Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

At the request of Senator Moore, I move:

That the order of business for consideration today be as follows:

(a) general business notice of motion no.241 standing in the name of Senator Moore relating to the 2014-15 Budget; and

(b) orders of the day relating to government documents

Question agreed to.

I know you do not want me to speak on this. I can understand why, too. I rise in support of this motion by Senator Moore. It is a very good motion. The government has delivered a budget of broken promises and twisted priorities. The facts are as plain as day. The states know it. The public know it. The government backbenchers know it. I even think that the cabinet ministers know it, and the Treasurer certainly knows it.

The extraordinary transformation of the Prime Minister from conviction politician to hollow man is now complete. You really only have to go as far as today to see that. Today their spokesman on economic affairs, their spokesman on the budget, the guy who smokes the big cigar—not a question. Instead, we got industrial relations from Senator Abetz—I do not blame Senator Abetz for this. I think that they are running away from their own budget. Quite frankly, I do not blame you from running away from your own budget, because it is a shocker.

Budgets are about choices and priorities. They show you the character of the government and tell you volumes about the people they care about and the people they do not. The budget handed out on Tuesday is heartless. It is economically irrational and it is not the budget of a responsible government. It is not even the budget this government promised before the election.

The budget delivers more money to well-off Australians and hits up lower- and middle-income families to foot the bill. For a government that promised to tackle costs of living, they have only worked to increase pressures on Australian families through a new GP tax and jacking up the price of petrol at the bowser.

It is a budget of broken promises. Let us look at the scoreboard: they said no cuts to health and no cuts to education—broken. The budget cuts $80 billion from schools and hospitals, and just listen to the state premiers yelling about this. 'No new taxes and tax cuts, not tax increases' was the their mantra before the election—broken. The budget will do both—targeting lower- and middle-income families—and Mr Joe Hockey has admitted this himself. If anyone wants to check on that, watch the 7.30 Report.

They said no change to pensions—smashed, broken. The budget has cuts to pensions and changes to make Australians work longer. They said no increases to university fees—broken. The budget delivers higher university fees for students and their families.

The budget is simply bad economics. You can see that in the commentary from the economists themselves. Replacing efficient taxes such as the rent tax, the minerals rent resources tax and carbon tax with inefficient taxes is bad economics.

Reserve Bank governors can be subtle over time, but I think Governor Stevens was being very blunt in his last report on the economy when he listed subdued public spending as a risk to the economy. This is political language but it was a stark warning to this government to be careful. He sent a warning straight to the government about the damage they would do to the economy with misplaced austerity measures. Cuts to direct spending like the cuts to schools and health take money directly out of the economy. These schools and hospitals buy goods and services and, if you reduce the money going to education and health, then you will damage this economy. That is why the states are yelling so loudly. They know how the impacts will be fed through into their state systems.

This is not just an attack on schools and hospitals though; it attacks the whole economy. The cuts to pensioners, students and Newstart recipients are again misplaced. These groups spend most of their essential money on goods and services. Most of this money goes straight into the economy, straight to shopkeepers, small businesses. Taking from those who can least afford it, it will not then go back into economy through small business. So it is not an attack just simply on pensioners; again, it is an attack against the whole economy.

You wonder how much this government dislikes pensioners, students, health and hospitals. But, again, they also were once champions, they said, of small business but they will rip small business apart because, where people spend in small business, it will not follow through in this economy.

In a similar way, the cuts to family benefits take money away from families—at the highest, the costs of shoes and clothing for kids. Again, for small businesses, the most affected are those from whom the money has disappeared but, where they then spend it will also have a downstream impact on people you once upon time called your own.

It is not just simply an attack on families though. As I have said, you are attacking the whole economy. The GP payment again is a cruel and twisted priority. A $7 payment may not seem a lot to members in this place but it hurts those who are most vulnerable. A $7 charge does not hurt the healthy; it hurts those with chronic health issues, those on low incomes and those people who work on hourly wages. These groups already pay dearly for medical care. Even if they can find a bulk-billing doctor, they bear the costs of taking time off work, the costs of transport and of the little hidden costs that add up associated with visiting a doctor. This government wants to whack them with another $7.

A RAND Corporation report showed that the result of cost sharing reduced the number of 'medically effective' visits to the doctor, and of course the most worrying statistics in this is that the decrease was especially true for children. The government is also cutting $338 million from preventative health, and $3 million will be cut from the anti-smoking campaigns. This government is also abolishing the National Preventive Health Agency.

In using this example of how short-sighted this government is, any budget savings from these health measures will be short-term That is typical of the short-sighted mess that this budget is. The long-term effects are more expensive. Care for chronic diseases and serious suffering of all Australians is where the long-term impact will hurt the economy even more. But, most importantly, it will hurt those people with those chronic diseases and those people suffering because they will be dissuaded from going to the doctor early and those opportunities to utilise preventative health will have been taken away. This government increases health care costs down the track. What they have done is deferred health care costs by trying to be smart and take away essential work in preventative health. It does not work, will not work and it is short-sighted.

I would welcome increased spending on medical research, but it should not come at the expense of the most vulnerable in our community. Medical research is not an issue to be traded for health access for the most vulnerable. Mr Abbott wants to tax the sick through the GP tax to pay for the fund. But look at what this government has already done in this area. In MYEFO they ripped $74.9 million from the Australian Research Council. They took money from the independent body that determines what research is best for Australia to pursue and what will get the best outcomes.

The Treasurer said yesterday, 'We need well-funded universities that are attracting the best in the world.' I agree with that. It is probably the only thing I agree with in the Treasurer statement. But Mr Hockey is undermining the ability of Australian universities to attract the best and brightest. How? Future Fellowships, started under Labor, attracts and retains the best and brightest midcareer researchers. This fellowship has been continued, which is a positive development, but they have changed it. They have sneakily change the eligibility so no bright foreign researchers can be attracted to Australia with the scheme. The Treasurer expressed an aspiration to have one Australian university in the top 20 in the world. But can I remind the Treasurer that he doesn't have to be parochial about it. You don't have to be parochial to attract the best and brightest.

We are now approaching the centenary of our first Nobel Prize winners, William Henry and William Lawrence Bragg. William Bragg was British and was attracted to Adelaide to be a professor and researcher. The work was crucial to understanding X-ray crystallography, an essential tool in the biology and physics of today. We were not being parochial when we attracted the William Henry Bragg to Adelaide. Imagine today. He would be turned away on the doorstep. He would not get a fellowship. The list goes on for our Nobel Prize winners: Bernard Katz, born in Germany; Brian Schmidt, born in America. I don't think we can afford to be parochial. Science doesn't have borders. Science stretches out across the world. What we have got is a narrow-minded, parochial government in place. The Medical Research Future Fund will be administered in the same way the Future Fund is managed. That is the claim. Quite frankly, I hope they heed the lessons of the Future Fund and clean up their high internal spending, including thousands and thousands of dollars on a Christmas party at a Melbourne to burlesque bar. I would hope they would not follow down that track.

Turning to other parts of how this budget has missed the mark, running through this budget are outdated ideas. It seems to suggest that the states should be set adrift. I thought we were a federation. When my home state of Queensland was hit by successive floods and cyclones, including Cyclone Yasi, in the summer of natural disasters in 2011, the Labor federal government did not throw its hands up and cast Queensland adrift. What it did to was look at how it could assist Queensland. We didn't do what education minister Christopher Pyne did last night and attack the Queensland government for not being adult enough. We recognised that we are a nation and that we have to work in partnership with state governments to deliver outcomes for all Australians. Floods and cyclones do not see state borders. Recovering and rebuilding is a shared responsibility and one that Labor happily took on in office. The then federal government invested over $8 billion in rebuilding Queensland after 2011. It has been money well and wisely spent. Labor put in place unprecedented checks and balances on the expenditure of federal taxpayer funds in the reconstruction effort. We created the first ever Australian Government Reconstruction Inspectorate to apply a value-for-money test for rebuilding projects. Chaired by former New South Wales Liberal Premier and federal finance minister Mr John Fahey, the inspectorate has been working to extract value for money. I would ask senators to have a look at the report by the Reconstruction Inspectorate, where Mr Fahey writes in his letter to the now Prime Minister, Mr Abbott:

Processes developed by the Commonwealth and Queensland governments have resulted in $1.7 billion of ineligible costs or withdrawn claims being excluded from reconstruction projects to date.

The inspectorate have saved the Commonwealth about $1.7 billion in what would have been wasted funds. That is good, diligent and careful work by the inspectorate. I congratulate them on the work that they have been tasked to do and have performed well.

Queensland has been no stranger to flooding since 2011. As many senators would know, the floods of 2013 hit South-East Queensland badly. Since January this year there have been an additional seven new natural disasters declared in Queensland alone. These new events will come with another need to fund the response under the Natural Disaster Relief and Recovery Arrangements. This is on top of the $4.8 billion still to be spent on the natural disasters. The budget papers show this is flowing through from 2015-16, because it does take time for repairs to be effected and for the money to be spent.

So it is disappointing to see the funding for the Reconstruction Inspectorate runs out in July next year, a full year before funding is due to be completed. This is assuming that the funding rolls out on time and no new natural disasters occur that will draw on Commonwealth funds. It seems a mismatch, quite a foolish prediction to have made. The inspectorate is driving value for money, yet this government is going to let it lapse and fall into disuse. On one hand, the inspectorate has continued to work diligently to save the Commonwealth money. But this government, showing the twisted priorities of Mr Tony Abbott's budget, is going to cut it out. Where it saves money, it is going to remove it.

This comes on top of the Abbott government's broken promises to regional Australia. Only two weeks before the budget, Mr Warren Truss said, 'To ignore regional Australia's need for investment and growth is to turn our backs on the opportunities for the future.' Two weeks later, and the Abbott government has savaged local government by ripping $1 billion in funding from local government. By cutting into the financial assistance grants local governments rely on, the consequences are that there will be less money for roads and for services. It is a cruel hoax that Mr Warren Truss has played on regional Australia, and particularly on local councils. At the same time, the Commonwealth costs will increase by scrapping the Reconstruction Inspectorate—dumb move, can I say.

The government is cutting support to lower the cost-of-living pressures on households. Labor knows the acute pressures on households in flood-prone areas. They find it tough to get good insurance to cover them. In government, led by Mr Bill Shorten, we developed a standard definition of 'flood'. We rolled out a key fact sheet, a one-page plain English document for consumers, and a flood data portal. Crucially, we also established the first ever National Insurance Affordability Initiative, initially funded for up to $100 million. This was to invest in flood mitigation projects that would put downward pressure on insurance premiums, helping households with their cost of living. Mitigation works to reduce insurance premiums. Average insurance premiums in Roma at the time when we implemented the system nearby were about $3,000. At Charleville, which has a flood levee now, the premiums are about one third of that amount because we acted to ensure that we could work with local government, drive down the cost of insurance and build levees to prevent flooding. In this budget, though, $83 million has been cut from flood mitigation projects, including the entirety of the offer to New South Wales—again, pretty dumb politics by this government.

They are cutting money. They could have saved money. They could relieve some of the burden on households, but instead they drive the costs up. They let insurance premiums continue to rise where they could have used $83 million to drive insurance prices down to truly help householders. There are plenty of worthwhile projects ready to go. These include Rockhampton and initial projects in Ipswich and Goodna in my home state. I have no doubt there are some in New South Wales. There is now no new money allocated to Western Sydney. Shame on this government. Where they do have an opportunity, they miss it. The government's twisted priorities have meant that, instead of investing money that would help residents in those areas with the cost of living, there is now no relief for those high insurance claims. This is a government that is missing the point when it comes to how you help those people. You can actually do both. You can save money and help people. You can save money by investing in flood mitigation. You can save money by driving down insurance costs for households. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Following Senator Ludwig, I have to remark that I am in awe of his ability to fake sincerity. How can Senator Ludwig, as a minister in the former government, give a 20-minute speech about saving money? Let us remember that the previous government racked up hundreds of billions of dollars worth of debt. It inherited no debt and it left an inheritance, a terrible legacy that this government is trying to pay off. Let us not forget about Senator Ludwig's own performance in his portfolios, where he decimated the cattle industry for the Northern Territory and northern Queensland by making ad hoc, poorly thought-out decisions.

For the Australian people, I will remark that we have the consequences of some of those decisions being investigated by a royal commission, in which a twice former Prime Minister of this country is appearing today. The evidence suggests to me the chaotic policy that we saw on the front line was also happening behind the scenes, and the buck-passing goes on and on and on.

The budget that was delivered two days ago was about yesterday and about what had happened in the previous six years, but it was also very much about the future. When Senator Ludwig in his contribution said it was dumb politics, I just cannot believe that we have an opposition member criticising a budget on a political basis. It is not about the policy. It has nothing to do with the policy. It is not about whether it is in the national interest or it is good for the country. Apparently, the politics are dumb.

Let me go on the record and say I think this budget is a politically risky budget. If someone wants to characterise that as dumb politics, so be it. Being in this place is not just about the politics. It is about getting effective outcomes and engineering positive things for the country. Sometimes you have to take political risks in order to do that.

We should be reminding every Australian that the smartest decision that has been made in this country in the last seven years was made at the last election, when Australians tipped the worst government in the history of this nation out and said, 'We want a fresh start. We want a new approach. We want an opportunity to get our country back on the right track.' Let me also say: there is no perfect budget. Viewed through the prism of individuality or the particular circumstances applying to a person, a family or a community, there is always something to pick holes with in a budget. I do not like the fact that we are going to be putting up the marginal tax rate for those who are perhaps paying the most tax in our community. I do not like the fact that we are going to have to take away some benefits for families. I do not like the fact that we are going to have to freeze or change indexation going into the future. But we have to do this in the national interest. And overwhelmingly, when you discount the hyperbole, when you discount the partisan politics that are going on, when you discount the ALP members that are trotted out on their ABC to say how badly the government is affecting them, and you go out into the community, overwhelmingly people are saying, 'There are aspects of this that I do not really like, but I am prepared to do my bit for the country.' And what more should we ask for from the Australian people? Everyone needs to do their bit for the country, because they recognise just how bad things have got.

Senator Ludwig talked about parochialism and that this is somehow parochial politics and it is a parochial budget. Let me tell you: I do not find parochialism to be some sort of sledge or slur. I think parochialism is about sticking up for your country and turning your back on those internationalists who say, 'Our responsibilities are abroad before they are at home.' That is why I will be a parochial politician. That is why I will look after my state, that is why I will look after my country, and I will let those on the other side say that they want to go out and lead the world with an emissions trading scheme or a carbon tax or some other cockamamie idea that is not going to achieve any outcomes. Let them swan around the world on their junkets to the United Nations to say how important they are. Let them worship at the altar of internationalism. I will be a parochial politician sticking up for my country. And I think that mob on the other side should do exactly the same. But they are not really interested in that.

Senator Ludwig belled the cat when he spoke about outdated ideas. Let me tell you about some of these outdated ideas that Senator Ludwig referred to. He referred to federalism as an outdated idea. He thought we were a federation. But apparently the policy mix that has come through in this budget, where we expect the states to pick up their constitutional responsibilities, where we are going to remove duplication of services and we are going to say, 'States, you look after your knitting and we will look after ours.' Apparently that is an outdated concept. Well, it's not. I know I get called old-fashioned but it is not an outdated concept where I come from and it is not an outdated concept in the history of our country or our Constitution, and it is what the Australian people want. They want more accountable government, they want government that is closer to them so they can pick and choose what is acceptable. And unfortunately, I must agree that in recent times federalism has not worked particularly well, because we have had these rogue, spendthrift states that have racked up billions of dollars' worth of debt doing nothing. We have had New South Wales—of course we had glamourpuss here; what was his name? Senator Bob Carr. We had him swanning around the place. He was very good at doing nothing in New South Wales, and he wrote a tell-tale book about how flying business class is akin to the slave trade. It was extraordinary. That is what is important to these people.

Where the states have failed it was left to the Commonwealth to pick up the tab. I regret that the Commonwealth does not have the money to pick up the tab anymore. We have got to stick to our knitting. We have got to look to the things that our Constitution says we should be providing and we have got to make the states accountable for their responsibilities. Federalism and federation are not outdated—not where I come from and not for the Australian people.

Apparently another outdated idea—I should list these as the F words—is financial accountability and financial responsibility. Apparently that is outdated. In Senator Ludwig's and the Labor Party's world, you can just keep clocking up debt after debt after debt. It is only 13 per cent of GDP, we are told. At one stage Greece had only 13 per cent of GDP, as did Japan, as did the United States. If you keep going in that way, soon enough you end up with 20 per cent of GDP in debt and 30, 40, 50 and 100 per cent. And then you go into bankruptcy. Mark my words, the world will experience a sovereign debt crisis in the next two or three years, and I do not want Australia to be part of that crisis. I do not want us to go down the same path that has been committed by the social democrats right around the world, where people have just been expecting to receive cash and handouts for doing nothing and governments put off the day of reckoning until it is too late.

I am pleased that this government has taken steps in the right direction, and that means embracing what Senator Ludwig and the Labor Party called 'outdated ideas: a financial responsibility'. See how outdated that is to the families of Australia who are struggling and know the very real risks of debt. Senator Ludwig also touched upon the issue of the family and how taking away some of the entitlements for families is going to make it more difficult for them. Of course, that is true. But the ultimate goal has to be about allowing families to keep more of their own money, their own earnings, in their pocket to make decisions for themselves. Gone should be the days when governments tax, shuffle, clip the ticket and then give it back. That is wrong. We should be taking less. We should be living within our means and we should be allowing Australian families to make decisions in their own interests. And, yes, starting that process and completing that process can involve pain. And it can be difficult for people, but it is a process that needs to be done. If it is not, this country will end up like those that I mentioned earlier.

Apparently another outdated concept for Senator Ludwig and the Labor Party is freedom, allowing people to make choices for themselves rather than being prescribed what is good for them. You know what? If people have responsibilities and if they have freedoms, they will live with the consequences of their decisions. Yes, people will make mistakes and people will experience hardship as a result of it, but they will learn. It is how children learn. It is how adults learn. We need to make sure that we have a safety net, but it should be more like a trampoline so they can bounce back, recover and keep going. We need to encourage people to take more responsibility for themselves, for their health care, for their retirement savings, for their consumption of medical services.

Much has been made about asking for a modest contribution towards attending a medical service. It is a modest contribution when you are on my salary. It is a much more significant contribution if you are a pensioner or unemployed, or you are on a much more modest salary than mine. But the point is it is not so much about how much it is; it is about the symbolic importance of people understanding nothing in this world is free. There is a price for everything. If someone is giving you something for nothing, it is because someone else has paid for it. Government is no different.

It is important to recognise that in the concept of this $7 co-payment, $2 will go to the doctor—and will probably cover the administrative process for the doctor—but $5 of every payment will go towards an investment in the future, an investment in medical research. I think it is a good idea, but my concern with these investments in the future is they can always be undone by future parliaments. We saw it with the rural telecommunications infrastructure fund in 2008. We have seen the Future Fund raided and put under pressure. We have seen those sorts of longstanding commitments have partisan politics applied to them. I do not want to see that happen with this medical research initiative. I sincerely hope it will not happen and I hope those on the other side will actually embrace it and put the partisan politics and the grubbiness aside, put all that aside, and say, 'In the end, this will be good for the country.'

The outdated ideas that Senator Ludwig loathes so much, supposedly—division of powers, financial accountability, freedom, families, responsibility, accountability, acting in the national interest, being a parochial Australian rather than some worshipper at the altar of internationalism—are outdated ideas that I embrace. I think they are outdated ideas, if that is what he wants to call them, that this government philosophically embraces. The former government were a spendthrift, social democratic government that had no accountability. They clocked up $300 billion in six very painful years of debt and left a legacy that expected the debt to run out to $667 billion in the future. They needed to be changed and that is what the Australian people voted for.

Not everyone will like everything in this budget and I certainly don't. I would rather see taxes lowered, but we cannot afford to do it right now. I would rather see less spending. I want to see the government as a smaller proportion of our gross national product. I want to see government stick to its knitting. I would like to see less bureaucracy. At least this government has taken a step in that direction by cutting out a billion dollars' worth of red and green tape over the next 12 months. I would like to see even more defined responsibilities between the states and the Commonwealth.

One thing I would like to see is a bigger saving made against the budget of the ABC. The ABC gets about $1.2 billion of taxpayers' money. Sure, we have shut down the Australia Network, or we intend to, which was playing reruns of Home and Away and mostly highlights of Senator Sarah Hanson-Young's opposition to refugee policy. But there is an efficiency dividend of one per cent applying to the ABC, some $9 million a year. Everyone else are having to make significant cuts, but one per cent is being applied to the ABC. This is less than what Prime Minister Bob Hawke applied to the ABC, which was 1.2 per cent back then. There are plenty of savings that can still be made. I would be delighted if the Minister for Communications would invite me in to give him a blueprint about exactly how we could reform the ABC to make it more financially viable for taxpayers. It would not involve cutting radio or television; it would maybe involve some structural separation. But that will be for another time.

The opportunity before this country is an immense one. We have a chance to get our nation back on the right track. In order to do that, to rebuild this self-reliance, this aggressive ingenuity, this spirit of entrepreneurialism, this idea that we can do it, we need to get government out of the way. We need to stop the bureaucrats from stifling the things that have built this nation. We need to accept the fact that we cannot have such a huge percentage of our workforce working in the public sector, not because they do not work hard or provide a contribution but because we simply cannot afford it. But if you want to create the jobs for the future, you have to encourage Australian families and businesspeople to invest, to take the risks themselves. We have to provide that opportunity so that whatever reductions come in our public service, those people can be redeployed. It should not matter whether they are young people, old people or middle-aged people; it should be about ensuring they have an opportunity to give to this country. There are incentives in this budget to do exactly that.

While no budget is perfect, we have started on a long journey. It is a journey that should be embraced by those on the other side of politics. I agree with Senator Ludwig that we should leave dumb politics behind, but dumb politics is about refusing to embrace good ideas simply because they come from somewhere else. Dumb politics is about suspending the national interest and the long-term interest of our country for some petty partisan point-scoring—which we have heard a lot of in the last few days.

Good politics is about redefining the goals of a nation and having the courage of your convictions to set those goals out very clearly for the Australian people, to make your case plainly in a language that everyone can understand—that we have to accept that we all have to make a contribution. I do regret that those on the other side have started in a manner that I think they will come to regret. If they do not embrace the change that the Australian people are demanding, they will forego any opportunity to reacquaint themselves with the Treasury benches. Quite frankly, we need a strong and competent opposition to ensure that the government is itself as strong and competent as it can be. That is how the adversarial system works. Unfortunately, over the last two days, the opposition have demonstrated that they are not willing to be strong and competent.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

What an incredible insight into the mind and thinking of Senator Bernardi! Senator Bernardi said many things that I object to, but he made one comment in particular about which I will say something. That was his comment about 'worshipping at the altar of internationalism'. Senator Bernardi seems to be arguing that if as a nation we fulfil our international obligations and meet our international responsibilities, somehow that has to come into conflict with the responsibilities we have at home.

I will talk about the budget more broadly, but I think the most horrible parts of this budget, Senator Bernardi, were the decisions to take $7.6 billion out of foreign aid, to cut the Australia Network and to take an average of over $100 million a year out of the DFAT budget. The government seems to want us to believe that we do not have the ability to simultaneously walk and chew gum—that we cannot meet our international obligations while we meet our obligations at home. Quite frankly, I think that is a false choice.

Never has a government so shamelessly lied its way into office. Promise after promise, commitment after commitment made before the last election has been broken. The Prime Minister's actions are made even worse by the fact that he staked his entire reputation on the idea of honesty. This was the standard set by the Prime Minister—repeatedly. Let us not forget how, on election night, after being made the Prime Minister of Australia, he promised us:

… a government that says what it means and means what it says, a government of no surprises, and no excuses, a government that understands the limits of power as well as its potential. And a government that accepts that it will be judged more by its deeds than by its mere words.

Let us then hold them accountable to their own words. Less than 13 hours before polling booths opened, the Prime Minister, then the opposition leader, said:

There will be no changes to pensions …

Now we find out there will be changes. There will be a new indexation system for pensioners. The pension was at 27.7 per cent of average male weekly earnings, against which it was indexed, but from 2017 it will be indexed against the CPI. That is about a 1½ per cent cut. Freezes to means test thresholds on all pensions means more people will receive a lower rate of pension or will be bumped off the pension entirely.

Let us hold the Prime Minister to what he said on 20 November 2012:

We are about reducing taxes, not increasing taxes. We are about getting rid of taxes, not imposing new taxes.

We just heard Senator Bernardi passionately talk about his ideological crusade to bring taxes down in this country. I do not know how he is going to vote for a budget that has an increase in income tax of two per cent for incomes over $180,000 and, by bringing back biannual CPI indexation, an effective increase in the petrol tax. The budget also gives $400 million back to big business by unwinding tax integrity measures.

Let us hold the Prime Minister to account for telling us, 13 hours before polling booths opened, that there would be no cuts to health when, in fact, $2.8 billion will be cut from public hospitals over the next five years, when there will be a $7 tax on GP visits and when there will be—something that has gone largely unnoticed—an increase in PBS co-payments of $5 for general patients and 80c for concessional patients. Let us hold the Prime Minister to account for saying that there would be no cuts to education when there is $181 million being cut from education over the next five years, to be followed by much bigger cuts to school funding beyond 2018.

Finally, let us hold the Prime Minister to account when he said:

A dumb way to cut spending would be to threaten family benefits or means test them further.

The government are cutting Family Tax Benefit Part A and Part B by freezing indexation and by reducing eligibility for part B. Cutting the family tax benefit end-of-year supplements by up to $306 and freezing family payment thresholds will mean that more people will be bumped off or will incur a lower rate. The one cut that I find quite horrific is that they say there will be no cuts to the ABC and no cuts to SBS, and then they come out on budget night with a $43 million cut, wag their finger and say that there will be more coming.

The Prime Minister said that he would be the Indigenous Prime Minister. He promised bipartisan support for Closing the Gap, yet he cut over $530 million from Indigenous affairs programs. This government said before the election that they had no plans to increase university fees, but straight afterwards they deregulated the entire industry knowing that it was going to mean the fees are going to go up.

This government will be and should be judged by their actions, as the Prime Minister said on election night, and stand condemned for them as well. Instead of saying what they meant during the election campaign, they kept making promise after promise, and it was clear they had no intention of keeping them. They promised that there would be no cuts to health, that there would be no cuts to education, that there would be no cuts to the pension, and that there would be no new taxes. They went to the Australian people under a series of promises in a budget situation which they were well aware of. Now there has been a kind of rethink and retake and MYEFO. We have gone through this in the Senate estimates process where matters seem to be recalculated and relooked at. Let us be clear, before the election the PEFO, the Pre-election Economic and Fiscal Outlook, was signed off as an independent document by the Secretary of the Treasury, Dr Martin Parkinson, and the Secretary of Finance, David Tune. It was signed off by the two most senior bureaucrats as an independent document. The government went to an election knowing that was the financial statement and came out afterwards, after they had made those promises, after they had made those commitments, with a clear view of breaking their promises.

Last Tuesday's budget was both full of surprises and full of excuses. It is a budget that rips billions from schools, from hospitals and from pensions. It will force Australians to work longer, and it introduces a great big new tax—to use the Prime Minister's words—on everything courtesy of the increased petrol prices. You almost have to feel for the state governments that, in good faith, negotiated with the federal government for funding programs in health and education. Many of them are conservative governments and supported the coalition when it was in opposition at the time of the last election, which they are entitled to do. Not once were they told that those programs, those initiatives, were going to be cut. They are not small cuts. We are talking about cuts in the vicinity of $80 billion. The Premier of Queensland said that it is nothing more than a ploy to create a situation in which the states will be forced to make the case for an increase in the GST. Frankly, it is not good enough. It is buck-passing and it is not going to work. I have to commend the state premiers, even the Premier of New South Wales Mike Baird, for being prepared to say that this is a kick in the guts for the people of New South Wales, because frankly that is what this budget is.

At the last election, if the government had said to the Australian people: 'This is what we are going to do. These are the cuts we are going to instil. We are going after Medicare. We are going after pensions. We are going to take away the benefits that middle-income earners have come to rely on. This will be our path to prosperity,' they did not do it because they knew the Australian public would not vote for it. So, what do we have? We have a great big lie. The government love to talk about and lecture those on this side of the chamber about mandates. There has been no mandate for their savage cuts, no mandate for their tax increases, no mandate for a budget that was built on mistruth and dishonesty. This budget is fundamentally a breach of trust. The worrying thing is that the government are not done yet.

The state premiers have opposed the government's $80 billion cuts to health and education. They have called it unreasonable cost-shifting. Many of the state premiers have come out, in particular Campbell Newman, bleating that it is nothing more than a smokescreen for the government to break yet another promise of no change to the GST. Let us be clear, any change to the GST is going to disproportionately hurt those on the lowest incomes. The idea that it is going to be made an issue for the states is another way of the government saying, 'If the states want an increase, we're not really going to be talking about tax compensation, we're really going to be talking about just broadening the base or increasing the rate.' It is going to disproportionately hurt lower and middle income families. It is just not good enough. It is not good enough as a nation to say, 'We're not going to be able to fund our schools. We're not going to be funding our hospitals,' without putting a greater burden on those lower and middle income families.

What is the plan now? The plan is to buck-pass $80 billion. Pass it onto the states and hope that they will go out and do the heavy lifting for the government, that they will call for an increase in the GST, and thus give the Prime Minister an excuse to blame the states for breaking his promise. The idea that has been peddled out by one government minister after another that you cannot change this agreement because all the states would have to agree is a fallacy and a farce. The government have gone out of their way to create an environment in which the states will be forced to make that argument. Frankly, it is not good enough and it is not fair to the states. It is a cowardly and a treacherous way to raise taxes. This government are hoping that by the next election Australians are going to forget the abuse of power and the abuse of process that this budget has demonstrated. They are hoping that, two years from now, the Australian people will no longer remember what has got on.

But that is not the case. We on this side of the chamber are going to hold them accountable; we are going to hold them accountable to the decisions that they made; we are going to hold them accountable to the promises that they made. This budget has given Australians an opportunity; they can send a signal that governments who betray the electorate cannot be rewarded. The hypocrisy of some of those on the other side—who berated those on this side of the chamber on the issue of placing a price on carbon—to defend this budget! The hypocrisy of going to an election campaign with one set of commitments clearly articulated!

Let us look through the process of what has happened. At first, the government pretended they would not be breaking their commitments. That lasted for about 48 hours—it even began pre-election. It was no coincidence that the Prime Minister was out for a few days but then vanished last week. Then the Treasurer was out and about and he kept fumbling. Then they had to bring out Senator Cormann to do the heavy lifting. What do we have here? We have a budget of broken promises, a budget of lies, a budget built on twisted priorities, a budget built on new and increased taxes and cuts to pensions, a budget built on more than $80 billion of cuts to schools and hospitals, a budget that is being built on the back of low- and middle-income Australians who are going to pay for the majority of it. At the same time, in many areas, this budget delivers more money to those Australians who do not need it.

What I am most concerned about is what this budget does to young Australians and those on low incomes. There is a generation of Australians, particularly those under 35 years of age, who are going to face the ultimate brunt of the horror of this budget—a generation of people who will be working until they are 70, a generation who will have to wait for six months until they get unemployment benefits, a generation of people who are not going to have the same access to family payments as those who went before them. Many of them are still in school and will see money being ripped out of their schools with the government's failure to commit to funding agreements and increased university fees and debt for the rest of their lives. There is a generation of Australians who are going to be fundamentally hurt by this budget more than others. I think it is a tragedy, I think it is a disgrace and I think it is something that none of us in this chamber should be proud of.

The fabric of Australian society is built on the notions of egalitarianism and a fair go. In the lead-up to the election there was a lot of rhetoric from the government about the idea of sharing the pain, of sharing the burden, of 'we're all in it together'. But when you go through the budget documents, when you look at the details of what is actually proposed, you see that this is not the case at all. The rhetoric is one thing; the reality is another. The reality demonstrates that those on lower incomes, those who are young, those who rely on government support and assistance are again and again the most targeted, the most hurt and the most impacted on by this budget.

This is a budget that the government should not be proud of. On budget night, in the other place, we had the Treasurer's beaming smile and the Prime Minister behind him with his beaming smile. They decided to celebrate the budget by dancing in offices, listening to music and chomping on cigars. That demonstrates not only how fundamentally wrong the government's priorities are, but also its attitude to those who rely on government the most. This was not a budget about keeping commitments made prior to the election; this was a budget about breaking them. They went through a Commission of Audit process which gave them an opportunity to start breaking their promises—and they came through.

There was all that talk of fearmongering. The Prime Minister went up to the electorate of Griffith during the by-election and said the opposition was scaremongering about Medicare co-payments and cuts to pensions. The same thing happened in the Western Australian election campaign. There was all that rhetoric from the government that the opposition was running a fear campaign and scaring people. The reality is that the horror of this budget, the horror of what was released on the day, was worse than anything that the Labor Party had proposed. Not even those who strongly and ideologically oppose this government thought they would be this cruel, this heartless, in their first budget.

As I was saying earlier, this budget has given Australians the opportunity to send a signal that this government has betrayed its electorate and should not be rewarded at the next election for its deceit. We will remember how this government promised that it would not surprise us. We will remember how we were played for fools and that this trust was abused. The Prime Minister will be held accountable for this deception.

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

I appreciate the opportunity to speak on this very important issue of the budget and how we restore our nation's finances. In order to do that, I need to tell the shocking story of how the Labor Party has made a mess of our nation's finances. So I would like to start by going through some of those numbers, the comparison with what Labor inherited and what they left for future generations and for the coalition to pick up as we come into government. It is a shocking tale of taking the best of times and squandering them, taking the greatest terms of trade in our history and blowing the lot, taking the best budgetary position that any government has ever inherited in this country and rapidly sending us on a path towards a European style way of budgeting and European style debt and deficits. That is the story of the Rudd-Gillard-Rudd Labor years.

Let us look first at some numbers. I think it is really important to put it into context when we look at how much money the government was getting when the Howard government left office in 2007 and what the Labor Party have left in terms of both revenue and expenditure. It tells quite a story and it puts into some context Labor's profligacy. When the Howard government left office Commonwealth revenue in that year was around $300 billion. With $300 billion worth of revenue just six years ago the Howard government was able to deliver a $20 billion surplus. So there was $300 billion of revenue and $280 billion of spending, and even then there were critics saying that the Howard government was spending too much and why didn't they return more in taxes. In fact, there were tax cuts right the way through. So $300 billion in 2007-08 apparently was enough to deliver for a coalition government a $20 billion surplus. Revenue during the Rudd-Gillard-Rudd years grew by around 25 per cent to $374 billion. That is not bad, $375 billion. In six years we saw revenue go up by about 25 per cent but the problem was the spending. The spending went up around 50 per cent in the same period. So from $280-odd billion to around $412 billion from the Rudd-Gillard-Rudd governments when they left office, and that is the fundamental problem that the coalition now needs to fix.

The Australian people are not stupid. The Australian people understand that you cannot live beyond your means. If you live beyond your means for a long time, eventually someone has to pay for it, someone has to pick up the bill. In this case it will be the Australian people. It will be the Australian people who, if we were to go on in the way the Labor Party was taking us, because not only did we see spending increase by 50 per cent over the period of the Labor government, they also then in the never-never promised to increase spending even further—rapid increases in spending in the out years with no ability to pay for it. So we know that the bill eventually has to be paid and the decision that we have as a nation now is whether or not we choose to start paying some of that bill now, to start making the contribution now so that we are not leaving it to our kids and our grandkids to pick up an ever greater bill, ever greater interest payments, in order to bring the budget back to stability. That is the fundamental choice we have and that is the one that the Labor Party has squibbed.

Here in the ACT one of the biggest issues in the budget is the issue of Public Service job cuts. I am a former public servant myself, my wife is a Commonwealth public servant, family members of mine including my father for all of his career or most of his career was a public servant. I understand the importance of the Public Service to this town. As a Canberran I do not want to see any jobs lost in Canberra. What we have got is a situation where even the Labor Party realised spending was so out of control that they in fact started to cut the Public Service. I will use a few figures to illustrate the point. The Labor Party in government, and we saw this in some other areas which they are now denying in opposition, at the very end did start to realise that their policy prescriptions were wrong. We saw it with the boats. Right at the end they said, 'We have to do something because we have lost control of our borders.' And we started to see it in budgeting but of course they were never able to follow through because whilst they proposed some savings in the last budget they now oppose those savings in opposition. And of course they made the decision, and this is important that this is put on the record, to cut 14½ thousand public servants. That was a Labor Party decision. That was the Labor Party recognising that in fact spending was out of control, that they had not controlled spending, that they were living beyond their means.

This is a difficult thing for Canberra. We need to deal with it. We need to do a couple of things that I think are important and it is important to get them on the record. One is that we are not talking about the same as 1996. In terms of magnitude, in terms of the proportion of the workforce, we are talking significantly less, but it is a substantial challenge for the city to deal with. So we need to deal with it in a calm and rational way. What is not helpful is when we have local Labor politicians such as Gai Brodtmann, who was part of a government that decided to cut 14½ thousand jobs, she was part of that decision, and Andrew Leigh, who was in the government that decided to cut 14½ thousand Public Service jobs, Kate Lundy was part of the government that decided to cut 14½ thousand jobs. When they decided to cut 14½ thousand jobs they did not talk about economic crisis in Canberra, they did not use hyperbole to describe it, but they now do. So people should see their hypocrisy for what it is. What we need to do is not talk our economy down, is to recognise that our private sector has grown significantly over the past 20 years. It is more mature

These are going to be real challenges for us to deal with, and I would call on the government to have regard to that as we go through the next couple of years. We want to see Canberra continue to prosper—and I believe it will. I believe it will, but it will take some transitional help. We will need that.

But this is the legacy. Whether it is the Public Service or whether it is in other cuts that we see in the budget, this is the legacy of a Labor government that completely lost control of spending. People understand that. The Australian people understand that, if you are headed for $667 billion of debt, when you are paying $12 billion a year in interest and you are headed for $34 billion a year in interest, you cannot keep going along the same path. We have seen what happens when nations lose control of their finances. When nations lose control of their finances, they lose control of their destiny. We have seen the bailouts in other countries. We do not ever want to go anywhere near that situation.

When spending gets out of control and when we see $12 billion a year in interest, headed for $34 billion a year in interest, that is a major concern. That can very quickly spiral out of control, as you struggle to keep up interest payments, as debt gets out of control and more and more needs to be spent just to service that debt. Imagine what we could do with $12 billion a year if it was not needed to service our debt, if it was not needed for interest repayments. Imagine what we could do in infrastructure, in roads building and rail. Imagine what we could do in health and education.

This is the cost that we have when governments lose control. We do not have to look far to see the kind of attitude the previous government had to spending, which led to the debt and deficit crisis that we now face. We are seeing this week the pink batts inquiry, with billions of dollars wasted and people dying because it was rushed out so quickly without thought—with thought only to tomorrow's headline rather than the consequences of wasting that money in the way that they did. We saw the cheques going to dead people and the cheques going to people living overseas in order to stimulate the Australian economy—$900 cheques sent to people living overseas in order to stimulate the Australian economy; cheques sent years after the financial crisis apparently in order to stimulate the economy during the financial crisis. There is the NBN blowout—which is being seen in the NBN committee that I am a part of. The independent analysis found that it would cost $73 billion to complete the National Broadband Network—some $29 billion more than the Labor government's forecast. These are the legacy issues that we are picking up.

When you see your spending growing at 50 per cent when your revenue is growing at 25 per cent, that represents a problem. When you see interest repayments getting to $12 billion a year and growing rapidly, governments have to act to get the finances back under control. I think it is also worth noting that we do not get the finances under control just for its own sake. Budgetary management is not just about being able to say we can deliver surpluses or we have lowered debt. It has real implications. It has impacts on the economy. It has impacts on confidence.

The comparison between the coalition government under John Howard versus the Labor government under Rudd and Gillard is stark. It is not just about the financial outcomes or the budgetary outcomes; it flows to results in the real economy. I will use some examples—firstly, with the financial outcomes. The coalition left a $19.8 billion surplus; Labor left a $47 billion deficit. That is how much they squandered. The average budget position under the coalition government was $8.1 billion surplus; the average position under Labor was a nearly $40 billion deficit. The interest on government debt in gross terms under the coalition government was $3.8 billion and it is now $12.4 billion. Government spending increases annually under the coalition government was 3.3 per cent; under the Labor Party it was 4.5 per cent.

We often hear about spending as a proportion of GDP. This one tells a story. Government spending as a proportion of GDP at the end of the Howard government was 23.1 per cent. At the end of the Rudd government spending as a proportion of GDP 25.9 per cent. That is a nearly three per cent increase in real terms as a proportion of GDP by that Labor government. That has implications. When your spending grows twice as fast as your revenue you are headed for destruction.

We have seen the benefits to the economy in managing the budget properly and getting the economic settings right. We saw things like average GDP growth. Under the Howard government it was 3.6 per cent versus 2½ per cent under the Labor government. We saw annual retail turnover growth of 5.9 per cent under the Howard government and 3.3 per cent under Labor—a massive difference. Multifactor productivity growth under the Howard government was 0.7 per cent annually and negative 0.7 per cent under the Rudd-Gillard government. We saw living standards going up under the Howard government—2.3 per cent annual GDP per capita growth. Under the Rudd-Gillard governments it was only 0.7 per cent. Employment growth under the Howard government was 2.1 per cent and 1.4 per cent under the Rudd-Gillard Labor governments. When we left government the unemployment rate was 4.4 per cent. It was 5.7 per cent at the end of the Rudd-Gillard-Rudd experiment. The list goes on and on. Real wages went up annually, above inflation, 1.8 per cent during the life of the Howard government and only 0.6 per cent on average under the Labor government.

These are the facts and these are the consequences of good budgetary and economic management versus poor budgetary and economic management. It is there for all to see. Living standards under good management go up. Productivity growth goes up. People have more choices. We see taxes over time coming down. That is the type of nation we should want to be living in.

As to what the Labor Party continues to advocate for, now in opposition: firstly, they say there is no problem—that $667 billion of debt is okay. We say that it is not. We say that $667 billion of debt is criminal neglect towards our children and our grandchildren. It is leaving them with a legacy of higher taxes and lower growth. That is what $667 billion of debt represents. Lowering debt and deficits and increasing economic growth is a way for us to share the burden with future generations, ensuring that we leave our children and our grandchildren in a better place than the place we inherited. That should be the task of any government. Any government's fundamental task is to be able to say that we left the country in a better place than we inherited—that we put in place policies that will leave a lasting, positive legacy for our children and grandchildren; that they will have more opportunity; that they will have more job opportunities; that they will have better living standards; that they will have less debt; that they will have less tax so that they can have more freedom in their daily lives, and so that they can look after their families in the way they choose rather than being burdened by more and more government interference.

The efforts to cut red tape are not simply about saying, 'Cutting red tape—it's politically a good look.' For every bit of genuine economic reform and red tape reduction, we see businesses able to thrive. We see businesses more likely to employ people. We see economic growth, as a result of allowing our businesses to do what they do best, not to be constantly bogged down in excessive paperwork.

In the time I have remaining, I will speak on the shift in focus of this budget. It is cutting spending and reducing spending over time, so that we can lower projected debt by around $275 billion. That is fundamentally important. But there is also a shift in the budget from focusing on spending primarily on consumption to spending on investment—on investment in infrastructure so that we can improve productivity, so that we can improve living standards. That is a fundamental part of this budget. It is an important part of this budget. It is something that I think has not been adequately commented on—the shift to more productive spending.

Not all spending by the government is of the same value. Building productive infrastructure is better spending than throwing away money on pink batts. Building productive infrastructure is better than giving cheques to people overseas in order to stimulate the Australian economy. These are the choices that we have every time we deliver a budget. Fixing Labor's mess is not easy. No-one in the coalition is taking the hard decisions because it is fun, or because it makes you popular or because it gets you a good headline, because it does not. These decisions are being taken because they are the right decisions for our nation. And as we get the budget back to good health, as we get debt and deficit under control, the dividend will be a strong one. The dividend for our economy, the dividend for our communities, the dividend for living standards and prosperity and growth will be significant.

That is what this budget debate is about. It is time that those opposite recognise the legacy that they have left, and recognise that we have to get on with fixing the mess that they have left us and, instead of blocking us, get out of the way and allow us to do it.

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

On 7 September last year, the Australian people went to the election and they voted. I am grateful—and I am sure everyone in here is—that we live in a democracy where that could occur. The people who voted made their decision based on what they had been told by all the different candidates and political parties that were there and made themselves available. They decided, in the majority, to support the coalition government that we have today. And that is fair enough—they voted, and that is what they got.

But what really sticks in my craw is the fact that those people were treated like mugs, because those people opposite did not stand up and say, 'We're going to the election to get a mandate to cut spending in Australia.' They did not say that. What they said—and I am assuming that those opposite support the comments made by their leader—was: 'No surprises. No excuses. No new taxes. No changes to pensions. No cuts to the ABC or SBS. No cuts to health or education.' So when the Australian people cast their vote on 7 September last year, they did so trusting that those opposite and in the other place meant what they said. They did so confident that there would be no surprises, no excuses, no cuts, no new taxes and no changes to pensions. They cast their vote confident that that would be the outcome. But, unfortunately, that is not what they got.

Senator Seselja, who has just left this place, said in his contribution that people know and people understand what the task of this government is. If he is so confident and others opposite were so confident that that was an honourable task and a task that needed to be done, why not have the courage to say so before the election?

Why not tell the Australian people: 'We believe there is a budget emergency and when we come in we're going to cut your pension. We are going to cut all the funding we promised to improve education in Australia. We are going to cut funding to public health. We are going to hit you with an extra fee every time you go to the doctor. We are going to dismantle universal health care.' They did not say that.

I got an email today from a constituent, a lady from Cygnet in Tasmania She is in shock. I will not use her name; she did not give me her permission. However, this is her plea. She says: 'When prioritising what to object to in the budget, please put the cruel cuts to support for young people before petrol tax, co-payments to doctors or the debt levy. My son has a severe learning difficulty, was on Newstart for several years but got specialised job search help. Heard of Youth Connections? He got a casual job through a family connection and then his job search people approached the employer and offered three months full wages or six-month half wages if they hired him full time. They did and he's still working there five years on. He was living in Sydney on his Newstart money until things fell into place for him. There are dozens of kids like him, with and without qualifications, who need extra help to find work and something to live on until they do get a job. I don't know how they're going to do it if they can't get it for six months. Without the support he got, my son would probably still be living at home in rural Tasmania; others would be living on the street. There are many bad things in this budget, but this is the worst of them, plus the other disincentives to young people. I do not at all appreciate the prospect of the age pension becoming just as inadequate as Newstart once the indexing is changed, but I think the attack on youth is the worst feature of this budget.'

And it is a budget that is a vicious attack on both Middle Australia and the poor. It is a budget that will hit Australians every time they go to a doctor and every time they get in their car. It will hit their local schools and hospitals. It will hit them when their kids want to go to university and it will hit them when they want to access a pension. The worst of it is that the current Prime Minister said he would not do these things. It is the most blatant dishonesty. He treats the voters of Australia with breathtaking contempt.

We know that families will get slugged. Family benefits and parenting payments are going to get slashed. At the same time, they will be hit with a new GP tax and a new fuel tax. Families on family tax benefit part B will now have their payment cut completely when the youngest child turns six or if their total household income is greater than $100,000 a year. Currently, eligible families continue to receive family tax benefit part B until their youngest child turns 16. This leaves families $2,268 worse off a year. We heard there would be no changes to benefits.

The budget freezes the rates and thresholds for family tax benefits, including the income threshold to receive the maximum rate of family tax benefit A, at $48,837. It confirms the abolition of the schoolkids bonus. How callous—eligible families losing $400 per year for primary aged children and $820 per year for secondary age children? Family tax benefit supplements are also going to be dramatically reduced. That will cost some families more than $300 a year.

What did Labor do for families? We get the pressure of the costs of living. We gave them support—record levels of assistance for low- and middle-income families at a time when they needed it most. In government, Labor provided targeted support to help ease the cost of living on families through tax cuts, worth up to $2,000 a year, and increased family payments, worth $4,000 a year. We increased the childcare rebate by 50 per cent. We brought in the new schoolkids bonus, worth $820 per year per child, and we brought in the first proper national Paid Parental Leave scheme. That is what Labor think of families; they support them.

Remember pensions. Once again, I quote our new leader saying, clearly, on the television—you could not turn around without hearing him say, 'No changes to pensions.' That is about the longest sentence that that man seems capable of speaking—'No changes to pensions, stop the boats' blah, blah, blah.

He did not tell the truth and that is becoming patently obvious. This budget slashes the current fair indexation system, which makes sure the pension keeps pace with the cost of living. Is it going to be indexed by the CPI alone, which we know will mean that pensions will fall behind the cost of living?

The government also intends to increase the pension age. The current Prime Minister has no mandate for these changes. How can he have a mandate to make such fundamental changes to the pension, when he told the people of Australia, 'There will be no changes to pensions'? He treats the Australian people like mugs. 'Tell them anything. Get their vote and then we can do what we like.' It is abominable. I hope pensioners are listening to what this government thinks of them. I personally believe they will never vote for this current leader again.

On top of this, all pensioners and state seniors card holders are set to lose valuable concessions for public transport and utilities, with the abolition of the National Partnership on Certain Concessions for Pensioners and Seniors Card Holders. What did Labor do in exactly the same space? We delivered a strong and sustainable pensions system that ensured the pension keeps pace with the rising costs of living and that was targeted at those who need it most.

Labor can think long term. That is why all those years ago Labor made sure that most, if not all, working Australians had access to superannuation. This government has already scrapped the low-income superannuation contribution and it is now going to delay the increase of the superannuation guarantee to 12 per cent. Labor committed to increasing the superannuation of Australia's low- and middle-income workers by introducing the superannuation guarantee rate, increasing each year until it reached 12 per cent on 1 September 2019.

This is sensible policy, and they also abolished the maximum age limit on the superannuation guarantee from 1 July 2013 to increase the incentive for workers aged 70 and over to remain in the workforce and further boost retirement savings. It also amended the eligibility criteria for the low-income superannuation contribution to now pay individuals with an entitlement below $20. It effectively refunds up to $500 a year, the tax paid on superannuation concessional contribution with incomes of up to $37,000 per year to the people who need it most.

Then carers—more broken promises. Labor has always recognised the significant role that carers play in our community. We provided booster payments of up to $5,300 a year and a new annual $600 carer supplement on top of that. Of course, we have got the NDIS.

What has the Liberal budget done? It has cut the indexation arrangements for the carer payment from September 2017—it is shameful. It has cut the National Respite for Carers Program, which provides much needed relief to people caring for loved ones at home who are unable to care for themselves because of disability or frailty. More than 90 per cent of carers on the carer payment have no other income, because of their caring responsibilities.

May I remind people of one of the other mantras of the now Prime Minister: No cuts to health. What did Labor do with health? Unprecedented investments; strengthening Medicare; hospitals, specialist services; and historic reforms to improving the delivery of primary health care across the country. What Labor managed to achieve was the highest bulk-billing rates in Medicare's history, greater than 82 per cent nationally; increases in the workforce—over 14,000 more doctors and over 28,000 more nurses; and, between 2008 and 2018, that growth is expected to slow. In the first two months of commencement, over 84,000 children had free dental services under Labor's Grow Up Smiling program, but what do we get now?

This budget's GP tax is a cruel broken promise—remember: No cuts to health—and represents the greatest attack on Medicare and universal health care in years. This budget will also see the cost of medicines rise to $42.70 for general patients and, for concessional patients, the cost will be $6.90. Patient will also be lumped with paying a new tax on GP visits, paying for pathology and imaging and find it harder to get the services they need from public hospitals. It also makes the Medicare safety net less fair, cutting $270 million from the provision existing arrangements and transferring those costs onto Australian families.

Then we get to housing and homelessness. People understand the pressures on housing fall across a continuum. If people cannot afford to buy their own home, then they have to rent. If rents are high and they cannot afford to get into private rental, then they need to get into public housing. If public housing does not have the scope to look after them, then they fall back on emergency and crisis housing, and the worst end of the spectrum is homelessness. That is a fact.

As former housing minister, I saw the benefits of NRAS in Tasmania. It made an extraordinary difference. We have already had 14,000 dwellings completed. People need to understand that good schemes need long-term thinking and planning to build momentum and then lead to fruition. And now you are going to cut one of the best policies when it came to providing affordable housing in Australia. It is an absolute disgrace—

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

It is outrageous to stand here—

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

and those opposite may bleat, but I do understand your embarrassment, because you got elected on a con. You said that there would be no surprises, no excuses, no cuts to education, no cuts to health, no changes to pensions and you conned the voters.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

It is an absolute and utter disgrace, and you did it!

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Oh dear! Very upset, are you? What else are you going to do about housing? You are going to cut $44 million to homelessness services. How kind and caring that is. You are going to axe housing help for the seniors program. Poor old pensioners have got less money and fewer houses to live in now. Let's remind everyone opposite what they said about cessation of the first home savers account.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

I rise on a point of order: as much as we are all very cognisant that those on the other side do not share the views, they are not shamed by the budget they brought down. Those sort of outbursts—I cannot even hear Senator Thorp, so I would ask you to bring the chamber to order.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Thank you, Senator Polley. Senator Mason, I do ask you to restrain from shouting across the chamber. It is unparliamentary.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

I apologise; I was just asking a question: when the honourable senator would pay back the debt. We haven't heard an answer.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Thank you. It is not an appropriate question. Thank you, Senator Mason.

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

What are they doing now? Having broken all those promises made pre-election and conned the Australian people into believing that they were getting what they voted for, they have now manufactured a budget crisis, a budget emergency. Yet, that is not what the experts say. All the chief economists say that Australia has an 'enviable budgetary position compared to other rich countries'. None thought the speculated deficit levy was 'an intelligent way to repair the budget'. 'Bank of America Merrill Lynch chief economist … said it was important to get the deficit under control in the longer term, but there were serious risks involved in moving too quickly.'

The economy is still fairly soft. Growth is below trend … I don’t see any particular urgency about 2014-15 or 2015-16.

On the most recent figures the Australian government’s debt is $191.5 billion, forecast to rise to more than $600 billion—

we are recognising the figures here—

The forecast deficit is $47 billion, but all economists said these figures were tiny—compared with other OECD countries—as a percentage of the overall economy.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Like Greece? Go Greece!

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Our position was enviable.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

You wouldn't even have an economy!

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Most countries would be envious of Australia's public finances as they currently stand.

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

Not because of your efforts, Lin; because of our efforts!

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

'We don't need a surplus tomorrow', said Chris Richardson, economist and partner at Deloitte Access Economics. So what we have is a series of untruthful statements made leading into the election and then a confected budget crisis post-election to con the Australian public. How about, if you want to make a tough decision—

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

When have you made one?

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

you don't make it on the backs of the poor!

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

When have you made one?

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

You don't make it on the backs of the sick!

Brett Mason (Queensland, Liberal Party, Parliamentary Secretary to the Minister for Foreign Affairs) Share this | Link to this | Hansard source

When have you made one?

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

Order!

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

You don't make it on the backs of pensioners! How about you do a few things like abolish negative gearing? How about you get rid of capital gains tax discounts? You would not know how to make a tough decision if it stared you in the face. Dishonesty before the election and dishonesty after it.

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Thorp. Senator Boyce, hopefully we might be able to give you some reasonable silence for your contribution.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Thank you, Madam Acting Deputy President, and I make the point that I will be speaking briefly to give my colleague Senator O'Sullivan the opportunity to speak as well.

What a delight to have the chance to talk about twisted priorities because the most twisted of any priorities have to be the priorities of the people opposite, of the opposition in this house. What a performance they have put on. Listening to the comments just made by Senator Thorp, I suppose NRAS may have been a successful program in Tasmania because they did not have enough overseas students to fill up the houses—which is what happened in Sydney. Once again a policy of the Labor government—we already have royal commissions into some of them—that they were unable to implement.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise on a point of order on the slurs that the good senator there is expressing in this debate. Her federal member for Bass obviously does not share those concerns because he was there taking the credit and opening those facilities.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Point of order—

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! There is already one point of order that I have to rule on thank you, Senator. There is no point of order there, Senator Polley, and I ask Senator Boyce to continue and to focus on the debate at hand.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Indeed I am, Madam Acting Deputy President. I thought the question we were debating was twisted priorities. And if there are any twisted priorities in this place, the kings and queens of twisted priorities are sitting on the opposition benches. In fact the queen of twisted priorities would be Ms Jenny Macklin, the shadow minister for social services, who thinks her priority is to scare people on disability pensions and people with disabilities and their carers witless by misrepresenting and deceiving them about what was happening with this budget.

We will see yet another example of twisted priorities tonight, one imagines, unless of course the opposition leader, Mr Shorten, chooses in his reply to the budget to tell us what he is going to do about the $191 billion worth of deficit that the former Labor government created and the other $123 billion of deficit they would have had in the forward estimates—and that is even without properly funding half of the programs they did. It is amusing to listen to people opposite bleat about the national partnership on homelessness when you realise the funding provided by the former Labor government for the national partnership on homelessness runs out in just over a month. This government was left with the airy-fairy twisted priorities of Mr Swan, who thought that he could deceive his way into coming up with a surplus. It cannot be done. He could not do it, so he just left half the funding needs for his promises out of his budgets. That is not something that this government will ever do.

I would like to make the point that there are currently 800,000 Australians on the disability support pension. We have one of the lowest rates of workforce participation by people with disability than many other OECD countries. This is not because people with disability cannot work; it is because many of the policies developed by the previous government gave them no opportunity to get into work. The vast majority of people with a disability would like to work, and I am certainly aware of many with an intellectual disability or cognitive impairment who, if the opportunity was there, would work.

Courtesy of the current opposition leader when he was the relevant minister, we had about three reviews of disability employment services with no improvement in outcome. The expenditure on disability support pensions is currently about $16 billion a year, and it is projected to grow by 27 per cent by the end of the decade. It is not sustainable. When is the twisted priority view of the opposition going to ever include the word 'sustainable'? It's not. There is a group of DSP recipients under 35—from between 2008 and 2011, when the then Labor government finally tightened up the impairment assessment tables—who will be reassessed by this government. That is reasonable. You just have to look at the way the graph goes to see that between 2008 and 2012 the growth was unsustainable. And this is not, by any means, suggesting that anyone with a severe or manifest disability will be reassessed—they will not. Let's just put to bed, finally, the deceits and twisted priorities of Minister Macklin, who is far more interested in playing politics with the NDIS than she is in assisting in its development. We will support the NDIS. We have put extra funding into the NDIS to ensure that what happens is right. But we have inherited a budget position that is unsustainable.

I will also put to bed some of the deliberate deceits that have been bandied about by members of the opposition in terms of how household incomes will be affected by the changes we are proposing. For a start, the changes to family tax benefit B, for those already on family tax benefit B will remain until June 2017. If you have a 10-year-old for whom you are currently receiving family tax benefit B, you will continue to receive that until the child is over 12—June 2017. By 2016-17 a sole parent with one child under six will be earning $60,000 before they pay more in tax than they receive in government benefits. A sole parent with two dependents under six will be receiving $70,000 in private income before the scale cuts in so that they pay more tax than they receive. The list goes on. You will be on at least $60,000 to $70,000 before you do not make a net gain from the government.

So there is no cruelty in what we are doing. What we are doing is trying to fix the ridiculous, unsustainable mess. One would hope that the opposition could get over its twisted priorities and support doing what is right for Australia into the future.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

Acting Deputy President Stephens, if I had known how exciting it was down here after dark I would have come down here more frequently!

The coalition was elected with a clear promise to the people of Australia that we would stop the boats, and we would stop the debt and deficit problems that were plaguing this nation's long-term prosperity. These problems are not of our making, but we take the responsibility to fix them. Only by doing this can we build a prosperous future for all.

Let's take the first part of the coalition's promise—to stop the boats. The government has taken strong and decisive action to restore the integrity of our borders. Not a single people-smuggling venture has successfully landed in Australia this year. This has meant savings of $2.5 billion to the budget, and the closure of nine detention centres. It is clear we are delivering on this important election promise.

Now let's take the second promise—to address Australia's credit problems. This week our government has proven its willingness to make the difficult but necessary decisions so that we can ensure prosperity for all in the future. We are in a situation where we have to make significant changes to our budget structure. We have to be able to live within our means, and that means everybody is going to have to make a contribution. If we do not move now to fix the budget and to strengthen the economy it is only going to get much harder over time. On the back of five budget deficits in a row we have inherited $123 billion of deficits and debt, rising to a projected $667 billion if there are no structural changes to the budget process.

Treasury projects that without the policy change we have delivered this week, the budget will be in deficit for the next 10 years. This would be the longest stretch of deficits in this country since the Second World War. Decisive action is needed to prevent a tidal wave of debt swamping our nation's economic future. That was the promise we took to the people of Australia at the election. And that was the promise the Treasurer delivered in the House of Representatives chamber on Tuesday night.

This does not mean difficult decisions were not required. But we have never shied away from this commitment to the Australian people. While there has been disappointing but predictable criticism from some, they overlook the positive work this budget undertakes not only to address the nation's debt problems but also to begin the vital process of building a solid platform for Australia's future. For example, the coalition government are building Australia's transport infrastructure for the 21st century. Indeed, the Abbott government has made a record $13.4-billion investment to build the infrastructure needed for the 21st century in my state of Queensland. These funds are part of the government's economic action strategy to build a strong, prosperous economy, boost productivity and create thousands of new jobs.

The most important project in my area, though, is that of the Toowoomba Second Range Crossing. This includes the construction of a bypass to the north of Toowoomba, running from the Warrego Highway at Helidon in the east to the Gore Highway at Athol in the west. This project is essential for that part of the world. The coalition will also continue to work on the Warrego Highway in Queensland, delivering pavement widening and lane duplication, an additional overtaking lane and intersection safety upgrades. Better roads mean less congestion, faster travel times and lower fuel costs. The Abbott government's investment in Queensland will also improve freight transport linkages to key domestic and export markets.

The combined efforts of these projects will better equip rural and regional Australia to compete in the world marketplace. Our budget strikes a solid balance between the short-term pain of budget reform and the long-term national interest, because it frees up the funding needed to invest in economic infrastructure to safeguard the economy. We are preparing our nation for future prosperity.

On the whole, the government has delivered a balanced and credible budget, designed to repair the budget and build a strong and prosperous economy for decades to come. But there is still much work to be done and this government is focused on laying the foundations so that future generations might benefit. What we did this week was deliver an honest and fair budget. We believe it is a budget that has kept faith with the commitments that we took to the last election. We are asking everyone across Australia to contribute and to help us rebuild, and build a stronger economy and get the budget back on track for future generations.

Sitting suspended from 18:00 to 20:00