Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I move:

That the Senate acknowledges that the first Rudd-Gillard Government budget is a high taxing, high spending, old fashioned Labor budget that is not inflation fighting.

(Quorum formed)

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

One question should always be asked to give this matter context—that is, a question about the history of the economy that is handed to an incoming government in this nation. The question you should ask is: in the history of our Federation has there ever been a better economy handed to an incoming government than the one of November last year? I ask the government: in the history of our country, has there ever been an economy with lower unemployment and higher growth than was handed to the government in November last year?

All we ever hear about is working families, and that is a good thing, because they are the backbone of this nation. Let me give a little bit of context for working families. Let us compare working families of the former Labor government to the previous Howard government. All that Mr Rudd ever says is that the Howard government did not care about working families. Let us have a look at the records and compare them. Let us have a brief look at unemployment in the time of the Hawke and Keating governments. More than one million people were unemployed during the time of the Hawke and Keating governments. Then what happened? Unemployment was halved by the incoming Howard government. So much for working families! You cannot have a working family if you do not have work. The unemployment rate was halved by the incoming Howard government. How is that for working families!

Let us look for a moment at real wages. During the time of the Hawke and Keating governments—during the time of the accord, during the time of high unemployment—what happened to real wages? For working families, real wages under the Hawke and Keating governments actually fell by nearly two per cent. That was the legacy of the previous Labor government.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

John Howard said they had never been better off.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

And then what happened to working families under the Howard government? Real wages under the Howard government went up 22 per cent, Senator Wong. That is a fact. They fell under the Hawke and Keating governments and they rose by 22 per cent under the Howard government. So much for the Labor Party being the friends of working families.

What about taxation measures? Very simply, 40 per cent of all working families during the Howard government paid no net tax. They had as much social welfare coming in as they paid out in tax. How is that for working families! The fact is that, in the history of our country, there has never been a better government for working families than the Howard government. So much for the rhetoric of the Labor government. Working families have been better served by the Howard government than by any other government in our nation’s history.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

What a great privilege it is to be able to follow Senator Mason in this debate. Having slithered his way into power, promising all sorts of contradictory propositions depending on to whom he was talking at the time, the Prime Minister has now shown his true colours, because with the budget the buck stops with him—no longer the deft positioning, the fancy footwork and the verbal nonsense of speaking in ‘Ruddles’.

The man who said he was, always had been and always will be an economic conservative is now boasting that his first budget is in fact a true Labor budget. I am glad that Labor have finally fessed up, because no-one would agree that a true Labor budget is somehow also economically conservative. Mr Rudd, I suppose, will now tell us that Labor have always been economically conservative—and, as proof positive, just look at the Whitlam era! The simple fact is this: this budget is Australia’s highest-taxing, highest-spending budget ever. That is what makes it a true Labor budget. As a result of it being the highest-taxing, highest-spending budget, what is it predicated on? An extra 134,000 of our fellow Australians on the scrap heap of unemployment. That is what the Labor Party are actually saying that they will deliver as a result of their budget. The silence of welfare groups on this aspect, I must say, is regrettable, albeit not surprising.

The Labor Party inherited a very good budgetary position. Mr Swan and Mr Rudd did not even have to get out of bed to get a budget surplus. Indeed, the Charter of Budget Honesty told us in a statement signed off by the head of Treasury and Finance that inflationary pressures were easing and were of no real concern over the horizon. And that is in fact the truth of the matter. Since coming to power, Labor have sought to promote inflation at four per cent as somehow being a crisis. Well, hello! What was the inflation rate when Labor were in power? It was six per cent plus throughout the total period, and it was never a crisis. It was always ‘the recession that we had to have’ or that we had to have one million people unemployed. All sorts of spin was confected by the Labor Party.

As all credible commentators have said, the budget is at best inflation neutral. I thought inflation was this major crisis, but of course the highest-taxing, highest-spending budget means that, at very best, it can be inflation neutral and, at worst, it will feed into inflation. But one area it is not neutral on is unemployment. It actively, deliberately and heartlessly seeks to grow unemployment. The Australians who were promised relief on petrol prices, groceries, mortgages and rentals were delivered absolutely nothing. Be they pensioners or the so-called working families, they got nothing for voting Labor. Well, that is not exactly right; I suppose I will have to correct myself: they did get Peter Costello’s tax cuts and Wayne Swan’s tax increases—increases that will push up the price of every car and hit the workers in the Australian automotive industry. They got the condensate tax, which will actually increase the price of petrol. But motorists, I am sure, will be reassured that the government, at the taxpayers’ expense, have in fact appointed somebody to watch the fuel price go up—a FuelWatch Commissioner. On the one hand they have promised, ‘We’ll appoint a FuelWatch Commissioner,’ while, on the other hand, they have a deliberate policy that will increase the price of petrol in this country.

The problem with Labor is not only the damage that they do in the short term; it is also the long-term impact, and that is the area that I seek to concentrate on this afternoon. It is in the long-term view of our great country that the government have not only dropped the ball but deliberately thrown it away. Australia’s future has always been built on the ingenuity and innovation of its current researchers, scientists and small and medium enterprises. Our wealth today as a society—financially, socially and environmentally—has been built on past innovation. Tomorrow’s wealth is being built today by the creativeness and innovation of today’s researchers, innovators and small business people.

So in giving Australia this so-called new leadership, looking to the future, Labor and Mr Rudd have made their most savage cuts in what areas? In our premier research institutions—from the CSIRO, to ANSTO, to DSTO. And not content with that, just in case there is still someone out there innovative enough to develop something that might have commercial prospects, Mr Rudd has not only cut but in fact abolished—I stress ‘abolished’, and I know it is hard to believe—the cost-effective and popular Commercial Ready program and has done so without warning. This stupid but, we are told, deliberate decision—therefore, this deliberately stupid decision—to axe completely the Commercial Ready program and cut funding to our premier research organisations will leave Australia behind the eight ball for years and years to come.

When the usually mild Australian Academy of Science attacks this measure as strangling Australia’s R&D and innovation sector, you do have to sit up and take note and not give the regrettable, typical, rhetorical and empty vitriolic response that Senator Carr gave in question time yesterday. The government is clearly sending a message that innovation, science and research are not important and, what is more, if you do happen to create some great innovation, Labor definitely will not help you to commercialise it. Believe it or not, the Commercial Ready program, which AusBiotech and a host of others have praised as being cost-effective and the most useful government program, is now being denigrated by Labor.

Interestingly, when asked about these cuts yesterday, Minister Carr did not have the courage to say that the highly popular and effective Commercial Ready program was money badly spent. Indeed, in his answer, he tried to dress up this deliberately stupid and short-sighted decision in economic rhetoric. He did not have the courage to denigrate the program. In a sinister twist, hapless Labor backbenchers have been given speaking notes which tell them how to defend the axing of the Commercial Ready program. These are the words they have been told to utter—and foolishly they have repeated them to some of the beneficiaries in the community: the Commercial Ready program ‘was helping businesses that didn’t actually need help’, and ‘it was public money badly spent.’ If Minister Carr honestly believes that, why did he not have the guts to say it in this chamber yesterday in response to my question? Instead, he tries to dress it up in some economic rhetoric and then give his hapless backbenchers speaking notes on this, seeking to denigrate a very popular and cost-effective program.

The letters, emails, faxes and telephone calls that my office has been receiving—in a virtual deluge—have expressed absolute disbelief at the fork-tongued approach of the Minister for Innovation, Industry, Science and Research. Before the election he was going around saying: ‘I’ll be the champion of innovation. We’ll spend more on science and research, we’ll help you innovate and we’ll thereby increase productivity’—and that, as a result, a lot of the claims the government were making about its industrial relations system would be viable and believable. That myth has been exposed by their very actions in cutting so heartlessly the Commercial Ready program, which was designed to—and did so very effectively—allow small and medium sized businesses, run by people in their backyards and people who have mortgaged their houses, to pursue their innovations and get them ready for market. Instead, how dismissive the minister was in answer to my question yesterday. It is very instructive when you listen to part of what he had to say:

We had this expectation that we should go on providing assistance … to millionaires …

Can I tell the minister, Mr Rudd and the Labor government that those who are in the innovation sector, those scientists who have partnered with universities and other institutions all around this country, are not millionaires. They are people who work very long hours and have a passion for and a commitment to their particular innovations, which in the future may deliver huge dividends for this country and, as a result, for all of us. But because we have an ideologically driven minister in this area, I am quite sure that, when the expenditure review committee came along, he said: ‘Yeah, I’ll put up my hand. Cut out $700 million from the Commercial Ready program. I’ve never liked business, I’ve never liked private enterprise, so why bother assisting them?’ How else does he explain his outrageous comment about providing support to millionaires in this program?

This program was designed to—and does—support small and medium enterprises. There are biotechnology companies—basically, one, two or sometimes up to five committed and passionate individuals—making a difference in diverse areas such as breast cancer research and agricultural research. You name it, in every facet of Australian life these people have been dedicating themselves to making a difference—and not only for Australia. Some of their innovations are world firsts, world leading and world class. This visionary Rudd government—which dines out at 2020 summits and talks about innovation—slashes and burns the innovation portfolio at the very first opportunity it gets.

It is clear from the phone calls, emails faxes and telephone calls that I have received about the minister’s attempted slur of these people—he called them ‘millionaires’—and the handing out of speaking notes to backbenchers to denigrate this scheme has gone down very badly. These people quite rightly feel betrayed by this minister and by this government. The problem is that this betrayal, while it may not necessarily be noticed today or tomorrow or indeed next year, will be felt for decades to come.

I was talking to a group of researchers in Western Australia just before I walked into the chamber. They said that one of their research programs has already been approached by an overseas company. That company said: ‘We’ve got money and we’re willing to invest in you. If the Australian government doesn’t have faith in you, that’s fine—we do.’ Scientists by the dozen will be losing their jobs as a result of this measure. Indeed, this truly Labor budget is predicated on an extra 100,000-plus unemployed people—and many of them will come from our research and science facilities. They will be on the unemployment list but for one thing—that is, going overseas. That is the grand vision of Mr Rudd and Labor, in their first budget, in the discrete area of innovation, industry, science and research—for which I happen to have responsibility.

We now have it, if you were to believe Senator Carr, that somehow, in George Orwell speak—it is truly Rudd speak, this—less is more, that we are doing innovation a favour by axing $700 million of funding. What is so cruel about this is there was no consultation about this measure. What is more, many small companies have employed consultants—to the tune of tens of thousands of dollars—to prepare their applications for the Commercial Ready program and are now told: ‘Well, that’s wasted money.’ No compensation is to be offered. Even if you have already mailed your application on the day of the budget, having spent tens of thousands of dollars, your application will be heartlessly disregarded. Not only is it heartless; it is stupid.

I do not know how I can get through to the minister and the government how stupidly short-sighted this cut in the innovation grants in the Commercial Ready program is. What is more, it is absolutely insulting, because the minister himself has appointed a review into innovation to look at all these things. Indeed, this innovation review has received over 600 submissions from Australian innovators all around this great country. A common theme is: the Commercial Ready program is cost-effective, popular and delivering where it counts.

If Senator Carr were to say, ‘Look, I don’t think it’s a good scheme; it could be enhanced,’ let him say so. But just to chop it and not replace it with anything else during a review is an insult to the chairman of that review, Dr Cutler—I dare say he gets paid for that job. What is more, it is an insult to all those 600 individuals and organisations, many of whom have used volunteer hours to put in submissions, just to be so high-handedly disregarded by this, some would say, arrogant minister—I actually think he just does not get it.

We have a situation now where Labor are boasting that they have delivered a truly Labor budget. I happen to agree with them. It is a truly Labor budget: highest taxing ever, highest spending ever, predicated on unemployment. But worse than that and on top of all that is the fact that they are prejudicing the future of young Australians and future generations by their short-sighted approach to the vital areas of innovation, industry, science and research. What it highlights is that the minister has no capacity in cabinet to prosecute the case for this vital area for Australia’s future. I invite the government to seriously reconsider its positioning in this and, in particular, to use the opportunity of Dr Cutler’s review to reinstate the Commercial Ready program. If pride gets in the way, give it a different name, call it something else, say it is your very own baby, but reinstate the program, because that is what Australia needs.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

It is interesting that in talking on this motion on the budget, the opposition senators have started from the point of the glory days of the early Howard government, back when they were actually doing things, and have harked back to what the economy was like then. But really they are operating from one of their weakest flanks, I think, because what the Howard government inherited from the Hawke-Keating government was an economy that had been set up by a far-sighted government that had changed rules, changed regulations and set up the workforce such that Australia was in a perfect position to take advantage of the upturn in the world economy, the steep increase in the terms of trade over those early years of their government. And what did they do with those excellent conditions that they were handed? They let them dribble away in ineffective programs and policies until we have reached the time again now when our economy is trembling because of the inflation pressure.

Look at what Hawke and Keating did to set up the economy before the Howard government got in. They reorganised the financial system. The previous Fraser government and Treasurer Howard squibbed on reorganising the financial regulation sector. They squibbed on reorganising banking, on opening that up to competition. They squibbed on floating the dollar. They squibbed on a whole range of things that Hawke and Keating got in and fixed up so that we were truly in a position to be globally competitive in our financial services and in our responsiveness to changes in the economy—that is what Hawke and Keating did to ensure that our country was properly set up for the future.

What Hawke and Keating also did was they worked with the union movement—with the working people of this nation—to set up an accord, which resulted in a much needed reduction in the demand for wages growth, and moderated that by changing the welfare system so that families were supported. That was a masterstroke which enabled the economy to settle down and enabled a stable industrial relations climate while we saw a stabilisation of wage demand and an ability to move forward in our economy. That is what the Hawke and Keating government did.

The then balance between wages and welfare was subsequently corrupted by the Howard government. It handed out one-off welfare payments and increased welfare payments to well-off people, which the Rudd government is now in the process of redressing. The Howard government was left with a situation where Australia was well set up for the future, but we saw the Howard government take advantage of terms of trade and good international situations and not use that money to set up Australia for the future. It was almost amusing to hear Senator Abetz complain about the Rudd government not setting up Australia for the future by not encouraging research, productivity and so on when it was the Howard government which did nothing for productivity and nothing for the future. The Howard government did nothing for skills development and nothing for infrastructure that set us up for the future. It did what it had to do at the time: it managed the economy. It had no strategy. It did not drive the economy anywhere. The Rudd Labor government has to address those problems, which we have now inherited.

Senator Abetz again is fighting from a very weak flank when he talks about enterprise and Commercial Ready. The Howard government left research in the tertiary sector in absolute turmoil. We had interventionist ministers and conflicting directions about which way research would go. There was just complete turmoil in that sector, which was absolutely crying out for change. The sector was appealing to the former government to get some rigour into research and for some direction and funding for what was happening. It got no response because no-one in the Howard government was far-sighted enough to see the importance of that.

At last we have a Labor government back in power that might be looking to address some of these situations and that might be looking not only at research and development but also at those areas that are needed to support commercialisation of that research and development. Researchers and scientists are wonderful people. I was one myself, so I am very much in favour of them. They are great people, but they need to be backed up by technicians and skilled and semiskilled people to ensure that their ideas come to fruition. No-one in the opposition can deny that that skill base in our economy is completely inadequate. The opposition did make an attempt towards the end of their government to redress that with Australian technical schools, but it was too little, too late. The Rudd Labor government is committed to pulling up that skills base, to putting resources into it, to making sure that we have people wanting to go into that work, to people having the ability to take up those skills and to advancing the technology of this nation so that we can take up these research opportunities and develop them into commercialisation opportunities.

The government in this budget has committed $251 million to establish the Enterprise Connect innovation centres. It is providing $326 million to fund future fellowships valued at up to $147,000 a year for 1,000 of Australia’s top mid-career researchers and $209 million to double the number of Australian postgraduate awards for PhDs or masters by research students. Senator Abetz claims that that is not enough; it is certainly a lot more than the Howard government did. I think that we can look forward to seeing a great deal more research—and certainly a great deal more research being developed over the next four years than we saw over the past four years.

The assistance being offered to science and maths students is in a similar vein. We have a crying need for scientists and for mathematicians—for that kind of skill base that will propel Australia into the future. It is that vision for the future—that strategic direction—that has been so missing from government for the past 12 years. One of the key reasons that people turned to the Rudd Labor government was that it was presenting a vision for the future. It was promising some strategic direction. It had some idea of where our country could go in the future. This government is not simply about selling our commodities, mineral exports and agricultural exports. It is not relying on strength of growth in China and India pulling in Australia’s primary industry exports. This government will not simply rely on that for our future. We want to see a future for ourselves that will extend beyond this boom and will have the ability to weather any changes in direction of the economy. That is what this budget is all about. The Treasurer, Mr Wayne Swan, has said this many times and I will repeat it: it is about balancing stimulation in this country so that we can continue to grow with a dire necessity to control the fiscal situation, because the Howard government allowed inflation to get out of control.

It is extraordinary that we still have the opposition in denial. I think it was either Senator Mason or Senator Abetz who said that Treasury said, at the time of the election, that inflation was stable. That has been positively debunked since. The RBA was, at the time, increasing interest rates. The Reserve Bank of Australia was obviously worried about an increase in inflation and so was Treasury. The first thing that Treasury talked about with the new Treasurer was the need to control inflation. The opposition continue to deny it. It is absolutely extraordinary that they should believe that inflation is not a problem. Senator Abetz was querying whether 4½ per cent was so bad. The trend is upwards and the opposition must recognise this and that inflation must be kept under control otherwise we will have continual interest rate rises.

I should not have to tell the opposition about what interest rate rises will do to farmers and small businesses and about the pressure that will put on prices and households. It is absolutely unbelievable that anyone should have to talk about this to the opposition. That they are in denial about the level of inflation in this country just shows that the opposition deserved to lose the last election. Heaven help this country if they had won and continued on the path which they had been stuck on absolutely for at least the last term and probably longer. They had run out of ideas, they had run out of ways to go and they had run out of any vision for the future that they might have possessed. I think the people of Australia very clearly recognised that and that it was very much time to go.

It was not just that they had an old leader in John Howard. It was a situation that went across the board—across the frontbench, across the backbench and certainly across the Senate, as we have heard in the last few days. The former government just had nowhere to go and had nothing to put forward to the Australian people that showed that they were prepared to take things in hand and lead Australia out of an inflationary environment and navigate through the uncertain shoals of the world economic situation.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

Shoals! SS Minnow

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

‘SS Minnow’ just about describes the current opposition, Senator Bernardi. I think that, once again, the Australian population got it right in their voting record. The Rudd government has seized control of the economy. It has announced a comprehensive review of taxation. It has announced a number of plans to go forward. It has outlined its strategic direction in this budget. It is providing a way forward for this country. In the past, Labor has been the government that has provided stability in the economy and looked for the way forward. I look forward to the current Rudd government doing the same. I commend the start that has been made in this budget and condemn the sentiments expressed in the current motion.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The motion we are debating reads:

That the Senate acknowledges that the first Rudd-Gillard Government budget is a high taxing, high spending, old fashioned Labor budget that is not inflation fighting.

The last speaker referred to how the Rudd Labor government is going to take control of inflation. I ask the good senator from South Australia: what is the Rudd Labor government going to do to control escalating commodity prices? You have taken a hit in Western Australia in relation to the removal of over $2 billion from Woodside and BHP. You have created real problems for Australia in terms of what I call sovereign risk. The mineral industry is really concerned about who is next on the hit list and it is raising questions about overseas people investing in Australia.

The big problem with oil price increases is that they feed into the cost of transport, they feed into food prices and they go right across the economy. It is going to be very, very difficult to take control of oil prices. You might have certain watches on prices of motor spirit at the petrol pump, for motorists, but there are the big items that are going to affect inflation and are going to automatically feed into the system by way of higher transportation costs and higher farming costs, which—through the increased cost of diesel—have gone through the roof, all factors outside the Labor Party’s control. How can you make a claim, as has been made here today, that you are going to control inflation, that you are going to put a lid on it, when there are these big external factors of oil prices and growing commodity prices, particularly from the states of Queensland and Western Australia, as a result of exports of coal and iron ore? Those exports are certainly good for the economy and are going to keep the economy moving but, I have got to say, I do fear for the future.

Now that we have had a day or two to digest the impact of the Rudd Labor government’s first attempt at a budget, two things stand out to grasp our attention. The first is the enormous difference which now exists in the Australian economy and government finances compared with the situation of the first Howard government, over a decade ago. In this country, governments traditionally use their first budget as a hard budget—they get all the hard decisions out of the way, and then in the next couple of years they loosen the purse strings a little bit. The best that could be said by commentators of the Rudd government is that it was modest—it was there, but it was modest. They have really lost a big opportunity in their first budget because this was the time to make the changes. They have lost that opportunity. The general commentary outside politics is that it is only a modest attack on inflation, a modest attempt at savings, so they have lost their opportunity.

The second aspect that stands out very clearly is the prophetic statement by the now Minister for the Environment, Heritage and the Arts, the Hon. Peter Garrett, when last year he let slip the view that Labor would change everything once they got into government.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

He was right.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

He was right, Senator Bernardi—no truer words have been spoken. To inherit a balance sheet of the sort faced by the Treasurer this year really would be a dream for any potential Treasurer—no $90 billion government debt or ongoing deficits, no high unemployment and no rampant inflation or historically high interest rates. In fact, there were no disastrous elements and none of the sorts of things that the coalition faced when we came to government 12 to 13 years ago. Yes, the Treasurer is faced with one challenge—serious but not out of control—to rein in inflation, which has started to rise in line with a long-term strong economy, strong demand and the financial problems within the international community.

The previous government, I remind the Senate, had already begun to address this challenge. While the Rudd Labor government has given lip-service to the need to reign in inflation, unfortunately the budget this week has not seen the action to positively or effectively put the brakes on the growth in the rate of inflation. Paul Keating used to proudly say, ‘I used to know how to pull the right levers.’ Certainly the Rudd government is not pulling the levers strongly enough. The government has continued its old bad habits of previous decades—habits clearly exhibited by its mates in the states and territories in recent times—continuing its history of being a high-taxing and high-spending government. Yes, the rate of spending has come down somewhat. But the actual spending, the aggregate, has gone up. While we saw carefully targeted reductions in numbers of Commonwealth public servants under the coalition government, the states and territories have run rampant. This is where a lot of your problem lies—in the states. We can assume that this habit will be matched by the Rudd Labor government now that it controls the federal budget.

When you look very carefully at how the agencies and departments have constructed their labour budgets, there is no consistency, unfortunately, in how they have tackled the concept of certified wage agreements. A lot of these are coming up and a lot of these are going to have an inflationary effect as they come into account. You are not going to control these wage outbreaks that are going to happen in the public sector, which will ultimately feed, by demands from the union movement, into the private sector. You say that you have control of inflation—you have no control on commodity prices, no control on the oil prices that are feeding into costs and expenses, particularly for farmers and export earners. Now you have lost control. You have no consistency in trying to put a lid on the wages explosion that is emerging in the Commonwealth public sector and is going to have a spillover effect in the private sector.

Between 1996 and 2007, there was a reduction in employees in the federal government across all public sector agencies, from 352,000 to 231,000. This occurred at a time when overall the rate of employment in this country was rising, unemployment was dropping and the number of full-time jobs was increasing. During a period when two million new jobs would be created across the Australian economy, there was a massive reduction in terms of the cost to taxpayers and the Commonwealth public sector. The challenge, Senator Sherry, is for your government to match it if you are going to control inflation. But you have no hope with a strong union movement matching it. That is going to be your challenge.

Sadly, while the Commonwealth public sector shrunk by more than 121,000 in the last 11 years, the state public sector expanded by 202,000. You are going to have a real problem controlling the states, because they will be getting more money and they are going to spend it, which means that there will be more demands on your state budgets for wage increases.

If the leader, the Hon. Kevin Rudd—and I have some respect for Kevin Rudd; I think he is a decent fellow—

Government Senators:

Government senators interjecting—

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

But the problem is: will he stay? That is the real worry that is on everybody’s minds—nobody wants to see the nice lady Julia Gillard take over. That is the worry around Australia. If Mr Rudd goes down the path taken by his Labor mates in the states and territories, it will be very, very expensive for the taxpayers of Australia. It will mean increased taxes. We have already seen in the budget taxes and costs that are going to go up. Potentially, 385,000 extra people are going to go onto the state hospital system. It is worrying because the money is not there to fund it. What is going to happen? Increased queues, decreased service and more anxiety for families.

It will be interesting to see whether the rhetoric of reining in inflation can be matched with similar restraints to keep the Commonwealth salary bill under appropriate restraint. It is going to be a challenge. I think it is going to be very difficult; in fact, I think it is going to be impossible. I am not full of confidence, as I said, because it would be out of character for Labor governments to exercise this sort of restraint based on past practice and on the very recent history of Labor state and territory governments. Of course, it has been very fortuitous for the Treasurer to inherit a budget situation in such a well-managed state, but the real test will come next year or the following year when the government will be living beyond its own resources.

There have been certain surprises in this budget. Mr Garrett’s famous and loosely released comment that ‘all will be changed after the election’ must be seen in a very serious context. Here I note the problem in Tasmania—the problem that $37.3 million which was allocated to the Tasmanian health service has been shown as a saving. I have got a problem because there is a lack of transparency. The budget paper that I refer to calls it a saving of $37.5 million because they did not fulfil their undertakings. I maintain that it is a transfer because Senator Ludwig indicated that this money had been transferred to other health services. How can you call it a saving but use it as a transfer? It is not a saving; it is a transfer from one program, which was not told to the Tasmanian people beforehand. So one section got let down hopelessly. Why try to confuse people by listing it as a saving? You are not being transparent and I think somebody is—no, I will not say what I thought because I do not want to cast aspersions on an honourable senator. It is not clear and it is not satisfactory.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

It is murky and grubby.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

If, as you say, Senator Bernardi, the waters are murky, people become suspicious and they are not happy. That is an unfortunate situation. This is a hospital system which has been badly neglected by the Tasmanian Labor government over many years and this lifeline has been snatched back just at a time when additional resources are so badly needed. That is unfortunate. Then we have the changes to the Medicare levy, which are certain to lead to severe reductions in the numbers of Australians with private health cover and will only serve to put even more pressure on a ramshackle state hospital system in Tasmania.

The Tasmanian hospital system has got to use more computerisation to reduce its high labour costs and get a better ratio between people who are helping the sick and those who are administering records.

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

Do we need more robots? I don’t understand what you mean by computerisation.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Whether you have a robot or not, they are not making full use of IT facilities that the private sector is using in industry. This is the challenge: get the experts in to ensure that the health dollar is spent on the sick and the needy. I know that other states will have to confront similar challenges when about half a million Australians currently entitled to private health cover line up at government hospitals. So the issue is: where is the extra Commonwealth funding coming from for the 385,000 who will effectively be thrown onto the government healthcare system?

Similarly, in areas such as the Regional Partnerships program, much of the great incentive for private enterprise and community groups will be scuttled. It was something where we had the community working together, often in more regional areas with great difficulties.

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

Regional rorts! What did the Auditor-General say about that?

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

There is a lot of suffering out there, Senator O’Brien. If you had gone down to the public meeting at Levendale the other day, you would have heard of the difficulties in that particular area. I applaud the decision of the Minister for Education to keep that school open because it is a signal that at least somebody is a little bit interested in a remote community that is suffering tremendously at the hands of drought and where people feel they are disempowered. I think it is regrettable for that program.

Unfortunately I am losing valuable time. People in the bush and in small business have become the forgotten people of Australia. That is the tragedy for Australia. A wonderful opportunity to drought-proof much of our nation has been lost, an opportunity that this huge budget surplus would have provided to overcome some of the problems of the worst drought in living memory. I remind honourable senators that 70 per cent of agricultural country is still in drought. It seems ironical that, while the budget provides extra skilling for certain industries, the government took away the training programs for those involved in agriculture. I think it is sad for the forgotten people of Australia.

There are lots of inconsistencies in the federal budget. We now have all sorts of different thresholds in relation to families. And then we have got the question of interest dividends and royalties in terms of a withholding tax. Where that money is remitted overseas, it is subject to a 30 per cent withholding tax. The government had an initiative—which I do not necessarily disagree with, because it is going to help build up the finance sector export opportunities and help make Australia a hub—which is going to create enormous problems for the Taxation Office because a new industry is going to emerge. A lot of overseas residents who receive interest dividends and royalty income will try and transfer that to other income to attract the 7.5 per cent rate. So certainly the tax office is going to have a big job watching and oversighting that sort of issue. Then there is the case of ordinary Australians who, if they receive this money, pay top marginal rates on that, whereas somebody overseas—maybe in the Canary Islands or somewhere—pays 7.5 per cent maximum.

Senator Sherry, this is an issue for you: a lot of lower income earners have used salary sacrifice to access the government’s co-contribution. Your industry funds have acknowledged the value of this co-contribution as a means of helping lift their aggregate superannuation investment. You have signalled that this is going to be challenged and changed next year. You have indicated that, where they use salary sacrifice, there are going to be problems where you put it into a co-contribution. But that opens the door—we have seen that—of changing— (Time expired)

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

This might sound a strange way for me to open this part of the debate, but I empathise with Senator Watson and those on the other side because it is very difficult discussing the first budget of a government. I came here in July 1996 as a fresh new senator and of course in August that year, unlike now with the budget being presented in May, I had the displeasure of listening to the first Howard budget. It is very difficult for oppositions first time round to find legs to criticise the budget. It becomes very difficult, having just experienced government—

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

It becomes very difficult indeed, Senator Bernardi, and of course that was no more evident than in the contributions here this afternoon from the government members. Senator Watson raised a couple of issues that I think need to be addressed at the outset: firstly, about there being no rampant inflation. Unfortunately, Senator Watson, you did not define rampant but I might help you out: there were eight successive increases in inflation under your government when you were the government of the day. If that is not rampant, then give me a definition of ‘rampant’ later on and then we might have a discussion.

Inflation was definitely on the increase and back in 2004 you promised to keep it at record lows and that was never done. But when you were in government, if you had been faced with the same situation that we were faced with coming into government—inflation on the increase such as it is posing a real threat and a real danger to the wellbeing of ordinary working Australians—then I am sure you would not have taken the initiative early on in the piece like Mr Kevin Rudd, our Prime Minister. He identified that inflation was a real problem and that there needed to be an example set about freezing the wages of politicians in this place for 2008-09. It was not particularly popular, Senator Watson, but nonetheless, it was setting an example—

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

and I know Senator Bernardi needs a pay increase desperately—to the rest of the community, the business community, the trade union movement and the workers of this country. But, have we seen those high-flyers freeze their wages? Have we seen that, Senator Watson? I put to you: no. But given that you are now facing opposition—and I understand the difficulties—someone has come up with a very creative motion this afternoon. Obviously, one of the things that is occupying our friends opposite is creative writing. That is the only thing I can determine, having read the motion that was put forward by Senator Parry this afternoon. I will just read the motion for the record; I do not think it has been read. It says:

That the Senate acknowledges that the first Rudd-Gillard Government budget is a high taxing, high spending, old fashioned Labor budget that is not inflation fighting.

Nothing in that is real at all, Senator Watson. So I was glad to hear your contribution on this. Creative writing is rampant and running riot on your side of the fence. What would you expect? You would come into this chamber and criticise any budget that was put down by the Rudd government. That is your job as the opposition. That is your job—

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

It keeps you honest.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Keep us honest! We are honest, thanks, Senator Watson—and thank you for your interjection too, Senator Bernardi. When this was described as an old-fashioned budget, it was nothing of the sort. Clearly, this was a budget, a Labor budget, designed to help those people who are suffering out there in the community in this day and age. That is what it was designed to do—

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Like pensioners?

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

You would not know about them, Senator Joyce. You would not know one if you fell over one; let’s get that straight to start with. The Treasurer identified in his speech and focused clearly on the fact that he was providing a budget for the future. That is what it was: a budget for the future meeting the necessary funding and urgent needs of infrastructure, education and skills development to ease the pressures on the family budget. If you had not ignored those areas like infrastructure, education, and skills, we would not be in the mess that we are in today, Senator Watson—

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Senator Joyce interjecting—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

and, Senator Joyce, it is good to hear you are still alive over there. Let’s look at what the Treasurer had to say, and then we will go to some figures. The Treasurer said in his opening remarks:

This Budget is designed to meet the big challenges of the future—

something that the Howard government was incapable of doing. It had lost its way; it had lost its direction; it did not know where to go. So in step Kevin Rudd and Wayne Swan to give some direction to this nation. If that were not the case, we would not be sitting on this side and you would not be on that side. Clearly the Australian people—

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I hope pensioners will be able to fill their fridges with your big challenges, because they will have nothing else.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

unlike you and your dwindling National Party, Senator Joyce, have some faith in us, and we are going to deliver. In the words of Mr Swan, we are about facing the big challenges of the future. It might serve you well to read some of the budget papers, Senator Joyce; it might help you out. Mr Swan went on to say:

It is a Budget that strengthens Australia’s economic foundations, and delivers for working families under pressure.

If you do not think working families are under pressure, go out there and find them, go out there and meet them like I do. You will see that they are struggling.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Senator Joyce interjecting—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

I am glad that you are interjecting, Senator Joyce, because it shows that you have not read the budget papers at all. He further said:

It is the responsible budget our nation needs at a time of international turbulence and high inflation at home.

And it is. You cannot label it old-fashioned, because it is a responsible budget and it addresses the issues of our time. It is high inflation at home that we inherited from the previous government. Mr Swan also said that it is ‘a budget carefully designed to fight inflation’.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Face reality!

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

You do not want to believe that, Senator Watson. I understand and accept it. If you did not, you would not be in opposition. You would not be melting away into oblivion over there. He further said it is a budget that will:

… ensure we meet the uncertainties of the future from a position of strength.

Let us look at what Mr Swan had to say about those economic factors. He said:

The Australian economy is enjoying its 17th year of growth, now spanning three governments.

He did not isolate it to one government; he said it is now spanning three governments. But he also said:

… productivity growth over the last five years has averaged 1.4 per cent a year, the lowest in 17 years.

This is the problem with the former government. They took their eyes off the ball. They lost their way. Productivity growth over the last five years was the lowest in 17 years. That was identified in the Treasurer’s speech the other night. No-one from the other side has answered that. He then went on to say:

And capacity constraints have put upward pressure on inflation.

Nothing has been said about the capacity constraints that have put pressure on inflation. I will come to that later. He then said:

When the Government came to office less than six months ago, Australia was facing the highest levels of domestic inflation in over 16 years—

so it was only natural that the Labor government would respond to the challenge that was put before it—

and inflation reached 4.2 per cent in the March quarter.

He went on to say, and this is significant:

Inflation is a drag on growth. It saps confidence, and hurts families and businesses throughout Australia.

Inflation is pervasive and it affects the life and lifestyles of every living person in this country, whether they be the wealthy or whether they be the poor. He went on:

We are working to put downward pressure on inflation so that we can ease the cost of living and interest rate pressures on working families.

To do that, what did Labor do? I will refer briefly to a press release from the Treasurer, dated 13 May. It is interesting to look at some of the areas that Labor decided to address, which have been neglected for a long period by the former government. Under ‘education and skills’, the Treasurer said:

The 2008-09 Budget invests $5.9 billion over five years in the Rudd Government’s Education Revolution, from early childhood education and care, through schools, vocational training and to our universities.

When I came here back in 1996, the first Howard budget was savage on the university area, and it has suffered ever since. It has never recovered. Higher education suffered badly. As a result of that, we have very significant skills shortages in that area. The vocational education and training area also suffered, and the shortages there are manifest in our community today.

The Rudd budget is delivering. It is putting $5.9 billion over five years into the education revolution. In a specific initiative, it is putting aside $2.5 billion over 10 years for trade training centres in schools. No-one would deny the trade shortages that exist, whether they be in the mining industry in my state of Queensland, whether they be in the mining industry in Western Australia or whether they be in our defence forces. It does not matter where one goes; there are chronic shortages of skilled labour.

Labor is prepared to put significant funds into trade training to shore up the gaps that are there—to ensure that the gaps do not cause the inflationary pressure that has come about as a result of the neglect of the Howard government in the latter time that it was in power. Under education and skills we are also committed to:

• $1.9 billion over five years to deliver up to 630,000 additional training places to boost the skill level of the workforce; and
• $1.2 billion over five years to provide up to $1 million per school to deliver computers and communication technologies to all students in Years 9 to 12.

This is something that is going to make us a clever nation and give us skills and jobs for the future. In his press release, the Treasurer went on to say:

… the Government will establish the Education Investment Fund to finance capital investment in higher education and vocational training.

This is a fund to operate into the future. This is not looking backwards; this is looking at shoring up the future for young people, ensuring that the education facilities in both higher education and vocational training are available.

There is an initial allocation there of $11 billion, and $6 billion of that will come from the Higher Education Endowment Fund. Further, in Mr Swan’s press release, he referred to an additional $500 million which will be provided in 2007-08 to help universities upgrade and maintain teaching and research facilities. He said:

This is a much needed down-payment of overdue funding, in advance of the funding decisions that will be taken once the Education Investment Fund is in place.

That is clearly a recognition of the gap in spending that had occurred in the years of the Howard government. He also outlined in his press release our commitment in terms of climate change, water and the environment. He clearly said in his statement that there had been a decade of neglect and inaction on the part of the previous government. Of course, this budget will deliver in full on the government’s commitment to tackle the long-term challenge of climate change, with measures totalling $2.3 billion over five years. Unlike the climate sceptics on the other side, we have a definite view that this issue needs to be addressed or we will suffer the consequences. It will have an effect on the jobs in our community, on inflation, on our capacity to produce goods competitively with other countries and on our capacity to provide average Australians with an income and a lifestyle that they deserve.

To address this issue, as I said, we have committed $2.3 billion over five years. Of that, $500 million over eight years is for projects that accelerate the development and deployment of clean coal and low emission technologies, $500 million over six years is to support the new renewable energy target and to accelerate the development and commercialisation of renewable technologies in Australia, and $150 million over four years is to support the development of clean energy technologies in Australia. Recently I had the pleasure of going to Emerald in central Queensland and whilst in Emerald I went to Blackwater and looked at the Blackwater International Coal Centre, which is being funded primarily by government and also industry. The centre is meant to focus on the role that coal will play into the future—in particular, clean coal.

Energy is important in the ongoing success of our society, in our capacity to deliver secure jobs to people so that they can plan their futures. Across the street from the coal centre I watched endless trains—wagons—loaded with coal, heading off to the ports. One of the people that were showing us around the new centre made a point of saying, ‘Every wagon that you see there has at least $10,000 worth of coal that is heading overseas and coming back into the Australian economy.’

One of the problems that we face—you would not believe it—is that the former Howard government failed to invest in infrastructure. The problems that we have getting out our products at the ports in Queensland are incredible indeed. But the Rudd Labor government has committed to investing in infrastructure in this budget—and not in an insignificant way. The Treasurer, again in his press release, made the point:

Neglect of critical infrastructure over the past decade has pushed up the costs of doing business and contributed to inflation and interest rate pressures in the economy. The Rudd Government is committed to tackling infrastructure bottlenecks that are constraining our economy.

That is a clear commitment on the part of the Rudd government. Surely, those with even a small amount of common sense on that side of the chamber would not be critical of that initiative. He refers then to the forming of Infrastructure Australia and the fact that we will develop a blueprint to unlock the infrastructure bottlenecks. That is vision—that did not happen in the previous budgets of the former Howard government. They ignored it.

So we have the establishment of the Building Australia Fund. There will be an initial allocation to that fund of $20 billion, and it will absorb the Communications Fund. This will attack some very important areas: ports, roads and broadband just to name a few. And they are not confined to the coast; they are for the whole of Australia, for regional Australia—to contribute to the development of our economy and to ensure that we have a healthy economy into the future. To simply describe this as high-taxing is unreal. (Time expired)

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

Without in any way indicating disrespect to all the previous speakers, it is debates like this that make me feel somewhat happier that I will be leaving this place in a few weeks time.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

We didn’t ask for it; they gave us a motion.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I appreciate that, Senator Hogg. I know why these sorts of debates happen, and that is why I do not mean any disrespect. But, in a way, it is unfortunate. To remind the Senate, and those that are listening: what we are debating is a motion put forward by the opposition, alleging that the first budget of the Rudd-Gillard government is a high-taxing, high-spending, old-fashioned Labor budget that is not inflation-fighting.

It is obviously a political rhetorical exchange that people are having, and that is all fine; these things happen. Nonetheless, I do not think it is a worthwhile use of anybody’s time, quite frankly. Budgets do not exist in isolation from wider economic policy and from wider ongoing issues and a range of other policy measures. Whilst it is certainly reasonable to criticise the overall impact of a budget and the specific measures within it, it is not reasonable to assess a budget without looking at some of the wider issues and indeed some of the still unanswered questions. For me the big issue of this budget is not only what is not in it but also what is still to happen and what is still not answered by it, although one budget on its own cannot answer all of those things. To simply have a process in this chamber whereby all we are having is each side trying to discredit the other, through fairly shallow talking points that create a nice piece of wrapping paper around their own side’s alleged economic record, does not really serve much purpose in enlightening anybody who is actually interested in the substantial and substantive issues that are involved here.

Even terms like ‘high taxing’ and ‘high spending’ really depend on how you measure things. There is a valid case to say that an overall growth in spending has happened and there is no doubt about that. It is also valid to say that the rate of growth in spending has declined. It is also valid to say that the overall amount of spending as a proportion of GDP has not increased. If you have a growing economy and it is growing faster than the amount of government spending, then, even though your government spending is increasing, it is not increasing by as much as the overall economy so you could allege that the spending is going down. You can end up having economic jargon and different frameworks being used to try to assert competing positions. My view is that blanket assertions, such as whether something is high taxing or whether something is high spending or the opposite, are not particularly helpful in this context. To me, and the Democrats more broadly, the issue is, frankly, what you are spending the money on, where your taxation is being derived from and how your tax system as a whole is working.

Personally, inasmuch as you can take the budget in isolation from everything else, I would give it a rough ‘pass’ and perhaps a six out of 10. It was more cautious than I expected, but that is, in another sense, perhaps not that surprising given what I suspect will be the overall tone that the new government will try to maintain. But I am not sure if a bare ‘pass’ or a marginally okay ‘pass’ is really good enough, given some of the serious immediate challenges that we have and face. I would like to name a few huge challenges that are very urgent and impacting now on people in very serious ways. There is firstly the urgency of the housing affordability crisis. There are a few measures in the budget, none of which are new as they had already been announced, that go a little bit of the way to addressing some of the issues involved but they really do not go to the heart of them at all. In the whole area of public housing, particularly given the years of criticism we heard from Labor—very valid criticism of the coalition government’s serious neglect in that area—we have seen nothing, not a cent, from the new Labor government to reverse that serious decline. As this is at a time of probably, historically, the worst ever crisis in housing affordability and availability, I think this is a serious omission, even in the context where there has been a clear attempt to try to constrain spending at least to some extent.

There is also the crisis, which has been widely acknowledged by all sides, in respect of Indigenous Australians: the huge and disgraceful ongoing life expectancy gap between Indigenous and non-Indigenous Australians. There are many other areas of inequality, whether they be housing, education, other areas of health, social engagement or life opportunities in general. As I raised in a question yesterday to the Leader of the Government in the Senate, I do not think there is anywhere near enough extra new investment in the area of Indigenous Australia, given the clear need that all sides now acknowledge is there.

In addition to that, there is the looming major crisis with regard to climate change. Whilst there are some measures for that in the budget, I do not believe they are anywhere near enough, in both scale and content, for what is needed.

That brings us to one of the other big question marks of this budget. It is one of those things that just sit to one side as a huge unknown, even in the context of what we are allegedly talking about here today, which is whether this is actually a big spending budget. I refer to these new funds that have been set up—in a move that builds on the mechanism that was originally used by the previous government—on top of the Future Fund. We have now got funds being set up—and the funds in them being set aside—for infrastructure, education and health. There is a valid debate to be had about whether or not that is a good way of doing things.

When you get huge chunks of money taken off budget that cannot be scrutinised in a more formal sense by the parliament but that will be spent down the track, then there are certainly issues of accountability, including by this parliament, of the budgetary process. The label of ‘slush fund’ is not completely inaccurate with regard to that, but it is probably a bit unfairly pejorative. The issue is not that the money is there. The issue is what it is spent on and whether the mechanisms that are used in making the decisions on that spending are, firstly, transparent and, secondly, credible and reasonable. It may well be that significant amounts of the earnings from those funds—or even the capital of those funds, if that is what is spent down the track—are spent on dealing with some of the problems that I have mentioned. I do not know how tightly the parameters will be around, for example, the infrastructure fund and whether money could be put into areas like public housing or other types of affordable housing as part of infrastructure in areas of extreme need at the moment in, for example, regional Australia, particularly where it is linked to major capacity constraints on the resources industry.

Similarly, it may well be that significant parts of the health fund or the education fund may be directed towards the serious and, if you are going to rank needs, greater needs of Indigenous Australians that I referred to earlier. It is possible that the framework is being put in place for those great needs to be addressed, but we really do not know. That is why I think it is premature to make blanket condemnations or, frankly, blanket praises of this budget. If you want to talk about its macroeconomic impact and whether the so-called high-taxing, high-spending budget is a plus or minus for inflation, from my knowledge of these issues there is some merit in saying that this budget does not match the prebudget rhetoric about slaying the inflation dragon and fighting a war on inflation. I think it is fair to say that. It is fair to say that it is not irresponsible with regard to further fuelling the risk of inflation and it is fair to criticise the final few budgets of the previous government for doing just that, but the prebudget rhetoric about the war on inflation is not matched by this budget. The budget is far more cautious than what is suggested by that sort of rhetoric.

Similarly, it is fair to say that the prebudget rhetoric about taking the meataxe to government spending and the Robin Hood rhetoric about slugging the rich and giving to the poor has, again, not been matched by what is in the budget. This is a matter of whether or not the spin matches the substance—but then we are just debating whether or not the spin is right, which, frankly, does not help anybody. What we should be debating is whether what is in the budget is good or bad, what else needs to be done and what is best for the Australian community, the Australian economy, the Australian environment and groups within our society, particularly those most in need. So, whilst there are a few headline measures that clearly do target Australians who are better off, they are not on a scale that could be equated to Robin Hood. I do not know what a microversion of Robin Hood would be, but these are very far below things that would be seen as Robin Hood measures. There are one or two that I am not opposed to. In fact, the change in the Medicare threshold for taxing people who have not taken out private health insurance, in particular, is a very positive move. Ironically, that is actually one measure that the opposition oppose, even though, if they are criticising the budget as high taxing, it actually gives some tax relief. Yet the coalition say they oppose it. This shows the problem with making single, swinging, blanket assertions about entire budgets. You quickly end up with inconsistencies when you try and match those assertions with the range of different and individual measures contained within a budget.

One of the areas flowing on from the failure of the budget and the federal government to date in meeting their prebudget rhetoric about bringing the meataxe to government spending is that there is clearly more to be done. Here is another question mark. A significant review of the tax system is flagged. It is not a root and branch review; there are areas that are excluded. It is probably politically very wise to exclude the GST. People can make decisions about the GST that can be quite damaging for their particular party from time to time, so I can see why the government might want to leave the GST right out of it. Purely from a policy perspective, I think it makes much better sense to include the GST in the overall review of the tax system. It has been in place for some time now, and it would be a good time to examine it. But even without that, there are significant aspects of the tax system that would benefit from a more comprehensive review. It may well be that the tax review process can move things further forward in trimming some of the unnecessary, inefficient, non-progressive components that are in place in our tax system.

When we talk about taking a meataxe to government expenditure, that can include—indeed it should include and has included in its own small way in this budget—some of those changes that deal with tax expenditures. Some of those still very much need to be wound back, far beyond what has been done in this budget. Some things were floated, have not been done and still, very justifiably, can be done—means-testing the first home owners grant, for example. Dealing with the preferential fringe benefits tax treatment for company cars is certainly one that is not only justified but very much needed. There are a number of other areas, including the broader issues of the existing exemptions and discounts on capital gains tax, the taxation treatment of trusts vis-a-vis companies and the entire treatment of negative gearing. If those sorts of things are examined in a comprehensive way in the tax review, and if its findings are taken on board by the government, some of the unfinished business from its first budget could actually be done down the track in the second and third budgets.

I should point to the contrast to the previous government, which announced an examination of the issues with regard to first home owners—an inquiry by the Productivity Commission. When the report was put on the desk of former Treasurer Mr Costello, he rejected every recommendation—which related to tax and examining issues to do with negative gearing and capital gains tax, I might say—that dealt with the federal level. That failure to act meant not only a refusal to examine some of the federal drivers of the housing affordability crisis that are now much worse but also distortions in the tax system which are not particularly helpful or equitable were left unaddressed as well. Not only have they become further embedded but they have become larger in their distorting impact. I would not say it is meaningless to use labels like ‘high taxing’, but it is not particularly useful, unless you are going way out of the ballpark.

If you just want to look at blanket assertions about that, there is no doubt that the previous government, as was often alleged, was—in a gross sense, in the economic sense of the word—the highest taxing government in Australia’s history. Whether that is a good or a bad thing, in my view, really depends both on where those taxes were derived from, whether they were derived in a fair and efficient way and where the revenue was spent. I think the whole high-taxing, high-spending mantra is really not much use in this context. We have good taxes and bad taxes; we have good spending and bad spending. What we need to do on both sides of the ledger is to get less of the bad and more of the good.

The total amount is a valid issue to debate but, frankly, it is nowhere near as big an issue, unless you are really getting way out of proportion. In the current economic context, as has been pointed out already, on the one hand people were arguing that we cannot have cuts that are too tough because people will suffer but, suddenly, afterwards they are arguing, ‘The cuts weren’t tough enough.’ On both sides, really it would be just a few billion dollars, although I do accept that that can have a big impact on individual people. However, when we are talking about the overall impact on our macroeconomic factors, it is really pretty marginal.

This debate is focused on the wrong area. That being the case, it probably does not matter that basically it is just a lot of rhetorical back and forth of no great consequence. But it does mean that the real issues of substance—not just about the overall state of the economy but some of those discrete issues of great significance to the Australian people—are not being properly examined.

Finally, one other area of the budget that I do think is a positive one but that also needs to be dealt with properly by other corresponding measures is the increase in the migration intake, not just the skilled migration intake but also the corresponding increase in family migration—skilled workers have families as well—and, indeed, a small increase in the humanitarian stream. That, I think, is valuable to Australia. It will be helpful in dealing with some of the capacity constraints within our economy at the moment, but only if adequate infrastructure investment that is properly spent, in the right way and at the right time, goes alongside of it—that question is also still there—as well as proper settlement assistance for people when they first arrive.

The other aspect I point out, just quickly, regards those in the Australian community who are most in need. That is where I think the Robin Hood rhetoric again is really quite overblown. Sure, there were tax cuts focused more at the lower end, and that is welcome and I do not oppose that. However, there are many people, particularly those on income support, to whom tax cuts are really of marginal benefit. Of those, pensioners and carers in particular have been pointed to. However, a whole lot of people more broadly are on very low incomes and income support and there is really not enough there. I know that Minister Macklin has made further statements about examining that issue and there is a review about that. That is a complex area and one that is in need of review, but it is another area where the best you can say is that it is still unfinished business and the question mark is still there. That is why there needs to be ongoing scrutiny and more reasonable, valid and rational debate about some of the issues in play here.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

It has happened at last. It has taken six months, but now it has happened: the wolf has shed its sheep’s clothing. This high-taxing, high-spending, old-fashioned Labor budget makes clear that the claims of the Prime Minister and his government to be economic conservatives are demonstrably false. This first Labor budget in 13 years obviously does nothing to fight inflation and will only disappoint those Australians who put their faith in this Labor government to maintain the sound, responsible, economic management of the Howard government. First, there is the tax grab through the dramatically increased tax on premixed alcoholic beverages, badly disguised as an attempt to deal with the problem of binge drinking amongst young people.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

It is binge taxation.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

It is binge taxation, mainlining on tax dollars, Senator Coonan. At first glance, the policy sounds feasible, even a positive step towards addressing the growing problem of binge drinking amongst young people. But when you get past the government’s spin and actually look at the figures you will see that, despite the tax, the government expects an increase in revenue from these drinks. In other words, the government’s budget predicts that, in fact, more of these beverages are going to be sold in the coming year despite the tax.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Didn’t you listen in question time?

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

I listened very closely to question time and the absolutely false spin that was put on that from the minister at that time, because the budget papers clearly show there is going to be an increase in revenue resulting from increase in consumption. That is the only conclusion that can be drawn from those budget figures. Any honest person would recognise that.

This policy clearly highlights a fault in this Labor government across the board. During the last election campaign they went around claiming to be the party for young people and holding themselves out to be in touch—a party that was all things to all people. But the development of this policy clearly indicates that both the Treasurer and the Prime Minister have spent very little time of late with teenagers.

Anyone who bothers to sit down and actually talk to a teenager would understand that the price of alcohol has absolutely no impact on a teenager’s desire to drink alcohol. If a young person wants to drink, the price of alcohol will not prevent them. The only thing that increasing the price of pre-mixed beverages will do is increase inflation and drive teenagers to make different choices about the alcoholic beverages they consume. For example, a six-pack of premixed Johnnie Walker Red and Cola cans, with an alcohol content of five per cent, at a local South Australian Dan Murphy’s, will now cost $18.99, while a 700 millilitre bottle of straight Johnnie Walker Red, with an alcohol content of 40 per cent, at the same store, will cost $28.99. Young people are financially savvy. They will instantly see that for only $10 more the bottle containing 22 standard drinks at 40 per cent alcohol content, plus bottles of Coke with which to mix their own drinks, is much better value for money than the premixed cans containing nine standard drinks at five per cent alcohol.

The sad result of this policy will be to encourage young people to move from lower alcohol content beverages with fewer standard drinks to much stronger alcohol with many more standard drinks. With premixed drinks, the alcohol consumption is accurately known.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Senator McLucas interjecting—

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

Common sense tells you that! It is about time this government applied a bit of common sense—because you clearly do not have any. As I was saying, with young people mixing their own drinks from bottles of Johnnie Walker and bottles of Coke, they will not have a clue how much alcohol they are consuming. The impact of this proposal will be the exact opposite of what the Prime Minister and the Treasurer are claiming it to be. Effectively, they will be adding to the epidemic of binge drinking among Australia’s young people. Originally, I put this absurd anomaly down to the fact that the Prime Minister and the Treasurer are just ignorant when it comes to young people. But after reading their budget figures and watching their behaviour it has become increasingly evident that it is a clear case of simply wanting to hike up taxes under the cloak of doing something positive for young people.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

A very cynical exercise.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

It is cynical, Senator Coonan; it is completely cynical and completely dishonest. This was confirmed by the Prime Minister’s reaction when questioned about this matter on radio yesterday and caught unawares by the Channel 10 News cameras as the spin surrounding this policy unravelled. The Prime Minister could not explain away that the budget papers clearly showed that consumption of premixed drinks will actually increase. For the first time, the public saw the Prime Minister’s real character—which has been known around this place for years but carefully hidden during the election campaign and the subsequent six months. We saw the temper tantrum, the dummy spit, as the Prime Minister threw down his earpiece and stormed out of the interview when he realised his spin machine had completely failed him. As the Prime Minister’s glass jaw was broken, it became increasingly evident to him that the Australian people are smarter than he gives them credit for. This policy will not achieve the results the government claims, and no amount of Labor Party spin can cover up the fact that this is simply a grab for additional tax dollars. It will serve only to increase inflation and, ironically, through self-mixed drinks, increase binge drinking among young people.

And then there is the absurd policy of increasing the income threshold for the Medicare surcharge from $50,000 to $100,000 for singles and from $100,000 to $150,000 for couples. This is Labor Party ideology gone mad and it shows no common sense at all. Leaving aside for a moment the issue of forcing people back into the public health system, which is already buckling under the pressure of mismanagement by state Labor governments, let us turn our attention to the inflationary impact of this policy. The government’s own budget papers and the Treasurer himself have confirmed that they expect 500,000 people will leave private health cover as a result of this bizarre policy. If the fearful rhetoric of this irresponsible government is correct and we are suffering an inflation crisis, why would they introduce a policy which will encourage people to withdraw from private health cover, effectively putting between $50 and $200 of disposable income per month back into people’s pockets? It is sheer hypocrisy! Treasurer Swan, Prime Minister Rudd and any other Labor representative who can grab five minutes in the media have been playing the politics of fear and talking up inflation. We are currently operating in a period of higher inflation, but, if it is as bad as they claim—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Marshall interjecting—

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

You do not understand economics at all, Senator Marshall. If inflation is as bad as they claim, why would the government deliver a budget measure which will only put further upward pressure on inflation? The government cannot have it both ways; either consumer spending needs to be restrained or it does not. You cannot spend an entire election campaign and your first six months in office saying one thing and then deliver a budget full of measures which deliver another, simply hoping that no-one will notice the hypocrisy. The opposition has noticed and, I assure you, so will the Australian people, who are far smarter than they are given credit for by this Labor government. At the end of his budget speech, the Treasurer stated:

It is a Labor Budget for the nation. For Australia’s future. For all Australians.

While this certainly is a Labor budget, it is certainly not a budget for all Australians. It was high taxing—definitely Labor.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

It was high spending.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

It was high spending, as you say, Senator Coonan—definitely Labor. It did nothing about inflation—definitely Labor. But what made this budget even worse and even more typical of the Australian Labor Party was that it sought to reward those whom the Labor Party believed had supported it and to punish those whom the Labor Party believed had not dared to do so. Rural Australia is a perfect example of that. The budget rips away $1 billion in funding from rural and regional Australia. But that is not all. After rural people have been suffering one of the cruellest droughts in Australian history, this government has now cut drought and exceptional circumstances funding to farmers.

My hardworking colleague Patrick Secker, the member for Barker, in South Australia, has been calling for the Prime Minister to come to his electorate and visit the Lower Lakes region, in the south-east of South Australia. I have been there. I have visited the farmers who have been devastated by drought. But the Prime Minister has not. He is ignoring the member for Barker’s calls—and now I can understand why. It is a hard trip to make. It is heart-wrenching to hear people talk about their livelihoods going down the drain—about their family farms, handed down for generations, being unworkable because of drought. It is heartbreaking and there is not much you can say to make it even a little bit better. But the job of Prime Minister is not meant to be easy, and Prime Minister Rudd has a responsibility to Australians living in areas like the Lower Lakes, in the south-east of South Australia, to visit them, to understand their plight and to do all he can to assist them.

Unless the Prime Minister or the Treasurer have a crystal ball and can promise every Australian farmer rain in the coming months then this policy of ripping money out of rural Australia is nothing more than a cruel payback for a group the Australian Labor Party sees as not having supported it. Once again, I invite the Prime Minister to come to this area of South Australia. Patrick Secker and I will take the Prime Minister to the Lower Lakes region and he can sit down with these devastated farmers and explain to them why he has ripped $1 billion out of rural Australia, including their exceptional circumstances funding. I assume that, in typical Labor form, the Prime Minister will reject that invitation. But then this budget, as I said, is typical of Labor, with its complete lack of understanding of basic economics and its use of this budget for payback at any cost.

As if that is not enough of a kick in the guts for farmers, the Labor government has confirmed its intention to introduce a de facto death duty on many farmers, not to mention small business people and others, who hold business assets and franked-dividend-paying equities in a discretionary trust. After a long period of lobbying by me and others, last year the Howard government legislated to allow all lineal descendants of the so-called ‘test person’ required of a trust making a family trust declaration so that its beneficiaries could receive franking credits, to be beneficiaries without suffering tax penalties.

Previously, non-penalty distributions could only go down the line as far as grandchildren. This previous situation meant, effectively, that a trust had to vest, once the test person, their children and grandchildren died out, and that was a capital gains tax event—as I say, in effect a de facto death duty on any further generations becoming entitled to the benefit of the trust assets. As I said, at long last the Howard government corrected this outrageous situation, which it had inadvertently created. However, this Labor government has announced it will restore that outrageous situation and overturn last year’s reform, restoring the de facto death duty.

Let it be clear: whatever its spin, this Labor government is the sworn enemy of small business and farmers. Nothing could be clearer from this wacky proposal. I asked questions on this matter at the supplementary budget estimates hearings in February and still have not received the answers three months later. I listened very closely to the budget speech on Tuesday night and to Treasurer Swan’s rhetoric and spin after the event. I am wondering if he thought we were all just going to take his word for it rather than actually read the budget papers.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

We’re not all gooses.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

That is right, Senator Coonan. The picture painted by the figures is very different from the picture painted by the Treasurer. Treasurer Swan has spent months telling Australians that he is an economic conservative and that this budget would slash government spending. In fact, spending has gone up by $3 billion in this current financial year and by $14.9 billion over the forward estimates.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Do you think he noticed?

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

One wonders. Over the forward estimates, Labor has cut $15.2 billion off coalition spending programs like exceptional circumstances and drought relief for rural areas, but it has more than matched that with $30.1 billion of new Labor spending programs, which pander to its core supporters, not the broad range of struggling Australians. One of the greatest legacies of the Howard government and Peter Costello’s time as Treasurer was strong economic management, whereby budget after budget delivered surpluses and tax cuts for hard working Australians.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

For all Australians.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

Indeed, for all Australians. While Treasurer Swan was a good little messenger boy and delivered Peter Costello’s tax cuts this year, he has made up for it by hitting Australians with a whole raft of increased taxes and charges. Australians work hard for their money. We on this side of the Senate believe that they should be rewarded for that, especially in times when Australians and particularly working families are finding it hard to make ends meet. True to Labor Party form, however, the government obviously does not agree.

Treasurer Swan is introducing new taxes to raise the cost of alcohol, to which I have already referred, motor cars, health insurance and energy. In the interests of all Australians, I plead with the Treasurer to understand that when prices go up, which is what happens when you increase taxes, it simply contributes to inflationary pressures and puts ever-increasing pressure on the working families Labor swore to protect while campaigning for their vote. How quickly they forget, once the vote was in the ballot box!

One of the most disturbing aspects of this budget is the Labor Party’s attempt to re-create class warfare in Australia by determining an arbitrary point at which Australians should not receive any assistance and, in the Treasurer’s own words, ‘can afford’ higher taxes. The Treasurer’s arbitrary point does not take account of the fact that the cost of living varies from state to state and that $150,000 in income is worth a lot less in real terms for the standard of living of a family of five than for a couple with just one child. Between the baby bonus means test and the tax on what Treasurer Swan calls ‘luxury cars’, but which seem to include such things as the Toyota Tarago, the Labor government is playing the politics of envy and pitting one group of Australians against another in a political stunt that is offensive and divisive.

While Prime Minister Rudd and Treasurer Swan are labelling any family which earns over $150,000 a year as the new rich, there are many families for whom the reality is very, very different. One such family, the Tanners, are featured in today’s AdelaideAdvertiser. Because their family income is over $150,000, Prime Minister Rudd has decided the Tanners are rich and can afford higher taxes and the removal of any government assistance.

The Tanners will no longer have access to the baby bonus, their childcare benefit is gone, they will get no more family tax benefit part B, they will miss out on tax breaks for solar panels and, had they not just purchased their new family car, they would have been hit by the hike in the luxury car tax. When the cost of private health cover inevitably rises as a result of the government’s absurd Medicare surcharge policy pushing them back into the public system, they will still have to pay the surcharge because they earn over $150,000. But that is okay, isn’t it, because Prime Minister Rudd says they are rich? Well, Wayne, Rebecca and their two children, Taylah and Jack Tanner, are experiencing a very different reality.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

They’re the new working poor.

Grant Chapman (SA, Liberal Party) Share this | Link to this | Hansard source

That is right. Mr Tanner was quoted as saying:

The Government may class us as rich in their Budget but I can tell you we do it tough every single day ...

But does this government care? No. The Treasurer’s response to people like the Tanners was:

The Government does not believe hard earned tax dollars are best spent on cash payments to the wealthiest Australians.

While the Tanners are working very hard to earn those tax dollars, they are certainly not living as the wealthiest Australians. Treasurer Swan’s arrogant response demonstrated only how out of touch this government has already become with struggling Australian working families. Wayne Tanner makes another very valuable point. When quoted in the Advertiser, he commented that the budget takes away an important Australian ethic—the incentive to work. I repeat that: Mr Tanner says a key Australian ethic, the incentive to work, has been taken away by this budget. His statement is very true.

The Tanner family is typical of the kind of Australians who give their all to raise a family and make a positive contribution to the Australian economy and society. They run a small business. Between them they work 80 hours a week, and they struggle to give their two children the best possible start in life. The government, however, has branded them as some of the new rich, has stripped away any kind of assistance or recognition for their hard work and, by pitting them against Australians earning less than $150,000, has implied they are on easy street. Well, the Tanners deserve better, and so do working families right across Australia.

This is a high-taxing, high-spending, old-fashioned Labor budget from an old-fashioned Labor government. There is absolutely nothing in this budget to fight inflation. While it is what we should have expected from a Labor government—because after all a leopard cannot change its spots—it is not what the Australian people believe they were voting for at the last election. The Australian people deserve much, much better.

In recent times we have been hearing commentators ask if the Australian economy can weather the international financial crisis, and we have questioned how families can survive times of high inflation and increases in interest rates. After this budget, the more pressing problem appears to be whether the Australian economy and Australian families can weather the storm of this incompetent government, incompetent Prime Minister and incompetent Treasurer.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I am very pleased to have an opportunity to speak in the chamber this afternoon against this opposition motion. I will focus on the excise increase on mixed drinks, which was criticised by the opposition once again in Senator Chapman’s speech. It is a policy which is focused on changing the culture of inappropriate drinking in our country. We know that there have been massive increases in the sales of ready-to-drink products since the loophole was created by the Liberal Party in the year 2000. In the year following the creation of that loophole, sales of RTDs grew by 50.4 per cent—in fact, the sales of RTDs have increased by a huge 254 per cent since 2000, when the loophole was established. We know that young people like drinking alcopops. They say they are sweet and the alcohol is hard to taste. Because they are sweet, ready-to-drinks provide the bridge from soft drink to alcohol, and that is a fact that is clearly understood by RTD manufacturers.

Let us look at what has happened since the 2000 loophole was established. In 1999 six per cent of 12- to 17-year-old boys nominated RTDs as their drink of choice. In 2005 it was 14 per cent. For young women in the same group, 12- to 17-year-olds, it was 23 per cent in 1999. By 2005 that had grown to 48 per cent. These are figures that the opposition need to understand. In the year 2000 about 40 per cent of female drinkers aged between 15 and 17 reported drinking RTDs at their last drinking occasion. By 2004 this had increased to 60 per cent. Twenty thousand girls in Australia aged younger than 15 have a weekly drinking habit. Almost 19 per cent of girls aged 14 to 19 drink at risky or high-risk levels of short-term harm at least monthly and almost 10 per cent drink at the same levels weekly. In the 20- to 29-year-old group, more than 23 per cent drink at the same risky levels monthly and more than 12 per cent do so weekly. We know that the rate of risky and high-risk drinking by teenage girls is higher than the rate for teenage boys. But it is not just girls: about 16 per cent of young men between 14 and 19 drink at risky or high-risk levels every month and nine per cent do so every week.

This week, coalition MPs and senators said that risky drinking is falling. It is true to say that the proportion of teenagers drinking at risky or high-risk levels every week fell between 2004 and 2007 from 10.7 per cent to 9.1 per cent. Obviously the opposition think that that kind of binge drinking level is okay in Australia. They were around when the levels were in fact over 10 per cent. The truth is they did nothing about it in their time in office. They knew of these figures and did absolutely nothing about them. If the people sitting on that side of the chamber think that 10 per cent of our young people drinking at high risk levels is okay then let them wear that. They may be happy that 9.1 per cent of our children continue to drink at risky levels once a week, but I can tell you this government does not agree and is not happy about that fact—and we intend to do something about it.

Senator Chapman talked a lot about his view of the world—and I still cannot get the logic of this—that young people are savvy enough to buy bottles of spirits because they get more bang for their buck that way. He says that is a bad thing because buying bottles of spirits will be more harmful. Leaving aside the fact that this new excise taxes the spirits in alcopops at the same rate that it does spirits in bottles, the logic of his position is that we should lower the excise on alcopops as a harm minimisation measure. He also went on to say—and had no evidence to support his position—that the increase in excise was not going to decrease consumption but, rather, increase it.

I would like to table some of the many, many reports that link increasing price with lowering consumption, particularly for young, price-sensitive children. I table The impact of the Northern Territory’s Living with Alcohol Program 1992-2002: revisiting the evaluation. I also table The prevention of substance use, risk and harm in Australia from the Ministerial Council on Drug Strategy, which links increase in price and lowering of consumption, particularly by young people, and a very important study Alcohol in Europe: a public health perspective, which likewise links lowering consumption with increased price. I table them for the use of those sitting opposite so that they can be more informed in their contribution around this debate. It is a shame I do not have further time to speak on this matter. It is something that we take seriously.

We take very seriously the level of inappropriate drinking by young people in this country, and it is something that we intend to tackle. It is not something that will be done with one measure. The measure of increasing excise is just one of a range of measures that we have announced. People will recall that we have announced a $54 million strategy, which has a number of facets and is evidence based. We expect to work with the increase in excise to reduce inappropriate consumption, particularly by young people in this country.

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

Order! It being 6 pm, time for general business has expired.