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

I rise to speak on the three appropriation bills forming the additional estimates for 2014-15—appropriation bills Nos 3 and 4 and of course the parliamentary departments bill. In total, these bills seeks to appropriate additional funds in the order of $1.7 billion for the 2014-15 year. They reflect changes in expenditure as a result of the 2014-15 MYEFO decisions as well as as a result of the machinery of government changes that were announced as part of the ministry reshuffle prior to Christmas of last year. Some of the measures that are the subject of the appropriations in the three bills include additional funding for defence overseas operations, additional funding for a number of agencies in the Attorney-General's portfolio and the immigration portfolio, funding for DPS and the AFP, funding for the Department of Employment in relation to job seeker compliance framework measures, funding for the Department of Health in relation to various upgrades and one matter which I did note, which is funding for the Department of Finance in relation to the Kenbi land claim on the Cox Peninsula. That caught my attention as I recently visited there with Senator Nova Peris.

The appropriation bills do give me an opportunity to speak a bit about the economic circumstances the nation faces and the damage that this government is doing to Australia's economy. Since the election we have seen a government that, by its actions and its words, is continuing to risk economic growth and economic prosperity and that is continuing by its actions and its words to damage economic confidence. This government has since its election done little but talk down the Australian economy. It is as if ministers on the other side have failed to make the transition from opposition to government and recognise that what they say as ministers in government carries much more weight than the irresponsible rhetoric they engaged in in opposition. We had an example of that in the Senate chamber during a dorothy dixer in question time one day when the Leader of the Government in the Senate said that the country was bankrupt. This was completely untrue, completely false, but that is what was said by the Leader of the Government in the Senate. There are plenty of examples of this rhetoric, of the Treasurer suggesting that the country was on its knees to the bankers of the world, of Senator Joyce suggesting that we were like Greece. None of these statements were based on facts, all of them were nothing more than fearmongering, but, worse, it was completely irresponsible from ministers of the Crown.

On top of this, what has the government done? It has brought down a budget which has slashed benefits for low- and middle-income families and slashed investment in education and health. It has slashed many of those investments which are important for the future of the nation. The reality is that these budget cuts are hurting people, they are damaging confidence and they are hurting the economy. We know that growth remains weak, and outside the resources sector the economy is contracting. According to many economists, we are officially in an income recession.

Let us look at some of the figures since the budget was handed down in May last year. Economic growth has slowed. The annual growth rate has declined from three per cent in the year to March 2014 to 2.5 per cent in the year to December 2014. GDP grew one per cent in the March quarter 2014, half a per cent in the June quarter, 0.3 per cent in the September quarter and 0.5 per cent in the December quarter. This is what has happened to economic growth under this government—economic growth has slowed. Business confidence is down. We remember the Treasurer spouting forth about how there could be a jolt in confidence, an adrenaline surge in confidence. Since he has been Treasurer, since those opposite have occupied the treasury bench, business confidence has gone down. The NAB monthly survey shows that business confidence has collapsed from positive eight points at the time of the budget to zero in February 2015—well below the long-run average for business confidence. Consumer confidence has taken a battering. Unemployment is up, from 5.7 per cent to 6.3 per cent, hovering at its highest level for more than a decade; youth unemployment has risen to just under 20 per cent—19.9 per cent—and is hovering at its highest level in 16 years. Nearly 50,000 more people are unemployed, and there are now over 750,000 people unemployed—777,000, the highest number in 16 years. Of course the Reserve Bank has had to cut interest rates to support the economy.

We hear all the rhetoric from Minister Cormann and others on the other side about what great economic managers they are, yet they are presiding over slowing growth, a decline in business confidence, consumer confidence taking a battering, an increase in unemployment, an increase in youth employment and more people in the unemployment queues. What a fantastic record to date. The reality is that Mr Hockey and Mr Abbott have mismanaged the budget and have mismanaged the economy. Slower growth means we are not creating enough new jobs to keep up with the number of people entering the labour force—hence the rise in unemployment. Let us recall that those on this side of the chamber kept the economy growing through the largest global financial crisis the world has seen since the Great Depression and that we created over 900,000 new jobs during our time in government.

Let us turn now to the budget. A lot of chest beating goes on over the other side about how well they are managing the budget. The truth is the opposite. Not only are they presiding over higher unemployment and lower growth; they are presiding over an increase in the budget deficit and an increase in debt. The budget deficit has blown out under the Abbott government. Under them, we have seen a deterioration in the projected deficit over the four years to 2016-17—that is compared with what they inherited, as set out in Treasury's Pre-Election Economic and Fiscal Outlook, from the Labor government. In the seven months between Mr Hockey's first budget and his midyear update, the projected deficit for the four years to 2017-18 deteriorated by $44 billion—a blow-out of more than $200 million for every day between Joe Hockey's first budget and his midyear update in December 2014.

Senator Cormann, who, I am sure, will turn up at some point in this debate, often tells me what a great finance minister he is. Let us compare how things were prior to him becoming finance minister—when we were in government and I was finance minister—with how things are now. Whilst I held the portfolio, we had lower federal government spending as a share of GDP than under the Abbott government, we had lower taxes as a share of GDP than under the Abbott government, and we left Australia with one of the lowest levels of government debt of any advanced economy. Since Senator Cormann has become finance minister, he is now budgeting over the next four years to increase spending by $70 billion, increase taxes by $80 billion and increase net debt. That is quite an achievement!

Over the four years to 2013-14, federal government spending averaged 24.75 per cent of GDP. Under the government's budget, spending will average 25.5 per cent of GDP over the four years to 2017-18. Tax receipts under the Labor government averaged 21.1 per cent of GDP over the four years to 2013-14; the Abbott government is budgeting for tax receipts averaging 22.6 per cent of GDP over the four years to 2017-18. So under this government we see higher spending as a share of GDP and higher taxes as a share of GDP—at the same time as they are presiding over lower growth and higher unemployment. Australia's net government debt stood at just under 13 per cent of GDP in 2013-14. According to the IMF Fiscal Monitor in 2014, that was the sixth lowest of the 26 advanced economies. Under the Abbott government, net debt is projected to rise by over $100 billion by 2017-18 and gross debt is also projected to increase to $484 billion by 2017-18. This is again an increase of in excess of $100 billion—some $165 billion.

So, for all the rhetoric, let us remember what this government is presiding over: higher unemployment, lower growth, lower business confidence, higher debt, higher deficits, higher spending and higher taxes. That is the record of this finance minister and this Treasurer thus far.

I now want to make a few comments about measures which are reflected, but not necessarily given effect, in the appropriation bills. This budget has been roundly condemned by the Australian community, by this parliament and, frankly, privately—and sometimes publicly—by members of the Liberal Party and even members of their own cabinet. We have seen a budget predicated on broken promises, on a breach of faith with the Australian people, and measures which are fundamentally unfair. This government seems to think that people who oppose them do so because we somehow do not understand the issues, because we are blinkered and ideological or because we are irresponsible—or whatever other insult they can throw at people who are opposed to their propositions. The reality is: this government's budget is unfair and has been roundly condemned because it targets those who can least afford it and because it is predicated on broken promises.

The reason this government cannot gain support for so many of its key budget measures—and let us remember that a number have been passed; I will come to that shortly—either from the community or in this parliament is that they have lost the argument. They have lost the numbers because they have lost the argument. They cannot sustain an argument that says, 'We told you there would be no cuts to health and education', whilst putting forward a GP tax which is nothing less than an imposition on families and other Australians going to the doctor. They cannot sustain a proposition that supports increasing university fees and cutting Commonwealth funding per place at university by 20 per cent after going to the election promising no change to the way universities would be funded. They cannot sustain a proposition that says indexation of the pension should be changed such that the real value of the pension declines over time—condemning more Australian pensioners to poverty—after going to the election saying 'There will be no changes to the pension.' I could go on.

The proposed changes to pension indexation have been estimated by ACOSS to be an $80 per week cut to pensions—a cut that is allowed for in the budget papers. We also know that the impact over the decade will be even more significant. The budget also included cuts to various family payments—for example, the restriction of access to family tax benefit part B to families with children under six, the reduction in the supplements and the freezing of the payment rates for two years. Those changes led to NATSEM estimates that $6,000 per year was being cut from a typical Australian family's budget.

Perhaps one of the most shameful measures in the budget is the government's proposal to leave young job seekers with nothing to live on for six months—a measure we were told recently was, in fact, one of the Prime Minister's so-called captain's picks. Despite the 'no new taxes' rhetoric that taxes would always be lower under this government—another lie—we have also seen an increase in the petrol tax, which was implemented through regulation, thus getting around the parliament, despite there being legislation on the increase in the excise sitting in the Senate. We have also seen cuts to the ABC and SBS, despite the Prime Minister saying 'no cuts to the ABC or SBS'. And, despite Ms Julie Bishop opposing it, we have seen continued cuts to foreign aid—some $11.3 billion over the 2014-15 MYEFO and the 2014-15 budget.

For all of these reasons, we condemn many of the measures in the government budget. I would make the point that Labor has in fact supported a number of savings—some $20 billion worth of savings in this budget—and we have also proposed a range of alternative savings, which include ensuring multinational companies pay their fair share of tax and a reduction in the superannuation tax concessions for high-income earners. We have also proposed—and we are pleased that the Prime Minister recognised this—scrapping his paid parental leave scheme, which was costed at over $5 billion a year.

With a number of the measures I have outlined, whilst reflected in the budget figures that ground these appropriation bills, obviously Labor will continue to oppose legislation giving effect to them. However, Labor is a party of government. We have made it clear that we would not be so irresponsible as to block supply. So we intend to support the passage of the appropriation bills through the parliament.