John Madigan (Victoria, Democratic Labor Party) Share this | Hansard source

On Tuesday, the budget of bad ideas was tabled. It shows that the government is implementing fierce austerity measures when it comes to offering something innovative and appropriate to ensure that the most vulnerable, including pensioners, families, the unemployed and asylum seekers are not continually taken advantage of.

Since the Commission of Audit came out of two weeks ago, I knew the government was going to hit the Australian people with a sizeable punch in the guts. I have come to expect nothing less. This is a family-hostile budget. Families are going to be hit hard.

It is ironic that today, United Nations International Day for Families, I am giving my response to the budget, which has moved Australia closer to abolishing any financial recognition of the cost of dependent children on taxpayers. Taxpayers in this country are treated as single individuals for tax purposes. This is regardless of whether they have dependent children and/or a dependent spouse. There is no universal recognition of the cost of children in our tax or welfare system. Only those families on significantly low incomes benefit from family tax benefit A and now those families who receive family tax benefit B will be subjected to harsher income testing and eligibility criteria.

Despite the rhetoric about the value of families, this government's fiscal policies tell us a different story. According to figures from Treasury officials, a family of three will lose $4,171 a year in family tax benefits. Add to this the increased cost of doctor's visits and the increasing petrol costs, cuts to hospitals and cuts to education funding, and it is not hard to see who the biggest losers will be. Meanwhile, the dreaded deficit levy will cost someone on $190,000 a year a mere $200.

Thirty years ago, Australia acknowledged the cost of raising children through a universal family allowance system. This was known as horizontal tax equity. Since then successive governments, both ALP and Liberal, have eroded this concept. Allowances were means-tested, then abolished and replaced by family tax benefits A and B. These have subsequently been eroded. Then we had the baby bonus, which has also been changed and devalued. The current proposals will further restrict eligibility for family tax benefit B, freeze the current levels of family tax benefit A and family tax benefit B and reduce payments to large families and single parent families.

Family assistance in Australia is now a welfare payment rather than a universal recognition of the cost of children. Families are now considered to be a drain on the public purse rather than a productive and necessary part of our economic and social system. It has come to this: the government of the day now believes that you should only have children if you can afford to, as though children are a private indulgence rather than a national benefit. This builds resentment in our community from the childless, who feel they are supporting those with children rather than acknowledging that an income supports more than the individual earning it.

The Democratic Labour Party believes we must all remember that our children are the future generation of Australia. They will assume responsibility for all of us and will inherit all of our failures and our fortunes one day. What kind of legacy are we leaving a generation whom we are continually devaluing?

Abolishing family tax benefit B after the youngest child turns six places more pressure on mothers in single income families to seek employment. Australia faces huge youth unemployment, yet now mothers are pressured into entering the paid workforce in order to make ends meet. Many older mothers are forced to compete for jobs with their own young adult children. It seems only those families already living in poverty will be able to receive benefits.

Mr Acting Deputy President, I seek some indulgence to speak a little about the establishment and evolution of family benefits in our tax system. It was during the Second World War that workers gave up a pay rise in favour of a general payroll tax to redistribute wage income to workers with dependent children. Child endowment had its origins as a voluntary redistribution of income by workers collectively in favour of their mates with dependent children. It was a social contract.

Later on, child endowment was severed from the payroll tax, which was given to the states to exploit as a general revenue source. By the 1970s, child endowment was merged with abolished tax rebates, formerly deductions, to create universal family allowances. These allowances were universal precisely because they were meant to recognise horizontal equity at all levels of income. Over the intervening years, family allowances and family payments have increasingly been as described as 'welfare'. But they were never welfare. The name 'family tax benefit' explains their original purpose—to even up tax burdens between those with dependent children and those without. Children were seen as a benefit to all.

The government and the Treasury cannot have it both ways. If they want to say a child or student is not entitled to government support because of that child's parents' income then they ought logically say that that part of the parents' income really belongs to the child and should be split with the child through a system of deductions. They should be saying that X thousand dollars of the parents' income should be reallocated and treated as the child's income and income tests applied accordingly to that income in the child's hands. Likewise with spouses—if you are to going to deny a social security benefit to a person because of a spouse's income, you should logically split the spouse's income between them and tax accordingly.

This budget simply does not make sense for Australia. The fuel excise levy is just one example where the government has lashed out indiscriminately This levy will disproportionately affect low- to middle-income earners, particularly those who are supporting a family or living in regional Australia. It is all good and fine for the Greens to suggest that the revenue be invested in more public transport; however, a myki card for those living on hundreds or thousands of acres in regional Australia is no real substitute for affordable fuel prices.

The Democratic Labour Party believes education is paramount for the development of young people in our society. The education industry and the future of education in this country has not been left unscathed by this budget. The massive multi-billion dollar cuts to higher education are not encouraging signs for those who are studying and those who are planning on future study.

Low- to middle-income families are the hardest hit in this budget. There is no recognition of any contribution they make to our society. Mothers at home raising children have no voice and no profile in a society which values money alone at the expense of human dignity and the common good. This budget further divides Australia into two classes: haves and have-nots. Low- to middle-income families will be hit hard.

What the government is doing to age pensioners deserves an honourable mention. All age pensioners have made a significant contribution to Australian society and should not be the target of cuts to spending. Forcing pensioners to pay $7 to visit a GP and to pay more on their medications due to changes to the Pharmaceutical Benefits Scheme is a strange way of thanking them. I asked the minister yesterday to outline how much money will be raised by increasing co-payments for concessional patients by 80c—how much impact this will have on the budget's bottom line—and whether this can be considered fair, reasonable and proportionate for the sick and elderly. Do you think I got a response? Of course not We are charging pensioners an extra 80c, yet I could not even get an answer on how much impact this would have on our bottom line. I bet it will have much less impact on our economy than it would on the standard of living of older members of our community.

This leads me to my next point. The Democratic Labour Party believes all pensions should be indexed by an independent tribunal in much the same way as parliamentary salaries so that they are not subject to political manipulation. It has become all too easy for successive governments to tamper with the pension amount, often forgetting how difficult it is for thousands of Australians to live on the allowance which they have been taxed all their life to create. Now, it is not as if the government is not consistent—consistent at putting the most vulnerable last.

This brings me to our responsibility towards people from other countries who turn to us for asylum. A government's act of compassion to asylum seekers can often be an indication of the heart of a nation. This budget would indicate that, as a nation, we are suffering a serious cardiovascular disease. This budget compromises Australia's ability to respond to asylum seekers with compassion and independence. Stationing Customs and border protection personnel out of Indonesia, Malaysia and particularly Sri Lanka indicates that we would prefer to close a blind eye to human rights abuses in the hope of maintaining strong diplomatic relations with often compromised governments. The Democratic Labour Party has a very strong policy on asylum seekers and refugees, and I implore those listening to the debate in the chamber this evening to read it.

I do not feel as if I would be doing the right thing by younger Australians, particularly Young Liberals, if I do not make mention of the government's privatisation plans. Before the budget, I had written off Medibank Private as a likely target for assured privatisation, however, to read that the government has allocated $11.7 million towards a scoping study on another five agencies is ludicrous. This money would be much better spent towards ensuring pensioners do not have to contribute to the costs of their much needed medication, not to mention what is going to be left for future generations of Young Liberals to privatise.

This budget leaves a lot to be desired. It truly is a budget of bad ideas. The government is committing $2.8 million over four years to assist small business to compete for Commonwealth contracts, yet it allocates $10 million over the same period to jointly fund research with China to assist them to take our natural resources.

The decreases in the income threshold for repaying HECS debts to $50,638 will place extra financial pressures on low-income families and single-income families This is compounded by the increase of the interest rate from two per cent to a capped level of six per cent in repaying HELP debts This will have a negative impact on many families. How will single-income families manage debt as these pressures sky rocket?

The new Trade Support Loans scheme for apprentices has really been promoted through a wolf in sheep's clothing. At a cost of $439 million over five years this is only possible due to the scrapping of the $914.6 million from the Tools For Your Trade scheme. A country is what a country makes, and further discouraging young people from doing apprenticeships is not helping the future of our nation. The government may argue that they have their priorities right, though it is clear that they simply do not.

It is not all bad news. It is nice to see that the government has announced a freeze on politicians' pay for a year and the removal of certain gold pass benefits for past and present politicians and their family members. However, these measures do not go far enough. I know I would certainly welcome a freeze on politicians' pay until we are back into surplus. This would be truly leading by example. After all, why should our finances improve if the finances of the nation we are responsible for do not?

What happened to Menzies' the forgotten people? What happened to Howard's battlers? The real challenge is to grow the cake for all Australians. Those with the least will, it seems, pay the most. This truly is the budget of little innovation, empathy or compassion.