Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I would like to say a few words about this Orwellian titled bill. The Labor 2013-14 Budget Savings (Measures No. 1) Bill 2014 is part of a growing tradition within this parliament to see legislation presented in the most partisan and most cynical of ways so that you get a highly politically charged description of a bill rather than its title going to the content of the bill.

What we see is the government calling upon this chamber to adjust its deteriorating budget position—a position that the Labor Party acknowledges, but you would not get any sense of that from the discussion of the government. I recall just before the last election the proposition that the current government could fix the deficit; they could reduce the debt. They gave no recognition whatsoever throughout the term of the previous Labor government of the deteriorating revenue position of the Commonwealth. Those positions have now come back to haunt the government itself.

Let me again put the facts on the record. This government has actually doubled the budget deficit in just 12 months, after promising to fix it. This was their biggest election promise, but like all their election promises it is a promise that has just evaporated. The Treasurer, Mr Hockey, has doubled the budget deficit in one year from $17.1 billion to $35 billion in 2015-16. Over the four-year period from 2013-14 to 2016-17, Mr Hockey has presided over a cumulative deterioration of some $96 billion in the deficit compared to the figures he inherited from Labor. We can see these figures quite clearly set out in the Pre-election Economic and Fiscal Outlook—a position that was made independently of the previous government and a position made very clear by the Public Service in the run-up to the last election. This change, the subject of this bill, was already factored into the forward estimates, and so if the bill does not pass by 30 June the consequence will be a further blow-out in the budget deficit, which is, as I say, already at $35 billion.

We have a government which, having abandoned all of those election promises, went through and produced a budget in its first year, which, of course, went down like a lead balloon. The government's political position has deteriorated so badly that it has now even abandoned that proposition in its public rhetoric. It has abandoned the rhetoric around fiscal rectitude in a desperate pursuit to rebuild its electoral fortunes and it is now in the process of preparing itself for an early election. But the reality is simple: the budget is built on a house of cards. The projected budget surplus is built on a change in the accounting rules that allows for the earnings of the Future Fund to be recorded and calculated in the deficit—not through any responsible measures. As we know, Mr Hockey's number are underpinned by unfair measures, which will never pass the Senate. We have seen this chamber on several occasions now reject measures which are fundamentally unfair and offer nothing in the way of rebuilding the prosperity of this nation.

When we talk of a house of cards, we need look no further than the proposals that the government is seeking to pursue in higher education. Not content with its unfair and unnecessary plans for the $100,000 degrees, which have been voted down twice by this chamber, the government continues to maintain its quixotic crusade. Embedded—in fact, hidden—in this year's budget, is the 20 per cent cut in university funding. There are cuts to the training of our research students. There are cuts to the funding to address student equity. There are $5.4 billion worth of cuts to universities, to students and to research.

These are cuts that the government cannot deliver but underlie the assumptions within this budget. So we have these phantom arrangements that the government seeks to pursue. The cuts that have been included in this budget are of course aimed at bodging up the figures to make them look better than they are. It is truly a fantasy budget—a fantastical dream in the imagination of Senator Cormann and his partners in crime, the Treasurer, the Prime Minister and of course the hapless fixer, the minister for education. But the Australian people understand that, if these measures ever were implemented, the enormous costs that they would have to this nation's future.

The stated purpose of this bill—and this is the really interesting point; we do not find this in the title. This is not an amendment bill; in effect, what it is is a proposition that in reality is nothing more than an attempt to change the Clean Energy (Income Tax Rates Amendments) Act 2011 and the Clean Energy (Tax Laws Amendments) Act 2011 so that both acts have their future operative provisions repealed. You would have thought that would be the appropriate way to actually to present these bills as amendments to those measures.

Both acts have provisions already in operation, and these would not be repealed. As such, the bill would repeal an increase in the nominal tax threshold from $18,200 in 2014 to $19,400 in 2015-16. They maintain the second personal marginal tax rate at 32.5 per cent rather than increase it to 33 per cent from 2015-16. They maintain the maximum value of the low-income tax offset at $445 rather than change the maximum value of the offset to $300 million in 2015-16 and they seek to maintain the threshold below which a person may receive the offset at a taxable income of $66,667 and the withdrawal rate at 1.5 per cent rather than the income threshold increasing to $67,000 and the withdrawal rate falling to one per cent from 2015-16.

Of course in these circumstances these were perfectly fair measures introduced at the time in which, as a package of measures, we proceeded in government to ensure that there was fairness about the climate change polices that we were pursuing. So we are now faced with this difficult position and, as a result, if the legislation does not pass by June, these measures of course will further undermine the fiscal position of the Commonwealth.

The shadow Treasurer said in the other place that the opposition has reflected on these matters and the circumstances of the mismanagement of the budget placed upon this Commonwealth. Ultimately, we have resolved to support the bill.

The opposition notes that the tax-free threshold trebled from $6,000 to $18,200 during our time in office. The change that this bill will repeal, while it would have been welcome, would have been a smaller percentage of the increase increasing the amount to $19,400. But, despite the spin that the government has sought to put on this, this action is not something we would have done in office. These are not measures that the Labor Party would have pursued in office. The difficulty of the decision is that we have to pick our battles, and we are trying to the best that we can to ensure that people enjoy the support of this parliament who need it most. Our focus will always be on protecting the most vulnerable from this government just as we are the only party that is responsible enough to call out this government on the issue of the unsustainability of our superannuation system, which of course rewards for those who are most advantaged in this country, or making it clear about the need to change the taxation arrangements for multinational companies so that multinational corporations actually pay their fair share of tax.

That is why we are opposing as well the government's latest rounds of cuts to the pension. I noticed overnight that the Greens have had their Meg Lees moment where they are seeking to adopt the position of the conservatives on the issues of the defence of the pensioners of this country. I look forward to seeing how that goes, because we know how this story ended for another great party, the Democrats. We understood the consequence when the Democrats went down this road of accommodating the reactionary forces in this country. And of course we saw the circumstances whereby, in time, the Democrats were obliterated. So, we are going to see the great party of protest, the great party that wants to express its views about the need to fundamentally transform this country, lining up with the reactionaries to defend this government's attack on the most vulnerable in our country, the pensioners. I look forward to seeing how the latter-day Meg Leeses get on in this circumstance!

This government, unfortunately, has sought to attempt to rewrite history. This is a government that made a number of commitments prior to the last election, all of which have been broken. This is a government that played big on the rhetoric of deficit and debt, all of which have been demonstrated to be hollow. This is a government that we now see wants to present to this parliament measures that of course would continue the great inequalities of this country—in fact, make it much worse—by the pursuit of a tax upon the most vulnerable. This is a government that wants to undermine our universal health system, wants to undermine our highly effective pension system. This is a government that wants to smash equity in higher education. And this is a government that of course is now desperate to present itself as something other than it really is.

We have suggested that there needs to be an alternative approach, and that is what the Labor Party will argue strongly for and defend vigorously in the run-up to the next election—which I say, on all the science, is not that far away. The opposition has outlined alternative measures that can be taken to secure the fiscal position of this country while maintaining fairness and social justice. The Labor Party has a very, very different view about ensuring that we have a country in which prosperity is genuinely shared throughout the community and in which we can ensure that our industries are innovative and modern and able to provide the employment opportunities so that everybody in this country has the right to expect the living standards that a country like ours can afford.

We have to make sure that this is about building priorities into the budget process that defend the fundamental democratic values, and I am afraid you will not find that on the opposition benches. Unfortunately, I now see that the Greens are falling for the old line about how responsible they are, how thoroughly respectable they are, how desperate they are to actually appease those on the other side. I look forward with interest to how that unfolds.