Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for McMahon proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The adverse impact of the budget on the Australian economy and on confidence.

I call upon those honourable members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

For the last month the Australian people have had the spectacle of a government in denial. No budget in living memory has been rejected so comprehensively by the Australian people as this budget has been. Yet the government simply does not get it.

The Treasurer, defensively and plaintively gave a speech last week calling for understanding and explaining to the Australian people that, really, the budget is very fair. The Treasurer seems pathologically incapable of understanding the Australian people's anger over this budget. But the truth is that the Australian people understand this budget better than the Treasurer does. They understand that it is fundamentally an unfair document. They understand that it is fundamentally a document based on deceit—the deceit of the Liberal and National parties at the last election.

The Treasurer arrogantly lectures people in a way that makes Peter Costello look humble. He arrogantly lectures people about the need for cuts and the difference between 'lifters' and 'leaners'. This Treasurer has been telling people that the age of entitlement is over and saying that he is astounded at the reaction of people who do not approve of Australia's patients being forced to pay $7 to go to the doctor if they are sick. He is astounded by the reaction, he says.

Yet at the same time we have seen that he does not even understand the details of his own policy. We saw him on the ABC a few weeks ago, just after the budget, fundamentally getting the details wrong about his own budget and then not even having the good grace to admit it when asked about it in this House. I have seen some speculation that members opposite have been saying, off the record, that the Treasurer is not selling the budget very well. I concede that he is not a very good salesman of the budget but the problem goes much deeper than that: it is fundamentally a bad budget.

We know it is a bad budget for families. We know it is a bad budget for pensioners. We know it is a bad budget for the unemployed. We know it is a bad budget for apprentices. We know it is a bad budget for university students or people who aspire to go to university. We know it is a bad budget for all those people, but it is fundamentally a bad budget for Australia. It is fundamentally a bad budget for the Australian economy. It is the wrong budget for our times. It is a budget driven by a stale and sterile ideology, not by any deep thought about the needs of the Australian economy at this time.

The Treasurer says—and I agree with him, because I said it when I was Treasurer—that Australia needs a plan to deal with the transition away from the investment boom in mining. But this is a budget that does nothing to assist that transition and in fact makes it worse. It is not a budget that inspires confidence. If we are going to get investment in the Australian economy—right across the economy, not just in the mining sector—we need businesses that are confident in the future. And to have businesses that are confident in the future we need consumers who are confident in the future. But this budget, of course, has delivered the opposite.

Now, of course, the Liberal and National parties had a lot to say about confidence before the election, didn't they? We had the Prime Minister say that there would be an 'instantaneous adrenaline rush' to confidence if he was elected. Well, we have not seen an instantaneous adrenaline rush; we have seen a Mogadon blanket on confidence—far from what the Prime Minister promised. This was the most puerile part of the now-government's campaign. The most bankrupt part of their campaign was their campaign around the economy: 'Just elect us and everything will be all right', they said. The now Treasurer said that Australian consumers will 'unleash their balance sheets' on the very election of a Liberal-National Party government. Even after the election he said, 'It's going to be a great Christmas'—because the Liberal Party is now in charge, spend up big! How has that worked out? Consumer confidence is 16 per cent lower today than it was on the day the Liberal and National parties were elected to office in Australia—some adrenaline, some rush to consumer confidence!

And what has caused this decline in consumer confidence? Well, it is pretty clear. Just have a look at the June Westpac consumer sentiment survey. Westpac says:

The Index is still in firmly pessimistic territory …

… A very high 74% of respondents recalled news on ‘Budget and taxation’ with a wide majority viewing the news as unfavourable.

And it gets better. Westpac says:

That is the highest level of recall for this topic since we began running the survey in the mid-1970s, surpassing those seen during the GST introduction in 2000 …

So, this is a budget that has been noticed more than at any time since the records of consumer confidence were set. The verdict is in, and the verdict is clear. Dun & Bradstreet conducted a survey: the financial stress index has shown financial stress levels increasing by almost a third since the September election. We saw consumer confidence decline and financial stress go up. Another Dun & Bradstreet survey says that 59 per cent of Australian businesses believe that this federal budget will make it harder for them to conduct their business—and that is right across the country. In the June quarter we saw only 29 per cent of Western Australians expecting the Western Australian economy to improve over the next 12 months, down from 48 per cent just last December. And this was a survey undertaken in the lead-up to the federal budget; this was a survey undertaken when all the speculation was out there about the Treasurer's cuts to services and increases in taxes, before they had become a reality. If this is the implication of the speculation, let us just imagine what the impact of the reality is on consumer confidence.

So, this is a bad budget when it comes to the economy, because 50 per cent of the economy is made up of consumption, and if you have consumer sentiment so low, so battered by the actions of this Prime Minister and his arrogant and out-of-touch and blustery Treasurer, then you are going to see an impact on the budget. You are going to see an impact on the budgets of the states. We saw that play out again today in New South Wales despite the pathetic denials of the Prime Minister at question time. And you are going to see an impact on family budgets. There is no budget emergency that this government did not create for the states or for the families of Australia. Their own budget creates budget emergencies right across the country. It is being reflected in consumer confidence and it is being reflected in the statements of every state premier and treasurer right across the country.

This is a budget that is fundamentally bad for the economy of today, and it is fundamentally bad for the economy of tomorrow as well. There are a lot of cuts in this budget that this side of the House objects to and objects to strongly as unconscionable. But there are some cuts that are just plain dumb, that are short-sighted and that are against our economic advantages as a nation. Cutting $111 million from the CSIRO must be one of the dumbest things any Treasurer has ever done. This is about the future of our nation, about being an innovative economy, about being an economy based on research and—heaven forbid!—science. Heaven forbid we could have a government that believes in science. But the Prime Minister says that this is a modest cut—only $111 million to the CSIRO, he says. Australian businesses and Australian scientists know the importance of science and innovation and research. We have seen the abolition—not the cut, not the shaving but the abolition—of the commercialisation of Australia. For every $1 that is invested by the Commonwealth through the commercialisation of Australia we see $2 invested in the private sector gone, as a result of this government's policies. CRCs are getting an $80 million cut, Geoscience Australia—again, there are those pesky scientists!—are being cut by $16 million and the Australian Research Council is being cut by $75 million. They are all being sacrificed on the altar of this government, this Prime Minister and this Treasurer and their stale ideology based on a different time. It is based on a time when the age of entitlement was considered a threat to the Australian people, not when the age of entrepreneurship, the age of science and the age of research and innovation could be embraced for the best interests of the Australian people.

There is a need to return the budget to surplus, but the best way to return the budget to surplus is to grow the economy through thinking in a way that embraces innovation and entrepreneurship, not the stale and negative cuts, not the demonisation of fellow Australians that this Prime Minister specialises in—the demonisation of unemployed people and the demonisation, dare I say it, of Australia's pensioners, who have done nothing wrong except work hard for their entire working lives and pay their taxes and are now insulted by a Prime Minister of Australia who stands there and denies that there are cuts to their pension, who does not realise that the pension is the primary source of their income, the way they put food on the table, the way they make small contributions to their families and their grandchildren. No, the Prime Minister just does not get it. The Treasurer does not get it. They do not get the anger right across Australia, including rural and regional Australia, at their wrong priorities, their warped priorities and their values, which are fundamentally rejected by the Australian people.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The member for McMahon wrote a letter today. The member for McMahon wrote me a letter about paid parental leave. He did not write me a letter back when I wrote to him about GrainCorp last year. In fact, he just left it on the table.

Mr Bowen interjecting—

I was what? I was wrong? I do not think I was wrong. I wrote you a letter asking for your response and you never bothered to reply. But that is not uncommon in Labor, because they did not often reply to a lot of things. They did not often reply when people wanted them to rein in expenses, to rein in the debt and the huge deficit that our country was being left with.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Tell us about the letter.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Well, he wrote me a letter about paid parental leave.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

What did he say you should do?

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Yes, I received a letter about paid parental leave today. I hear the shadow minister. If he will just be quiet, I will tell him about the letter. The letter was talking about paid parental leave and asking for me to have a meeting with him. I will have a meeting with you, member for McMahon. I will happily have a meeting with you. The paid parental leave is going to be a productivity measure. He talked about the fact that there would be more people gaining a benefit in the Prime Minister's electorate than there would be—now he leaves the chamber. You should stay and listen because then you can avoid having a meeting with me! You should stay and listen. You might actually learn something. No, that is typical—he walks away. He talked about the fact that there would be more than 400 Riverina families who would benefit from the paid parental leave. Therefore, what is so wrong with people getting a benefit?

I have to say: Labor continually talk about the pension being stripped away. Well, I would ask the member for McMahon to ask the pensioners in his electorate if any of them are receiving a pension cut. In fact, the pension will continue to increase. We heard the Prime Minister say it again and again in question time today, but obviously the member for McMahon was not listening. The pension will continue to increase twice each year to keep up with the cost of living. In March this year the pension rate increased by a maximum of $15.70 a fortnight for single pensioners and $11.90 a fortnight for each member of a couple. The amount of the pension will increase again in September. We heard the Prime Minister say it will increase again twice next year, twice the year after.

The trouble with Labor is they are not listening. They did not listen in six years when they were on the Treasury benches and they fail to listen now. They do not have a plan for the future; they have a plan for the past, though. That plan is to eradicate 7 September from last year's calendar. They have a plan to say that 7 September, election day last year, did not occur. They have a plan to say, 'No, no, no—we're still in power, we're still running the show. Let's keep this age of entitlement going. Let's keep the welfare going up and up and up. Let's keep regional Australia where they belong—absolutely feeling like second-class citizens.'

We are getting on with the job of building the roads of the 21st century. We have got on with the job—and we are doing it again and again—of stopping the boats. We are getting on with the job of paying down Labor's debt, which, if left unchecked, would be $667 billion. There is $1 billion a month in interest payments that would build, as the Treasurer said today, teaching hospitals. We would have fantastic teaching hospitals if that money were spent where it ought to be spent. So many schools could be built on just the $1 billion a month we are spending in interest alone. We cannot keep maxing out the credit card.

The member for McMahon in his matter of public importance lead speech said we have talked a lot about surveys. He quoted a lot of surveys. Here is one for him: of the 17 top-surveyed International Monetary Fund countries, Labor left Australia with the fastest growth in spending of anyone in the world and the third highest growth in debt of any country in the top 17. There is a survey he can wrap his ears around. He talks about the adverse impact of the budget on the Australian economy and on confidence. Well, let me tell you: if there is any sap of the Australian confidence it is with the carbon tax. The carbon tax is costing each and every family $550 per year extra every time they turn on the power, every time they go to the supermarket, every time they drive their car. It is costing them $550 extra a year.

We heard in question time today about state parliaments. Today a good friend of mine, the Hon. Andrew Constance, the member for Bega—I know him well; we have been mates for a long time—showed what can happen when governments are not afraid to make tough decisions early. Andrew Constance is the new Treasurer of New South Wales in the Baird-Stoner government. Just as an aside, the carbon tax is costing the state of New South Wales, that fine state, $237 million a year, which should be being spent on schools, because at the end of the day states are responsible for schools. Newsflash, Labor: states are responsible for educating our kids. That is why they call them state schools. But they are also responsible for health. That $237 million would be far better spent on schools and on health.

When the New South Wales Nationals-Liberal government came into power they too inherited a mess. It was back in 2011. They had a debt which was out of control. Why would it have been out of control? Can anybody tell me why it might have been out of control?

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Too much spending, too much debt.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Too much spending, too much debt, I hear the member for Bass say—as well as 16 years of Labor governments. The Nationals-Liberal government under Barry O'Farrell and Andrew Stoner inherited a mess. They followed a government which had lost control, but they did take some tough decisions early. They had to. While I must admit the debt and deficit problem our state colleagues inherited was nowhere near the projections of $667 billion that we have been saddled with—it is not just we; it is the taxpayers of Australia—no-one can argue that they did not get on with the job and make the tough decisions. Our state colleagues, with a strong Nationals team behind them, know how to grow an economy. They know how to grow an economy and they are doing it now in collaboration with the Abbott-Truss government.

It is in the DNA of Labor governments, whether here in Canberra or in Sydney, to borrow and spend beyond their means. Get these stupid campaigns on the back of beer coasters like NBN and pink batts and school halls that were overpriced beyond their means, and then expect future generations to pay for them. Inside Labor is a conviction to promise policies it knows it will never have to deliver, like it did with Gonski. Years five and six—that is where the big money was. But, under us, under the coalition, there is actually more money in the four years of the forward estimates.

Like the budget of our colleagues in New South Wales, our federal budget sets us on the course to get the debt under control. It sets the course to ensure the government can actually afford to build the infrastructure and services which underpin economic growth. It sets us on the course to ensure, just as the member for Bega in New South Wales aptly put it in parliament today, that the government is in control of its budget, and not the other way around. Just like our colleagues in Macquarie Street, we are going to get on with the job of making the tough decisions.

We know that those opposite, particularly the member for Maribyrnong, were plagued by the New South Wales disease in government—never quite sure who to pick as leader and more interested in the follies of factional fighting. They were navel gazing; they were inward looking. That is typical Labor: more worried about who is going to lead them and which faction is fighting which than about getting on with the job of governing—whether it is New South Wales and governing the state or whether it is federal and governing the nation.

What the New South Wales budget today also highlights is an understanding—an understanding etched into the minds of coalition members of parliament, particularly the Nationals—that strong regions make for a strong economy. When I say 'the Nationals', I should also include the rural Liberals. We have some good rural Liberals. I can see the member for Barker, the member for Durack over there, and the member for Paterson here at the table. They are good rural Liberals—getting on with the job of building the infrastructure that we need. We know that the regions produce the food, the fibre and the mining wealth that makes this country great. That food, fibre and mining wealth were badly impacted by Labor's policies. Whether it was the Murray-Darling Basin fiasco or the minerals resource rent tax tax—no matter what it was, Labor stood in the way of us getting on with the job of generating growth, creating jobs for people and getting people, as this budget has done, to either earn or learn.

We on this side understand that investing in good country roads not only improves the safety and security of country commuters but assists in getting product to market. It is not only about helping commuters; it is about getting commerce happening. That is something Labor never understood in government and could not care less about in opposition. This budget certainly delivers for country roads. Country roads are at the forefront of the $50 billion in infrastructure spending. I would argue that is as it should be. We are building, maintaining and improving our critical roads—the infrastructure arteries which keep our economy, our nation, moving. Whether it is the Bruce Highway, the Pacific Highway or the Warrego Highway, this government knows how crucial these roads are and will invest in making them better.

But it does not stop there. Our National Stronger Regions Fund, which will begin on 1 July 2015, is part of the strategy—our strategy—to make sure the regions are at the forefront of getting the nation's finances back in order and investing in growth for the future. Country people get that. Country people understand that you cannot spend beyond your means, country people understand that you cannot spend more than what you earn and country people, like coalition MPs, understand that we have to pay back Labor's debt so that we do not saddle future generations with far greater debt and deficits than they can manage. (Time expired)

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

This is a budget which is fundamentally unfair and it is a budget which was not taken to the Australian people. Why didn't young people get to decide at the last election whether they wanted to vote for higher university fees? Why didn't the elderly get to vote on whether they wanted their pension indexation cut? Why didn't the schoolteachers and parents get to vote on cuts to investment in education? Why didn't the sick get the chance to vote on whether they should make an extra $7 payment in order to see a GP?

The fact is that this government has hurt confidence in our economy. This budget sends a clear message that, if you are doing it tough, if you are a young person, if you lose your job, if you are long-term unemployed or if you are a pensioner, you are on your own. It is little surprise, then, that consumer confidence is now 16 per cent lower than when this government came to power—16 per cent lower. This government sounds eerily like those Vietnam era generals: 'We had to destroy the economy in order to save it.'

The post-budget collapse in confidence has been sustained. In commenting on the Westpac-Melbourne Institute consumer sentiment index data for June, Westpac senior economist Matthew Hassan said:

A very high 74 per cent of respondents recalled news on 'Budget and taxation', with a wide majority viewing the news as unfavourable. That is the highest level of recall for this topic since we began running the survey in the mid-1970s …

This is happening at a time when growth in wages is struggling to keep up with the general increase in the cost of living and households remained worried about their jobs.

The release of the Dun and Bradstreet quarterly consumer financial stress index provides further evidence that the government's woeful budget sell has fuelled a collapse in consumer sentiment and a rise in financial stress across the country. The financial stress index shows that Australian financial stress levels have risen by almost a third since September last year. The ANZ-Roy Morgan consumer confidence survey found confidence began weakening noticeably three weeks before the budget, when government leaks about it started, and fell over the next four weeks by 14 per cent—the steepest decline over a four-week period since the series became weekly in October 2008.

It is incredibly foolish for this government to talk down the Australian economy, hysterically claiming that we have a 'budget emergency'. The fact is that Labor left behind an Australian economy that was fundamentally strong—low inflation, low interest rates, net debt peaking at just one-seventh of the level of the major advanced economies, and a AAA credit rating. Make no mistake: this Treasurer has been talking down the Australian economy ever since he was in opposition. He compared Australia's sovereign debt risk to that of Greece and has seriously exaggerated Australia's debt and financial position—when the reality is that the Australian economy has been one of the strongest in the developed world.

A core element of the Treasurer's talking down of the economy and of his scare campaign—one much beloved by the right of politics as a way of conjuring up fear about our social safety net—is regular expressions of concern about workforce ageing and the accompanying idea that a diminishing number of workers is going to be left with the burden of carrying a population grown old and grey. This kind of thinking and rhetoric lies behind government proposals to increase the retirement age and reduce the incomes and support being received by pensioners and retirees. It is true that the workforce is ageing. What is not true is that this is a problem. In fact, even 50 years from now we will have a higher participation rate than we had as far back as 1966—when there was no talk of a small workforce carrying the burden of a large out-of-work proportion of the population.

Our economy has weathered the global financial crisis in good shape. The greatest threat to it comes from a collapse in confidence precipitated by the austerity measures in this fundamentally unfair budget.

Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source

The proposition that Labor is advancing in this matter of public importance discussion this afternoon is that the budget has had an adverse impact on confidence in the Australian economy. It is true that the words of the Treasurer in the 2014-15 budget speech recently did not match the sweeping, the soaring, the inspirational rhetoric that we heard from the previous Treasurer in May 2012, when he said:

The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy …

In an uncertain and fast-changing world, we walk tall—as a nation confidently living within its means.

Didn't the pride swell in our collective breasts that our national economic performance was in such a fine hands—the hands of the then member for Lilley. Everything was going so terrifically well. If the rhetoric was so good, surely Swanny's performance would have been even better—it sounded so great as he was speaking; all of us felt that wonderful sense of confidence he talked about. It did require a $45 billion turnaround in just one year, from the $43 billion deficit he was on track to deliver to the $2 billion surplus he was claiming, but if Swanny said it could be done, of course it could be done. How did he perform against that inspirational rhetoric that had us all feeling so proud? What did he deliver? Surely not, it cannot be right—a deficit of $19 billion, in the very year he promised a surplus. And what about the surplus after surplus that was supposed to follow? It was to be $50 billion in 2013-14. Surely not, Swanny.

Is it true that the budget that the Abbott government and the member for North Sydney have brought forward in May 2014 does not quite match that sweeping rhetoric, does not promise perhaps the same almost impossible deliverables? It does not promise impossible deliverables because, as we have seen, when you promise something that is impossible to deliver, you end up with quite a lot of egg on your face. What we have produced, by contrast, is a credible plan forward—a path to reduce the deficit year after year, so by 2017-18 we will have a deficit which is projected to be a mere $2.8 billion. We have a steady and credible path back towards where we need to get, and I might add it is a credible plan from the side of politics that has the track record—the side of politics that in 1996-97 inherited a $6 billion deficit and turned that into a steady stream of surpluses year after year through a calm, consistent, credible performance. That is what confidence in the economy is about; that is what is going to persuade the Australian people that you have the economic management team—the Prime Minister, the Treasurer and the Minister for Finance in the Abbott Liberal-National government—that is on the case to deliver a credible plan to return our economic position and our budgetary position to where it needs to be.

Of course we could follow the alternative plan that we have heard yet again from the member for McMahon this afternoon—an alternative plan which essentially says not to worry, let's do nothing about it, there really is no problem here, everything is fine, keep moving, nothing to look at here. The member for McMahon suggested that perhaps innovation and entrepreneurship was the solution—we did not have to worry about getting the budget or the deficit under control because innovation and entrepreneurship and a bit more vision from this side of the parliament would apparently solve the problem. The irony of this is rich—this is from the very same Labor Party that under the member for Lilley, in the sad and regrettable days when he was Treasurer, killed off employee share ownership plans in 2009. If there is one complaint that we hear more than any other from the innovation and entrepreneurship sector of the economy, it is the absence of employee share ownership plan arrangements to allow companies here to be competitive with companies in other parts of the world—all because of the ill-judged actions of the member for Lilley back in 2009. On this side of the House we have a clear, credible, deliverable plan which is going to produce the right outcome, and that is the way to maintain and build the economic confidence of the Australian people.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Credibility is very important in this debate and that is why the comment made by the Prime Minister that 'This is the budget that the Australian people elected us to bring down' is such a breathtakingly arrogant statement. It reflects how out of touch this government is with community sentiment but it also reflects, more importantly, a disregard for the Australian people. Saying one thing before the election and then doing another, as is reflected in the broken promises of this budget, is insulting enough but to turn around and assert that this is what people voted for is downright offensive. It is particularly offensive to the people in my electorate who have been very hard hit by the measures in this budget. My electorate has a long history of socioeconomic disadvantage—it is in the top 10 most disadvantaged electorates in the country. My residents have been particularly hard hit by the closure of the automotive manufacturing industry, Qantas's ruthless decision to move jobs offshore and the continued onslaught of the rising cost of living. By no stretch of the imagination are pressures on low- to middle-income families and the erosion of consumer confidence conducive to economic growth.

The Abbott government promised to turbocharge consumer confidence but what we saw in the lead-up to the May budget was the exact reverse, with the Treasurer making it clear in his own words that these budget measures were about hitting household consumption. That inevitably means that pensioners, students and families relying on basic services and payments to get ahead will suffer—and so will the economy. If households do not spend, business will continue to sit on the sidelines and the economy will be unable to fill the gap left by rapidly falling investment in the mining sector. The release of the Dun and Bradstreet quarterly Consumer Financial Stress Index has shown, as the member for Wills mentioned, that Australian financial stress levels have risen by almost a third, to 18.7 points from 13 points in September last year. Low- and middle-income households are reeling from this budget through the new GP tax, the petrol tax increase, cuts to the pension and cuts to family benefits. The Dun and Bradstreet Business Expectations Survey report comes on the back of consumer confidence collapsing to its lowest level in nearly three years.

With mining investment in steep decline, the economy is desperate for other sources of growth. That growth should come from other areas of the economy and, in particular, from science and innovation. Instead of putting a plan in place that will underpin future growth and productivity, this budget takes a baseball bat to education and innovation funding. The massive cuts to the major science and research agencies of at least $878 million come on top of more than $5 billion slashed from higher education. The cuts to the CSIRO, totalling about $111 million, add to the obvious penchant this government has for slashing innovation, research and education.

This budget means big job losses, a range of missed opportunities and the tragic loss of scientific expertise through an inevitable brain drain. None of this augurs well for the Australian economy. The government is oblivious to its responsibility to invest in its people in order to secure future economic growth and the creation of jobs through the innovation economy.

Australia's capacity to nurture high-tech start-ups has suffered a massive blow. The budget completely abolishes Commercialisation Australia, Enterprise Connect, the Enterprise Solutions Program, the Industry Innovation Precincts Program, the Innovation Investment Fund, Australian Industry Participation plans, and textile, clothing and footwear industry co-investment.

Mark Dreyfus (Isaacs, Australian Labor Party, Shadow Attorney General) Share this | Link to this | Hansard source

There's not much left!

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

There is not much left. That is absolutely correct.

The Abbott government's abandonment of Australia's advanced technology companies and emerging industries puts thousands of jobs in the sector at risk by adversely affecting the economy. My electorate has lost thousands of jobs, especially in manufacturing. It relies, therefore, on government to invest in innovation, skills and education. This government's budget has shown no commitment or interest in such investments. As such, it has been and is detrimental to the Australian economy. (Time expired)

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

When I first saw today's MPI, I actually had to stop and reread it a couple of times. I did so because it was clearly difficult to comprehend how Labor could even string these words together without physically collapsing under the weight of their hypocrisy. I am sure that most Australians listening would agree with that and would shake their heads in utter disbelief. Then I thought maybe I was in a time warp; maybe I had been caught up and was somehow back in the last parliament—or even the parliament before that—because it was the budgets of the 42nd and 43rd parliaments that really brought home the bacon when it came to having an adverse impact on the Australian economy and on confidence. They were of a standard that eclipsed even the largesse and dodgy economics of the 1970s Whitlam era so beloved by those opposite and so lamented by the Australian taxpayers who lived through that dark time in the history of Australia.

Between 2008-09 and 2012-13, members opposite delivered a succession of budget deficits totalling $191 billion. The member for McMahon and the Leader of the Opposition were right there on the front bench all along, absolutely complicit in Labor's economic hatchet job. The figures do not lie. In less than six years Labor spent $191 billion dollars—191 thousand million dollars—most of it borrowed from overseas. What is worse, they left structural deficits totalling another $123 billion over the next four years. The fact is that Labor's budgets continue to have an adverse impact on the Australian economy day in and day out. They cost us $12 billion every single year in interest payments—more than $33 million every single day. That is $1,375,000 per hour, $22,917 per minute or $382 per second. So, in the time that it would take the Leader of the Opposition to draw breath, the debt that has been racked up in interest payments alone is over $1,000. That is a serious adverse impact on the economy and a massive drain on our nation. It is taxpayers' money wasted—money that we will not get back—and we continue, as taxpayers, to foot the bill for Labor's mismanagement. Imagine all the good we could do with $33 million a day, every day of the week. Instead we are borrowing money to pay back that debt—the interest on Labor's debt, which adds even more to the mess Labor left behind and which is an ongoing burden on our economy and our confidence.

But I am pleased to say the 2014-15 budget begins the repair job that is so necessary to change all that and ensure a stronger economy in the future. It is all about taking the tough decisions to rein in spending, invest in nation-building infrastructure and ensure continued economic growth. It is about working towards the surplus that Labor promised but never delivered.

While it is hard to believe from their recent actions that Labor used to think a balanced budget was a good thing, they did. After all, they promised a surplus all the time. Remember how many times Kevin Rudd promised a budget surplus during the 2007 election? Remember how Wayne Swan stood in this place, budget after budget, promising that Labor would return to surplus in the near future? Remember his last budget that was supposed to deliver just a sliver of a surplus? It ended up being a massive $50 billion deficit—a $50 billion hit to the economy. Talk about an adverse impact!

But at least Labor used to recognise that a balanced budget was worth aiming for, even if they always fell well short of the mark. Now Labor are eerily silent on balancing the budget. In fact, they are pretty much bereft of any plan to fix their budget mess to secure economic growth. If anything is having an adverse impact on the Australian economy and confidence, it is Labor's fearmongering about the budget. If anything is causing uncertainty, it is Labor irresponsibly blocking important savings measures in the Senate; it is Labor standing in the way of letting us clean up the mess they left behind. It is Labor refusing to scrap the carbon and mining taxes to boost confidence.

This eye-wateringly hypocritical MPI today really, truly sums up everything that is wrong with the 2014 version of the Labor Party. They just do not get it. They do not get how responsible government works. They do not get that debt and deficit is a drag on the economy. They do not get that a balanced budget is crucial for a stronger economy. They do not get that the tough measures they now oppose are necessary as a direct consequence of their own incompetence. Or perhaps they do get it, but they are just playing politics rather than acting in Australia's national interest. (Time expired)

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the matter of public importance. I am pleased to have the opportunity to speak once more on this budget in this place, as I have been in my electorate in the week between the sittings. Let everyone in this place be very clear: people in Scullin have no confidence in this budget nor in this government's twisted priorities. So I am very pleased to have the opportunity to speak on this genuine matter of public importance.

The budget is, of course, cruel. It divides Australians into lifters and leaners and into haves and have nots. Importantly, it is also uncertain and incoherent. So we see the rhetoric of emergency and of tough decisions while there are also big, unjustifiable spends—most obviously, paid parental leave. We see the confidence-sapping gap between the pre-election promises that the government so solemnly issued signed by our Prime Minister, who talked so much about lifting standards in politics and public life, and today's reality, the reality of the broken promises now facing Australian businesses and Australian families. It is damaging our economy just as it fragments our society and indeed Australia's social fabric. Perhaps this is why the Treasurer always looks so annoyed and tired when he is held to account or even, in fact, when he is asked Dorothy Dixers. He produces that world-weary sigh that we are not worthy to hear his words of wisdom.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

It is the sound of confidence.

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

We have not heard much about confidence from your side and I do not think we will, Andrew. It is astonishing how yesterday members of this government, including the Treasurer, started to talk about the equitable nature of the budget. Putting aside for one minute the ludicrous nature of this claim, it is telling that it was made. It was another distraction. But it was yesterday's distraction; it has been forgotten about today because the budget is a failure in its own terms. Yesterday the Prime Minister said, 'This is the budget the Australian people elected us to bring down.' Really? Consumer confidence has collapsed since the budget was announced. It is at its lowest level for three years. That is not much of an adrenaline charge; it is more like a sedative. I am sure that members opposite have not been selling the budget assiduously in their communities.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Absolutely, every day!

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

I doubt that. As the member for Wills and the member for McMahon touched upon earlier, and as members opposite seem oblivious to, the Westpac and Melbourne Institute data supports what people in Scullin have been telling me. Not only is confidence low, this is clearly driven by an informed response to the government's priorities as set out in the budget. Westpac and the Melbourne Institute have found the highest level of recall amongst respondents for news in the budget and taxation category since the 1970s—higher than in respect of the introduction of the GST. Unsurprisingly, the view of respondents is overwhelmingly unfavourable. Who would have thought! Today, ANZ-Roy Morgan research referred to in The Sydney Morning Herald shows consumer confidence today at 11 per cent below where it was before the budget—that is, 11 per cent below before the Economic Action Strategy, as we are now told to refer to it.

As the previous speaker did not seem to understand, people in Scullin get it and Australians get it. They understand that this budget is not a repair job. It is a con job, but not a very good one. It is asking those with the least to do the most, while doing nothing for Australia's economy. This is an issue that the Minister for Small Business did not touch upon: a majority of businesses are concerned about the impact of the budget on how they will fare.

The pressure on living standards is of course a major concern. Work insecurity compounds anxieties in this regard, as does the slow pace of wages growth. Whatever ideologically-charged ministers may say in this regard, the evidence is once again clear: we are a long way from a wages explosion and most workers are struggling to keep pace. There is no shining light on the jobs front, of course, but we do not have a jobs plan, just a commitment to punish young workers. It is shameful. Financial stress is hurting consumer confidence and constraining consumption. We need a plan to manage our transition to a sustainable economy for the future, and the Treasurer's blind faith and overblown rhetoric and bluster offers nothing less than nothing, really.

A government interested in growing our economy and boosting productivity would be investing in our cities, not retreating from the challenge of supporting these great engines of our economy where over eighty per cent of economic activity takes place. It would be listening to suburban families grappling with real budget emergencies. It would be boosting investment in science innovation, not cutting it to the bone, and it would have a vision for the future, not simply an aspiration to build a better yesterday tomorrow. Calling the budget an economic action strategy does not generate economic activity and it does not change the fact that this government has no plan and is reaping the cost of its relentless negativity. (Time expired)

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the matter of public importance. We have had six years of the Labor experiment where the notion was that the bigger and busier a bureaucracy, the better this nation would be. Look where it left us. I know today has been somewhat of a battle between two sides of politics' talking points, but I think Australians really do get that where we were heading was simply unsustainable. They get that no matter how good the party was last night, and we do not quite know who was responsible, this side of politics is going to clean up the situation. It is not easy to do. There are tough decisions. It is quite easy to see individuals over on the Labor side of politics wandering around like roving complaints desk managers looking for anyone who has a grievance and trying to talk it up. They are like the ronin from medieval Japan, wandering around like lost samurai without masters hoping that someone has got a whinge. For six years that lot never saw a special interest they could not fund, but it has all come home to roost, hasn't it?

Let us be honest, in 2009 good people in Treasury said in MYEFO, when they relied on trim inputs which were overly reliant on US inputs, that there genuinely was the risk of a five per cent drop in our GDP. Of course that proved to be wrong. The mistake was not made in 2008 when Wayne Swan initiated the first one to two per cent of GDP stimulus. The mistake came in 2009 when the then Labor government was too embarrassed to admit that the new Treasury figures showed that there would be no recession whatsoever in Australia. Did they take the foot off the accelerator? No. That was the crime for which we now the pay the price as an Australian nation. That was the crime that leaves us looking at the weeping sore of unpaid debt that this nation somehow has to deal with. The debt of $667 billion, as articulately put by my neighbour here, is an enormous amount of money for which Labor opposite has never contemplated a solution.

We will address it systematically and methodically. It will not be easy and, yes, it means tightening belts. I am inspired when I talk to people in my electorate who say, 'You know what? I can see the situation we are in. You are talking to me straight and together we will get out of this mess.' It starts by deregulating education to have the finest universities in the world right here. It starts by everyone who can pay a co-payment doing just that in our health system. I know that general practitioners will always bulk bill even under these new arrangements people who cannot afford to pay. I note that the sick will always have access to a chronic disease management plan which attracts no co-payment whatsoever, nor do pregnancy visits and nor do follow-ups and reviews. You can have your health looked after with a chronic disease under those 97 items that do not attract any co-payment whatsoever.

What are we replacing? We are replacing an opposition that talks about their commitment to industry and to innovation and that now questions our $3.03 billion investment into CSIRO or our investment into ANSTO of $777 million and $508 million for Geoscience Australia. These are significant investments and yet this mob tried to launch the RB investigator but allocated no money to run it or staff it. This is the ingenious kind of management by press release that Australians are so glad to see the back of.

I have given a bit of historical context, but I also want to talk about the future. This week the Bank of England is looking at raising its interest rates. The US is looking at a 200-basis-point increase in interest rates over the next two years, and this is a significant issue for Australia. With 2.9 per cent inflation right now, the Reserve Bank would be quite within its rights to raise interest rates, but they do not because of the arbitrage impacts of the US not doing so. When the US does, and I think it is more likely than not, we are then faced with the predicament of who funds all of the bonds that attracted the money here to pay off the debt. The government pays the interest. And what happens to that interest rate? It goes up. When we start paying off that interest to foreign bond holders who expect that return on investment, you will see an even greater challenge for paying off the debt than we already face. Of course, it was way beyond the previous Treasurer and previous government, but we appreciate that this will be a significant challenge and we are the only side of politics that will ever deal with it. It reminds you a bit of the neighbour who comes over to borrow the mower, but the mower never comes back the same as when you lent it. That is exactly how it is when we look after the economy—it was in good, safe hands only to have it run down and destroyed by a pack that says, 'You know what? We've got no ideas left.' We appreciate you have no ideas left; we love the way you grab the lectern and talk about Gas Bill Shorten's talking points for a few minutes in this MPI—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member will refer to members by their proper title.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

My electorate of Lalor is one of the highest growth areas in Australia; it is also going to be one of the electorates most affected by this budget of broken promises and twisted priorities. Lalor is home to lots of young families and pensioners. We have lots of single families and a high proportion of those living with a disability. There are approximately 10,000 aged pensioners and 5000 disability support pensioners in Lalor. We have a 92 per cent bulk-billing rate. We have 3300 students with a disability in our local schools. The youth unemployment rate is high and getting higher.

These are the people to be most immediately affected by this budget. They will be affected by the GP co-payment, the increases to university and training costs and the cuts to the Schoolkids Bonus, to carers payments, to the Tools for our Trade program and to the pension. All this means less money being injected into our local economy. This is the immediate known local impact. It is a scenario being repeated across the country. As communities take the time to digest this cruel budget, many have raised the potential impact on the local economy. Some are even saying that they can see the possibility of a local recession.

My locals are sending a very loud and clear message. A coffee shop has already reported a downturn in trade and the neighbouring jeweller is saying the same. A local builder bailed me up at the footy and expressed concern for his business. Could people still afford to make home improvements after the cost of living pressures announced in the budget? Would he be able to keep on the apprentice or would he need to put him off, due to work drying up? Down at the homemaker centre, the worry is that people will no longer upgrade their white goods and furniture, if their incomes are reduced.

My community is not unique. If this is the talk in the streets of Werribee, Tarneit and Point Cook, I am sure these are the conversations being held in Western Sydney, in the suburbs in the outskirts of Brisbane, Perth and Adelaide. The local businesses in Lalor would not regard themselves as economists, but they know enough to know that the confidence of households is paramount to the success of the economy. And they are backed by the economists. As we have heard already, the June Westpac/Melbourne Institute Index of Consumer Sentiment data—and I will repeat it, because I am not sure those opposite are reading the same information—said:

The Index is still in firmly pessimistic territory … down 6.6% from its pre-Budget level in April and 15.6% below its post-election high in November last year.

The Dun and Bradstreet Consumer Financial Stress Index has shown Australian financial stress levels have risen by almost a third, from 13 per cent in September last year to a current level of 18.7 per cent. Dun and Bradstreet also found in their Business Expectations Survey that 59 per cent of businesses are concerned about the impact of the federal budget on their operations—59 per cent. That is the budget delivered in this chamber by this government. Today we saw, the Reject Shop and Pacific Brands, amongst a slew of retail business, record profit downgrades. And the Reserve Bank indicated just yesterday that 'the unemployment rate is expected to remain elevated' over the next two years.

The people in my electorate of Lalor are not so far wrong about this budget. Through its cuts to household budgets, this government is risking the largest source of growth the economy has—consumption, which makes up more than half of all economic activity in Australia. The recent national accounts showed an economy that is being held up almost entirely by our mining exports. The experts know that if households do not spend, business will continue to sit on the sidelines and the economy will be unable to fill the gap left by rapidly falling investment in the mining sector.

Budgets are about priorities—they shine a light on what a government believes—and this budget is no different At a time when wages growth is at its lowest level in 17 years, this government has delivered a budget full of shocks and surprises, which cut household budgets and which will do nothing to encourage households to feel confident about the future. Our local community is still digesting the news about the Toyota and the GMH closures and the loss of a projected 4,000 jobs in our immediate area. Last week the local shipbuilding industry also took a hit. You can only imagine the impact on consumer confidence this news has had on our local people.

This is a cruel and unfair budget—some are saying it is the most damaging budget in over a decade. This is a budget that divides Australia; it is a budget that puts our economic future at risk; and it is a budget that this side rejects. (Time expired)

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

It never ceases to amaze me the MPIs that the opposition put up, particularly those by the member for McMahon. When I look at the MPI that he has put up today, I see that he talks about the 'adverse impact of the budget on the Australian economy'. If we really want to look at the adverse impact on the Australian economy, I think we should go to the Labor Party's hit list. What do we see? We see 200,000 more people unemployed. This is the legacy which those opposite left us with. Do you know what? That is more than the population in the whole of the Penrith area in Western Sydney. Gross debt is projected to rise to $667 billion. There is $123 billion in cumulative deficits and the world's greatest carbon tax. If you want to talk about an 'adverse impact', well, there it is, dot pointed, ready to go.

If we want to look at what those opposite have left us, it is $1 billion a month in interest payments. This is paying off a credit card with another credit card. I would like to bring home to the member for McMahon—who just happens to be my neighbour in Western Sydney—what this means. With $1 billion a month, he would probably be looking at something like Mamre Road to be upgraded, from the Great Western Highway all the way down to Elizabeth Drive. That would cost you around $800 million, member for McMahon. You could buy that in one month and still have the best part of $200,000 left over. If you want to do something for your community, member for McMahon, that is the way to go.

He also goes on in his statement about confidence. He wants to talk about confidence. He wants to put confidence back into the economy. I would like to talk to those opposite about what confidence is. Confidence is about—and it surprised me that the member for McMahon also used these words—innovation, entrepreneurship and having vision. I dare say he has not gone through any of the budget papers, particularly the one on building Australia's infrastructure. He is possibly not aware of it or even read any of the local papers that talk about the $3.5 billion worth of infrastructure that will be coming to Western Sydney, which will include Elizabeth Drive, Bringelly Road and the Northern Road. Elizabeth Drive is in his own electorate. Elizabeth Drive is going to be upgraded to a motorway-style of road. These roads will link key business parks right through Western Sydney—right through the member for McMahon's own electorate.

If you want to build confidence, what do you do? You invest in the people of Australia. You invest in our infrastructure. You create pathways for people to find more jobs. Once again, this budget delivers exactly that. If we look at what that means in Western Sydney, it will be WestConnex; in the north, it will be NorthConnex. It is $3.5 billion worth of infrastructure right here, alone, and that is where we can find the first piece of innovation, entrepreneurship and vision. I am sorry if those words are a little bit difficult for the member for McMahon to hear, because those opposite are not used to delivering on their promises—

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

He has actually left.

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

That is very true. If we go further and look at the entire budget package and what it will provide, we see things like CCTV, which will be placed right across Western Sydney and right across our nation. For instance, I think there will be $1 million worth of CCTV for Parramatta; $300,000 worth of CCTV for my own electorate of Lindsay. These practical benefits will improve the economic activity in some of our disjointed suburban shopping districts to provide safe places for people to shop. It will provide—and, once again, to use the member for McMahon's words—vision. entrepreneurship and confidence.

So when I really look at this MPI, I find it quite astounding that those opposite would talk about an adverse impact with this budget when they themselves have created the adverse impact. We are cleaning up six years of Labor's mess. When it comes to confidence, you just have to look at the infrastructure package that we are running right across our country. There is an $11.6 billion infrastructure growth package, which shows nothing more than vision from the Prime Minister, the Deputy Prime Minister and the Assistant Minister for Infrastructure.

I would like to commend the government for having the vision and the entrepreneurship to invest in our regions and to ensure that we build a better Australia for our children and that each of our outer metropolitan regions have connectivity and jobs for the future.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Order! The discussion has now concluded.