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

I move:

That the Senate take note of the answers given by the Minister for the Arts and Sport (Senator Kemp) to questions without notice asked by Senators Evans, Moore and Lundy today relating to the 2006-07 Budget.

Labor has welcomed and will support the changes to tax and family payments in the budget, because this year the government has finally looked to help those low- and middle-income earners, whereas last year the budget reforms were very much directed to the top end of town. They do well out of this package as well, but Labor recognises that at least there is something in it for middle-income earners on this occasion. You can argue about whether it is properly directed, and we will have those arguments.

Most middle-income earners know that this is getting a bit of their own money back for the taxes they paid over the last year, and it might help them meet the increasing costs of petrol and their mortgages. I think a lot of them will realise that even the compensation in the budget will not allow them to meet those extra costs, given how the price of petrol and interest rates are going up. Of course, there is the question of how much this budget will add to the pressure on interest rates, which we will obviously debate in coming months.

The focus of the questions to Senator Kemp today was on the forgotten people, the people not mentioned in the budget who received no assistance. It is interesting that most of those are the people doing it toughest in our community. The government produced scales which showed the impact on people who were earning private income of over $10,000—great! There was no coverage of those earning less than $10,000 in private income. There was no mention of pensioners, those on disability support pensions or single parents. Most of them do not have any private income. They rely on income support payments to support themselves. Many of them rely on those payments to raise children. Single parents and their children are families too. If you want to have a family friendly budget, you should not ignore the millions of families who rely on income support, but this budget has done so.

I know it is not sexy or trendy to talk about the poor or those on income support. The government has been very good at demonising those people. But there is nothing in this budget for them. At a time of great prosperity, when the government is able to find $39 billion in tax cuts, you would think they would have found them something. You would think at least one measure would have been directed to those most in need. But, if you are a single parent on income support with one or two children, there is absolutely nothing in this for you. You are forgotten completely by this budget.

So, while the government says, ‘You should be focusing on the winners,’ quite frankly, part of our job today is to focus on those who have been forgotten. It is not good enough, it reflects badly on the government and it reflects badly on our society that we so easily dismiss those families who are doing it tough. It is true that families on low private incomes are doing it tough and that there are some measures, including the improvements to the threshold for family payments, that help them. I welcome them. Labor has been arguing for that for some time. A number of the measures are things that we advocated at the last election and that we advocated in response to the last budget.

But, at a time when the government can find $39 billion for tax cuts, the fact that it can find nothing for those on income support—the single pensioners and people on the disability support pension—is I think an indictment of the government and the budget. I would normally include aged care pensioners—because effectively they found nothing—but the aged care pensioners did get something. They got a $102 utilities allowance payment. If you compare that to the largesse to all the others, it is a very small amount indeed. But the aged care pensioners did get that. I concede that.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Carers?

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

I am talking about the people on income support, Senator. Those aged care pensioners also providing care did not receive the full $1,000 payment. They were excluded. That is another question I have received no explanation for today from the minister, who clearly has not read the budget. He is the minister responsible in this chamber and he could not answer any of the questions about why the pensioners missed out. He could not answer any of the questions about the inequities in the measures being proposed. These are genuine questions that have not been answered. I think it is an indictment of this government when, from 1 July, high-income earners and many others are going to get a big whack in their pockets while those people relying on a disability support pension and single parent pensions will have their income reduced. The rates will be lower at the same time— (Time expired)

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I feel honoured and privileged to stand here today to respond to Senator Evans’s and the Labor Party’s motion to take note of the responses from Senator Kemp, and indeed others on this side of the chamber today, because we have in fact delivered a remarkable outcome for Australian families. This whole allegation from the Labor Party is an attack on Australian families, on older Australians and indeed on younger Australians. Labor have a blind spot. They have forgotten about the record low inflation, the record low interest rates and the record low unemployment in this country. They have forgotten about the above three per cent growth since 1996. They have forgotten about the 1.7 million new jobs in the last 10 years. They have forgotten about the 16.8 per cent increase in real wages. That is what they have forgotten. These are real wages. This is money in the pockets of Australian men and women and their families, and that benefits the whole community.

In my home state of Tasmania the figure is actually 15.9 per cent. I am very proud of that fact. Senator Minchin mentioned today government debt. It is interesting that Senator Evans did not mention or even refer to it. There was no mention of it. When Labor left office it was $96 billion. Do you know how much we were paying in interest at that time?

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

Senator Wong interjecting—

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Wong, what was the interest we were paying at that time? It was $8 billion. Senator Wong does not know that fact. Let us remind Senator Wong and the Labor members on the other side that that is how much it was. What we are doing with that money now is spending it on essential services. We are spending it on health, education, security and defence—on things that are important to everyday Australians. And that $8 billion was going into a big black hole under Labor 10 years ago.

Here we are, we have delivered a budget and the Labor Party are accusing us of spending too much and putting pressure on interest rates. We have delivered a $10 billion surplus—not only this year but next year, the year after and the year after that. That is about one per cent of GDP. What do the experts say about the impact on Australian families? Do they say that it will put upward pressure on interest rates? I want to quote to you from Terry McCrann and what he had to say. He said:

One big question: will the tax cuts put pressure on interest rates? Answer, an emphatic no.

Alan Wood, in today’s Australian, had this to say:

... the question du jour 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.

So you can see that Labor have missed the point. They are chasing a red herring. The Labor Party talk about petrol prices and interest rates going up and, of course, these so-called extreme industrial relations changes. That is all they can come up with. But, when you talk to the experts, they say: ‘No, Labor Party, you’re wrong. The government’s actually got it right. They’ve got the balance right.’ It is in fact a remarkable result for Australian families, for working men and women.

Let us look at some of the benefits for older Australians. I am particularly proud of the initiative for carers of people with disabilities. That is tremendous: an additional one-off $1,000 payment prior to 30 June this year and a one-off $600 payment for recipients of the carer allowance. On top of that, Senator Evans talked about what we were doing for the aged care pensioners. Of course, you have the $100 utilities allowance. What does that cost the taxpayer? It is $173 million paid by 30 June this year. This is something that people were not planning for. This is good news—to pay the power bill, to help with miscellaneous expenses in and around the home. That is what we are doing. We are caring for older Australians. We are caring for families. There was an attack on the government from the Tasmanian Treasurer, who said that we are not spending enough on hospitals. Goodness gracious me! It is in the budget. It is a $220 million increase in Tasmania, and he has denied that that is— (Time expired)

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

I rise to speak on Senator Evans’s motion—which was, for Senator Barnett’s information, in relation to answers given by Senator Kemp. I would be happy to have a discussion about the current account deficit if he wanted to do so on another occasion. The current account deficit has, of course, ballooned under this government, which has no plan to enhance Australia’s export performance. But I will leave that for another day.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Have you heard of the mineral boom?

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

I will take that interjection, Senator McGauran. Yes, I have; and that is why Labor says that we should be investing in those things which will drive Australia’s future prosperity and future productivity. Yet we have instead a government that continues to fail to invest in skills but rides the commodities boom without any plan for the future. That is the reality, Senator McGauran.

I want to go back to the questions that were answered—or not answered—by Senator Kemp, about the people who were forgotten in this budget. It is not very fashionable to talk about those who are in poverty. It is not very fashionable to talk about poor people in this country. The reality is that those people on income support—the many parents who are struggling to bring up children on income support, people on disability support pensions and the like—get nothing out of this budget. Senator Kemp knows that, and that is why he would not answer the questions. Those people have been forgotten. They are the poorest people in Australia.

It appears that this government does have a habit of forgetting some of the poorest people in Australia. Senators will recall, despite protestations to the contrary, that on the occasion of the last budget, 80 per cent of Australian taxpayers missed out. At least now the government has got tax cuts going to 50 per cent of taxpayers. But the fact is that people with a disability, people on the parenting payment and parents on income support who are struggling to bring up children have been forgotten. Judging by some of the answers that Senator Kemp gave, perhaps they have been forgotten so much that Senator Kemp did not even know that they had been forgotten. Around two million Australians rely on income support and they do not really share in any of the real benefits provided in the budget.

What is perhaps worse is that this is the same group of people who will receive a substantial reduction in income support payments on 1 July, as Senator Evans outlined. We know from statistics that the type of family most likely to live in poverty in this country is a family headed by a single woman. That is the case. Those are the people who, as a result of last year’s budget, face a reduction in their income support payments on 1 July—at the same time as the rest of Australia receives from this budget very substantial tax benefits. We on this side of the parliament do want to make a point about the vulnerable and poorer people in the Australian community who are not going to share in the benefits that are provided in the budget.

I want to talk very briefly about some of the challenges that have been forgotten in this budget. There were four things which were not mentioned in the Treasurer’s speech: productivity, education, participation and the current account deficit. I want to talk about participation, because one of the answers given by Senator Kemp in relation to child care really demonstrated this government’s failure to grasp the challenge of participation.

There are three things that need to be addressed if we want to tackle participation in this country. The first is the disincentives in the taxation system through the effective marginal tax rate, the second is skills and the third is child care. The disincentives which are faced by people moving off welfare into work, the program which the government has in place, have not been substantially altered at all by this budget. There will be people with a disability or parents moving off welfare into work who will face effective marginal tax rates of 64c in the dollar. They will actually be paying more back to the government for the privilege of working than they will receive in their own pocket.

Perhaps one of the worst cons in this budget is the con on child care. We heard a great deal of fanfare prior to this budget that child care was going to be a priority and that parents were going to get some relief from the fact that child care is either not affordable or not accessible for too many families in this country. The fact is that this budget does not guarantee a single extra place, it does not take a single dollar off their bills, and it does not save a single minute for parents who drive children to and from child care. Uncapping the out-of-school-hours places in the context of the government already sitting on almost 100,000 unallocated child-care places is clearly not the sort of systemic change that parents in Australia were hoping for. The fact is, if you do not have a child-care system that is working, if you do not have a child-care system that is affordable and, perhaps more importantly, if you do not have a child-care system that is accessible, you are not going to deal with the participation challenges that our economy and our society face. (Time expired)

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I am happy to stand up today and comment on this motion. You have to feel a little bit sorry for the Australian Labor Party in these circumstances. Here they are, presented with a budget which has been extremely widely acknowledged and welcomed by the Australian community. The Labor Party’s job as politicians is to identify those people who might not be happy or who might not be considered to be winners with this budget, hunt those people down and advocate on their behalf. It is not a very easy job to do, because there are lots and lots of winners in the community today as a result of what Treasurer Peter Costello announced last night.

The Labor Party have got to push aside people like taxpayers and families who need support and pay taxes. They need to push aside those who are approaching retirement. They need to ignore those who use child care in our community. They need to ignore those who are physically ill. They need to ignore those who are mentally ill. They need to ignore those who drive cars. They need to ignore those who work in the private sector. They need to ignore those who live in rural and regional Australia. They need to plough through all these countless Australians—each of whom can clearly point to a benefit from this budget—and identify those who apparently are not winners this time around. When you look at it from that point of view, you see that it is so totally fatuous as to not be worth wasting the time of the Senate on.

The fact is that this budget is one of a succession of budgets delivered by this government which has looked at the fundamentals of Australian society and has, over the years, put money where it needs to go. We have put money into infrastructure. We have put money into reducing debt. We have put money into supporting the incomes of Australians on low incomes. If you look at the position of those Australians today compared with 10 years ago, you can see that they are infinitely better off as a result of what we have done.

We have lifted real wages. We have provided for stronger community services through better funding and greater support by the states through the GST. We have attended to all the fundamentals of Australian society. If there are individuals for whom no particular benefit can be identified in this budget, that is a short-sighted and narrow-minded approach. The fact is that, no matter what we had done in this budget, we would not have won using that philosophy. If we had not looked at that longstanding problem in Australian society of people on high tax rates paying higher amounts than people in comparable countries in the OECD are paying, we would have criticism from, among others, key figures in the ALP because we had not addressed that problem.

It was only last week, I think, that former Prime Minister Paul Keating criticised this government for not having faced the issue of high marginal tax rates before—and, incidentally, for issues like bracket creep. We had Mr Beazley, not that many years ago, making exactly the same point. We have addressed that in this budget, so where are the plaudits? If we were to spread the benefits of this budget across all income groups at all levels of society, those cuts would necessarily be spread very thin. What would we get then? A milkshake and hamburger type of comment from the opposition such as, ‘You’re spreading your largesse too thinly.’ Of course, if we had made substantial cuts to everybody’s income tax, we would have had more comments, but they would have been along the lines of: ‘You’re spending too much in this area. You’re outlaying far too much. Interest rates are going to go up.’

The fact of the matter is that this mob opposite is looking for any pretext to criticise this budget. We are providing the things that matter to Australians. Every Australian, including those on low incomes that you refer to, will benefit from the outlays on spending that this budget contains such as the extra spending on medical research, on road and rail infrastructure—poor people use roads and trains as well—and on child care. People like that use child-care services. Those things are important and they are provided for in this budget. This budget takes care of the fundamentals of Australia’s economic and social experience, and I am very proud to stand behind it. I think Australians have identified those facts, and they will also stand behind and support this budget when they see the benefits it brings them.

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

I also rise to take note of answers on the budget. It seems that, when you claim a budget is for all, it is very difficult for anyone to accept even direct questions about how people will be affected by it. Amidst the hyperbole, it seems that it is impossible for people anywhere—but in particular for people on this side of the chamber—to ask any question about the budget without being accused by government members of quibbling, complaining or being desperate. Basically, we have had the delivery of the budget and we have heard that there are certain values in this budget that people do celebrate; indeed, last night various groups did say that there were things in this budget that they applauded. When that was done, instead of the government actually acknowledging that there is this common ground that this is a good thing, they are throwing back at us any kind of positive comment that people have made about the budget, claiming that these militate against any questions we might have about people who may not have received generous benefits or in fact any benefits from the budget.

I reject the allegation that there is desperation in questioning any government decision; that is our job. The questions that we have will emerge, as the different information comes forward, because all we have now is the original process and the inches of paper, as we all know, where we hope to find the details that back up the wide promises that have been made. In the questions we asked today—not attacks but simple direct questions about information we had—we looked at how different groups in our society would be affected by the decisions that have come out of the budget. We asked questions about the degree of payment that came out in various things, such as the utilities payments, which we talked about, and also about those groups of carers, groups that we all value and celebrate. When we specifically asked whether the benefits that were announced apply equally to all people who provide care, the minister, instead of responding to those direct questions, decided to turn the argument around and made the usual longstanding statement about how we are complaining and seeking to find the losers in the budget.

Minister, no-one is seeking to find losers in the budget. What we are trying to do is investigate the claim that has been made by the government, which is that it is a budget for all. If it is a budget for all, there should be expectations from all in the community that they will receive something out of the budget. Also, it should be open to all to investigate whether they have in fact been forgotten in this budget process. Increasingly, the government seems to reject any kind of questioning of its decisions.

On the issue of poverty, we know that when there was an inquiry into poverty in this country the government rejected the notion that there was poverty in the community. They rejected the majority report of the Senate Community Affairs Committee’s poverty inquiry and came back with pages of documentation from numerous government agencies on programs that had operated in the time since the inquiry had been completed. I am not quite sure how that was relevant to the investigations at the time of the inquiry. But the statement that there are people in our community who suffer disadvantage is not accepted by this government; it is rejected, and people who ask questions are in some way demonised for having the gall to question whether the hyperbole is in fact warranted.

There are people who are currently disadvantaged because of their income, particularly those who are in receipt of various payments through the social welfare system, and we need to know: where is the benefit to them from this particular budget? If it is not there, accept that and look at where we should go in the future. Don’t colour the argument by trying to attack those who are asking questions. Don’t try to divide the community by saying that asking whether one group is getting more out of this budget than another is somehow divisive. Either it is a fact or it is not. So, please, engage in the discussion. It is only through discussion that we will be able to effect real change.

There has been no attempt by people on this side of the chamber to devalue the good things that came out of this budget. However, we are not claiming that it is automatically a budget for all. That would seem to be an obvious response. But, if you make the claim, make sure you can stand by it, and do not attack those who are asking questions about it. Let us see what is in the budget for every single Australian. Let us see if every Australian will benefit. Don’t just throw stupid comments back at us—and I will respond in kind: it is not short sighted and narrow minded to ask questions; we actually see where the answers are. (Time expired)

Question agreed to.