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

Here is another one—Senator O'Sullivan. He does not want to look at the facts; he spouts the rhetoric. They claimed that they would reduce debt and deficit; they have grown the debt. So I again remind them: since their first budget was handed down in May 2014 we have seen a slowing of economic growth. As Senator Bullock rightly pointed out in question time today, the annual growth rate to the year ending March 2014 was three per cent, around trend. In the year to March 2015 it was 2.3 per cent—substantially below trend. There has been a denting of confidence, as I have reminded those opposite. They do not want to hear it.The NAB business survey shows that business confidence has fallen by 75 per cent since the government took office and consumer sentiment has fallen by 13.8 per cent. Wages growth has slumped. In the year to March 2015 wages grew by 2.3 per cent—the lowest annual rate of wage growth in two decades. Senator Cormann today interjected in question time, 'It is all fine because CPI is low'. I said to him, 'Why don't you go to the voters of Hasluck and say to them, "It's okay that you are getting wages growth at the lowest rate in 20 years, because CPI is really low; inflation is really low."' See how that works. We know this government does not make wages growth a priority; does not make increasing inequality, increasing the sharing of economic prosperity in this country, a priority. And of course the unemployment rate is up. The unemployment rate has been at six per cent or higher since their first budget in 2014. Under the Labor government the unemployment rate never had a six in front of it—not even at the height of the global financial crisis.

So slower growth, sluggish wages, rising unemployment—what this means is that Australians' incomes have fallen under this government. The latest national accounts show that the average Australian's disposable income fell by 1.5 per cent in real terms in the year to March 2015. That is worth considering—the average Australian's disposable income fell by 1½ per cent in real terms in the year to March 2015. That is what this government is presiding over. Just this week we have seen a report from PricewaterhouseCoopers which shows a growing economic problem—one that governments of both persuasions need to tackle; the difference is those on that side do not appear to be willing to—and that is the increasing disparity in economic activity around Australia. One-third of regional locations are in recession.

The government's second budget is as socially unfair and economically short-sighted as its first budget. It still includes $80 billion in cuts to local schools and hospitals funding. In question time today Senator Brandis kept talking about CPI and population growth as good bases for indexation. I am sure there are those opposite who understand the mathematics of this enough, which is that if your costs grow at a rate higher than indexation, you erode funding over time. That is what the government is ignoring. Nobody on either side of politics asserts that health costs only grow by the consumer price index. No-one who can be taken seriously would assert that. The government's approach of changing indexation for health and education funding is a cut—it cuts funding over time because we know that the costs of these activities historically have continued to rise at rates higher than CPI. You do not have to take it from me—Liberal Party ministers and governments are complaining about this. As was discussed today, the New South Wales government's own evidence is that we will see longer waiting times for elective surgery and greater pressure on public hospitals as a result of the cuts to hospitals.

What else does the budget still include, apart from the $80 billion cut to schools and hospitals? There are $100,000 university degrees, a new tax on visiting the doctor and $2 billion more in cuts to health care, with children's health care, dementia assistance and Medicare benefits hit the hardest. This second budget hits families again, just as the government's first budget did. An analysis by NATSEM shows that the government's budget policies will inflict more than $6,000 in cuts to the typical family.

Labor has outlined its approach. We will invest in the education of our young people and the skills of our workforce. We want more young Australians to learn the language of the digital age, coding, from the beginning of formal learning in primary and secondary school. I was at a breakfast this morning with the Business Council of Australia where there was discussion about the demand for these skills, certainly in the United States, and why these skills are so important to employment prospects for the next generation of Australians. To cater for this we have to boost the skills of our primary and secondary teachers; we also have to encourage more recent graduates in science, technology, engineering and mathematics to become teachers and we have to introduce new measures to encourage more young people, particularly women, to study the science, technology, engineering and mathematics disciplines. These are all matters that Mr Shorten has spoken at length about. Labor has also made clear the priority of investment in science research and innovation and supporting new ideas and start-ups to drive the economy. Our commitment is to ensure that three per cent of Australia's GDP is invested in science research and development by the end of the next decade. This is all about a smart, modern and fair Australia.

In conclusion, I return to the need for a sustainable budget. We understand the need for a sustainable budget, and we demonstrated that when we were in government, as I said, by making targeted savings totalling over $180 billion over the six budgets from 2008-09. We have supported in excess of $20 billion of proposed savings announced by the government, and we have proposed a range of alternatives—alternatives which are responsible and fair. These include reducing superannuation tax breaks for high-income earners, saving over $14 billion in 10 years. I note today that Mr Tony Shepherd, the Prime Minister's hand-picked head of the Commission of Audit, has said what the Prime Minister cannot say, has said what the government cannot agree with, and that is that superannuation concessions need to be revisited. They do. They are overwhelmingly tilted to high-income earners, and in the interests of long-term sustainability of the budget position, as well as the encouragement of a sensible policy for all retirement incomes, you cannot take them off the table in the way the government has.

Another measure the opposition has announced is multinational tax reform to ensure multinational companies pay their fair share of tax, saving some $7.2 billion over 10 years, and we indicated clearly that we did not support the Prime Minister's Paid Parental Leave scheme or his Direct Action scheme, which cost, respectively, $5.5 million and $2.6 billion a year. These are savings which are socially fair, unlike the Abbott government's cuts which fall hardest on low- and middle-income earners. Alternative savings are also economically and fiscally responsible—contributing to fiscal consolidation while supporting economic growth—and they address reform priorities: the need for a more sustainable retirement income system and also the impact of multinational tax shifting on budget revenues, which is an ongoing challenge for all advanced economies.

In conclusion, I want to turn to the issue of spending. Those opposite like to mouth a lot of rhetoric about Labor's spending, but in opposition they made a range of assertions which were simply not true. I think it was Barnaby Joyce who said that we were heading for Greek-like levels of debt; I recall Senator Abetz in question time suggesting that the country was bankrupt. In fact these are economically irresponsible statements; they are not only untrue and not only partisan, but they are economically irresponsible for senior members of a party of government to make. Senator Cormann also spent a lot of time, both in opposition and in the lead up to the 2014 budget, beating his chest about how fiscally conservative he was. It must be very embarrassing for him now to be the finance minister presiding over the budget. He spends a lot of time telling me how bad I was; I would like to point out some figures to him and hopefully he will reflect upon them.

During my time as finance minister, government spending averaged 24.6 per cent of GDP. Since Senator Cormann was sworn into the position of finance minister, government spending has run at an average of 25.8 per cent of GDP—that is a full percentage point of GDP higher than during my period as finance minister. But it is also higher than it was during the tenures of finance ministers Tanner, Minchin, Fahey, Beazley, Willis, Walsh, Guilfoyle, Robinson and Lynch. So in a government that has notched up so many dubious distinctions, here is another: congratulations to Senator Cormann, you hold the record as Australia's biggest-spending finance minister.