Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Hansard source

Senator Bernardi may not remember, but Senator McGauran would. I am a student of history and I can remember the interest rates when Mr Howard was last Treasurer of this country. They peaked at 21.7 per cent, Senator Bernardi, when Mr Howard was Treasurer. If you want to reflect on history after 11 long years of a Liberal government, I can remember the budget deficit that the current Prime Minister, Mr Howard, left us in 1983 when he was Treasurer—a $10 billion budget deficit, and in today’s dollar values about $20 billion. But let us deal with the issues of today and of the last 11years and let the Australian people make their judgement at the next election.

However, I come back to the tax cuts, which I was talking about before I was so rudely interrupted by Senator McGauran yet again. He can never resist. Shifting from the National Party to the Liberal Party certainly has not silenced him. Let us look at the tax cuts for low- and middle-income earners. They are very welcome. Those people have been largely ignored in the last few budgets, but six months out from the election it is clever politics for the government to try to provide assistance to the battlers. But the cuts do not hand back all the additional tax that the Liberal government has been collecting as a consequence of the mining boom.

Despite these tax cuts, the Liberal government will still collect $10 billion more in income tax, excluding company tax, from 2007-08 to 2009-10 than was originally anticipated before the budget was handed down. The Liberal government are providing some tax relief to low- and middle-income families, and it is about time. It is good that they are doing that. They have finally decided to do it six months out from an election. But the income tax collection is still going up.

The childcare measures are welcome, but the announcement of a bringing forward of the childcare tax rebate simply delivers on Treasurer Costello’s original promise in 2004 to pay the rebate immediately after the financial year in which childcare expenses are incurred. It does not take a long memory to recall the very mean and tricky approach of the Treasurer on this one. Just before the election in 2004, when that promise was made, Australians were given the clear impression that that childcare tax rebate would be delivered almost immediately. And what happened? They had to wait 18 months. So, really, the Treasurer is just doing what he promised to do in 2004, and I hope Australians remember this—another tricky, clever approach six months out from an election.

Labor supports the decision to pay the rebate through Centrelink to ensure that low-income families accessing the childcare benefit receive this assistance. The Treasurer should be more honest with families accessing the rebate about the number likely to receive a payment of $8,000. From some of the headlines, the impression is that everyone is going to receive $8,000—far from it. Given that the average rebate is only $813, few families are likely to receive payments of the order that the government has been claiming. Certainly most families are not going to receive anywhere near $8,000. The one-off 10 per cent increase in childcare benefit will be welcome news for parents who have faced annual increases in childcare fees over the last four years of greater than 12 per cent. So, yes, the relief is welcome and it comes to about 10 per cent, but their bills have actually gone up by 12 per cent.

It is disappointing that the Liberal government has failed to match Labor’s commitment of $450 million for a universal year of preschool for all four-year-olds and its promise of up to $200 million for 260 new childcare centres on school sites. These measures would increase the supply of childcare places and put downward pressure on childcare fees.

As I mentioned earlier, the budget has failed a key component of the future test by not funding any new large-scale practical measures to effectively deal with the economic cost of climate change and the national water crisis. The Minister for the Environment and Water Resources, Mr Turnbull, said last week that climate change is ‘the greatest economic challenge our national faces’, yet the climate change and the water sections of this budget seem to have been written by the government’s climate change sceptics. Total proposed expenditure on climate change over the next four years is less than 0.1 per cent of gross domestic product, and it actually declines over the budget’s forecast period. We know from the last Treasury estimates that Treasury were not even asked—although I think they were willing—to do any economic modelling in this fundamentally economically important area so critical to the future of this country.