Grant Chapman (SA, Liberal Party) Share this | Hansard source

It was high spending, as you say, Senator Coonan—definitely Labor. It did nothing about inflation—definitely Labor. But what made this budget even worse and even more typical of the Australian Labor Party was that it sought to reward those whom the Labor Party believed had supported it and to punish those whom the Labor Party believed had not dared to do so. Rural Australia is a perfect example of that. The budget rips away $1 billion in funding from rural and regional Australia. But that is not all. After rural people have been suffering one of the cruellest droughts in Australian history, this government has now cut drought and exceptional circumstances funding to farmers.

My hardworking colleague Patrick Secker, the member for Barker, in South Australia, has been calling for the Prime Minister to come to his electorate and visit the Lower Lakes region, in the south-east of South Australia. I have been there. I have visited the farmers who have been devastated by drought. But the Prime Minister has not. He is ignoring the member for Barker’s calls—and now I can understand why. It is a hard trip to make. It is heart-wrenching to hear people talk about their livelihoods going down the drain—about their family farms, handed down for generations, being unworkable because of drought. It is heartbreaking and there is not much you can say to make it even a little bit better. But the job of Prime Minister is not meant to be easy, and Prime Minister Rudd has a responsibility to Australians living in areas like the Lower Lakes, in the south-east of South Australia, to visit them, to understand their plight and to do all he can to assist them.

Unless the Prime Minister or the Treasurer have a crystal ball and can promise every Australian farmer rain in the coming months then this policy of ripping money out of rural Australia is nothing more than a cruel payback for a group the Australian Labor Party sees as not having supported it. Once again, I invite the Prime Minister to come to this area of South Australia. Patrick Secker and I will take the Prime Minister to the Lower Lakes region and he can sit down with these devastated farmers and explain to them why he has ripped $1 billion out of rural Australia, including their exceptional circumstances funding. I assume that, in typical Labor form, the Prime Minister will reject that invitation. But then this budget, as I said, is typical of Labor, with its complete lack of understanding of basic economics and its use of this budget for payback at any cost.

As if that is not enough of a kick in the guts for farmers, the Labor government has confirmed its intention to introduce a de facto death duty on many farmers, not to mention small business people and others, who hold business assets and franked-dividend-paying equities in a discretionary trust. After a long period of lobbying by me and others, last year the Howard government legislated to allow all lineal descendants of the so-called ‘test person’ required of a trust making a family trust declaration so that its beneficiaries could receive franking credits, to be beneficiaries without suffering tax penalties.

Previously, non-penalty distributions could only go down the line as far as grandchildren. This previous situation meant, effectively, that a trust had to vest, once the test person, their children and grandchildren died out, and that was a capital gains tax event—as I say, in effect a de facto death duty on any further generations becoming entitled to the benefit of the trust assets. As I said, at long last the Howard government corrected this outrageous situation, which it had inadvertently created. However, this Labor government has announced it will restore that outrageous situation and overturn last year’s reform, restoring the de facto death duty.

Let it be clear: whatever its spin, this Labor government is the sworn enemy of small business and farmers. Nothing could be clearer from this wacky proposal. I asked questions on this matter at the supplementary budget estimates hearings in February and still have not received the answers three months later. I listened very closely to the budget speech on Tuesday night and to Treasurer Swan’s rhetoric and spin after the event. I am wondering if he thought we were all just going to take his word for it rather than actually read the budget papers.