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

I move:

That the Senate notes the 2007-08 Budget:

(a)

fails to:

(i)

tackle Australia’s poor productivity performance,

(ii)

meet the challenges of climate change,

(iii)

deliver practical solutions to the water crisis, and

(v)

ensure long-term investment in broadband infrastructure; and

(b)

focuses on a short-term election fix rather than long-term nation building.

The matter under consideration for debate in general business is the 2007-08 budget. Firstly, a general comment about the budget, its presentation and contents is that it is a very clever and cunning election-year budget. I do not think Labor have any doubts about that. We have seen significant attention to many groups of people, albeit late and in limited circumstances in some cases—and I will deal with that in a little more detail—and as such it represents a clever, cunning election budget. We are six months out from the election. Many of the groups are battlers in our society who have been doing it tough and for the first time they have received some significant assistance—and Labor welcome that. In the area of tax cuts and one-off payments in the 2007 budget, we welcome the assistance because many Australian families and carers are under financial pressure. They have been doing it tough.

Firstly, I wish to make a couple of points about the one-off, lump sum payments that have been included in the budget just six months out from the election. Labor welcomes the payment of $500 to senior Australians on a senior concession card, but it is a one-off payment. That $500 is great assistance, for example, to a person on a full age pension—I think the current single full age pension is about $13,700 a year—being delivered just six months out from an election. It is great for those individuals who are doing it tough, and many are battlers in my home state on the north-west coast of Tasmania, where there are many elderly people in the community. What happens next year? There is no election next year. They get the $500 this year, which is welcome assistance. With fuel prices, rates if you own your own home and food prices they have been doing it tough. But what happens next year?

The superannuation measure, up to $1,500—we just passed the legislation through the chamber in the luncheon break and Labor supported it—is a cost of just over $1 billon delivered retrospectively for this group of lower middle-income earners. Again, that is fine; it boosts the savings on a one-off basis for that group of people. But in terms of designing long-term effective policy I think the Assistant Treasurer, Mr Dutton, whom I give credit to, got it right when he argued publicly some weeks ago that the scheme required a fundamental redesign of its features in order to encourage future savings, particularly amongst the group of people under 45.

Labor are a responsible alternative government, and we give credit to the government where it is due. I want to acknowledge the public comments of Mr Dutton, the Assistant Treasurer, because he was right: the scheme needed re-examination in its fundamental details. Clearly, he could not convince the Prime Minister and Treasurer, who were so anxious for that dash to the election—the clever, smart, short-term political fix: ‘We’ve got to pay attention to various groups because we’ve ignored them in many cases.’ It was very cunning. We are so used to it. We admire the cleverness of the Prime Minister, in particular in this regard: ‘The election’s coming up—got to readjust policy in major areas and spend significant amounts of money for those people that we’ve ignored in the past.’ So we admire the cleverness. But, unfortunately, the Assistant Treasurer, who so perceptively made those observations a few weeks ago, was overruled by the Prime Minister and the Treasurer.

I think that exemplifies that the budget fails the future test. The budget does very little to build Australia’s future productivity. Instead, it relies on the continuation of the mining boom for our future economic prosperity. The current mining boom has injected some $55 billion into our economy over the last year and over the last five years it has injected more than $300 billion into the budget. This massive injection of cash is masking the fact that Australia’s productivity growth is so low. I had a significant exchange with Senator Minchin; we debated this issue of productivity yesterday in the Senate.