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

I rise to speak on the appropriation bills. In a legal sense the annual appropriation bills are at the core of any budget. They make appropriations from the Consolidated Revenue Fund, the CRF, for the government's activities. So in a technical sense these underpin the budget. But when it comes to economic and social philosophy, when it comes to values and principles, we do find something else at the core of the Abbott government's first budget, something quite rotten. We find a perverse approach to economic policy—an approach of talking the economy down, of propagating a fabricated budget crisis and damaging consumer confidence, an approach which will increase the cost of living for middle Australia, making people pay more for basic needs like visiting the doctor and buying medicines. At the same time as it makes people pay more, the budget increases the tax impost on ordinary Australians—from the Prime Minister who said, 'No new taxes.' It cuts benefits are concessions for those who are most vulnerable like pensioners—from the Prime Minister who said, 'No changes to the pension, no cuts to health, no cuts to education.'

At the core of this budget is a hardline agenda of dismantling Australia's social safety net. It is as simple as that. At the core of this budget is a perverse approach to social policy as well as to economic policy, a harsh philosophy of slugging low- and middle-income earners while cushioning the wealthy and big business. If senators opposite do not agree with me, I refer them to Senator Macdonald's intervention in the debate on the deficit levy bill last week. It is a philosophy of entrenching privilege for those who can afford the best quality education and the best quality health care while reducing educational opportunities and curtailing access to health care for low- and middle-income earners. This is a budget of broken promises, a budget of deep unfairness, bad economics and big lies. It is a budget which will take this nation backwards.

The budget's deep unfairness starts with its attacks on Australians who work hard. It attacks families struggling with the cost of living, parents who want a better future for their children, young people who want to go to university—all of them attacked by this budget. The budget's unfairness continues with its attack on the weak and the disadvantaged. It attacks the elderly, those on the age pension and self-funded retirees. The pensioners of this country were promised by Mr Abbott, 'There will be no changes to the pension'—all a lie. It attacks the vulnerable, people who are sick, people with disabilities and their carers, war veterans and Indigenous Australians. The unfairness of the government's policies can be illustrated with one simple contrast. This budget will make a couple on an income of $65,000 a year with two children more than $6,000 a year worse off—a couple on an income of $65,000 a year with two kids, more than $6,000 worse off as a result of this Abbott budget. Yet, at the same time as this government is slugging low-income households, it is giving millionaires $50,000 for having a baby. There is a Paid Parental Leave scheme for the well-off, but there are higher taxes, higher charges and lower benefits for low- and middle-income earners. This tells us everything we need to know about where Mr Abbott's priorities lie.

This is a budget with a cradle to grave assault on fairness. It hits ordinary Australians at every stage of their lives. It hits child care, with $450 million of cuts to out-of-school hours care; it is cutting the number of places for before and after school care. It hits schoolchildren, cutting $6½ billion from the Gonski school funding reforms. Remember, these were funding reforms that Mr Abbott promised Australians he would not roll back. He promised Australians he would not cut. He said, 'We said we are on a unity ticket with the Labor Party when it comes to school reforms.' University students will pay more to go to university. Working families are hit hard with the slashing of the family tax benefit. As the former Prime Minister John Howard has pointed out, this amounts to a tax hike on low- and middle-income Australia. A new petrol tax will slug working families $2.2 billion over four years. There is a new GP tax of $7 every time a family visits the doctor and a new medicines tax of $5 every time they go to a chemist to fill a prescription. Labor's schoolkids bonus is scrapped. Eligible families are losing money for children going to school—$410 per primary school child per year and $820 per secondary school child per year.

For those struck down by illness or facing disability, the government replaces the helping hand with a slap in the face. Indexation of the disability support pension is cut, leaving more than 800,000 people with disabilities worse off. These are people who receive less than $20,000 a year in pension payments. People who lose their jobs are hit. Workers under 30 who lose their jobs will be denied income support for six months—six months!—leaving these Australians with no income to put a roof over their head, let alone pay for things such as phone calls or travel to the job interviews that the government says they have to do. People who have retired from the workforce after paying taxes all their lives are also hit by this unfair budget. The government is cutting the age pension and making people work until they are 70 before they can receive the pension. Self-funded retirees are also hit with the government cutting funding for concessions for seniors health card holders. These are cruel cuts. They represent an attempt to change the face of Australia; to increase the cost of living; to slash our social safety net; to throw out the idea of a fair go and to entrench inequality; and to make this nation a more unfair, a more unequal and a more uncaring society.

The budget is not only unfair social policy. We say it is also bad economics. For a start, this is a budget built on an economic lie, the myth that the Commonwealth is facing a budget emergency. We know that this is a Prime Minister who has an addiction to scare campaigns. We remember the claim from Mr Abbott that whole cities would be wiped off the map. From claiming that those cities would be wiped off the map to a fictitious budget emergency, the reality is this is a man who sacrifices facts in the pursuit of a political objective.

Nations with budget emergencies do not receive AAA credit ratings with a stable outlook from all three credit rating agencies, as Australia did under Labor. We are only one of 10 economies in the world with such a rating from all three agencies. This puts us in the company of other countries with strong public finances, like Germany, Canada, Sweden, Singapore and Switzerland. So much for Mr Abbott's confected budget emergency—which is the entire economic and fiscal rationale for this budget of harsh cuts and broken promises.

The government's scare campaign about the Commonwealth's finances is economically irresponsible. What sort of message does it send to international financial markets for the Prime Minister and the Treasurer of our country to declare over and over again a budget emergency? This fabricated budget emergency will be deterring investment from abroad and it has also eroded consumer confidence at home The Westpac Melbourne Institute's consumer sentiment index has fallen by 17 points over the last seven months—17 points! Let's remember Mr Hockey before the last election saying solemnly, with his serious face on, 'We have to restore confidence.' Well, in seven months there has been a drop of 17.4 points in consumer confidence and sharp falls in May and June following the announcement of the budget. This is what happens when a government spends months falsely claiming the nation's finances are in an emergency and then brings down a budget which cuts the living standards of the vast bulk of householders in this country. Depressing consumer sentiment in this way can only have a negative impact on economic growth in the short term.

It is as if Mr Abbott and Mr Hockey have forgotten that, when you are in government and you are a senior economic minister or the Prime Minister, your words have a real economy effect. They have an effect in the real economy. They have an effect on market confidence. They have an effect on consumer confidence. But all of that is ignored because the pursuit of a political scare campaign is regarded as more important than the national interest. One thing you can always say about this Prime Minister and this government is that they will always put their political interest ahead of the national interest.

When it comes to the medium term and the economic reforms Australia needs to keep growing for the future, this is an extraordinarily short-sighted budget. As our population ages, Australia needs to boost workforce participation, improve our workforce skills and lift our workforce productivity. But the budget contains policies which are bad for participation, bad for skills and bad for productivity. It cuts $80 billion from schools and hospitals over the next 10 years—cuts which will jeopardise our future economic prosperity.

Employers need our young people to emerge from schools with a quality education and the skills needed to make a contribution in the workforce of tomorrow; yet we have a budget that is slashing schools funding. What effect will this have? It will have a direct impact on the education of the next generation of Australians. It will mean fewer teachers in classrooms. It will mean fewer opportunities for children from disadvantaged backgrounds to get a quality education. This isn’t just unfair; this does not just deny opportunities to the individual concerned. It is bad for workforce skills and productivity.

This budget makes $5 billion in cuts to universities and higher education. Those cuts will also hurt our economy. It will mean higher student fees, less public investment in university teaching per student and increasing debts for students—with higher interest rates on those larger debts. Our future competitiveness will depend on having enough graduates in disciplines like science, technology, engineering and mathematics; yet we have a government whose approach is to cut investment in universities and to deter people from going on to higher education.

The radical and drastic health cuts in this budget—again, the cuts the Prime Minister promised would not happen—will also have adverse long-term economic impacts. You do not foster workforce participation and productivity by undermining access to health care; yet that is what this government is doing. You do not ensure the health dollar is spend most effectively by undermining primary health care, which is precisely what this budget does through the new GP tax and medicines tax.

Low-income earners, we know, are especially sensitive to co-payments. A recent report by the COAG Reform Council found that 5.8 per cent of Australians delayed or did not see a GP because of cost; and 8½ per cent reported that cost was a barrier to filling prescriptions.

The new GP and medicines tax will make this situation worse, deterring more people from going to the doctor, and that is the whole aim of the government's policy. When they talk about sustainability of Medicare, when they talk about the growth in the health budget and when they say we need to do what they are doing—imposing a GP tax—what they are actually saying is: they want to have fewer people going to the doctor. They want to deter Australians from going to the doctor.

The whole aim of the government's policy is to deter low- and middle-income earners from going to the doctor when they are sick. This will mean that medical conditions, which could be treated relatively inexpensively when diagnosed early, will go untreated and risk developing into more serious health problems. This not only inflicts more harm on individuals; it will also require more expensive medical treatment down the track.

As the COAG Reform Council has observed, effective primary and community health help to keep people out of hospital—this is a fundamental principle of health economics, one that the government does not want to heed. The GP tax will result in more people needing to go to hospital, and it is just one example of the flawed economic thinking behind the tax. The budget cuts to investment in health, universities and schools are bad economic policy as well as bad social policy.

As I said at the outset, budgets reveal the values and priorities of a government. Budgets also reveal the character of those who lead governments, and what does this budget reveal? It reveals a Prime Minister who did not tell Australians the truth about his plans before the last election; a Prime Minister not just breaking one promise but every promise he made before the election; a Prime Minister who promised no cuts to health and no cuts to education, but Mr Abbott is now cutting $80 billion from Australian schools and hospitals; a Prime Minister who before the election promised no new taxes—now here he is hiking petrol tax, imposing a new GP tax, imposing a medicines tax and increasing the top marginal rate of income tax; a Prime Minister who promised no change to the pensions and now he is cutting pensions; a Prime Minister who promised no increase to university fees who is now increasing university fees; a Prime Minister who before the election promised no cuts to the ABC, no cuts to SBS and now has presented a budget which will cut funding to the public broadcasters by $240 million and that is only the first step; a Prime Minister who said the government would not slash foreign aid but presents a budget which slashes foreign aid by $7.6 billion; and a Prime Minister who said that he would be the Prime Minister for Aboriginal affairs and who presents a budget that cuts half a billion dollars from Indigenous Australians.

Perhaps the biggest of the big lies was Mr Abbott's claim that he would reduce the cost of living for Australian families, because this is a budget which dramatically increases the cost of living for low- and middle-income earners. NATSEM research has shown the budget would leave a range of typical low- and middle-income families thousands of dollars a year worse off—huge impacts on people who are already finding it hard and are working hard to make ends meet.

The Prime Minister's great crusade before the election was to repeal the carbon price in the name of easing cost of living pressures and now he is introducing tax hikes and cuts to payments that will leave families thousands of dollars a year worse off. In the face of overwhelming public opposition to this budget, the Prime Minister has compounded his own deceit with yet more lies. He has tried to pretend that the budget does not cut pensions by playing word games. At least the Minister for Finance, who presented these appropriation bills, has been honest enough to acknowledge that reducing indexation of pensions does indeed mean you are cutting benefits and pensions. In the Senate last week, Senator Cormann said:

Now obviously and necessarily, reducing government payments, reducing the spending growth trajectory, will impact on people–individuals, families, pensioners, organisations, states and territories–who receive payments from the federal government.

In fact the Prime Minister's deception has now reached breathtaking levels, because last week in the House of Representatives he made the risible claim:

This is a fundamentally fair budget.

Well, it is nothing of the sort—it is a fundamentally unfair budget.

Consistent with longstanding principles, the opposition will not oppose the passage of these appropriation bills, but when the government brings forward its broken promises like the GP tax and the cuts to pensions into this parliament, Labor will fight with everything we have against these socially regressive and economically damaging measures. We on this side of the chamber will continue to stand up for the fair go.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak on the appropriation bills, the bills which form the backbone of the Abbott government's first budget. This is a budget of cruel cuts. It is a budget built on lies and broken promises. This is the budget where the Abbott government demonstrates to the Australian people, if they haven't already realised it, that the government they got is not the one they thought they had elected. Mr Abbott went to great pains to assure the Australian people that, despite declaring a need to make savage cuts, he would protect and defend their vital public services. On the eve of the election Mr Abbott, hand on heart, promised 'no cuts to education, no cuts to health, no changes to pensions, no changes to the GST and no cuts to the ABC or SBS'. With the exception of 'no change to the GST', every single one of these promises has been broken, and the rhetoric coming from the government's front bench, especially the ministers with financial portfolios, suggests that the GST promise could end up being broken too.

The Abbott government declared, through its Treasurer, Mr Hockey, that 'the age of entitlement is over'. Yet they have shown that the age of entitlement is well and truly alive when they are pushing a paid parental leave scheme which delivers the biggest entitlement scheme in history, one that writes out $50,000 cheques to millionaires to have babies. Add to that the entitlement for billionaire miners to make super profits without giving the rest of Australia its fair share, and the generous tax cuts for Australia's 16,000 richest superannuants. I guess what Mr Hockey really meant was that the age of entitlement is over for the people who really need the support. After all, it will be the 3.6 million lowest earning workers who will be paying through their superannuation taxes, the millions of age pensioners and the seniors who have to work till they are 70 who will be doing the heavy lifting, as Mr Hockey would put it, to pay for the entitlements of billionaire mining magnates and millionaire mums.

Of course, even after the election, we still hear those opposite—without a hint of irony—claim that they have to take drastic action to fix some fictional budget disaster. I say it is ironic because those opposite, shortly after coming to government, doubled the deficit through a series of spending decisions and pessimistic forecasts. And the now government claimed in opposition they wanted to 'end the waste'. Yet they are engaging in some incredibly wasteful spending, such as their gold-plated paid parental leave scheme and their $9 billion unsolicited gift to the Reserve Bank, both of which were contrary to expert advice, from the Productivity Commission and Treasury respectively. This reckless fiscal management is true to the form of their predecessors, the Howard government, in which the current Prime Minister was a minister, and which the IMF exposed as the most wasteful government in Australia's history.

Mr Abbott said he wanted to lead a government of no surprises. He said the Australian people were 'sick of nasty surprises' and that he wanted to lead a government which, instead of breaking promises, would 'underpromise and overdeliver'. Instead, what the Australian people see are broken promises and nasty surprises at every turn. You see, the 2013 federal election and the 2014-15 federal budget together tell a story: it is the tale of the two Tonies. First there is the pre-election Tony, or fake Tony. This was the Tony who railed against cost of living pressures. This was the Tony who decried debt and deficit, and declared that he would 'fix the budget' and 'end wasteful spending'. This was the Tony who extolled the virtues of honesty and preached day in, day out about the evils of breaking promises. This was the Tony who said he would spend his first week as Prime Minister in Arnhem Land—which, by the way, turned out to be his first broken promise.

The Liberal-National coalition was at such great pains before the election to elevate the fake Tony that their frontbenchers started waxing lyrical about the 'Tony they know' and what a great bloke he was. They even held back the real Tony and the real coalition agenda until after the Western Australian by-election and the state elections in South Australia and Tasmania, by sitting on the report of their commission of cuts. Now, with this budget, we see the real Tony. We see the Tony who breaks promises, who subjects struggling Australians to abject poverty and abundant cruelty and whose dismissive response to the outcry of the Australians who elected him is, 'Where's the problem?'

Of course, you have all heard this line of argument before, but there is a particular reason that I wanted to make a contribution on the bills. What I want to do today is not talk about the statistics and how a family on X dollars will be worse off by Y dollars; not talk about the overwhelming evidence from welfare organisations, professional medical associations and other community groups about how this budget will severely attack the most disadvantaged and vulnerable in our society; and not even talk about the cuts to programs and services such as health and education, Landcare, the ABC, the Arts, the CSIRO, social services and Indigenous programs. What I want to do in my contribution today is give a voice to some of the ordinary people who have contacted my office and who wish to tell their stories about how this cruel budget is going to hurt them.

I will start with a pensioner couple in a rural area in my home state of Tasmania. This couple spoke recently at a forum organised by the Tasmanian Council of Social Services to discuss the impact of the Abbott government's $7 GP tax. One of them has several chronic health conditions. This means she has to have regular appointments with her GP and various specialists. This couple is already struggling to get by with mortgage payments of more than $400 a fortnight. Being from a rural area, they have to travel into town for specialist appointments, which can cost them about $40 for just one week.

They explained to the forum that they found the Treasurer's suggestion that $7 is a couple of beers or a third of a pack of cigarettes deeply insulting. They do not drink or smoke. In fact, they have very little discretionary spending. To them, $7 might be a few loaves of bread, a couple of bottles of milk or cat food for their cat. This couple are going to be hit from several directions by this budget should all the measures pass the Senate. Not only are they concerned about the GP tax, but they could also face higher fuel costs when they travel to Hobart to visit specialists. As custodial grandparents for a teenage boy, they also face the prospect of losing family tax benefit part B and the schoolkids bonus. They are also concerned about the challenges their grandson will face if he relies on youth allowance after leaving home.

This couple are active participants in their local community centre, their local branch of the pensioners' association and a variety of other community organisations. They are absolute icons of their rural community. If they lose the capacity to participate in their community not only would they lose but also the community as a whole would lose. This couple have not only shared their own story with me but they have also expressed their concern about people in their community who they have come across through their volunteer work. They mention, for example, those who rely on their local GP for health care and or the people who rely on the local community centre for something as simple as a phone call to Centrelink.

Another person who has conveyed their story to my office was a mother living in a rural area whose youngest child had just turned nine. Her husband has a modest income and the family is only just scraping by. The cuts to family tax benefit part B alone could see the family losing more than 10 per cent of its income. She and her husband have three children in their care. They also have a grandson in Sydney, who they see very rarely because they could barely afford the travel. In her words, 'The only time we get to see our grandson is when someone dies.'

One small luxury her children have, if you could call it that, is participation in weekend soccer games; yet if the budget measures go through she will not be able to afford the registration fees. She quite reasonably regards the weekend sport as an important outlet to develop the health and fitness of her children and for them to socialise with other kids. A trip to the cinema is, in her words 'out of the question' even if they could afford the petrol to get into the city. To illustrate how reliant the family is on their income for the bare necessities, recently the woman turned 50 and she was asked by her dad what she would like for her 50th birthday, and she asked for new tyres for the family car. That was her 50th birthday present—car tyres from her dad. Imagine how this family is going to struggle, not only losing income from family tax benefit but also paying a GP tax every time a family member visits the doctor and paying additional fuel tax on their car trips. Imagine how they would struggle to pay for school fees and uniforms with the loss of the schoolkids bonus. These are two comprehensive examples of families who are going to suffer if the measures in the Abbott government's budget are implemented in full. In both cases, a particular budget measure on its own could plunge these families into severe hardship, not to mention a combination of several measures.

I will now provide a few quotes from other people who are concerned about the impact the budget will have on them. These are from people who have contacted the Labor Party or contacted my office to share their concerns. From a 50-year-old mother on Newstart allowance:

These cuts will affect myself and my family from every angle. My son is 10 years old. Having Family Tax Benefit B cut is going to disadvantage him in many ways. Even the basics like staying warm, a hot shower and having fresh fruit and vegies in the fridge will be luxuries. Already, any activities outside of school hours are unaffordable. We live on a day-to-day basis. We have discussed, many times, the importance of continuing to higher education, but my hopes of keeping our future dreams alive have faded to the point of a creeping depression setting in. I cannot see how this move will help break the 'welfare cycle' as I see nothing in the future for us but a poverty driven life that I will be powerless to break.

This one comes from a teacher at a school in a very disadvantaged area in the South of Tasmania:

I teach at a low SES school where the students often come to school hungry and tired. There is a high rate of mental illness that results from the trauma these students have suffered. Their parents are impoverished and there seems to be a high rate of illness. Teachers are often blamed for poor performance results in NAPLAN, but if you knew these students you would know that learning isn't as simple as it is for other students. When you are malnourished, tired and your focus is on other things, absorbing information and concepts is very difficult.

This budget is going to make things a whole lot worse for these students.

A pensioner told me in an email that she had visited the doctor six times in the last two weeks, which would have cost her $42 with Mr Abbott's GP tax. As she explained to me:

I would not have spent that $42 on beer or cigarettes. It would probably go towards my power bill, or food.

I also had a disability support pensioner with a chronic health condition call my office and explain that he simply would not be able to afford visits to the doctor or medication. In other words, he simply would not be able to afford to have his condition treated. I have mentioned a few examples of parents who would struggle with the changes to family tax benefit part B. One single parent who emailed me said that the money she receives through this payment, to her, is 'survival'. She said that if she lost this payment, she would not be able to afford her rent and her family were at risk of homelessness.

These are just a few of the many examples of how the Abbott government's budget, if implemented in full, will literally plunge families into poverty. The Abbott government is trying desperately to sell their rotten budget as a necessary evil. The rhetoric from those opposite suggests that Labor does not accept the need for savings. Such rhetoric overlooks the fact that we did make savings in government. Over the course of our time in government, Labor put forward $180 billion in savings—to fund our budget promises. Many of those savings were vigorously opposed by the then opposition, now government, despite their continued rhetoric about a 'budget crisis'.

You see, budgets are about priorities. Budgets are about choices. Our argument with the government is not about the need to make tough budget decisions; it is about the quality of the decisions they are making. The proposition that the government has no choice but to attack the social fabric of Australia in order to balance the budget is, quite frankly, ludicrous. The government has plenty of alternatives available to them. For example, they could scrap their gold-plated Paid Parental Leave scheme—the one which the Productivity Commission said would be wasteful and have 'few incremental benefits' over Labor's scheme. They could drop their generous tax breaks for people with superannuation balances over a million dollars. They could retain the mining tax, which ensures that mining companies which make 'super profits', from a resource that can only be dug up once, are required to provide the rest of Australia with a fair share of the revenue from that resource—a resource which belongs to the Australian people. But, instead, they choose to cut essential services like health and education and attack the living standards of pensioners, families and jobseekers.

The government have not been forced to cut pensions. They have not been forced to tax the sick. They have not been forced to slug motorists and uni students. They have made a conscious choice to do so. Austerity is not an excuse for cruelty. Yet when Labor makes the quite sensible suggestion that the government should be standing up for the poor, the sick and the vulnerable, the government accuses us of 'class warfare'. US billionaire Warren Buffett had a refreshing take on this catchphrase 'class warfare'. In an interview in November 2006 with the New York Times, Mr Buffett said, 'There's class warfare, all right; but it's my class, the rich class, that's making war, and we're winning.' Mr Buffett's comments could easily be applied to Australia.

Since the 1970s, the share of income for the top one percent of earners has doubled. For the top 0.1 percent, it has tripled. The richest three Australians control more wealth than the poorest one million, and this budget will make it worse. Modelling by NATSEM, the National Centre for Social and Economic Modelling, shows that under this budget the 20 percent of Australians on the lowest incomes will see their incomes fall by an average of 2.2 percent. That is right: 20 per cent of Australians on the lowest incomes will see their incomes fall by an average of 2.2 per cent. By contrast, those in the top 20 percent will lose only 0.2 percent of their incomes. That is right: those in the top 20 per cent will lose only 0.2 per cent of their incomes.

With their cry of 'class warfare' is the government seriously suggesting that it is a declaration of war to defend the basic safety net and equality of opportunity to which Australians are entitled? To me, the only form of class warfare is that which suggests removing the safety net from those who need it in favour of tax cuts and income support for millionaires and billionaires who do not. To suggest that government income support—whether it be in the form of payments or tax concessions—should go to the Australians with the highest need should not be a controversial suggestion. This government calls it 'class warfare'. We on this side have another term for it: 'fairness'.

Having outlined how cruel the Abbott budget is, having outlined that we see this budget as representing a multitude of broken promises, I will echo what Senator Wong said in her contribution—that Labor will not be opposing the appropriation bills. We do not intend to throw the baby out with the bathwater and reject this budget in its entirety. To block supply would be to deny funding to vital public services, and we will not use thousands of hardworking public servants as human shields in our fight against this cruel budget. However, we will be opposing and fighting hard against the cruellest budget measures when they come to this place in the form of separate enabling legislation.

We will fight cuts to pensions, cuts to family payments, cuts to assistance for job seekers, increased university fees and the Abbott government's new GP and petrol taxes. We will do so on behalf of, and in defence of, the people whose stories I have just told and the millions of ordinary Australians like them.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise today to address the issue of the appropriation bills. A budget reflects the vision for the nation that the government of the day has, and it puts into clear view the values that underpin that vision for the nation. Frankly, where you put your money tells you where your priorities are. It is the same for a household; it is the same for a government. You put the money there and it shows people what you think is important.

The Abbott government has made it very clear that it is steering Australia on a cold-hearted path where the gap between those who have and those who have not grows ever larger. The Abbott government's budget reflects that our Prime Minister's vision for this country is a vision of the past. It is a vision that says, 'Let's leg-rope Australia to the 19th and 20th centuries. Let's keep this country as a dig it up, cut it down, ship it away economy. Let's keep on hollowing out manufacturing and losing manufacturing jobs. Let's ignore the major, overwhelming issue of our time—global warming—and we don't care about what it is doing, particularly in rural and regional Australia, to agriculture, let alone the environment. Ignore all that, because essentially we want to protect the vested interests of the people who donate and vote for the Liberal Party.' That is essentially what this budget has done. It is about protecting the vested interests of the old order. It is not new. Machiavelli identified it in the 15th century.

There is nothing harder to bring about than change, because the vested interests of the old order fight like partisans to keep their vested interests. Those who believe in a new way are lukewarm in their support, because people do not believe in things until they have actual experience of them. That is what is going on with this budget. The vested interests of the old order have been itching for a coalition government to get back in so that they can absolutely nail down their wealth and interests. That is why this budget is driving Australia towards being a plutocracy, a country in which the wealth, the wealthy and big business own and run the government for their own interest. That is what is happening here.

In order to for that to happen, we are seeing a massive, permanent hit on low-income earners, on the unemployed, on the sick, on students—on the future. That is because the future of the country depends on transitioning out of the things that make the vested interests of the old order rich—that is, transitioning away from a resource based economy and investing in a country that says, 'In this century we are going to do everything to protect our ability to survive on this planet, and that means looking after the environment in the face of global warming, doing what we can to slow it down and to adapt to what is already in place' but at the same time saying, 'Well, what sort of society do we want?' In addressing global warming you actually get to rethink what sort of society you want. Do you want a society that is more equal? Do you want a society where everyone gets a good education, regardless of who their parents are, where they live or where they were brought up, where everyone has an equal opportunity, where there is no discrimination on the basis of race, sexuality or gender? Any discrimination should go. We have an opportunity to rethink everything. Of course, that includes the design of our cities and our transportation systems. We have so many opportunities.

This budget is essentially the Abbott government locking in the vested interests of the past, their wealth and their wealth sources against those who want to transition to a better future that addresses global warming and inequality. These are two of the things the World Economic Forum has identified as being the overwhelming threats to the stability of the planet in this next decade. The Abbott government is moving to dismantle universal health care, defund access to quality public education, strip away money from Indigenous programs, push young people into poverty and saddle students with ever-increasing higher-education debt. It is forgoing the billions of dollars in revenue from carbon pricing—the big polluters paying for their pollution, which is driving global warming. Instead of that, the Abbott government is ripping up the safety net and the social contract that has been central to safeguarding egalitarianism in this country. We are going backwards on the idea that people in Australia have equal opportunity. In a budget, you should be trying to fix that, not actually lock it in and drive it harder.

Contrary to the stack of budget papers that were released last month, we Greens do not want this country run for corporations. We do not want a country in which you have BHP turning up in the Treasurer's office saying: 'Don't you dare touch our fuel tax credits, because we're capable of running exactly the same campaign against you that we ran against Kevin Rudd when and destroyed his ability to bring in the superprofits tax on the big miners. Don't do it. Don't touch us.' And so that is exactly what happened. BHP is not going to be touched; none of the big resource based industries are touched. In fact, they are going to get their fuel tax rebate just as they wanted.

This is one of the things the government can do; big corporations can avoid tax, and they do. But they cannot get out of it if the government determined not to give them back their fossil fuel subsidies and their fuel tax rebate. But, no, that has not happened.

And while I am on the subject of the fuel indexation: if you are going to put in a price signal it has to drive transformation. Saying to people, 'We are going to take money from people who have no options with public transport, who drive old, inefficient cars. We are going to take money from you, and we are going to put it into more roads so we can have more congestion, more urban sprawl and less sustainable cities,' makes no sense. It is quite extraordinary that the Greens have pushed for years for mandatory vehicle fuel efficiency standards—and we still do—and yet in the last period of government the Labor Party would not move on mandatory vehicle fuel efficiency standards and neither what the coalition. Why? Because the cars we were building in Australia would not have met standards like that.

We were allowing the transport fleet in Australia to go backwards, whereas in other countries they are moving on fuel efficiency standards. When President Obama talks about fuel efficiency on the G20 agenda he is talking about mandatory vehicle fuel efficiency standards, and good on him! We intend to push that here, because the best way of transforming things is, of course, getting a more efficient vehicle fleet and getting more public transport so that people have the option of driving less and, when they do drive, of driving more efficiently.

But we have a scenario where the Abbott government tried to confect a budget emergency. Explain to me, someone, how you can say that there is a budget emergency when at the same time you say, 'We are not going to fix the mining tax. We want the big miners not to pay any of this extra profit that they are making,' and at the same time say, 'We don't want the polluters to pay. In fact, we're going to raise a couple of billion dollars out of your pocket to give to the big polluters.' That is what the supposed Direct Action actually does.

We have people ringing our offices constantly, telling us about the hardship that they are experiencing because of this budget. We have people ring us and tell us every day that they cannot afford it. We have had students write to us, saying that they simply will not be able to go to university because it is already a challenge if you live rurally to get to uni and be able to meet the accommodation and extra costs and this will make it nearly impossible now.

So we will send these budget measures back. We will vote against what the Abbott government wants to do. We will send back all of their harsh cuts in every shape or form that we can. But there are some who have suggested—such as Andrew Wilkie and the Palmer United Party—that the Senate should block supply and should stop the ordinary annual services of government being delivered, which would mean that they would grind to a halt in a progressive weight from 1 July. That includes hundred and 150,000 federal public servants not being paid. These are the public servants who not only would suffer personally but are also the ones who make sure that government services like Medicare payments, or social security pensions or welfare payments are paid to people who need them. If you decide that you are going to stop the ordinary annual services of government you are going to shut down those offices and people are not going to be able to access those services.

The rejecting or delaying of appropriation bills means that, without those annual appropriations, there is no source of funding for delivering the wide range of services that government agencies deliver and, whilst the funds might be there to pay the pension or to pay tax refunds and a whole range of other government payments, there are no funds lawfully available to pay for the administration of those payments, whether they are through direct salary, systems administration costs or contractors. So, effectively, if Andrew Wilkie and Clive Palmer have their way, a range of vital services that government delivers—everything from air services and other transport safety services, quarantine protections, customs and border operations, law enforcement and regulatory services, the administration of the federal courts and tribunals, a multiplicity of research activities and the conduct of international relations—could all be compromised by the unavailability of funds to be able to have people deliver them.

While it is expected that essential services would be maintained and employees would continue to work for deferred salary, the impact on the economy and the financial system through the failure of the government to pay its bills and honour its contracts cannot be underestimated. That impact would be acerbated by the inability of individual Commonwealth employees to pay their bills or buy goods and services. If you are realistic about this, people live from pay to pay. They have to pay a mortgage. What is a Commonwealth Public Servant going to do if they do not get paid? Are they going to default on their mortgage? How are they going to pay their rates? How are they going to pay their energy bills? How are they going to buy food? These are the realities.

Let there be no doubt that we are absolutely going to take it up to the Abbott government on this budget. We have already given a clear indication that we are going to do everything in our power to keep the clean energy package and the Clean Energy Finance Corporation. In supporting the retention of that, we have set up a double dissolution trigger—and, if the government wants to go to an election, it can. Blocking appropriation bills means that the government has the choice of just going to a House of Representatives election. A double dissolution trigger means that you can secure a re-election for the whole parliament. We have already set up one trigger, and it is now up to the Abbott government. Of course, as soon as we set up the trigger, we heard the government say 'Just because we've got a trigger, we wouldn't pull it.' That is because the Prime Minister, Tony Abbott, knows that the community finds this budget totally abhorrent.

It is interesting that it is always the far right wingers who are the ones who create instability and uncertainty in the community. If you look at what the Tea Party did in the United States, bringing that country almost to the brink in terms of the financial relationship there, you can see what happens if you start threatening ordinary annual services of government. Of course, in Australia it was the Liberal Party who forced the constitutional crisis in 1975. They only threatened to block the budget; they did not actually do it—and that brought on that major constitutional crisis. The Greens are here as very strong and reliable people in this parliament. We have demonstrated through balance of power in state governments around the country and in this parliament that we will absolutely take it up to the government. We are going to vote down every one of their cruel budget measures that come through this place, but we are not going to cause a constitutional crisis.

We will, however, set up a double dissolution trigger and have that potential to go to an election. If the government are prepared to go to an election, good, because the people will show them very well that they do not support the unfair and regressive measures that the government are proposing. Just to reiterate: the Greens will block and vote against the attacks on universal health care and vote down the $7 GP co-payment; we will block the cruel changes to the living and studying allowance for young people and students; we will vote against and block the unfair and regressive user-pays model proposed for our universities; and we will do everything we can to stop the destruction of the clean energy package—which again goes to the question of whether you want the past or whether you want the future. We are very much focused on the future of our nation, of looking after people, of creating jobs, of attracting investment in renewable energy and new jobs, in spending money on research and universities, in developing the knowledge based economy in supporting the creative industries—that is where we want to go—and we absolutely condemn the government's attack on science, research and evidence based policy.

We do not support in any shape or form the crippling cuts to CSIRO, the Bureau of Meteorology and rolling together the National Environmental Research Program and the Australian Climate Change Science Program. We cannot continue to produce world-class research if the government keeps threatening the research budget every year. It is the wrong way to be going in Australia and, in terms of Tasmania, we now have a world world-class hub of marine, climate and Antarctic researchers and we should be strengthening that. Instead of that, the government is smashing it with cuts to CSIRO, and we are going to see a further 18 jobs go making a total of 16 in the last year. We are strong supporters of CSIRO and we are not going to support those savage attacks.

Nor do we support the attacks on the ABC and SBS and the next round: we are told that the $45 million is just the start and there will be another $45 million out of the ABC and SBS. Australians love the ABC and SBS and do not want to support these cuts but it shows the values. This shows the Rupert Murdoch agenda coming out of the government. It shows what the Institute of Public Affairs wants to do to shut down and cut down the public broadcaster and SBS, and we all know why that is the case, and of course the Australia Network is something that Rupert Murdoch has long wanted to shut down.

The Greens want the big miners, bankers and polluters to pay their fair share first and we could raise $79.2 billion in revenue and avoid all these cruel measures in the budget if we actually did get those super profits tax on the miners fixed; if we got tax avoidance from these discretionary trusts dealt with, if we retained the carbon price; if we actually dealt with this issue of past and future; if we actually put a levy on the big four banks; and if we imposed a levy on thermal coal. We need to actually make decisions that set us up for the future not leg-rope us to the past. I reiterate: the Greens in this budget will stand absolutely up to the Abbott government's attempt to lock us into the wealth and the resource based economy dictating unfairness. (Time expired)

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to be able to contribute to this debate today on the appropriations bills before the Senate and to make some comments about the Abbott Liberal government's budget—a budget that is a litany of broken promises.

It has taken Prime Minister Abbott less than nine months to make so many Australians disenchanted with his government as they realise that the promises that were made before the election are now to be broken; in fact that they were lied to before the election. Before the election they were promised no cuts to health, no cuts to education, no cuts to pensions, no cuts to the ABC or SBS and no new taxes. Those promises have been broken—broken too is the pledge from the Abbott government not to cut the jobs of more than 12,000 public servants and the promise not to make further cuts to overseas development aid—and all of this on the back of another lie about the state of the federal budget and the confected emergency about the state of budget.

There is no credible economist who supports the federal government's continued lie that Australia' budget is in a dire situation. It is not, and we should not be making decisions based on a lie. In my home state of South Australia, we have been hit particularly hard by the government's backflips; however, it is regional South Australia that will really feel the brunt of these actions. In fact, rural and regional South Australians will be worse off after $18 million was cut from our road funding. Every local council in South Australia has written to South Australian senators complaining about the devastating effect that that cut to funding will have. We can thank in part the member for Mayo and the Assistant Minister for Infrastructure and Regional Development, Jamie Briggs, a South Australian himself, for the fact that rural and regional roads across South Australia will be stripped of vital funding. Surely, as a South Australian, Mr Briggs would understand how important it is to have the vast regional road network in South Australia adequately funded to keep those roads safe for regional and rural South Australian drivers.

Furthermore, the member for Barker, Mr Tony Pasin, whose local electorate covers much of regional south-east and north South Australia and the Riverland, has not stood up for the people who voted for him either. Rather than fighting for his local region, fighting to protect the vital infrastructure linking South Australia's regional towns, Mr Pasin is out there giving the message to rural and regional councils and residents that the Abbott government only cares about the safety of motorists travelling on roads within Adelaide and the city's surrounds. This is a budget that defies belief. It has inflicted or will inflict suffering on almost every part of the community. From the fuel tax to the GP tax to the increase in prescription medicines, no-one will avoid paying more because of this cruel budget. I listened in disbelief to fellow South Australian, Senator Birmingham, a Liberal senator, in this place last week when he spoke in a positive light about the budget, mentioning how good it would be for South Australians and all Australians. Senator Birmingham said in his speech, 'Australia should have a society where we look after those who need it, provide opportunity to all those across Australia and reach out to give a helping hand to those who are in need.' What riled me most is that I do not disagree with that comment from Senator Birmingham, but for him to then go on and say that somehow this budget would deliver that is incredible—

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

Incredulous.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

and incredulous. Mr Acting Deputy President, I would ask Senator Birmingham through you: how do you not realise that, in order to reach out and give that helping hand to those people in need, you cannot start by cutting their benefits, particularly those of unemployed people. That does not assist them to get back into the economy. That does not assist them to get back to work; it throws them on the scrap heap. How do you not realise that the Abbott government's vicious cuts will hit South Australians hard, in particular, by slashing funding to South Australian hospitals, with some $655 million having gone from South Australian hospitals? How many beds will have to be closed in South Australia? How many extra people are going to front up to the emergency services department in South Australian hospitals because they cannot afford the $7 GP tax? The South Australian government has done some modelling on this already. They estimate that waiting times in emergency departments in South Australian hospitals will increase threefold because people are forced to go to the emergency departments of hospitals because they cannot afford the $7 GP tax.

I have had quite a bit of correspondence from people across South Australia complaining about the budget and giving me their personal account of how it is going to negatively affect them. Sue, who lives in the Barker electorate, said that as a chronic asthmatic with osteoarthritis in both knees and her wrist, she will be unable to afford to pay the $7 GP tax every time she needs to get a prescription. Furthermore, she said that, on top of that, rather than having to pay more to fill those prescriptions, she will just have to live with the pain. Julie, who lives in Boothby, is a single mum with two children, who works four days a week and is also a full-time student. She lives in public housing. She has seen a 25 per cent increase in her food bills and cost of living over the last year. Her six-year-old daughter has diabetes, so Julie has added financial pressures from her medication requirements and utilities expenses. She said:

If any more financial burden is passed on to me, such as costs of medical visits, increase in diabetic pump consumables, the loss of Family Tax part B, we will be in a very serious dilemma.

She is not alone. Any additional expenditure for Julie and her daughter will be something that she will find unbearable, and clearly something else will have to give so that she can afford to purchase those essential medications for herself and her daughter. Julie further stated:

I don't think the present government—

that is, the Abbott government—

has ANY idea what it is like for those who ARE doing their best to do all the right things and STILL not being able to get ahead, or in their case, being a lot worse off. It is the difference between putting food on the table, or going to the doctor or even having to access charities—

go begging to charities—

to obtain food or assistance.

Unfortunately, Julie's and Sue's stories are just scraping the surface of the number of South Australian people that will be affected by this unfair and cruel budget. I have heard plenty of other stories from people in similar situations.

Perhaps most significant for me was the reaction of people who live in Barker, a regional seat and one of my duty electorates. Barker has always been a Liberal-held seat. In the days and weeks following the budget, the Letters to the Editor section of the newspapers were anything but Liberal-leaning, I have to say. It was extraordinary to see in those letters and messages to regional newspapers in Barker the amount of anger aimed at the coalition government that bubbled up and spilt off the pages. It was unlike anything I had seen before in South Australia. Clearly people who live in the regions know they have been dudded by the government that they supported, because the government lied to them before the election.

Another thing that has resonated in particular with regional South Australians is the cuts to the ABC. As we all know, the ABC is valued, if not loved, by regional Australians, who understand how important it is to have an independent broadcaster subsidised, if you like, by government and by the taxpayers of Australia to provide essential news services and other information services in regional Australia. We know that privately owned news media and other media outlets are withdrawing from providing comprehensive services into regional Australia. Again, I have been inundated with comments, emails and letters from people in regional South Australia and the Barker electorate saying, 'Please, protect our ABC.' Before the election, the Prime Minister clearly stated that there would be no cuts to the ABC. We have heard that quote reiterated many times in this chamber. And what was one of the first things Prime Minister Tony Abbott did? He cut $232 million from the ABC budget. The managing director of the ABC has clearly indicated that this is going to have an adverse effect on the services of the ABC. We also know that that is not the end to the cuts to the ABC. There is more to come.

I want to touch on a couple of other facets of the budget—in particular, the threat the budget poses to the vital defence industry in South Australia. We know that defence industries in South Australia contribute $2.5 billion to the state's economy and will employ over 38,000 people by 2020, if they are funded properly. But after the budget the future of those jobs in South Australia is in doubt. South Australia currently holds 25 per cent of the nation's defence projects, including the largest defence project on record, the Air Warfare Destroyer Project. There is also the Future Submarine Project. We have been asking the Minister for Defence what will happen to that, and what the impact will be in South Australia. So far we have had no solace from the responses of the Minister for Defence, who is clearly preparing to walk away from South Australia. In South Australia we also have the significant presence of the Defence Science and Technology Organisation at RAAF Base Edinburgh, another defence installation vital to the South Australian economy. We are concerned about the future of that magnificent research institution. As I mentioned in the chamber last week, we are desperately worried about the future of the shipbuilding industry in Australia and desperately worried that shipbuilding in Australia will be tossed aside by this federal government in favour of purchasing ships from overseas.

I also want to highlight the effect that this budget will have on our veterans. The government seems quite happy to gradually erode our veterans' pensions and benefits, despite that fact that the Prime Minister, before the election, said that there would be no cuts to pensions. This budget clearly includes cuts to pensions, and to veterans' pensions as well. The Veterans' Affairs budget itself has been cut by more than $100 million, down from Labor's record $12.5 billion in the 2013-14 budget. The Seniors Supplement for veterans will be scrapped. The supplement helps them pay for energy, telephone, internet, rates, water and sewerage, so its scrapping will just add to the pain of trying to live on a pension. Veterans will also suffer from the reductions in other support measures relating to medical and pharmaceutical benefits in various local and state government concessions, unless state governments step up to the mark and fund them out of their own budgets. It is disappointing when we see coalition members ready to wrap themselves in the Australian flag and declare their support for Australian veterans on one hand and then on the other hand support a budget that targets veterans who rely on pensions to live.

Last week's South Australian state budget revealed the true cost to South Australia of the Prime Minister's broken election promises—a massive $5.5 billion in cuts to our schools and hospitals over the next decade and a $123 million cut to pensioner concession funding over the next four years. Liberal cuts are going to really hurt South Australian families. On this side of the chamber, we are prepared to stand up for South Australian families and we will continue to fight against the worst aspects of this budget. As has been said, we will support the appropriation bills. That is a responsible thing to do, but that will not stop us fighting every step of the way to restore fairness and equity to the Australian budget. There is no need for a budget that is unfair and cruel, as this one is. I look forward to working with all of my colleagues to ensure that we ameliorate the worst aspects of this budget. I call upon coalition senators from South Australia to stand up for their state.

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

This is a budget you would go hoarse on; it is that bad. I rise to contribute to the debate on the appropriation bills.

The Prime Minister called this budget a 'fair budget'. He believes that this budget is fair on the Australian people. He could not be more wrong. This is a budget of broken promises and twisted priorities. It is a budget that attacks the fundamental basis of the Australian social contract. The Treasurer has claimed that Australia has 'lifters and leaners', trying to split people in two. He is trying to divide that social contract. He has made a high political value of the cost per working Australian to support those on welfare. Lifters and leaners: a not-too-subtle coded attack on the poor, those people who are unwell and the most vulnerable Australians. With all of the rhetoric from the big, dancing Treasurer you would think that if the budget were to be cruel, it would at least be consistent. Yet, the budget is as inconsistent and unfair as it is cruel. It is because at the heart of this budget lies a real stinker—a real betrayal of the hard-working Australians who are being attacked by the budget. The Paid Parental Leave scheme—this friendless policy which the Prime Minister calls his 'signature policy'—hands out to those who need it the least. His backbench knows it; his Cabinet knows it; and, quite frankly, the Australian people get it, too. They know it. The PPL is bad policy; it is fundamentally unfair; and it is tearing this government apart.

The government claims that there is a budget emergency, and so let's walk through the facts about this emergency. I do not hear any siren in the background. The claimed emergency is of such grave magnitude that they have cut $80 billion from health and education, imposing a $7 tax when you visit your doctor or get an X-ray and an increased cost for medicines. Attacks on the elderly and people with disability and their carers by cutting pensions and by changing the indexation arrangements to carers payments and disability payments form the centrepiece of this broken promise. What a centrepiece it is: it attacks young people by increasing HECS fees and people on Newstart and youth allowance by forcing them to wait six months before receiving any support. From the young people starting out of life to those senior people who have contributed so much to this nation, they are all being made to suffer for this unfair budget full of twisted priorities and cuts because of the siren in the background—this so-called emergency.

The emergency is so severe the government wants to introduce a massive rolled-gold Paid Parental Leave scheme—that is how this emergency is framed. This scheme is economically irresponsible, inherently unfair, poorly constructed and, could I say, the best example of the ideological confusion that grips this Abbott government. It does spark outrage from those opposite; they should be as outraged as I am with this Paid Parental Leave scheme and its unfairness. I reckon they would find it hard to convince their electorate, but I hear rumours that they are hiding from their electorate when it comes to these issues. Mr Abbott's scheme is so unfair that, for example, women earning $100,000 or more will receive the new maximum of $50,000, while a woman on the minimum wage receives $16,000. It is pretty easy to work out who is much better off; it is plainly and simply not right.

I think those who questioned the then opposition leader Mr Abbott at the debate at the Rooty Hill RSL put it well. One man asked the Prime Minister why it was fair that a forklift driver from the Mount Druitt area should pay taxes to fund the parental leave of a lawyer in North Sydney. In contrast, before Labor introduced a fair Paid Parental Scheme for the first time in our history, only 55 per cent of women were able to access paid parental leave. This was a dreadful situation for working mothers, as they often had to take unpaid leave or, worst of all, leave the workforce completely. Today around 95 per cent of working mothers have access to paid parental leave, because Labor built a scheme which was fair, affordable and, most of all, which supported those who needed it the most. The Productivity Commission said in its 2009 report to government that:

… a flat rate payment is appropriate in an Australian context and has the virtue of simplicity and affordability.

It went on to say:

Payment at a flat rate would mean that the labour supply effects would be greatest for lower income, less skilled women precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave. Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.

I think that independent source sums it up well. It is a strange day when a Liberal government wants to ignore the findings of a Productivity Commission report. I find it strange, because the Productivity Commission has, in my opinion, always fallen on the more conservative view, and yet the coalition have shunned it. It has put them at the wrong end of this book.

It is important to emphasise, though, that this Paid Parental Leave scheme is not an idea that has organically developed from within the Liberal and National Party room. It is not part of Liberal party philosophy, and I do not think I have ever seen it on their manifesto. It did not come about from thorough analysis and policy development from inside the government. This is the Prime Minister's own costly answer to a political problem—namely, the lack of trust women place in him personally. The problem with the Abbott Paid Parental Leave scheme is that it essentially acts as an income support payment without the means testing that other welfare payments currently receive. Contrast that with what they are now doing and saying in the welfare area. It stands in contrast to that. For a government that speaks a lot about ending the age of entitlement, introducing a gold-plated Paid Parental Leave scheme that is unfair, badly targeted, and expensive—I will let those opposite judge how contradictory that is, because they are being told that every day when they return to their electorates.

Let us not forget that when Mr Tony Abbott was overseas, it was Mr Joe Hockey doing the rounds, crying about the burden on taxpayers in funding welfare programs—Mr Abbott did a hospital pass to Mr Hockey to sell this. The Paid Parental Leave scheme was crafted for political purposes and without any evidentiary base as to its efficacy. Contrast this with the current Paid Parental Leave scheme introduced by Labor. After the Howard government had done nothing for years, Labor acted. We faced opposition too, of course: let us recall what Mr Tony Abbott said about it in 2002: 'Compulsory paid maternity leave? Over this government's dead body; frankly, it just won't happen'. That is what he said—an amazing turnaround for this guy. He knew that his scheme was so unpopular and so unfair that it would not even get approval from the shadow cabinet, let alone the coalition party room. So he just announced it—brought you all on board; told you all about it after the event—to the bemusement of many shadow cabinet ministers at the time. He certainly blindsided his own backbench. We have had Senator Williams—rightly—point out that this scheme is too expensive. Senator Boswell, Senator Bernardi, Senator Smith and others also note their reservations and their opposition to this unaffordable scheme. To understand the full workings of this government and this Prime Minister, I think it is worth reminding the chamber of the words of Senator Ian Macdonald in this place a few months ago.

This Prime Minister is working on what I would call an old style, Soviet command-and-control structure. It is quite amazing for those opposite to talk about their own government in this way. Even the Greens do not have this sort of Communist dictatorial nonsense; I would accept it from them, but for the Liberals and Nationals, who are never happier than when they are reliving the Cold War, this is a strange way to act. I thought I had seen it all, but Mr Tony Abbott's ragtag bunch of misfits have found new and innovative ways of putting the 'fun' into dysfunctional. So let us remember Senator Macdonald's words from December last year, which really explain the dysfunction at the core of this government. He said:

I was particularly disappointed as my many inquiries to the Prime Minister's office, which seems to have an almost obsessive centralised control phobia over this and every other aspect of parliament, responded to me when I kept inquiring with, 'We will let you know when the terms of reference are eventually decided.'

And he went on to say:

I will not have unelected advisers in the Prime Minister's office telling elected politicians, who are actually in touch with their constituencies, what should and should not be done.

This just shows the chaos, the venom and the anger in the Liberal party ranks over this dog of a budget.

I want to spend a little bit of time working through the labyrinth of illogicality as to how this exorbitant Paid Parental Leave scheme will supposedly be funded. Bear with me for a little bit, because I suspect the only way you can fully understand the funding mechanism for the scheme is by clinging tightly to the misfiring synapses within the Prime Minister's brain. The first thing the coalition proposes to fund the multibillion-dollars-a-year scheme is to cut company tax across the board by 1.5 per cent—hold onto your horses on that one! That is right, in order to fund a massive new spending and entitlement scheme, the first thing the government will do is to cut taxes. Then the Prime Minister plans to impose a levy of 1.5 per cent on all Australian companies with a taxable income of more than $5 million. So they are saying, 'we will cut 1.5 per cent of taxes, and we will find a 1.5 per cent levy to put back'—I assume—in its place. So if you run a company with a profit of more than $5 million, you receive a tax cut that is immediately followed by—let's face it—a tax rise. As part of this preposterous funding plan, the government will undo a significant Hawke-Keating reform by reintroducing double taxation to company profits distributed to shareholders as dividends. The respected financial journalist, David Love, described well the taxation scheme that existed until Hawke-Keating government in his book, Unfinished Business: Paul Keating's Interrupted Revolution. He says this:

For decades, investors in Australian companies had paid tax twice on company incomes. They had paid it in the form of company tax when company income was declared, and they had paid it again in the form of personal income tax when company income was distributed.

For generations of mostly right-wing treasurers, the Australian capitalist had gone on blindly paying tax twice on his equity capital. This was largely because conservative treasurers had been too lazy or incompetent to pick up the anomaly.

Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Link to this | Hansard source

Or both!

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

Or both. Paul Keating set to work getting rid of this preposterous circumstance, which has forced mum-and-dad investors and small, family-run businesses to pay tax twice on company income. These days, when dividends are distributed to shareholders—whether they are small private investors like self-funded retirees or families that run successful businesses—individuals receive a franking credit for the company tax already paid on that income—that is sensible.

The ATO currently recognises that dividends have already been taxed at the company rate and therefore individual investors receive a franking credit when dividends are distributed. That means that an investor who has had a marginal tax rate of 37 per cent will only be taxed at seven per cent for the dividend that they receive—clear. But the Treasurer and Prime Minister are planning to bring back double taxation in order to fund this Paid Parental Leave scheme. They are going to hit mum and dad investors again.

Now people who receive dividends from companies which are liable to pay the 1.5 per cent levy will no longer receive a franking credit for that 1.5 per cent. Mum and dad investors who listened to John Howard and bought Telstra shares and had a marginal tax rate of 37 per cent will now pay 8.5 per cent tax on any dividends they receive—another slug. You think it will not be seen? It is there. Mums and dads will feel it, let me tell you.

Paul Keating did Australia a great service by removing double taxation, and it is quite astonishing that a government such as this—a conservative government, which, at least up until a few years ago, championed the ability to say that they were for mum and dad investors—would consider reintroducing that appalling position. It is even more galling that it is being done to pay for an excessive paid parental leave scheme that will deliver very few benefits. For a party that professes to be in favour lower taxes, it is frankly absurd to be reintroducing double taxation. But there we have it. That is what they are doing.

I would encourage those opposite to recognise that that is exactly what they are signing up to: to double taxation again. But, given the conservatives' history in this area, it should not come as any great surprise; it just places Mr Joe Hockey in his rightful place in the long line of lazy and incompetent treasurers that we have had from the conservative side of politics. He dances on the 'best day of his life' as he cuts support and funding for the most vulnerable in the community; that is his signature tune. Mr Abbott's signature tune is an unaffordable Paid Parent Leave scheme.

This bizarre funding mechanism does not even cover the entire cost of the scheme. As Laura Tingle pointed out prior to the 2013 election:

Having finally undertaken a more serious costings exercise than it did in 2010, it emerges this levy will only finance slightly less than half the cost of the scheme.

In fact this government is so unsure as to how it will pay for the Paid Parental Leave scheme, it is not even in the budget. It cannot be found. It is a signature policy, the one that they have been promoting for so long, but it cannot be found in this budget. Instead, it is locked up in the contingency fund, because the government is still working through how to fund it. So, be aware: double taxation might be the first tranche of some other innovative ways this high-taxing Liberal government will find to tax the Australian people so as to be able to cover an unaffordable Paid Parental Leave scheme that is plated in gold.

The Prime Minister and the Treasurer have had four years to figure out how to pay for this extravagant scheme—three years in opposition and now almost a year with the full resources of the Treasury department to help them—but they are still unable to find a coherent funding mechanism. Quite frankly: give it up.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

If the Abbott budget were to be summed up with one word, that word would be 'unfair'. Mr Abbott and Mr Hockey have unfairly attacked Australia's most vulnerable citizens, through a whole series of measures in this budget, and in doing so they have knowingly broken their election promises and sacrificed the interests—and, indeed, the wellbeing—of young people, older people and people already living with disadvantage. To make matters worse, they have manufactured a 'budget crisis' in a pitiful attempt to try and justify these savage cuts. This manufactured budget crisis is a serious and committed attempt by them to mislead the electorate and justify the enormity of the cuts that they are seeking to put through in this budget.

It is also a budget that, I believe, attacks the values that Australians believe to be perennial values. Often, as major political parties, we are challenged about being too much alike. I certainly know that we get that from the cross-bench. In some parts, a universal commitment to free education, to investing in education, and a universal commitment to the sustaining of public health care are things that people, I think naively, took for granted—not from the Labor Party but from the coalition, who went to the last election promising that many things like this would not change. They went further, promising explicitly that their commitment, for example, to our education reforms that came about through the Gonski review would not be touched, and would not change, and that they were going to stand with the Labor Party in the commitments to those education reforms. I will talk about higher education shortly. But, as I said, this budget does undermine the fundamental values that I think many Australians—in retrospect, naively—thought that the coalition would also stand for once they attained office.

The inequality of this budget and the fabrication of the budget crisis is a reality and, I think, has been now realised by the Australian people. In recognising this, there is a great deal of anger in the community, and I, like many of my colleagues—and, I am sure, many coalition senators—have been contacted by voters who placed their trust in the Liberal Party at the last election and feel mind-blowingly betrayed. Voters looked at their policies—as I know many people in my constituency do—very closely. They looked at them from their own perspective, for sure, but they also put them to that general decency test, as they put every government to when they consider casting a vote for them.

I believe that, in the area that I represent, the Australian Capital Territory, the inequity and unfairness of this budget is more apparent than ever. I know that all around Australia people are concerned. They are angry. They are very worried about their future, their parents' future and their children's future. But here in the ACT we are being asked to carry a disproportionate cost in relation to job cuts coming about as a direct result of these budget cuts. It is not just jobs. It is also about health and education. For example, cuts to the states' and territories' health funding mean that the ACT health budget will take an instant hit of some $47 million on 1 July 2014. This is the equivalent of 390 nurses' salaries and more than 2,800 elective surgeries. This is the first instalment of a $240 million reduction in health funding flagged to hit Canberra over the next four years.

To put this in perspective, the New South Wales government is also losing $1.2 billion in health funding over the next four years, which works out, if you want a simplistic analysis, at about $165 per person. In the ACT, the $240 million worth of health cuts is equivalent to the loss of $627 per person in health funding, approximately four times that of the state within which the ACT sits.

Education is also taking a hit in this unfair budget. We have 62,500 primary and secondary students here in the ACT whose education outcomes have been put in jeopardy—and not just theirs but those of the future generations of students who will move through our education system as well. We know the cuts to higher education in particular are going to disproportionately impact on Canberra again because we have a high proportion of higher education students. There are 37,000 higher education students here in Canberra. That is one in 10 Canberrans engaged in one form or another of higher education. Each one of these Canberra students contributes to our local economy both as a consumer and very often as a casual or part-time worker. They are also carers and contribute to community and family life. These students are facing a double whammy of increased costs and greater debt.

The coalition's proposal to deregulate university fees and their plans to raise interest rates on HECS debts while at the same time lowering the minimum repayment threshold will cause university fees and debts to rise. It will inevitably lead to a situation where students will weigh up how much debt they are prepared to incur and how long it will take for them to repay it when deciding whether or not to undertake tertiary education at all.

This is an attack on the values and system established firmly by the Whitlam and Hawke governments of the past, sustained by previous coalition governments. It is a system built around the principle that someone's merit rather than their wealth is what should determine their opportunity for higher education. Cuts of this magnitude are reminiscent of the previous Liberal government's cuts after the 1996 election. But back then the principle of maintaining one's ability to access higher education based on merit was not undermined to the extent that it is in this budget and these budget proposals. I remember Senator Vanstone having stewardship of the portfolio of higher education at the time and the way in which across there, probably not too far from where Senator Cormann is sitting now, she announced stewardship over a substantial raft of cuts to higher education research and development funding. So for someone like me who has been here now for quite some time, including in the first term of the previous coalition government from 1996 to 1998, it is like deja vu. It is like deja vu seeing this first round of budget cuts emanating from a government that has abandoned the principle of education in this country being based on merit rather than on personal or family wealth.

As there was back then, there was an explicit commitment by the leader of the coalition that there would be no changes to government funding for higher education. Now, like then, we see that commitment being completely abandoned, seemingly without a second thought and certainly without a peep of protest from either the frontbench or the backbench of the coalition government. This is a sad indictment on politicians representing the coalition who I know believed the rhetoric that they heard from their leader, which was that a promise was a promise and promises would be honoured. All around the electorate we heard them make much of those promises and now we see example after example in this place of those promises, principles and values being recklessly abandoned. They stand up here and make no apology for that.

I am also very worried about young Canberrans who are not in higher education but have decided—I think very wisely—to devote themselves to developing their skills in vocational programs, such as apprenticeships, to go into a multitude of trades. Before the election, Mr Abbott promised the 9,000 apprentices and trainees who call Canberra home that under his government they would receive more financial assistance to learn their trade and find employment. But, instead, the Abbott government has cut over $1 billion from programs that supported apprentices. Tools For Your Trade payments, currently to the tune of $5,500 for each apprentice—and you only need to go to the local hardware store to understand the costs incurred by young tradesmen and tradeswomen if they seek to kit themselves up for a life in their chosen trade—have been abolished in the budget, as have numerous mentoring programs that supported apprentices from disadvantaged backgrounds. This is a continuation of the litany of broken promises.

Of course, there is more. Another area of significance for the ACT economy is the commitment to research, development and innovation here in the ACT. I acknowledge the ACT is a substantial beneficiary of the physical location of organisations such as the CSIRO. I think our whole society benefits from the presence of so many scientists among us. But the CSIRO is going to be cut by $115 million. This will cost the organisation some 420 staff in the next 12 months and an estimated $49 million in external revenue. The CSIRO Staff Association believe that, in response to these cuts, management will cease research in neuroscience and geothermal energy as well as cut back research into astrophysics, radio astronomy and carbon capture. Surely in just this short list of five areas of scientific research you can see the folly of such a cut. All of these areas are likely to produce not only great scientific outcomes and benefits to our industry and our society but I suspect some really strong export revenues as well. These are the areas of scientific research that will drive our future economic growth and yet this thoughtless cut, this broken promise, is going to undermine our very capacity as a nation to leverage our brains in this knowledge economy and to create an optimistic and prosperous future. As I said, the CSIRO have a strong presence here in Canberra and the impacts of these cuts will be felt throughout the community.

Research for information technology has also been savaged in this budget—eight programs which support Australia's continued innovation within the information technology sector. It is hard to say 'sector', because information technology is the core of every sector these days. In attacking information technology investment in R&D and innovation, the government is actually attacking the heart of every sector, every business place, from the public sector right through to mining. It is IT that drives their business processes; it is IT that sits beneath the data that is used, whether it is for exploration in our offshore oil and gas fields or whether it is environmental data being collected so we can assess the prospects for our agricultural sector. This data, this information technology that empowers every sector to be smart in the way they do business, has been attacked. This includes Commercialisation Australia—a $213 million grant program for start-ups—and the Innovation Investment Fund, which co-invests and supports our capital venture sector to make sure that our smart start-ups find their way into the market. Without these programs, which were designed through successive governments to address a market failure in the Australian economy, I am concerned that this market will fail again. Commercialisation Australia, for example, has supported over 500 companies and provides that vital lifeline to start-ups that have proven technology but need to expand their ability to prove their product, take it to market and start deriving the kinds of growth revenues and export revenues that allow our economy to continue to grow.

I have spent a fair bit of time looking very closely at the IT and related industries, and we are in so many sectors the best in the world. There are bright Australians all around the world, leading the way in technology—and here we are, through this unfair budget, spiking the very foundation of where our brightest people come from. We are denying Australia the opportunity to build these successful companies from scratch, and we are saying to these bright people, 'We don't want you, go and find your fortune and your success offshore.' In this way, these measures in this unfair budget are directly contributing to the brain drain that we all stand up here and lament on a regular basis.

NICTA is another casualty. NICTA will be defunded from 2016 under this budget. I hope that all those PhD students and all those clever people who are now working to create new wealth-creating companies based on fantastic Australian technology can, between now and the 2015 budget, convince the Abbott government cabinet to continue funding for NICTA, because they deserve it. NICTA was a product of the Howard government, and it came about as a response to the lack of consolidated and focused effort in driving PhD student opportunities and driving opportunities for commercialisation specifically of IT start-ups in the Australian economy. It was a coalition solution to a market failure that prevented Australia from capitalising on what we were great at—IT. Now this government is saying it is not going to fund the very response to a national need to grow our economy that they came up with in the first place. What folly! Surely on the coalition side there is someone with a little depth and a little corporate knowledge that understands the stupidity of these measure and the damage they will do.

I turn to the Public Service. In the last 24 hours we have heard further reports from the CPSU about another attack on the very conditions of Australian public servants. The Australian Public Service is one of the strongest performing in the world. We know that despite the misinformation promoted by the coalition government it is one of the most efficient public services in the world, and it is one of the most effective. We know, because of our experience in government, that you need a strong and efficient and effective Public Service to get the job done and to serve Australians' needs. We had a program in government of making sure the Public Service was extremely efficient. The Labor Party does not accept that our proposed measures to extract those efficiencies in any way led to the magnitude of job cuts that constitute yet another broken promise by this government. Senator Seselja, my fellow ACT senator, said on 4 July 2013 on ABC local radio with Adam Shirley:

The Coalition have been good enough to put their policies on the table and that policy is to, across Australia, reduce the size of the public service by 12,000 through natural attrition. Now my job should I be elected to the Senate will of course be to hold the Coalition to that promise … that's the way it should occur—that's what the Coalition has said in their policy.

Of course we know that Senator Seselja has failed, and we now know that there was never an intention to limit job cuts to natural attrition. We now know that the job cuts on the books extend to 16,500 and what we know from the analysis from the Community and Public Sector Union and evidence gathered through the commission of cuts, or Commission of Audit Senate select committee, was that the CPSU believes that could be as high as $25,000.

This is a double hit for many people in Canberra, because we are also enduring a hiring freeze. Combined with the attacks on conditions, this is an arbitrary—and I believe, an ideologically-motivated—effort to shrink the public sector on some misguided belief that you can say: 'Click your fingers—smaller government. That is what we believe in.' The real world is not like that, and perhaps after a few more months in government you will find that you cannot actually do the things that you say you will do, because you do not have a workforce capable of doing it.

Finally, I would like to acknowledge and thank the ACT government for their thoughtful and clever budget in making sure that, in response to an unfair and disreputable federal budget, they have been able to mitigate much of the damage that has been done. (Time expired)

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

I thank all senators who have contributed to this debate, though listening to the contribution by Labor senators, I have to say it is very sad to see that Labor continues to be in complete denial about the debt and deficit disaster they left behind after six years of bad government. Labor created the budget mess that we are now dealing with. Labor created the budget mess that we are now working very hard to fix. But instead of taking responsibility for their mess by helping us to fix it, here they are—even more reckless and irresponsible than they were during their six years in government.

We know that in their first five budgets in government, Labor delivered $191 billion in accumulated deficits. Labor spent $191 billion more than they raised in revenue in their first five years in government and left us with a final budget—the 2013-14 budget—which projected another $123 billion in deficits. They put us on a trajectory that was taking us to a government debt of $667 billion within the decade and growing beyond that. Government spending as a share of GDP as a result of the decisions made by the previous government was heading for 26.5 per cent when our current tax revenue as a share of GDP ratio is below 22 per cent, with the long-term average at about 23.7 per cent. That is clearly unsustainable, clearly unaffordable and clearly unrealistic for the future.

Now here we are with the Labor Party recklessly and irresponsibly opposing $5 billion of their own savings—savings they initiated in their last budget; savings they banked in their last budget; savings they failed to legislate because they were either too lazy, too incompetent or in too much confusion and chaos, given all of the leadership turmoil that took place post the last budget. Whatever the reason, they failed to legislate $5 billion in savings they had already banked in their last budget. Now we are doing the heavy lifting and the hard yards to do their work for them, they are turning around and saying: 'No, we are going to oppose that.'

All up, Labor is currently opposing nearly $40 billion in savings measures. Do we have an alternative plan from Labor on how they would fix the budget mess they left behind? No, we do not. There is no alternative plan—just politics, just reckless and irresponsible posturing that is even worse than what we experienced during a period of government that was bad enough for Australia—the Rudd-Gillard government.

Clearly what Labor wants us to do after $191 billion in deficits in their first five budgets, after another $123 billion in projected deficits in their last budget, is to continue to borrow from our children and grandchildren to fund our lifestyle and consumption today. Labor wants us to continue to borrow from our children and grandchildren so we can give the money away in various cash handouts which Labor does not want us to remove. That is incredibly reckless and irresponsible, because what will the effect be? The effect will be to reduce opportunity for our children and grandchildren, to force our children and grandchildren to pay the price for Labor's cash handouts today with interest, either through higher taxes then or through lower spending then. There are no two ways about it: at the end of the day, government cannot keep spending money that it has not got, and that is a fundamental truth that Labor just does not seem to understand.

The point that every senator in this chamber has to reflect on is that, while you might think that some of the measures in our budget are tough, if we do not start making the decisions required in order to get our spending on a more sustainable, realistic and affordable growth trajectory today, those decisions will only become harder. It will not become easier from here. If we continue to borrow from our children and grandchildren to fund our lifestyle today and in order to give cash handouts, it will only become harder when, ultimately, we have to make decisions to get Labor's budget mess back under control.

In conclusion, I was listening to Senator Lundy's remarks there and I was struck by how she said that she had been here during the period when the Howard government delivered its first budget back in 1996, and how all of this was deja vu. What I would say to Senator Lundy and to all Labor senators, and indeed to all senators in this chamber, is this: just reflect on where that journey led us. In 1996—it is indeed deja vu—we had a coalition government which, like us, inherited a budget in a mess, courtesy of a previous Labor government. We had a government that had to make tough but necessary decisions in order to get us back on track, in order to ensure that government spending was sustainable and affordable into the future.

And where did that lead us? It led us to a very strong economy, to the government having no debt and to a strong surplus. The Howard government not only paid back all of Labor's debt and delivered surplus budgets but were able to deliver tax cuts and improved benefits and services on the back of their sound financial management. That is exactly what this government wants to do; that is exactly what this government is committed to. We are committed to repairing the budget mess we have inherited from Labor and to imposing sound financial management principles on our budget so that, over time—as we get our budget back under control, as we build a stronger more prosperous economy where everyone has the opportunity to get ahead—we can again, on the back of a sound and strong fiscal position, make the sorts of judgements that we have been able to make in the past.

That is the journey we are on. We are not doing any of this for fun. We are doing it because it has to be done and because not doing it now will only make it harder to ensure that we can live within our means in the future. With those few words, I commend these bills to the Senate.

Question agreed to.

Bills read a second time.