Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on the appropriation bills. In a legal sense the annual appropriation bills are at the core of any budget. They make appropriations from the Consolidated Revenue Fund, the CRF, for the government's activities. So in a technical sense these underpin the budget. But when it comes to economic and social philosophy, when it comes to values and principles, we do find something else at the core of the Abbott government's first budget, something quite rotten. We find a perverse approach to economic policy—an approach of talking the economy down, of propagating a fabricated budget crisis and damaging consumer confidence, an approach which will increase the cost of living for middle Australia, making people pay more for basic needs like visiting the doctor and buying medicines. At the same time as it makes people pay more, the budget increases the tax impost on ordinary Australians—from the Prime Minister who said, 'No new taxes.' It cuts benefits are concessions for those who are most vulnerable like pensioners—from the Prime Minister who said, 'No changes to the pension, no cuts to health, no cuts to education.'

At the core of this budget is a hardline agenda of dismantling Australia's social safety net. It is as simple as that. At the core of this budget is a perverse approach to social policy as well as to economic policy, a harsh philosophy of slugging low- and middle-income earners while cushioning the wealthy and big business. If senators opposite do not agree with me, I refer them to Senator Macdonald's intervention in the debate on the deficit levy bill last week. It is a philosophy of entrenching privilege for those who can afford the best quality education and the best quality health care while reducing educational opportunities and curtailing access to health care for low- and middle-income earners. This is a budget of broken promises, a budget of deep unfairness, bad economics and big lies. It is a budget which will take this nation backwards.

The budget's deep unfairness starts with its attacks on Australians who work hard. It attacks families struggling with the cost of living, parents who want a better future for their children, young people who want to go to university—all of them attacked by this budget. The budget's unfairness continues with its attack on the weak and the disadvantaged. It attacks the elderly, those on the age pension and self-funded retirees. The pensioners of this country were promised by Mr Abbott, 'There will be no changes to the pension'—all a lie. It attacks the vulnerable, people who are sick, people with disabilities and their carers, war veterans and Indigenous Australians. The unfairness of the government's policies can be illustrated with one simple contrast. This budget will make a couple on an income of $65,000 a year with two children more than $6,000 a year worse off—a couple on an income of $65,000 a year with two kids, more than $6,000 worse off as a result of this Abbott budget. Yet, at the same time as this government is slugging low-income households, it is giving millionaires $50,000 for having a baby. There is a Paid Parental Leave scheme for the well-off, but there are higher taxes, higher charges and lower benefits for low- and middle-income earners. This tells us everything we need to know about where Mr Abbott's priorities lie.

This is a budget with a cradle to grave assault on fairness. It hits ordinary Australians at every stage of their lives. It hits child care, with $450 million of cuts to out-of-school hours care; it is cutting the number of places for before and after school care. It hits schoolchildren, cutting $6½ billion from the Gonski school funding reforms. Remember, these were funding reforms that Mr Abbott promised Australians he would not roll back. He promised Australians he would not cut. He said, 'We said we are on a unity ticket with the Labor Party when it comes to school reforms.' University students will pay more to go to university. Working families are hit hard with the slashing of the family tax benefit. As the former Prime Minister John Howard has pointed out, this amounts to a tax hike on low- and middle-income Australia. A new petrol tax will slug working families $2.2 billion over four years. There is a new GP tax of $7 every time a family visits the doctor and a new medicines tax of $5 every time they go to a chemist to fill a prescription. Labor's schoolkids bonus is scrapped. Eligible families are losing money for children going to school—$410 per primary school child per year and $820 per secondary school child per year.

For those struck down by illness or facing disability, the government replaces the helping hand with a slap in the face. Indexation of the disability support pension is cut, leaving more than 800,000 people with disabilities worse off. These are people who receive less than $20,000 a year in pension payments. People who lose their jobs are hit. Workers under 30 who lose their jobs will be denied income support for six months—six months!—leaving these Australians with no income to put a roof over their head, let alone pay for things such as phone calls or travel to the job interviews that the government says they have to do. People who have retired from the workforce after paying taxes all their lives are also hit by this unfair budget. The government is cutting the age pension and making people work until they are 70 before they can receive the pension. Self-funded retirees are also hit with the government cutting funding for concessions for seniors health card holders. These are cruel cuts. They represent an attempt to change the face of Australia; to increase the cost of living; to slash our social safety net; to throw out the idea of a fair go and to entrench inequality; and to make this nation a more unfair, a more unequal and a more uncaring society.

The budget is not only unfair social policy. We say it is also bad economics. For a start, this is a budget built on an economic lie, the myth that the Commonwealth is facing a budget emergency. We know that this is a Prime Minister who has an addiction to scare campaigns. We remember the claim from Mr Abbott that whole cities would be wiped off the map. From claiming that those cities would be wiped off the map to a fictitious budget emergency, the reality is this is a man who sacrifices facts in the pursuit of a political objective.

Nations with budget emergencies do not receive AAA credit ratings with a stable outlook from all three credit rating agencies, as Australia did under Labor. We are only one of 10 economies in the world with such a rating from all three agencies. This puts us in the company of other countries with strong public finances, like Germany, Canada, Sweden, Singapore and Switzerland. So much for Mr Abbott's confected budget emergency—which is the entire economic and fiscal rationale for this budget of harsh cuts and broken promises.

The government's scare campaign about the Commonwealth's finances is economically irresponsible. What sort of message does it send to international financial markets for the Prime Minister and the Treasurer of our country to declare over and over again a budget emergency? This fabricated budget emergency will be deterring investment from abroad and it has also eroded consumer confidence at home The Westpac Melbourne Institute's consumer sentiment index has fallen by 17 points over the last seven months—17 points! Let's remember Mr Hockey before the last election saying solemnly, with his serious face on, 'We have to restore confidence.' Well, in seven months there has been a drop of 17.4 points in consumer confidence and sharp falls in May and June following the announcement of the budget. This is what happens when a government spends months falsely claiming the nation's finances are in an emergency and then brings down a budget which cuts the living standards of the vast bulk of householders in this country. Depressing consumer sentiment in this way can only have a negative impact on economic growth in the short term.

It is as if Mr Abbott and Mr Hockey have forgotten that, when you are in government and you are a senior economic minister or the Prime Minister, your words have a real economy effect. They have an effect in the real economy. They have an effect on market confidence. They have an effect on consumer confidence. But all of that is ignored because the pursuit of a political scare campaign is regarded as more important than the national interest. One thing you can always say about this Prime Minister and this government is that they will always put their political interest ahead of the national interest.

When it comes to the medium term and the economic reforms Australia needs to keep growing for the future, this is an extraordinarily short-sighted budget. As our population ages, Australia needs to boost workforce participation, improve our workforce skills and lift our workforce productivity. But the budget contains policies which are bad for participation, bad for skills and bad for productivity. It cuts $80 billion from schools and hospitals over the next 10 years—cuts which will jeopardise our future economic prosperity.

Employers need our young people to emerge from schools with a quality education and the skills needed to make a contribution in the workforce of tomorrow; yet we have a budget that is slashing schools funding. What effect will this have? It will have a direct impact on the education of the next generation of Australians. It will mean fewer teachers in classrooms. It will mean fewer opportunities for children from disadvantaged backgrounds to get a quality education. This isn’t just unfair; this does not just deny opportunities to the individual concerned. It is bad for workforce skills and productivity.

This budget makes $5 billion in cuts to universities and higher education. Those cuts will also hurt our economy. It will mean higher student fees, less public investment in university teaching per student and increasing debts for students—with higher interest rates on those larger debts. Our future competitiveness will depend on having enough graduates in disciplines like science, technology, engineering and mathematics; yet we have a government whose approach is to cut investment in universities and to deter people from going on to higher education.

The radical and drastic health cuts in this budget—again, the cuts the Prime Minister promised would not happen—will also have adverse long-term economic impacts. You do not foster workforce participation and productivity by undermining access to health care; yet that is what this government is doing. You do not ensure the health dollar is spend most effectively by undermining primary health care, which is precisely what this budget does through the new GP tax and medicines tax.

Low-income earners, we know, are especially sensitive to co-payments. A recent report by the COAG Reform Council found that 5.8 per cent of Australians delayed or did not see a GP because of cost; and 8½ per cent reported that cost was a barrier to filling prescriptions.

The new GP and medicines tax will make this situation worse, deterring more people from going to the doctor, and that is the whole aim of the government's policy. When they talk about sustainability of Medicare, when they talk about the growth in the health budget and when they say we need to do what they are doing—imposing a GP tax—what they are actually saying is: they want to have fewer people going to the doctor. They want to deter Australians from going to the doctor.

The whole aim of the government's policy is to deter low- and middle-income earners from going to the doctor when they are sick. This will mean that medical conditions, which could be treated relatively inexpensively when diagnosed early, will go untreated and risk developing into more serious health problems. This not only inflicts more harm on individuals; it will also require more expensive medical treatment down the track.

As the COAG Reform Council has observed, effective primary and community health help to keep people out of hospital—this is a fundamental principle of health economics, one that the government does not want to heed. The GP tax will result in more people needing to go to hospital, and it is just one example of the flawed economic thinking behind the tax. The budget cuts to investment in health, universities and schools are bad economic policy as well as bad social policy.

As I said at the outset, budgets reveal the values and priorities of a government. Budgets also reveal the character of those who lead governments, and what does this budget reveal? It reveals a Prime Minister who did not tell Australians the truth about his plans before the last election; a Prime Minister not just breaking one promise but every promise he made before the election; a Prime Minister who promised no cuts to health and no cuts to education, but Mr Abbott is now cutting $80 billion from Australian schools and hospitals; a Prime Minister who before the election promised no new taxes—now here he is hiking petrol tax, imposing a new GP tax, imposing a medicines tax and increasing the top marginal rate of income tax; a Prime Minister who promised no change to the pensions and now he is cutting pensions; a Prime Minister who promised no increase to university fees who is now increasing university fees; a Prime Minister who before the election promised no cuts to the ABC, no cuts to SBS and now has presented a budget which will cut funding to the public broadcasters by $240 million and that is only the first step; a Prime Minister who said the government would not slash foreign aid but presents a budget which slashes foreign aid by $7.6 billion; and a Prime Minister who said that he would be the Prime Minister for Aboriginal affairs and who presents a budget that cuts half a billion dollars from Indigenous Australians.

Perhaps the biggest of the big lies was Mr Abbott's claim that he would reduce the cost of living for Australian families, because this is a budget which dramatically increases the cost of living for low- and middle-income earners. NATSEM research has shown the budget would leave a range of typical low- and middle-income families thousands of dollars a year worse off—huge impacts on people who are already finding it hard and are working hard to make ends meet.

The Prime Minister's great crusade before the election was to repeal the carbon price in the name of easing cost of living pressures and now he is introducing tax hikes and cuts to payments that will leave families thousands of dollars a year worse off. In the face of overwhelming public opposition to this budget, the Prime Minister has compounded his own deceit with yet more lies. He has tried to pretend that the budget does not cut pensions by playing word games. At least the Minister for Finance, who presented these appropriation bills, has been honest enough to acknowledge that reducing indexation of pensions does indeed mean you are cutting benefits and pensions. In the Senate last week, Senator Cormann said:

Now obviously and necessarily, reducing government payments, reducing the spending growth trajectory, will impact on people–individuals, families, pensioners, organisations, states and territories–who receive payments from the federal government.

In fact the Prime Minister's deception has now reached breathtaking levels, because last week in the House of Representatives he made the risible claim:

This is a fundamentally fair budget.

Well, it is nothing of the sort—it is a fundamentally unfair budget.

Consistent with longstanding principles, the opposition will not oppose the passage of these appropriation bills, but when the government brings forward its broken promises like the GP tax and the cuts to pensions into this parliament, Labor will fight with everything we have against these socially regressive and economically damaging measures. We on this side of the chamber will continue to stand up for the fair go.