Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to Senator Kemp, representing the Minister for Families, Community Services and Indigenous Affairs. Can the minister confirm that under the budget’s tax and family payment changes announced last night single parents with one or two children will receive no extra benefit at all from those changes? Given that the tax cuts to high-income earners and others are deemed to be affordable, why has there been no assistance whatsoever to those raising children on income support? What is the logic or the rationale of denying any extra assistance to the poorest families in our community who are struggling to raise children on income support? Why have the two million people who rely entirely on income support—the single parents and the disability pensioners—been totally forgotten in the measures contained in this budget?

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

It is funny, you know, that everyone has welcomed this budget. In fact I saw Wayne Swan on TV last night referring to this as the ‘Santa Claus budget’. Most people think Santa Claus is a good thing—actually, a very good thing. To be quite frank—

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

You can’t answer the question.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Senator Penny Wong is complaining too, but can I point out to you that this budget has delivered very big benefits for families. This government has paid great attention over many years to those on pensions, to carers and to disability pensioners and they, of course, are the ones the government has given a very high priority to. So, Senator, you may quibble and complain, but the fact is that this budget has been very much welcomed by Australian families. It enjoys very strong community support.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

What about those two million?

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Well, Senator O’Brien, you complain about the issue of two million pensioners. The truth is this government has been the great friend of pensioners and carers. I am sorry that we are seeing some critical comments coming from the Labor Party on this budget. It is a good budget. It is one which has been widely welcomed and, if you have any doubts about it, listen to Wayne Swan’s comments last night and the praise he gave the budget.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Following that bluster, I return to the core question. I ask the minister why those people—two million people relying entirely on income support—did not get a visit from Santa Claus. In fact, they did not get a visit at all. Why have they been totally denied any improved benefits as a result of the budget? These are people raising children in the poorest circumstances in our community. You say you have done something for families—I am asking: what about those families? I would appreciate a serious answer to a serious question: why has there not been any assistance to those poorest families who live on income support?

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

It was not me who referred to the Santa Claus budget. It was not this government which referred to the Santa Claus budget—it was actually the Labor Party which referred to the Santa Claus budget. We have given, as you are well aware, Senator, very considerable help to pensioners, carers and people on other pensions and benefits over the years.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | Link to this | Hansard source

Where?

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Well, Senator Carr, I think the figures speak for themselves. This budget has been very widely welcomed in the Australian community. It is one which the Labor Party will be very vexed about because it enjoys such strong support.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

We’ll see.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Senator Evans says, ‘We’ll see,’ and we will see. This is good news for the Australian community and it is good news for Australian families. I regret to say that you are reflecting an issue that probably means that it is bad news for the Australian Labor Party. (Time expired)

Mitch Fifield (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Administration, Senator Minchin, who has just co-authored his fifth budget. Will the minister inform the Senate of the benefits flowing to the Australian community from last night’s federal budget, including the substantial business and personal tax cuts?

Opposition Senators:

Opposition senators interjecting—

Paul Calvert (President) Share this | Link to this | Hansard source

Order! Senators on my left.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank Senator Fifield for that very good question and pertinent observation. Last night’s budget does demonstrate the virtues of eliminating all government debt and managing public finances responsibly—as we have done for the last 10 years. By eliminating net debt we do not have to spend the $8 billion per annum on interest payments that the last Labor government did. And by running budget surpluses we actually add to national savings and we ensure that fiscal policy puts no pressure on interest rates. This budget forecasts surpluses of one per cent of GDP for each of the next four years—some $40 billion in total of surpluses over the forward estimates. So while this budget does provide for tax cuts and for increased spending in key areas, our bottom line is in the black. As Alan Wood said in today’s Australian:

... the question ... yesterday was: wouldn’t all this tax cutting and spending force the Reserve Bank to put up interest rates again? The answer is an unequivocal no.

Prudent budget management has allowed us to deliver substantial new investments in areas like defence, national savings, road and rail, and medical research. We have been able to deliver personal income tax cuts for the fourth year in a row as well as substantial business tax cuts and a radical new plan to remove the end tax on superannuation. The personal income tax cuts in this budget not only deliver $36.7 billion over four years directly to Australian families, they also involve significant reform of the income tax scales: the top two tax rates have been cut to 45 and 40 per cent respectively, and from 1 July the top tax rate will apply only to incomes over $150,000. Only six years ago the threshold for the top rate was just $50,000.

Low- and middle-income families will benefit from the rise in the 30c threshold from $21,600 to $25,000 and the expansion of the low income tax offset. Middle-income families with children will benefit from the extension of eligibility for the maximum rate of FTB. So a family with two children on $40,000 is going to be $48 a week better off as a result of this budget. The tax cuts are fair, and I welcome the Labor Party’s acceptance of that fairness in these tax cuts.

The biggest percentage reductions are actually focused on low-income earners. Even after these tax changes, a taxpayer on $150,000—who by definition earns five times as much as someone on $30,000—will pay 10 times as much tax as that person on $30,000. The top 15 per cent of income earners account for half of total income tax revenue—half from 15 per cent. On the other hand, the bottom 50 per cent of income earners pay just 14 per cent of total revenue. So the structure of our progressive tax system does still remain, despite these cuts. The reason why large dollar tax cuts go to higher income earners is obviously because they pay more tax to begin with. Even after these cuts, someone on $150,000 will still pay nearly $1,000 a week in tax.

Business taxation has had substantial reform with a $3.7 billion reduction and a $435 million reduction in tax for small business. These tax reforms bring economic benefits in themselves, in encouraging work incentives and participation. They deliver in the context of a budget that is clearly in surplus. They are affordable, they are sustainable and they will not put any upward pressure on interest rates.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Kemp, representing the Minister for Families, Community Services and Indigenous Affairs. Can the minister confirm that under the budget released yesterday an age pension couple will receive a single $102.80 payment—that is, $51.40 each? Can the minister confirm that a self-funded retiree couple earning $80,000 will receive $205.60—that is, $102.80 each? Why does the age pension couple get a one-off payment of just $102.80, while the self-funded retiree couple gets double that amount? Don’t the self-funded retiree couple also stand to gain from the income tax cuts, whilst the vast majority of age pensioners will receive nothing? Why have the two million age pensioners been short-changed by the Howard government when compared to self-funded retirees?

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I am afraid we are back to the old Latham view of the world: the old class war. We are pitting groups against other groups. Senator, I have been in this chamber a little bit longer than you, and I have long heard the concerns of self-funded retirees and the feeling that they have not in the past, certainly under a Labor government, been adequately recognised in the tax system. We make no apology for paying particular attention to the self-funded retirees. Obviously, I will look at the figures you have raised, Senator, and if I want to make any particular comment on that, I will. But this government is a government for the whole community, and it is one which over the 10 years of our government has paid particular attention to lifting the real rate of pensions in this community.

You will be aware from the budget last night, Senator, that there is a carer bonus. You will be aware of that. You will be aware of the changes which were made in relation to assets tests. There is a range of measures which will be welcomed, I believe, by the pensioner community. Equally, I think the measures in the budget will certainly be welcomed by self-funded retirees. I think there will be a lot of self-funded retirees listening to question time—I know this is being broadcast; maybe it is even being shown on TV—and they will note the Labor Party attack on those people who have saved for their retirement. That is what they will note, Senator.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I rise on a point of order going to relevance. This is the second question the minister has been asked that he has not attempted to answer. He was asked very specifically why pensioners received half the rate that was paid in the same allowance as was paid to self-funded retirees. He has made no attempt to answer the question. He may want to denigrate senators and make political points, but I think people deserve an answer to the question. It is the government’s budget. The minister is responsible for explaining it here in these matters. Can you please ask him to answer the question?

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | Link to this | Hansard source

Tell us why you don’t like pensioners.

Paul Calvert (President) Share this | Link to this | Hansard source

The minister has just a shade over two minutes left to complete his answer and I am sure he will be relevant.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Mr President, I just heard an interjection from Senator Carr, who slandered this government in relation to its strong support and commitment to the pensioners.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | Link to this | Hansard source

Why don’t you like pensioners? What you have got against pensioners? Why do you hate pensioners?

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I think that we are unfortunately seeing, as I mentioned earlier, an attack on self-funded retirees. Self-funded retirees have long felt that the Labor Party has not given them enough attention and that the recognition they deserve for being able to provide for their own retirement has not been adequately recognised. This government makes no apology whatsoever for the recognition that we give to self-funded retirees, and I regret to say that we are back to the old Latham view of the world where we pit people against people. This government has looked after pensioners and it has looked after self-funded retirees.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Thank you, Minister, for agreeing to check those figures. I will continue my question. It is not attack, Minister; I am questioning the budget. Can the minister also confirm that in those carers payments that you mention the government has extended eligibility for the $1,000 carer’s bonus to carers in receipt of wife pension, carer service pension and partner service pension? It has not extended this payment to carers in receipt of the age pension. Why are some pensioners now eligible for this $1,000 payment, but those on age pension do not seem to be so? Is it not the case that both groups are providing the same level of care, often to a loved family member? Why the discrepancy? It is a question, Minister, not an attack.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Senator, you will be aware that this is the third year in a row that the government have been able to provide additional support to carers in the form of a one-off lump sum bonus. We provided some $278 million in 2004-05 and $317 million total in the 2005-06 budget. The carers out there are well used to the support they are getting from this government. We recognise the magnificent work that carers do. Again, what we are seeing is nitpicking in relation to this budget. We provided very extensive support for carers. The Australian Labor Party last night went on TV and called this a Santa Claus budget. We prefer to call it a very responsible budget. The truth is that, again, carers are another group that have significantly benefited as a result of these budget measures.