Tony Smith (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’s incompetent handling of 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

The Australian people already knew that the Turnbull government have unfairness ingrained in their DNA, but this week it has been rather spectacularly demonstrated that they are incompetent as they go about that unfairness. Unfairness and incompetence are a pretty unfortunate combination, but that is what is at the heart of the economic policy of the Turnbull government. Normally the first full sitting week after a budget is a good week for the Treasurer. It is a good week to highlight the initiatives in the budget, to show that the Treasurer understands what is in the budget. Normally the Treasurer is constantly at the dispatch box in question time and doing lots of media. Instead, this week we have a Treasurer in the witness protection program. He is not allowed to do media and he is only reluctantly let out for question time because they have to, because his budget has been exposed and, frankly, the Treasurer has been exposed as well.

There is a lot we could traverse in this discussion about the unfairness of the budget—we could talk about infrastructure, we could talk about health, we could talk about education, but we have to limit our remarks, because there is so much to say. So I will limit my remarks to the bank tax and to the important issue of the Medicare levy and the National Disability Insurance Scheme.

Firstly there is the matter of the bank tax, which goes to competence. Sometimes in the community—we have all heard it; people on both sides of politics have heard it—people say: 'Why can't we have more bipartisanship? Why can't the two sides work together? Why can't you support an idea from the other side, even if it is not exactly how you would do it?' We hear the message. So on budget night we looked at the bank tax and said: 'Well, the Liberal Party played a very obstructionist role when we introduced a bank levy. They opposed it. They said it would end Western civilisation. They did not proceed with it. But we will not take that approach. It is not how we would do it; it is not designed the way we would design it, but we will back it. We will support the government in introducing the bank tax.'

The Treasurer is very good at blaming the Labor Party for all sorts of things, but on this one he has got nobody to blame but himself. He has bipartisan support and he has still got it wrong. He has still managed to not implement this bank tax in a respectable way. On budget night it was very clear in the budget papers it would raise $1.6 billion in the coming financial year. The Prime Minister repeated it on Monday. The Prime Minister did not know whether it was tax-deductible or not, but at least he knew how much it would raise. We give him credit for that. There is a big problem, though, for the Prime Minister and the Treasurer: the banks have reported to the Australian stock exchange—as they are required to do and required to be accurate under law—how much they are going to pay, and what does it come out as? It comes out as $965 million. That is rather short of $1.6 billion. So the Treasurer had a massive problem. What did he do? He had missed the goal, so he moved the goal posts. He came into the House and said, 'The accrual figure doesn't matter—it is all about cash.'

I am not going to detain the House and explain the difference between accrual and cash. Suffice it to say that the Treasurer got it utterly wrong. He could have fessed up and said, 'We think those numbers are wrong.' Instead, he tried to change the story. He did not realise—or perhaps he did realise but thought he might get away with it—that the bank tax is paid quarterly in arrears, so the cash figure was utterly irrelevant, because what the banks have reported to the stock exchange was the accrual figure. He was wrong. Either he did not know his budget or he chose to mislead the House. Either way he stands condemned.

So there is a $2 billion black hole in the budget. We know, therefore, that the government will have to fill that $2 billion black hole. That is why this is important. The other thing we know about this government is that they will find an unfair way to fill the black hole, and the Australian people will pay the price.

That brings me to the matter of personal income tax, the Medicare levy and the NDIS. Firstly, on the very important issue of the NDIS, which is one of the great social reforms of our time, introduced by this side of the House. The government says they support the NDIS. I have a very simple message to the government: if you support it, stop threatening it. If you support the NDIS, stop threatening to cut it, and stop threatening people who receive support from the NDIS and their families with the threat that that support might cease. Because that is what the government does all the time. Stop playing politics with disability—that is my message to this government.

The Turnbull government has signed agreements with the states to implement the National Disability Insurance Scheme. We welcome that. That is a good thing, that they are continuing with the NDIS. Are they really saying they intend to renege on those agreements with the states? I do not think they are. I do not think they will renege on those agreements—I give them credit for that. Then stop threatening to do that, because that is effectively what they are doing every time they say that the NDIS is under threat.

They say, incorrectly, that the NDIS is underfunded. Now to say that is morally and factually wrong. It is morally wrong because it concerns people who receive NDIS support when they hear it. They get worried. It is factually wrong as well. If the NDIS were underfunded, wouldn't you have thought that that would be reflected in the pre-election economic forecasts prepared by the Department of the Treasury and the Department of Finance, independent of the government of the day, in the 2013 election or the 2016 election? Wouldn't you think that the PEFO would have said somewhere, 'By the way, this major government scheme will fall short in funding.' Was it there in the PEFO in 2013? No. Was it there in the PEFO in 2016? No. The government should stop playing politics.

If the government is really concerned about raising enough revenue for the NDIS or anything else, they do have another option. They can adopt Labor's plan. They can take our plan, because it makes more money. They can spend that money on the NDIS if they want. They can spend it on health or education, heaven forbid, or they could engage in budget repair. It is all there, because there is $4½ billion more in Labor's plan for personal tax.

Could it be that the government does not want to do that because they do not like the implications? There is something very important to think about when we think of the 2014 budget, which we all recall. There were lots of measures in that budget which affected low- and middle-income earners. They were all permanent. The government did not say to pensioners, 'We are going to cut your pension indexation just until we are back in surplus.' They did not say to low-income earners, 'We are going to take your family tax benefits away just until we are back into balance.' They did not say to unemployed people, 'We're going to make you wait for Newstart, with no support, until the budget has improved.' Those measures were all permanent—forever. The only temporary measure in that budget was the only one that impacted high-income earners. The only measure where they said, 'We are just going to keep it until we get back into budget balance' was the deficit levy. Isn't that convenient? What a coincidence—the only temporary one is the one that affects high-income earners! As a result, in effect, high-income earners get a tax cut on 1 July this year. That is the fact. If you are on a high income you will pay less tax on 2 July that you paid on 30 June, as a result of this government's decisions. If you are on $1 million a year you will get a $16,400 tax cut, courtesy of this Prime Minister and this Treasurer. But, under their plans, if you are on $60,000 a year you will pay $300 a year more.

There is a better way. We recognise the need for difficult decisions, but we say they must be implemented fairly. The fact of the matter is that both sides of politics—somewhat unusually in recent Australian history—will go to the next election proposing an increase in personal tax. But there will be a difference: this side of the House will say the tax rise should apply to people on more than $87,000 year; that side of the House will propose that the tax rise apply to people on more than $21,000 a year. That is the difference. That is the choice for the Australian people at the next election. Those are the competing plans being offered to the people.

And the government is doing this at a time when wages growth is at a record low. Last week, we saw figures confirming that wages in Australia are going backwards on this government's watch. People are falling behind; their wages are not keeping up with inflation. Living standards are falling, and that impacts most severely on people on low and middle incomes. And on 1 July, people who commit the crime of working on a Sunday will see their wages cut further. And this government wants to increase their tax just to help out that little bit more! This is at a time when inequality in Australia is at a 75-year high. What is their answer? Increase tax for people on $21,000 a year and give away $65 million in corporate tax cuts!

They tell us about fantasy money—$22 billion to fund education. I will tell you what is fantasy money—$65 billion in corporate tax cuts. That is fantasy money, that is an unfunded promise from this government. There is a fairer way, which a Shorten Labor government will implement—with a mandate from the Australian people. When we go to the people with our plans and receive that mandate, we will implement them in a budget a whole lot more competently than this Treasurer has been able to do over the last week.

Michael McCormack (Riverina, National Party, Minister for Small Business) Share this | Link to this | Hansard source

Once upon a time there was a Labor Party that stood for the true believers. Once there was a party of the workers—those who were not doing so well and those who wanted to get ahead. Once there was a party where small business was not penalised for growing, nor was the politics of envy in play—because, to them, politics is more important than people. Once there was a party that wanted more Australians in work and worked with the parliament to make possible the dreams of those who seek to make our nation fairer. And once there was a party that was up to the job that Australians deserve of their parliaments.

Unfortunately, those days are gone. This matter of public importance debate proves it. That the member for McMahon would lecture this government about incompetence is absolutely laughable. This is the shadow Treasurer from the one-time government of Grocery Watch, the incompetent government of Fuel Watch. He was the Minister for Immigration who oversaw huge numbers of boat arrivals, and chaos at the heart of government. He sat at the Treasurer's desk for a few sorry weeks, albeit he never delivered a budget. The shadow Treasurer has written a book on Labor's 'money men'. But as Labor's money man he has never had to write a budget. He has never had to make spending add up, nor fund the promises of those opposite—

Mr Bowen interjecting—

He agrees with me! That is good. Listen up, you might agree with what I have to say. That is why he stands in opposition to the fair and reasonable spending in this budget. Now we will see if it agrees with me. Just a little more than two weeks ago, on 9 May, this government delivered a budget for all Australians. It was an 'action' budget. It was not like the budgets written by the member for Rankin, opposite, for the member for Lilley, oh no!

Australians wanted action on schools, so we took it. Australians wanted action on the National Disability Insurance Scheme, so we funded it. Australians wanted to see the inland rail between Brisbane and Melbourne built, so we are building it. And Australians in small business wanted tax cuts, so we delivered that. It was a budget of security, of opportunity and of fairness for communities large and small, inland and on the coast. No matter where people live, it is a budget, as with all of our budgets, that backs small businesses and puts them in the driver's seat to grow our economy. It backs those who create jobs. It backs those who build our nation. And it is there for those who need the support the most: the vulnerable.

It was a fair budget. But, as we look to the Labor Party to get on board with some of our budget measures—which secure better days for all Australian, which make permanent policies that should make this parliament proud—those opposite just play politics. They are happy to sell Australians down the river, happy to see small business suffer, happy to play politics, rather than do the job they were elected to do. This year's budget had our commitment to fully fund the NDIS, because it is the fair, proper, right and correct thing to do. But while this government delivers the full funding of a bipartisan testament to that which is possible, when this parliament works together those opposite, again, seek to play petty politics, and none more petty than those of the member for McMahon opposite.

Almost everyone agrees that the 0.5 per cent increase that funds the NDIS is a fair way to ensure that the scheme—of which every member in this place and every Australian should rightly be proud—is a reality for the Australians who need it the most. We collect the money only when the bills come in, because we owe it to the Australians who need it to link this levy from 1 July 2019 to the NDIS savings fund. When this idea was first introduced and the 'Every Australian Counts' campaign was asking federal MPs to pledge their support, I was the first from New South Wales to sign up, and I was delighted to do so—delighted. For me, as for the coalition at the time, this was not a question of politics or pettiness; it was sensible, it was fair and it had our full support. It also had the support of Kurrajong Waratah in the Wagga Wagga community and the wider Riverina. So, now we are asking every Australian who has a reasonable capacity to contribute to do so through a levy that fairly represents their ability. As the Minister for Social Services has said, our plans are to ask those who can to contribute, and that is only fair. He said:

A single person with an income of $28,000, to fill the funding gap they would be expected to pay $75 a year in 2019-20. A person on an income of $200,000 would be required to pay an extra $1,000. So a person with seven times more income would pay 13 times more to fill the gap.

That is a fair way to fund the National Disability Insurance Scheme.

Deep within the heart of those opposite is the party of the possible, of that which I outlined at the start of this MPI, but it is not in the heart of the member for McMahon or the opposition leader. We have read reports of how the opposition leader chose politics over people. We have read about those opposite who wanted to fill the funding gap those opposite left but were thwarted by the opposition leader's political games. Even Dr Craig Emerson, a former Labor minister and certainly a luminary for those on the other side, has called out the opposition leader's hypocrisy. He said:

Labor should support the full Medicare levy rise. In doing so, it would lock in the National Disability Insurance Scheme, a signature Labor reform for which Bill Shorten can take much credit from his time as the Rudd government's parliamentary secretary for disabilities and children's services.

But gone are the days of the opposition leader taking credit. Now it is just about him and it is just about politics. Dr Emerson knows the story of rank hypocrisy from those opposite. He knows that it does not stop at the NDIS. His op-ed—and really, I would urge members opposite to read it—continues:

Labor can again demonstrate its credentials as a party of social reform and economic credibility. It should support the full increase in the Medicare levy, unconditionally back the bank levy and pass the school-funding legislation.

That is what Dr Emerson—former minister, former Labor luminary—said.

Our school-funding model implements what David Gonski was calling for. We know education is the great enabler. Through delivering a needs based model of funding for schools, with investment increasing year on year over the next decade, we are skilling our kids with the tools they need for the future, from today, for tomorrow. It is $18.6 billion over the next decade to make sure schools funding is needs based, equitable and targeted. Unfortunately, once again all those opposite are doing is playing politics. There are 128 schools in the Riverina and central west electorate that I represent—a large rural electorate—and each and every one of them is going to see a very real increase in funding.

Perhaps the greatest hypocrisy of those opposite is the speed with which they have sold out small business. There was a time when the Leader of the Opposition was part of a party which wanted to create jobs. Just over three years ago he stood at the dispatch box there and said:

I invite you to work with me on a fair and fiscally responsible plan to reduce the tax rate for Australian small business from 30 to 25 per cent—not a 1½ per cent cut; a five per cent cut.

And further:

Small business represents aspiration. It represents people who want to break away from a salaried job.

Yet today he sells small business down the river. His Labor Party voted against our tax cuts and made clear that those opposite do not understand small business and they will raise its taxes in government. That is what they will do if they ever get back here. If ever they get back on this side, they will raise taxes. The member for Rankin is smiling. He has that smile about him, thinking:, 'That's who we'll hit: small business. That's who we'll work on. We will jack up their taxes and take away the instant asset write-off. That is what he will do if ever he gets a position of power in which he can do that.

Given multiple opportunities at the National Press Club last week, the shadow Treasurer could have confirmed whether Labor would keep the coalition's tax cuts for small business. He could have. But instead the shadow Treasurer dodged, ducked and weaved and failed to answer the questions. Why? The answer is simple: we back small business. Our budget backs small business. It funds the NDIS. It funds needs based school funding. It is fair. It delivers a budget for all Australians and for equity. While we are the ones who will deliver the fairness, the opportunity and security Australia needs, those opposite will just backflip again. I cannot understand why Labor does not want to back the 27½ per cent tax rate. It is the lowest it has been for many, many decades. All those opposite want to do is ramp taxes back up. They do not see that the definition of a small business should be a $10 million turnover. They confuse turnover with profit. They do not understand the difference. They do not understand that many, many thousands more small businesses will now have access to the instant asset write-off so that they can buy the capital equipment that they need in their small business to create more efficiency, more productivity and more jobs.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

If this government was a junior cricket team, the Treasurer's nickname would be butterfingers. In every junior sporting team, whether it is cricket, netball or rugby league—whatever sport you want to nominate—there is always, unfortunately for that kid, a kid called butterfingers. In this parliament the kid called butter-fingers is the Treasurer. Every time he gets an opportunity to take a catch, he fumbles it. Think about the bank tax in particular. He was just standing there at short leg, the bank tax was a little dolly that just popped up in front of him and all he had to do was grab it. He had the support of both sides of parliament and a big chunk of the crossbench. It was a dolly and butterfingers still managed to drop the ball. We were, and are, all up for it, properly implemented. The member for McMahon was up for it. I was up for it. The member for Scullin, the member for Franklin and the member for Griffith—all of us, ready to support a bank levy to help fix the mess that those opposite have made of the budget. But in came butterfingers with the usual incompetence that he has displayed in this place every day that he has been the Treasurer. He just could not make it stick. That just goes to the startling incompetence of the Treasurer—a Treasurer who just cannot get it right. His answers in this place on the bank levy, the bank tax, this week have given us no confidence, firstly, that he even understands the $2 billion black hole in his bank tax and, secondly, that, even if he understood it, he has the competence to fix the mess that he has made of it.

The only conclusion we can reasonably reach is that the Treasurer's policy on banks amounts to a $2 billion hole in the bank levy, according to independent analysis from JP Morgan and Deutsche Bank, and a protection racket against the royal commission. On top of that—and they do not like to talk about this, but we are on to it—the big four banks, according to the Australia Institute, will pocket something like $10 billion of the $65 billion company tax cut. This is the fraud that they are trying to make people around the country believe in. They stand up there and they want to pretend that they are cracking down on the banks, but they are standing in the way of a royal commission and they are letting the big four banks trouser $10 billion of the $65 billion company tax cut—that is the sum total of their approach to the banks. And they should fess up to the Australian people that this is all an act, a charade, while they continue to give big banks the tax cut that they have in their budget.

Under this government, debacles like the bank levy have become the norm not the exception. In unpredictable times there is one certainty, and that is: if the Treasurer is involved, a debacle is not far away. Whether it was the GST or income taxes for the states or the back and forth on negative gearing and capital gains, we have seen one debacle after another, going from fanfare to farce in the usual trajectory.

As to this $2 billion hole, a $2 billion hole is a pretty remarkable thing. I remember, soon after the election, there was a hole in his budget of about $100 million, and we thought that that was bad, but boy were we wrong! This $2 billion hole in the budget is a remarkable thing, but it is also at the same time not entirely surprising because the Treasurer is involved. Everything he touches turns to custard.

No wonder we have deficit blow-outs. We have a deficit for the coming year 10 times bigger than even Joe Hockey handed down in 2014. We have got record net debt for three more years. We have got record gross debt for as far as the eye can see. We have got the AAA rating on negative watch. Despite $21 billion in new taxes, the AAA is still at risk. We have got downgrades to growth and jobs. We have got 95,000 fewer jobs forecast in this budget than the one before. We have got record underemployment. We have got workers going backwards because their wages are not even growing as fast as inflation. And whenever the Treasurer gets up here—and we all see it in question time—they all pretend to read or to do something else. There is an awkward silence that descends whenever the Treasurer is on his feet. And even the conservative commentators, the ones that they can usually rely on, have turned on him.

This is the worst combination, of an out-of-touch Prime Minister, a hapless and hopeless Treasurer and a divided and dysfunctional government—a government defining and destroying itself with its own incompetence. And the bank tax is just one example of that. In this budget, both sides are talking about fairness, but it is only our side that means it.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

I think the Australian people would forgive the Labor Party when they are unconsciously incompetent but the Australian people would not forgive the Labor Party when they are consciously incompetent. For those who are unsure of the difference, let me give you an example of how the Labor Party can be unconsciously incompetent.

Let us take the member for McMahon, the shadow Treasurer, for example, who once had, as his view of the world, as his policy, that China should float the yen! China, whose currency is in fact the yuan or the renminbi, is in fact a different country from Japan, whose currency is the yen. So here we have the man who wants to manage the Australian economy suggesting that China should float the Japanese yen. In one simple comment, here we have the shadow Treasurer not just offending but showing complete disregard for our No. 1 trading partner, in China, and our No. 3 trading partner, in Japan. That makes me wonder what currency our second largest trading partner, the United States, might have according to the shadow Treasurer? Multiple choice—and he is in the House, so he can answer if he likes: is it the United States baht, is it the US peso, or is it the US dollar?

I wonder.

Even though the man who wants to manage the Australian economy does not know the difference between Japan and China, I think the Australian people will forgive the Labor Party for being unconsciously incompetent, because that is what they are historically. But what they will not forgive is being consciously incompetent. What the Australian people will not forgive is when the Labor Party know that they are putting flawed positions for no reason other than political gain. They say, on one hand, that they support jobs. But, on the other hand, they want to deny small business a tax cut. They say that they believe in needs-based school funding. But then, all of a sudden, they do not give a Gonski. Work that one out, Mr Deputy Speaker! They say that they believe in the NDIS. But then they refuse to fully fund it. This is where you have conscious incompetence. They know very well what they are doing but they just want to take advantage politically.

Is it any surprise that the Labor Party are interested in maintaining 27 secret deals? I do not think so. The Australian people know the Labor Party now. They do not want to work in a world of transparency; they want to work in a world of secret deals. That is the way the Labor Party runs. That is the way the union movement runs. So once there is a sniff of transparency and of accountability, it should come as no surprise that those opposite, those who are consciously incompetent, will rise up and try to take the fight.

For the member for McMahon, the shadow Treasurer who put forward this MPI today, I welcome him to come to my patch on the Sunshine Coast and tell people that he refuses to support $530 million for the Bruce Highway, that he refuses to support 70 schools receiving more funding, that he refuses to support nearly 3,000 veterans having greater access to mental health and that he refuses to support over 37,000 small businesses in my neck of the woods receiving a tax cut. Not only has he proven to be unconsciously incompetent; he is consciously incompetent.

Anne Stanley (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

The 2017 budget was delivered in this House barely 17 days ago amid self-congratulatory backslapping and repetition of the word 'fair'. Since then the grim reality of what 'fair' actually means to this government has become clear.

The problem with this budget is not just that it is unfair and that it rips $22 billion from schools, keeps the freeze on Medicare rebates until 2020 and, apparently, aims to be fair introducing a levy on the big four banks. The Treasurer tells us that:

Unlike the previous bank deposit tax, this is specifically not a levy on pensioners' and others' ordinary deposit accounts, nor is it on home loans.

That just demonstrates utter naivety on the part of the member for Cook and the government. Does the Treasurer really expect that the banks are not going to pass this on to their customers? We are talking here about for-profit organisations which have an obligation to their shareholders to improve their financial position. So where else is the money coming from? More disturbingly, as the market and as investment banks like Morgan Stanley and Deutsche Bank have pointed out, this levy will not raise the money that the Treasurer claims, creating a $2 billion budget black hole—not that there is any way to check, of course, as we are still waiting for the legislation to be released.

This government has been selling this budget on the basis that it is fair. But simply saying it is fair is cold comfort for the people living and working in my electorate in south western Sydney who are seeing no real wages growth but will pay $300 more in taxes. Saying this budget is fair is cold comfort for them when they hear that people earning over a million dollars will receive a tax cut of $16,400. And that pay cut does not include the amount they will lose when penalty rates are cut from 1 July. Police, nurses, baristas and any other shift workers in my electorate are set to lose $77 in their take home pay. That means that there will be less money to spend in businesses across the region and elsewhere.

One of the main issues that was constantly raised with me last year and during the election campaign and since has been Medicare and supporting it. Paul Keating once said that the health of any one of us should be important to all of us. This budget does not meet that test for my constituents or any other Australians, with the freeze on Medicare remaining until 2020. It is hard enough for my constituents to fund their out-of-pocked medical expenses as it is, with many of them already having been hit hard by other measures in this supposedly fair budget.

This budget also does little to address the substantive issues that are creating the housing affordability crisis across Sydney and instead tinkers around the edges. Housing affordability is particularly acute in my electorate, where many young families come looking to buy their first home. Ten years ago, workers on the average wage could save for a house deposit in six years; now it will take them over 10. For young people, the situation is made even worse when you consider that a recent university graduate, earning around $50,000 would be looking at paying $1,250 more in Medicare levies and HELP repayments. You are living in a different reality if you think for a moment that they have the means to enter the housing market. First home buyers cannot compete with the tax benefits that are afforded to investors and other parties who are already in the property market. The fact is that we cannot afford the capital gains tax discount or negative gearing in their current form. We need to seriously consider the impact that those measures are having on housing affordability. These measures simply make the dreams of first home buyers harder to achieve and they do nothing for renters either.

The repeated use of the word 'fair' is an attempt to hide from the people I represent and other Australians what this budget truly is and the fact that this budget does little for most people and nothing for the less well-off in my electorate. The fact is they deserve better. They deserve proper funding for Medicare and a pension that does not force them into poverty and working until they are over 70. They deserve a chance to buy a house where the repayments will not cripple them and, most importantly, they deserve a properly resourced education system, no matter where they live or who they are.

Ben Morton (Tangney, Liberal Party) Share this | Link to this | Hansard source

Isn't it amazing that we are talking in this MPI about the words 'incompetent' and 'budget' and it is proposed by the Labor Party. It is quite puzzling to think that the Labor Party would have the gall to come into this House and use those words in this matter of public importance.

I would like to start off by talking about the NDIS. It is really important that the Turnbull government fully fund the NDIS, because we need to put the arguments of the past about funding behind us. We need to provide certainty for NDIS participants, their families and their carers and make sure that their needs are met. We need to talk about the implementation of this scheme. That is what people in my electorate talk to me about. An additional 0.5 per cent increase in the Medicare levy is a fair way to fill the funding shortfall. I do not understand why members opposite do not realise that, when you have a percentage levy, the less you earn the less you pay and the more you earn, the more you pay. It is extremely simple. The Labor Party are very good at announcing things and they are very, very good at creating hope. But they are not very good at funding things. But this government has very proudly put a path forward to fully fund the NDIS.

The Labor Party claim that they clearly identified long-term savings to pay for the NDIS. Let's look at that claim a little bit more. How can they make that claim when Labor's actual budget papers did not link any savings to the NDIS? A proposition that it did so, appeared only in the 2013-14 budget glossy. What is a budget glossy? We in this place know that it is a pamphlet; it is a flyer. The Labor Party did not make a commitment to fund the NDIS in the formal budget papers, but in a brochure, a flyer, they talked about 'other long-term savings' being made to fund the NDIS. But when you actually go to more detail, and ask Treasury officials in Senate estimates whether the measures could be listed in detail, the response was, 'The short answer is no.' We need to put the concerns of those people who will be participants in the NDIS and their families ahead of a funding argument in this place.

Let's look at the education debate. The Australian government is delivering a record and growing funding for schools. A record $242.3 billion will be invested in total school recurrent funding from 2018 to 2027, including $81.1 billion over 2018 to 2021. Funding to schools will grow from a record $17.5 billion to $30.6 billion in 2017. Funding will grow faster than economic growth. Total Commonwealth funding is growing by proximately 75 per cent over the next 10 years, and we are removing those secret, special deals. Only a few days ago I was in here debating the corrupting benefits legislation. Again, the Labor Party were defending secret deals. We are on the side of transparency. We are on the side of transparency when it comes to the allocation of public taxpayers' funds towards the education of our kids. We are on the side of transparency when it comes to dealing with corrupting benefits in unions.

The Labor Party has abandoned the principles of the Gonski review. I find it absolutely fascinating to walk around in this House. For those members of the public that have not been behind the scenes, each of our offices has a window, and many people put a poster of some sort in that front window. It is quite interesting that many of the Labor Party members in this place had posters that made very clear that they 'gave a Gonski'. I find it absolutely entertaining that when you walk past some of those offices—I have OCD; I like things to be nice and clean and tidy; but when you walk past some Labor members' offices, they did not even take the posters down nicely. The corners of those posters still remain where they once were. They ripped them down in a frenzy. They have abandoned the Gonski principles so quickly, leaving the remnants there on those windows.

But let us hear what Gonski has to say. Gonski says:

I'm very pleased to hear that the Turnbull Government has accepted the fundamental recommendations of our 2011 report, and particularly regarding a needs-based situation … I'm very pleased that there is substantial additional money …

No wonder those posters were ripped down in such a frenzied madness by those opposite, because David Gonski has told us exactly what we need to know. (Time expired)

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to be speaking on this matter of public importance about the government's incompetent handling of its unfair budget. Unlike those opposite, I am going to speak to it and about it—not just incoherent ramblings like we just heard.

Since this unfair budget was announced, we have really seen this incompetent government move from disaster to disaster, day after day. Whether it is the bank levy or education funding or Medicare, they are mostly two things: incompetent and unfair. That is certainly the feedback that I hear in my electorate all the time. The Australian public know it. They are certainly onto them and they are highlighting it and telling us that all the time.

The fact is also that this budget completely fails the economic credibility test in so many different ways. That is another thing that most Australians are certainly aware of. The big joke this week has been the Treasurer and his $2 billion bank levy black hole. That certainly has been highlighted this week, and it really does highlight the incompetence of this Treasurer and this government. It is certainly clear that we see that again today. It is not every day that a Treasurer loses $2 billion, but that is what he has done. It is not just us on the Labor side saying this. Investment banks are saying that there is likely to be a $2 billion black hole. They said that just weeks after the budget was released.

Remember that this is a government that promised to fix the budget. That is what they said. There was lots of talk about jobs and growth. We heard it everywhere. Everyone said 'jobs and growth' all over the place. Well, none of those things have happened. In fact, the budget fails the economic credibility test. We know that gross debt will now pass half a trillion dollars in the coming months. We know that growth is down, employment is down, wages growth is down, unemployment is up and the deficit has gone up. So they are not fixing anything—in fact, it is all getting worse. All those things they promised to do, none of that has happened. That is why they are so incompetent.

We have talked a lot, of course, about their bank tax. We have made it very clear—we have heard this particularly from our shadow Treasurer and others—that we will not stop their new tax on the banks. We are very worried about the fact that they failed to put in place any safeguards at all that will stop those fees being passed on to Australians—another example of their incompetence. Certainly, that is something we are very worried about

The heart of this budget is really absolute unfairness. It is an unfair budget that delivers tax handouts for multinationals and millionaires while hurting everyday families—families like those in my electorate of Richmond. The only people who will see any better days in this budget are the very wealthy and big business—that is it! No-one else. And if you particularly compare that to electorates like mine, and if you look at rural and regional Australia, how unfair is it for them? How has this government walked away from them? How has the National Party, particularly, walked away from them?

Who would have thought we would see the National Party in this place standing up for the multimillionaires and for big business, forgetting all those farmers and country folk they are supposed to represent? Well, they have walked away from all of them. I would certainly like to highlight that we have seen that very starkly in my electorate over the past couple of weeks when, of course, we have had the devastating impact of the flooding following Cyclone Debbie, which has devastated many areas of the North Coast of New South Wales.

This government and this National Party, at a state and federal level, have failed to provide sufficient resources, funding and a commitment to fix communities that are desperate. It really is very incompetent. There was a lot of concern that there was nothing in the budget to adequately help these communities that are indeed struggling. Again, it highlights the incompetence of this government.

When we turn to the budget and we look at it, the government made some choices. They chose to continue with these tax handouts for big business while increasing taxes for workers. They did nothing meaningful to tackle big issues, like the housing affordability crisis. Compare that to our initiatives around negative gearing and capital gains tax. But there was nothing from them at all.

And we also see their cuts. There is $22 billion cut from Australian schools and cuts to universities. How unfair can you get, when you are cutting $22 billion from our schools? That will be devastating for kids in areas like mine, when every school will have a major cut. It is over $40 million for the public schools in my electorate.

So we get this government running around all the time and saying that they are all about fairness and all about providing more for people. It is completely untrue—totally untrue! What they are actually doing is making it harder, particularly for those families in regional and rural areas. I think that something like the schools funding and the cuts to universities really highlights that as well—how difficult it will be for those families in regional and rural areas.

But do you know what? In those regional and rural areas, they know that the only party standing up for them is the Labor Party. We have their backs, we are looking after them and we will keep fighting this government and this government's incompetence.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

It is a great pleasure to speak. We deserve everything we get as members of this House, individually and when we go to our electorates and speak with our constituents. I suggest that they genuinely like us, otherwise we would not get elected in our own right!

Opposition Members:

Opposition members interjecting—

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

They do, they like us! I am assuming that your constituents like you on that side—through you, Mr Deputy Speaker.

But when the Australian public speaks about politicians collectively, they no longer adopt the position of liking us personally. They see us collectively as untrustworthy—noses in the trough. It is a reality, and for us to change the perception of the Australian public goes to the heart of how we debate in this chamber. No doubt, the Labor Party come into this chamber, hands on their hearts, and deliver the lines they are given wholeheartedly—as we do. It is moments like this though, through the MPIs, where you can stand and actually debate a topic that you feel passionately about. Today, the topic put up by Labor is 'the government's incompetent handling of its unfair budget'.

We heard one of our speakers today talk about two stages of incompetence. There are four stages of incompetence: there is unconscious competence, conscious competence, conscious incompetence and unconscious incompetence. I do not suggest that those on the other side may have heard of those, but, nevertheless, there is a hierarchal structure of competence and incompetence. I want to remind the House that up in the gallery today we are joined by some principals.

Mr Hill interjecting—

Mark Coulton (Parkes, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Bruce is warned.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I sat quietly through the earlier speakers and I do not expect that the same respect would be shown to me, but I understand that there are different levels of respect in this place. I did sit quietly through the speeches. I want to acknowledge the principals in the gallery who have come here today, because they come to hear a logical debate. They come to hear a factual debate, and I think what they heard when we referred to the budget was that there were going to be cuts to their schools. As principals, that should scare them. If the choreographed line of the Labor Party is to scare and intimidate principals around Australia, then continue on. We have those principals who are in this chamber today; those principals in my electorate, where I have 71 schools; I think the member for McMahon has 39 or 49 schools; and the member for Rankin, who spoke earlier, has about 39. Whilst I was listening to their contributions—their heartfelt contributions—I went through and had a look on the online calculator. The reality is that not one of their schools, when you refer to the education department's online calculator, actually takes a cut. Yet, when you listen to—

Mr Bowen interjecting—

The member for McMahon has 49 schools. I am not going to bore you with statistics, you can have a look at it—

Opposition members interjecting—

Oh, righto—you want a go? Let's go. Here comes the chuckle. We currently fund your Emmaus Catholic College with $11½ million dollars, which will increase to $12 million, an increase of around $400,000. Pick a school, a school per member, and I will tell you what the increase in your area is going to be. Old Guildford Public School—apparently we fund it to the tune of $1.176 million, and there is going to be an increase of $59,600. Pick another school—anyone. Merrylands High School—an increase of $119,000. The reality is, when you refer to the online calculator there is not one school which is going to take a cut. But listen to those on the other side of the House come to this chamber and bleat that there are going to be cuts and use intimidatory and bullying tactics, wanting to scare those principals who come here in good faith. I know those principals are good people. I know they come here wanting to influence outcomes for their children and their students and their schools. They come into this chamber and hear mendacious claims that their school budgets are going to be cut—the contempt that they have been shown needs to be dealt with.

Ross Hart (Bass, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the matter of public importance. Tasmanians, and, in particular, those within my electorate of Bass, need to hear about this government's abdication of its responsibilities to the state of Tasmania and its failure to understand what matters. There is nothing in this budget which demonstrates that the government understands the challenges facing Tasmania or, indeed, the economic challenges facing this nation. This government is incompetent; it prefers the interest of those who are from the so-called big end of town to those of ordinary Australians. Nevertheless, when it seeks to tax the big banks with a levy, something Labor will support, it cannot even get that right. There is a black hole. The Treasurer's calculator needs to be fixed again.

The government appropriates the language of fairness whilst not understanding the concept at all. It does not understand that those in low-paid or insecure work need protection. It has failed to stand up for those in receipt of penalty rates who, on 1 July, may stand to lose significant amounts of money—money that would be spent in regional communities sustaining the jobs of other workers and businesses within regional Australia. The government warns about low wages growth but does nothing about it. It does not regard the interests of low-paid workers in securing better pay and conditions as important at all. It does not understand the fact that underemployment within regional Australia means that small businesses are at risk of losing the livelihood of their existence—the disposable incomes in the pockets of average Australians, which are spent each week on sustaining daily life.

There are real consequences, not just in the wider economic sense, in ignoring the interests of lower paid and middle-income earners in our communities. I know that the experience in Tasmania following the loss of jobs in the forestry industry was that there were significant rounds of secondary job losses in supermarkets and small businesses as a consequence of the loss of jobs in regional communities. It is perfectly appropriate for leading economists, including those from the big banks, to warn about the risk of low wage growth to the economy generally. This will mean lower tax receipts. But, in small communities like those in my electorate of Bass, the loss of penalty rates for retail and hospitality workers may mean a loss of up to $12 million in income—money that would be more likely spent on consuming goods and services locally, week in and week out. Small business in my electorate understands that loss of wages or loss of entitlements has a direct consequence in reduced economic activity.

This government proposes a tax increase on low-paid workers in the form of an increased Medicare levy whilst bizarrely giving those who are on higher incomes a tax cut in the abolition of the deficit reduction levy. A person on a $60,000 per annum income will pay $300 more as a consequence of this budget. The government also prefers to give the largest corporations in Australia an expensive, unfunded tax cut. This government is so incompetent that it sought to avoid disclosure of the yearly cost of this unfunded tax cut and, when pressed, finally disclosed the cost per year would ultimately exceed $16.5 billion in one year and $65.5 billion over 10 years. This government has the cheek to lecture Labor about funding for the NDIA but is prepared to give an unfunded tax cut in the hope that trickle-down economics will generate a wider economic benefit. We know that if choices are to be made—and they must be made—a better choice to drive growth is to invest in education rather than rip $22 billion from funding schools whilst claiming additional or increased investment.

In the Tasmanian context we know that the Tasmanian economy underperforms average gross state product per capita of the other states by something approaching 27 per cent. Saul Eslake has pinpointed the fact that a leading cause of underperformance in the Tasmanian economy is a lack of educational attainment. Slugging students more to attend university and making them repay their HELP debt earlier does not address that. The Liberals are so proud of their investment in fairness, their investment in education and their investment in Tasmania that not one—no single minister or assistant minister—has bothered to travel to Tasmania to talk about the benefits of the budget for Tasmanians.

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

Have any Labor people been?

Ross Hart (Bass, Australian Labor Party) Share this | Link to this | Hansard source

Yes. I know that the Liberals have long ago abandoned Tasmania. They fail to listen to the electors of Tasmania and fail to recognise the importance of jobs, health and education to our disadvantaged communities. They have no idea. Labelling a budget as fair does not make it so.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

On Monday this week the Liberal Party celebrated Robert Menzies's 'Forgotten People' broadcast. We can take many lessons from it, particularly the timely reminder that family life is at the heart of our nation. But it also reminds us that some things never change. So, while the Labor Party primary vote continues to shrink to match their diminished imagination and vision, it reminds us that they are still the cold-hearted class warriors of yesteryear—people who play a zero-sum game, who cannot acknowledge good policy, even when it drives us all towards a stronger, secure future for this country. As Menzies himself said, the class war is always a false war. And the topic of this debate is exactly that. The class warriors are seeking to ignite a class war.

We are living in a very dangerous world. The tragic events of this week confirm that. The West—and by that I mean Western liberal democracies—faces threats from both within and without. And the evil terrorist act which took the lives of 22 people in Manchester this week reminds us that Australians are also not immune from this threat, the threat of radical Islamic terrorism. So the core task of government is to secure the Australian people so that they can live peaceful lives and pursue their own ambitions and happiness. To be free, we need to first be secure.

The coalition government is therefore delivering national and economic security to the Australian people and we are doing so in a competent, just and fair manner. Our budget priorities reflect this fact. I am going to demonstrate in three points how we are delivering national and economic security to the Australian people: (1) we are securing our borders and we are securing the Australian people by raising the standard for Australian citizenship, (2) we are equipping our intelligence and law enforcement agencies with the resources to disrupt the defeat terrorist threats and (3), unlike those opposite during their six years, we are building our defence force and growing an organic defence industry.

Firstly, on the border security and securing the Australian people: this government, since taking office in 2013 and commencing Operation Sovereign Borders, has stopped the boats. We have secured our borders. Need I not remind those opposite of their record: 50,000 illegal arrivals on 800 boats and 12,000 deaths at the sea to the cost of $13.7 billion, with an ongoing cost of $1.9 billion. Since OSB started, this government has turned 30 boats around, we have closed 17 detention centres and we have got 8,000 children out of detention—and we are building on this. We have seen the disaster facing Europe, particularly France and Germany, and we have committed $95.4 million in this budget to support new technologies for the Department of Immigration and Border Protection.

We are modernising our biometric storage to enhance the processing of people who cross our borders. Over 700,000 people move across our borders every week, and that is going to increase by 20 per cent in the coming year, so we are spending money in this year's budget to make sure that we can process people more effectively. We are also committing $12 million over the next four years to introduce tougher standards for Australian citizenship, making sure that people have competence when it comes to English, have allegiance to Australia, commit to our values and laws and demonstrate a willingness to integrate into our society.

This budget equips our law enforcement and security agencies to disrupt and defeat terrorist threats. Since coming to office in 2013, we have improved CT funding for those charged with protecting Australian people. We have introduced eight tranches of legislation which strengthens the ability of intelligence and law enforcement agencies to investigate, track, arrest and prosecute homegrown terrorists. In this year's budget, we have committed $321 million to increase the Australian Federal Police's ability to counter threats and to do their work of policing those who cause harm to the Australian people.

Finally, on Defence: we are maintaining our commitment to increase Defence spending to two per cent by 2021. Under Labor, we went to the lowest spending for Defence since 1938. That was on your watch; you treated Defence like a giant ATM and we are still recovering from it. This government cares about securing the Australian people, and this budget demonstrates our commitment to those priorities.

Mark Coulton (Parkes, Deputy-Speaker) Share this | Link to this | Hansard source

The time allotted for this discussion has now expired.