Rachel Siewert (WA, Australian Greens) Share this | Hansard source

I too rise today to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Get More Of Their Money) Bill 2019—or should I say 'treasury laws amendment (destroying Australia's progressive tax system)' or 'giving to those already doing okay even more money'? The gall of this government to pretend it cares about low- or middle-income Australians when this bill does nothing for those on the lowest income, those struggling to survive on Newstart or youth allowance. It does nothing for them, while the bulk of the money goes to those who are already doing okay, thank you very much. It will not help those on the very lowest incomes. Not only does this do nothing, but the government clearly intends to do nothing for those people.

On top of that, where does this money come from? When you look at the budget papers—and I'll go into this in more detail a little bit later—it comes from not spending on services for the very people who are going to be the worst off under this proposal. So it's a double whammy. You're not increasing Newstart, youth allowance and those other payments that really need an increase, but you also cutting services that would in fact be helping those very people.

This bill implements reductions in personal income tax rates over three stages. The proposed changes are on top of the tax cuts already legislated through the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018. Together these tax cuts will cost the government approximately $158 billion over 10 years. This cut means spending will shrink—we can make no mistake about that—and that will impact on the people who can least afford to pay.

Stage 1 of the tax cuts, commencing in 2018-19, increases the low- and middle-income tax offset, which is a non-refundable tax offset. This stage will reduce government expenditure by about $14.9 billion or $15 billion over the decade. Stage 2 , commencing in 2022-23, further increases the lower tax offset and changes the top taxable income threshold. This stage will reduce COMET expenditure by approximately $47.6 billion over the decade. Stage 3 of the tax cuts, commencing in 2024-25, further reduces the marginal tax rate from 32.5 per cent to 30 per cent. This means that taxpayers that have a taxable income of between $45,000 and $200,000 will pay a marginal tax rate of 30 per cent. People with taxable incomes of $200,000 stand to gain a maximum of $11,640 each year from these changes.

I'll just stop here very quickly and say that those on Newstart get about $15,000 a year. So, under this proposal to cap taxes, those on that high income of $200,000 will be gaining in tax almost as much as a person gets on Newstart—a person who is trying to survive on Newstart. That is simply outrageous. This stage will reduce government expenditure by a whopping $95.4 billion. Clearly, this money is disproportionately benefiting those on the highest incomes. It's really clear where the government's priority is. My colleague Senator Di Natale, the Greens leader, has already outlined that we will be moving amendments that, in fact, would deliver better outcomes relating to tax offsets for those on low and middle incomes, and my colleague Peter Whish-Wilson will, I know, be talking about that further.

Let's have a think about how we could better spend $158 billion. We could start by raising Newstart and youth allowance. The other day I came across some documents that I had been working on in 2012. They related to the inquiry that we had about the adequacy of Newstart and other payments. We have known for a very, very long time that Newstart and youth allowance are inadequate. In 2010 they were inadequate, in 2012 they were inadequate and in 2019 they are disgustingly inadequate. People in this country are living in poverty. And what are we doing? Giving people on $200,000 a whole lot of money that's nearly the equivalent of a whole Newstart payment. What is this country coming to when we think that is okay? And the crossbench is about to lock that in! They are about to lock that in by agreeing to—well, we don't know! So much for transparency in this country. We don't know what they're agreeing to, because it's all a little bit airy-fairy; it's all on a promise.

I wouldn't trust this government as far as I could throw them. They don't care about those on the lowest incomes, because, if they did, they would increase Newstart. They keep promoting this absolute fallacy that Newstart is only a transitional payment and it's only to help people through while they are out of work for a short time. That has been demonstrated time and time again to be false. People, particularly certain cohorts, are stuck on Newstart for a very long time—a very long time. Single parents with children are stuck on Newstart. And we know—the evidence is really clear—what the impact of poverty is on those living in poverty. It is a barrier to finding work and it has long-term impacts on the children that are growing up in poverty.

It has been demonstrated time and time again that we need an increase in Newstart, and it has been called for. The Business Council, ACOSS—the list goes on and on of the number of organisations and people who see the wisdom of increasing Newstart. Just a couple of weeks ago, we saw Philip Lowe, the Governor of the Reserve Bank, say that an increase in Newstart would be 'good for the economy'. You know why? Because when you're living below the poverty line, when you're living, literally, from payment to payment, any increase you get, you spend. You spend it on either meeting a bill—making sure you're paying those bills and they're not in arrears—or putting food on the table. You stimulate the economy. You buy those extra little things you need for your kids. You make sure that you give them a little bit of extra money so they may be able to buy something once a week at the canteen like all the other kids at school. It would absolutely stimulate the economy directly, and the Reserve Bank governor says so.

Over the past 30 years poverty has remained consistent in Australia despite economic growth and low unemployment. But this government continues to do nothing to eliminate poverty or reduce income inequality, and this will make it worse. We don't have a poverty reduction plan. In fact, the plan is to actually increase poverty, because we are not dealing with Newstart. We don't even have an agreed national definition of poverty, let alone regular reporting by governments on any progress to address it.

Today there are around three million people in Australia living below the poverty line. Over 700,000 children are living in poverty, which has increased by two per cent over the past decade. The reality is that we are living in a time where income inequality is rising alongside the cost of living. This is the worst time to be handing out tax cuts to the wealthy and big business.

The people experiencing poverty at the highest levels in Australia are those living on Newstart and youth allowance. We have the second worst poverty rate amongst unemployed people in the OECD. We need only look at the statistics on food relief and housing stress to see that income support payments are inadequate. Charities across Australia are struggling to keep up with the demand for food relief. The proportion of food-insecure Australians seeking food relief rose from 46 per cent in 2017 to 51 per cent in 2018. Children in Australia are more likely to live in food-insecure households than adults. I reinforce the message that living in poverty is a barrier to employment but it can also have lifelong impacts.

This year's Anglicare Rental Affordability Snapshot shows how people receiving Newstart and youth allowance are experiencing housing stress. It once again demonstrated that there are no affordable rentals for a single person on Newstart or youth allowance in any capital city in this country. Yet the government stands there with its hands in its ears and its hands over its eyes; it won't hear and it won't see what is happening to people who are struggling on income support in this country.

We also know that poorer people have increased levels of psychological distress, which is associated with poor mental health and issues such as depression and anxiety. Nobody is getting a fair go when they are living in poverty on less than $40 a day. The government, as I've said, claims that Newstart is only a short-term payment and justifies its refusal to increase the rate. This is simply not true. We know that 44 per cent of people receiving Newstart and youth allowance are on these payments for over two years and 15 per cent for over five years. It is clear that the perverse and punitive rules that we have in place on people who are receiving income support payments are keeping people in poverty and acting as a barrier to employment.

Since 2014, and that dreadful budget that we can all remember, more than $1.8 billion has been ripped from the community sector—those who are helping those who are the worst off. These tax cuts will undoubtedly result in more cuts to services and programs by generating less money for essential public services like social security, health and education.

But let's look at the budget papers for 2019-20. When you take a closer look at them you will see that there is less spending on families, children and communities over the next five years. Look at the Department of Social Security budget statement on page 63 and what's budgeted at program 2.3, 'Social and community services'. The estimated expenditure for 2018-19 was around $277 million. If you then go to what is projected for 2022-23 you will see that it is $259 million. That is a drop, when we know that we will have inflation, that we have an increasing population and that the government is not doing anything to increase Newstart. People on Newstart will still need services. You are cutting services. That's where these cuts are coming from: services. These are coming off the back of the most disadvantaged in our community.

Let's turn to something that most people in this chamber won't know about—that is, the equal remuneration order. If you think back to over about five years ago, we made sure that there was an increase for those working in the community sector, and the government made sure that they put money into that. Well, that runs out next year—$500 million runs out—but it's not being made up for in the money that is going to the community sector. In other words, they will have less money through this process—through the budget there is already less money going there. On top of that, if this government does not address the issue around the ERO, as it's commonly called, these organisations will have to make cuts. That will be a triple-whammy now to these services: increased caseloads and reduced real funding through the budget, because they will no longer be able to provide the same number of services if they are to pay their workers proper wages.

This comes on the backs of the most disadvantaged in our community. It is simply outrageous! You are destroying our progressive tax system. You are destroying our community services and public services and universal delivery of services. When you look at health, the money in the budget into the forwards does not properly address the true cost of inflation in the health budget. So, again, inevitably that will come out of the pockets of the most disadvantaged. Because you're giving money to the wealthy, they will be able to pay for it. The most disadvantaged will not be able to pay for it. That's the true cost of these budget tax cuts. These budget tax cuts will impact on the most disadvantaged in the community, throughout our service delivery system.

What else do we spend this money on? Let's look at aged care. We know we have a shortage in residential aged care, particularly in levels 3 and 4. We know we need an increase there. You could provide a lot of beds with this amount of money. You could actually make sure that we are delivering care. At the moment we have a royal commission inquiring into our inappropriate and ineffective aged-care system. We know from the evidence—again, I know the government doesn't like the word 'evidence'—that we need to increase the level of care, per resident, in residential aged care. We know that it needs to increase to least four hours and 18 minutes. We could spend some of this money on looking after our elderly. We could afford to pay for Denticare. These cuts will have devastating impacts on those on the lowest income.

At the same time that the government professes to care for those on low and middle incomes, it has now signalled that it is going to have another go at attacking our industrial relations system by further undermining workers' rights to campaign and take action and to make sure they have fair pay and fair conditions. They have already cut penalty rates. And who does that impact on? It impacts on the lowest paid. What the government should be doing is increasing Newstart and youth allowance if it wants to stimulate the economy. We know from the Reserve Bank governor and from a long list of experts in this field that that would help stimulate the economy and help those on the lowest incomes. I foreshadow that I will be moving as a second reading amendment that:

At the end of the motion, add:

“, but the Senate:

(a) notes that the bill does nothing to assist people receiving newstart allowance or youth allowance; and

(b) calls upon the Government to introduce legislation to amend the Social Security Act 1991 to increase the maximum single rates of newstart allowance and youth allowance by $150 per fortnight”.

That's what would really help those on the lowest incomes. That's what would really help stimulate our economy.

These tax cuts are coming at the expense of our progressive tax system, at the expense of those on the lowest incomes. These tax cuts will result in cuts to essential services that people need, particularly as this government is refusing to address the issues around Newstart. We are urging the crossbench to reconsider their support for these tax cuts. They are bad for this country. They are bad for the people that they profess to care about. We urge the ALP to vow to repeal these tax cuts. If the ALP genuinely care about people on the lowest incomes, they will see the absolute flaws in this.

It is a travesty that we are giving so much money through these cuts to the top end of town, to those that are on high incomes and don't need these cuts. The people that need a boost are those that are trying to survive on $15,000 a year. Go and try it. I did, and you can't do it—and that was in 2012. Things have gone up since then. We oppose these tax cuts. We stand for the most vulnerable people in this community. We stand for a fair Australia, and these tax cuts are not fair.