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

I am feeling nostalgic today. This will be my last speech on a budget; indeed, my last speech in the Senate. I first came to this parliament in 1975, at the tender age of 26 years old. Nothing takes me back to those days like a good, old-fashioned, class warfare Labor budget, a bash-the-rich budget, a budget that punishes people’s aspirations, a budget with the politics of envy and payback. Ah, the days when—to use taxidermy terminology—Labor always stuffed the economy! Here we go again. As Treasurer, Wayne Swan is Jim Cairns without the charisma. This budget, cobbled together by a work-experience Treasurer, is based on two things and two things alone: Labor Party ideology, as deeply embedded as a mutant gene that is passed from one generation to another, and a shameless appetite for the approval of the left-leaning media. The sad reality is that neither of these priorities addresses the best interests of the Australian economy or the very working families who entrusted their future to the Rudd Labor government at the last election.

I ask Treasurer Swan: what do the following have in common—prickly pear, cane toads, the soursob, the rabbit? Give up? They are all examples of unintended consequences. Mr Swan has brought down a budget riddled with unintended consequences. The boys from Brissie have smuggled a few cane toads south of the border. They claim they are drafting a budget to control inflation, and they deliver a budget that fuels inflation. Did I say fuel? I bet the blood drains from the faces of those opposite when I mention fuel. The Minister for Finance and Deregulation runs about for months like Edward Scissorhands, promising to cut expenditure to the bone. Labor present a budget that increases government spending and, as a consequence, pushes inflation higher. They promise a budget to improve the lives of working families. They bring down a budget that they blandly admit will increase unemployment—the first budget in 11 years to do so. Labor claim to represent working families. They ensure that there will be fewer families working. Unintended consequences indeed.

Let me offer some specific examples. Labor’s budget increases the income threshold for the Medicare surcharge from $50,000 to $100,000 a year income for singles and from $100,000 to $150,000 for couples. This is a policy based not on economic common sense but entirely on ingrained Labor ideology. It will have a devastating impact on our public health system, which is already suffering under the mismanagement of state Labor governments. The reality of this policy is that it will drive people and, more importantly, working families out of private health cover and force them back into the public hospital system. Here is the irony: while this policy herds more and more people back into the public health system, it simultaneously ensures that fewer and fewer people will be paying the surcharge which funds that very system—unintended consequences.

The government’s own budget papers and the Treasurer himself have confirmed that they expect 500,000 people will leave private health cover—that is, half a million extra people will rely on the public system, which is already buckling under Labor’s state-by-state mismanagement. Include their families, and Labor have added over a million extra patients to the public hospital queues, which are, of course, already obscenely overstretched. What makes it even worse is the sheer hypocrisy of Labor’s scare tactics. The Prime Minister, Treasurer Swan and their spear carriers have been playing the politics of fear in the media by talking up a so-called inflation crisis. There is no doubt that we are currently experiencing a period of rising inflation. But, if their rhetoric is correct and we face an inflation crisis, why would any government introduce a policy which encourages people to withdraw from private health cover—effectively putting an extra $50 to $200 per month of disposable income back into those people’s pockets?

The Rudd government cannot have it both ways. Either consumer spending needs to be constrained or it does not. Either the public health system needs more funding or it does not. Labor cannot spend an entire election campaign and its first six months in office saying one thing and then deliver a budget that is creaking with policies that deliver the exact opposite. These are very real objections. These are sound economic arguments. The government simply confronts them with spin. When I say ‘spin’, I mean the googly, the flipper and the doosra all rolled into one. The Labor Party operates under an entrenched ideology which, at its heart, proclaims free universal health care for all. It emerges in this screwball budget as a resentment and disdain for private health cover. Do not get me wrong—we all agree that universal, free, high-quality health care is an admirable goal. But we on this side of the Senate—the Liberal and National parties—are realists. We know that someone actually has to pay to achieve that admirable goal. If you massively reduce the number of people paying the surcharge and propping up the system, those with even a basic grasp of economics—and here I am magnanimously including the Treasurer—know what the consequence will be: less funds to service those who already rely on the system, let alone the huge influx of people enticed back into the system. The inevitable flow-on result will be higher private health premiums—cane toads!

Then there was that other well-orchestrated leak, the increase in the tax on luxury vehicles from 25 per cent to 33 per cent. The luxury car tax currently kicks in when a car costs $57,000. But here is what Treasurer Swan has failed to consider: this figure has not been indexed to account for inflation since its inception in 1999. His statement that individuals who buy these cars can afford it is spiteful, insulting and dangerous.