Dean Smith (WA, Liberal Party) Share this | Hansard source

I am also pleased to make a contribution to this matter of public importance debate this afternoon in the Senate. What Labor senators, and I suspect Australian Greens senators, are trying to do is to: undermine the public and community confidence in the government's plan for families, whether they be low- or middle-income families; undermine the community's confidence in the government's commitment to budget repair; undermine the community's confidence in the government's very, very clear plan to put the country on a more sustainable footing, not just over the next few months but also into future years.

It has to be recognised that there is a very real tension in our country at the moment, and that tension exists fundamentally around the issue of budget repair. There can be no denying that in this country the issue of budget repair has to be our most important priority. If it is not our priority then we are doing a disservice not just to ourselves and not just to the next generation, we are doing a disservice to all future generations of Australians. Tardy budget management, budgets that deliver debt and deficit do not just diminish the capacity of this generation, they also diminish the capacity of every future generation. You cannot have a discussion about the future of Australian children without also having a discussion about the importance of budget repair.

Of course the tension arises because in order to fix the budget there are two very clear choices for governments. One of those choices is to increase taxes. For some people in the Senate, indeed, for some people in the broader community, the idea of taxing people more has huge attractions. But I would argue that addressing budget repair by increasing taxes undermines the opportunity for low- and middle-income families to get ahead. Increasing taxes will slow economic growth and it will make job opportunities diminish in the economy. That cannot be a good outcome for any family, whether they be a low-income family, a middle-income family or, indeed, a wealthier Australian family.

The other option, and I happily put myself on the austerity side of the ledger, is to tackle the issue of government spending. The simple fact of the matter for me, and I am sure for other coalition senators, and I hope for others on this side of the chamber, is that the government cannot continue to spend at the rate it is spending. That brings us to the issue of the social services budget. It accounts for such a large part of our budget outlay, and, importantly, many of those measures—I think the figure might be in excess of 80 per cent—are legislated, which means that the parliament must cast a judgement over the suitability of those social service arrangements.

In recent days, indeed over the recent week, much of that tension has focused itself on two issues: the issue of penalty rates reform—I have supported and I continue to support penalty rate reform—and the issue of childcare reform. I will come to those two issues in a brief moment. Of course what we know about inequality in the Australian community, inequality between Australian families, is that at its heart it is joblessness that drives that inequality. That is why the government's focus is clearly on the issue of job creation and economic growth. So to suggest that we are not doing anything around the issue of supporting low- and middle-income families is blatantly wrong. We have a clear commitment to addressing inequality in our community, because we believe that at the heart of inequality is the issue of joblessness. So when you look at what is the government doing, how is the government attempting to tackle the issue of joblessness, then the record is strong and it is clear. The government is seeking to support higher wages and the creation of new jobs by lowering the tax rate for all businesses over the next 10 years, starting with small business.

The government's childcare packages, happily passed by this Senate last week, will support around one million families who rely on child care to go out and work, providing the highest rate of subsidy to those with the lowest incomes. It is interesting that in the childcare debate, which I will come to in a moment, a key point that has been missing is what it does for female participation in the workforce. In order to drive greater economic growth, higher levels of productivity in the Australian economy, the government, the community, must address the issue of female workplace participation. That is an important element, and often an element much neglected in the government's childcare package.

Further than that, the government is investing almost $840 million in a youth employment package that would deliberately seek to increase the employment of vulnerable young people under 25 years of age. None of us in this place would find the level of youth unemployment in our country acceptable. The government is investing in education, providing $73.6 billion over the next four years, hoping to set our children up for future prosperity. In addition, the government is committed to ensuring that we get taxpayer support to those who need it most, and encouraging those who can work to work, and to use their own means to support themselves where possible.

I will come briefly to the issue of the childcare package, and then move to the issue of the penalty rate debate. It is important to recognise that the childcare reforms that were passed by this Senate do a number of things. They put downward pressure on incessant childcare fee increases through an hourly rate cap. They abolish the $7½ thousand childcare rebate cap to ensure that low- and middle-income families are not limited by a cap on the amount of child care they can access. Importantly, they introduce new compliance powers to further strengthen the government's efforts to clamp down on fraud, and they provide a billion-dollar childcare safety net for the most vulnerable children and slash red tape so that services can be more flexible in the hours that they are available to families. Importantly—to those senators who represent states with large rural and regional communities—the package provides rural, regional and remote childcare services with the support of funding streams like the childcare subsidy, the additional childcare subsidy and the community childcare fund. Together, these have the potential to provide much more funding for important childcare services across rural and regional communities.

It is important to see the government's reform efforts, whether they be penalty rate reform or in the area of childcare reform, as supporting increased participation in the workforce by allowing people and giving people the opportunity to find jobs, because it is in finding jobs that people can have the best way of addressing inequality in our community but also the best opportunity to support their own families. Let me just demonstrate how important the childcare reforms are by drawing out a number of cameos that the Minister for Education and Training, in this case the minister responsible for the childcare package, Simon Birmingham, talked about in his contribution to the Senate last week. I will use three cameos. I will use a cameo of a family on $50,000, a cameo of a family on $80,000 and finally a cameo of a family on $94,000.

In the case of a family on $50,000 with both parents working, with two children under the age of six in long day care for two days a week at $100 a day, that family will be $2,197 better off as a result of the government's childcare package. There is no way you can argue that the government is hurting low- and middle-income families when a family on $50,000 will have a benefit of $2,197 as a result of the government's childcare package.

Look at another modest family income of $80,000 with both parents working, with two children under the age of six, again, in long day care for three days a week at $100 a day. They will be $3,424 better off. Again, you just cannot argue with a straight face that the government's childcare reforms are not benefiting low- and middle-income families.

Finally, before I move to the issue of penalty rate reform, a family on $94,000 with both parents working, with two children under the age of six in long day care for three days a week at $100 a day, will be $2,657 better off a year. So it does not withstand scrutiny that the government's efforts to support female participation in the workforce and to support Australian families with its childcare reforms are somehow dudding low-income and middle-income families in our country.

I just want to turn to the issue of penalty rate reform. This, I think, is a classic example of where the rhetoric and the sound and fury of the Labor Party and some other senators on this issue just do not stack up to reason. What we have in our country without penalty rate reform, what we have in our country without the decision of a few weeks ago of the independent Fair Work Commission, is a very unlevel playing field between small businesses and big business. We know small businesses are run predominantly by families, and we know that many women are managing those small businesses and taking those small businesses' risks. We have an unlevel playing field between that group in the community and big business.

One of the things that motivated me to join the Liberal Party over 30 years ago—30 years ago last month—was the realisation when I watched the Western Australian Labor Party in the 1980s that, for some people, having big unions and big business in bed with big government is how they want to run our country. I reject the idea that big unions in bed with big business in bed with big government help ordinary families. I saw it for myself. I saw my own family not being looked after by the interests of the organised labour movement. In fact, they were dudding low-income families like our own and not supporting middle-income families but supporting the big end of town, and that is shameful.

The comparison between what is available to big business at the expense of small business in the absence of penalty rate reform is illuminating. I will give you a couple of examples. For example, a permanent full-time or part-time staff member working on Sundays at a bed-and-breakfast must be paid $10 an hour more than at a five-star hotel. A family chicken shop must pay $8 an hour more than KFC. A family-owned takeaway must pay $8 an hour more than McDonald's. A family greengrocer must pay $5 an hour more than Woolworths. (Time expired)