not live at home—and much of her course work is now online. She was going to use the tools bonus introduced by the former government—and now axed by this government—to buy a computer so that she would be able to do her course work online. These are the effects of this budget. These are the effects on just three or four people working at the Country Cob Bakery.

Now the owner: he said that his concern with the budget is how it will hit his customer base. He is concerned that pensioners will have less money to spend in his bakery. He is concerned that the mums will not come in and have their cake and coffee on Tuesday, Wednesday and Thursday mornings. The problem is that, when you reduce the incomes of those on the smallest of incomes, they do not spend. They do not have the disposable income to spend in their local community.

The budget cuts are inherently regressive. They target the poorest parts of our community who benefit the most from government spending. Whilst the debt levy, which Labor supports, on the rich is temporary, the intended changes to Medicare, university fees, pensions and welfare payments will be permanent. There has been talk of how Labor in government produces these policy time bombs. There has also been talk about a great conspiracy theory that Labor was setting up a budget to catch out the incoming government. This is so wrong. What Labor did in government was invest in and create programs for the future: Gonski, a great program; the NDIS, a great program; and ensuring that our hospitals have adequate funding, a great program. Prior to the election, this government had no problem in standing side by side with Labor on these issues. Prior to the election, when Tony Abbott or Joe Hockey were in Bendigo, they said that there would be no cuts to health and education. They stood at the front of the Bendigo Hospital and proudly said that they will continue to invest every dollar, just as Labor had done. So it is not a conspiracy theory if, before the election, you agreed with it. And it is not a time bomb if, before the election, you agreed with it. This is a government that will say one thing to get elected and do another once it is elected. Let us be true about this budget. It is about ideology. It is about cutting back government and cutting services. It does not believe that government has a role to play in investing to build a stronger community. It does not build Australia; it tears it down.

There are other examples of how this budget is bad for the economy and bad for the Bendigo electorate. Let us look at the health cuts that I referred to. On budget night, it was revealed that $25 million would be cut from Bendigo Health between now and the next five years, because the government had torn up the national partnership on hospital funding. This is a lot of money to be lost from one particular hospital. The funding cuts to our regional hospitals may force some of our smaller hospitals to merge; it may force some hospitals to close. We have an issue in providing quality, affordable health care in our region. There is no point building a brand-new hospital if they do not have the operating budget to keep it open.

Another health cut that will hit the community hard is the GP tax, the $7 per visit. We have heard today the private Brooke Street clinic in Woodend blast the $7 per visit payment. Dr Richard Bills has said that this would deter people from seeking help. He was also critical of the fact that they have will have to charge it when they turn up to nursing homes. In regional communities our doctors do their bit to help in hospitals and nursing homes and do the after-hours clinic services. If you are a distance from a hospital, you need GP clinics and you need GPs to do this work. Now they have to make sure that they have got their accounts and have change for the $7 co-payment.

Another thing that will hit the electorate hard is the cuts to education funding. Bendigo schools were going to be big winners under the former federal Labor government's Gonski plan. Over $100 million was going to be invested in our schools to ensure that they had the resources that they need. It was not just a splash for cash; it was built on the principle that every school, regardless of where they are, would have the resources they need. The funding was going to follow the child. It would have given families choices. Under this budget we have seen funding to our local schools in Bendigo cut.

The changes to higher education are also a disaster for the region. It is not just about the HECS debts that will now not be subject to the CPI but subject to up to six per cent interest rates; it is also about the low-socioeconomic students attending a local university. This will be a barrier for them to attend university. Currently 25 per cent of people enrolled at Bendigo's La Trobe University are from a low-socioeconomic background. The cuts this government has made to the programs that encourage students from low-socioeconomic backgrounds will see that number fall.

The changes to higher education will also hit country kids who move to the city to go to university. Not too many people from the country have the economic needs to support a household in the city for children going to university and a household in their home electorate. Skye, the City of Greater Bendigo's Youth Citizen of the Year, is studying her third year of medicine at Monash University. Just on the weekend she said that, if these changes were in five years ago when she was considering to studying medicine, she believes that her family or she would not have been able to afford it. Skye grew up in North Bendigo. It is not an area of wealth. Skye would have to pay $200,000 for her medicine degree, and that is a debt that she or her family could not have taken on board.

Another thing in this budget that will have a big impact on Bendigo is the public sector job cuts. We are not immune to the over 16,000 job cuts that will occur in our electorate. The ATO in Bendigo will go. That is about 10 jobs. Jobs at the Australian Emergency Management Institute will also go. That is 60 jobs, including contractors. Why on earth would you cut funding and close the Australian Emergency Management Institute when in regional Victoria we are trying to get on top of emergency management? It is a silly decision to make. It is a reckless decision to make. This institute ensures that when disaster strikes, when there is an emergency, the people in charge are prepared and have the skills. It brings together our SES, our CFA, the departments and the people in charge to ensure that when there is an emergency they are prepared and ready.

Bendigo deserves its fair share of public sector jobs, yet in the budget we have seen jobs cut. This budget has no plan for jobs. All it does is cut jobs, whether they be jobs in the public sector, the not-for-profit sector or associated with support programs like Youth Connections and family counselling. This budget is an attack on jobs and good jobs. It sees more job cuts in our region.

On debt, any high-school economics student can tell you that to counter a recession a government needs to spend during the downturns to ensure that the recovery is sooner, to save during the booms and spend during the downturns to give the private sector the best opportunity to pick itself back up. Governments have historically gone into debt to fund social programs to avoid recessions. This is nothing new. This is ensuring that we do not have a period of austerity which just prolongs a recession. I do fear that our local community and our local economy will fall into recession as a result of this budget.

No-one's personal success is completely independent of the society in which they live. The funding cuts, the job cuts, the job losses, the changes that will occur from this budget will see an economic downturn and may hit the Bendigo economy very hard. In terms of the economy, this budget is simply bad economics. We have seen austerity overseas. As we have seen overseas, it will not result in a growth of the market, it will not result in a boost in our jobs and it will not ensure that we survive the last of the global financial crisis.

Some are saying that everyone will need to do the heavy lifting in this budget, but this is simply not true. What we are seeing are that the most vulnerable, those with the least income, have to pay the most. We have seen that for a young job seeker on an income of $13,000, this budget will cost them $7,000. We have seen that for an age pensioner on an income of less than $22,000, this budget will cost them $7,000. As young Rachel said in her letter to the Prime Minister about this budget: 'We are absolutely shocked by your actions and we believe it is unfair and a disgrace.'

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on these combined appropriation bills. I found it very interesting just now to listen to the Keynesian economic analysis by the member for Bendigo. I think if she were to stay she might learn a few lessons from the analysis that I am about to give, which is that Labor turned a strong budget position into a very weak budget position over six short years. We cannot forget that Labor inherited a strong budget position: no net debt, $50 billion that had been invested in the Future Fund and a position where the government was not only living within its means but being able to set aside money for the benefit of future generations, for such schemes as the Higher Education Endowment Fund and the like. But it all changed when Labor came into power. It all changed because Labor believes in spending big and borrowing large. We should have known this lesson of history because, of course, in 1996 we had to repay over $96 billion of Labor's debt. But what we inherited coming into government just eight months ago was even worse.

I am just going to cite the facts because there is a lot of emotion in this debate and even Labor denialists cannot ignore these facts. Between 2008-09 and 2012-13, Labor delivered deficits—deficit after deficit—totalling over $191 billion. It also, though, left deficits of over $123 billion going forward, through the forward estimates from 2013-14 to 2016-17. In the entire period of time that Labor was in government it did not deliver one surplus budget. It did not once live within its means and, going forward, was never going to live within its means. What does that mean? It means that the interest bill is about a billion dollars per month. And if you add that up over a year and put it in context it is more than the total cost of the National Disability Insurance Scheme that we are working up to in 2023-24. That is based on the Commission of Audit figures. It is actually around what we currently spend as a Commonwealth on our schools funding. So this is not a small amount of money. We cannot disregard the fact that this is money that we are paying in interest that could be better spent on those programs that we as a government think are worthwhile.

Under Labor's plan, debt was set to peak at around $667 billion, according to the MYEFO figures. That is the amount it would have peaked at within the decade, which would have blown out the interest we would have needed to pay to just under $3 billion a month. This was clearly an unsustainable spending spree with borrowed money. Over six budgets, Labor increased spending by over 50 per cent—that is, $137 billion. They promised that they would cap real spending growth. They said that they would cap that to around two per cent. But what they said they would do and what they actually did were entirely different. Real spending growth was, on average, around 3.5 per cent. But in the fifth year—the out year just beyond the forward estimates period—it was set to increase by more than six per cent. That is the year that comes into this particular budget.

Clearly Labor had a spending problem. We are not the only ones who have pointed this out. We are not the only ones to have acknowledged this problem. This has been acknowledged by so many others, including the International Monetary Fund, which recently reported that Australia's government spending growth between 2012 and 2018 under Labor's budget settings was projected to be the highest amongst 17 advanced economies. That is higher than Canada, the USA, France, Germany—and the list goes on.

The IMF are not alone. Respected economists in Australia called out this spending problem. Deloitte Access Economics partner and former senior Treasury official Chris Richardson said, 'Australia needs a conversation about its budget. It is our national social compact with ourselves. It is broken and it does need fixing.' Even Saul Eslake, who I know the others over on the other side likes to quote, on many occasions said: 'Certainly the situation is worse than the previous government had suggested it would be. Certainly it is worse than it should have been given that we are now 22 years out from the last recession and we have just been through the biggest upswing in commodity prices in over 150 years.'

At the risk of loading on the number of people who acknowledged this problem, even though there are denialists over on the other side, Phil Bowen, the Parliamentary Budget Officer said:

If you just continued on the trajectory of payments and revenues prior to the budget, net debt is forecast to grow rapidly, I think, at the highest rate in the OECD …

I don’t think that’s a fiction at all …

He went on to say:

Sure we’re currently at a very low level relative to the rest of the developed world, but frankly we don’t want to find ourselves where the rest of the world is …

You’ve got to have a buffer. One of the reasons we came through the global financial crisis so well was because we started with assets.

You only need to look at the very good work done by the Commission of Audit, particularly in table 4.2, which looks at the large and fast-growing programs, to realise how unsustainable the spending trajectory is. For instance, take the line item of the age pension. It is currently at around just under $40 billion, projected by 2023 to go up to $72.3 billion. The Medicare Benefits Schedule is currently around $19 billion. It is set to hit around $37.7 billion in 2023-24. Hospitals are at around $14 billion, going up to $37.8 billion by 2023. Schools are at $12.9 billion, hitting around $31 billion in 2023-24. That is clearly not sustainable.

As Nobel prizewinner Albert Einstein so eloquently said: 'Insanity is doing the same thing over and over again and expecting different results.' But Labor do not always get it wrong. Sometimes they do actually get it right. I am going to quote Dr Andrew Leigh, the shadow Assistant Treasurer. He says, in the appropriation speech—amidst a lot of stuff that I do not agree with—'If you are serious about jobs, you have to get the short-term settings right and the long-term settings right.' And he is absolutely correct when he says that.

That is why the priority for this budget has been threefold: to pay back Labor's debt, to get spending under control and live within our means, and to put in place sustainable settings that allow business to invest in growth, which ultimately will result in jobs. In our budget we are going to reduce the budget deficit from almost $50 billion in 2014 to $29 billion by next year, and to just $2.8 billion in 2017-18. Seventy-seven per cent of our budget improvements come from reduced expenditure and only 23 per cent come from higher receipts. This contrasts very significantly with Labor's approach. Labor put an extra burden on Australian families and on Australian businesses when they were in government. They introduced more than 940 revenue measures over that time, which meant around $107.3 billion in taxes on those Australian families and businesses.

We want to cut tax, and in our budget that is what we setting about doing. We are going to reduce taxes by just under $6 billion in the current financial year; we are going to particularly cut the company tax rate for businesses by 1.5 per cent from first 1 July 2015. This is very significant, particularly for small businesses. It will help around 800,000 Australian businesses and take the burden off them. That is in addition to cutting the carbon tax and the mining tax, which are being frustrated by the Labor Party and the Greens in the Senate right now. We want to help business to grow, invest and employ, and this is one measure that will help them to do just that.

There are other measures that will promote growth. I will focus on two in the short time that is available. We will be making an historic infrastructure investment of around $50 billion over the next seven years, throughout Australia, into productivity-enhancing infrastructure. I know that in my home state of Victoria this will amount to around $7.6 billion, around $3 billion of which will go into the East West Link. All of these investments in infrastructure will help to get our economy moving, help business to move, and help our state governments to prioritise their spending in a more productive fashion. It will free them up to invest in other infrastructure measures, such as the Metro Rail in Victoria. With the added incentives of the infrastructure recycling package, all up—together with business and state governments—this will lead to an investment of around $125 billion in infrastructure that is so vitally needed to help our country and economy grow.

The other measure I want to single out today is the focus we have on helping young people earn or learn. We realise how important it is for young people to invest in their future, whether that be in acquiring new skills or in achieving a higher diploma or a university degree. We are making those incentives much stronger for young people to do that, by giving them a choice. Instead of being able to get straight on the dole, if they have the capacity to work they will be supported into employment—if that is what they want to do. If they want to achieve a higher education degree they will be supported in that. Our higher education reforms are absolutely critical in ensuring those people who want access to higher education—even advanced diplomas—are on equal footing. They do not have to pay one dollar up-front but will instead contribute to their educational expenses once they start earning over $50,000.

When it comes to higher education, the balance needs to be more fairly split between the Australian taxpayer and those that benefit from the education they are receiving. We know that those who receive a higher education are often able to earn around $1 million more throughout their lifetime than those who do not receive the same benefits. Currently the split between the taxpayer and the student is around 60 per cent for the taxpayer and 40 per cent for the student. With our changes, that will be balanced so that the student is funding more of their education than the taxpayer, while still receiving strong support from the taxpayer. We believe that it is fair for a plumber who is working hard to be funding less of the education that, for instance, somebody like me would be receiving and that I would pay a higher proportion of that myself.

It is all about balance and fairness, and that is what this budget focuses on. It focuses on getting the right incentives in place and making sure that together we can build a strong, prosperous economy and a safe and secure Australia. It calls on everyone and every business to contribute, to grow our workforce, to boost productivity and to help build the strong economy we need.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I was interested, listening to the member for Higgins' address, to hear this incredibly conventional view of what we need to do to take Australia forward. We are dealing with Appropriation Bill (No. 1) 2014-2015 and related bills. There is a lot in the budget we will have the opportunity to talk about as other more specific legislation comes before this House, but I particularly want to talk today about a range of agencies whose funding will be cut as a result of the appropriation bills we are considering today.

It shows the government's very narrow and short-sighted understanding of our economic needs and what the role of government in the 21st century is in driving the economy forward. From my point of view, I am just going to put aside all of the discussion of the great unfairnesses in this budget for the time being and concentrate on the great stupidities. In particular I want to look at the cuts that have been made to science and research agencies across this country.

Implicit in all the commentary we get from the Treasurer and, indeed, from the member for Kooyong—

Ms O'Dwyer interjecting—

Excuse me—I mean the member for Higgins. I knew you were part of the Liberal royal family somewhere.

Inherent in the discussion of the member for Higgins—and you get it from the Treasurer also—is the notion that the thing government has to do is to keep as small as possible; to create the conditions for the private sector and then keep out of its way, and that will see business flourish. Indeed, they say very often that the public sector is crowding out the private sector and creating a constraint on private sector development, and that is what is holding our economy back.

Whilst of course one has to be very mindful of creating the environment and the operating conditions in which the private sector can thrive, this is to completely underestimate what really is driving the modern economy, where the big changes in the economy are going and where indeed those big changes have come from. Very critically, if we look at the great developments over the last 30 or 40 years, the vast majority of those, interestingly, turn out to have been developed by the public sector. These are development that never would have taken place in the private sector. Sure, once the research is done and the great idea has been developed, it is the private sector that grabs that and commercialises it, but without the active and strong investment in the public sector, we would not see those things that now form the basis of our economy.

The internet itself was developed in the United States under the government defence and science programs. We have seen the equivalent in Australia in terms of the development of Wi-Fi, which came out of the CSIRO. We have seen other developments—the touchscreen which is now increasingly part of the technology that is driving industry forward, again, was developed in the United States.

I had a very interesting example when I went to visit Oak Ridge Laboratory in the United States, that developed the atom bomb, to see the creative work that was being done and to hear the researchers in this government-funded instrumentality explaining the funding that they receive from Toyota for the sale of every Toyota Prius. A royalty is paid to the Oak Bridge Laboratory with each sale because the fundamental technology of that fuel cell that drives the hybrid car was developed in that government-funded agency through government-funded programs. The amount that has been spent in the United States through their largely defence-oriented operations and research agencies has been extraordinary and the benefit that has yielded for the US economy has been tremendous.

We have got some examples here in Australia. We know that CSIRO has been responsible for the Wi-Fi. I believe the CSIRO has also been involved in the development of radar, the first effective influenza treatment, and the Hendra virus vaccine, amongst many more. They are doing very, very interesting research that would not be done by the private sector. As one of the world's biggest producers of titanium, they finding new ways for the production of titanium and the use of 3-D printing with titanium. All of this really important but very expensive work that requires long lead times and very patient investment would not be done by the private sector.

So what is the response to the reality, for our need to be out there participating in the new science and technology? What have we done? We have absolutely gutted our scientific agencies and gutted the research effort. Within these appropriation bills we are looking at today we see cuts of at least $878 million across the forward estimates to our major science and research agencies. CSIRO alone are receiving funding cuts of $111 million and they are going to be losing approximately 10 per cent of their capacity and staff, and this at a time when we know we need to reposition ourselves, when we know that we cannot rely on just being a quarry, that we need to create a future for ourselves. If we had any sense, if we were looking at what has worked around the world in countries that have got that edge in science and technology, we would know that we need to be pouring more money into these agencies, not stripping them of funds.

I find it really very worrying that we have got such narrow-minded, undeveloped intellects seemingly in charge of making these very important strategic decisions. We have people who are very much locked in a small government Ayn Rand mould, and there is no doubt of that on the part of the Treasurer, who really do believe that is all we have to do. Where is the imagination that is going to drive us forward? Where are we going to find those people who are prepared to understand how investment in science and technology needs to come from the government in order to create those circumstances where we can be players on a global scale. We should not be entities that are just technology takers; we should also have the ability to facilitate being technology creators. We quite rightly talk about wanting to have our universities in the top 10 or the top 20 in the world, but if we are not investing in research, if we are stripping out $800 million over the forward estimates from research, then we are not going to be up there. We will not be fantastic world-class universities; we need to invest.

We had an interesting debate this morning in the other chamber. There was a lot of pontification about how fantastic this government was going to be for the development of the north of Australia. In the course of the hearings that have been going on with the northern Australia committee, it is very evident that the availability of water is the absolutely No. 1 essential issue that we need to address, that we need to get right for the development of northern Australia and for northern Australia to be able to take its rightful place and to have a sustainable level of development catering for the increase in food needs—not only for our own communities, but also for those of Asia to our north. The evidence we have been getting is that CSIRO have been doing tremendous work in this area. They have, over the past four to five years, produced some very, very important studies. But they stressed to us that for them to be able to really get a clear picture of the sustainability needed to enable us to be able to develop at an appropriate scale, then there is a lot more detailed work to be done. So what have we done? As I said, we have slashed $111 million from the CSIRO budget; we have reduced its capacity by 10 per cent at a time when we say that we want to drive northern Australia forward. And we know water is going to become an increasingly important issue as we have a drying climate in most of the southern half of the continent.

I want to look at the funding reductions. The Sustainable Rural Water Use and Infrastructure Program: that has been cut by $324 million. That is perhaps not so much a research program, but the purely research programs have likewise been cut. The water resources assessment research grant has been cut; I mentioned the science and research agency before, $146 million. So in addition to the $111 million that has been cut from the CSIRO, we have had an additional $30 million cut from other agencies. I believe the CRCs have lost something in the order of $80 million over the next four years. CRCs are really important because they bring together a very important collaboration of government skills from across a number of government entities with the private sector.

CRCs are in fact very much the agencies that will be driving forward innovation into the future. But we have seen a dramatic cut, and indeed the next round of funding has been entirely chopped out. Those CRCs are extremely concerned, because in February this year they were asked to make submissions for the next round of funding. A great deal of effort has gone in by those organisations, taking the government at its word in February that there would be an additional round of funding. They have spent many hundreds of thousands of dollars, to be cut out of the budget. That entire round will virtually not exist.

The Fisheries RDC would be one of the hardest hit by the changes. Fisheries research is also taking a big hit through reduced Commonwealth funding for the Fisheries Resources Research Fund program. If we go through and look at the list of projects that are being cut, the science and research budget that is being stripped, we see a critical failure to understand that there is increasingly an important role for government to invest in this level of science and technology. It is only in that way that we are going to be able to participate as something other than technology takers into the 21st century.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the appropriation bills before the House. Appropriation bills Nos 1 and 5 deal with the ordinary annual services of government while appropriation bills Nos 2 and 6 fund new activities. Appropriation Bill (No. 2) also seeks appropriation authority from the parliament for measures announced in the 2014-15 budget, and it is the measures announced in our budget which I focus on in my contribution today.

The budget reflects our determination to get the budget back on track, to get the nation's finances back on track. It reflects our determination to rein in Labor's mess—year after year of spiralling debt and deficit. It reflects our determination to deliver on what we committed to do so that we can restore the nation's finances and build a stronger and more prosperous economy. Why is this important? It is important because a stronger and more prosperous economy delivers jobs growth and certainty. It helps build confidence in new industries and a future for our children and grandchildren. Our budget calls on everyone to build and contribute. While we have had to make some difficult decisions, our budget also reflects our determination to invest in jobs and infrastructure.

I want to remind Australians about Labor's record—year after year of record deficits: $27 billion, $54 billion, $47 billion, $43 billion, $19 billion and, in this current year, $50 billion. Let us not forget that we are currently paying more than $1 billion a month in interest payments just on the borrowings. Without the hard decisions we are on track to deliver $123 billion in cumulative deficits and $667 billion in debt. Of the top 17 IMF countries surveyed, Labor left us with the fastest growth in spending of anyone in the world and they left us with the third highest growth in debt of anyone in the top 17. Let us not forget how we left the economy, how the Howard government left the economy back in 2007: no net debt, a $20 billion surplus and some $50 billion in the bank.

Our government is making the difficult but necessary decisions to get the budget back on track.

As the budget papers outline, the budget deficit will fall from its current $50 billion to $29.8 billion next year. And by 2017-18 it will be slashed to a manageable $2.8 billion. We are on track to deliver a surplus—the surplus Labor promised it would deliver some 500 times, but never did. As Margaret Thatcher once famously said, 'The trouble with socialism is that eventually you run out of other people's money.'

And that is what Labor did. It spent money—more than we earnt—year after year, with a reckless disregard for the bottom line and with a reckless disregard for our economy and for future generations. Our decisions in this budget have contributed a $36 billion improvement in the bottom line, and while there is still much work to be done over the next 10 years, we will reduce our debt by nearly $300 billion—from $667 billion to $389 billion.

We have heard from member after member opposite, but what is Labor's plan? What is Labor's plan to stop this reckless spending spree that we have seen over the last six years? Unfortunately, to date we have heard absolutely no plan. We have heard no plan from Labor. All we have heard are suggestions from members such as the Deputy Leader of the Opposition to add another $16 billion to foreign aid. But we have heard no plan whatsoever as to what Labor would do to rein in this reckless spending.

We have some very important features in our budget. Yes, we have had to take some unpopular measures. We have had to make some difficult decisions but, as the Prime Minister has said, this is a budget that reflects that this government has a head, a heart and a backbone. The infrastructure growth package that we have announced will take the government's transport investment to $50 billion by 2019-20. As a result, total infrastructure investment from the Commonwealth, state and local governments, as well as the private sector, will build to over $125 billion. This is so important for jobs and for our future.

We have also announced the full deregulation of the higher education sector, which will remove fee caps for universities and higher education providers and expand the demand-driven system to bachelor and sub-bachelor courses at all accredited higher education providers. This opens up enormous opportunities for providers in my electorate of Corangamite and also for Deakin University—a great university headquartered in the Geelong region. Some fees may go up; some fees may go down, but what we are seeing is greater competition and greater opportunity in the higher education sector.

We have proudly delivered a $20 billion medical research future fund. We have proudly announced a strong strategy such that young people will be required to earn, learn or participate in a work-for-the-dole program. This has been received incredibly well in the Geelong area, where this program will be rolled out as of 1 July, because over the past six years we have seen so many young people languishing on the dole. The previous government had a mickey mouse work-for-the dole program that has made no substantial difference. So we are now proudly saying, 'We care about your future. We want you to gain confidence. We want you to gain skills, and we have a way of doing it.'

The budget also reflects our strong commitment to older Australians. Businesses will receive up to $10,000 for employing workers older than 50 who have been on income support for more than six months. So we have a very strong agenda of driving jobs and driving incentives to employ young people and older people.

I want to put on the record some facts. There has been a lot of misleading statements in relation to a range of issues on this budget. I want to make it very clear that over the next four years Australian government funding to the states for public hospitals will increase by some 40 per cent. Total spending on health will increase by more than $10 billion a year over the next four years.

I turn now to the facts about schools. The government is investing $64.5 billion in schools over the next four years—over $1.2 billion more than Labor would have spent. When it comes to Medicare, 10 years ago we were spending $8 billion a year; today, we are spending $20 billion. We are asking everyone for a modest contribution to ensure that Medicare is sustainable, just as Labor did when it asked for a $6 co-payment for PBS medications. We have a very strong safety net. Australia's 8.6 million concession cardholders and children under 16 will only pay the contribution for the first 10 visits or 10 services each year.

In my electorate of Corangamite, we are making some incredibly important investments. We have announced some $321 million for local projects. These very important projects include the duplication of the Princess Highway and the upgrade of the Great Ocean Road. There are small projects in places like Rokewood, such as the upgrade of the Rokewood War Memorial. There is $200,000 for the Grovedale Sports Club; $3.5 million for Shell Road in Ocean Grove; and $2.5 million for the Colac Central Reserve to address issues of disadvantage as well as to invest in sporting infrastructure. There are a wide range of projects that we are proudly funding.

But the big focus for me is jobs. After being a member of the Victorian economic review panel, chaired by Minister Macfarlane, I am very proud of our $155 million Growth Fund, which is investing in the next generation of jobs—$60 million for next generation manufacturing and $30 million for regional infrastructure. It reflects a very strong focus on investing in long-term sustainable jobs. I refer to the contribution by the member for Corio a short time ago in this debate and the reference to Alcoa. The closure of Alcoa at Point Henry is a terrible blow to our community, but what we are focused on is investing in long-term jobs—not coming up with short-term fixes like Labor did, offering $40 million to Alcoa and promising a long-term future, only to see that collapse.

I want to put on the record that the Geelong Region Innovation and Investment Fund has increased by some $5 million to $29.5 million, thanks to a very important contribution from Alcoa—something that the member for Corio did not acknowledge. This is a very important contribution to the skills and the retraining of Alcoa workers. Through the GRIIF, companies like Carbon Revolution are benefiting. We have heard about Carbon Revolution and the many other companies in my region that are working in advanced manufacturing. Carbon Revolution received a $5 million grant under this scheme and it is delivering another 150 new jobs. So we have a very bright future in advanced manufacturing; but, importantly, we need to focus on delivering long-term sustainable jobs, not the short-term fixes that Labor delivered.

The member for Corio also mentioned Land 400, and I am pleased that he did because, despite his lecturing of our government, this is actually the first time that he has ever mentioned Land 400 in parliament. This is an incredibly important project. I have championed this project. The mayor of the City of Greater Geelong, Darryn Lyons, has also championed this project. It is a $10 billion project. We are fighting very, very hard to bring Land 400 to our region. It is not in the budget, because it has not been approved as yet. That will happen at some point this year, when it comes up for first pass approval. Perhaps Labor does need to get it facts right in relation to that particular project.

I also want to make the point that we have funded the NDIS. The Prime Minister proudly opened the NDIA headquarters in Geelong a number of weeks ago. Despite the scare campaign run by Labor, we have funded the NDIS within the agreed funding envelope with the states—a very proud delivery by our government as confirmed in our budget. Of course, there are some smaller projects, such as the Green Army. There are about four Green Army projects in my electorate. There is a wonderful Surf Coast Solar Town program of some $300,000.

Let us also look at some of these major infrastructure projects. One of the big commitments that the Prime Minister, our infrastructure Prime Minister, has made is to build the roads of the 21st century. I make particular reference to the $3 billion that our government is investing in the East West Link and, importantly for the people of Geelong, in the western section stage 2, which will cut travel time for Geelong commuters by some three hours a week. This is an incredibly important project for Western Melbourne and for Geelong. It will do so much for our productivity and for our local economy but—would you believe it?—Labor is opposing this project. It is one of the most important infrastructure projects for the Geelong region and Victoria that we have seen for some time. Then again, Labor also opposed the upgrade of the Great Ocean Road, such an important upgrade for jobs, tourism and our local economy. I am still mystified by the very deceptive campaign that Labor ran in relation to that critical project. I am very, very proud today as we see more news about the Great Ocean Road projects being rolled out.

Our government is proudly working hard to deliver the structural reform that our economy needs, to grow jobs and to deliver a stronger and more prosperous economy and a safer Australia. We are abolishing the carbon and mining taxes. Of course, Labor is standing in the way, which is an absolute disgrace after it committed in the previous government to terminating the carbon tax. We are cutting the company tax rate by 1.5 per cent. We are cutting red tape by some $1 billion a year. We are investing in the roads of the 21st century. And, most importantly, we are getting the budget back on track. This budget reflects our strong commitment to the Australian people. I commend these bills to the House.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I rise to speak on the appropriation bills and to make some commentary on the budget that was handed down by the Treasurer a couple of weeks ago. This budget really is disastrous for our nation and for every Australian. It is a budget that has been built on a web of broken promises and twisted priorities and it is a budget that has the wrong priorities, priorities that are focused on making cuts to low- and middle-income earners, and that has not a word about jobs.

During the election campaign Tony Abbott and Joe Hockey promised that there would be no cuts to education, health, pensions, the ABC or SBS. They also made a commitment that there would be no tax increases, that taxes would go down not up. But this month's budget has brought reality back to home. There are broken promises, mean cuts, new taxes and extra costs to low-to-middle-income families. If it was not enough for the Prime Minister to promise that there would be no cuts to health and then bring a $50 billion cut to health and hospitals to the states and territories, he has also ensured that every single household has more health costs to find from their pocket by putting a $7 tax on going to the doctor.

This is the greatest attack on Medicare since its inception. It is an attack on universal health care, which has been so critical for our nation. This scheme really makes it more expensive for people to go to the doctor, to get a prescription, to have an X-ray and to get a blood test. The scheme will have the greatest impact on those lower income earners, the seriously ill, those with chronic disease and our senior Australians. This will cost families $3.5 billion a year. In my constituency of Kingston in South Australia the GP tax equates to approximately $7 million.

I have been speaking to people at railway stations and at street-corner meetings, and in my electorate office, as well as when I have been out and about, and have been inundated with hundreds of people concerned about the impact of this GP tax. They are concerned particularly about what it means. They are saying to me that this government just does not get it. It does not get what is to work hard for a living, to have a small income coming in and not be able to access universal health care. One of these people is Paula Tonkin from Seaford, who is among 87 per cent of people in Kingston who get bulk-billed. She wrote to me and said:

My husband and I are a single income family, we get nothing from the government in the way that benefits us and work hard to keep things that way. My husband has a life threatening illness, he frequently visits the local GP. Demanding that GPs charge $7 rather than bulk bill patients like us is only cruel, it is short-sighted and inhumane. We pay our taxes and are law-abiding citizens. It's about time we got a break

Paula is right. This GP tax is a cruel, short-sighted policy, and I am proud that Labor will oppose it.

The co-payments create a disincentive for our most vulnerable Australians to get the health care they need. Last week we saw the Australian Medical Association report that its members are already seeing patients not presenting to a GP because they mistakenly believe the GP tax is already in place. This is just the start of the Prime Minister's assault on universal health care. This country does not need a US-style health system that can be accessed only by the wealthy.

The Prime Minister has also broken a promise, as I have mentioned, by ripping $50 billion away from Australia's public hospitals. In South Australia it is estimated that this will result in a $655 million cut in health funding over the next four years. These cuts are the equivalent of the entire Flinders Medical Centre that services my electorate. That is nearly 600 hospital beds and equates to 500 nurses. The Abbott government's own budget papers clearly demonstrate that the cuts to hospitals start this financial year and totally ignore an agreement that state and territory governments signed up to. It is not just in Labor states that the premiers are incredibly concerned and upset about this; it is in Liberal states as well.

The Prime Minister promised before the election that no Medicare Locals would be shut. But, in another broken promise, he is axing the Medicare Locals and replacing them with primary care health networks on 1 July. However, the cuts have already started, with money being moved away from Medicare Locals if it is not for direct services to the public. Indeed, support, assistance and advice for GPs in running their practices have been ripped away. This is a short-sighted decision and does not recognise the localised nature of these Medicare Locals.

I was recently joined by the deputy leader of the Labor Party, the member for Sydney, to hear firsthand the concerns of the Southern Adelaide-Fleurieu-Kangaroo Island Medicare Local. That is the Medicare Local that looks after my electorate. This Medicare Local was one of the first set up and it has made a huge difference to people's health in Kingston. For example, its childhood immunisation program has boosted rates from 88 per cent to above 91 per cent. We spoke to the senior team there, who expressed deep concerns about the impact of abolishing the Medicare Locals and particularly the impact it will have on front-line services. But it is not only that. They are concerned that it will have an impact on the coordination of health care. One of the critical elements of these Medicare Locals was that they would respond to gaps in health service provision for local needs. I know that the Medicare Local in my electorate has been doing that in nursing homes. Nursing homes were unable to attract GPs and doctors. It has been working hard to fill those gaps. So cutting these Medicare Locals is a real step back in time.

I understand that the Minister for Health did not like them because they were a Labor idea. I ask him to put his partisanship aside, actually look at what these Medicare Locals are doing and, for one of the first times, put patients first. I ask him to put people and the health of our community first.

This budget is also incredibly cruel on those who need our support the most. There is the freezing of the rate of family tax benefit to many. This will have an impact on many low- and middle-income families that will have to foot the bill for the Prime Minister's broken election promises. Then there is the cut to pensioners. The Prime Minister made a solemn promise before the election. He said he would make no cuts to the age pension. He is trying to convince us that slashing and lowering the indexation is not a cut to the age pension. Well, he has a big job trying to convince pensioners of that, because pensioners can tell a trick and spin when they see it. They have said clearly to me that these indexation arrangements and the changes will hurt them over a period of time and will erode their standard of living.

There are also deep concerns in my electorate about the Prime Minister and the Treasurer's plan to ensure that you cannot get a pension until you are 70 years of age. What people have said to me is there seems to be a lack of understanding—there is a huge amount of age discrimination out there in our community. I have many people under the age of 60 who are saying they are trying to find work, but no-one will employ them. They cannot find jobs, because of age discrimination. Without a plan for jobs, this government has condemned these people to a period of unemployment, and this will only get more difficult. Without a strategy to address jobs and age discrimination, their policy is making it more difficult for pensioners.

The Prime Minister is also ripping away Commonwealth support for state and territory based seniors' concessions, leaving the future of these concessional programs in limbo. It does not stop there. The promise of no new taxes quickly changed, with the broken promise of ensuring there is a new fuel tax and an increase in excise indexation. Once again, no-one would have expected the Prime Minister to agree to it in this budget but, of course, it is another broken promise. This will impact my constituents in a more disproportionate way than in many other electorates. Many constituents in my electorate travel a long way to work—in fact, 40 or 50 kilometres. They spend a lot of time in the car going off to work. As a result of this and of the Prime Minister's pledge of no investment in public transport—he does not think public transport is very useful at all—it will cost even more for those in my electorate to get in a car.

We also have the Prime Minister's broken promise of ripping $30 billion from our schools. The cost of getting a decent education will be put out of the reach of many ordinary Australians, especially through the deregulation of tuition fees. We will see the cost of university courses rise and an increasing amount of student debt. It was interesting to hear the Minister for Education being contradicted by the Prime Minister in question time today. We heard the truth today in question time. The changes in interest rates that go onto student debt will occur to anyone who has a HECS debt. So even if you entered the system before these arrangements were put in place, you will have a new interest rate put onto your HECS debt. There is a lot of concern in my local electorate.

Funnily enough, I took the Minister for Education at his word. When I was out in my local community, people were coming up to me with this concern. I said, 'No, the Minister for Education said it will not apply to new people.' I was then informed about a letter, from a constituent, that contradicted that. She said her son had received this letter and that, indeed, he would have to pay the higher interest rate, and there was huge concern about what that would mean. So it is good we have the truth now from the Prime Minister that it is not just those students who go in with their eyes wide open, it is indeed many students who are finding difficulty.

There is so much that is difficult about this budget and it hurts my electorate so much, but in the limited time I have left I would like to talk about Youth Connection, which was axed. Indeed, when we talk about youth unemployment, what seems to be missing from this government is support to ensure that young people can get the experience, that they can get the support, to find a job. Youth Connections was doing just this.

Dannika Harrop, a 17-year-old from Aberfoyle Park, credits Youth Connections for turning her life around. Before Youth Connections stepped in, Dannika would regularly skip school and faced the prospect of dropping out of school in year 9. Thanks to the help of Youth Connections she has returned to school, has finished year 12 and is now volunteering at the local youth centre. This is the work that Youth Connections was doing. Of course, that has been cut.

There are also many other organisations that are still in limbo after this budget. Many organisations whose funding is expiring on 30 June were hoping that the budget would give some clarity. It has not. Indeed, the carers support and respite centre was funded by a number of programs in the budget. It supports around 7,000 carers and their families in the south and east metropolitan areas. It is still not sure whether it will be funded. Also the Hackham West Community Centre is still not sure whether it will be receiving funding. All these expire on 30 June. These organisations need some certainty. They thought the budget would give them clarity. Of course it has not.

This is a cruel budget. It is a budget that illustrates that the government is not in touch with the ordinary people on the street. These measures are incredibly disappointing. I hope the government sees sense on many of these measures and will ditch a lot of them that hurt ordinary Australians.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

The iron law of economic history is, whether it is a family, a small business or a nation, no entity can continue to live beyond its means for an extended period and prosper. From the Medicis to the Spanish Empire, the Ottomans, the Asian financial crisis and the issues we have seen in contemporary Southern Europe, the evidence is absolutely clear: nations or empires that live beyond their means on any extended basis are condemning their next generation and those that come after to repay the debt. It is the equivalent of parents leaving the bill for the kids. It is cruel, it is irresponsible, it is utterly against the flow of history and it is an abrogation of responsibility for each and every government that engages in an act of intergenerational theft.

Lest this just be thought to be words, let us deal with the facts and the reality of the last six years. Over the last six years the then Australian government spent $240 billion more than it received in income. The Labor government ran annual deficits over its six budgets during its period of government of $27 billion, $54 billion, $47 billion, $43 billion, $18 billion and $49 billion. It is an extraordinary period of fiscal profligacy unmatched in Australian history.

What does that actually tells us? It tells us that they started with net government expenditure of approximately $270 billion from the 2007-08 budget and net government revenue of $290 billion—a surplus of $20 billion. Over the next six years that was then increased with additional revenue because we had been told that we had a revenue crisis and it was all about a collapse in revenue. We had additional revenue of $70 billion to take the total revenue for the Commonwealth of Australia, the government of Australia, to about $360 billion. In other words, over that six-year period there was a $70 billion increase, so almost $12 billion a year average increase over the period of the Labor government. At the same time their annual expenditure went from $270 billion up to $410 billion. In other words, the revenue increased by $70 billion and their expenditure increased by $140 billion. It was an extraordinary period of fiscal profligacy, which always means the next generation has to pay the bill. And what is that bill? That bill is an annual interest payment of about $12 billion, $1 billion a month. Because we are running in deficit, each of those monthly billion-dollar payments has to be borrowed and added to the deficit. It is putting money on the credit card to pay just the interest on the mortgage. No family and no business can sustain itself under those conditions and nor can any other country. There is an inevitable, fundamental day of reckoning.

Against that background we have made significant changes to redress the fiscal deficit. We have made significant changes which will save approximately $300 billion of national debt which would otherwise have been accrued in the period out to 2023; a consequence of that is the difference between almost $3 billion of interest a month, which would have been accrued, and a little over a billion. It is a massive difference in the situation facing Australia compared with what it otherwise would have been. If you talk about intergenerational responsibility, nothing could be clearer or more fundamental. If you talk about intergenerational irresponsibility, theft or cruel action, nothing could be clearer. Leaving the bill for the next generation is the sign of a diminished generation, not a great generation. A great generation is one which makes sacrifices now for those who are to come in the future.

Against that background we are still running a Commonwealth budget of approximately $412 billion this coming financial year. Part of that is the environment portfolio. Our portfolio resources are about $2.4 billion. Our national environment plan comprises four pillars: clean air, clean land, clean water and heritage. In terms of clean air there are two fundamentals here. The first is to address climate change by directly reducing our emissions rather than to imagine that a higher electricity tax will achieve the job when, as we know, in the first year of the carbon tax, after a $7.6 billion payment, Australia's emissions dropped 0.1 per cent. It is the definition of pain without gain. In this budget we will be abolishing the carbon tax, and we intend to do that by introducing the legislation in the last week of June and then having that debated in the Senate in the first two weeks of sitting. We hope to have it passed during that fortnight, the new Senate willing, but we come with a mandate from the Australian people and an express, clear, absolute commitment not to stop until that is done. It will take effect as of 1 July. In other words, there will be no remittances due to the Commonwealth for any period after 1 July 2014. I make this as a direct statement which can then be used by the Australian Taxation Office.

Beyond that, we have now allocated an additional $1 billion in this budget to take to a total of $2.55 billion the emissions reduction fund. The breakthrough in this budget is twofold: there is the additional billion dollars and the full amount of the $2.55, which can be used from day 1 by the Clean Energy Regulator for the writing of contracts to reduce our emissions on a lowest-cost basis. We will achieve our targets. We will do it clearly, we will do it easily and we will do it without a carbon tax.

The second of the clean air pillars is to work towards a national clean air agreement by mid-2016. Particulate pollution is a killer, and we need to address this issue. I know that the member for Corangamite has raised this issue with me directly as well as in public and there are those with deep concerns in areas such as Anglesey. Particulate pollution is a deep personal project for me, and to have secured the agreement of all the states and territories to work towards a national clean air agreement by 2016 was a singular breakthrough on behalf of the government.

The second of the environmental pillars is clean land. This budget delivers $2 billion in the natural resource management stakes. That has been misrepresented by some in the opposition and so let me be absolutely clear: under the new National Landcare program there is over $1 billion available through the NRM program for NRM and Landcare projects, but then there is another $525 million in Landcare extension, an additional $200 million in the Working for Country program and an additional $200 million through the Land Sector package, as well as $40 million for the Reef Trust. The Green Army is coming. It will provide jobs, opportunity and genuine environmental outcomes for young Australians and for the community. The Landcare package is significant. All up, the Natural Resources Management program, as set out in the portfolio budget statement at page 27, shows over $2 billion, compared with $1.7 billion which was set out for natural resource management at midyear economic forecast period.

Then we turn to the one-stop shop, which is a fundamental part of what we are proposing. We have already cleared $500 billion of delayed project approvals which were left in limbo by the previous government and we have put in place memoranda of understanding with every state and territory for a one-stop-shop approach, which was announced and trumpeted by the former Prime Minister, Julia Gillard, which was embraced and endorsed by the Labor Party at the time and which was defined as absolutely essential. Unfortunately, nothing happened. We have delivered the MOUs; we have already delivered agreements with New South Wales and Queensland; we have published agreements with the ACT, the Northern Territory, South Australia and Western Australia; and I am very hopeful that Tasmania and Victoria will come soon; and we will have operating agreements, in my judgement, with all those states and territories in the relatively near future. That is a huge step forward in maintaining standards but reducing green tape and, in many cases, we are lifting the relevant standards.

This then brings me to the issue of clean water. I am thrilled that we have completed the work which has now spanned three governments and began under John Howard for a Murray-Darling Basin Agreement. It is an early-signature achievement of the current government, and I acknowledge the work of previous governments in this space. An amount of more that $2.3 billion is allocated to water infrastructure—the grand task of replumbing rural Australia to create productivity and water efficiency and to allow more water to be used by both our farmers and our rivers without detracting from the overall balance. It is a fundamentally important approach. Similarly, we are not afraid of new dams in Northern Australia, where appropriate, and there is the grand, long-term Reef 2050 Plan, which is underpinned by the Reef Trust with $40 million initial Commonwealth seeding, potentially up to $89 million of private sector offset funds and more to come as different projects are considered over the coming years.

Against that background there is also the Heritage Strategy, and I am absolutely thrilled and delighted that we have been able to support a national Community Heritage and Icons program. I have garnered support through the decision of the Cabinet to approve a new national icebreaker, which is absolutely fundamental to protecting and preserving our Antarctic heritage. It is a great project; it was critical national infrastructure left unfunded by the previous government. When you put the icebreaker and the Bureau of Meteorology super computer—another piece of critical national infrastructure left unfunded by the previous government—together, that is half a billion dollars of scientific hard infrastructure which is being invested in by the new government. It is the largest ever investment in the future of Antarctica in Australia's history. I think that is a profoundly positive outcome. Against that background, I am delighted that we have played our part in the budget. The environment department and the environment portfolio have contributed significantly, but these are outstanding outcomes: the billion dollars for the Emissions Reduction Fund, the half a billion dollars and more for the Green Army, the Reef 2050 Plan and the Reef Trust and, beyond that, the extraordinary outcome for the Bureau of Meteorology super computer and the icebreaker. These are investments that will last decades, in the case of the icebreaker, and have a profound impact on farm and national productivity in the case of the Bureau of Meteorology.

But at the end of the day our grand historic task is to ensure that we do not fall into the trap of other empires, states and nations who, faced with a period of prosperity, spent more than they had in their treasury. They ran into complacency and left the bill for the next generation. We have a solid foundation but we were on a terrible trajectory. That is what the emergency was: our direction was unsustainable. We are determined to put this country back on a sustainable footing because anything less would be to rob our children and we will not do that. I commend the bill.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

The budget is an opportunity for the government to send a message to the nation about the things they stand for. The sad thing about this budget is that it sends the wrong message to the nation. It is a very sad message indeed, and it goes something like this: do not get old; do not dream of going to university; for god's sake do not lose your job; and do not get crook. If you are unlucky enough to get sick, make sure you have a credit card, because your Medicare card is not going to be enough for you to see a doctor anymore.

The unfortunate thing is that it did not have to be like this. It did not have to be like this, and Australians were promised it would be very different. We all remember the Prime Minister—the Leader of the Opposition as he then was—telling Australians there would be no cuts to pensions, no changes to Medicare and no cuts to health. That is what Australians voted on but it is not what they got. It did not have to be like this. When they came to office, they inherited an economy with low unemployment rates—one of the lowest in the Western world—and growth. We have been growing at trend growth through some of the toughest economic times in the world's economic history; there is no other nation on earth that can make those sorts of claims. Even through the darkest days of the GFC there was one quarter, and one quarter alone, when the Australian economy did not grow.

That did not happen by accident; it happened because of deliberate decisions by the government—decisions that said that, when the economy is grinding to a halt, the role of government is to support confidence, business, and jobs and keep the economy ticking over. So yes, we did spend money, and we did take the budget from surplus to deficit. We did that because it was the right thing to do. There was an alternative—it was the alternative cheered for by the opposition at the time, the now government, and those policies would have seen over one million people thrown onto the unemployment heap.

So when the government came into power it inherited a very good set of economic circumstances: low unemployment, a growing economy, a triple-A credit rating—they do not in those out like confetti—and low interest rates. You would have thought, with an inheritance like that, they could have kept faith with their pre-election promises. Instead we are seeing in this budget something very different. We are seeing, if the bills associated with this budget find their way through both houses of parliament, that Australia will have the unenviable title of having the oldest retirement age in the world. Increasing the age before you are entitled to a pension is nothing more than a breach of trust.

This picture says it all. This guy is a fellow by the name of Bobby Turner.

Government Member:

A government member interjecting—

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

Those people who have never worked with their hands might want to listen to this because it is important, and I will get to the point that the noisy member from the other side of the chamber makes.

This guy started work at the age of 14. By the time Chris Pyne was running around university campuses in Adelaide telling people, at that point in time, that he was in favour of free education because he knew he had to say that get elected, Bobby Turner had already worked eight years. He went to sea at the age of 14 and worked with his hands every day of his life.

You can see that this message says it all. Only a bloke who has worked in an office his whole life would think that you could work until you are 70. It says it all. Little wonder that this photo was seen by over eight million people on Facebook. Over 250,000—about a quarter of a million people—said that they agreed with this and it evoked over 40,000 comments. Sometimes a picture says 1,000 words. Increasing the age of retirement is nothing more than a kick in the guts for millions of Australians who work in physically demanding jobs. There are over 60,000 of them in the Illawarra, my region, and the proposition which is in this budget is completely out of touch with those people.

It will hit regional Australia even harder because these are the areas where people are more likely to be working in that sort of work. These are also the sorts of areas where you have a lower life expectancy.

An opposition member interjecting—

The noisy member from the other side of the chamber says perhaps this man is only thinking of himself. I know that she does not understand older Australians and that somehow she thinks that Bobby Turner only cares about himself. He knows that these changes are not going to impact upon him but he is one of millions of other Australians who care about more than himself.

An opposition member interjecting—

The people on that side of the chamber do not get that. They cannot conceive that there are Australians out there who care about others apart from themselves. I can tell you that Bobby Turner is one of them. He is worried about his kids and his grandkids—something that you might want to think about.

This proposition contained within the budget that says that irrespective of the work that you have done for your entire life you now have to wait until age 70 to be able to access the age pension is nothing short of a breach of faith. No changes to pensions, no cuts to entitlements—I tell you that the Bobby Turners of this world and the other 60,000 people who work in similar occupations in my area will remember this in 2½ years time.

This year marks the 30th birthday of Medicare, and I sincerely hope that it has a 35th birthday. Before the election, we heard the Prime Minister say that they would be the best friend that Medicare has ever had. I have got to say, Deputy Speaker, to borrow words from the communications minister, with friends like these you hardly need enemies. The bills before the House propose to slug every Australian a $7 GP tax just for visiting their doctor. The cost in regional and rural communities alone is $1.4 billion—that is right, Deputy Speaker, a $1.4 billion slug to patients in rural and regional Australia.

On top of that, we are seeing an increase in the price of PBS medications, a $5 hike for general patients and a 80c hike for people on concession cards, a hiking up with the safety net—the amount that you spend on PBS items over the course of a year before you can access them for free—around $145 per year increase in the PBS safety net.

Probably one of the harshest measures within this set of bills is the provision which will punish GPs who try to do the right thing by their community. It is hardly believable. After five years when the previous government put a lot of effort into ensuring that we could increase bulk-billing rates for Australians when they visited their GP, as the shadow health minister told the House today around 83 per cent now are able to access bulk-building services, a fact that seemed to surprise the health minister himself. The objective of these proposals is nothing more than trying to kill bulk billing. They say, 'Don't worry about it, because doctors will be able to continue to bulk-bill.' But the AMA has put a stop to that nonsense today. They have made it quite clear that they are going to be financially penalised if they try to do the right thing by patients within their community. It is bizarre. A doctor tries to do the right thing by patients in their community and the Commonwealth turns around and financially penalises them.

There is another good practical sense why these provisions are going to kill bulk-billing. I find this very amusing. Those opposite like to talk about red tape on small businesses. Well, Deputy Speaker, you have never seen a proposal which is going to heap a greater amount of red tape on GP practices in electorates like your own and in electorates like mine—in electorates around the country—than this proposition for a GP co-payment. After years of GP surgeries removing cash and associated items from their front-of-house, can you imagine them reintroducing it to put in place this government's madcap proposal? Imagine: you go to the GP who used to bulk-bill and the GP says, 'I will bulk-bill you for the Medicare rebate, but can I have $7 from you for the remainder? The government says I have to charge you a $7 co-payment.' You say, 'Here is $10' and the doctor says, 'Here is your $3 change.' It simply will not happen. It is an administrative nightmare and it introduces all sorts of security concerns into medical practices that they simply do not need.

What it means is that when you go to a doctor you are not just going to be hit with a $7 co-payment; you are going to be hit with the lot. Whether your doctor charges roughly $38, which is the Medicare Benefits Schedule listed fee for a basic consultation or whether they charge the AMA rate, which is closer to $72, you are going to be hit for the lot. This proposition is going to do exactly what it is designed to do—that is, kill bulk-billing and put the thin edge of a very thick wedge into the national institution known as Medicare. If these were the only two proposals—the breach of faith on pensions and the changes to Medicare—you would say it were bad enough. But everywhere you look with these propositions you find more black art.

If you look at the proposition for unemployment, you would not want to lose your job. I have heard the Prime Minister, the Minister for Social Services and others say: 'We want to change the culture, moving from welfare to work. We want people to be earning or learning. We want to move from a culture of the handout to the hand up.' What they did not say is that the hand held out to you is not a hand up; it is something that is about to give you a clip around the years. If you are unfortunate enough to lose your job—thousands of people do every year—you have no hope of receiving government support for six months.

I have heard the minister pull out the example of fruit and vegie picking in Tasmania. I do not know about members opposite, but I have actually done fruit and vegie picking in my life. I have done a lot of seasonal work. The thing I know about it is this: it does not go all year. Generally speaking you will have a couple of months here or a couple of weeks there and then you move on to the next joint, or maybe that is all you will be lucky enough to get in that particular year. Think about this: every time you lose a job or you are out of work, you are off benefits for six months. A seasonal worker would want to get a damn good pay rate for those three months that he is in work, because he is off benefits for the next six months. If ever there were a provision which removed the incentive for unemployed people to go out and find some casual or seasonal work, this is it, here in one. If employers have difficulty finding seasonal labour now, I can tell you it is going to go through the roof after these provisions are introduced.

There is so much more that could be said about the black arts that are contained within this budget. There are others here who want to speak on it, but let me say this: these are the wrong decisions for Australia. These are the wrong priorities for Australia. A budget is all about your values, and the government have their values all wrong. They inherited an economy which was in a very good position, one of the strongest positions of any of the countries that we ever like to compare ourselves to. They have sent it backwards by increasing the budget deficit themselves and insisting on moving forward with their mad gold-plated maternity leave scheme. This is the wrong budget, the wrong values and the wrong priorities and should be rejected by Australians.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker Jones, I take this opportunity to congratulate you on your recent ascension to the Speaker's panel. I am thrilled to have the opportunity to speak on the appropriations bill this evening because this is absolutely at the heart of the government's agenda. Indeed, it is at the heart of the distinction between the government and the sorry, sorry record of those opposite. We all understand the fundamentals about bank accounts. We understand that one wants to have money in the bank rather than a very large debt. That applies whether you are a family, a small business in any electorate or, indeed, a government. When the previous government came to power they were in the tremendous situation of having about $50 billion in the bank. What would be the logical human reaction to that? I think it would be to say, 'We should do whatever we need to do to preserve this fantastic economic situation which we have inherited.' That would be the logical thing to do. That would be the right thing to do by the people of Australia. But that is not what happened, of course. That is, unfortunately, not what happened at all.

In six short years that $45 billion to $50 billion of cash in the bank went to almost $200 billion of net debt. That is a debt that not only increased very rapidly in a six years but is increasing at an increasing rate—so much so that, if the government does not act, we are on track for debt of $667 billion within a decade. That introduces a new word to the Australian economic lexicon, which is 'trillion'. That is because $667 billion is two-thirds of $1 trillion. We are a mid-sized economy. We are not the EU or the United States. We are not used to throwing around trillions of dollars, but that is the reality of where we are headed unless we change course—and change course we will, because we need to.

The spending growth under the previous government was projected to be the fastest in the OECD from 2012 to 2018. In order to understand why that was happening you have to look at the underlying motivations of those opposite and contrast them with the government. Those opposite never saw a government program they did not like. They fundamentally believe that government is here to solve every single issue—'If you only get a few politicians and bureaucrats around the table you can fix every problem and really dictate to the nation how things should be.' As we know, that is not how the economy works. That is not how the real world works because government does not create wealth. Wealth is created by the enterprise and expertise of business and individuals. What we saw from the other side in those six sad and sorry years of government was an incapacity to manage right across the board. That was the only consistent characteristic.

We talked this morning about the NBN. Unfortunately, we only had five minutes to address that issue and it was very difficult in that time to cover off on all the incompetence. The NBN was an extraordinary example of the mismanagement of government funds. The former Prime Minister, from your own state of Queensland, Mr Deputy Speaker, was gravely intoning back in 2009 that the government would step forward and build this NBN, which was going to be wonderful and done very quickly. Of course, what we saw by the time of the 2013 election was that even though $6½ billion had been spent on the NBN only three per cent of homes were actually covered. There was a real lack of operational capacity and a real lack of regard for the taxpayers' money.

We saw that in border protection as well. Those opposite like to assert humanitarian superiority on this matter, but that is entirely inappropriate because the previous border protection policies were an absolutely failure from a humanitarian perspective and they were an absolute failure from an economic perspective, with a blow-out of some $11 billion for border protection—or, indeed, the lack thereof. With the borders once again under control under the leadership of the minister for immigration, we now see savings of $2½ billion through the closure of redundant detention centres. We also see a humanitarian benefit that those opposite do not like to dwell on, and that is the introduction of about 4,000 additional places under the special humanitarian visa program for people who perhaps did not comply with the strict letter of the UN convention but nonetheless are in desperate situations. Those people were not being allowed in in any significant numbers under the previous government because the illegal boat arrivals were overwhelming the system. That has been fixed, with a fantastic economic and humanitarian benefit.

It is not a good idea, when seeking to manage funds, to send cheques to stimulate the Australian economy to people who (a) do not live in Australia or (b) are in fact dead. That is not going to stimulate the Australian economy, but the previous government did that and that contributed to its appalling record. There were no budget surpluses under the previous government after 1989—a very long time ago. It was a different era then, some 25 years ago: 1989, 1990, 1991, 1992, 1993, 1994, 1995 and 1996, then you go into more recent memory from 2007 to 2013, but there were no surpluses at any stage during that entire period. If it happened once or twice you might say it was a difficult time, perhaps it was an aberration, but for 12 or 13 years in a row? That is just a way of life. That was the way of life under the previous government.

Turning to the solution, which these appropriation bills embody, we will be going from a deficit of $50 billion in financial year 2014 right down to $3 billion in financial year 2018. That is a huge reduction in the operating result of the Commonwealth, saving $300 billion in debt over that period. That is a truly dramatic saving. On top of that, of course, there is the saving on the interest which you would otherwise have paid on the $300 billion. Right now, with net debt of around $200 billion, we are paying interest of a billion dollars a month and we are borrowing money to pay that interest. It is really interesting to reflect on what we get for our billion dollars a month. What we get for that billion dollars is the capacity to not go into any further debt. We basically get to stand still. We do not pay off any principal for that billion dollars, we simply pay the interest which is accumulating on a daily basis. We are basically going out to the markets, borrowing more than $30 million every day and at the end of the day saying, 'We didn't increase the principal on our debt'—but nor did we paid it off if we are only paying that interest bill. So we face a very difficult situation.

There are structural issues that need to be addressed in the budget. Good governments tackle problems. Just as, in life, you have to be honest, in government you have to confront issues and you have to address them in a serious and sober fashion. What you cannot do is just kick them down the road to another day. What you cannot do is sleepwalk into the future, pretending everything is okay, when it is not. We are not going to do that. We are not going to sleepwalk into the future. We are going to address the economic mess that the previous government so shamefully left our nation in.

It is important to talk a little bit about some of the specific measures that are contained in these appropriation bills, because one thing I have learned in the brief time that I have been in this parliament is that misinformation is quite common in this whole area of politics. Lots of misinformation has been promulgated by those opposite in relation to the budget, so it important to reflect on some of the reality.

I turn to hospital funding. When you manage the budget in a sensible way—when you make the difficult structural decisions—you find that it is possible to make some investment in important areas, where it is appropriate to do so. Hospital funding is going up by 40 per cent in the next four years. And, indeed, thereafter it will increase by CPI each year. The notion that hospital funding is being cut is absurd, because every single year we will be setting a record. Hospital funding will go up by nine per cent, then nine per cent, then nine per cent and then six per cent, and then by CPI every year after that. So ever year will be a record year when it comes to hospital funding.

Funding for schools is similar—34 per cent in four years. Indeed, as the member for Mitchell well knows, we will be putting an additional $1.2 billion into schools that Labor had so cruelly taken out of the school budget. School funding will also increase by CPI every year. So it will be a record every year. Within the envelope of sensible economic management it is possible to provide for these important areas.

Pensions will increase every single year. There will be important structural reform of universities. We should have a university system that competes with the world. We should not sit idly by while nations around the world grow their university sectors more effectively than we do. And that is why the initiatives contained in the Minister for Education's plans are so important; they will enable universities to stand on their own two feet and compete.

To address those myths that, unfortunately, get promulgated from time to time it is important to note that no student, under these reforms, is required to pay up front. No student is required to pay back their HELP debt until they earn at least $50,000 a year. And the total contribution of students to their education relative to the contribution of taxpayers will be about 50 per cent. That sounds fair to me. Obviously, many of us in this chamber derived a big benefit from studying at university. It is appropriate that we make a contribution side by side with the taxpayer because there is a personal benefit in addition to a public one.

And what about infrastructure? Infrastructure is so critical because it is the economic gift that keeps on giving. If you build a road—you take that hard decision and go through the very complex planning and financial processes—at the end of the day you have something that will be there, not for a couple of days or a few weeks, but for decades. The productivity benefits are delivered on day 1, day 100, day 1,000 and day 10,000. That is so important in Sydney—in particular in my electorate, where WestConnex will provide a fantastic benefit. WestConnex will provide 20 to 25 minutes quicker travelling time from Beverly Hills to the city.

I know, Mr Deputy Speaker Jones, there are probably limited traffic issues in Townsville, where you are from, but certainly in Sydney there are very substantial traffic issues and 25 minutes less in travelling time from Beverly Hills to the city is a massive win for the people of my electorate. That has been made possible by both a $1.5 billion cash injection and a $2 billion concessional loan from the Commonwealth—a fantastic initiative.

If those opposite really care about the standards of living and the cost of living of ordinary Australian families, there is something very, very simple that they can do. It is something we have been talking about for a long time now. It is a simple measure. All that is required is the Leader of the Opposition to get in touch with his senators, perhaps gather them in a room and it just say to them, 'It's time to stop getting in the way of the removal of the carbon tax.' The removal of the carbon tax will save the average family $550 per year, and that is a very substantial saving. It will provide broader economic benefits, because it means that the small businesses and broader businesses that are currently shackled by that tax will be unshackled and much more free to compete. I am delighted to speak in favour of these appropriation bills and I commend them to the parliament.

Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

This government's first budget stands perhaps as the single worst budget this country has ever seen. That is a fairly large claim but one I think this budget lives up to. Not only is built upon broken promises and untruths pedalled to the Australian people before the election last year; it is deeply unfair and indeed cruel, pushing the worst of the Treasurer's cuts and tax increases on to those that can least afford it. This so-called 'spreading the burden' is a myth, all to fix a so-called budget emergency—an emergency so severe, so detrimental to this country's future, that the first significant act of the Abbott government was to double the size of the deficit with a spending increase of $68 billion.

This government's barefaced duplicity with the Australian people would be a source of great hilarity if the consequences of its actions were not so dire. After coming into office, the Abbott government has borrowed $68 billion to fund its own decisions and new measures, such as the spending measures associated with the repeal of the carbon tax, which will cost $2.8 billion over four years; funding land transport infrastructure programs, costing $5.6 billion over four years; implementing its cruel border protection policies to the tune of $2.1 billion over four years; and paying an $8.8 billion grant to the Reserve Bank of Australia. This is all new Abbott government spending. It is not Labor spending; it is Liberal spending—fact-checked and verified.

But still they persist with the concoction of a budget emergency, a crisis on our fiscal horizon that will shackle our children for untold generations—and why? Because this concocted budget crisis is being used as a smokescreen to hide the hideous truth of this budget. This budget is not simply about saving money; it is a budget which seeks to fundamentally and permanently change the social structure and programs which keeps this country fair and maintain the living standards of people on low and middle incomes. It is the legislation manifesto of the wish list—or, more accurately, the hit list—drawn up by the faceless men of the Institute of Public Affairs, who have, Medicare, pensions, public education, affordable universities, public broadcasters, government-owned infrastructure, Public Service jobs, government agencies and any meaningful action on climate change all firmly in their sights.

The Prime Minister may not have put the policies of the faceless men of the IPA to the people of the electorate, but he is certainly implementing them now. There are so many injustices and economic fallacies laid out in the Treasurer's first budget that it can be hard to know where to begin. But my electorate is home to two of the biggest university campuses in Victoria, indeed Australia—Monash University at Clayton, and Deakin University in Burwood—so I will begin there.

Despite promising before the election that the coalition had 'no plan to increase university fees' and then in the November last year repeating the pledge: 'We're not going to raise fees. I'm not even considering it, because we promised that we wouldn't. We repeat: we promised that we wouldn't.' This budget has nevertheless pressed ahead with item 11 of the IPA's faceless men hit list—deregulation of university fees. But, of course, why stop there, when at the same time the government can cut its contribution to each student course by 20 per cent, which is exactly what it has done. If young people were not already daunted by the prospect of embarking on a degree which has suddenly become more expensive, despite not offering any more qualifications or outcomes, the government intends on increasing the rate of interest on all HECS and HELP loans, dramatically increasing the cost of a university degree. Let us be clear on this interest-rate increase. Every person who has a HECS or HELP debt, as of 2016, will pay this higher rate of interest. So if you are studying now, it could impact you. Anyone who plans to study, is currently studying or has recently finished studying will pay this increased interest rate of up to six per cent per annum.

Even those who attain their degrees, whose degrees have not changed since graduation and whose degrees offer no extra qualifications today than they did the day they graduated, will pay more for education they have already received. There are people out there who have been looking at the HECS or HELP deductions in their pay packets and are planning and budgeting for the day when these loans are paid and gone. The Treasurer has shifted the goal posts of all these people. Whilst you say it is a debt and you can pay it off, it is a debt. You are carrying that debt. You cannot progress with many of the things you would like to do when you start work—buy a home, maybe even go overseas or buy a car. You are straddled with this debt, and it is growing. Again, the goalposts have been shifted. Many of them will now have families and are already facing increased costs of Medicare, reduced family-assistance payments and cuts to child care.

Consider also the recently graduated student struggling to find work, and facing ballooning debts far beyond what they had originally bargained for and which would have been paid back sooner. Surely all graduates and current students must be asking themselves: how is it fair that a contract I entered into when I began my studies has now been changed? And what of students of tomorrow? They will be paying 80 per cent of the cost of their degrees. These are degrees which the Vice-Chancellor of Melbourne University, Professor Glyn Davis, has said will cost students up to 61 per cent more at Melbourne University as a result of the government cuts—not of the deregulation but of the cuts. There is an increased fee of up to 40 per cent for humanitarian and social sciences.

The government excuses its inequities with the claim that only one per cent of all university graduates are unemployed, and graduates earn 75 per cent more than people who do not go to university. Both of these claims are false, and again were repeated by the Minister for Education during question time today. The unemployment rate of university graduates is 3.3 per cent, and a range of studies into the lifetime earnings of university graduates found that graduates are more likely to earn only 30 per cent more—not 75 per cent—than those who do not attend university. This is an average figure and varies widely for many degrees.

A report by the Centre for Labour Market Research, CLMR, found that while males can expect an average rate of return of 15 per cent per year for education it is 12 per cent for women—again, there is the differential, which is a bit sad, seeing as you have the same degree—in some degrees but, and this stat really impressed me, with Arts the annual rate of return is only three per cent for men and nine per cent for women. It is not 75 per cent. This is one differential where women are actually going to earn more than men from their degrees. It is the only time it happens. The report's author, Professor Phil Lewis, said that for the average student the rate of return is quite good. But there is a whole crowd of people where that is not the case. Alarmingly, he said that for about one in every five students their degree is not financially worthwhile at the moment. So they are paying this huge amount that is not giving them the return that everyone in the government says it will.

The government's changes to university fees will possibly bring that figure to one in three—or worse. So that is one in three students, not getting a benefit, who are the spending a small fortune on their education. Labor made it easier to access university education, increasing student numbers by 750,000 and boosting revenue by 10 per cent per student. The Abbott Liberal government—at the behest of the faceless men of the IPA—is hell-bent on a path that will radically change our higher-education system and entrench a two-tiered system similar to the United States.

I have two very large universities in my electorate. I can envisage going back to pre-Dawkins days and seeing one as a very intensive university of research and one as a teaching centre. Some people may say that is a good thing—and I am getting looks from across the chamber that it may be a good thing—but that is not a university education. A university education is about embracing all aspects of going to university: research, learning and progressing. Maybe even going to a tute, where somebody might actually engage with you on something, which I am not sure many university students do anymore—or are allowed to because the class sizes are already impinging on universities. This is going to make that experience of a university degree that much worse.

And why do we want to have a two-tiered system? Why do we actually want to entrench this system again—going back to the days where my mother did not get to go to university and my father-in-law had to sit his leaving exam twice to get the results that would give him the full scholarship to go to university? I do not want to see those days entrenched again. I do not want to be here in generations hence hearing about others being the first generation of university graduates in their families because people choose not to go to university because it will be far too expensive and they will be saddled with too much debt. It will be a system where access to education will depend on your bank balance, and the low-income students will struggle to find an affordable degree in the field they want to pursue. It will be a system where people must choose their course based solely on the financial return they hope to achieve, leaving low-paid and in demand professions such as social work and teaching in long-term and systematic decline. This is a situation the Labor Party can never support. Australia's strength as a future economy depends on achieving world-class standards of education, encouraging innovation and ensuring that all our citizens are able to access the transformative opportunities that affordable education provides.

Where will we be left in a future global economy where cutting edge research and innovation has become the benchmark of economies like ours?    This brings us to item 21 on the hit list of our faceless friends at the IPA, which seeks to reduce government investment in research. The budget cuts $114 million out of CSIRO, which will see whole research programs slashed, departments removed and 500 researchers put out of their jobs. I have no doubt many of these jobs will be lost from the CSIRO facility in Clayton in my electorate—again, one of the largest facilities that CSIRO operates in Australia. These cuts will force CSIRO to cut funding for research into geothermal energy, marine biodiversity, liquid fuels and radio astronomy. It was the radio astronomy section of CSIRO that discovered wi-fi, a patent which has earned CSIRO well over $230 million and counting and makes my children very happy. It makes my children very unhappy when the wi-fi goes down. Let us understand the benefit to all of our communities of wi-fi. And this is only one of the decreased departments. These are cuts to profitable government agencies that develop sustainable technologies for all Australians. CSIRO is not only our peak scientific body but also a flagship for Australian innovation and development. A properly funded CSIRO is a critically important tool in making sure that we are thoroughly investigating ways to reduce carbon pollution and mitigate the impacts of climate change.

Australia is one of only a handful of OECD countries to maintain a AAA credit rating. Yet to maintain the fiction of a budget emergency, the government will sacrifice funding to the CSIRO—funding which could lead to greater revenue. And in this day and age of decline in manufacturing, it is CSIRO that will lead the charge to the jobs of tomorrow—jobs that are being lost in my electorate today. These cuts to CSIRO, with further cuts to research and development, are not only detrimental for the pursuit of science they are also detractors to economic growth and will inhibit private investment as much as they do government investment.

In its response to the budget, NAB expressed its view about the cuts to CSIRO. It said it would 'detract from the agency's ability to assist with industry-enhancing innovation'. And Jennifer Westacott, CEO of the Business Council of Australia, said:

Growing the economy requires Australia to adopt a more global mindset and an unprecedented focus on innovation and knowledge infrastructure.

Some of the cuts to research and development and industry assistance programs are not consistent with this imperative, nor is the constant chopping and changing in the R&D funding arrangements which by their nature need to be long term and predictable.

That is the problem: there is no predictability.

It is clear that this budget, and, indeed, this government's whole approach to research investment, is simply not capable of delivering Australia the dividends we need from research investment. Australian science, innovation and research will go backwards and we will fall behind competing countries, placing our industries at a disadvantage and robbing us of future opportunities. The government will still argue they are committed to research, citing the $20 billion research endowment fund built from taxes of the sick. Can there be a more unethical way to increase funding to medical research than taxing the sick? I would think that, based on the Australian public's reaction to this atrocious budget, the government already has the answer to the question.

This is a budget that breaks every promise the Prime Minister made to the Australian people, a budget with so many appalling injustices and inequalities there is simply not enough time allotted to cover them all, but that does not mean those cuts and inequities have gone unnoticed. I will still be speaking about the terrible cuts to foreign aid, the cuts to community services and emergency system funds, and other hidden cruelties in this budget at other opportunities in this place.

This is a budget that cuts $80 billion from health and education. It makes universities more expensive and less accessible. It destroys the very foundation of our universal healthcare system and increases the cost of living for very low and middle income earners in the country. And it is not because the government really believes they have a budget emergency. It is because they believe that right now they can change the fundamental social structure of life in Australia and tick most of the boxes of the hit list of the faceless men of the IPA.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

It is difficult to know where to start after that contribution from the member for Chisholm, but I would say there are a great deal of myths being perpetuated about the first Abbott budget, which has been delivered by the Treasurer in the past few weeks. It is a good day for me to be able to stand up and say that this is a tough budget. It is a budget where there are not a lot of clear winners, and that is because it is in the context of a budget where we have debt projected to reach $667 billion, we are paying $1 billion in interest every month and we had a profligate government over the last six years that delivered budget after budget without regard for the consequences for the Australian taxpayer and, indeed, the bottom line.

That is well seen by the contributions from members opposite, and the member for Chisholm is no exception. They say we are cutting $80 billion out of health and $80 billion out of education, all this money going up in smoke. Unlike some of my colleagues, I do not criticise any of the state premiers for rushing to sign agreements with the last Labor government. Frankly, when you had a bunch of people in the central government in Canberra willing to hand out money so willy-nilly—'Would you like $20 billion?' 'No.' 'Well, would you take $30?' 'No no.' 'Would you take $40 billion?' They promised money beyond the forward estimates that they had no intention of ever funding, no method of funding and no ability to pay except to borrow it—endlessly borrow it. So of course any premier in this country sat down with the last Labor government and said, 'Can we do a deal?' Absolutely they could do a deal. Whatever the price was, the Labor government in Canberra doubled it.

It was unsustainable, so it is no surprise that in this budget we had to make some tough decisions to rein in that expenditure beyond the forward estimates—that money that can never be funded without massive tax increases and complete societal change. It is simply unsustainable to promise money that you have no intention of ever funding or ever being able to deliver. And we saw that in so many ways.

Instead we see a budget here which is making important structural reforms, and structural reforms in particular are very important because we have a structural deficit. I know members opposite struggle with this problem as well, but structural deficit problems need structural solutions. We see so many nations around the world today burdened under structural deficit problems that they cannot fix. If you do not make the decisions early enough and structurally, you will have no chance of paying back your debt or bringing your budget back into line. Unlike the previous government, which promised surplus after surplus—the ridiculous scenario of the Treasurer, Wayne Swan, promising a surplus every single year, saying he had achieved a surplus, having David Bradbury, the member for Lindsay, issuing statements to his electorate as the Assistant Treasurer telling them how great the surplus was—we are not promising a surplus in this budget. We are soberly telling the Australian people that, with all of our best endeavours, simply put, we can only reduce debt by $300 billion over the forward estimates. That is just a start on the debt and deficit legacy left to us by the Labor Party.

It is only the beginning, and it is oh, so important that we do so. It is a great credit to Tony Abbott and to the Treasurer that they have delivered a budget in which we can continue to see important economic infrastructure delivered. In fact, we have $50 billion of infrastructure still going ahead in the context of a very difficult budgetary environment. That decision has been taken by the government because it is that key economic infrastructure that will enable our economy and society to continue to progress, even in the difficult budgetary times we have seen because of a profligate government over six years.

The member for Grayndler, who was the infrastructure minister, did not deliver a cent for Sydney's infrastructure—nothing at all—but hundreds of millions of dollars for studies that had to be handed back. The member for Banks might remember that: the state government had to hand it back because the last Labor state government was so incompetent. The member for Grayndler talked a big game in infrastructure but in his home town—in the biggest economy in the nation and, as some would argue, the most important city—there was nothing. It is good to see a government that is providing the infrastructure needs for our biggest economy. We are seeing a Western Sydney infrastructure plan, including the great decision on Badgerys Creek, which gives certainty to the community and to our city and plans for our future needs; upgrades to the Northern and Bringelly Roads; a new motorway from the M7 to the Northern Road; a $200 million Local Roads package. These are not promises; construction starts in 2015. Four thousand construction jobs are to commence, and the federal contribution for that is $2.9 billion. The WestConnex program, which the member for Banks so eloquently spoke about, is a 33-kilometre motorway linking western and south-western Sydney with the city. There are projects at Kingsford Smith Airport and the port precincts; another tackles the M5; 10,000 jobs are to be supported.

I want to record my thanks to the state Liberal government: Liberal governments provide the necessary infrastructure—Labor only talks about the problems and promises to do something about it. That is what they did for over 10 years in New South Wales. I want to thank the state Liberal government in particular for the $10 billion rail line currently under construction in my electorate. It is wonderful to see cranes in the air and tunnel boring machines about to be put into the ground. It will be the biggest rail tunnel in the southern hemisphere. I want to record for this House for the first time in recent history that it is on time and on budget. People in New South Wales lost their faith in government to deliver projects on time and under budget. We now have a state government that is taking care of projects—with proper funding, management and delivery. When you are talking about tens of billions of dollars of infrastructure, you are talking about a serious project. For it to be on time and on budget is a serious tick to the management of the New South Wales government. We are going to see similar management from the federal level for these massive infrastructure projects for roads in the Western Sydney basin. The WestConnex, the NorthConnex, the northern Sydney freight corridor—these are vital infrastructure arterials from our major city and major economy that will deliver great benefits. Finally we have a federal government committed to real improvement in the economic infrastructure in our biggest city.

It is not just infrastructure that the government is delivering in the budget. There are many other things. I want to commend the government for its approach in managing our unemployment problems and our structural deficit problems in the welfare area. There are many critics of some of the changes we are proposing. I am not one of them; I am one of its supporters, because it is so vital that we do something to tackle the scourge of youth unemployment. The Labor Party has ruled out any industrial relations changes—it is unwilling to be a modern labour party—by not realising that the role of unions and collective bargaining is to work with the employer, not against the employer. We have a situation in Australia now where so many young people cannot get a job or access casual work because of the stiff industrial relations system that we have, because of the inflexibility of unions and the unreasonableness of so many decisions which prevent employers who really want to take on young people. Small businesses in my electorate and throughout Western Sydney would love to have extra workers. They are already working too hard themselves, but they do not have a flexible industrial relations system to help them.

We saw the member for Fraser, the shadow assistant Treasurer, underscore his failure in understanding youth unemployment when he asked: what is a young person in Tasmania supposed to do with the government's changes to the dole?

He said the factors that had caused so much youth unemployment in Tasmania—perhaps without realising the irony of what he was saying—were structural: the decline of the manufacturing and forestry sector in Tasmania led to the situation. He then lamented the federal government's attempts to do something about it. The member for Fraser was exactly right: the problem was structural. It was a state government structural problem—a Labor-Greens alliance which deliberately drove business from the state of Tasmania. Everyone here knows a young Tasmanian who had to flee the island to seek work on the mainland, either in Melbourne or one of our major cities, because of the structural problems created by an incompetent and deliberately antibusiness government in Tasmania. So it is particularly galling to hear the member for Fraser attack the federal government for saying we want to tackle youth unemployment, saying, 'What about places like Tasmania?' When you pursue policies that are deliberately designed to create high unemployment—to chase business from your state, to chase out all of your manufacturing and other sectors like forestry—then of course you are going to end up with unemployment.

The answer is not to keep people on government payments permanently. The answer is to have a pro-business, pro-economic growth government that understands the budget. We welcome the new government in Tasmania which is already taking a pro-business, pro-industry approach that will allow people to go back and get jobs in Tasmania. They have policies that will promote growth.

The Labor Party has been in denial about the state of the budget. They are in denial of the problem they caused. I was here in the chamber last week and it was particularly interesting to see the new member for Scullin come in to the chamber and say:

Of course, there is no fire, no emergency.

I am referring to the Prime Minister's metaphor of the fire being started by the Australian Labor Party and us being the Fire Brigade.

Opposition Member:

An opposition member interjecting—

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

Perhaps the member opposite also wants to suggest there is no fire. The member for Scullin had a case of poor timing because that was just before—literally just before—the Parliamentary Budget Office announced that if Australia's spending continued at the same rate, the nation's debt forecast would increase at the fastest rate in the OECD. We have heard the criticism drop off since that statement, but it is a sobering statement and one we all ought to reflect on.

How are we supposed to tackle the problems of debt and deficit left by the previous government if the Australian Labor Party and their voters in the Senate refuse to acknowledge we have a problem? The first stage of addressing any problem or crisis is to acknowledge we have a problem. I would say to members opposite: stop being debt deniers and get with the program. You helped create the problem; you need to help find the solutions. This government is proposing solutions to the debt and deficit crisis. Even with the measures we are taking, only $300 billion of your debt will be wiped out over the forward estimates—only $300 million. That is less than half of the projected net debt.

It is a very serious situation. It is a debt crisis. We are not a big nation and we are not an economy with a huge GDP that can afford to sustain large levels of debt. It is not enough to point to Europe, the sick countries in the world and the United States—they would kill to be in our position. They do not know how to solve their debt problems and return to the level we are at. They look at us with envy. It is not appropriate for us to chase them at the fastest rate of debt growth of anywhere in the world, especially in the current world economic climate. Take the member for Chisholm's previous points about us. She lamented us not being competitive. At the moment we are certainly not competitive with countries in Asia which have low taxation rates and economies that are very competitive—countries that are structurally geared towards encouraging investment, entrepreneurship and development.

Opposition members interjecting—

It is galling to hear members opposite interjecting on this point. You could go to Singapore where the corporate tax rate is capped at 17 per cent; no wonder business wants to go there from Australia. People are now making investments all around the world and looking at Australia, saying, 'The top marginal tax rate is almost 50c in the dollar. Why would I invest in Australia?' It is unacceptably high all through the income tax scales, all the way down. That is because we have to pay for all the nonsense that Labor came up with, whether it be the pink batts scheme or the school hall scheme. I had a school in my electorate, the member opposite would be interested to know, where there were only 100 pupils. They already had a library but your last government built them a second library. The second library, you might be interested to know, member for Banks, did not have air conditioning and did not have any internet connections. The first library was better than the second library. That poor little school got two libraries for 100 pupils. That was the Labor government. That is the Labor way: spend money willy-nilly because it is not yours and you never have to pay it back.

In this budget we have taken tough decisions. The budget is tough because it needs to be. It is not tough because we want it to be but because we are in the context of $667 billion of projected net debt. We have one of the fastest growing net debts in the OECD. Without structural reform we will go further into debt and be paying off this debt for a long time to come, off the prosperity of future generations of Australians. That is a position I am not prepared to accept. I fully support the budget measures. It is difficult and tough, and I understand that many people, not only from my electorate but all around Western Sydney and Sydney in general, will find this a tough budget. But they will acknowledge that this is a necessary budget when we pay back $300 billion of Labor's debt and we have smaller interest bills to pay and more money for the federal government to do good work.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in relation to the appropriations bills. The Abbott government's first budget is a budget of cuts and broken promises. The Abbott government would do well to remember what Arthur Miller said: 'Betrayal is the only truth that sticks.' What we have seen in this budget is betrayal of Australians and betrayal of the Australian way of life, not to mention attacks on pillars of our society such as Medicare and access to education.

I have spoken about the Abbott government's attacks on universal health care in this country on a number of occasions. The Liberals have always opposed Medicare, and in this year's budget they have shown their true colours. Tony Abbott promised before the last election that there would be no cuts to health. He has not just broken that promise he has smashed it. The government's first budget includes an $80 billion cut to Australian public hospitals and education. It is right there in the budget papers. The Prime Minister has broken his promise that there would be no new taxes with a $7 GP tax. That will cost Australian households an extra $3.5 billion in out-of-pocket expenses and it is something that I am very concerned about. In the Griffith by-election—it feels like a long time ago, now—I spoke out against the GP tax. My opponent was for it. Of course he tried to retreat once he realised how unpopular was his support for the GP tax. Everyone from the foreign minister to the Prime Minister swanned into Brisbane just to claim that there were no plans for that GP tax. 'No plans!', they said. 'Scaremongering!', they said. Yet what have we seen? We have found out that those were just weasel words calculated to make people think, before a by-election and a Senate election in Western Australia, that a GP tax would not happen. But they could not hide it forever, because, here we are, down the track, with a budget that, of course, has a GP tax.

The worst thing about the GP tax is that it is not actually about savings; it is about philosophy. It is part of the government's plan to end universal health care. It is a lazy policy that will deter Australians from seeking early care and treatment. It is going to lead to greater complications and sickness when people do not get diagnosed early because they do not go to a GP. The purpose of the GP tax is to dissuade people from going to the GP by sending a so-called price signal. The Abbott government is calling Australians hypochondriacs. People are rightly angry. We know from international experience that people will not seek preventative care for follow-up treatment when there is this so-called price signal in place. We know that people will not fill a second script, because they will not be able to afford it. That is exactly what this measure will do. The only people advocating for this are the Abbott government and the Commission of Audit. Why does Tony Abbott think that he knows best when it comes to Australians' health care? The AMA, the college of emergency physicians, the Doctors Reform Society, the Public Health Association, the College of General Practitioners, the Consumer Health Forum, the Australian Healthcare and Hospitals Association and countless health academics are against this tax, but the government is doing it anyway. The government also wants to get state governments to have hospital taxes. If you go to an emergency department they are expected to collect taxes from you as well. That is not to mention making medicines more expensive for every Australian by adding an additional $1.26 billion burden to household budgets across this country. In addressing these appropriation bills it is obviously important to talk about attacks on Medicare, because they are almost the worst feature of this budget, if you had to choose one.

There are a number of other cuts that I want to speak about this evening. First are the cuts to public broadcasting and the arts. Of all the problems with this budget and of all the cuts and attacks on middle-class Australia and on the Australian way of life, it might be that the cuts to the arts and public broadcasting are under the radar in a comparative sense. It is important to recognise that this budget cuts $43½ million from so-called efficiency savings from the ABC and SBS. That is $8 million from SBS and $33½ million from the ABC. The government is abolishing the Australia Network. It is a $196.8 million cut. And that is not the end of it. We are expecting more cuts to both the ABC and SBS. It is spelt out in the budget papers, clear and simple. It says that this is an adjusted down payment on the ABC and SBS efficiency study. This is the study that Malcolm Turnbull commissioned in January, even though in September, before the election, the then opposition leader, now Prime Minister, had claimed there would not be any cuts to the ABC and SBS. The ABC Managing Director, Mark Scott, has said that the funding cuts will regrettably and invariably result in redundancies and a reduction in services. It is a shame that the government said one thing to get elected and is now saying something else, now that it holds power in this country.

There are other cuts to arts and culture. Dr John Gardener-Garden of the Parliamentary Library has written a very useful summary about the budget's effect on arts and culture. He says the budget includes 'significant funding reductions to arts, screen and cultural bodies'. There are cuts to the arts of $87.1 million over four years; $33.8 million of cuts to come from the arts programs that the Attorney-General's Department administers; and $28.2 million in cuts to the Australia Council. As Dr Gardener-Garden observes, that cut will hit individual artists and smaller arts organisations the hardest, because these are the people and groups who usually are not in three-year or one-year funding deals.

In addition—and it is surprising, I think, that in this country right now there is going to be a cut to Screen Australia—there is $25.1 million in cuts to Screen Australia, making it harder for that body to support home-grown film and TV. Funding is going to cease for the Australian Interactive Games Fund. This is typical of the Abbott government's failure when it comes to industry policy and innovation. As Screen Australia says, the purpose of the Interactive Games Fund is to help build a sustainable base for companies to grow in a global market. Screen Australia says that the fund:

… recognises the international potential and originality of our local interactive entertainment by assisting Australian companies during a period of increased pressure following major shifts in the market.

The objectives of the Australian Interactive Games Fund are to:

•   promote industry growth and sustainability

•   support the development of new intellectual property

•   encourage skills retention and renewal

•   maximise the creative opportunities of fast broadband.

Screen Australia explains the importance of interactive entertainment. Games are big business. Screen Australia goes on to say:

Like going to the cinema and watching television, interactive entertainment is a mainstream activity in Australia. Due to cultural and technological shifts in the industry over the last few years, there is now a wider variety of games that are more accessible to more people.

A recent study commissioned by the Interactive Games and Entertainment Association … found that 92 per cent of Australian households have a device for playing computer games, up from 88 per cent in late 2008.

The report shows that the demographic profile of people playing interactive games is moving closer to that of the general population, with 75 per cent aged 18 years and over. In fact, the average age has risen from 30 to 32 years old since 2008. … women now make up 47 per cent of the total gaming population, up from 46 per cent over the same period. It goes on to state that the average adult who plays games has now been playing them for 12 years, with 26 per cent having played for more than 20 years.

As a some time gamer myself, not averse to the odd bit of World of Warcraft, I can identify with those demographic shifts in the gaming industry. Screen Australia goes on to say:

Beyond levels of engagement there is also potential for real economic growth. The global interactive entertainment industry is forecast to be the fastest growing entertainment and media sector, expanding from $56.8 billion in revenue in 2011 to $80.3 billion in 2016 …

Those are the forecasts. Further, it goes on to say:

In Australia, the market is expected to grow at a compound annual growth rate of 7.4 per cent to reach $2.2 billion in 2016. This is in large part due to the exponential growth of online distribution of games… The physical retail console and PC market is expected to recover slightly over the next five years after a recent decline, expanding globally at a growth rate of 1.7 per cent. The growth will be driven by the release of the next generation of console hardware.

I have gone into some detail to recite a length what Screen Australia has said in an attempt to outline for the parliament the importance of the games industry. It is not a fledgeling industry worldwide anymore. It is a massive industry that involves millions of people, and here in Australia we have seen this demographic shift when more people are gaming. So you would think that in a well-off country with people who have got the capacity to have gaming consoles—given that statistic of over 90 per cent of people having gaming consoles—that we would want to have a home-grown games industry strengthened. That is exactly why the Interactive Games Fund was established. The reason is that there had been growth in consumer demand. Screen Australia said:

… while this growth in consumer demand is impressive, it does not necessarily translate into benefits for local games developers.

They were saying that we actually needed to harness that growth and make sure that jobs and investment were not going overseas. They said that there are a number of threats confronting the Australian industry and that they can be broadly grouped into two interrelated areas: falling foreign investment and talent being driven offshore.

The Interactive Games Fund money was to support industry to combat those challenges. In my family there are young gamers who are extremely skilled, people who have got degrees in technology. One of them is working in Jakarta because that is where the industry is really firing at the moment. Yet here in Australia where we have got the capacity to harness that growth and profit from it, the Abbott government has decided to cut the Interactive Games Fund money. There are no plans for jobs and no plans for growth. This cut just shows how backward-looking this government is and how twisted its priorities are. And that is not the only arts funding cut. There is a range of other arts funding cuts as well.

As it is Reconciliation Week until tomorrow, it is timely to comment on the cuts to Indigenous affairs in this budget. Under the government's first budget there is an incredible $549.4 million cut, over half a billion dollars out of Indigenous programs, cuts which have been criticised as threatening the Closing the Gap efforts. Of course that is gravely concerning.

In the arts space, I have spoken before about the importance of heritage languages in our community. That includes Indigenous languages, part of the oldest continuous culture in the world. So in the arts space it is particularly concerning to see the cut to heritage languages in relation to the Indigenous language program. As I have quoted before, the New South Wales government's program Racism No Way describes the significance of heritage languages, saying:

Language is intrinsic to the expression of culture. As a means of communicating values, beliefs and customs, it has an important social function and fosters feelings of group identity and solidarity. It is the means by which culture and its traditions and shared values may be conveyed and preserved.

That is part of why language is so important. We know that there was a very recent parliamentary inquiry in 2012 calling on the then government to respond to an urgent need to support Indigenous languages. Labor responded. Labor heeded that call. Yet the Abbott government is cutting funding for Indigenous languages by 9½ million dollars. The Get Reading program is suffering cuts as well and the government also seems to think that they are going to make savings by moving to a shared services model, as Dr Gardiner-Garden has noted in relation to some of the arts institutions. Steven Schwartz, the Executive Director of the Council for Humanities, Arts and Social Sciences has been reported as saying that a similar idea was tried in Queensland—my home state—'to save money and see those savings redirected [but that] neither of those two things occurred'. All of these cuts are in stark contrast to Labor's record of investing around $200 million in the arts through our national cultural policy, Creative Australia.

Not content with taking the axe to health, the arts, public broadcasting and Indigenous affairs, this government is also failing our nation's future when it comes to science. Everyone already knew that the Abbott government does not care about science. We all know what the Abbott government thinks of the science of climate change. There is not even a science minister in this government. In this budget we see more evidence of the disregard for science. Nearly $150 million has been cut from the CSIRO, the Australian Nuclear Science and Technology Organisation and the Australian Institute of Marine Science.

Last week I visited a local school, the Cannon Hill Anglican College. The principal showed me their new science block where students had access to facilities and equipment of a very high standard. She was really proud of those facilities and of her students' achievements and, like Principal Bell, I believe that science needs to be front and centre in our nation in the interests of our future.

In the short time I have left to me I want to mention one other cut that I think is very important. $120.1 million has been cut from the Australian Securities and Investments Commission, the organisation that is supposed to ensure that our financial markets are fair and transparent and provide information to consumers and investors alike. It is a cut that has raised eyebrows.

It is worth quoting ABC business reporter Pat McGrath's interview with Professor Ian Ramsay, who heads Melbourne University's Centre for Corporate Law and Securities Regulation. He is surprised by the cut. He said to Pat McGrath:

There is absolutely no doubt that this is very serious and I'm sure will significantly impact upon the broad range of responsibilities that ASIC is called upon to exercise.

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

Order! The debate is interrupted in accordance with standing order 192. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The member will have leave to continue speaking when the debate is resumed on a future day.