Joe Ludwig (Queensland, Australian Labor Party) Share this | Hansard source

This is a budget you would go hoarse on; it is that bad. I rise to contribute to the debate on the appropriation bills.

The Prime Minister called this budget a 'fair budget'. He believes that this budget is fair on the Australian people. He could not be more wrong. This is a budget of broken promises and twisted priorities. It is a budget that attacks the fundamental basis of the Australian social contract. The Treasurer has claimed that Australia has 'lifters and leaners', trying to split people in two. He is trying to divide that social contract. He has made a high political value of the cost per working Australian to support those on welfare. Lifters and leaners: a not-too-subtle coded attack on the poor, those people who are unwell and the most vulnerable Australians. With all of the rhetoric from the big, dancing Treasurer you would think that if the budget were to be cruel, it would at least be consistent. Yet, the budget is as inconsistent and unfair as it is cruel. It is because at the heart of this budget lies a real stinker—a real betrayal of the hard-working Australians who are being attacked by the budget. The Paid Parental Leave scheme—this friendless policy which the Prime Minister calls his 'signature policy'—hands out to those who need it the least. His backbench knows it; his Cabinet knows it; and, quite frankly, the Australian people get it, too. They know it. The PPL is bad policy; it is fundamentally unfair; and it is tearing this government apart.

The government claims that there is a budget emergency, and so let's walk through the facts about this emergency. I do not hear any siren in the background. The claimed emergency is of such grave magnitude that they have cut $80 billion from health and education, imposing a $7 tax when you visit your doctor or get an X-ray and an increased cost for medicines. Attacks on the elderly and people with disability and their carers by cutting pensions and by changing the indexation arrangements to carers payments and disability payments form the centrepiece of this broken promise. What a centrepiece it is: it attacks young people by increasing HECS fees and people on Newstart and youth allowance by forcing them to wait six months before receiving any support. From the young people starting out of life to those senior people who have contributed so much to this nation, they are all being made to suffer for this unfair budget full of twisted priorities and cuts because of the siren in the background—this so-called emergency.

The emergency is so severe the government wants to introduce a massive rolled-gold Paid Parental Leave scheme—that is how this emergency is framed. This scheme is economically irresponsible, inherently unfair, poorly constructed and, could I say, the best example of the ideological confusion that grips this Abbott government. It does spark outrage from those opposite; they should be as outraged as I am with this Paid Parental Leave scheme and its unfairness. I reckon they would find it hard to convince their electorate, but I hear rumours that they are hiding from their electorate when it comes to these issues. Mr Abbott's scheme is so unfair that, for example, women earning $100,000 or more will receive the new maximum of $50,000, while a woman on the minimum wage receives $16,000. It is pretty easy to work out who is much better off; it is plainly and simply not right.

I think those who questioned the then opposition leader Mr Abbott at the debate at the Rooty Hill RSL put it well. One man asked the Prime Minister why it was fair that a forklift driver from the Mount Druitt area should pay taxes to fund the parental leave of a lawyer in North Sydney. In contrast, before Labor introduced a fair Paid Parental Scheme for the first time in our history, only 55 per cent of women were able to access paid parental leave. This was a dreadful situation for working mothers, as they often had to take unpaid leave or, worst of all, leave the workforce completely. Today around 95 per cent of working mothers have access to paid parental leave, because Labor built a scheme which was fair, affordable and, most of all, which supported those who needed it the most. The Productivity Commission said in its 2009 report to government that:

… a flat rate payment is appropriate in an Australian context and has the virtue of simplicity and affordability.

It went on to say:

Payment at a flat rate would mean that the labour supply effects would be greatest for lower income, less skilled women precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave. Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.

I think that independent source sums it up well. It is a strange day when a Liberal government wants to ignore the findings of a Productivity Commission report. I find it strange, because the Productivity Commission has, in my opinion, always fallen on the more conservative view, and yet the coalition have shunned it. It has put them at the wrong end of this book.

It is important to emphasise, though, that this Paid Parental Leave scheme is not an idea that has organically developed from within the Liberal and National Party room. It is not part of Liberal party philosophy, and I do not think I have ever seen it on their manifesto. It did not come about from thorough analysis and policy development from inside the government. This is the Prime Minister's own costly answer to a political problem—namely, the lack of trust women place in him personally. The problem with the Abbott Paid Parental Leave scheme is that it essentially acts as an income support payment without the means testing that other welfare payments currently receive. Contrast that with what they are now doing and saying in the welfare area. It stands in contrast to that. For a government that speaks a lot about ending the age of entitlement, introducing a gold-plated Paid Parental Leave scheme that is unfair, badly targeted, and expensive—I will let those opposite judge how contradictory that is, because they are being told that every day when they return to their electorates.

Let us not forget that when Mr Tony Abbott was overseas, it was Mr Joe Hockey doing the rounds, crying about the burden on taxpayers in funding welfare programs—Mr Abbott did a hospital pass to Mr Hockey to sell this. The Paid Parental Leave scheme was crafted for political purposes and without any evidentiary base as to its efficacy. Contrast this with the current Paid Parental Leave scheme introduced by Labor. After the Howard government had done nothing for years, Labor acted. We faced opposition too, of course: let us recall what Mr Tony Abbott said about it in 2002: 'Compulsory paid maternity leave? Over this government's dead body; frankly, it just won't happen'. That is what he said—an amazing turnaround for this guy. He knew that his scheme was so unpopular and so unfair that it would not even get approval from the shadow cabinet, let alone the coalition party room. So he just announced it—brought you all on board; told you all about it after the event—to the bemusement of many shadow cabinet ministers at the time. He certainly blindsided his own backbench. We have had Senator Williams—rightly—point out that this scheme is too expensive. Senator Boswell, Senator Bernardi, Senator Smith and others also note their reservations and their opposition to this unaffordable scheme. To understand the full workings of this government and this Prime Minister, I think it is worth reminding the chamber of the words of Senator Ian Macdonald in this place a few months ago.

This Prime Minister is working on what I would call an old style, Soviet command-and-control structure. It is quite amazing for those opposite to talk about their own government in this way. Even the Greens do not have this sort of Communist dictatorial nonsense; I would accept it from them, but for the Liberals and Nationals, who are never happier than when they are reliving the Cold War, this is a strange way to act. I thought I had seen it all, but Mr Tony Abbott's ragtag bunch of misfits have found new and innovative ways of putting the 'fun' into dysfunctional. So let us remember Senator Macdonald's words from December last year, which really explain the dysfunction at the core of this government. He said:

I was particularly disappointed as my many inquiries to the Prime Minister's office, which seems to have an almost obsessive centralised control phobia over this and every other aspect of parliament, responded to me when I kept inquiring with, 'We will let you know when the terms of reference are eventually decided.'

And he went on to say:

I will not have unelected advisers in the Prime Minister's office telling elected politicians, who are actually in touch with their constituencies, what should and should not be done.

This just shows the chaos, the venom and the anger in the Liberal party ranks over this dog of a budget.

I want to spend a little bit of time working through the labyrinth of illogicality as to how this exorbitant Paid Parental Leave scheme will supposedly be funded. Bear with me for a little bit, because I suspect the only way you can fully understand the funding mechanism for the scheme is by clinging tightly to the misfiring synapses within the Prime Minister's brain. The first thing the coalition proposes to fund the multibillion-dollars-a-year scheme is to cut company tax across the board by 1.5 per cent—hold onto your horses on that one! That is right, in order to fund a massive new spending and entitlement scheme, the first thing the government will do is to cut taxes. Then the Prime Minister plans to impose a levy of 1.5 per cent on all Australian companies with a taxable income of more than $5 million. So they are saying, 'we will cut 1.5 per cent of taxes, and we will find a 1.5 per cent levy to put back'—I assume—in its place. So if you run a company with a profit of more than $5 million, you receive a tax cut that is immediately followed by—let's face it—a tax rise. As part of this preposterous funding plan, the government will undo a significant Hawke-Keating reform by reintroducing double taxation to company profits distributed to shareholders as dividends. The respected financial journalist, David Love, described well the taxation scheme that existed until Hawke-Keating government in his book, Unfinished Business: Paul Keating's Interrupted Revolution. He says this:

For decades, investors in Australian companies had paid tax twice on company incomes. They had paid it in the form of company tax when company income was declared, and they had paid it again in the form of personal income tax when company income was distributed.

For generations of mostly right-wing treasurers, the Australian capitalist had gone on blindly paying tax twice on his equity capital. This was largely because conservative treasurers had been too lazy or incompetent to pick up the anomaly.