Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

I am speaking today on the Social Service Legislation Amendment (Budget Repair) Bill 2015. Only the Liberal Party would have the audacity to come into this place and put forward a bill with the words 'Budget Repair' in the title, because for the last two years this Liberal government has done absolutely nothing to repair the budget. In fact, the deficit has doubled during their time in office. That is right: the budget deficit has doubled under this Liberal government's watch. Yet they come in here day after day and lecture the Australian people about fiscal responsibility.

It takes a special kind of audacity for the Minister for Social Services to come in here and talk about the need for fiscal restraint. The Minister for Social Services was of course the Treasurer of Western Australia between 2010 and 2012. Today, Western Australia has a budget deficit of $3.1 billion. That is the Minister for Social Services' legacy to the people of Western Australia: a $3.1 billion deficit. This is the man who as Treasurer of Western Australia mismanaged one of the greatest mineral booms in history and left the Western Australian people with a deficit of $3.1 billion. So, every time this Minister for Social Services preaches about the need to cut support to pensioners or people with disability or young people—because we have to be fiscally responsible—we will be reminding him every single time of his record of economic incompetence in Western Australia—a $3.1 billion deficit that the Minister for Social Services left behind in Perth. He has no credibility whatsoever when it comes to budget repair.

Labor understands how important it is to repair the budget, but you have to do it in a way that is fair and equitable. The Liberals' approach, whether it was under the member for Warringah, Tony Abbott, when he was the Prime Minister, or the latest Prime Minister, Malcolm Turnbull, is to make unfair cuts affecting low-income and middle-income Australians. We know that the latest thing they want to do is increase the GST to 15 per cent—a regressive tax that will make the cost of everything go up and will hit low-income and middle-income earners the hardest.

On the other hand, Labor thinks we should make multinational companies pay their fair share of tax. We think that we should end the unfair and unsustainable superannuation tax concessions for the very wealthy. Labor will oppose this bill today. We will oppose each and every one of the measures contained in the bill, just as we have opposed them on previous occasions. I will go through the reasons why. People might remember that these cuts have their origins in the 2014 and 2015 budgets. The bill proves that it does not matter who the Liberal Prime Minister is. This Liberal government is intent on hurting low-income and middle-income Australians.

The first measure in the bill proposes changes to the proportional payment of pensions outside Australia. In other words, the Liberals want to make it harder for some pensioners to continue to receive their full pension whilst they are overseas. Just remember that, all of you over there who have lots of pensioners who were born overseas in your electorates. This bill today is going to make it harder for those pensioners to receive their full pension whilst they are overseas. Currently, pensioners can stay overseas for 26 weeks and receive their full pension. Following that time, the pension is reduced to a rate that depends on the number of years a pensioner has worked in Australia. But, under the government's proposal that is in this bill today and that every single Liberal and National party member is about to vote for, from January 2017 that 26 weeks will be reduced to six weeks. If the government gets its way, after six weeks overseas, some pensioners will have their rate of pension reduced. Labor oppose this because we think it unfairly punishes pensioners who choose to spend a period of time overseas, possibly for visiting family.

As the Chairperson of the Federation of Ethnic Communities' Councils of Australia, Joe Caputo, has said, 'pensioners born overseas often need to travel overseas for extended periods to stay in touch with family or to care for a sick or dying relative'. In some cases, they had never been back to the country of their birth and were going on, as they describe it, 'the trip of a lifetime'. A Melbourne pensioner, Vic Guarino, who came to Australia from Italy in the early 1960s, described the government's changes to pension portability as 'like a threat'. Mr Guarino said:

You want to go [overseas] because you want to see someone in the family that's old … My wife had a sister in Italy, she wanted to spend time with her before it was too late.

They are many pensioners across Australia who feel like they are being targeted by this government.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Tell the truth about what's in the bill!

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

The Liberal government are hell-bent on cutting support for pensioners and seniors. Obviously, there is a bit of sensitivity from the member opposite. I will be glad to see whether he tells all of the pensioners in his electorate who were born overseas that he is cutting their entitlements. If he does not do it, I will.

The Liberal government are hell-bent on cutting support to pensioners and seniors. This is just the latest effort. Their first instinct is to take money off pensioners. Let us have a look at each and every one of the measures that that member over there who is making all that noise and every single other Liberal and National party member have so far voted for. First of all, they voted for a cut to pension indexation—a move that would have seen an $80 a week cut to the pension over 10 years. That is what they all voted for. They also voted for cuts to 330,000 pensioners by changing the pension assets test. That will now start next year, and each and every pensioner who is on a part pension because of the assets test knows that the Liberal government will cut their pension. They made cuts to pensioner concessions—the Liberal government took $1 billion out of pensioner concessions. The government also want to increase the pension age to 70. If they get that through the parliament, it will mean Australia would have the oldest pension age in the developed world. In this bill are cuts to pensioners who spend time out of Australia. That is the Liberal-National government's record on pensions—absolutely shameful.

It is important to note that this new cut, the latest cut by this Liberal-National party government to pensioners, is widely opposed by seniors groups, migrant groups and the welfare sector. The Council on the Ageing describes the change as:

… excessively punitive and inequitable in its impact on Australians not born in this country and who maintain cultural and familial ties to their place of birth.

Around 40 per cent of age pensioners were not born in Australia. The Council on the Ageing says the impact of the measure is likely to be:

… significant and unfairly borne by one segment of our community.

Their submission to the Senate Community Affairs Legislation Committee inquiry goes on to say:

We know from our members and constituency that it is not unusual for older Australians born overseas to take 'the one big trip' to their country of birth when their working lives are over. They make the most of their time there, given the cost of travel, spending an extended period seeing family and friends before returning to Australia. COTA does not see this as unreasonable.

I think that best sums up the sentiment of so many people who have written to me on this issue. It is not unreasonable for pensioners to go for 'one big trip' in their retirement to visit their friends and family in the place of their birth.

The St Vincent de Paul Society said in their submission to the Senate inquiry into this bill:

It is unfair that a new Australian from a refugee background, who has had to return to their country of origin for a few months, should have their Pension cut significantly more than someone who has lived in Australia their whole life and then permanently emigrated overseas.

The Refugee Council of Australia also opposes this measure, noting that, due to the numerous problems with the family reunion program, refugee community members are often required to travel overseas for long periods of time to visit their relatives and community members. This is particularly important for those people who may have sick or dying relatives in secondary countries of asylum. So, clearly, the migrant and refugee communities are very much opposed to this change.

Of course, it does not end there. Also included in this bill are some other relics from this government's dark past. It includes the abolition of the pensioner education supplement. People opposite might like to forget the 2014 'lifters and leaners' budget. They have punted the previous Treasurer, Mr Hockey, out of the country, but what they have in this bill today is some of the remnants. The pensioner education supplement has, so far, outlasted the former Treasurer, Joe Hockey.

I will just remind people opposite what the pensioner education supplement is and who uses it. It is a payment of between $31.20 and $62.40 a fortnight, depending on levels of study, to help pensioners—largely, people on the disability support pension and the carer payment—who are studying. It provides a small but important payment to help with the costs of study. It can be used to purchase study aids, covering items like textbooks and other academic resources, and for printing, transport and internet connections. Once again, every Liberal and National Party member, having already tried to abolish this a number of times, is going to try again. This measure will see 47,000 pensioners lose their supplement. As the Women and Work Research Group at the University of Sydney has said:

For those in an already difficult financial position who are attempting to improve their education and consequently their employment prospects, these cuts will be significant.

The pensioner education supplement is a payment to people with disabilities, to people who are carers, to single parents and to young people who are studying. According to the Welfare Rights Centre, around three in 10 people on this payment are aged under 25, indicating that the payment offers beneficial support that helps young people to continue in education and study. Seven per cent of those studying with the pensioner education supplement are Indigenous. Around 40 per cent of people receiving the payment have a disability and so, in fact, it is people with a disability who will be the biggest losers if this supplement is abolished. It is a small allowance. It is nothing generous. It is nothing lavish—a maximum of $62 a fortnight—and yet this government, under the previous Prime Minister, Mr Abbott, and under this new Prime Minister, Mr Turnbull, have sought to cut it. They have sought to cut it from people who are already in a difficult financial position, some of society's most vulnerable people. That really is what this government's approach to budget repair is about.

This bill also seeks to abolish the education entry payment—once again, another small payment that goes to recipients of Newstart, parenting payment and partner or widow allowance. In 2013-14, around 87,000 people received the payment. This, too, is a payment that is designed to help vulnerable people with study costs, and yet this government, under Prime Minister Turnbull, and every member of the Liberal and National parties are trying to rip it away.

The final measure in this bill reintroduces something that was contained in the 2014 budget and later introduced in the Social Services Legislation Amendment (Youth Employment and Other Measures) Bill 2015. These changes include freezing, for three years, the income-free areas for all working-age allowances—other than student payments—and for parenting payment single from a new start date of 1 July 2016. So, in a few months time, if the government gets its way, it will try to freeze—that is, not increase, even to keep up with inflation—all of those working-age allowances.

They also want to freeze, for three years, the income-free areas and other means-test thresholds for student payments, including the student income bank, from 1 January. What we see with this measure is the Liberal-National Party government's steadfast commitment to make life harder for young Australians. By freezing these thresholds, more young Australians will be ineligible to get assistance while they undertake study or training. The measure is absolutely consistent with this government's—both Mr Abbott's and Mr Turnbull's—approach of forcing young people to wait one month before they get access to any sort of income support.

Of course, originally they wanted to make young jobseekers wait six months before accessing any income support. Labor was able to stop that. Then the Liberal Party came back under the current Prime Minister and wanted to make people wait a month before they get any form of income support. So people are supposed to live on absolutely nothing for a month. I am very pleased to say to the House that Labor, so far, has been able to stop the government from pushing young people into poverty and hardship. I hope we can continue to do that.

In summary, this bill gives us further evidence that, no matter who is leader of the Liberal Party, they will always seek to cut support to pensioners, to people with disability, to carers, to women and to young people. It is a bill introduced by a minister whose biggest legacy as the Treasurer of Western Australia was leaving behind a $3.1 billion deficit. It is a bill from a Prime Minister who claims that he is committed to fairness but then tries to cut support to pensioners, to people with disability, to their carers, to women and to young people—a Prime Minister who we now know and see every single day says one thing and then does another.

He says he believes in fairness and then he tries to sneak through cuts to pensioners. Whether it is on fairness, climate change, marriage equality or the republic, this Prime Minister says one thing and does another. By contrast, Labor will always put people first. That is why we have fought against so many of this government's unfair cuts. Unlike this Prime Minister, who puts power before principle, Labor will put people first, and that is exactly what we are doing by opposing this bill.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

I am pleased that I have this opportunity to speak on the Social Services Legislation Amendment (Budget Repair) Bill 2015. I am going to move away from the notes and the facts of this for a moment to address the cries that we have just heard from the other side—and what a tired voice that is. The shadow minister who took a brutal axe to single mother payments not that long ago now stands in here and tries to preach to those of us who have tried to clean up the mess of the previous Labor government that left our nation's finances in such a state that—and anyone who is not aware of this should be made aware—it is costing us $100 million every day just to pay the interest bill on the debt that was accrued through those six long, hard years of Labor. Let me repeat that: that is $100 million every day. When you wake up, folks, every morning when the alarm bell goes off—kerching!—the taxpayers of Australia have to borrow $100 million just to pay the debt that was accrued by that lot on the opposite side.

Let's put this in perspective. When that lot over there took the Treasury benches in 2007, the budgets going forward—that is not just the budget of the time but the projected budgets going forward—under Howard and Costello were in surplus. Whether you liked that government or not, whether you liked the initiatives of that government over a 13-year period or not, the fact of the matter is that this country was living within its means, as I would expect people to do in their households and as I would teach my children to do. But in a short, six-year period, a dark part of the country's history, we have gone to a situation where we have to borrow so much money to balance the books each and every year that every day when the alarm clock goes off—kerching!—$100 million has to be borrowed to pay just the interest on the loan.

People know how their house loan works. It is hard enough paying the interest, let alone slightly chewing the capital away, on the statement that they receive each and every month. These are the facts of the matter. Those opposite can cry crocodile tears all they like, but the reality is that somebody, some government, some day, somewhere has to stand up to the truth of the matter. We cannot continue to live the way we are living. We cannot continue to put the future of our children, our grandchildren and our great-grandchildren into jeopardy. That is what we are doing, and I am not going to be a part of it.

I am not going to stand here for one moment and say that the decisions that have to be made by the executive government of this country are not going to be hard. They are. It is no different to decisions in someone's household. When major changes come up in your finances, you need to make changes. You need to make a difference in the way you spend your money, the way you go and earn your money and the way in which you may in fact choose to borrow money.

The reality—newsflash, folks!—is that the government of Australia cannot do everything for everyone. If you think that can go on, you are living in cloud cuckoo land. It cannot happen. It is taxpayers' money. Out here in the bowels of parliament we do not have a printing press that prints $50 and $100 notes every day. It does not happen. The money that this government have at our disposal to spend is the Australian people's money. They elected us to spend it on their behalf. It is their hard-earned money. They wake up every day and go and earn it. They come home and try to pay the bills, to give a good life to their children and to build a future for their families. It is their money that we are spending. The reality is that we are spending a hell of a lot more than their money. We are borrowing $100 million every day to clean up Labor's mess and pay down the debt that was accrued in just a very short period of time.

That is the context in which this bill, the Social Services Legislation Amendment (Budget Repair) Bill 2015, appears in this chamber. Those who were listening on radio, here in the chamber today or in their offices, would have thought from the cries of the shadow minister that we were going to cut the pensions of everybody the minute they stepped over the line out of this country for more than six weeks. That is not true. It makes for a very good sound grab, but let's get to the facts of this matter.

The reality for disabled support pensioners is that there is no real change. We are talking about age pensioners in this context. We all know that you do not receive an age pension until you are 65. In some cases now it is 66, 67 and 67½. Let's just think about this. The bill says that if you have been working and living in this country for 35 years, whether you started from overseas or not, this will not affect you. The six-week limit on being overseas does not exist for those people. The example of the shadow minister was of a person who arrived here in the early 1970s from, I think, Greece. I do not get it. What a terrible example to give. There is no doubt that that person has been working in this country for more than 35 years. If he and his wife want to go back and see family in Athens or wherever, this does not apply to them. It does not apply. People should push the pause button on their recording and go back and listen to what the shadow minister said. She tried to give the impression that we were going to cut the pensions of those who want to leave the country to see a sick mama and papa. That is just a wrong interpretation of this bill. If 65 is the pension age and you have been here 35 years, even if you were born in some other country, even if you arrived at the ripe old age of 30 you would still be eligible to go out of this country over and above six weeks and collect your pension. Those are the facts for everybody to consider.

If you have not been here 35 years, there is a proportional reduction. That is a fact. If you have been here only 30 years, your pension will not be taken away from you if you choose to go and live with family overseas in Europe or America for two or three months. Your pension may be reduced—that is true. But do not listen to this garbage that is coming from the other side with crocodile tears that we are cutting away the pensions of everybody. These are pure scare tactics. Those opposite are masters of them. They go to a special school for Labor politicians in their early days to learn the scare-tactics strategy for being an opposition member of parliament and a Labor member of parliament. These are the facts and they are what should be put on the table.

Those opposite have done nothing but oppose every effort of this government to get the budget back in the black. Are all the initiatives that have been placed on the table loved by the people of Australia? Of course they are not. Governments are not here to be loved by everyone. Governments have a mandate to do what they said they would do. We said to each and every one of the Australian voters, 'We want to come in and clean up the mess.' What I have come to determine is that, whilst they gave us that mandate and everyone cheered us on to do that, what some people actually meant was: 'Clean up the mess, do the difficult things, make the hard choices and make the changes, but just don't do them to me. Do them to my neighbour; do them to my footy mates, do them to my work mates, but do not do them to me.' It is a 'not in my backyard' sort of scenario. Well, it does not work that way. We are a nation. We are a family. We have to fix this problem together. We have to all take some of the burden, and we need to get the job done.

In this bill, there are a number of initiatives that will save hundreds of millions of dollars over the forward estimates. Whilst, to the average Joe Public, that sounds like a lot of money, the reality is that the savings in this bill alone—I have not done the sums; I am thinking off the top of my head—will probably save seven days of interest a year, if that. So there are still 358 days to go. Get it in context, folks. Here are the facts. Let us face the facts. Let us face the reality that we have a job to do.

The deficits of the Labor governments over those years totalled $191 billion. That is how much they spent, more than they earned, over six years. There was an extra $123 billion on top of that which they projected to spend more than they earned, and they gave us that as a beautiful inheritance on the day that we arrived here in September 2013. What a lovely inheritance to have! When that black briefcase was opened by the Treasury officials to give the dark news to Mr Hockey and Mr Abbott, I reckon that, as the little clips on it unlocked, it would have exploded in their faces. There was the truth: $191 billion more had been spent that we knew of, but 'Here, Mr Abbott; here, Mr Hockey, happy Christmas!' We had also inherited $123 billion in projected deficits. You think that we had a job ahead of us? Well, you got it right.

Every time we come into this place to bring about changes to the budget, to bring about a healthier response to the budget, they say no. They always say no. They are not interested in fixing up their mess. They are like the people that set fire to their rental property: they torched it, they trashed it and then they ran away, only to discover that the neighbours came to help save it. The fire brigade, the police and the emergency services turned up to get this thing under control, and they came back and shot everyone that was trying to put out the fire. That is pretty well what it is. That was not in my notes, but it had to be said, because the previous speaker just cried crocodile tears for 27 minutes and made no sense at all.

It is true that a couple of measures will no longer be part of government policy: the pensioner education supplement, which was introduced 30 years ago, with the aim of assisting the long-term unemployed to adapt their skills to rejoin the workforce; and the education entry payment, which is over 20 years old. Folks, we have lots of other programs in place that now provide that support. These payments are hangovers from 20 and 30 years ago, and there are savings in here across the forward estimates of $500 million that can go towards paying off the debt that I referred to earlier in my speech.

The job of government is not to please everyone; it is to do what the public would expect us to do—to live within our means. Imagine if every family in Australia continued, day in, day out—not giving a stuff—to spend and spend and spend, and borrow and borrow and borrow. I hear some of you saying, 'We are probably doing it too much anyway,' and there could be some truth in that, but imagine if everyone had that attitude. The government of the country should not have that attitude. It should have an attitude of far better stewardship than that. I like to think that that is what this government is putting its attention and its priorities into. Whether you like it or not, the initiatives in this bill are part of the solution, the greater strategy, to get the budget back under control.

There are a number of funding mechanisms that are now available to people when it comes to their educational outcomes. They are often collectively known as HECS. Every year, the government provides $3,500 million under HECS programs to assist people of any age to undertake further educational qualifications. So do not for one moment, those who are listening to this contribution, think that there will be nothing left for people as they strive to build on their educational qualifications.

One of the other initiatives in this bill, which I will wrap up on, is the portability of pensions. Whilst we are placing a new condition of just six weeks on people as they leave the country, I am concerned that there are some inconsistencies in relation to those that we are making this change for—in some cases, former prime ministers of the country. Let me put it straight. I have a little difficulty in accepting that we may have a bit of work to do here, but apparently it is all right, because former prime ministers are funded under a taxpayer pensioner scheme. But, as I read the paper at the moment, Mr Rudd, for example, has spent most of the last 12 months out of the country, on the speakers circuit, in advertising for Hillary Clinton, with Julia Gillard, who is now a so-called adjunct professor at some university. I would like to see some consistency—

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

God, you are mean-spirited. What about Malcolm Fraser? What about John Howard? You are absolutely unbelievable. What about Robert Menzies?

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

I do not care whether they are Liberal, Labor, Callithumpian—I do not care. I do not care if they are one of us or one of you. At the end of the day, I have written to the minister, saying, 'You might want to have a look at this.' Why should pensions for prime ministers be allowed to continue on indefinitely, if in fact we are changing it for others? Why should Kevin Rudd be able to live in New York or wherever for 10 months and collect his pension? I think we should have a look at that. I think the public would expect us to. They would expect some consistency. They would expect us to have some integrity on this, and I will write to the minister asking that. I thank the House. (Time expired)

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

It is so classic for government MPs to stand up and say: 'We cannot be everything to everyone. We have to be honest. We're not here to be loved by everyone.' Then why are you going after only the lowest paid people in our community? Be honest with the Australian people. Don't just come in here and say, 'We've got to provide tough love; we've got to go after the pensioners; we've got to go after the young people and the unemployed.' Why aren't you going after the people who are really making a profit in this community? Why aren't you getting real about cracking down on multinationals who are not paying their fair share of tax? Why is this government so obsessed with going after pensioners and going after young people who are unemployed and not going after the people in our community who are getting a free ride—like big multinationals who are not paying their fair share of tax and wealthy superannuants who are getting generous tax breaks from this government? This government are not being real and genuine when they come in here and say, 'We've got to make the tough decisions.' The only tough decisions that these people are making are the tough decisions that hurt the people who can least afford it.

This is a government that is not committed to supporting those on the lowest incomes. This is a government that is here to prop up and support their mates in big business and support the people who actually have the means in our society. It is a government that is obsessed with attacking people on the lowest incomes, and this bill that is before us, the Social Services Legislation Amendment (Budget Repair) Bill 2015, is another example. All they are doing with these budget measures—they call it budget repair—is going after people on the lowest incomes. What have they got against people in our community on the lowest incomes? Where are the real tax reforms? Where is the real budget repair for the other end of town? They would have a little bit more credit with the Australian people if they would say, 'This is what we are doing across the board'. But no, instead—as we have now seen in two budgets—they are going after working families, they are going after Australian pensioners and they are going after our young people. The changes in this bill are another example of that.

They are changing the proportion of the pension payment to pensioners who are outside Australia. That is just a mean measure. It does not take into context the global community that we now live in, the relationships that we have with other countries. I have had a couple of people come and speak to me about how challenging it is for their mother, who receives a part pension from overseas, because she may have had her early years in another country and a pension here in Australia. They tell me that it is a nightmare to try to get the paperwork right—not just for Centrelink, not just for themselves but for the country overseas. There has got to be a better way to do this, and this government and these measures are just going to make that challenge more complicated.

This bill also introduces measures contained in the 2014 budget. These are changes that the government have not been able to legislate. These are the abolition of the pensioner education supplement and the education entry payment. How could you deny pensioners who want to gain further education a supplement to do so? It shows that this government and these MPs do not understand who the pensioners are in their community. They do not understand that there are people on a pension who want to do more, who want to seek an education.

It is very expensive to study these days in Australia—very expensive. And yet this government is saying to those who want to put their hand up to do extra study, to do extra coursework, 'We're not going to support you in that.' It demonstrates how out of touch this government is, because they do not understand how hard it is to survive on a pension in Australia today.

There are several types of people on retirement incomes in our country. I have mentioned the wealthy superannuants at one end; then we have people who are on super; then we have people who are on a mix of super and pension. They are the people who are surviving. Then you have people who are solely on a pension. The only way you can describe the circumstances of a lot of them is that they are living in poverty. If they have been fortunate enough to be able to pay off their home, if they have solar panels on their roof so they can knock out that one electricity bill, then those pensioners are making ends meet. But pensioners who might be renting, pensioners who do not have solar panels on their roof and pensioners who are on a single income are living in poverty, and they need more support from this government, not less—particularly women who find themselves in the situation where they want to do extra study, yet this government will not be supporting them if these measures go through.

This bill also introduces measures to freeze the income-free areas for all working-age allowances other than student payments and for parenting payments for singles, from a new start date of 1 July 2016. This bill also maintains the levels for three years for income-free areas and other means-tested thresholds for student payments, including student income bank limits, from 1 January 2016. This is a measure that is just mean. They are going to say to people who go out there and start earning a little bit of extra money, 'We're keeping the amount that you can earn at a set level.' So to people who might be on a payment whilst they are studying and to people who might be on a payment whilst trying to find more work, this government is saying, 'Your income bank is frozen.'

You can tell that many members of the government, when they were studying at university, did not try to survive on youth allowance. That is what it was back in my day. You are forcing people into poverty because they cannot earn a few extra dollars to subsidise their youth allowance. The cost of living goes up every single year: the cost of the basics, the cost of rent, the cost of books and the cost of study go up. So, if people want to pick up that extra shift at work, they now cannot, because they will lose part of their youth allowance. What this government has not realised—because they are so out of touch with people in the lowest income bracket—is that they are forcing people into poverty. If they take the extra shift, they are no better off, because they lose part of the income that they receive through youth allowance and their other payments.

We need a system that is fair and that acknowledges people who are transitioning into work and that supports them and does not force them into poverty. Yet that is exactly what this government, in freezing the income-free areas, is doing. They did this when they were last in government. They do not genuinely believe in supporting people back into work. They prefer the tough love approach—taking out the big stick. That is exactly what they have done here. They do not understand how hard it is to survive on these small incomes. They are now saying to those who may pick up extra work, 'You might have to give up that extra shift or lose a bit of the small income that you get from us, because we are freezing your income bank.' It is one of the meanest measures that are being put forward by this government. The government are so focused on protecting the one per cent that they forgot to do what government should be doing, which is to support the 99 per cent, particularly those on small incomes.

My electorate of Bendigo is a classic example of most regional electorates. About 30 per cent of the electorate survives on less than $600 per week. That means 30 per cent of the electorate are single-income households. Most of them are on some form of payment, whether it be a pension, Newstart or a combination of part-payment part-work. There is simply not enough work available today. This government has done very little to help create jobs in regional areas like my area of Bendigo. A lot of people are complaining and do find it hard to get the extra work. I know from working with UnitingCare of Bendigo in my electorate over the break that they are seeing more and more working families presenting for emergency relief, both before Christmas and after Christmas with the return to school. Our community of Bendigo have been incredibly generous. They have donated money to help UnitingCare help these families. There are quite expensive schoolbook lists this year. In one of our schools the book list was $1,000. For a family with three children to find $1,000 for each child for their schoolbook list is expensive, particularly straight after Christmas.

So these families are already doing it tough, and the measures that are being put forward in this bill, if they are enacted, are just going to make it that bit harder. It is another demonstration of how this government does not really appreciate or prioritise supporting those who are on the lowest incomes. The rhetoric they will use when they stand up here is that it is about the debt left behind by Labor; that it was Labor's problem; that Labor spends, spends, spends. It is not true. This government's plan, and what they are prioritising, is not about helping the people who most need it. That is the real difference between Labor and Liberal. It is about how you prioritise your spending and how you prioritise where government dollars will go.

They have demonstrated that they are not going to prioritise our schools. They are not going to put the funding back into the Gonski reforms to fund schools. Let us put that into context. A small primary school in my area, Epsom Primary School, has its library in a hallway. Their budget for buying new books this year is less than $1,000. Yet we have an Attorney-General who spent $15,000 on moving his personal library at Parliament House and $13,000 on his personal book collection. It is another example of how this government is prioritising the one per cent and not the rest of the country. If this government were serious about being fair and measured it would see reform at the other end of the tax scale and income brackets. That is not what we have seen to date.

It does not matter who the Prime Minister is—whether it be Tony Abbott or Malcolm Turnbull—the Liberal government inherently do not want to support people in our communities on low to middle incomes. Time after time we see bills come before this House that go after the very people who most need the support of government. The cuts in these bills may have originated under the former Prime Minister and the former Treasurer but they have been continued by this Prime Minister and Treasurer. It is another example of how the government say one thing and do another. This is a government that, for all of their rhetoric about change, have not changed, because deep within their values they believe that those on the lowest incomes should just be able to pick themselves up. It does not work that way.

The people that you hurt the most by these cuts are our pensioners, who have worked hard their whole lives, or the young people in our community who are trying to get ahead. Currently pensioners who stay overseas for 26 weeks receive the full pension. Following that time the pension is reduced at a rate depending on how many years the pensioner has worked overseas. That is just an example of how this government does not understand working, whether people have worked, what is working and the relationships we have with other countries. People know that it was Labor that increased the pension and built those reforms in, starting to get the pension back to an income that people could survive on. That was voted down by the opposition, the present government, when it was first introduced, for very similar reasons—arguing that this country cannot afford it. We can afford it. We just need to get serious about how we are raising our revenue. We have a government that prioritises the most wealthy self-funded retirees over those who need the greatest support.

If this government were serious about our young people we would see a genuine job creation plan on the table, not these attacks on their income-free banks. Time and time again I have this raised with me in the electorate: 'I'm worried about my son or daughter—they just can't get a start.' Entry-level jobs today do not exist like they did a generation ago. It is something that people on the other side seem to ignore every time they come in here and demonise young people, forcing them into poverty. If this government were serious about the next generation they would be out there partnering with industry to rebuild our apprenticeship program, rebuild our vocational education program and rebuild our entry-level jobs that just do not exist today. The measures in this bill go after the very people that this government or any government should be supporting. Instead, they choose to go after them again. I hope, as with previous attempts by this government, that the crossbenchers stand with Labor and vote against this bill.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

The Social Services Legislation Amendment (Budget Repair) Bill 2015 is timely and critical to the long-term economic health of our country. Maintaining our current high standard of living in the future depends on it. This bill is another brick—another protection—in the dam wall against the sea of red ink left by Labor. So why is this bill so important? Why is it so important to take action, and how bad is this mess? After six years in power, Labor left Australia with a broken budget, a damaged economy and a serious mess to clean up. Labor delivered deficits totalling $191 billion. Treasury projected that without policy change the budget would be $667 billion in deficit.

Honourable Members:

Honourable members interjecting—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Tangney has the call.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

This would mean that we would have 16 unbroken years of deficits—the longest stretch of deficits since World War II. Labor's waste and mismanagement while in government included a cost blow-out of at least $29 billion with the National Broadband Network and the disastrous pink batts program, which cost $2.8 billion and, most tragically, four lives. Days lost to strikes more than doubled. Under Labor the number of unemployed increased by over 200,000, and the unemployment rate jumped from 4.4 to 5.7 per cent.

They broke a pre-election promise and introduced the world's largest carbon tax. In its first year the carbon tax was a $7.6 billion hit to the economy. When the $900 stimulus cheques were sent around, 27,000 Australians who were living overseas received them, including 21,000 deceased persons. Cheques to dead people: it really is indicative of pump prime economics! The only real stimulus occurring from stimulus economics is at the ballot box, and even that is not sustained or sustainable.

Labor's failed border protection policies resulted in 50,000 illegal arrivals on more than 800 boats, causing a cost blow-out of more than $11 billion. Tragically this also resulted in over 1,100 drownings at sea. Labor introduced more than 20,000 new or amended regulations, creating new red tape for business. I remember the proud boast about how much legislation they were putting through parliament. This place is supposed to be about putting quality legislation through and not just putting quantity through.

During the six years Labor held government household health costs increased by 35 per cent, education costs increased by 39 per cent, gas prices increased by 71 per cent, water and sewage prices increased by 79 per cent and electricity prices increased by 101 per cent. Investment in defence fell to 1.56 per cent of GDP in 2012-13. This was the lowest level of defence funding since 1938. The 10.5 per cent cut was also the biggest since the Korean conflict. Under Labor, hospital waiting times for elective surgery grew from 34 to 36 days. They promised 64 GP super clinics but delivered only 33.

When Labor came to office they inherited a surplus of $20 billion, with no net debt and $45 billion in the bank. In Labor's five budgets from 2008-09 to 2012-13 they delivered $191 billion of budget deficits. Their deficits have reversed Australia's strong position of having no net debt. Labor effectively chaired the fastest deterioration of the Australian government's debt position in modern Australian history. This was largely because of Labor's spending problem—not because of a revenue problem. Labor increased spending sharply over its six budgets, including increases of 16 per cent, or $44 billion, and almost seven per cent, or $21 billion, in its first two budgets alone. Over Labor's five budgets government spending increased by over 50 per cent, or $137 billion.

Since the coalition came to power, we have worked tirelessly to fix the problems inherited from Labor. We, the coalition, believe in being an agile and nimble government. This is clearly evident in what we have achieved and the work that we have done since entering government. We are actively repairing the mess left by Labor and returning the budget to a strong and sustainable position. However, the reality is that our social services bill represents almost a third of the Commonwealth budget, and it is increasing faster than any other area of government. Without further restraint our welfare bill is expected to grow from $149 billion in 2014-15 to $277 billion in 2025-26. It is evident from these figures that we need to restrain the growth in welfare and continue to fix the mess left by Labor.

Although significant savings in the Social Services portfolio have been secured, it is imperative that we continue with our efforts to spend our social services budget more effectively in order to reduce long-term pressures. This must be done so that we can better support those who need it most, ensuring also that Australia's social security safety net is sustainable for future generations. The government has proposed four measures in the Social Services Legislation Amendment (Budget Repair) Bill 2015 in order to achieve this.

The first measure, in schedule 1, will tighten proportionality requirements for pensioners from 1 January 2017. This measure will reduce the amount of time a full pension is paid to pensioners absent from Australia from 26 to six weeks. After this period, payment will be adjusted according to the length of the pensioner's working life residence. This measure will also treat all people who have spent less than 35 years of their working life in Australia the same, whether they were born in Australia or overseas. Those who have spent more than 35 years of their working life in Australia remain unaffected.

This measure does not impact on the length of the portability period. The age pension and a limited number of other pensions will continue to be payable overseas indefinitely. Only the amount they receive after a six-week absence will change. Those who have spent fewer than 35 years of their working life in Australia will see their pensions reduced once they spend more than six weeks outside Australia. The amount the payment is reduced by is based on the proportion of their working life spent in Australia. This measure will continue to reinforce and strengthen the residence based nature of Australia's social security system. After a six-week absence, payment will be adjusted according to the length of time a person has resided in Australia during their working life.

The coalition has made this change because we believe a person's retirement costs should be fairly distributed between the countries a person has spent most of their working life in. Our expectation is that a person will be eligible to receive a pension from the country in which they have spent a proportion of their working life in. Australia now has 30 international social security agreements around the world to support people living and working in more than one country. These agreements generally allow Australian residents to maximise their income by helping them claim payments from other countries where they have spent part of their working life.

Under measures 2 and 3, the government will also cease the pensioner education supplement and the education entry payment, saving Australian taxpayers around $300 million over the forward estimates. In spite of its name, the pensioner education supplement is not available to people receiving the age pension. It assists students with the ongoing costs of full-time or part-time study. The most common payment type for people receiving this is the parenting payment single, at 43 per cent, followed by the disability support pension, at 41 per cent, and the carer payment, at nine per cent. As at the end of September 2015, PES provided fortnightly payments to around 46,000 people. The education entry payment is a lump sum payment paid once a year to eligible recipients, removing financial barriers to education by providing financial assistance for study entry payment. In 2014-15, around 83,000 recipients received an EEP lump sum payment of $208.

Originally, these payments were introduced to assist long-term income support recipients who had been out of the workforce for a long period of time. The payments helped recipients improve or rebuild their skills to be more competitive in the labour market. However, since the introduction of these payments, several other policies have been introduced to reduce the length of time that income support recipients, including single parents who have the capacity to work, remain out of the workforce. These policy changes include varied eligibility and participation requirements for parenting payment, as we recognise that, as children age, their parents' capacity to work increases. We have also made changes to the assessment and eligibility criteria for payments for people with a reduced capacity to work, requiring these people to work, or look for work, in line with their capacity. The coalition has created more appropriate channels for government funded study and training assistance for income support recipients. These include the Higher Education Loan Program and the FEE-HELP and VET FEE-HELP tuition loan programs through employment service providers.

Ceasing these two payments will help reduce the number of payment supplements and is consistent with the recommendations of the McClure review of welfare. McClure's review highlighted 20 main payment types and 53 payment supplements that resulted in a complex income support system.

Measure 4 will reintroduce elements of the 2014 budget savings to maintain the income-free areas and means test thresholds for all working-age allowances. Parenting payment single and student payments, including student bank limits, will also be maintained and not indexed for three years. Pausing indexation will allow us to realise budget savings and help slow the growth in social security expenditure.

We, the government, believe that these are sensible measures that will help us back to a surplus. They will also allow us to continue to fix the budget mess we inherited from Labor. These changes will help achieve long-term sustainability of the payments system, while ensuring Australia has a targeted, means-tested income support system that provides financial assistance for those most in need, all the while encouraging self-provision.

After signing into law the social security amendments of 1961, John Kennedy said:

The Social Security program plays an important part in providing for families, children, and older persons in times of stress.

But he added this:

But it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision.

If we want to remain an agile and innovative government, we need to regularly assess the measures we take and evaluate their success. It is important that we continue to find a better way and the best way forward, learning from our predecessors' mistakes, growing from our past attempts and, therefore, providing the Australian people with solutions and measures that achieve long-term sustainability.

It is important that we acknowledge changes that have occurred, not just in the Australian government or our coalition policies but also in our working habits, living standards and population. Our world continues to become more globalised and interdependent. It is important that our policies reflect this. This bill does that by updating pension measures, removing out-of-date education related payments and acknowledging that more appropriate channels of government funded study assistance are available. We are able to drive the government back into surplus and clean up the economic mess that we inherited from Labor.

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

I rise to join this debate on the Social Services Legislation Amendment (Budget Repair) Bill 2015 to stand up, as I always do, for my community and to oppose each of the measures contained in this bill. It is not surprising that this government needs a budget repair bill, but not as is claimed for anything that it can attach to the previous government—because this government, of course, has doubled the deficit and is struggling with that narrative. It is struggling to convince the Australian public that that is not the case, when every day in this place we see that it is the case.

Not unusually, in introducing this bill the government is once again attacking the most vulnerable Australians. We on this side of the chamber will stand and defend the most vulnerable Australians. This bill cuts support to Australians who have worked hard for their entire lives. It cuts support to people who have made contributions to their families, to their communities and, indeed, to the nation. It seeks to cut support for pensioners. Let us be clear, front and centre, what this legislation is about. It is about repairing the government's issues and repairing the government's doubling of the deficit by cutting support to the most vulnerable in our communities. That is what this bill is about. This bill targets seniors. It targets the most vulnerable.

Let us have a look at this government's record of the last 2½ years. This government's record on pensioners is appalling with cuts that they have tried to get through this parliament since 2013. Every time that they have come into this chamber to attack pensioners and to cut their living wage we on this side have stood up to defend those pensioners. We have had some success. They wanted to introduce cuts to pension indexation—cuts that would have seen an $80-a-week cut to the pension over 10 years. There were cuts to 330,000 pensioners through changes to the pension assets test. There were cuts to pensioner concessions through $1 billion worth of cuts. That was, if you remember, part of their shift of the blame and the cost to the states.

Probably the most venal thing was the government's wanting to increase the pension age to 70, making Australia the only country in the world with a pension age of 70. They were expecting that people who had worked hard all their lives in manual labour could continue to do that until they were 70. It is an important point to note because it goes to the logic behind all of their cuts. As we go to the detail in this bill you will also see that they want to cut support to our seniors and cut support to pensioners who would like to continue their journey of lifelong learning. They want to cut the support that would allow an age pensioner to engage in education. So you would have to work until you were 70 and then, once you were 70, you would be discarded on the scrapheap. You could not go to university, you could not re-engage, you could not decide, with support, to continue your lifelong journey in education. These cuts go to the government's attitude to the senior members of our communities. It goes to the members of our communities that have given so much to those communities.

The first measure I will talk about is the cuts to support pensioners who spend time out of Australia. The government are now seeking to reintroduce a measure from the 2015 budget that changes the proportional payment of pensions outside Australia after six weeks—currently that change is made after 26 weeks. The crux of the first measure in this bill is that the Liberals want to make it harder for some pensioners to continue to receive their full pension whilst they are overseas. Currently they receive the full pension for 26 weeks, but the pension will be reduced to a rate that depends on the number of years a pensioner has worked in Australia. The government are proposing that from January 2017 that 26 weeks will be reduced to six weeks. This unfairly punishes pensioners across the country, but it particularly punishes pensioners in my community. It punishes those who choose to spend a period of time overseas visiting family. This has particular impact in multicultural communities, obviously. It is important to remember that 40 per cent of our pensioners were born overseas. In my community there is large number of pensioners who were born overseas.

As the member for Jagajaga mentioned, the Refugee Council of Australia has had something to say about this. It is opposing this measure noting that, due to numerous problems with family reunion programs, refugee community members are often required to travel overseas for long periods of time to visit their relatives. This is particularly important for those people who may have sick or dying relatives in secondary countries of asylum. The assumption that some people may be making that journey to return to their birth country is just not accurate. It could be that as someone who came to this country as a refugee and is now a citizen has a sibling, perhaps in New Zealand, that they want to care for. This legislation would be punitive to those wanted to do that.

Clearly the migrant and refugee communities are very much opposed to this change. If you think about retirement, you think about the one big trip. If you are taken away from caring for a relative, you can think about that one big trip. And, as the previous member said, if you think about the global nature of our modern lives and the amount of travelling Australians, whether they were born in this country or in others, then this bill seems out of whack with our cultural expectations and with the new, modern world. We are great travellers. We have many citizens who have family living in other countries. As pensioners they are not wealthy. This bill means they can visit relatives at no loss for six weeks, but to avoid that loss they must come home after that. This might be fine for the wealthy who can afford the next plane trip, but others may have spent their savings on airfares for their one big trip. Now that one big trip will have to be limited to six weeks before you incur a loss.

This government does not seem to grasp what Australians value. They value family. They value weddings. They travel for funerals. They may travel for an impending birth. They may be going overseas to support a family member who has had a child, to do some caring for that child. Now that will incur a loss, if it is for longer than six weeks. But, most critically, are those areas of caring responsibilities—where this will limit their ability, without loss, to go and care for a relative overseas. It comes down, as do most things in this chamber, to this government's priorities and to where fairness comes into those priorities. And fairness does not seem to be a priority for this government. They say they have a budget problem, and their answer to that is to place punitive measures on the most vulnerable in our community.

This government does not like to limit its attack on the vulnerable to just the elderly. The bill also includes the abolition of the pensioner education supplement, which I referenced earlier—a small payment of a maximum of $62 a fortnight that this government is hell-bent on cutting. It is hell-bent on cutting support for someone to engage in education—not just cuts in schools education, not just cuts in TAFE, not just slashing support for apprentices; the elderly cannot get educated in this country, either. It speaks volumes of their attitude to education and learning. The pensioner education supplement is a payment of between $31.20 and $62 a fortnight, depending on the levels of study, to help pensioners, disability support pensioners and carers who are studying. It provides a small but important payment to help with the costs of study and can be used to purchase study aids and items such as textbooks, academic resources, printing, transport and internet connections.

Again, the punitive measures come through here; the anti-education. There is nothing new here—it just reinforces the attitude this government has. It reinforces the message to our pensioners, to those people who have given so much in this community, that 'You are finished. You have nothing more to contribute.' This again sends them the message that they do not deserve the dignity of a decent retirement.

This measure will see around 47,000 recipients lose their supplement. It will hurt those who have decided, quite admirably, to improve their financial position, possibly to broaden their minds or to broaden their horizons through the power of education.

The third measure in this bill seeks to abolish the education entry payment, a payment that goes to recipients of Newstart, the parenting payment, partner or widow allowance. In 2013-14, about 87,000 people received this payment. This, too, is a payment designed to assist vulnerable people with study costs. This government's attitude to education and the most vulnerable in our community is extraordinary.

Finally, the bill also introduces a measure that was contained in the 2014 budget—you know, the 'lifters and leaners' budget; the one we all remember so well. A lot of the rhetoric from the other side of the chamber is about being agile. This certainly demonstrates agility, because we have seen this change in indexation trick before. It was also in the 2014 budget around pensions: let's just pause indexation without any reference to the loss that means to somebody's living allowance and their ability to have a decent retirement or a decent life.

This measure predominantly impacts students and some working parents on income support—again, people who are trying to make a difference in their own lives, trying to get an education, to step up, to go on to other things. Again it is that trick—and it shows agility, alright. We are going back to the 2014 budget.

This bill really goes to the heart of the way this government is operating. They have found themselves a new leader but, as Prime Minister Turnbull so eloquently put it yesterday, after 141 days nothing much has changed. This piece of legislation before us today confirms exactly that: the leader has changed, but the strategy has not. They are still going after the most vulnerable, they are still coming after Australia's pensioners and they are still going to punish the most vulnerable to make up for their lack of vision and for their doubling of the deficit. They need to treat pensioners with respect. They need to treat the most vulnerable in this country with respect. I oppose this bill, as do all members on this side of the House.

Alan Tudge (Aston, Liberal Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I think almost everybody in Australia except for the Labor Party understands that we have a fiscal problem, that the expenditure of governments, despite all of the work that this government has already done, is still well in excess of the revenue which the government collects. Almost everybody in Australia knows this. They know that, after all the work we have done, our expenditure is still about 10 per cent higher than the revenue which is collected. They know you just cannot continue along the path of having expenditure exceed your revenue and, consequently, having budget deficits. In some respects, it is common sense that you cannot have budget deficits indefinitely into the future. Everybody in Australia, except, it seems, the Labor Party, understands that that is just not a sustainable position.

Of course, everybody in Australia also understands that it was the Rudd-Gillard government that put us in such a difficult position, that turned the budget position from being in a great surplus—with $20 billion worth of surpluses each year—to having very severe deficits. In their very short amount of time in office—too long for most Australians—they clocked up $191 billion worth of budget deficits and they locked in expenditure of 3.7 per cent going forward. In the forward outlooks, there was billions of dollars of deficit as far as the eye could see. It was not sustainable and it is not sustainable. As a nation, we simply cannot sustain having ongoing large budget deficits.

If the opposition do not want to listen to us in making this point, then hopefully they will listen to the Treasury Secretary, who just a week ago made this point very clear. He said that if we do not get on top of the fiscal repair job, particularly on the expenditure side, then future living standards will be at risk. He said that very clearly. I will quote what he said. He said:

Why should the living standards of future generations be compromised just because we were not willing to make sacrifices to the unsustainable growth of government expenditure?

He squarely pointed out, very clearly, that it is the future living standards of our children that are at stake when we talk about budget repair. That is what is at issue and that is the underlying context of these bills before us today.

There are a number of ways you can think about and address a fiscal problem. First, you can just put your head in the sand, as Labor seems to do. Second, you can constantly raise taxes to try and chase an ever-increasing expenditure. Third, you can get expenditure under control and concurrently grow the economy faster. Perhaps the greatest difference between the two parties at the moment is our differing approach to this problem and which options we pursue. It is quite clear that the Labor Party is pursuing accommodation of options 1 or 2—put your head in the sand in relation to the fact that we even have a problem or constantly propose new taxes to chase ever-increasing budget expenditure. We, on the other hand, strongly favour option 3—that is, budgetary expenditure restraint combined with making the economy grow more rapidly.

Of all the contributions we have heard from the Labor Party today, almost none admitted that there was actually a budget problem to start with. I do not think any of them did. Despite the bill itself been called the 'budget repair bill', I do not think a single contributor from the other side said that we have a problem and that we need to deal with that problem. Yes, there are some who admit that there is perhaps a problem in terms of the sustainability of our fiscal finances. But their solution is of course just more taxes. We have already had from the Labor Party this year additional taxes for superannuation, despite their saying that there would be no changes; additional taxes for cigarettes; and additional taxes on companies. And, no doubt, there will be many more policy proposals for more taxes from the Labor Party between now and the election. That is their approach to the fiscal problem—either ignore it altogether and say it does not exist or constantly increase taxes to chase the tale of expenditure.

Our approach is not that. Our approach is expenditure restraint. When you look at the data it is actually the expenditure side of the equation which is the problem rather than the revenue side of the equation. On the revenue side our revenue as a percentage of GDP is roughly where the 10-year average is, whereas the expenditure side of the equation is still at GFC levels. It is still well above the long-term average at 25.9 per cent of GDP, whereas the longer term average is about 23 per cent of GDP. That is why we believe it is the expenditure side which must be restrained, and that is what we are doing. And we are not just doing that but also growing the economy more rapidly. We are putting in place policies that will do that, including of course our infrastructure plans, lowering some of our taxes and our innovation agenda. And, right now, we are going through a tax reform process to again try to stimulate the economy and get it to grow faster.

Of course, if you do those two things—if you have expenditure restraint, which we are putting in place, and you grow the economy faster—then over time you get control of the budget and get back into surplus. We are doing exactly that and we are doing it successfully. We have stopped expenditure growth. There was 3.5 per cent real growth under the Labor Party and it is now below two per cent ongoing. Meanwhile, we now have the fastest growing economy in the G7 at about 2½ per cent. It needs to be faster, but it is still about 2½ per cent. Consequently, if you are growing the economy faster than your expenditure growth, over time your expenditure as a percentage of GDP declines and you have the budget under control. That is our economic and fiscal strategy in relation to the budget. I think it is sensible. We are doing it carefully and we are managing it well.

The Social Services Legislation Amendment (Budget Repair) Bill 2015 is very much within that strategy. It proposes further measures for modest restraint to the largest section of the budget, which is the welfare section. As you probably know, Mr Deputy Speaker Vasta, the social services element of the budget is about a third of the entire budget and is growing more rapidly than any other elements of the budget. If we are not addressing that element and trying to restrain expenditure then we will have great difficulty getting on top of the expenditure problem overall. Again, we have already put through many measures in this area, and Christian Porter, the social services minister, is doing a terrific job going through the entire portfolio and finding more savings that can be made in a sensible, responsible way.

The measures in this bill in front of us today continue in that vein. Perhaps I could mention just a few of them that I think are sensible measures and that are done within that context of necessary budget restraint. For example, from 1 January 2017 the government will tighten proportionality requirements for pensioners. This measure reduces from 26 to six weeks the amount of time a full pension is paid to pensioners who are absent from Australia. This measure treats all people who have spent less than 35 years of their working lives in Australia the same, whether they were born in Australia or overseas. Those who have spent more than 35 years of their working lives in Australia remain unaffected. This measure does not impact on the length of the portability period. The age pension and a limited number of other pensions will continue to be payable overseas indefinitely. Only the amounts that may be received after a six-week absence will change.

This measure will reinforce and strengthen the residence based nature of Australia's social security system. There are already about 30 international social security arrangements to support people who are living and working in more than one country. Generally these agreements allow Australian residents to maximise their income by helping them to claim payments from other countries where they have spent part of their working life. This is a further measure in that vein of expenditure restraint. It saves in the vicinity of $168.4 million over the forward estimates, and we think it is a reasonable proposal, given the stresses on the budget.

The additional measures include the cessation of the pensioner education supplement and the education entry payment, which would save Australian taxpayers around $300 million over the forward estimates. The pensioner education supplement was introduced in 1987 to assist single parents with the ongoing costs of education. Despite its name, the pensioner education supplement is not actually available to people receiving the age pension. Rather, it tends to be received by people who are on parenting payments, disability support pensions and carer payments. It is provided to about 46,000 people. When this payment was introduced, both of the payments aimed to assist long-term income support recipients who had been out of the workforce for a long period of time by helping them improve or rebuild their skills to be more competitive in the labour market. However, since the introduction of these payments several policies have been introduced to reduce the length of time that income support recipients, including single parents who have capacity to work, remain out of the workforce. Policy changes include varied eligibility and participation requirements for parenting payments, recognising that parents' capacity to work increases as their children age.

I think these measures are reasonable savings measures in the context of our fiscal challenges. None of the savings measures that we put forward in this House are easy or straightforward. Expenditure restraint is never easy. It is much easier to spend money than it is to exercise expenditure restraint. But the fact of the matter is, as I outlined at the beginning of my remarks, that we have an obligation—a responsibility as members of parliament—to the Australian people to act in their long-term interests. And acting in their long-term interests means we must get control of the government's expenditure. I know the Labor Party does not accept this, and I wish they would listen more closely to people such as the Treasury secretary, who has made this very clear.

These bills go towards those ends. They are reasonable measures. They are not straightforward measures, but they are reasonable measures in that context. If we do not put in place measures like this—which do get control of the budget, which do mean that our overall expenditure growth maintains at a reasonable level below economic growth—then we will have a very serious financial challenge on our hands in the future and the living standards of our children will be lower. That is what is at stake with the budget measures we are putting in place. I commend this bill to the House.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

The previous speaker on this bill, the Social Services Legislation Amendment (Budget Repair) Bill 2015, said that matters of budgetary consideration in relation to social services are difficult. I accept that they are difficult, because they directly impact on people who are least able to protect themselves. It will not come as a surprise to you, Mr Deputy Speaker Vasta, that, like other colleagues on my side of the House, we oppose these measures. This bill introduces measures from the 2015 budget that change the proportionality of payments for pensioners who travel outside Australia. It reintroduces measures contained in the 2014 budget that the government has been unable to legislate. Those measures deal principally with the pensioner education supplement and the abolition of the education entry payment. Further, the bill deals with other measures of the 2014 budget, particularly in relation to indexation.

I would like to concentrate on only a couple of these measures. I am happy that the member for Hughes is in the room here, because he will understand—and we have adjoining electorates. My electorate, in particular, is the most multicultural electorate in the whole of Australia. It is something that those who visit there—and I have noticed that the member for Hughes frequents there—

Mr Craig Kelly interjecting—

I understand he likes yum cha. That is why he goes there. He will understand when I say that the colour, the vibrancy and the diversity of my community is something to be very proud of. More than 60 per cent of the people in my community were born overseas. My community is also one of significant need. It is not a rich community. My community certainly has a significant proportion of residents who live with a disability. We have high unemployment and, regrettably, dreadfully high youth unemployment. These are things that we need to work, hopefully, in partnership with the government to do something about. My area is also one where the vast majority of refugees have come to this country. I will just take a couple of groups. Forty years ago was the fall of Saigon. We commemorated that last April. After the fall of Saigon, in 1975, the Fraser government opened the doors to the first wave of Vietnamese refugees to this country—some 50,000. I think we are all indebted to his foresight in doing that. Opening the doors to those 50,000 did not mean that that was it. Refugees flowed from Vietnam for years and years to come. As a matter of fact, some 200,000 have joined us and have made a marvellous contribution.

One of the things to note, when dealing with an immigrant and refugee based community, is not only the way that they adapt to their adopted country but also the way that they continue to support people at home. They take responsibility for the elderly. They take responsibility for those who could not escape. They take responsibility for them in a family capacity by looking after their welfare. In my office—and no doubt the member for Hughes experiences this as well—we are forever helping people bring relatives in for visitations and ensuring that people from Australia can visit overseas. Some of those visits overseas, whether they are for funeral arrangements, the welfare of families or are in relation to various matters of property settlements, take many weeks—a lot more than six weeks. I know that the government has a view that after six weeks the proportionality test for those who are travelling overseas will reduce the age pension. As it stands at the moment, after 26 weeks the pension is reduced. The government want to reduce that to six weeks. I do not know what the experience is of other members here, but I know for a fact that for people in my community who have left the workforce and who travel overseas to undertake family and community responsibilities, to look after the interests or the welfare of family members et cetera, their visitation is normally longer than six weeks. We are going to say to those people: we are going to cut your pension; we are going reduce it by up to $61 a fortnight. That is pretty significant. We are talking about age pensioners. We are not talking about superannuants; we are talking about age pensioners. They are not going to be able to come back and say, 'I will make up that money with an extra shift or some more overtime.' These are people who lack the ability to make that up.

Surely the government is not trying to tell people that if you are an immigrant to this country and an age pension, if you are a refugee to this country, if you have worked and participated to the full and contributed to the Australian community, not only by paying taxes, you are not entitled to go away for six weeks, regardless of how long you have been here. That is a pretty harsh position being adopted by this government.

I think when members participate in this debate they should not try to say, 'Well, this was in the 2015 budget, so therefore we're trying to deliver budget repair' and all the other things that flow off the tongue. I think they have to start thinking of the people in their electorates—the people who are dependent on an age pension. I know that my electorate is not unique. I know that the member for Gellibrand also has many Vietnamese in his electorate. We need to think of the composition of our electorates and about the contribution that people have made. The fact is that we are now going to say to these people: unless you have been here for 35 years we are going to reduce your ability to travel, and we are going to ensure that by having a disincentive. If you are away for more than six weeks, we are going to cut your age pension. I just think that is unAustralian.

If the government is going to make changes to deal with the budget, if what those on that side of the House are trying to tell us is that debt is a problem, then I am sure—if I can use the words used long ago by Joe Hockey—'more debt is not the answer'. You only have to look at the increase in debt since the coalition took office to see that there is only one way that they have gone—and that been to increase the debt of the nation. But even with all that, the thing that they should not do is target those least able to afford it.

There is some reluctance by those on the other side to target international businesses, which, according to all the reports, have been very successful in minimising and sometimes totally avoiding paying tax in this country. I would have thought that that would have been a priority. I would have that having very, very generous provisions in superannuation, catering for the high-end earners would have been a priority. Again, I would have thought that those would have been the priority, not doing what they started to do in the budget of 2014 and target aged pensioners and people supported by disability payments and those who are on carer payments. That is not the message a government that cares about people should be putting out.

I say the government generally because we are all in this place as a parliament, and I think we are all here hopefully for the right reasons—that is, making a difference for the better in our respective communities. If we are going to do that, the priority can never be to target those least able to afford it. This is a bill which is one of many that seems to do just that. And that is why we say that this is inappropriate and it should not proceed. If the government is as concerned as they say about the budgetary position, I am sure that they will find the support of the opposition in measures such as multinational corporations paying their fair share of tax. They will get support to address gross inequities in superannuation. There are many issues that we would work together on but, when the attack is on those who are most vulnerable in our society, you can always expect the Labor Party will stand up to protect them.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I am pleased to rise to speak on the Social Services Legislation Amendment (Budget Repair) Bill 2015. 'Budget repair' are the key words of this bill, because we do have a budget that is in desperate need of repair. I should not have to remind the House that we are now coming into the ninth year in a row of budget deficits.

Starting off we note that the last budget the previous coalition government handed down, under the management of John Howard and Peter Costello, had a $20 billion surplus. And then, in 2008-09, the Labor Party took over and they started off with a $27 billion deficit. In 2009-10, the supposedly temporary budget deficit was $54 billion. In 2010-11, there was another $47 billion deficit, and they followed that in 2011-12 with another $43 billion deficit. In 2012-13, with a little bit of tricky financial accounting and shifting some expenditures to the year before or the year after and pulling revenue from the year before or the year after back in, they were able to get it down to $19 billion, but we saw the trickery of that. In 2014, there was a $48 billion deficit, and last financial year, 2014-15, there was $38 billion. This year we are projecting a $37 billion deficit, and the following year we are predicting $34 billion.

So, even if all these budget measures go through, in the next coming financial year, we will still be, as a nation, borrowing close to $100 million every day and we will have been doing that for almost the last 10 years. That means that every single day of the year governments have had to pay the expenses and accounts. They have had to borrow $100 million every single day, and that builds up a debt, a higher taxation obligation and a lesser ability to enjoy social services for our kids and our grandkids.

Already this year the interest payment on the debt we have is something like $14 billion. What that means is that we, as the government, have to collect $14 billion from the taxes of the hardworking people of Australia not to pay back the debt but just to service the interest alone. If you break that down, that works out at about $35 million every single day. My speaking time on this bill is 15 minutes, and in that 15 minutes this nation will have had to pay $300,000 in interest on that debt. This cannot continue, and thankfully there is a former Labor Prime Minister that I would hope all Labor members of parliament would listen to, one Paul Keating. I quote him from The Australiantoday:

The real point is the rest of the world has trimmed us down, commodity prices have fallen … and of course with (lower) wages growth, in the budget revenues are falling.

When commonwealth revenue has been so affected, the penny ought to drop that what we should be doing is cutting spending.

Sadly, on the other side of this chamber the penny has not dropped, because they are still out there telling the Australian public that governments can keep on spending, keep on borrowing and keep on putting more debt onto our children and our grandchildren, making a less prosperous lifestyle for Australians, because they simply want to be electorally popular. Sometimes in this parliament hard decisions need to be made. Those decisions may not be popular, but they must be made for the betterment of our country. Paul Keating continued, saying:

The Treasurer has got to sit and go through, line by line, every item of social expenditure—indeed every item of expenditure …

We owe it to our kids to do so. Keating goes on:

(Then ministers) Peter Walsh, John Dawkins and myself sat in those expenditure review committees 10 weeks a year, 10 hours a day.

In the end I was sitting up at the desk with a tennis shade on and sunglasses because I couldn’t stand the light from the paper, sitting there for so long.

That was the former Labor government. Labor Prime Ministers Paul Keating and Bob Hawke knew that they could not continue on spending the way they were, and even then they were still unable to bring the budget back into balance. And yet we have had speaker after speaker from the Labor side completely ignoring the facts of the budget problem we have—

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

Order! The debate is interrupted in accordance with standing order 43. The member will have leave to continue his remarks when the debate is resumed.