Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to oppose the Social Services and Other Legislation Amendment (2014 Budget Measures No. 1) Bill 2014 and the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. Before the election we were told this would be a government of no surprises, a government that would never countenance cuts to health or education and that would leave the pension exactly as it is, a government that would support Australian families. How times have changed. We now know this is a budget that attacks the poor and vulnerable while it rewards the wealthy. It contains some of the harshest measures in Australian history. If passed in full, it would leave the Australian social contract in tatters and each and every one of us would be poorer for it.

Some of the very worst of the attacks in this budget are contained in the bills before us today. If they are passed, literally millions of Australians will be worse off. Very few low- and middle-income Australians would escape the crosshairs of this brutal legislation. This social services legislation includes significant attacks on pensioners, people with a disability, carers, young job seekers and low- and middle-income Australian families. Australia did not vote for these bills, and Labor will not and cannot support them as they stand. What is worse is that these cruel attacks are not necessary. The government has fabricated an economic crisis or a budget emergency, as they like to call it, in order to justify the harsh measures contained in these bills.

The truth is that Australia's economic credentials are the envy of the world. We have the 12th largest economy on the planet, despite the fact that we do not even make the top 50 for population size. We have solid growth, relatively low unemployment, low interest rates and low debt. According to the Organisation for Economic Cooperation and Development, the current net debt for all levels of government in Australia is equivalent to 13.8 per cent of GDP. This is less than one-fifth of the average debt burden carried by other industrial economies. We are only one of 10 nations in the world to achieve the AAA stamp of economic approval from all three ratings agencies. How those opposite can stand up again and again and tell the Australian people that we are in the midst of an economic crisis given these undeniably solid fundamentals is beyond me.

Normally when governments are trying to mount a case in the national debate they will put forward independent and reputable experts who will back up their argument. But, as we have seen, economists who have been willing to come out in support of the government's Chicken Little 'sky is falling' view of the world have been very thin on the ground. In fact, the very opposite is true. Earlier this month, 63 of Australia's leading economists banded together to publicly refute the government's confection. They rejected the very concept of the budget emergency, in a statement that read in part:

Australia does not face any present or imminent debt crisis. Australia’s deficit and accumulated debt are both low, relative to international experience and Australia’s own history.

They also warned that the way forward is investment in jobs, not harsh cuts. On this matter they say:

The most effective route to restored fiscal balance is to help more Australians find work, earn incomes, and pay taxes. But major and unnecessary reductions in government program spending and public sector employment would have the opposite effect.

This expert testimony shines a glaring light on how seriously overblown and dangerous the government's economic claims really are. But it seems those opposite will not let either expert advice or solid facts get in the way of their scaremongering. No-one is denying that we should be chartering a path to a more sustainable balance of incomings and outgoings, but to launch an all-out attack on the most vulnerable Australians in order to achieve this is shameful. This is not the only fabrication the government are spreading in order to justify these cruel bills. No, not content with talking down our economy, they have also turned to maligning Australia's solid welfare system, trying to convince us all that spending is spiralling out of control. Again, they have neither truth nor evidence to support this.

The truth is that Australia's welfare bill is second lowest amongst OECD countries. In 2013 our welfare spending was just 8.6 per cent of our GDP compared to the OECD average of 13 per cent. This is a government that trades in fear in order to scare Australians into believing that its cruel and heartless agenda is the only way forward. Tony Abbott misled the Australian people to get into high office and now he is confecting a budget emergency and welfare spike in order to launch a systematic attack on millions of Australians.

First in line for cuts are pensioners. In 2009, on the recommendation of the Harmer pension review, the age, disability and carer pensions increased to 27.7 per cent of male total average weekly earnings to ensure that real incomes did not go backwards as the years went by. But these bills would change this accepted formula. Instead, the government wants to link pensions to the usually lower consumer price index. To give you an idea of the impacts of this in the real world, if these indexing arrangements were put in place four years ago, a single pensioner would now be $1,500 a year worse off each year than they are today. It is very clear that those opposite do not understand the impacts of a $1,500 cut to a very modest income of around $22,000 on Australian pensioners. Although that is not surprising when you consider recent reports that one of the budget's greatest fans, Mr Christopher Pyne, thought nothing of splashing close to $1,500 of taxpayers' money on a day room in a swish London hotel.

Looking forward, the Australian Council of Social Service, ACOSS, has estimated that, if it is passed, this measure would see pensioners $80 a week poorer in a decade's time. This adds up to over $4,000 a year. If this measure passes, the cost of living will continue to increase but the pension will fail to keep up. Over time this smaller pension increase will compound, making it even harder to make ends meet. Make no mistake: this is a cut, despite what those opposite might say—a cut by stealth, granted, but a cut nonetheless. If these bills pass, Australia's 2.9 million pensioners will see an ongoing erosion of their spending capacity and an ever-mounting burden just to stay on top of daily expenses. In Tasmania this will impact on close to 100,000 pensioners. Nearly 22,000 of these pensioners live in my home electorate of Braddon. These people have contributed all their lives to the social and economic wealth of the country, but they are now being treated as little more than an economic burden.

The government's flimsy justification for these cuts relies on peddling that old rotten chestnut that our spending on pensions is out of control. Again, the facts are not on the government side. Australia spends just 3.5 per cent of GDP on the age pension, making us one of the lowest spending nations in the developed world. The OECD average of spending on pensions was 7.8 per cent of GDP in 2009. In fact, many nations—including Austria, France, Germany, Italy, Japan, Portugal and Slovenia—spend in excess of 10 per cent.

Notably, these cuts will not be restricted to age pensions. The government also proposes to use the same indexing measures for the disability support and carers pensions, and the single parenting payment, ensuring that in total 3.2 million Australians will be worse off. Not only are pensioners being forced to suffer a continuing decline in their standard of living but this bill would also have them working until they are 70 years old. This would give Australia the highest pension age of any country in the OECD. This proposal is short-sighted, and it will unfairly impact on blue-collar workers, low-income workers and women. It also flies in the face of everything we know about the serious problem of age discrimination in Australian workplaces. If 50-year-olds are finding it hard to get work, how does the government think that the situation is going to magically reverse itself for 60- or 65-year-olds?

Labor's decision to increase the pension age to 67 by 2023 was supported by a broad and thorough review of Australia's pension system. It also came with a significant improvement to the base rate for the pension and improvements to indexation. In contrast, this plan to increase the pension age to 70 is an ill-considered and ill-advised move that has been rushed through with no consultation or rational basis.

To add insult to injury, the Abbott government is axing the National Partnership Agreement on Certain Concessions for Pensioner Concession Card and Seniors Card Holders. This will scrap $1.3 billion in Commonwealth assistance to the states and territories to provide seniors and Seniors Health Card holders with discounts on their rate notices; on their water, sewerage, electricity and gas bills; on their car registration; and on their public transport fares. The national seniors organisation estimates that these concessions can add up to $1,200 for seniors each and every year. This is clearly another cut that will mean that pensioners will have to pay more for essential services from already tight budgets.

Tony Abbott promised solemnly before the election—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order! Senator Urquhart, please refer to the Prime Minister by his correct title.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Prime Minister Abbott promised solemnly before the election that there would be no changes to the pension. Now he wants to keep people working longer before they get the pension, pay them less when they finally get there and rip away government support for essential services. Australia's pensioners have a right to feel betrayed by this government and its broken promises, but they are not the only ones. These shabby amendments would also slash $7.5 billion from the budgets of Australian families through changes to the family payments system. Firstly, the Abbott government is seeking to freeze the family tax benefit payment rates including the income-free area for people on the maximum family benefit A rate. This would see more than 370,000 families lose around $750 a year in 2016-17, which will compound over time making it harder and harder to keep up with the cost of living. Again, we are seeing another policy from this government that will hit the poorest hardest.

The ACTU pointed out the unfairness of these cuts to family benefits when it said:

Many low- and middle-income working families rely on Family Tax Benefit to ensure they have a decent material standard of living. The expansion of family payments was a proud achievement of the Accord under the Hawke and Keating Governments. The provision of adequate family payments significantly reduced child poverty in Australia. Reducing these payments in real terms, as this Budget measure proposes to do, will cut the incomes of millions of working Australians. Child poverty is highly likely to rise.

In addition to these undeniable cuts, those opposite also want to cut family tax benefit B from families when their youngest child turns six. This is likely to impact 700,000 families and it will, again, unquestionably hit single-income families the hardest. In fact, it will slug single parents with an effective marginal tax rate of around 80c in the dollar for each dollar that they earn above $48,000.

The Australian Council of Social Services found that a single parent with one child aged between six and 12 would lose $37 a week from this measure alone. But it does not stop there. The Abbott government also plans to cut and then stop indexation of the family tax benefit end of year supplements. Together, these family payment changes are unfair measures that will disproportionately affect the poorest Australians, and they come at a time when the Palmer party has cosied up with the government to axe the schoolkids bonus in December 2016.

The bills before us today contain some of the most disgraceful elements of one of the most unfair budgets in history. If passed in full, this budget of broken promises would have seen around 1.2 million families $3,000 a year worse off on average by 2017-18. At the same time, the top 20 per cent of households would be a little better off. These figures do not come from Labor. They actually come from the National Centre for Social and Economic Modelling, or NATSEM, which garnered a glowing recommendation from our Prime Minister as being:

… the most reputable and authoritative modelling organisation in Australia.

Of course, this is part of the information that Mr Hockey removed from the budget papers, despite the fact that it has been a standard inclusion back to 2005. Modelling has shown a single-income family on $65,000 with two school-aged children will be around $6,000 a year worse off from 2016 as a result of the proposed changes. Clearly, a loss of 10 per cent of income would have a significant impact on their ability to manage everyday living costs, and is entirely unacceptable. It is clear that Mr Hockey knew how unfair his budget was, and he was trying to hide it from the Australian people.

If the cuts to pensioners and families within these bills are harsh and unnecessary, then the attack on job seekers is absolutely reprehensible. It is no overstatement to say that these are some of the most draconian welfare measures we have ever seen in this country. The most serious concern for me is the Abbott government's plan to force young job seekers to wait six months before they are eligible for any income support. This is not just cruel; it is inhumane. We are a country that prides itself on our strong safety net and our support for others when they are down on their luck. This bill tears the guiding principle of a fair go to shreds in favour of enforced destitution that is a sure-fire recipe for mass desperation. And, of course, it will do absolutely nothing to create more jobs for young Australians.

Department of Social Services figures obtained by ACOSS show that each year more than 100,000 people would be hit by the proposed six-month waiting period. In my home state of Tasmania, it is estimated that 12,500 young jobseekers will be affected over the next four years.

Unsurprisingly, this measure has been widely condemned by anyone who has an understanding of Australia's labour market and of our welfare system. The National Welfare Rights Network described it perfectly as:

… a fundamental attack on the basic right to social security and the principle of adequate income support based on need.

St Vincent De Paul chief, John Falzon, warned that it will plunge jobseekers into poverty and force them to choose between charity and crime. Some jobseekers may be able to turn to family or friends but many thousands of jobseekers do not have this kind of support. For them, illegal means might be the only option they have. And, of course, any increase in crime will undoubtedly flow through into the judicial system.

Similarly, our health and social services systems will wear a heavy burden if there is a spike in depression, suicide, homelessness and other social problems that often accompany financial desperation. We should never forget that if the hit on the budget will be bad from this ill-considered policy, the toll on families and local communities will be immeasurable.

Yet again we have seen the government dragging out falsehoods to justify their bad bills. The Minister for Social Services, Kevin Andrews, was caught out last week peddling false information. The minister has recently been trying to justify this cruel measure by saying that New Zealand already forces its jobseekers to wait a month before they receive income support. The Parliamentary Library disagrees, saying that no such waiting period exists. Yet again we see the government fabricating evidence to support their heartless policy.

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

I rise on a point of order. It is this reference to the government, or members of the government, with these disparaging remarks, suggesting that they are lying—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

There is no point of order. Senator Urquhart has the call.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Even the Parliamentary Joint Committee on Human Rights, which is chaired by the government's own Senator Dean Smith, found this legislation to be harsh and incompatible with Australia's human rights obligations. The plan to force young people to live without an income for six months breaches the right of Australians to social security and to an adequate standard of living. Not only that, but the committee also found the government's plan to increase the eligible age for Newstart from 22 to 25 years breached the rights to equality and non-discrimination on the basis of age.

Despite their stated goal of helping jobseekers to gain the dignity of work, their words belie their cruel and heartless attitudes to unemployed people. We have had Treasurer Joe Hockey falsely divide the world into lifters and leaners, with implications that the latter are just too lazy to go out and get themselves a six-figure salary. He has continued to use this false and arrogant division to fan public resentment against unemployed people.

Those opposite need to understand that unemployment is not a lifestyle choice. The vast majority of jobseekers are genuinely seeking work to escape an income that is far below the poverty line. This government is on the ball when it comes to punishing jobseekers, but sadly lacking on creating jobs.

In North West Tasmania, which has a 12-month average youth unemployment rate of close to 18 per cent, the government has actually cut the Employment Coordinator. If this does not show how completely twisted their priorities are, I do not know what would.

These bills represent some of the cruellest attacks in history on vulnerable Australians. They do not have the support of experts, and they will unfairly impact on literally millions of low-income and middle-income Australians, jobseekers and pensioners across all of Australia. We should vote against this legislation.

Debate interrupted.