Anne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

I rise to oppose the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. Before the election we were told this would be a government of no surprises, a government that would never countenance cuts to health or education and that would leave the pension exactly as it is, a government that would support Australian families. How times have changed. We now know this is a budget that attacks the poor and vulnerable while it rewards the wealthy. It contains some of the harshest measures in Australian history. If passed in full, it would leave the Australian social contract in tatters and each and every one of us would be poorer for it.

Some of the very worst of the attacks in this budget are contained in the bills before us today. If they are passed, literally millions of Australians will be worse off. Very few low- and middle-income Australians would escape the crosshairs of this brutal legislation. This social services legislation includes significant attacks on pensioners, people with a disability, carers, young job seekers and low- and middle-income Australian families. Australia did not vote for these bills, and Labor will not and cannot support them as they stand. What is worse is that these cruel attacks are not necessary. The government has fabricated an economic crisis or a budget emergency, as they like to call it, in order to justify the harsh measures contained in these bills.

The truth is that Australia's economic credentials are the envy of the world. We have the 12th largest economy on the planet, despite the fact that we do not even make the top 50 for population size. We have solid growth, relatively low unemployment, low interest rates and low debt. According to the Organisation for Economic Cooperation and Development, the current net debt for all levels of government in Australia is equivalent to 13.8 per cent of GDP. This is less than one-fifth of the average debt burden carried by other industrial economies. We are only one of 10 nations in the world to achieve the AAA stamp of economic approval from all three ratings agencies. How those opposite can stand up again and again and tell the Australian people that we are in the midst of an economic crisis given these undeniably solid fundamentals is beyond me.

Normally when governments are trying to mount a case in the national debate they will put forward independent and reputable experts who will back up their argument. But, as we have seen, economists who have been willing to come out in support of the government's Chicken Little 'sky is falling' view of the world have been very thin on the ground. In fact, the very opposite is true. Earlier this month, 63 of Australia's leading economists banded together to publicly refute the government's confection. They rejected the very concept of the budget emergency, in a statement that read in part:

Australia does not face any present or imminent debt crisis. Australia’s deficit and accumulated debt are both low, relative to international experience and Australia’s own history.

They also warned that the way forward is investment in jobs, not harsh cuts. On this matter they say:

The most effective route to restored fiscal balance is to help more Australians find work, earn incomes, and pay taxes. But major and unnecessary reductions in government program spending and public sector employment would have the opposite effect.

This expert testimony shines a glaring light on how seriously overblown and dangerous the government's economic claims really are. But it seems those opposite will not let either expert advice or solid facts get in the way of their scaremongering. No-one is denying that we should be chartering a path to a more sustainable balance of incomings and outgoings, but to launch an all-out attack on the most vulnerable Australians in order to achieve this is shameful. This is not the only fabrication the government are spreading in order to justify these cruel bills. No, not content with talking down our economy, they have also turned to maligning Australia's solid welfare system, trying to convince us all that spending is spiralling out of control. Again, they have neither truth nor evidence to support this.

The truth is that Australia's welfare bill is second lowest amongst OECD countries. In 2013 our welfare spending was just 8.6 per cent of our GDP compared to the OECD average of 13 per cent. This is a government that trades in fear in order to scare Australians into believing that its cruel and heartless agenda is the only way forward. Tony Abbott misled the Australian people to get into high office and now he is confecting a budget emergency and welfare spike in order to launch a systematic attack on millions of Australians.

First in line for cuts are pensioners. In 2009, on the recommendation of the Harmer pension review, the age, disability and carer pensions increased to 27.7 per cent of male total average weekly earnings to ensure that real incomes did not go backwards as the years went by. But these bills would change this accepted formula. Instead, the government wants to link pensions to the usually lower consumer price index. To give you an idea of the impacts of this in the real world, if these indexing arrangements were put in place four years ago, a single pensioner would now be $1,500 a year worse off each year than they are today. It is very clear that those opposite do not understand the impacts of a $1,500 cut to a very modest income of around $22,000 on Australian pensioners. Although that is not surprising when you consider recent reports that one of the budget's greatest fans, Mr Christopher Pyne, thought nothing of splashing close to $1,500 of taxpayers' money on a day room in a swish London hotel.

Looking forward, the Australian Council of Social Service, ACOSS, has estimated that, if it is passed, this measure would see pensioners $80 a week poorer in a decade's time. This adds up to over $4,000 a year. If this measure passes, the cost of living will continue to increase but the pension will fail to keep up. Over time this smaller pension increase will compound, making it even harder to make ends meet. Make no mistake: this is a cut, despite what those opposite might say—a cut by stealth, granted, but a cut nonetheless. If these bills pass, Australia's 2.9 million pensioners will see an ongoing erosion of their spending capacity and an ever-mounting burden just to stay on top of daily expenses. In Tasmania this will impact on close to 100,000 pensioners. Nearly 22,000 of these pensioners live in my home electorate of Braddon. These people have contributed all their lives to the social and economic wealth of the country, but they are now being treated as little more than an economic burden.

The government's flimsy justification for these cuts relies on peddling that old rotten chestnut that our spending on pensions is out of control. Again, the facts are not on the government side. Australia spends just 3.5 per cent of GDP on the age pension, making us one of the lowest spending nations in the developed world. The OECD average of spending on pensions was 7.8 per cent of GDP in 2009. In fact, many nations—including Austria, France, Germany, Italy, Japan, Portugal and Slovenia—spend in excess of 10 per cent.

Notably, these cuts will not be restricted to age pensions. The government also proposes to use the same indexing measures for the disability support and carers pensions, and the single parenting payment, ensuring that in total 3.2 million Australians will be worse off. Not only are pensioners being forced to suffer a continuing decline in their standard of living but this bill would also have them working until they are 70 years old. This would give Australia the highest pension age of any country in the OECD. This proposal is short-sighted, and it will unfairly impact on blue-collar workers, low-income workers and women. It also flies in the face of everything we know about the serious problem of age discrimination in Australian workplaces. If 50-year-olds are finding it hard to get work, how does the government think that the situation is going to magically reverse itself for 60- or 65-year-olds?

Labor's decision to increase the pension age to 67 by 2023 was supported by a broad and thorough review of Australia's pension system. It also came with a significant improvement to the base rate for the pension and improvements to indexation. In contrast, this plan to increase the pension age to 70 is an ill-considered and ill-advised move that has been rushed through with no consultation or rational basis.

To add insult to injury, the Abbott government is axing the National Partnership Agreement on Certain Concessions for Pensioner Concession Card and Seniors Card Holders. This will scrap $1.3 billion in Commonwealth assistance to the states and territories to provide seniors and Seniors Health Card holders with discounts on their rate notices; on their water, sewerage, electricity and gas bills; on their car registration; and on their public transport fares. The national seniors organisation estimates that these concessions can add up to $1,200 for seniors each and every year. This is clearly another cut that will mean that pensioners will have to pay more for essential services from already tight budgets.

Tony Abbott promised solemnly before the election—