Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

Senator Cormann was certainly very loyal to the coalition in that he did not give away any of Mr Abbott's budget reply speech. Certainly he presented nothing new to us. He ran along the same old tracks of trying to make a case that the coalition are better economic managers than the Labor Party. But in fact this budget is quite solid proof that the opposite is true. Labor has presented a budget that is a solid foundation for the future, as have been the last couple of budgets. This makes a nonsense of the motion that we have before us. As Senator Cormann did, I will read it out:

The Senate notes the Labor government's ceaseless and ongoing commitment to debt and to deficit budgeting …'A ceaseless and ongoing commitment to debt and deficit budgeting' which will cease next year—

So much for the veracity of that part of the statement. This is a solid commitment which has been a commitment of the Labor government for some years now. The Labor government is committed to a surplus in 2012-13 and this budget shows that the Labor Party is able to and will deliver a surplus next year and that those surpluses will continue. That is completely reflected in this budget and upholds the Labor government's commitment.

Once again we have heard 20 minutes of debate from members of the coalition government where they conveniently overlook that the world has experienced one of the greatest financial crises in 70 years, that the GFC was real, that quick action was required and that the Labor Party took that action. The Labor Party took necessary measures to ensure that our country was not plunged into a recession. Australia was one of the only countries that got out of the crisis relatively unscathed, but that does not mean it was not affected. What is horrifying is that had we taken the coalition's approach Australia would have been probably in greater deficit because we would have coped with falling economic revenue from the effect of being in recession and we would have had major unemployment with the depressing effect that has on the economy and on revenue and the resultant increase in welfare expenditure.

The Labor government tackled that issue in the teeth of opposition from the coalition parties and introduced stimulus spending. Stimulus spending was targeted to have longer term benefits in the way of infrastructure. Having spent the last few weeks going to a number of country areas in the Yorke and Eyre peninsulas and opening much-needed infrastructure in those schools in the form of libraries, outdoor areas and classrooms, I at least saw very clearly and practically the effect of this stimulus spending. The government committed that stimulus spending and Australia came out of the GFC relatively well. At the time the Labor government promised that we would, at the right time, reduce that stimulus spending and put the economy back on an even keel, and that is what we have delivered in this budget. Thankfully, the Labor government did have that vision and foresight, because over 700,000 jobs have been created since Labor was elected in 2007.

What are the economic credentials of the coalition government? Again, we hear time after time, and one understands this, the coalition spruik their economic credentials. In fact the evidence shows the opposite—first of all in their response to what was happening with the GFC and, second, in the economic outlook that they took to the last election—the $11 billion black hole. If the coalition government had been put into office at the last election, they would have started off with another $11 billion of expenditure that they had to take over. They tell us that they would have returned the budget to surplus earlier—that they would have returned this year. It is laughable really, quite laughable.

To go back to the budget, not only did the Labor government have to cope with the effects of the GFC, which we are now overcoming, but of course we had the effects of terrible floods and natural disasters which have softened the revenue side of the budget. That has affected the first two years of the budget. However, the surplus is still there and it is still on track. Another significant problem which the government have had to face is that, yes, our terms of trade are very good at the moment but there is the well-canvassed matter of the patchwork economy, of trying to get into our economy a system which will spread the benefits of the increase in mining revenue to all Australians and to have a more even growth. I think that the government are doing a very good job in this budget to ensure that that happens.

It is a tough budget in some senses. There has been cutting in expenditure to make sure that we are not adding to the inflation and cost-of-living pressures in the years ahead. The Labor government understand those pressures very well, unlike, one might say, the Howard government in the final years of its government when Australians were faced with one interest rate rise after another caused by heavy spending from the Howard government. Middle-class welfare, regional rorts and the proverbial spending like drunken sailors happened under the Howard government and that at a time when it was already taking in strong tax receipts from an already burgeoning mining and resources sector. The government are not ignoring those issues at all. This has been a budget that combines good restraint in spending, substantial savings measures, with responsible measures to spread the benefits of the resources income around Australia. Let us go back and look at where we stand at the moment. We can highlight some of the actions that the government has taken up till now that have benefitted Australia. First of all, and pre-eminently, there is unemployment. Australia has an unemployment rate of 4.9 per cent and it is expected to go down. This is in comparison to nine per cent unemployment in the United States. The European Union has a combined statistic of 9.5 per cent unemployment. So Australia is a world leader when it comes to jobs. Those are jobs that the Labor government has saved and jobs that the Labor government has created. In just this last year 300,000 jobs were created. The real GDP growth is forecast to remain at a strong 4.4 per cent in 2011-12. This year's GDP growth was of course affected by natural disasters, but the forecast shows that real growth is strong and that we are heading in the right direction.

Regarding the deficit, we can compare the forecast deficit to the two major comparable nations in the world—the United States and the United Kingdom. While Australia's deficit will reach 1.5 per cent of GDP in 2011-12, the United States will have a deficit of 10.8 per cent of GDP and the United Kingdom will have a deficit of 8.6 per cent of GDP. That is a very stark comparison: 1.5 per cent for Australia compared to 10.8 per cent for the United States and 8.6 per cent for the United Kingdom. I doubt very much that the United States or the United Kingdom will be looking at a surplus any time soon.

Another key fact is that the real government spending growth of 0.5 per cent in 2011-12 is the smallest increase since the 1980s. The Howard government never delivered a cut to real spending. Under this government, spending is projected to decline in 2012-13 in real terms. Senator Fifield was a staffer when former Prime Minister Howard and Treasurer Costello were delivering increases in interest rates and inflation. They never delivered a real spending cut. Where was Senator Fifield then to make the case for real spending cuts? If he was there it was certainly not in evidence in the actions of the former Howard government.

What future benefits are we looking at from this budget? The budget delivers cuts and savings but it also creates opportunities for employment and provides necessary services to the community that will drive our economy. Delivering productivity is the sort of thing that this side of the chamber has been talking about for many years, because it will position our economy to be strong in the future. The Labor government will create an extra 500,000 jobs over the next two years; however, we recognise that there are 320,000 young Australians not currently employed and 230,000 long-term unemployed. Labor is firm in its belief in the dignity of work and is putting in place measures to get people back into work.

The government will phase out the dependent spouse tax which gives spouses no incentive to get back to work. Of course we recognise that it provides important benefits to families but it is one of the tough cuts that was deemed necessary to make. There is also an incentive for young people to go back to work. The incentive to leave study and go straight onto the dole is to be removed by extending the 'earn or learn' requirements and by creating pathways to full-time employment. The same goes for the long-term unemployed, with $233 million to be invested in new support programs to encourage employers to hire those who have not worked for more than two years.

The growth of the disability support pension in Australia is of concern to the government. That is why the government will be bringing in strict new work tests, updating the definition of incapacity and introducing new requirements for younger recipients. It will provide more wage subsidies and will allow more hours to be worked before payments are suspended. So the government is introducing measures to increase participation in the community and provide incentives for people to go out to work, but it is also giving essential support to people on disability pensions.

Skills levels are always an important issue for the Labor government because it understands the benefit of skills in increasing productivity in our economy and ensuring that the resources boom keeps on going and that other areas of the economy can be stimulated. There is a $100 million invest­ment in a national apprenticeship mentoring program, another $100 million to develop new apprenticeship models and a $281 million support package for additional tax-free payments. Skills and jobs are not separate; they are linked to each other. That is why the government is providing $550 million for a new workforce development fund. That is a fantastic outcome for industry.

There are also benefits for working fam­ilies. Health services in regional Australia will benefit considerably. In my state it was a great joy for me to hear that there will be health benefits in my duty electorate of Grey. The Wallaroo Hospital and Health Service will have $3.3 million to establish a five-surgery public dental clinic. Also, $39.2 million was made available for the redevelopment of the Port Lincoln Hospital and Health Service. It is an area I know well and I am extremely pleased that the Labor government facilitated this investment. Furthermore, the Mimili, Pipalyatjara, Pukatja and Amata communities will be receiving $2.3 million for the construction of four new two-bedroom staff and visitor houses. Those are all very welcome pieces of infrastructure for a regional area. Finally, the area of mental health, which has been neglected for far too long, will benefit greatly from this budget. This is a necessary amount for a very deserving issue, and it is the largest mental health package ever delivered by a Commonwealth government.

We look forward to hearing the opposition's reaction to the budget; we look forward to hearing Mr Abbott's reply. The opposition told us that they would bring the budget back into surplus in the current year, so we look forward to hearing about the ways in which the coalition say they will do this. At the last election, the opposition's mental health package was mainly based on cuts in other areas of the health sector. What other cuts will the coalition be suggesting now? The coalition need to provide substan­tial input on this budget in their reply, because Senator Cormann and other senators in this chamber have tried again and again to reinforce the coalition's economic credentials but that has not been our experience on this side of the parliament. Mr Hockey has been making reckless promises about a return to surplus without indicating where it will come from. There was the $11 billion budget blowout at the last election. Last year, the suggested cuts not only were publicly derided but even embarrassed people in their own party. The coalition need to come clean, not make vague statements like 'the govern­ment should have cut more', 'they should have spent less', 'it should've been a tougher budget' or 'they should have spent more in other areas'. It is important that tonight we see Mr Abbott back up the commitments that the coalition have made. I suspect that the budget reply will be deficient in that respect, because the budget produced by the Prime Minister and by the Treasurer, Wayne Swan, is a solid budget that delivers on the promis­es made by this government and will provide a solid foundation for the future.