Mrs Bronwyn Bishop (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 Government politicising the intergenerational report to sell its unfair Budget.

I call upon those 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

A little over five years ago, when an Intergenerational report was released, the then shadow Treasurer held a press conference and said that the report had 'more hot air than the Hindenburg'. Mr Hockey was predicting his own report five years later! In fact, he was predicting his entire tenure in the Treasury portfolio! 'More hot air than the Hindenburg': he was predicting his entire reign over the Treasury portfolio.

We know that the Australian people, when they think of generational change, are very interested in one generational change; that is a change of government, and a change of government to a government which actually understands the challenges and opportunities in Australia.

We know that this document, the 2015 Intergenerational report, is a gross politicisation of what should be a proper process. We know that this document is one last desperate attempt by the Treasurer to sell his unfair budget. Here we are, all those months later, when normally a government would be well into preparing the next budget—they would be well into preparing the final details of the next budget—and the Treasurer is still flailing around trying to sell the last one and abusing the Charter of Budget Honesty as he does so. He is flailing around with a new narrative every day—a new excuse, a new alibi, a new story—because he cannot sell what is a bad product, and that bad product is his handiwork. It is his federal budget.

This report tells us quite a lot; it tells us a lot about this government. It tells us about their desperation. Forty-five times this document refers to 'previous policy'. What are those previous policies? They are the previous policies of this Treasurer, as outlined in his Mid-Year Economic and Fiscal Outlook. He could have chosen as a starting point that Pre-Election Fiscal Outlook, signed off not by me, not by Minister Wong, but by the then secretaries of the departments of Treasury and Finance, independent of government. I read the PEFO when it was released to the public, as I should. It was an independent document, signed off by the secretaries of those two departments. Did the Treasurer use that as the starting point for his 'previous policy'? No, because that would not be politically convenient. He had to use as a starting point the mid-year economic forecast, which included his own decisions. It included his decision to give $9 billion to the Reserve Bank. It included his decision to increase spending by a $14 billion. It included his doubling of the deficit in Australia. That is the fact of the matter. That is the starting point he chose as 'previous policy'.

If you are going to engage in using the Intergenerational report and the Charter of Budget Honesty to sledge a previous government, at least get your facts right. At least start with a bit of honesty; at least start with the pre-election economic forecast signed off by the departments of Treasury and Finance.

As I said, this report does tells a fair bit about this government; we heard during question time. It tells us what they think about climate change.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

It's an economic benefit! It's a nirvana!

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

Apparently, greed is good, and climate change is better! The report says:

Some economic effects may be beneficial—where regions become warmer or wetter this may allow for increased agricultural output …

Well, that's a relief. Phew! I was worried about climate change before! I think the Minister for Agriculture has not just been changing Hansard; he has been changing the Intergenerational report as well! That is our friend the Minister for Agriculture. The report talks about the good work on climate change that happens in California. Just as well they do not have a cap-and-trade scheme! That is just as well! That would be 'an inconvenient truth'! It also tells us what the government think about productivity and innovation. The report says:

There is little evidence that slower productivity growth has been the result of inadequate investment in skills, education and innovation more broadly.

Well, you would not want to invest in skills, education or innovation to increase productivity! Why would you go and do that? What does innovation have to do with productivity? What a terrible thought! This report has cleared up quite a lot for me now! We know that climate change is actually good, and innovation and education—why would you invest in that?—have nothing to do with productivity! We know they are not, because we also know that education funding falls dramatically under the scenarios presented as government policy, this government's policy, as a percentage of GDP.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

Not true. Not true.

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

Let us talk about education funding as a percentage of GDP. I invite the member for Kooyong to comment on what this report says about education funding as a percentage of GDP. He should tell us what it says, because it is not a pretty story. We know that this government has one way of dealing with demographic change, and that is to make people work longer and to give them less in retirement. That is their only answer. But of course there are better answers than that. Thirty-two years ago today in Australia, a new government was elected: the Hawke Labor government.

What a contrast: the Hawke Labor government with their Prime Minister and their Treasurer who knew that we should invest in the future, who knew how to deliver economic reform, who knew how to make the case for economic reform, who knew how to take the Australian people with them on economic reform, who did not lecture them about lifters and leaners and who said to the Australian people, 'You know what? You deserve a first-class retirement income system, and we'll give it to you. We'll give you a universal superannuation system, which means that every Australian worker should be able to save for retirement through that system.' It is a system that Labor built against the opposition of the Liberal and National parties at every stage. Let us not hear about bipartisanship from the Liberal and National parties, who opposed Medicare all the way, who opposed superannuation all the way, at every stage, and who said they would destroy Medicare.

The now Prime Minister, who sat up there somewhere, presumably, as an opposition backbencher, said superannuation was the biggest con job in Australian history. Now that he is the Prime Minister of Australia he uses his office as an opportunity to wreck superannuation, to stop an increase in the superannuation guarantee, to take away a tax concession from low-income workers. And he is doing that in this week of all weeks. Let us take a moment to think about what that means. Australia's low-income workers—3.2 million Australians, two-thirds of whom are women—benefited from the low-income superannuation contribution. We know that, on average, Australian females will retire with $92,000 less in the superannuation account and we know that we should do something about it as a parliament and as a nation, because Australian women deserve better. Those Australian women working hard right across the country, many of them here in this building, in factories, schools and workplaces right across the country, deserve better in Australia than to retire with $92,000 less for their retirement. They deserve some help to save for their retirement through the low-income superannuation contribution. They deserve a bit of support from their government, not to be arrogantly lectured to about being leaners, when they are not; not to be told that they are takers and not makers, when they are not; not to be told that Australia cannot afford to keep them with a decent age pension or that they should work in the hospitals and the schools and the factories until they are 70, because they should not. They should be able to retire in dignity at a decent age, not at the highest pension age in the developed world, which is what this Treasurer, this government and this Prime Minister want to give them. And the Prime Minister lectures them about it. Disgracefully, the Prime Minister uses this document to sell his policies to make Australians work longer than anybody else in the world and to give them an inadequate pension. What a disgrace!

There is a better way than that. We can use the Intergenerational report to have a proper conversation with the Australian people—that will be the Labor way. When we are in office we will keep the Intergenerational report, but it will be prepared independently of government, by the Parliamentary Budget Office, because the Australian people deserve a proper conversation. If we are in office we will not hide from scrutiny and we will not mind an independent conversation. If we do not like what the Parliamentary Budget Office does, we will not seek to drive it out of office, which is what this government does with independent statutory office holders it does not like. That is how this government treats independent scrutiny. That is how this government handles public debate. It bullies independent statutory office holders. We will have a different approach. We will have an approach that not only embraces an Intergenerational report and a proper conversation about Australia's future and opportunities but invests in the future, invests in Australian retirement incomes and uses the great strength of the Australian financial system and its financial sector to give every working Australian a decent retirement and the chance of a dignified retirement, regardless of whether they are cleaner, a carpenter, a policeman, a bricklayer or a member of parliament. Every Australian deserves to have a dignified retirement. Every Australian deserves the chance not to be entirely reliant on the full age pension. Our changes would have added $500 billion to Australia's retirement income system. Their changes take it away. As they do that, they lecture the Australian people, saying that they are not working hard enough, that they need to work longer and that their age pension is too generous. Guess what? The age pension is not too generous and Australians should not work longer than anybody else in the world, and it is only the government that thinks it.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

What a pitiful effort from the maestro of marginal tax rates, the professor of ouzo economics. He has had a tough couple of weeks. Today's question time was his moment to shine in the sun, but did he ask one question of the Treasurer about the Intergenerational report? No. He did not ask one question. After a couple of tough weeks he missed his big chance in the sun.

We saw today in the two speeches from the member for McMahon and in question time a pitiful effort. We had B1 and B2: Bill Shorten and Adam Bandt. During question time they were asking questions about climate change, but the report says two particular things about this government's approach to climate change. No. 1, we will meet our Kyoto targets. That is what it says. No. 2, we have an emissions reduction fund which is actually investing in the type of technology to reduce emissions.

What else happened in question time today? The Leader of the Opposition started talking about retirement incomes and the pension. We know that the pension is going up under this government. We know also that the Leader of the Opposition had his own retirement plan for two of his fellow leaders. He was trying to put them into retirement. He had his own retirement plan, and it worked. What else did we hear from the member for McMahon. We heard that education spending is going down under this government. In fact, it is going up, and if you look at the IGR you will see a very clear table that says that education spending is going up from $1,500 per person to $1,900 per person. That is the message in the IGR. The member for McMahon had the gall to raise innovation. Why? Because those opposite actually stifled innovation and start-up companies with their change to the taxation treatment of employee share ownership schemes. It has been left to us to come up with crowdsource funding. But it was the opposition who punished employee share ownership schemes, which meant that it was more difficult for companies in Australia to attract the best and the brightest. Earlier today, the member for McMahon raised the advertising plan that goes with the Intergenerational report. The hide of those opposite! The member for McMahon spent nearly $5 million of taxpayers' money just changing the Centrelink logo. That was his record in government. And who can forget the nearly $70 million that those opposite spent on their carbon tax plan, promoting the carbon tax initiative, including spending nearly $100,000 of taxpayers' money on three fake kitchens for their TV ads?

You raised issues related to measures that will not continue in some areas. I can tell you that they are related to the mining tax, as the Prime Minister told the parliament during question time, because that was the tax that was supposed to produce $50 billion worth of revenue while introducing sovereign risk into our country but produced a little more than $300 million worth of revenue and cost $50 million to implement. Then we had the sight in question time of the member for Lilley being a martyr, refusing to apologise to the chair. Who can forget his immortal words in this place, 'The four budget surpluses that I introduce tonight'? And the message goes on.

This document is a key document produced every five years with the experts in Treasury that sets out 40-year projections. It helps frame the economic narrative of the government and helps inform the economic decisions that we will take. As the Treasurer has said, it is a compact between this generation and the next. What are its key facets? Its key points relate to the three P's: participation, population and productivity. Dealing with population first, it is very clear that we have an ageing boom. Where today there might be 4,000 Australians who are over the age of 100, that will increase to 40,000 by 2055. If you look at the ratio of those under 65 to those over 65, in 1970 it was 7.5, today it is 4.5, and it will fall to just 2.7 in 2055. That is a key demographic change for us to understand.

Then it is about participation. This is the 'grey army' who in increasing numbers are entering our workforce. It is about getting more women into the workforce. It is a $25 billion dividend to the Australian economy if we can lift the rate of female participation in this country to where it is in Canada, which is six points ahead of where we are in Australia today.

What about productivity? In the 1980s, productivity was about 1.3 per cent. In the 1990s, when the country undertook some significant economic reform, it was 2.2 per cent. In the 2000s, it went back to 1.5 per cent, and the projection is for it to be 1.5 per cent in the future—but, if we are going to become wealthier as a nation and our standard of living is to rise, we have to boost productivity. That is why we are cutting red tape; $2 billion worth of red tape reductions is so significant. That is why we are encouraging businesses to invest in materials for their business, to get the best equipment so that they can boost productivity. That is why we are committed to industrial relations reform—and those opposite are trying to block the reintroduction of the Australian Building and Construction Commission. That is why those on this side of the House are committed to the greatest infrastructure spend that Australia has ever seen, with the equivalent of eight Snowy hydro schemes just in the last budget alone. That is our commitment to boosting productivity, because that is our commitment to a higher standard of living.

Referring to the key pages of this document, I draw the attention of the House to page 53, which is the net debt international comparison. You have to understand that, under Labor, we were heading to a record $5.6 trillion worth of debt, or 122 per cent of GDP. Now, under us, as a result of the hard measures that we have taken—the tough, brave measures that we have taken—debt will fall as a percentage of GDP to 57.2 per cent in 2055 and $2.6 trillion. If you want to see this played out in an important graph, it is on page 53. It shows that, under those opposite, if we continued on the trajectory that Labor gave us of spend, spend, spend; tax, tax, tax—the trajectory of the Labor Party—we were nearly going to get to the levels that Greece was at by 2054-55. The member for McMahon knows this all too well, because just the other day, in his description of debt and deficit as being just rhetoric, he actually said—

Mr Bowen interjecting—

Now he is denying it. He said, 'It's okay in Australia because we're not Greece.' But page 53 of this IGR says that we were heading to Greece under your leadership, under your management and under your spending program. When the member for McMahon is on a beach on the corner of the Aegean, flipping through his treatise on ouzo economics and he turns to page 53 of his treatise on ouzo economics, he might just find that chart, which says Australia was heading towards the debt levels of Greece.

I want to finish on a positive note. Under this government, the last budget was the heavy lifting that this country needs and it is setting us on the right trajectory. Now we are starting to see the green shoots in the Australian economy. There are 600 jobs being created every day, three times faster than under Labor. New private dwellings are up to record levels. Consumer confidence is moving up month after month. We are seeing more investment in infrastructure. We are seeing business registrations grow by record numbers. This is the positive story of this government. We have now created stability and certainty in our economy for innovation and entrepreneurship and for individuals to grow and to prosper.

The work is not done. We have the competition policy to respond to. We have David Murray's financial systems inquiry. We have a tax white paper process. We are committed to serious reform in industrial relations. We have the federation white paper. We have the red tape reductions. As the centrepiece of our economic strategy, we have these three free trade agreements, which have set Australia up for decades to come. These are things that the Labor Party were unable to deliver.

When it comes to budget repair, we have shown the ability to get things right. When it comes to those opposite, all they can do is spend, spend, spend; tax, tax, tax—lifting the rate of debt and deficit to levels Australia has never seen before. In the immortal words of Jerry Maguire: 'Show us the money.' Show us the money, because you have no road map for Australia's future.

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

I remind the House yet again that members should speak through the chair, not at the chair. The use of the word 'you' is becoming a burden on my shoulders—the things I sometimes do and have responsibility for!

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

Egalitarianism is a great Australian value and over the last generation inequality in Australia has been rising. The 2010 Intergenerational report had an in-depth section on disadvantage and on the rising gap between rich and poor, but this Intergenerational report does not contain the word 'inequality.' Now why would that be? Perhaps it is because this is a government that has cut the wages of the cleaners who clean their offices while it is sending a billion dollars offshore. Since coming to office, this government has given a billion-dollar handout to multibillion dollar firms who need a tax break like Prince Phillip needs a knighthood. This is a government that likes channelling Robert Menzies to split Australia into 'leaners' and 'lifters.' In Britain the Tories are doing the same—they are talking about 'strivers' and 'skivers'. But it is all of a piece. It is the idea of 'us and them'. This is a government that wants us to be split into two Australias. This government's idea of fairness is sending the under 9s up against the Hawks.

This Treasurer is a Treasurer of and for the top one per cent. The figures in table A3 of this Intergenerational report show that age and service pensions, as a share of GDP, are going to be down and that education spending will be halved. This is a government that is raising superannuation taxes on the poor and cutting superannuation taxes on the rich. This government is so unfair that the Sheriff of Nottingham would be voting Palmer in the Senate. These are insecure times and Australia needs a Treasurer who will instil confidence, not the sort of Treasurer who is likely to tweet: 'Hey gang, what do you think the deficit should be before the next ERC?' This is a Treasurer who has run a million-dollar advertising campaign to sell his Intergenerational report. That is an enough to make you fall off your chair. Why has this Treasurer been late in delivering his Intergenerational report? Why has he, as the shadow Treasurer has pointed out, broken the Charter of Budget Honesty? Why is he in breach of the law? Maybe it is because he has been doing his own numbers rather than the budget numbers. Maybe he has been a little bit too busy updating his LinkedIn profile to put together the Intergenerational report.

This Intergenerational report is all about the past. It is 80 pages of history and eight pages of the future. This is the kind of government who, when Adam and Eve got caught in the Garden of Eden, would be sending around talking points saying, 'You know it is Labor's fault.' They pretend that the $9 billion grant they gave to the Reserve Bank was a Labor measure rather than recognising it is a coalition measure. Seriously, Bart Simpson would be embarrassed to blame-shift like these guys blame-shift.

This is a government that are seriously suggesting that climate change could improve the state of the Australian economy. They have included a section on climate change. It was included in the Intergenerational report thanks to a deal that the Greens struck in exchange for allowing unlimited debt. Those Greens know how to strike a hard bargain! This section on climate change suggests that climate change is good for growth, but that is not what every Intergenerational report has said about climate change. If you go back to 2007, an Intergenerational report when Peter Costello was Treasurer said about climate change that 'significant levels of global warming imply losses in global GDP over the longer term'. It went to how to tackle climate change and it said:

While many consider climate change mitigation is best addressed through market-based mechanisms such as an emissions trading scheme, governments may alternatively elect to purchase abatement activities using budget funding. The potential cost to the budget from adopting the latter approach can rise quite significantly, imposing a substantial tax burden on today’s, and future, generations.

Peter Costello had the measure of those opposite. Peter Costello never would have suggested that the Pre-election Economic and Fiscal Outlook was not the baseline. Peter Costello never would have breached the Charter of Budget Honesty. Let's be clear: I do not think Peter Costello was a great Treasurer, but I do think that he was right on the issue of climate change and he was right when he said that direction action is a bad way of tackling climate change, as it costs the budget more and it does less to tackle a critical intergenerational challenge for our nation.

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

Anybody who was wandering into the public gallery over the past little while would have been forgiven for thinking that they had wandered into the comedy hour—except that this is not a laughing matter; this is a serious issue. It would have been really nice, given that the Labor Party actually raised this issue of debating the Intergenerational report, to have actually looked at the substance contained in this very important report. Why is the Intergenerational report important? The Intergenerational report is important because it is a stocktake. It is a stocktake of where Australia is today and where Australia could be heading in the years to come. We want to engage the Australian people in a conversation about that, in a conversation about the different paths that we can take as a nation. That path discussion, the journey we will take together, will involve different choices depending on where we want to end up.

A responsible government looks to build prosperity for the future. Over my lifetime I have been fortunate to live in a time where average incomes have doubled in real terms since around 1975, and I want that same positive, prosperous future for my baby. When we look at the Intergenerational report it gives us some real facts around life expectancy and demographic changes that we can expect in the years to come. When my baby is born, if it is a boy, he will live on average to 95 years of age and if my baby is a girl she will live on average to 96 years of age. This is a fantastic thing—that people in Australia have some of the greatest life expectancies in the world for both men and women and that our population is living longer and living healthier lives. But it does pose some challenges and we need to be honest about those challenges. Those challenges are that, today, there are only five people of average working age for every person aged 65 and older. For projections going forward, that will drop to 2.7 people of average working age for every person aged 65 and older. Why is that an issue? It is an issue because those people will be asked to share even more of the burden to fund the lifestyle of people in the future, when we cannot currently fund our lifestyle today. That is the most serious aspect of this Intergenerational report.

Net debt to GDP is something that has been examined in the report, and we are on a trajectory of ever-increasing net debt to GDP. It is critical, because currently Australia has about 15 per cent net debt to GDP. This is about four percentage points higher than the nation of Ireland just before the global financial crisis. In six short years, Ireland's net debt to GDP skyrocketed to around 90 per cent. What were the implications of that? Their unemployment doubled. That has a serious impact on people's lives.

This Labor opposition, who actually put us on the path to an ever-increasing spending trajectory that was unfunded and was not able to be managed, except by ever-increasing debt or by increasing taxes, needs to come to a reckoning. That reckoning is the reckoning that is in the Intergenerational report. We can choose to continue along that path and we will see net debt to GDP in 2054 of about 122 per cent. That is double that of Spain today. That is not a record we want to hit.

So we have real choices, and those choices are before us. That is why we want to engage in a public conversation with the Australian population. We want a strong and prosperous future, and I can only hope that those opposite want the same.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

What is incredible about this debate and the way the government have gone on today is this: they are trying to turn the well-known into the exceptional, the extraordinary. All of a sudden we have discovered that Australia is ageing. Apparently this was not known. Up until today we did not know that people were living longer. In recent times, every single generation has lived longer than the last. In fact, it was commented on in the first Intergenerational report. Everyone knew it. Everyone knew, for example, that the number of taxpayers that would support those that had retired was decreasing, that there would be fewer of them.

We then say, 'If they have just discovered this, let us look at what they did in the months preceding the Intergenerational report .' Given how long it has taken, I was thinking that we would have to wait another generation to get this report. But we finally got it, five years late. It should have been delivered much earlier. It should have been delivered earlier in the year. In fact, they promised they would deliver it last year and they did not. When they bring it down, they say, 'We need to think about the future of the country and what people are doing.' What decision did they make, for example, on pensions? They realised people are going to be living longer, they realised that there will be more of them, and what did they do? In their first budget they cut pensions. They cut the income that people will be relying upon. If you say, 'In actual fact, we do not want people relying on pensions,' what is the next policy lever that you pull?

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Super.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Superannuation. So what did they do? They had a chance on superannuation to support what we were doing, to ensure that people have retirement—

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

Where's the money coming from? Show us the money tree!

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

There you go: 'Where is the money coming from?' That is exactly it. That was the argument when we introduced superannuation. Those opposite say: 'We were always there for economic reform. We worked with the Hawke and Keating governments.' Way back when, to oppose superannuation, they used the argument that the member for Hume uses. When we were arguing that instead of having pensions to rely upon for retirement incomes we would have a pool of national savings that would be good for the economy and would generate income for people in retirement, they opposed it. They opposed superannuation, they cut pensions and they made sure that, when people retire, they have less to live on. That is what the argument was. They cut superannuation. They had a chance to fix it and they did not. Now they have again stopped the increase to superannuation; they have refused to support it. If you do not have super and you rely on the pension, you are looking at a cut. If you have super and you want to ensure that you have a good retirement income, that is cut. And what is the other prescription? All those people sitting on the backbench argue that we have to cut penalty rates and that we have to see lower wages. Wages are at their lowest growth level since the RBA started collecting the stats, and those opposite are going around arguing for a cut in penalty rates.

Ann Sudmalis (Gilmore, Liberal Party) Share this | Link to this | Hansard source

Fairytales!

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

It is not fairytales. Go and look at the stats, Member for Gilmore. I know they have cut the education funds, but you would expect that you guys could read. You would expect you guys would know. As the Prime Minister apparently said today, fact is fact—breaking news! It is a joke that we have this mob now saying that they want to have this Intergenerational report to fix all these things when they are wrecking it on the way through.

I cannot believe, for example, the member for Kooyong is proving that you can disagree on absolutely everything but still be friends. I do not know how we do it.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

You're a generous man, Ed.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

I am a generous man; thank you for that, Member for Charlton. This Intergenerational report took its time to get here. They need consultants to work out how to sell it. You spent $400,000. You outsourced your political skill. You have no political skill in selling your budget, so you had to bring people in to sell this.

An honourable member: And how's it going?

Exactly, and that is going sensationally! It would be interesting to see whether this is actual fact, and it ain't. When they talk about debt going out in 50 years, they do not talk about the decisions they made to load up debt, the fact that straight after PEFO they brought out MYEFO and they doubled the debt; they handed $9 billion to the Reserve Bank and made cuts. Talking of leaners and lifters, they leaned on low-income earners and took their superannuation away so that they could lift off the tax required out of wealthy superannuants. This is a shameful document. It is a shameful document because it has been abused. It should be a good policy document. It has been abused by those opposite.

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

What an extraordinary MPI this is. All year, the shadow Treasurer has been demanding the release of the Intergenerational report. In question time, he asked not one question of the Treasurer, and his entire contribution of 10 minutes avoided the very topic. He just pulled out his talking points. He was exceeded only by the member for Fraser, who dusted off all his silly jokes that we have all heard before, and dusted off his inequality book, and in he came. And who is the shadow Assistant Treasurer? Then we have the member for Chifley. He is actually a little bit smarter than them both. The member for Kooyong would agree with this. He thought, 'I haven't got time to read it, but I'll put a few sticky tabs inside the book. I'm not sure what pages they are on.' All three of them refused to deal—

Opposition members interjecting —

Oh, they are going to come home strong. It was only publically released at midday, so maybe the last speaker on the Labor side will have had time to actually read it and talk on the topic of our demographic destiny, and, under you, what was our massive debt destiny. That is the other word you did not hear from any of them: debt.

Ms MacTiernan interjecting—

Let's go through some of Labor's history, and for the member interjecting over there this will be a revelation, because you have been to reprogramming school. Let's take you through what actually happened. Let's go back to 2011, when Labor decided to put Australia into massive debt. In 2011 we had $45 billion in the bank, and Labor decided to ram us into massive debt and deficit. Back then, four years ago, the now Leader of the Opposition had this to say in the parliament: 'At the peak, under Labor's economic stewardship, which is represented in its flagship, the budget, net debt will be 7.2 per cent of GDP.'

Today it is double that, because from 2011 they ran deficit after deficit. As the member for Higgins pointed out, today it is 15 per cent of GDP. As the member for Higgins and the member for Kooyong pointed out, we have had a debt destiny under Labor. What the Intergenerational report, a Treasury document, points out is where we were going, where we are now heading and where we can be if we take responsible decisions. If we had done as those opposite suggested, and done nothing, as the documents point out we would have reached 122 per cent of GDP in 2054-55. Under decisions already legislated, net debt is projected to reach 57.2 per cent of GDP. If we had done nothing, as the member for Kooyong rightly pointed out, we would be right up there heading towards Greece. The graph on page 53, produced by the Treasury, shows just that.

But for those opposite that is not a worry. In fact, the shadow Treasurer, whenever asked about debt, says our net debt is not as high as other countries. In other words, he looks to the worst not as something to avoid, but as some sort of ambitious target. For those opposite, back in 2011 7.2 per cent of GDP was not a problem. Today they are saying 15 per cent is not a problem. They have no plan for how they would bring it down. They owe the Australian people a straight answer. This is a question Labor will be asked every day in this parliament: what level of net debt does Labor think Australia should have? What should it have today? What are they comfortable with? What should it have tomorrow? What should be in the generations ahead? If we had done nothing, and we had taken your advice, the future would be the present that those European countries have today. (Time expired)

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I wish we did not have to have this MPI, I really do. I wish that the two acolytes of Peter Costello we have just heard from honoured the memory of their departed boss by having to defend an Intergenerational report that had credibility, that acknowledged the challenges of this nation and that was not the biggest stitch up since the Fine Cotton affair, a stitch up written not by Treasury but by the Treasurer. A stitch up that shows it is just a political document, a great act of fiction. An act of fiction that is more concerned about previous policy than the future. An act of fiction that claims somehow that the 2013-14 MYEFO launched by the current Treasurer—at least for a few more days—Joe Hockey, was the policy of the previous Labor government. It is a MYEFO that loaded down government spending with a further $14 billion, including a $9 billion payment to the RBA, a payment that they did not ask for, a payment that they said they did not especially need, a payment that they have already returned $1.3 billion of back to the government this year, demonstrating that it was a political fix to load down Labor's legacy.

That is what this document is. It is a document designed to attack the legacy of this side of politics, rather than a future plan for this nation—a future assessment of where we are heading. That is a great tragedy, because in this place we all profess to care about the future. We have a number of great members of parliament who are pregnant, and they have been talking about how that focuses them even more on the future. I have been lucky enough that recently my wife delivered a second child, and it does focus you on the future. It does focus you on wanting to leave this country a better place.

But how can we leave this country a better placed than those on the other side, the government, still pursue this myth that somehow either climate change is not happening or, even more ridiculous and offensive, that climate change will be beneficial for this nation. That is what this document says. The climate change section of this report is an obscenity. It is an obscenity that undermines the credibility of this entire report. It is a section that endorses the direct action propaganda. It is a pay-the-polluters scheme that has been repudiated by every respectable, independent economist in this country. It is a policy costed by the Treasury at $48 billion. No economist, who is not paid by the government, goes anywhere near this document, this policy, yet they have the temerity to talk about it in this report as, somehow, a great solution for climate change.

Then we have the box 1.6—I have actually read the report—on international approaches to climate change. Whoever wrote this is either blind, has a very selective reading of what is happening internationally, or is in fact the Treasurer. It does mention Fiji somewhere, so maybe he found out about it on his holiday over there. It lists nine countries and their international action. What it omits to say about these nine countries is that five of the nine have emissions trading schemes in place, which every reputable economist says is the right way to tackle climate change. The truth is that by next year three billion people in this world will live in countries or provinces governed by emissions trading schemes. The government are rejecting that and their document is full of propaganda that betrays the lightweight nature of this document.

To suggest that somehow climate change will be beneficial repudiates all the scientific analysis that is done in this country and around the world. Let me quote from an Australian government report of the impact if climate change is left unchecked: 'A 92 per cent reduction in agricultural production in the Murray Darling Irrigation Area. The destruction of the $9 billion Great Barrier Reef tourism. Wine making becoming more and more difficult,' and that is already impacting in my region in the Hunter, and 'more than a doubling of temperature related deaths.' That is the cost of not taking climate change seriously. Let me repeat that: if climate change is left unchecked, as is the policy of those opposite, if we do nothing about it or have a fig leaf of a policy, which is their policy, as the member for Wentworth attested to, we will see a more than doubling of climate change related deaths in this country.

That is really what this report should be concentrating on. That is really what intergenerational equity should be about. It is about leaving this country in a better place for our children and our grandchildren, and that is not what this report is about. This report is about this government surviving to next week and next month, and it should be condemned for the political fix that it is.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

When I first came to this place I hoped, perhaps naively, that on issues that would affect the future of my children and, in time, perhaps my grandchildren, there would be at least an attempt at some level of bipartisanship. The extraordinary disappointment for me has been that there has not even been an attempt in this case. In what is one of the most important pieces of work that our public servants, our independent public servants, do, there has been no attempt by the other side at any level of bipartisanship before they have even read the report. So, it is time to actually look at the Australia we are going to leave our children and grandchildren if we continue with the policies that we inherited. That is the starting point. You cannot think about the future without understanding the starting point.

Let us look at a few of the facts. Australian government spending, as it was, was on its way to 37 per cent of GDP. Almost 40 per cent of the economy was federal government spending. That is great if you are a socialist, because you have taken it from 22 per cent to 37 per cent, and no doubt in time you are on your way to 100 per cent. We as a government have already got that down to 30 per cent. You have to ask yourself: what was it about Labor policies that were pushing that number up to 37 per cent, and the answer is very simple. They allowed spending growth to be faster than GDP. It is that simple. If you do that, then away it goes, away it rips.

When we look at net debt it was $6 trillion and 122 per cent of GDP. As we heard earlier from the member for Kooyong, this is an extraordinary number compared to other countries in the world. In fact Austria, which has not been one of the world's best on this front, is at 53 per cent at the moment. Canada is at only 35 per cent. New Zealand is at 26 per cent. The UK, which has been a real problem area, is at 82 per cent. The US is at 87 per cent. But, of course, we were on our way towards Greece at 155 per cent and Ireland at 102 per cent. That is where the Labor policies were taking us, because they could not contain spending growth, because they were locking in spending growth greater than GDP.

When we look at deficits they were taking us to 12 per cent of GDP. That is over $600 billion a year. Let us do a few more comparisons. I looked at the 2015 forecast and the 2014 actuals. The interesting thing about that is that I could not find a deficit in the OECD that got to 12 per cent of GDP. There was not one there. In fact I had to go back in history to 2009 to find some deficits that approached 12 per cent of GDP. I managed to find Greece at 15.6 per cent, Portugal at 10 per cent, Spain at 11 per cent and the United States at 12 per cent. We would be as bad as the worst countries during the GFC on the policies that Labor left us.

I thought it would be an interesting exercise to have a look at how you might fix this problem. My starting point, of course, was to look for the money tree. I could not find the money tree in Hotham. I had a look at Newcastle, and Scullin, and Wakefield, and McMahon, and then I thought: I know where the money tree is. The money tree must be in Lilley because the member for Lilley promised us three surpluses, which he never delivered. Then I suddenly realised where the money tree was. The money tree was the next generation of Australians.

In fact I did some very simple calculations of how much tax the next generation of Australians would be paying to pay for these deficits, and that was very interesting. Let us put this in perspective. The GST today generates 3.6 per cent. If we quadrupled the GST, the 40 per cent GST rate would be Labor's money tree. The personal income tax generates 11½ per cent. If we double the personal income tax rate that would be the money tree. It is clear that Labor's policies were to tax more, to take us down the path of debt and deficit and to leave extraordinary liabilities for the next generation of Australians.

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

One of the core beliefs that I had before coming into this parliament is that politics should be more focused on long-term issues. As a member of parliament, I have a much better understanding of why it is that we seem to get caught up in the politics of the day. As backbench members of parliament, we often have tasks that could fill two days for every day we work, and I know that ministers could have weeks of time for the work that has to be done in one day. So I do understand that in this environment sometimes long-term issues can get brushed away as the day-to-day things come into play. So I am very interested in ways that we can try to shape the political process to change this, because it is obviously not in the best interests of the country. That is why, despite the Charter of Budget Honesty being introduced by a coalition government, there are a lot of things about this piece of legislation that I respect and admire, and I think it has been good for the democratic process.

The Intergenerational reportis one of the core things that I think is fantastic for the nation. What could be better than to have a fact based discussion about where this country is going? It is with very genuine disappointment that I stand today to condemn the way that this government has politicised the Intergenerational report, taking away from all of us the opportunity to have a fact based and values based discussion about what we should be doing in Australia to deal with creating a better future for our children.

We know that this document has been heavily politicised, because Treasury has told us that. We had the Prime Minister claiming in question time this week that the Intergenerational report was prepared by experts at the Treasury. The Treasurer has also recently claimed that the Intergenerational report was 'independent analysis', and yet what we found in estimates was that, when these claims were put to the Treasury Secretary, he said, 'This is a document of the Treasurer.' Again, he said, 'All of the key elements in the Intergenerational report are ultimately matters for the Treasurer.' This is very disappointing. The Senate estimates questions followed reports that were widely in the press about the Treasurer and how he was trying to lean on the department to change the net migration figures of Australia so that the fiscal position under one of the policy settings that he examined would look worse than they would otherwise. How can we expect the Australian people to join us in a discussion when we have the Treasurer trying to fiddle the figures to justify a set of policy settings that he wants to put in place?

There is no better illustration of the politicisation of this document than the way that climate change is managed in the Intergenerational report. We know that this government has some difficult constituencies to manage, but it should try to be honest. If it were being honest, this report would say, frankly, that the biggest long-term economic threat for Australia is climate change. Think about the shape of our economy. Agriculture, mining, tourism—all of these are fundamentally threatened by what could be radical changes in our climate over the next 50 and then 100 years. That is not even starting to mention the natural disasters, the increased fire risk, and the increased and very expensive heatwaves that we are going to need to manage. This could change our way of life. And yet the IGR is pretty tepid on it. There are some things. Sure, there might be some costs, but it also points to the great benefits that we might have. Surprise, surprise—after all this, it gives a ringing endorsement of Direct Action, policy that we know that no serious economist and no serious climate scientist in this country will stand behind.

Then there is the excessive and somewhat sad focus on Labor in this report. This is a government that is so bereft of vision that it spends the majority of the report talking about what it asserts Labor would do were it in government today. I say to you on the other side of the House: 'Get with the program. You are the government. We are the opposition. You are meant to be producing the documents of vision, ideas and leadership for where this country should be heading. Instead, you are obsessing about what you think we might have done were we in government. What a missed opportunity. It is absolutely depressing to me.

I say to you as I have said many times in the House: this is not about any sense of vision or sense of the future; this is about justifying the toxic budget that has been so profoundly rejected by the Australian people. We have heard various mea culpas from different people in the government that this was really about a sales job. We know the Intergenerational report has been politicised to help that sales job. I would say to you on the other side of the House that what you need to recognise is that that budget failed not because it was a bad sales job but because it was bad policy. You decried a budget emergency, then you got rid of taxes on major polluters and mining companies and tried to cut pensions for Australians. We will not have it. (Time expired)

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

When you think the Labor Party can only go so low, they go lower. They have not got up to discuss the policy issues in relation to the Intergenerational report. They have attacked the report itself—the report produced independently by Treasury. No, they do not want to debate the ideas that we need to discuss as a government, as a country, in this report; they attack the independent people who write the report. It is a disgrace. This report, as it should, is talking about a word that a lot of other people will talk about at other times in relation to other things, and that is sustainability. That is all this report wants to discuss. It is laying down the scene of where we are at and where we are projected to go, and from that we need to have a discussion, as we should, and that discussion should be debated, but not the report itself. It is a disgrace that it has only just come out and, without even reading it properly, they are doing that.

When we talk about sustainability, what do we mean? We all want to, in every facet of our life, leave things in a better shape than we found them. Mr Deputy Speaker Scott, I know that you have a property. I have quite a modest property. I do weed control on it, I look after the creek, I have revegetated the creek. I have put in water troughs so that my cattle do not go to the creek. As you would know, they walk through a creek to go to a water trough, so if you have water troughs you can protect your creek so that they do not do that. Why do we do that? I do that because I want to leave my property in better shape than when I got it. I look at my family. I had wonderful parents and I am, as a parent, trying to be a great parent because I want my each of my children—and I am sure they will be, which is probably more of a credit to my wife than I—to be a better person than I am. That is what I want to contribute in the sense that my property will be a better property and my children will be better people. That is because we are into sustainability.

What is this Intergenerational report about? It is about economic sustainability. With what we are doing here, we can imagine ourselves as a family. Let's do that: we are a family with a family budget. What would this family be discussing right now? This family would be saying, 'Right, six years ago we had a certain amount of income and no debt. Six years on, we have more income. We are actually earning lots more money than we were six years ago, but we have been spending more money every year for six years and we have racked up a debt.' Income can go up or down; it is a thing that is sometimes outside your control as a family, as it can be for a country. We should be looking at this as if we are a family. Six years ago, we had no debt. We now have a lot. There are risks on the horizon, as this Intergenerational report talks about. We need to have a discussion about what, as a family, we are going to do. Are we going to keep on spending more money every year? How secure is our income when some of those things are out of our control?

That is what this would be about. As a family, we would also be saying, unfortunately, that over that six years as a family we have not bought necessarily any assets that are going to produce as money or we have not bought anything that is going to produce us income. We have just increased our recurrent expenditure. We have not actually spent this money or run up this debt on anything that is going to generate us money. What should this family do? What should we as a country do? Are we going to keep spending? Obviously, some countries and some families do. It has been mentioned before in this MPI that countries like Greece have done that. What happens then? The people that owe you the money and the bankers then become your controllers. We as a country certainty do not ever want to get into this.

I have read this report. I think it is very well produced. I acknowledge Treasury for producing this report. I think there is a lot in this for us to acknowledge. As we well know, from the debt that we have run up, we have $1 billion in interest that we pay every month to cover this debt. We are spending $100 million a day more than we get in. It is an issue that we need to address. Again, I say that the attack on this report is outrageous. Popularist politics might feel good in the short term, but it gives the country a long-term headache. (Time expired)