John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. Minister, this budget has been widely considered to have the strongest consequences for those who can least afford it, whether it be single income families, pensioners or low to middle income workers. A $200 deficit levy for those on $190,000 would be considered as a joke by pensioners, who will now be paying $7 to visit their GP. Can the minister outline the government's justification for applying further restrictions to eligibility for family tax benefit B when this was the only form of horizontal tax equity which compensated for the expense of dependent children for families on low and middle incomes?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Madigan for that question and I appreciate and the government appreciates his genuine interest in the welfare of families. In this budget we have asked everyone to contribute to build Australia, to create opportunity and to make sure that we are back on a sustainable footing. We understand that some of the decisions we have had to make are difficult decisions. We understand that people across Australia will not universally be excited about the contribution they are being asked to make. But what I would say to you is that our objective and our focus has been on making sure that welfare support for families is targeted at those most in need.

In relation to the reference to somebody on $190,000, it is true that in the budget we are imposing a temporary budget repair levy. We could call it the Swan-Wong budget mess repair levy but we are calling it the budget repair levy, which is effectively a temporary increase by two per cent in the top marginal tax rate. Senator Madigan mentions how much somebody on $190,000 would pay in tax. After we have imposed that levy, somebody earning $190,000 per annum will be paying $60,197 in tax. So the point here is that we are very conscious of the fact that higher income earners already do a lot of the heavy lifting. In an absolute effort and commitment to ensure that we spread the additional effort required to fix the mess that Labor left behind as fairly and equitably as possible, we have ensured that there are also measures in this budget that require a special effort from higher income earners that comes on top of a very substantial effort they are already required to make. (Time expired)

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

I ask a supplementary question, Mr President. In the budget it was announced that $618 million in funding to the automotive industry will be ripped out over the next eight years with only $100 million being invested for over six years in a growth fund to support those affected by the loss of the automotive industry. Can the minister outline how flagging $29.8 million of these funds for the regional infrastructure program will assist component manufacturers to innovate and grow their businesses?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

What we have done in this budget is face up to the facts. One of the facts that we have to deal with is that after six years of Labor manufacturing in Australia was in decline. The cost of doing business in Australia after six years of Labor kept going up and up. The carbon tax, excessive red tape, budget mismanagement, all of that has contributed to a circumstance where manufacturing in Australia when we came into government was in decline. We inherited an economy growing below trend, rising unemployment, consumer confidence too low, business investment which had plateaued. We are working on turning that situation around and we want to do it by creating a stronger environment in which all businesses, large and small, can prosper. We want those businesses to prosper that genuinely produce and deliver goods and services that people actually want. So we are not here unashamedly continuing to provide subsidies for businesses that no longer produce products that people actually want; we want all businesses to be genuinely— (Time expired)

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

Mr President, I have a further supplementary question. Can the minister outline how much money will be raised by increasing co-payments for concessional patients by eight cents, what impact this will have on the budget's bottom line and whether this can be considered fair, reasonable and proportionate for the sick and elderly?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

We have gone out of our way in this budget to ensure that we very carefully target all of the measures so that everyone does their fair bit in helping to repair the budget mess that we have inherited from Labor.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

So low- and middle-income Australians pay.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I note that question time is about to come to an end and Senator Wong is very loudly interjecting. I note that the Labor Party has not been interested enough in the budget to ask me a simple question—

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You lied before the last election. You should come in here and tell people why you lied.

John Hogg (President) Share this | Link to this | Hansard source

Senator Wong, you need to withdraw that comment.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I withdraw. Perhaps the minister will say why 'no cuts to health' was true.

John Hogg (President) Share this | Link to this | Hansard source

No, that is debating the issue.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

It was a deceit on the Australian people—no cuts to health, no cuts to education, no changes to the pension.

John Hogg (President) Share this | Link to this | Hansard source

Order! That is debating the issue. Resume your seat.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The former finance minister did not have the courage to ask me a question about the budget, but she is happy to hurl abuse across the chamber. We made a promise that we would stick to the funding envelope for health, and we are keeping it. We are making efficiencies in the health portfolio—as we should—to treat taxpayers with respect and we are reinvesting it in the health system. We are reinvesting it in a very exciting initiative, the medical research future fund, which will improve our medical care, our health care, for decades— (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Indigenous Affairs, Senator Scullion. I refer to the Prime Minister's pledge to be a Prime Minister for Aboriginal affairs. Why is the Prime Minister cutting $409 million from Indigenous affairs programs in his own department? Can the minister advise the Senate what frontline programs and services will be cut?

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Budget paper No. 2 will provide a little bit more information for the senator. If you look carefully, the $409 million had a contribution of $355 million, of which $239 million was a save but the other $115 million came back into the budget in terms of our savings. So it was not the $409 million figure.

I indicated in an earlier answer that these savings of $239 million are because of the new adjustments in streamlining the programs. This can be saved through making sure that the red tape, inefficiencies and bureaucracy are streamlined.

Opposition Senators:

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! Senator Scullion, continue.

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

We think a 4.5 per cent cut is a modest cut. It is a modest cut not only in the context of the budget task in front of us but also because, as many in here—

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! When there is silence we will proceed. If you wish to debate it, at the end of question time you have half an hour to debate these issues. When there is silence I will call Senator Scullion to continue.

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I am confident that that 4.5 per cent saving can be harvested from efficiencies.

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! I will not give you the call, Senator Moore, until there is silence.

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

Mr President, my point of order is on relevance. The particular question asked what frontline programs and services will be cut. Could the minister actually respond to that part of the question?

John Hogg (President) Share this | Link to this | Hansard source

The minister is responding to the question. The minister has 42 seconds remaining.

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

As I was about to get to, we will not be having any impact on the ground to frontline services. We believe that the harvest of efficiencies through administration can be there. There will be no impact on the ground. I say that with confidence because, due to the complete mess in this area by those opposite, we have plenty of areas of incompetence, mismanagement, red tape and over-bureaucratisation in this area and we can cop the 4.5 per cent and we can harvest that without any impact on the ground to services.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I thank the minister for that response on those modest cuts. My supplementary question is: what cuts will be made to remote housing and municipal services programs?

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I am pleased to inform the Senate that there will be no cuts to the National Partnership Agreement on Remote Indigenous Housing. But it will be subject to a slight change, and that is in the nature of the relationship. We will no longer be continuing with the national partnership; we will now be having negotiations through a bilateral round. So the context, for example, of the senator from Queensland is that we can speak to the Queensland government and we can talk about the delivery of houses in their context, not in a national context. It is just a much smarter way of doing business.

Senator, in terms of your context, of the municipal services program—

Opposition Senators:

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order on my left! Senator Scullion is entitled to be heard.

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

In terms of the municipal services processes, it really beggars belief to know that the Commonwealth is actually delivering municipal services still, in some parts of the country. I know successive governments— (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. My question is again to the minister. Why is the Prime Minister's department cutting $3.5 million from the Torres Strait Regional Authority over the next four years, and what programs and services for Torres Strait Islanders will be cut?

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

If I can just continue on the previous question, because I have got the time to answer on both—

Opposition senators: No!

In terms of municipal services, I am very pleased to note that your state, Senator Furner, only last week, was the first to agree to a change in municipal services, and they are now providing that service themselves.

In terms of Torres Strait Islanders, if you do the maths you will find that $3.4 million is in fact 4.5 per cent of their budget, which is a budget that has been taken across to services. I was in the Torres Strait recently and I can assure you: with the assistance of the TSRA, we think that, as to that 4.5 per cent harvesting of efficiency dividends across the portfolio, we are able to make that without actually having any impact on the ground.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.