Katy Gallagher (ACT, Australian Labor Party) Share this | Hansard source

I rise to speak to the Appropriation Bill (No. 3) 2016-2017 and the Appropriation Bill (No. 4) 2016-2017. This package of bills is required to ensure the ordinary functions of government continue for the remainder of this financial year. The bills appropriate a total of around $2.2 billion in the 2016-17 financial year. This is in addition to the amounts appropriated by the supply and appropriation acts last year.

Labor will support these bills. The funding appropriated is already incorporated into the bottom line, as presented in the midyear update late last year. But it is worth just reflecting on the fact that around three years ago the Liberals declared that there was a 'budget emergency', yet since then the budget deficit and net debt have continued to grow. In fact the budget deficit has tripled since 2014. The government's first budget predicted the deficit for 2016-17 at about $11 billion; now they say it will rise to $36.5 billion this year. And from the day the government took office net debt has increased by about $100 billion. The 2016 Mid-Year Economic and Fiscal Outlook shows that it is expected to reach $317 billion this year.

The government's failures are putting Australia's AAA credit rating at risk. A downgrade in the rating would smash confidence in our economy and drive up mortgage repayments for families. The government promised 'jobs and growth', but instead what we are seeing is that the economy is growing below trend, the unemployment rate has increased and is now close to six per cent, underemployment is at record highs, there are fewer full-time jobs than there were a year ago, and wages growth is at record lows. Malcolm Turnbull and the Liberals are not managing the economy or the budget in the interests of middle- and working-class people.

Today the government is pressing ahead with its $50 billion tax cut for big businesses and the banks, tax cuts which we simply cannot afford. Despite the deficit and debt blowing out, and the Treasurer saying that 'we must act to protect the revenue base from structural weaknesses', this government still persists with its $50 billion ram raid to the budget. The economic benefits are also dubious. From Treasury's own modelling, there is a one per cent growth dividend from a tax cut to 25 per cent, and that would occur in around 20 years. We also heard that a full-time worker on average earnings will receive $750 a year flowing from this $50 billion company tax cut. That is $2 a day in 20 years time. And then there are the interest charges. When the government borrows $50 billion to give to big business, it will cost Australians around $4 billion in extra interest charges. This equates to around $162 for every single man, woman and child in the country.

While the government wants to give big business a handout, it is still pursuing many of the unfair measures of the disastrous Abbott and Hockey 2014 budget. Last year's Mid-Year Fiscal and Economic Outlook showed that the Turnbull government was still committed to freezing the Medicare rebates. This is despite health stakeholders including the AMA, the Royal Australian College of General Practitioners, the Australian Nursing and Midwifery Federation, the Consumers Health Forum, the Australian Healthcare and Hospitals Association and the Rural Doctors Association sending a clear message to the government that its health policy is pushing general practice and primary care to the brink. GPs and patients are continuing to bear the brunt of this budget saving. Last week the government proceeded with its cuts to Australian families by freezing the family tax benefit payment rates for two years. These cuts will affect every single recipient of the family tax benefit, leaving 1.5 million Australian families worse off. Around 588,000 of these families receive the maximum rate of family tax benefit part A, which means their household income is less than $52,000 a year. Also last week, with the passage of the government's childcare bill, the government failed to ensure vulnerable children will retain access to a minimum of two days care.

The government is also supporting penalty rate cuts which could see up to 700,000 Australians lose up to $77 a week. The decision to cut penalty rates for hospitality, retail and fast food workers is a devastating blow for the low-paid workers that rely on them. The government could vote against the penalty rate cuts, but, while it stands up and fights for big businesses and the banks, it seems that it will not stand up in the same way for working people. Recent work by the Australia Institute shows that, in addition to being a direct cut to low-paid workers' pay, the impact of the penalty rates decision could be a $650 billion impact to the budget bottom line.

We all know that budgets are about priorities, and we can see this government's priorities are focused at the big end of town. We have inequality at a 75-year high in this country, and yet this government seems intent on giving millionaires a tax cut of over $16,000 when the deficit levy ceases on 30 June this year.

Labor has worked, and will continue to work, constructively with the government on budget repair that is fair. We are demonstrating with our policies and with our actions that budget repair can be fair and that we can satisfy three key objectives of economic policy: to ensure that growth is inclusive, that hard work is rewarded and that there is a decent safety net for those who are left behind. We have negotiated with the government to secure $6.3 billion in budget savings—more savings than the government initially put forward in their first omnibus bill. In doing so, we protected vulnerable people targeted by cuts and saved the Australian Renewable Energy Agency. We have put forward sensible and well considered policies that improve the bottom line of the budget. We have led the debate on superannuation tax reform, on cracking down on multinational tax avoidance, and on tobacco tax reform. We were pleased to see that the government picked some of our policies, including the increase to the tobacco excise, changes to VET FEE-HELP and opposing the return of the baby bonus. We have also led the way on proposing changes to capital gains tax and negative gearing which not only would be good for the budget but would also help level the playing field for first home buyers trying to get into the housing market at a time when housing affordability—certainly in some city markets—is at crisis levels.

In conclusion, Labor will support this bill. We will also continue to lead the way when it comes to setting the policy agenda and fixing the budget. We will continue to play that constructive role that the people of Australia expect us to. We will agree with budget repair measures where we can, and we will disagree where we must. We will not support measures that unfairly target the most vulnerable people in our community nor ask them to carry the heaviest burden for the government's budget failures. We will keep offering alternative, responsible policies and savings measures, as is our role in opposition, and we will always prioritise budget repair that is fair.