Joe Bullock (WA, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of Senator Moore, I move:

That the Senate notes the Abbott Government's petrol tax ambush and its negative impact on cost pressures facing Australian households and businesses.

I am aware of an amendment about to be moved by Senator Lazarus with respect to this motion. It is now just over a year since the Australian people accepted the word of the then opposition leader and voted to put the grown-ups back in charge and elected the 'no surprises, no excuses government' you could trust. The Liberals said you could trust them. They ran a unity ticket with Labor on the Gonski reforms. They promised no cuts to health, no cuts to education, no changes to pensions, no adverse changes to superannuation and no new taxes.

Mr Abbott told the Australian people at his campaign launch in August last year that Australians were:

… sick of nasty surprises and lame excuses from people that you have trusted with your future.

Amen to that! Just 12 months later this government has established a remarkable record. It is a record of broken promises that is possibly unequalled—a record of nasty surprises and lame excuses. Gonski has gone. Education has been cut. Health has been cut. Pensioners who rely on the government—and many of them put their faith in this government—have been betrayed by this government. This has ensured that their standard of living will fall relative to the rest of the community by decoupling increases to the pension from increases in wages. This government vies with Brutus for inflicting the unkindest cut of all on a most vulnerable section of the community who have no alternative other than to accept what they are offered by this heartless government.

I have already questioned Senator Abetz on the adverse change to the superannuation entitlements of Australian workers entailed by the freezing of their superannuation contributions for seven years—not six years as Senator Cormann lamely claimed in mitigation—and delaying the increase to 12 per cent until 2025. Senator Abetz's excuse for breaking this promise to the working people of Australia was:

… sometimes it is worthwhile to say no pay increase to protect jobs.

The government has broken its promise to the workers of Australia and told them to be thankful that they have a job—thankful, indeed, that they do not work in the vehicle industry, which this government has dispatched from our shores. What a lame excuse!

The list of broken promises goes on and on, and today it is our turn to examine the wreckage of the no new taxes promise and, in particular, the new tax on petrol. It is a new tax on practically every Australian household and small business. The current petrol tax regime is a legacy of Australia's second longest serving Prime Minister, John Howard. Mr Howard may not have experienced the love affair with the Australian people enjoyed by the great Labor Prime Minister Bob Hawke, but at least he could take their political temperature. In 2001 he stood out against the ideologues in his own party and made a decision on petrol which arguably saved his government. In 2001 John Howard abolished the automatic half-yearly excise indexation, and this is what he said on 1 March of that year:

Now that is an enormous structural change in the area of fuel taxation and, I mean, for those who adopt a lazy approach to raising revenue this will not be welcome. But for those who believe that greater disciplines can be put on government it will be welcome.

I do not for a moment accept the continuing negative commentary of the government that the Australian economy is in crisis—at least it was not in September last year when Labor left office. Although, with the progressive shutting down of Australia's manufacturing industry encouraged by this government and the associated steady rising of the unemployment rate, the economic chickens of this government may soon be coming home to roost. Nevertheless, if we were in a crisis, we would not expect the government of grown-ups to take the 'lazy approach to raising revenue' or to eschew the 'greater disciplines that can be put on government', as advocated by Mr Howard.

The Prime Minister should follow in the footsteps of his mentor, Mr Howard, and scrap this new tax on everything. Mr Howard was a big enough man to admit that he had been wrong in advocating fuel excise indexation. He said:

Let me make it clear that I was plainly wrong in not understanding some of the concerns held by the Australian people about the price of petrol, and I acknowledge that.

This government needs to follow the example of Mr Howard, acknowledge the interests of Australian people, admit that they were plainly wrong, abandon the lazy approach to raising revenue and scrap this tax. Mr Howard sought, through his actions, to bind future governments. He said that his decision would impose what motorists would see as a very welcome discipline on future governments. How disappointed Mr Howard will be to see that it is a coalition government which is abandoning the discipline which he sought to impose. While I would not claim that Mr Howard always acted in the interests of working people, particularly in his later, politically disastrous Work Choices years, there was a time when his understanding of working people—of Howard's battlers—won him elections. He understood the sensitivity of working people to petrol prices and legislated accordingly.

What is the level of understanding shown by this government? I was reminded of Michael Keaton's character in the movie Multiplicity when the current Treasurer Mr Hockey, like Peter Costello's dimwitted clone, claimed that his new tax was progressive because the poorest people either do not have cars or, if they do, do not drive them very far. If Mr Hockey had ever visited the outer suburbs of a major city, he may have been surprised to find large numbers of low-income families living there. He may also have discovered, as Professor Currie found in his 2008 research with respect to Melbourne, that the average car trip in the outer suburbs is 16.4 kilometres, whereas, in the inner suburbs, home to the more high-income families, the average car trip is only 6.4 kilometres. He may also have found that the outer suburbs are particularly ill-served by public transport. What this means for working people, Professor Currie found, was that 90 per cent of workers in outer suburbs use their cars to get to work, compared to just 65 per cent across Melbourne as a whole. For low-income outer-suburban families, you need a car to have a job.

And what of the unemployed? Having relatively prospered throughout the global financial crisis, as a result of the bold initiatives by Labor's courageous and underrated Treasurer Wayne Swan, Australia's unemployment rate is now somewhere over six per cent. I cannot be exactly sure, because of the crisis in the ABS overseen by this government. Our unemployment rate is now higher than the United States', for the first time in years. The unemployed are told to apply for more jobs. Petrol stations report an increasing number of motorists putting a minimum $5 petrol purchase in their cars. Like everyone else, these people would love to fill 'er up, but just cannot afford to do so. The $5 just gets them to their next job interview. Tell these people that an extra petrol tax is insignificant and does not matter. It does matter.

The government's senators have shown a liking for quoting the ABC's FactCheck when it suits them. This is what FactCheck said about the impact of the new petrol tax:

High income Australians spend more in absolute dollar terms on fuel, so will pay more fuel tax than lower income households.

However, as a proportion of gross income and weekly spending, fuel bills hit lower income families harder.

Census data and research from independent experts shows that people on lower incomes have enough cars and drive far enough to feel the impact of raising the fuel tax more than those on higher incomes.

So this new tax, this lazy approach to raising revenue, will hit low-income families hard. In this regard, it is like the new 15 per cent tax on superannuation contributions for workers earning less than $37,000 a year. It hits low-income earners. It is like the new proposed goods and services tax on food, which is part of the Prime Minister's 'mature debate' on the GST. It hits low-income earners hard. It is like the proposed lift in the rate of GST from 10 per cent to 12 per cent. The GST hits hardest those who spend the greatest part of their income. Low-income earners tend to spend the lot. A higher GST hits low-income earners hard. It is like the $7 GP tax. It hits low-income earners hard. All of these new taxes hit low-income earners. 'No new taxes'? What a joke!

Senator Cormann says that the new petrol tax is not a new tax at all; it is merely adjusting the rate of an existing tax. What a pathetic excuse! The government might just as well claim that, when it said, 'No cuts to health, no cuts to education, no change to pension arrangements, no adverse changes to superannuation, no surprises, no excuses, no cuts to the ABC and no new taxes,' the word 'no' was merely an inadvertent typographical error—as claimed by Mr Abetz today in answer to a question. Those excuses are just as lame as their current excuses.

When John Howard scrapped the indexation of the fuel excise, he said:

… what that means is that if a future government of whatever stripe wants to increase the excise on petrol that government will have to pass a bill to increase it.

This current government has tried to sneak around that requirement, but what Labor says on behalf of the working people of Australia is: don't do it.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Bullock. Senator Seselja.

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

Thank you, Mr Acting Deputy President. I was not expecting to get the call for a few minutes, so bear with me for one moment.

I did want to start with a brief rebuttal of some of the issues that Senator Bullock raised, because he did go a little bit beyond the motion—and I will stick to the motion, I assure you, Mr Acting Deputy President, but I do have to rebut some of the statements that were made and some of the assertions that were made on a range of issues by Senator Bullock. He touched on things like superannuation, car industry jobs and unemployment. I want to touch on those before I go to the detail of the motion before us.

Firstly, on superannuation: we heard it again from Senator Bullock, and it seems to be this modern Labor Party approach—or, at least, a post Hawke-Keating approach—which is blind, it seems, to the impacts of policy. What Senator Bullock seems to be suggesting on superannuation and what Labor seems to be suggesting is: when you increase compulsory super, there is no impact. You can do it. It is always a good thing. It never has any impact. Of course, economists will tell you different. They will just tell you that it is a deferred pay rise. Bill Shorten has said that it comes out of your wages. There is less money for wages. If you do not believe that, Senator Bullock, and if you think that what most economists say—what virtually every economist says—and what Bill Shorten has said is true, then you would double or triple compulsory super, because it would have no impact. We know, of course, that—

Senator Bullock interjecting—

But that is the logical extension, Senator Bullock, of what you are saying, because if it has no impact on wages, if it has no impact on businesses, then jack it up as high as you like! It is a magic pudding! We know that that is not true. We know that as compulsory super goes up there is less money for wage rises. That is a fact. And no serious economist will dispute that. So we believe in compulsory superannuation, but if you do not increase it as quickly as the Labor Party would like, that does mean that there is more money for people's wages. It means that people have that money now, to choose what to do with. They can choose to put it into their super. They can choose to put it into their mortgage. They can choose to live a different lifestyle. That is an individual choice for individuals and families to make, not one to have dictated to them by governments.

Senator Bullock touched on car industry jobs.

Senator Lines interjecting—

'No understanding'—I hear from Sue Lines about how I have got no understanding of the magic-pudding theory on superannuation and everything else.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Seselja, I would urge you to ignore the interjections. If you could refer to senators by their official titles, it would be appreciated. Please just direct your comments through the chair.

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

I do apologise. You are correct. I will do that. I will not respond to interjections from Senator Lines or anyone else, regardless of how ignorant they may be. Let us just deal with it. Let us just deal with the issues that the likes of Senator Lines raise. That is, again, this magic-pudding theory when it comes to superannuation. That is that there is a magic pot of money and that if you increase compulsory superannuation, it has no impact. Well, it clearly does. It is absolutely ridiculous to suggest otherwise.

It is likewise with car industry jobs, which was touched on by Senator Bullock. He was trying to blame the coalition for the loss of car industry jobs. But let us go this issue because, again, the Labor Party are claiming and would put this claim out that endless subsidies are okay and that no matter how high the subsidy is for car industry jobs we should pay it. We believe there is a limit to that kind of assistance. There is a cost. The Productivity Commission suggested around $300,000 in subsidies per job. The shop assistants, who Senator Bullock used to represent, are asked—

Joe Bullock (WA, Australian Labor Party) Share this | Link to this | Hansard source

Still do.

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

Senator Bullock tells me that he still does. The shop assistants who Senator Bullock seeks to represent are being asked, were being asked and would be asked by Labor in perpetuity to be paying out of their wages to subsidise $300,000 per car industry job. Is that the kind of policy we want to see in this country? That is unaffordable and that is the kind of approach that we have seen from the Labor Party in a whole range of areas: all care, no responsibility. It is always popular to hand out money—let's face it. But in the end, you run out of other people's money. That is the fundamental problem.

I have just one final point of rebuttal in relation to unemployment. Senator Bullock and the Labor Party have no credibility when it comes to criticising the coalition on unemployment. When we left office, the unemployment rate was 4.4 per cent. It shot up under Labor, in the very time that Senator Bullock was talking about. They left it at 5.7 per cent. We have inherited that and we are endeavouring to turn that around through a range of policies to improve the economy, to improve productivity and to make it easier for businesses to employ people. Those are the kinds of policies that will see employment grow, not endless subsidies and not endless government spending on all sorts of irresponsible programs, as we have seen from the previous government.

Let us go to the motion and why we have this situation of a reintroduction of indexation for the fuel excise. As Senator Abetz said earlier today, and all of us on this side of the chamber would share this view, we do not want to see taxes go up. I want to see taxes go down. But the reality we face is a serious budgetary problem. If I had my way and if we did not have the inheritance that we have from the Labor Party, I would not just want to see the fuel excise go down; I would want to see income tax go down and I would want to see all kinds of other taxes go down. Under coalition governments, they do—once we get the finances under control.

That is what we saw under the Howard government and that is what we will see under this government. We are already seeing it with things like the carbon tax—that is, the massive tax reduction with the carbon tax and the mining tax. We have seen significant tax reductions, but in a perfect world I would like to see them all go down. When we get the finances under control, we will again see more and more taxes going down; that is what good governments do over time. Liberal governments fix the mess from their Labor predecessors. Sometimes that does involve increases in taxes. It hurts. We saw that under the Howard government as well, but what we saw overall under the Howard government was a significant decrease in tax whilst delivering large surpluses. We grew the economy, we got the budget under control and then we returned money to the people through tax cuts. That is what a good government should do and that is what I would like to see this government do—and it will.

The final-year budget position that the last coalition government left was a $19.8 billion surplus. The Labor government left us $47 billion deficit. The average budget position under the former coalition government was an $8.1 billion surplus. The average under the Labor government was almost a $40 billion deficit. The government debt in net terms was negative $44.8 billion at the end of the Howard government and it was $191.5 billion at the end of the Rudd-Gillard-Rudd government. Gross government debt was $55 billion at the end of the Howard government and $310 billion at the end of the Rudd-Gillard-Rudd government. Interest on government debt was negative $1 billion at the end of the Howard government and $8.8 billion in net terms under the Labor government. It was $12.4 billion in gross terms. With any measure you want on the economy or on the budget and budgetary management, we see a stark contrast between the coalition and the Labor Party.

We do want to see these taxes go down. Let us deal with a number of the assertions and the claims of those opposite in relation to it. Let us look at the cost of this, because, as I said, I want to see taxes go down wherever possible. We need to make it clear that what we are talking about here is 40c a week for the average family. I would prefer that was not happening, but these are the fiscal realities. That is the truth. It is 40c a week on average. At the same time that we have got rid of the carbon tax, the people can see their electricity prices coming down and a whole range of other costs coming down. The Treasury, under the former government, estimated around $500 per year in savings for the average household. So we need to look at this in relation to all of the government's policies. We have gotten rid of a massive tax on families and we have kept the compensation. With reindexation, what we are saying is that the real value of the tax will stay the same over time. That does mean a 40c per week hit on the average family.

But that is in contrast to the average $10 per week that families save as a result of getting rid of the carbon tax. Let us not forget that. The Labor Party, who are now arguing against a 40c increase in fuel excise that will go to roads funding, supported and voted to keep an extra $10 hit every week on average families as a result of the carbon tax—a carbon tax that had no positive impact, where what we are talking about when it comes to fuel excise is greater funding for roads. We are talking about better roads for Australians—putting $2.2 billion into roads. That is a stark contrast, isn't it, as we look at the relative merits. I think every contribution from the Labor Party or the Greens, who voted to keep that carbon tax, should be seen in that context. They now say they do not want to see a 40c increase per family per week for fuel, which would go into roads funding of $2.2 billion, but they do want to see a $10-per-week hit on families—on their electricity and other costs—as a result of the carbon tax, which, of course, achieved nothing. There is the stark contrast.

The Labor Party talks about the precedent. This is a precedent that they engaged in, in terms of the mechanism. This is a precedent that the Labor Party imposed in the previous government. I would also add this—and perhaps in any of the further contributions from Labor senators they can put on the record what they are going to do, because there will be a couple of opportunities. Will they be voting to get rid of indexation, or to reduce fuel excise? Remember that the Labor Party have not supported any of our savings. Bill Shorten makes the laughable claim that he can get to surplus more quickly than the coalition can. So, he has put it out there whilst rejecting all the savings—rejecting even his own savings—that the Labor Party supported whilst they were in government. The question now is: will they promise to reduce these taxes? I put it to you, Mr Acting Deputy President, that come the next election the Labor Party will not be promising to reduce any taxes, and if they do they will do so with absolutely no credibility. They have not identified any savings and they are committed to all the extra spending, so they are going to start way behind on the task of getting the budget back into surplus. They will have no capacity to credibly offer tax cuts in any area. Be it income tax cuts, be it indirect or be it things like the fuel excise, the Labor Party will have no ability to offer any relief to taxpayers.

Only a responsible government that gets the budget under control, that has had a record of lowering taxes, growing the economy and delivering surplus budgets, will have the credibility to offer anything in the way of tax reductions and tax cuts. If there is one thing we know, it is that, no matter what the revenue is for the Labor Party, they will always spend it, and more. That has been the record in Australia. That is now a fact in Australian politics. As many of us will remember, Labor has not delivered a surplus budget in a generation. They went through the greatest mining boom we have seen in 100 years, the greatest terms of trade we have seen in over 100 years, and they still could not deliver a surplus, notwithstanding that. If you cannot deliver it when you have the best terms of trade ever, then you will never deliver it. I think that if you cannot deliver it for 20 years then the Australian people can safely conclude that the Labor Party is not capable of delivering a surplus, despite having promised that they had already done it. Bill Shorten told us that he had already done it. That was rubbish. It was not true, and the Australian people know it.

As we look at these issues we need to look at all of the facts. We need to look at the facts of what we were left with and what we are trying to fix. We need to look at the fact that, counter to the 40c increase per family per week for fuel, we are talking about an average $10 reduction as a result of our policy to get rid of the carbon tax—something the Labor Party and the Greens opposed. And we need to look at the record of coalition governments in getting budgets back under control and then delivering that dividend back to the community, whether it is through record investment in roads and infrastructure, whether it is through other services or whether it is through tax cuts. That is the record of coalition governments, and that is what we are aspiring to do as we fix the significant debt and deficit disaster that was left to us by our predecessors—the $1 billion a month, headed for $3 billion a month if we do not get it under control. This is what we are dealing with as a nation. This is what serious governments have to deal with, and those opposite, as they critique our efforts to fix their mess, have absolutely no credibility in doing so.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Labor Party's motion on fuel excise and the amendments foreshadowed by Senator Lazarus. The Labor Party's motion is 'that the Senate notes the Abbott government's petrol tax ambush and its negative impact on cost pressures facing Australian households and businesses'. Then Senator Lazarus has some amendments to that, and in particular I would like to talk to part 2 of the foreshadowed amendment that talks about how the underhanded act to increase petrol prices will have a negative impact on Australian families, pensioners, low-income earners, single parents, retirees, the sick, the disadvantaged and businesses, including small business owners. That is exactly right. This will have a negative impact on pensioners, single parents, low-income households—in other words, the most vulnerable and disadvantaged in our community.

But of course we need to bear in mind that the impact of this comes on top of the other budget measures that this government wants to impose on the most vulnerable and disadvantaged in our community. Of course, the government does not care, because they do not think the poor and the most disadvantaged actually use cars or consume petrol. Mr Hockey clearly does not understand that. Who can forget his comments that the poorest people either do not have cars or do not drive very far in many cases? But they are opposing what is meant to be, according to the Treasury, a progressive tax. It is simply absurd, as everybody in Australia pointed out at the time. The fact is that the poorest and most disadvantaged in our community will be desperately hit by what essentially amounts to an increase in the cost of living. I will shortly go through some of the terrible poverty figures we are faced with in Australia.

Very often the most disadvantaged and poorest live in communities that are poorly served by public transport, communities where it is hard to access public transport and communities that are some distance if people have to travel to the city. And this tax will not invest in public transport. Mapping done by a Queensland university, called VAMPIRE mapping, looked at peak oil, the scarcity of fuel into the future and who will be affected by the resulting price increases. The maps show, in a visual form, where people are living. When you look at the application of those maps to our cities, you can see how difficult it is for the most disadvantaged and poorest people to access transport if they cannot afford fuel. Either they have to spend more of their very limited income—and they have less disposable income because they are on a low income—or they become more isolated. Often, many of the people who live in these communities are unemployed. That is not always the case—and I am not stereotyping those communities—but that is the unfortunate reality. As they become more isolated it is harder for them to access work, training or education.

Household items and basic expenses like transport costs make up a huge proportion of the budgets of low-income individuals and families. Therefore, if you increase the costs of those basics you are making it even harder for people to survive. I need to put that in perspective in relation to poverty in Australia at the moment. We have just had Anti-Poverty Week in Australia, which highlighted some absolutely appalling statistics. An ACOSS report released in the run-up to Anti-Poverty Week showed that 2.5 million people are living in poverty in Australia. The poverty line ACOSS used, 50 per cent of median income, was $400 per week for a single adult and $841 per week for a couple with children. It was found that 2,548,496 people—13.9 per cent of the population—were living below the poverty line. There were 602,604 children—17.7 per cent of all children—living below the poverty line. For those on income support, 41.1 per cent of people on social security payments were living below the poverty line, including 55.1 per cent of those Newstart allowance, 50.6 per cent of those on youth allowance—in other words, half the people on youth allowance—and 47.2 per cent of those on parenting payment, the vast majority of whom would be single parents. Those figures do not include the additional single parents who were dumped onto Newstart under the Gillard government's measure to move grandfathered single parents onto Newstart. Further, those living below the poverty line included 48 per cent of people on disability support pension; 24.8 per cent, nearly a quarter of people, on carers payment; and 15.7 per cent of those on the age pension. Of the unemployed, 61.2 per cent of people were living below the poverty line. A third of Australians who were classed as the working poor lived below the poverty line and were from households where the main income was from wages. Overall, from 2010 to 2012 poverty had increased by nearly one per cent, going from 13 per cent to 13.9 per cent.

Some states have higher poverty rates than others. Tasmania has a poverty rate of 15.1 per cent. The rate varied in the regional areas of Tasmania. It was much higher in the regions than it was in Hobart. The poverty rates in other states were as follows: Queensland, 14.8 per cent; New South Wales, 14.6 per cent; Victoria, 13.9 per cent; Western Australia, 12.4 per cent; South Australia, 11.7 per cent; and ACT and the NT, 9.1 per cent.

The groups most at risk were women, children and older people; sole parents; those born overseas; people with disabilities; and Aboriginal and Torres Strait Islanders. ABS data does not include information to accurately measure the poverty rate for Aboriginal and Torres Strait Islanders. However, the 2011 HILDA database showed that 19.3 per cent of Aboriginal and Torres Strait Islander people were living in poverty, compared with 12.4 per cent of the wider population. These are the people who will be most at risk from increasing prices—those people who spend more of their income on basic essentials.

We can look at this measure in the context of other measures that are proposed in the budget. The government did some modelling before the budget, and a couple of weeks ago the income inequality inquiry heard that the government, in doing their figures, used the model that NATSEM developed. Both the government modelling and the NATSEM modelling quite clearly show that the budget will disproportionately hit the most disadvantaged. A much higher percentage of their income will be affected. The government's budget measures, as they knew very well before they brought them in, will most significantly hit the most disadvantaged.

This hit to the bottom line for those on the lowest income, those living in poverty and those most disadvantaged, has to be borne in mind when we are considering this issue. It will layer on top of all those other measures. The most vulnerable includes sole parents, the majority of whom are single mothers. They have been progressively hit by decreases in their income from the Howard government's cuts to single parents and from the Gillard government's changes which dumped them onto Newstart, which had perverse outcomes on their ability to find work, on their ability to maintain a connection with work and on their incomes. It had perverse outcomes for some people because they were on Newstart instead of the parenting payment single, if they found work their income went down; so there was more incentive not to increase the number of hours that they were working. If you look at the way that cuts in previous budgets and the petrol tax layer on single parents, you start to see that it has a significant impact on people's ability to survive and people's ability to raise their kids.

We need to look at this in the context of the growing inequality in this country. I think I have said in this place before—I certainly have said it in other forums—that there is some dispute around the margins about how much inequality has risen, particularly in view of the global financial crisis. It is agreed that inequality is rising and it has risen over the last three decades. We need to look at what that does to our community. A number of well-researched and articulate papers have been written on this issue. Well-known academics Richard Wilkinson of the London School of Economics and Kate Pickett of the University of York show that issues such as health, violence, lack of community life and mental illness are all likely to occur in societies where the rate of inequality is higher.

As Catholic Health Australia have noted, 65 per cent of those in the lowest income groups report long-term health problems compared with just 15 per cent of our wealthiest groups. In other words, greater inequality will have more of an impact, for example, on our health services. As is so often the case, those already facing challenges are among the first to be affected by bad policymaking, and they feel the effects the hardest.

One of the key conclusions of a report by the International Monetary Fund's research department on the topic of inequality in February this year titled Redistribution, inequality, and growthis that:

… lower net inequality is robustly correlated with faster and more durable growth, for a given level of redistribution.

It said:

It would still be a mistake to focus on growth and let inequality take care of itself, not only because inequality may be ethically undesirable but also because the resulting growth may be low and unsustainable.

As they are saying, it is not only ethically undesirable to force the most vulnerable and disadvantaged in our community to live in poverty and increase inequality but also bad for the economy. The government are proposing another policy that adversely impacts on the most vulnerable and on those living in poverty, and they keep saying that they are doing it in the name of economic growth and repairing the budget bottom line, but even the IMF say that increasing inequality reduces productivity. Christine Lagarde has made other very strong statements about the impact of inequality. The government say, 'We are all about economic growth; we are all about improving the economic bottom line,' but their policies, which will inevitably increase inequality, will have a negative impact on productivity and on the economic bottom line. It is a false economy to put in place measures that impact on the most vulnerable and increase inequality, because, as the IMF is now pointing out, it has an impact on productivity. You will not increase the bottom line. The government keep talking about a better future for their grandchildren and their great-grandchildren. You will not achieve that if you continue to increase inequality, which is what these measures will, in the long-term, lead to.

As the St Vincent de Paul Society pointed out:

Inequality does not affect everyone equally: those who suffer the most are more likely to be Indigenous Australians, older and younger Australians, people experiencing illness, refugees, and women.

The St Vincent de Paul Society also noted the discrepancy between Australia's average full-time income of around $1,500 per week and both the full-time minimum wage of $622 per week and the inadequate rate of Newstart at just $249 per week. They suggest that up to 13 per cent of Australians live in a household with an income of under $20,000 per year. If you compare the average full-time income of around $1,500 a week to people trying to struggle on Newstart, what do you think is the proportional impact of increases on the basic costs of living? The most significant impact is on the most vulnerable in our community.

The Greens have four key pillars. One of those key pillars is social justice. We cannot consider policies outside the prism of what impact they have on the most disadvantaged in our community. It is very clear that we have a huge poverty problem in this country. The government keeps putting blinkers on; they think that you can just increase economic and everybody will be lifted up. They float the boats. That is clearly not true. People get left behind: 2.5 million people are getting left behind in this country with the full-steam-ahead government putting in measures that hit the most vulnerable first. In fact, the measures are demonising of the most vulnerable people on income support. It is punishing them instead of taking a supportive, inclusive process, which will only lead to more negative outcomes for our community.

Before I finish, in the next couple of minutes, I do need to address the comments that Senator Seselja made about the impact of the petrol tax and the fact that the Greens and the Labor Party, when they were in government, imposed the carbon tax and that it was not working. Well, that is not true. It was working, and you need to give these things time to make sure that they are. So, for a start, he is wrong. Then he says, 'Oh, there's no compensation and they didn't care about the poorest.' Well, that is not true. There was a compensation package, because people were aware of it. I take great offence that he would suggest that the Greens were not caring about the most vulnerable in the community. I think it would be fair to say that the Greens, and certainly myself, are in here day in and day out talking about the impact of government policies on the most vulnerable in our community, on families, on single parents, on age pensioners and on people on disability support pension. For him to say that we ignored that is completely not true. He knows that very well. He knows that there were things built into the clean energy package that ensured compensation for families and ensured that the most vulnerable were assisted. He knows that it was a comprehensive package.

I am thoroughly sick of the government trying to suggest that it was a pack of nonsense; it simply was not. Senator Seselja knows that. It was a well constructed package that very clearly thought through the impacts on families and on the community, and compensation measures were put in place. A simple Google search, if Senator Seselja had not been paying attention when the debate was happening—because I know he was not in the parliament at that stage—would have shown him that those measures were in place.

The fact is that we have a growing poverty problem in this country, we have a growing inequality problem in this country, and we need measures to be put in place that actually address those systemic problems. Please listen to the IMF, and it is not that often that the Greens quote the IMF. The IMF said that growing inequality is bad for the economy. Beyond that and very, very importantly, it is bad for the community and it is bad for people. It increases health problem. It increases community issues. As the IMF said, 'It is not ethically desirable.' We need to have policies in place that actually do not impact on the most vulnerable in our community.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on Senator Moore's motion regarding the fuel tax. I rise and wonder, and I put the question to the Abbott government: how much more money are they going to take out of the purses and wallets of Australians? How much more money, and when can Australians have some certainty that the robbing of family budgets that is going on currently will stop? I also pose a second question, and that is: do the Abbott government really understand the effects of their harsh and cruel budget? It seems to me that the government are the only people in Australia who continue to support their budget, although we are seeing, by degrees, that they move away from sections of it each week. They obviously have no understanding of its real impact in the Australian community.

Every one of the Abbott government's broken promises has an effect on the household budgets of Australians, especially low-income Australians, Australians who live on benefits and Australians who live on the age pension. Every action from this 'no surprises' government takes us by surprise and it takes its toll. Whether it is the higher education reform package or whether it is this new fuel tax, they have an impact on the budgets of Australian families. What a sneaky move and what a fast move the fuel tax is, because it will take effect in the next pay packet of Australians. So, this week is the last pay packet that most Australians will get before they have to pay additional money at the petrol browser. The fuel tax could come under a number of the Abbott government's glib statements. Is it a broken promise, or is it a 'no new tax', or is it 'we'll be a government of no surprises'? It is probably every one of them, but what really matters is that it adds to the battering of household budgets by the Abbott government.

Remember when Mr Abbott became the Prime Minister—'remember when' is almost becoming a slogan in itself—and he kept saying in those early weeks that he had a mandate for this and he had a mandate for that? He had a mandate for everything, seemingly, according to the Prime Minister. For those who believe that, for those who believe in mandates, the Abbott government certainly had no mandate to hit Australians with a fuel tax, because Mr Abbott repeatedly said, 'There will be no new taxes under my government.' Yet, what he has done is sneakily impose this new fuel tax.

Seemingly, the partners in the coalition, the Nationals, say that they are there as the party of the bush, to stick up for regional and remote Australians. I am not quite sure when the last time was that they fuelled their cars and paid for it out of their pockets, but regional and rural Australians do that weekly. We all know that fuel in the country, fuel in the bush, fuel in remote areas, is incredibly expensive.

Maybe what the Abbott government—and indeed the Nationals—have missed is that there are low-income earners in the bush. Not everybody owns a farm or has access to some sort of tax write-off. There are aged-care workers who live in the bush, there are early childhood educators who live in the bush and there are roadhouse workers who live in the bush—and they earn very meagre wages. They earn $18, $19, $20 or $21 an hour. But the Nationals, who in partnership with the Abbott government have imposed this sneaky deal, seem to have completely forgotten about those folk. Many of those workers, particularly the ones who work in aged care, work part time—and they drive a significance distance to work each day. Their part-time wage has to stretch across a family budget.

Every time Mr Abbott says this is a small increase—and we have heard several government senators say that in this place today—it shows that he fails to understand that low-income earners, pensioners and others living on benefits do not completely fill their cars. Why is that? It is because even now they cannot afford to do that. They buy the exact amount of petrol they need in order to get to work or to do the family errands.

This morning I had the privilege of attending a meeting of the Parliamentary Friends of Early Childhood with some of my former comrades from United Voice. There were a number of early childhood educators there. Predominantly women, these educators work in a professional capacity but unfortunately do not get paid a professional wage. That is bad enough, but some months ago the Abbott government took money out of their already thin pay packets when they cancelled the Early Years Quality Fund. Early childhood educators earn $20 to $21 an hour.

Many of these women have children of their own and struggle with their mortgages. Believe me: they never have the money to fill up their cars—never, ever. They put enough fuel in their cars to get them to and from work, to pick their kids up and to run them to places. There are no additional funds available for any extras. From 10 November, this increase in the fuel tax will hit those educators, those women I was meeting with this morning, in their pockets. After that, when they next look at that fuel bowser after they get their next pay packet, they are going to have to recalculate their family budget—and something else will drop off it. They do not earn enough right now to live a decent life, they do not earn enough to put their own children into quality care and very few of them—especially if they are single-income earners with children—earn enough to buy a house. But all of that goes completely over the Abbott government's heads, which is particularly noticeable when the Prime Minister keeps standing up and saying, 'This is a small increase.' Every time he says that, he sends a message to ordinary Australians—those struggling on low wages—that he is well out of touch with their family budgets.

I am very surprised that the Nationals, who know the high cost of fuel in the bush, would accept such a deal from the government. But wait, there's more! I seem to recall that earlier in the year the Liberals tricked the Nationals, their own coalition partners. That's right! They let it slip out that they wanted to put a tax on diesel. They knew of course—it was very predictable—that the Nationals would blow up about that. But that just meant that the Liberals could achieve their fallback position—a fuel tax hike—without the Nationals complaining. After all, the Liberals told them, the money had to come from somewhere. The Nationals wiped their brows and said: 'Phew! We dodged a bullet there on diesel' and then they agreed to what the Liberals wanted all along.

All of this shows that they are out of touch with what happens when people fill up their cars in Halls Creek, Kununurra, Esperance or Waroona—name any remote town in Western Australia. People in those places all know that they pay a significant amount more when they put petrol in their car—not filling it, just putting in enough to get them to work. That completely passes the Nationals by, and then we have the Prime Minister of the country standing up and saying, 'It is only a small increase.' Keep saying that, Prime Minister Abbott, because every time you do, you remind Australians that you are completely out of touch.

One government member has been brave enough to stand up and call it as it is. Senator Macdonald is on the public record saying that this is a low move, that this is going to hurt low-income earners. He had the courage to tell the truth on this matter. The rest of the government have obviously chosen to put up with it and shut up, but not Senator Macdonald. He has called it as it is—and he is not the only one. Another is the chief executive of the Australian Automobile Association, Andrew McKellar.

Automobile associations are not the radical fringe. You cannot attack them as you do the unions. They are pretty conservative groups. They are pretty polite because they know they rely on governments of whatever political persuasion to be nice to them. But even Mr McKellar has come out and called the petrol move 'weak, sneaky and tricky.' Why did he do that? He did it because the government has avoided any scrutiny of this sneaky move by using the customs tariff. It did that because it does not want to come before this parliament and have to answer questions about why it is imposing this tax hike. It does not want transparency. It does not want the scrutiny of the parliament. It is a government of surprises—quite contrary to Mr Abbott's words when he stood up and said, 'I want to be a government of no surprises.' There are in fact constant surprises with this government. Every day there are more surprises.

Let's not forget where else the Abbott government has attacked working Australians. We had that sudden freeze on superannuation. We heard in this chamber today from government senators that somehow that freeze on superannuation has been good for workers because they will have this additional invisible money in their pockets to spend each week. That just shows the absolute ignorance of the government in not understanding how industrial superannuation is paid. It comes from the employer through to the workers. When the Abbott government puts a freeze on industry superannuation it lets the boss off, so the boss saves money and the workers miss out. Nothing actually goes into their pockets. Freezing retirement incomes is the most ridiculous move I have seen from the government. Why would you do that with an ageing population? Government senators have said today that the money that has been frozen is going to magically go out of the boss's pocket and into the worker's pocket and the worker will have more money. That is a complete myth and just demonstrates total ignorance about how the superannuation system works, just like suggesting that this increase in fuel is not going to cost Australians very much at all. It will and they will not forget who has done this to them.

Let's not forget the threats we have had from Senator Cormann when he said that if Labor did not support this move we would be held responsible for giving money back—that somehow money that had to go back to fuel companies would be our fault. The Abbott government likes to scapegoat Labor almost on a daily basis, and if it is not Labor it is the unions, but it is mostly Labor. Seriously—it is a sneaky decision that the government has taken, a decision that has avoided the scrutiny of the parliament to increase the cost of fuel for everyday Australians, and the government is going to try to say it is all Labor's fault. Who is going to believe that? That is the most ridiculous assertion I have heard in a long while.

Where is this budget emergency that the government talks about? Sixty-three leading Australian economists have said that there is not one. What is the money going to go into? Apparently it is going into roads—not public transport, but roads. How is that moving the country forward? How is putting more roads in place of assistance to those who rely on public transport? You would think that if the government were going to do this it would look at a better spend for its dollar, but, no, it is so out of touch and it is so opposed to public transport. The government said a few months ago: 'That's a state government responsibility. It's not an area that the federal government gets involved in. So we're going to continue to fund roads.' I can tell you that people in Western Australia do not need more roads; we need more public transport. In Western Australia, we do not even have public transport to the airport. I will tell you what: if you live in a suburb and you want to get to another suburb at the other side of town, it is a two- or three-hour bus trip, if a trip is available at all. We clearly need expenditure on all forms of transport, but seemingly that is not going to eventuate under this government. This is just another sneaky attack on the purses and wallets and the cost of living of every Australian. It is also a sneaky attack on the parliament and a total disregard for the Senate, but that seems to be one of the things that the Abbott government excels in: being sneaky and disregarding parliamentary processes.

This is not just about the fuel tax; it is a demonstration of the lengths to which the Prime Minister and his team will go to undermine the parliament and sneak increases into Australian families' costs. Maybe what the Abbott government are hoping is that, because this has not gone through the parliament and because it has avoided the public scrutiny that the parliament provides, somehow Australians might blame the fuel companies. I am sure the fuel companies have already outsmarted the Abbott government on that and I am sure that they are not going to accept responsibility for this increase.

We know that raising petrol excise taxes is regressive. As The Conversation said:

Higher fuel prices will raise the cost of living for consumers on low incomes who are not financially able to upgrade to a fuel-efficient vehicle. Nor are they able to reduce kilometres travelled if they live in an area that has limited access to public transport. Consumers and businesses entitled to claim a tax deduction for higher fuel costs may not be discouraged from buying high emitting vehicles and reducing kilometres travelled.

Many educators, aged-carers, disability service workers and hospitality workers do not live in the hearts of our cities. Why don't they live there? Because the rents are too high. They cannot afford to live there. Most workers that I know live at least an hour's travel away from their workplace. Added to that, many of them are shift workers. They might start at 5 am or 6 am in the morning. That is often at a time when public transport is not running, so they have little other available option than to take their car, and they will fill it only with enough fuel so that they can do their shifts with a little bit of fuel spare. If you want evidence of that, I would ask you to look to the Fair Work Commission and the submissions that were put forward as part of United Voice's low-pay bargaining application. Submission after submission from aged-care workers tells the story of how difficult and almost impossible it is for them to balance their budgets on their meagre incomes, and now the Abbott government has gone completely behind their backs and the backs of other low-paid workers in this country—pensioners and those on benefits—to hike up the cost of fuel without a single care for those struggling the most in our community. This is a government that is absolutely out of touch. It looks after the elite and the wealthy in our community and shows scant regard for anyone else.

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

Before I address my remarks to the private member's motion in relation to the fuel excise, I cannot help but feel the need to give Senator Lines a lesson in economics 101. The senator has made a heap of comments about people on low-incomes, on welfare payments and the like who are unable to afford this increase in their weekly expenditure, but Senator Lines has failed to realise that there are many payments made to people in Australia that are funded by the government. I think you can supplant the word 'government' with 'other taxpaying members of the Australian public', because we need to remember that governments do not have money of their own; they only have the money of the people of Australia.

In order for us to pay the welfare payments and to have all the things that Senator Lines would like us to have, we must have revenue sources, unless Senator Lines is suggesting that we continue to increase our budget debts and deficits to such an extent that we spend all of the money raised from taxation on paying off the interest on our debt. Whilst Senator Lines can come in here and make these sorts of comments, she has to realise that there are two sides to a ledger. There is the income side and there is the expenditure side. Somewhere down the track, you have to bring it to account. You cannot keep forking it out, without having some sort of revenue base. If Senator Lines spent a little bit more time thinking about where the money comes from to pay for all these things that she would like Australians to have, then we might end up with a more sensible debate than the one we have just had.

There are a couple of other comments in Senator Lines's speech that warrant a comment on the record, of which one was this assertion that our farmers and primary producers were somehow rich people. You, Mr Acting Deputy President Gallacher, coming from a state that relies so heavily on agriculture and primary production as the basis of its economy, would understand that many of our farmers have no income at all. They may have some assets but those assets, at the moment, are so devalued—because of debt, poor commodity prices in a lot of Australia and the high Australian dollar—that these people are well below the poverty line. Some of them earn no money at all, though there are those that are lucky enough to be able to draw on their savings. To make an asinine comment about 'rich' farmers being somehow able to pay for any increase in fuel, whereas people who live in the city—those 'poor' people—will in no way be able to cope is the most outrageous comment I have ever heard.

Finally, before I move onto the substantive matter before us, I will quote Senator Lines. If anybody wants to, they can have a look in Hansard to see that this is exactly what she said:

… people of Western Australia do not need more roads …

Maybe the people of Western Australia do not want more roads. I would be interested to test that one in the marketplace—and I am sure my colleagues from Western Australia possibly will—but I assure Senator Lines that people across the rest of Australia want more roads. They want more roads, they want better roads and they want safer roads. Maybe we should test the statement that the 'people of Western Australia do not want more roads', because it would come up with some very interesting results.

I turn to Senator Bullock's substantive motion before us in relation to the fuel excise. I am sure I speak on behalf of everybody in this place—whether they be Labor, Greens, crossbenchers, Liberals, Nationals—when I say that we would all like to see increases in spending. We would all like to increase the spending on market access to our primary produce so that we can get better access to markets for our producers in Australia. We would love to see an increase in spending on research and development, innovation and technology—the things that, in the past, we have been world leaders in and things that have made Australia the great country it is. We would love to be spending more on that. I would love to see an increase in funding to the NBN to accelerate the roll-out of the NBN, particularly to country areas, because there are parts of this country and parts of our home state in South Australia where people do not have any internet connectivity whatsoever. It would be fabulous to spend more money there. I would absolutely love to see the deregulation of the higher education sector without the need for government funding being cut. I do not move away from the fact that we need to deregulate, but wouldn't it great if we could go to a model of deregulation without reducing the amount of funding that is made available to the higher education sector? That would be terrific. We could increase funding for all things that improve public amenity and public good, such as the arts, so that we can enjoy ourselves and have access to wonderful artistic and cultural activities. We would all love to see that.

I would love for us not to be in a position where there is a need to change the indexation situation on fuel. Unfortunately, we do not have any choice, and I go back to my opening comments in relation to economics 101—that is, if you want to spend something, you need to have the funds. We on this side of the House do not believe that you just keep borrowing on the never-never, if you want to have all the things that I just talked about and the myriad other ones that, I am sure, every senator in this place and every member in the other place can come up with. Every lower House member would love lots of things for their electorates. We all want a wonderful country to live in. We have a fabulous country to live in. We have a fabulous country with a wonderful standard of living. But of course we would all like to think that that standard of living would never be challenged. Well, the only way that that standard of living will not be challenged is if we have an economy that is robust and self-sufficient—that is, an economy that is not constantly being burdened by the debt interest that we have to pay on an ever-burgeoning budget debt and deficit.

But back to the substantive motion from Senator Bullock. The government is trying to balance the books. The first thing we have to do is actually get rid of the deficit. Economics 101 actually says that, unless you are actually earning more than you are spending or if you are earning at least as much as you are spending, you will actually be increasing your debt. It is a pretty simple equation. I am sorry that nobody on the other side seems to get it.

The government want to balance those books so that our debt is no longer increasing and then move to a budget surplus so that we can start paying down that debt. But, at the same time, it is extraordinarily important that we also stimulate economic growth because the only way that our tax receipts will increase is by providing an economic environment in which the growth and productivity of our private sector is sufficient to generate that sort of tax income.

The government find it necessary to do this. I will not go on ad nauseam about this but, unfortunately, this situation was not of our doing and for those opposite to sit here and be critical of us for trying to be sensible, rational and good economic managers I really do think is a little bit rich. We inherited an extraordinary situation and now, in the height of audacity, those opposite turn around and give us a hard time for trying to fix it.

But back to roads. With respect to the small increase in the price of fuel—and do not get me wrong, I do not want to see any price rise in fuel—I can let you know, Senator Lines, with respect to your throwaway comment, 'Those opposite wouldn't have any idea as to the last time they paid to fill up their car,' that, like you, when I fuel up my Commonwealth government-provided car, the Commonwealth pays for it, just as it does when you fuel up your car, Mr Acting Deputy President. The Commonwealth pays for that; the taxpayers of Australia pay for your fuel, as they do for Senator Lines. But do you know what? When a farmer goes to fill up his fuel tanks—

Senator Payne interjecting—

or her fuel tanks—in my case, as a female farmer, and Senator Payne also has a property—on their farm or we fuel up our vehicles that we use as part of our primary production, do you know what? We pay for that. I do not know that Senator Lines is in much of a position to be throwing over here and suggesting that, somehow, I am going to be immune from the slight increase in the fuel excise. I will be one of the people in this chamber who will probably be most impacted by the increase in the price of fuel because I run a number of tractors and vehicles on the road, and equipment and machinery on my primary-producing property. We do receive a rebate, but we still have to pay for the fuel. So I would just like to draw Senator Lines's attention that she is in no position to be throwing over to this side of the chamber and suggesting that, somehow, we will be immune from the impact of these changes. We will not be immune.

Back to roads. We need to have roads of the 21st century, because roads and transport infrastructure is so tremendously important in this country. Coming from a state where the majority of our economic activity is actually generated in country areas and where we are very reliant on primary production and mining, it is extremely important for us in rural and regional areas, particularly in South Australia, that we have good transport infrastructure, whether that be roads, ports or infrastructure that supports those things. For us to shy away from that, I think, would be irresponsible because, unless you actually make the investment now, you have no hope whatsoever of being able to realise the economic activity into the future.

Over the last number of years we have seen a lack of funding in my state, not just by the previous federal government. Because the government in my home state has neglected road funding to such an extent that it has such a huge backlog of road funding, it is seeking to reduce the speed limits because our roads are no longer safe to drive on at the current speed limits. So we do have to realise that there are things that we have to do—money that we have to spend—in support of promoting growth and economic activity, particularly in our primary areas.

Much has been said about the fact that the change in indexation and its likely impact on the price of fuel is a small amount. I am sure nobody wants to spend one cent more on anything than they have to. But if you look at the broad base of this particular change in our taxation regime you will see that everybody will be paying a little bit. This measure is not about smacking one particular group in our community; it is about ensuring we make everybody lift just a small amount of the burden. In so doing, hopefully, we will be able to see the expenditure that is necessary into the future so that we can have all the wonderful things that Australians have become so used to having.

In speaking on this motion from Senator Bullock—I like Senator Bullock—I am sure everybody else in this place would love not to be sitting here and debating this particular motion. However, the cold, hard reality is that we have been left in an absolutely untenable position because of the budget where we have been forced, because we are sensible and responsible economic managers, into a situation where we are having to undertake changes to our taxation regime and deal with matters in the budget which are not particularly palatable to the public. But do you know what? At the end of the day, you cannot keep on conning the Australian people by giving them more and more when you are borrowing on the never-never to pay for it. It is regrettable that we even have to be sitting here having this debate today and it is regrettable that we have found ourselves in this situation where we find it necessary to find alternative means for generating revenue to pay off the most outrageous debt and deficit situation that has been inherited from those opposit

I just hope that maybe one day those opposite will sit down, listen and realise that if you do not have the money to pay for it you should not be having it. At the end of the day, if you do not balance your books, you just end up in a nasty situation where it all ends in tears.

Glenn Lazarus (Queensland, Palmer United Party) Share this | Link to this | Hansard source

I move the following amendment to this motion:

Omit all words after "That", substitute:

(1) the Senate notes the Abbott Government has broken another pre-election promise with their petrol tax ambush in by-passing Parliamentary processes to increase the cost of petrol through a 'tariff proposal', effectively raising the tax before having Parliamentary approval; and

(2) this underhanded act to increase petrol prices will have a negative impact on Australian families, pensioners, low income earners, single parents, retirees, the sick and disadvantaged, and businesses including small business owners;

(3) the Senate calls on the Abbott Government to reverse this decision and instead proceed to put the proposal to the Senate where it can be properly debated and they will of the people delivered.

Palmer United is firmly opposed to the Abbott government's underhanded, deceitful and totally unethical actions to increase the cost of petrol through an increase in taxes. The Palmer United Party is opposed to increasing the tax on petrol. The Abbott government has not attempted to introduce the measure into the Senate because they know it would be defeated. So, instead, the Abbott government has found another way to shaft Australians—by increasing taxes on petrol instead of bringing the matter to the Senate for consideration and decision by the will of the people of Australia—the very people who voted the Abbott government in.

The Abbott government has undermined all Australians. The petrol increase will harm families, low-income earners, pensioners, the sick, the disadvantaged, single-parent families, retirees and many, many others. In my home state of Queensland, people are on their knees. Over 75 per cent of the state is in drought. Business is struggling. Unemployment in rural and regional Australia as well as overall unemployment levels are at an all-time high. In Queensland, we already pay high taxes when we fill up at the bowser, and we are also asked to pay a toll on many major roads we travel on. Now the government is going to put more strain on us Queenslanders and, indeed, on all Australians by putting taxes up on petrol.

If all petrol taxes currently being collected were spent on roads, there would be no need for a new tariff or increase on petrol taxes. It is important to note that petrol taxes were introduced to pay for roads—for building new roads and for maintaining the existing roads. In other words, petrol taxes represent a user-pays system. Many would consider this a fair thing. But, as predictable as the sun rising, petrol taxes started to be siphoned off to pay for other things. Hence, road tolls were introduced. The Abbott government cannot keep introducing more taxes and raising existing taxes. No-one can afford increased fuel prices.

The Abbott government must overturn this cruel and underhanded decision, and let the people of Australia voice their views and decisions on this matter. The Abbott government should do the right thing and bring this matter before the Senate for proper consideration. I am calling on the Abbott government to do the right and honest thing: reverse your tax increases on petrol and bring this matter before the Senate.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I thought Senator Rice was on the list before me but I am very happy to speak on this subject. As you know, Mr Acting Deputy President Gallacher, and as my colleagues know—I have made it clear to all of them—I am not in favour of the increase in excise. As I say, I have made my views very well known. I call this the Labor Party's tax increase. Why do I do that? Because if it was not for the Labor Party's mismanagement of our economy over a long period of time—the six years that they were in power—we would still be in surplus. Rather than increasing taxes, which, regrettably, this does, we would be cutting income tax, as was a feature of the last Liberal government—the Howard government—when, on a number of occasions, the actual income tax rate payable by ordinary Australians was cut. When you have $60 billion in the bank and when you are running annual surpluses, you are able to do that sort of thing. You are able to cut taxes.

The Labor Party came into government in 2007 with, as I said, $60 billion in the bank and an annual surplus of some $20 billion a year. So it was a pretty good situation when the Labor Party took control. But within six short years there was not one Labor surplus, despite promises we used to get from the Labor Treasurer, Mr Swan—does anyone remember him?—who, each budget year, would promise that there would be a surplus but who never delivered one. There were two Prime Ministers during this period, but neither of them was able to properly manage money. In the Labor Party, neither the Prime Minister nor the Treasurer could manage money. Rather than having $60 billion in credit and surpluses of $20 billion each year, the Labor Party put us in a situation whereby if nothing is done we will end up with a $600 billion deficit. This is what Labor did to us—$600 billion in debt. Work out the interest on that!

Already we are paying $33 million a day in interest to foreign lenders because of the Labor Party's incompetence. I ask: how many roads in Australia could you build with $33 million extra every day? I can tell you, Mr Acting Deputy President, that you would get a four-lane highway between where I live in Ayr in North Queensland and where my office is in Townsville in North Queensland. We could have a four-lane highway there if we had $33 million a day to spend on it. But we do not have that, because that $33 million each and every day that we are paying in interest goes to foreign lenders, not to road constructors in my part of the world.

That is why I call this fuel excise increase the Labor Party's new tax. It is the Labor Party's fuel increase, because I understand that Mr Hockey has to take extreme measures to try and address the debt and deficit left to him by the Labor Party.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

They are extreme.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

There was an interjection, but I could not quite catch it. It cannot have been terribly important. So that is the situation we are in. I have made my position quite clear, unlike the lobotomised zombies on the other side of the chamber, as my good friend Senator Cameron used to call his own colleagues. Remember the lobotomised zombies. It is not me calling the Labor Party that. It was Senator Cameron calling his colleagues and you, Mr Acting Deputy President, and your whip there that. I would not have called you a lobotomised zombie. But, in calling you lobotomised zombies, clearly your friend and colleague Senator Cameron did not have any regard for you.

On our side of the chamber we do have debates. We are able to put forward new ideas. If you have a different idea to the leader of the party at the time, you are not automatically expelled from the Liberal Party, as you are in the Labor Party. I understand that is how the Labor Party is. But I can well understand why Senator Cameron referred to opposition senators as lobotomised zombies, because you just sit there and take whatever is given to you by the great financial intellect of people like Mr Wayne Swan, the Treasurer of the Labor regime that never once had a surplus, in spite of consistently promising that there would be one. On our side of parliament we are entitled to have a different view and we are entitled to express that view.

I have said it publicly—and it comes as no surprise to my colleagues—that I think there are better ways of trying to address Labor's debt and deficit, because I do think that fuel increases impact more heavily on those outside the capital cities. These are people that do not have a tram down at the end of the street, that do not have a public bus service in the next block, that do not have suburban trains and whose schools are more than just a couple of kilometres away so parents can readily get their children there. It has an impact on these people, like the people I represent, who have to use their vehicles for everything.

I know of an instance up near Georgetown were a caring mother drives her children 80 kilometres to the school. If she goes home and then to come back and picks up the child in the afternoon, that is 160 kilometres to get the child to school and another 160 kilometres to pick the child up. That is 320 kilometres in a day just to get the child to school. With respect, I am quite sure that few of my colleagues on the other side of the chamber would understand that. This is not a criticism, but it is a fact of life that most of you live in the capital cities, you represent the capital cities and you would find it difficult to believe that there are places in Australia, particularly in the north where I come from, where a parent would drive 320 kilometres each and every day just to get their child to school. In the city, you could walk the couple of blocks or quickly drive to the next suburb to drop the child off. And that is just schooling. Multiply that by going to the doctor, going to hospital, going to sporting events and going to cultural events.

If you want to get to a cultural event in many parts of rural and remote Australia you have got to get on a plane and fly to Brisbane or Sydney or Melbourne—that is, unless you go to Townsville for the Festival of Chamber Music, which is held annually, and which, as I mentioned in another speech in this chamber recently, has inexplicably not been funded by the Australia Council this year. So, yet again, it seems to me, and I do not want to get paranoid about this, that sometimes these rules seem to be made by capital city people for capital city people. In relation to the Festival of Chamber Music, I will be wanting to see how much money went to cultural events in Sydney, Melbourne, Canberra, Adelaide and Brisbane compared to what goes to places like Townsville.

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

What about Hobart.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I am not sure where you go in Hobart with regard to those sort of expenses, Senator Bilyk. I guess it depends who is on the Australia Council and just what exactly the thoughts of those on the council are. But I certainly want to find out why they are not funding the Townsville Festival of Chamber Music. But I digress.

Fuel is used more in rural and regional Australia, and that does increase the cost of living. That is why I am very keen—as I certainly hope my government, in the white paper on Northern Australia that is due to come out very shortly, will be—to address the issue of the zone tax rebate

It has not been amended for a number of years, and it needs to be brought up to date. And why was that introduced, back in the years immediately post the war? It was introduced to try and in some way compensate for the recognised additional costs that are incurred by people who live remote from the capital cities. Unfortunately, the high ideals of that initiative, back in the immediate postwar years, have lessened over the years when there has been no indexation. If that were to come in, you could say, as I would say, that those additional costs for using your car all the time are in fact compensated for by an increased zone tax rebate. But until that happens I will be opposing legislation that taxes unfairly those who live outside the capital cities.

As I say, I do not blame Mr Hockey for this. I certainly do not blame our government for this. I blame the Labor Party because, I repeat, when Labor came to power, they had $60 billion in credit, and they had an annual surplus of some $20 billion. It did not take long for the Labor Party to squander what was in the bank and run up a debt which, if it is not addressed, will approach some $600 billion that future generations will have to pay. So I understand the dilemma that Mr Hockey is in, and I do not blame him for it. Had he asked me—and, regrettably, he did not—I could have perhaps suggested other ways that he might have been able to gain that money. I regret that it has gone to fuel, but I hope that, perhaps, with the northern Australia white paper, the government may seriously look at amending the zone tax allowance rebate to compensate for the cost not just of fuel and the impact of fuel but on all of the things that make living in areas remote from the capital cities more expensive.

This has been the passion of my life. This is why I came to this federal parliament a long number of years ago. I thought we had almost got around to doing something about it in 2004, and we were heading towards that goal of trying to bring some equity and justice to those who live remote from the capital cities. I was at the time the Minister for Regional Services. We had got so far. But, after the election in 2001, I was moved to another portfolio, and the initiatives which we had had at the starting blocks, if I might say, were never consummated to the extent that I had hoped that they might have been.

We are at that stage again. The Joint Select Committee on Northern Australia has been working. It has put forward a report. I know that the government is considering a white paper. The government did promise that it would have that out within 12 months of the election. Unfortunately, that has not happened yet, but I expect that that will happen in the very near future. I do not know what is going to be in the white paper, but I am hopeful that a lot of the submissions that have been made will be addressed. And a lot of those submissions deal with roads in northern Australia. They deal with water management and storage in northern Australia. They deal with health and education issues in northern Australia. I again repeat that education in non-capital-city areas does, of necessity, cost more. Most things that come into the North are transported from a southern capital, and you do not have to be an economic genius to work out that that costs more. So I think it is important, in equity and fairness—David?

Senator Bushby interjecting—

Mr Acting Deputy President, I ask the Senate's forgiveness; I just had to have a short chat to the whip, but the whip has indicated that others are prepared to forgo their position so that I can finish my speech.

Regrettably, Labor's petrol excise increase tax is with us. I am disappointed about that. I am opposed to it. I made it quite clear I would vote against it, had there been a vote. I will vote against it in 12 months time. I will be interested to see what the Labor Party does, in 12 months time—whether they are going to vote against it, when this excise tariff area has to be approved by parliament. It will be fascinating to see, after some of the speeches today, just where those senators who were so passionate about it today actually vote in 12 months time. It is going to be very interesting.

Again: my views are clear, but I do not blame Mr Hockey; as I say, I blame the Australian Labor Party. If they had not been so completely dysfunctional in their financial management, we would be reducing the cost of excise, we would be reducing income tax and we would be reducing company tax, but we cannot do that now because Labor ran up a debt of what would approach $600 billion if it were not arrested.

It is not just Labor that is at fault here. It was the Greens political party that supported Labor all the way in this reckless spending—this spending that took a bank account, if one might put it that way, of some $60 billion, which Labor inherited from the Howard government, from a $60 billion credit to a deficit approaching some $600 billion. Only the Labor Party and the Greens could do that. So, regrettably, I part company with my own party on this particular tax, but I blame the Labor Party. If it were not for the Labor Party, I would not be put in this position. And Labor should be eternally shamed.

Stephen Parry (President) Share this | Link to this | Hansard source

Thank you, Senator Macdonald. The time for the debate has expired.