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

A letter has been received from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Abbott Government's 2015 budget which locks in the unfairness of last year's budget.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

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

I want to focus on one of the government's packages that it has been very proud of—that is, the child care package. I want to try to unpack what is in that package and look at some of the aspects that the government has either ignored or it thinks are too hard to solve.

It seems clear to me that Prime Minister Abbott has learnt nothing from last year's budget. This government has unfairness at its core. No matter how many times it tries to say that it is a fair budget or it is a fair government, fairness is something you believe in, not something you can just make up one day because it sounds like it is a good idea. Certainly, Labor stands for fairness, and we have a strong record of standing for fairness. But the Abbott government has no record on fairness. This budget certainly does not deliver the fairness that you will hear them talk about. Before this budget Mr Abbott promised that this budget would not be at the expense of the family budget. He has once again broken that promise. Mr Abbott's legacy will be as the Prime Minister of broken promises.

Let us pause for a moment and think about child care and what commitments were made during the election campaign and indeed over the last period of the Abbott government. They have promised that fees will be lower in the child care space. They have promised that there will be better access. But what has the government developed? Labor is concerned about where additional child care places will come from for these women who supposedly will be lured back to work by the family package. Where will those places come from? It does not look to me that there is a plan in the budget to find additional child care places. In fact, it is quite the reverse. That is an area that Labor will continue to focus on and look at closely.

We, the Labor Party, are concerned about reports and concerns from the child care sector itself that many, many families will be locked out of child care because of the work activity test. These are areas that we will look at closely. Last week, in Western Australia, a young woman who does not have family close by told me that she does not know how she will manage if she loses the two days a week that she currently has in child care and absolutely relies on. Labor knows that families are under significant financial pressures, especially with the cost of child care. One of the disappointments for families is that these changes to child care do not start until 2017—which means another whole year of high childcare fees. The cost of child care, by the government's own admission, is expected to go up by 20 per cent between now and 2017. That must be the biggest recorded increase in the history of subsidised child care in this country, and that is according to the budget papers—but, of course, you will not hear the Abbott government talk about that.

This means a huge increase in the out-of-pocket cost for families, and yet the government will provide no help to families with the costs of child care in the intervening period and, in fact, it wants to cut the family tax benefit in the meantime. The government has not tackled the increasing costs of child care. Giving more to some families completely ignores the market—and make no mistake, child care operates in a market. It is not a benevolent service; it operates in a market. Private operators comprise 70 per cent of the sector, and some within that market will take advantage of the extra subsidy by increasing their costs. Parents will be hit with the additional costs into the future and their out-of-pocket expenses will continue to rise, because the Abbott government has done nothing to look at how to curtail fee increases. And between now and 1 July 2017, when the new package takes effect, prices will rise.

Mr Morrison has told us that about 20 per cent of services are around and above the new benchmark price—20 per cent! How many services, or what percentage of services, are below the benchmark cost? We do not know that, and I am not sure that the government does, but it is something we will be pursuing in Senate estimates. The budget papers predict a 20 per cent rise in childcare fees. A 20 per cent rise is bigger than any other rise we have seen in the subsidised childcare area—and this from a government who promises high quality and low cost! Of course, it is another broken promise. If, by Mr Morrison's own admission and as the budget papers demonstrate, 20 per cent of childcare services are above the benchmark rate, where are the 80 per cent? Are they at or below the benchmark rate? It is a critical question that needs to be answered. When we look at the budget papers we see that the Abbott government does expect a significant rise in fees. What does that tell us? It will be a fee rise such as we have never seen before in this market as operators who sit below the benchmark—maybe 80 per cent, maybe not—lift their fees to the benchmark level before it comes into operation so that they maximise the government subsidy, because this is a market and fees do not go down.

This is surely an inflationary measure completely missed by the government. And of course there is nothing on the table about making extra places available for families, so even where families may want to take up the package, they will not be able to. The Abbott government has done nothing to reduce waiting lists. There are waiting lists of up to two years and more in our major cities. Family day care—a flexible option—was gutted in the last budget, forcing services to close. I have met with services in Western Australia, and last week a service provider told me they had lost seven educators and had closed up their business solely because of what the Abbott government had done. They had shut their doors, making fewer services available in the suburbs of Western Australia.

Family day care has been gutted again. The CEO of the Family Day Care Association states that, in the whole time that Mr Morrison has been the minister, he has not once visited their service—not once. Yet here we have family day care providers who are in our suburbs, who provide a home care environment, who provide early morning care, who provide late evening care, who provide weekend care—services that we know some families in our community need. These services have been gutted. And what has been put in their place? A trial for nannies. Family day care providers are regulated. They have to be trained. They are managed. They come within the licensing of the states. They are part of the National Quality Framework. They know what their role is and provide an exceptional service, yet these educators are being sacrificed so that we can have this trial of unregulated nannies who will not sit within the National Quality Framework.

What are we creating in this country? Will this be another area that labour hire companies get into to exploit 417 visa holders? Will this be another unregulated area where we see 417 visa holders being exploited, being underpaid, being treated appallingly, such as we saw on the Four Corners program a week or so ago? Because 417 visas are no longer holiday working visas; they are another form of exploitation of labour. They are completely unregulated, and the best the Abbott government can do is to pursue underpayment of wages.

It would be appalling if the area of childcare, where Labor has worked so hard to lift standards, was ripped apart because of this cheap, unregulated nanny scheme. And what of the low-paid educators who care for and educate the nation's children? There was nothing for them, so we will continue to see massive turnover of educators in this sector. The Abbott government has not done nearly enough in the area of early childhood.

James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I am very happy to rise to speak on this, and explain why the budget this year is such a fair budget. I do not accept the premise that last year's budget was unfair. This is a very good budget for Australia. It is a very good budget for those who want to have a go. I think that that is to be applauded.

The Treasurer, the finance minister and all those who worked on this budget need to be congratulated. This budget is the next step in the coalition's responsible, long-term economic plan to build a strong, safe and prosperous future for all Australians. We all know there are economic challenges. China's economy has slowed, and the iron ore price has almost halved since the last budget, but it is important to stabilise the nation's finances and reduce debt.

This is key to building a stronger economy and a better future for all Australians. Our country has seen real progress. Our economic plan is working. Growth is up and jobs are up. Labor's projected debt and deficit have already been cut in half, and this year's budget delivers a credible path back to surplus. This government, the coalition government, remains committed to returning the budget to surplus as soon as possible, and this budget shows that our plan is working. The budget will deliver jobs, growth and opportunity in a way that is responsible, measured and fair.

We want to help Australians get ahead and we want to provide them with greater capacity to make their own decisions about their future. That is why this year's budget is good for families and good, especially, for small business. There is a jobs and small business package which I will talk about shortly. It includes a small-business tax cut, which will boost investment and create jobs. And the budget delivers a better childcare system that is simpler, more affordable, more flexible and more accessible. This will provide parents with greater choice when it comes to balancing work and family.

Addressing Labor's debt and deficit will make Australia stronger and allow the government to invest more in the services that Australians need. So we are taking the responsible decisions in the long-term interests of our country. There will always be economic challenges but our plan is realistic, achievable and capable of adapting to changing circumstances.

We should remind those who are listening to this, or reading it, that we inherited a deficit of $48 billion. The deficit for the budget year is now estimated to be $35 billion, and it is forecast to reduce each and every year to below $7 billion over the next four years. That means that, over four years, we will have reduced the $123 billion worth of deficits inherited from Labor by over $40 billion. And we have a credible path—with a credible plan—back to get us surplus.

Because of our efforts, the deficit reduces each and every year on average by around half a percentage point of GDP. This is despite a reduction of over $90 billion in tax receipts having been written off since we came into government. Iron ore prices have halved since the last budget, from US$90 a tonne to US$48 a tonne in this budget. This has contributed to the largest fall in the terms of trade in over 50 years.

As we have promised, the size of government will reduce over the next four years. As someone who passionately believes in a smaller government—it means greater power for individual families—I think that is a good thing. We have kept real payments growth in check at 1.5 per cent average over the five years to 2018-19. While Labor promised real spending growth of two per cent per annum they delivered a 3.6 per cent per annum increase. Gross debt in a decade will be more than $110 billion lower than we inherited from Labor, which was a forecast of $667 billion. Net debt is projected to peak at 18 per cent of GDP in 2016-17, before falling considerably to 7.1 per cent of GDP in 2025-26.

Our action on the budget has allowed us, each year, to lower taxes. In 2014, we removed the carbon and mining taxes, a key election promise. In 2015, we are reducing taxes for 96 per cent of all Australian businesses. I will repeat that: we are reducing taxes for 96 per cent of all Australian businesses. Taken together, all of our decisions since government have reduced the overall burden of tax by $5.4 billion.

This government's economic stewardship, under the leadership of Tony Abbott, has seen nearly a quarter of a million new jobs created since we came to office. In the lead-up to the budget, Labor was standing in the way of fixing the budget by blocking $30 billion in savings, including $5 billion of savings that they had promised. There is more to do—we know that—but we have made considerable progress and laid a strong foundation for the future.

I want to focus, with your permission, on small businesses. Like many on this side of the chamber, I come from a small business background. My parents were farmers, and I was a sole trader for a period of time. I was always quite frustrated when filling out the BAS forms that a small business has to fill out. It shows that on our side of politics we understand the stresses and tribulations that small businesses go through. They are often just mum-and-dad operations.

Small businesses form the engine room of our economy, and as the economy changes, the role of our small businesses will be even more important. With the economy in transition we are freeing up small businesses to create new jobs for Australians and for their children. That is why the $5.5 billion Growing Jobs and Small Business package will deliver a major incentive for businesses to invest, hire and grow. In addition, the package includes $375 million aimed particularly at improving opportunities for Australians to get a job and reach out to disengaged youth.

From 1 July 2015—a mere few weeks away—all small businesses, whether they are incorporated or not, will receive a tax cut. From 1 July 2015, the government will cut the company tax rate for incorporated businesses with annual turnovers of up to $2 million by 1½ percentage points to 28½ per cent.

From 1 July 2015 the government will also provide a five per cent tax discount to unincorporated businesses with an annual turnover of up to $2 million. It was great news for small businesses when, at 7:30 pm last night, the Treasurer said the words, 'Up until 30 June 2017 small businesses will also be able to immediately deduct every asset they acquire, which is valued up to $20,000, for tax purposes'. Currently the threshold sits at $1,000. This is fantastic news for businesses in terms of how they deal with their tax liabilities, but it is more fantastic for those small businesses that are going to purchase goods. So, there is going to be a little miniboom over the coming weeks and months up until, certainly, the end of this tax year as people take advantage of this fantastic deduction.

This budget will also help everyday Australians access new jobs, particularly young job seekers and the long-term unemployed. New measures will focus on making job seekers more employable, on reducing the costs of taking on new staff and on bringing job seekers and job providers together. These initiatives include a $1.2 billion national wage subsidy pool to target long-term unemployment. Employers will receive this subsidy from the time an employee starts in a job, when hiring and training costs are greatest, rather than waiting six months or more. This will ensure wage subsidies are more effective. This initiative also includes reforms to restart or to make it easier for small businesses to receive government support sooner when they employ older workers. A private sector work-for-the-dole program of $18 million over four years, for around 6,000 job seekers annually, to undertake valuable work experience is another program that was announced in the budget. This will allow, particularly, young job seekers the chance to develop practical skills, gain workplace experience and better connect with real jobs.

It is not just small businesses. There is a strong package on families. The $4.4 billion jobs for families package will deliver a childcare system that is simpler, more affordable, more flexible and more accessible. Our objective is to help parents who want to work and parents who want to work more. This package will provide parents with greater choice when it comes to balancing work and family. Families with incomes of between $65,000 and $170,000, who use child care from 2017, will be around $30 a week better off. Those on higher incomes will, on average, continue to receive the same level of support when faced with costs when wanting to return to the workforce. Having two parents in paid employment has become a necessity for most families because of the changes taking place in society and in the economy over many years. All mothers work hard, and many are also in paid employment.

This budget is not a budget that is unfair. This budget is a budget that is very fair for all Australians.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I agree that the 2015 budget is unfair. It is unfair to future Australians and it is unfair to current taxpayers. It is unfair to future Australians because it buries them further in debt. Next financial year the Commonwealth government's liabilities will exceed its assets by $261 billion. That is $11,000 of net liabilities for every Australian—man, woman and child. Net debt to GDP will be 17.3 per cent of GDP. Since 1970 it has only been higher than that once—in 1995-96. That was Keating's last year as Prime Minister, and it brought on Howard's era where debt and deficit were eliminated. Unfortunately we see no sign of a concerted deficit reduction strategy from the Abbott government.

The projected surpluses in 2019-20 and beyond are too late and too small. Too late because we have four more years of getting deeper into debt. Too small because these surpluses will only whittle away at what will be a significant pile of debt. What is more, these paper-thin surpluses are not worth the paper they are written on. These distant and small surpluses would only be achieved if the Senate passed all of the government's policy-specific legislation, like the increase in the eligibility age for the age pension and the cuts to family tax benefits and higher education subsidies. The government has rejected my call for a surplus to be achieved immediately by putting spending cuts in the annual appropriation bills. These are bills that Labor will never block. These distant and small surpluses would only be achieved if Australia achieved the longest period of continuous economic growth in history. In fact, Australia would need to achieve growth rates of 3½ per cent over a number of years—a feat that is far from assured given our current antigrowth policies in areas like industrial relations. These distant and small surpluses would only be achieved if Commonwealth taxes rise to 23.9 per cent of GDP through unabated bracket creep.

The Australian public will not stand for this, and nor should they. Our top marginal personal income tax rates are already among the world's highest, and bracket creep will put more and more of the middle class into these brackets. The 23.9 per cent of GDP represents an extraordinarily high Commonwealth tax burden. In only four years, since 1970, have we endured a higher Commonwealth tax burden, and that was during the commodity price boom of the early 2000s when company tax collections were pouring in. Running deficits now means we are living the high life at the expense of current taxpayers and future generations. It is unfair in the extreme.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to talk about this government's second budget and how it has, once again, failed my home state of Queensland. Last year we learned that this was a government of broken promises and twisted priorities. Last year we also found out how unfair a coalition government could be if it really put its mind to it. The fact is that the Abbott government's 2015 budget locks in the unfairness of last year's budget. It is not only an unfair budget; it is a weak budget when it comes to the critical points and the tests of job creation and increasing economic opportunities. Under this budget unemployment remains stuck, with the government forecasting it at over six per cent until 2018-19, which means that they have essentially given up on creating more jobs and doing the hard work to bring unemployment down faster.

As I say, this budget retains much of the unfairness of last year's budget. The Abbott government has not reversed its massive cuts to our hospitals. They have not reversed the cuts to education. The government's higher education proposals are still very much on the table—$80 billion of cuts to schools and hospitals are still on the table and the same $100,000 degrees are still there. We are still left with big cuts to family payments. This second budget is no better than the first. The Abbott government's second budget does not address the cuts to health and education from the first budget. This budget is all about saving the Prime Minister's job. It is about the Prime Minister's and the Treasurer's political survival. There is no long-term vision for Australia in this budget. It is not about the future of Australia; it is short-sighted and this government seems to make things up as it goes along.

It is hard to keep track of the government's litany of broken promises, and they are all to the detriment of my home state of Queensland. On examination of the budget we see that Queensland is facing an $18 billion funding shortfall in health and education over the next 10 years. It is obvious that this government's shocking and clumsy approach to Commonwealth-state relations remains intact. The Commonwealth budget papers reveal that Queensland will be $924 million worse off in hospitals funding over the next three years compared to the specific purpose payments in last year's federal budget. We will also be $466 million worse off in schools funding over the next three years compared with the specific purpose payments of last year's budget.

It is refreshing to point out that the long-held hysteria about debt has suddenly and miraculously disappeared, with debt now suddenly not an issue. Last year the red lights were flashing and we had a budget emergency; this year the glass is half full. It is a miraculous turnaround. Our nation's budget deficit has doubled on Mr Hockey's watch and Mr Hockey says that is okay now. The government has doubled the deficit since last year and we are now under this government seeing the highest tax and spending levels.

I return to a point I made earlier about financial assistance grants to local authorities, which is an important issue in Queensland. This funding arrangement is vital to ensure that local government is supported by the Commonwealth so it can carry out important work for communities. I have already mentioned today that in the electorate of Kennedy the total figure for cuts to local authorities under the financial assistance grants is estimated at $27,698,012 million to the 2017-18 financial year. Longreach Regional Council alone loses $3.3 million. Every single local government will be worse off as a result of the Abbott government's indexation freeze. The government admitted during Senate estimates that they had not done an analysis of the impact of the cuts to local governments and what effect they will have on communities or service provision. They have also admitted to having undertaken no consultation with local councils or communities before making this decision. The flow-on from this decision will hamper the ability of these councils to provide good local roads, decent libraries, well-maintained parks, regular garbage pickups and high quality essential services including child care. Labor has always been a strong supporter of local government and its role in the community and only Labor understands the critical role that local governments play in the economic growth of local communities.

To reiterate, spending is up, unemployment is high, debt and taxes are up and yet the Abbott government's second budget does not redress the cuts to health and education from the government's first budget. This is the same Prime Minister that said that under a coalition government debt would be down, taxes would be down and spending would be down. This government claims that the budget is about fairness and encouraging people to have a go. This government is cutting $80 billion worth of funding to schools and hospitals, and I do not categorise that as a fair budget.

I want to turn to the issue of the Paid Parental Leave scheme and make the observation that the cuts announced in last night's budget will hurt new families in my area. The Treasurer has changed the terms of paid parental leave benefits meaning that mothers can no longer claim paid parental leave from the state if their employer also provides a benefit. Labor will oppose this measure. The Paid Parental Leave scheme that is now in place was designed by Labor to support working fathers and mothers. The scheme was designed to make sure that the basic scheme is built on with top ups from employers. Mr Abbott said years ago that paid parental leave would be introduced over his dead body. At the time, Mr Abbott wanted to introduce his gold-plated paid parental leave scheme that would have seen mothers get $75,000 to have a baby. Now Mr Abbott and Mr Hockey want to cut paid parental leave to around 80,000 mothers. How can the Australian people believe anything that Tony Abbott ever says again when it comes to family policy? Whilst I am talking about paid parental leave, one must also express great concern at the demonisation in this debate of mothers who access both the government scheme and their employer's scheme. It is suggested that they are somehow rorting the system, but nothing could be further from the truth and I think it is reprehensible that the government has portrayed Australian mothers in that light.

On the issue of health, the GP tax remains in the background of this unfair budget. Millions of patients are set to be hit with a GP tax even bigger than the original proposal, with the 2015 budget confirming that the Abbott government is committed to a four-year freeze on Medicare rebates. The fundamental unfairness of last year's budget disaster continues. The rebate freeze is just the latest version of the unfair GP tax, which has seen the government attempt to slug patients with a $7 fee, a $5 fee, a $20 fee and now an $8.43 fee through the back door.

On the issue of multinational tax avoidance, the Prime Minister has spent months promising to reap billions from tax integrity measures. Joe Hockey's own budget papers reveal this to be a fraud. Mr Hockey's best effort at tackling multinational tax avoidance is worth a total of $30 million over four years, less than one-sixtieth of Labor's multinationals package. I think everybody can agree that all companies should pay their fair share of tax. Labor has announced a fully costed, carefully calibrated package of measures that would keep $7.2 billion worth of tax in Australia over the next decade. Those changes relate to arrangements as to how multinational companies claim tax deductions, greater compliance work by the ATO, cracking down on multinational companies using hybrid structures to reduce tax, and improved transparency and data matching. Only Labor has a plan to tackle multinational tax avoidance and ensure big multinationals pay their fair share.

This Abbott government budget does lock in the unfairness of last year's budget.

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

It never ceases to amaze me, I have to say, that the Labor Party never seem to have the answers in government. They create the problems in government, but, in the wisdom of opposition, apparently they always have a plan that they are going to bring forward. Their plan over the last 18 months has been to stop budget repair. They have stood in the way of tens of billions of dollars worth of savings that would have offset some of the spendthrift and wasteful nature that characterised their government. But the job, as always in repaying Labor's debt and deficit, falls to the prudent policies of the coalition.

I will not gild the lily; not every decision in last year's budget met with my approval. I did not want to see tax rates go up, but that is okay—Labor supported that. I do not want to see Australian consumers hurt; I want to see small business flourish, and the government has undertaken a package in this budget to do exactly that. It has undertaken not to lift taxes. It has undertaken to give a tax break to Australia's small businesses whether they are incorporated, by lowering the tax rate to 28½ per cent, or unincorporated, by allowing them to have a $1,000 tax rebate. That is a magnificent start to spurring the engine room of the Australian economy. If nothing else, the Labor Party's maladministration over the six or so years of the Rudd-Gillard-Rudd governments demonstrated that the government does not drive the economy. The government creates problems for those who do undertake productive and effective work.

In the budget handed down by Mr Hockey last night, the centrepiece—the flag-bearer for it, from my point of view—is the way it treats small business. I was brought up in small business; my father was involved in it; I was involved with it before I came into this place. I understand how tough it can be for small business people, whose only motivation, might I add, is to provide for their families, to try and make a dollar, hopefully to grow, and to employ other Australians so that they can lead productive lives and look after their families as well. That is the motivation for bosses, and yet the circumstances we had under Labor were barrier after barrier, red tape after red tape, and green tape after green tape put up in front of small businesses so that not only was it tough for them to get started but it was very tough for them to get any bigger. This government went a long way last night to redressing that, not only by lowering the tax rate but by this magnificent and, I have to say, unbelievably generous measure for immediate depreciation of assets purchased for the business up to the value of $20,000. That is, I think, one of the best policy decisions I have heard. It will stimulate the economy and encourage businesspeople to go out, invest in the assets, the infrastructure and what is necessary for them to function in their business, and employ people going forward. It is a very generous measure, and I think it is fantastic, so I support that.

Also, the government has focused on the ability for businesses to transform out of perhaps an unwieldy structure into a more modern structure. A lot of businesses, when they are incorporated or created, are not set up in the most effective manner for them, which is proved subsequently with their growth and various other changes. The government has implemented some procedures and some regulations that will allow for the minimisation of taxation and costs in respect of the transition to a more flexible or perhaps a more relevant structure for businesses.

The government has also touched on employee share schemes, to make it worthwhile and less onerous for the start-up companies—the ones that are going to drive our economy going forward—to include employees in the benefits of any success that business may have. If you want to look around the world, you will see that some of the great success stories, whether it be Google or Apple or any of these other start-ups that have emerged—Uber and PayPal are other examples—have all had employee share schemes that have enabled those people to go into work and receive a salary perhaps under what they might otherwise command in the private sector but with the upside of business ownership and entrepreneurship. That is the culture we should be encouraging in this country. It is a culture that I absolutely support, because it is what is going to drive innovation—and innovation is what we need to be encouraging.

It is often said at my children's school that information is available, to every child, wherever they go. They can go to Google or anywhere else and get all the information they need, but it is how they analyse and look at that information that is important. That is what they are teaching children in schools today—I hope they are—how to learn, how to digest and how to dissect information.

We have to start to think that our economy cannot be prescriptive. It is not just about manufacturing or mining or anything else. They are very important, but probably the most successful company in this country has not even been started yet. Maybe it started in the last year. We are yet to see it grow, and we cannot even envisage the success of the future that so many people will undertake. That is why innovation, particularly innovation and investment in small business by government, is so welcome.

None of this comes without expense, but it is far better to give a tax break to business that will result in more jobs, overall, than to send cheques for $900 to people who live overseas or who are deceased. One senator said you should be able to put it into the poker machines. A government investing in small business is much better than giving someone money to put into a poker machine. That is just a personal view. I know some on the other side have different views, because they have said them before in this place.

Last night's budget was an excellent budget for the country at the time we find ourselves in. Let us not fool ourselves. We have a massive process ahead of paying back the debt to reclaim the deficits that have been characterised by modern budgets, but we have made some giant inroads along the way. We have cut the deficit that was projected. We have cut the overwhelming national debt that was projected under the previous governments. We are on the right path.

If we can stimulate our economy, if we can continue to grow it—the best way to grow an economy is to get government out-of-the-way of it; it is to cut taxes, allow more freedom and allow more innovation—then we have a real chance of addressing the economic and fiscal problems that our country faces as a result of the Rudd-Gillard-Rudd governments. We cannot afford to continue down the path they set us on, and last night's budget goes a long way to addressing that damage.

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

I rise to make a contribution to this matter of public importance that discusses whether the budget locks in unfairness. Yes, it definitely does. We have the cuts the previous budget made that are continued, here with this budget, and those that have already started.

You have the cuts that were made to Aboriginal and Torres Strait Islander peoples through the Indigenous Advancement Strategy, which took $534 million out of spending in Aboriginal and Torres Strait Islander communities. That is already being felt on the ground in those communities and is extremely unfair. You have the cuts to the Department of Social Services, which are $270 million taken out of supports and services for the most vulnerable in our community—and those are hitting the ground. The cuts to emergency relief are hitting the ground not only across metropolitan areas throughout this country but also in rural and regional areas. You have cuts to health that are already hitting the ground. There is the loss of youthconnect. The list goes on.

Those were the cuts from last year, which have been entrenched in this budget and the measures that have not been passed and those that are still on the books. There are the cuts to family tax benefits and, in particular, those that would hit very hard on single parents. And there is the government's total refusal to look at key revenue measures, including looking at super to the big end of town. They will not look at it. They have made no commitments at all.

They are shying away from and refusing to address issues around retirement income—in the broader context—and looking at a review. Seniors groups are calling for this and have been repeating their calls for that broader review of retirement incomes, to make sure that retirement income is fair and equitable and that the government is not just looking after the wealthy through the very generous tax concessions, for super, for the wealthy. Those are grossly unfair. The government knows about it. They are shutting their eyes and do not want to deal with it—because it might affect their mates.

The Treasurer, Mr Hockey, said the budget enables every Australian to 'have a go'. I have news for him: no, it does not. The cuts they are locking in through this budget, that they brought through the last budget, undermine the ability of vulnerable Australians to have a go. What do you think happens to a young person when they are on no income, whatsoever? The government said it has heard the message. They said: 'Do you think it unfair that young people are dumped off income support, of any form of income, for six months?' 'Oh, we have heard that. We'll just make it seem a bit fairer by reducing it to one month.' No. It is not fairer. It is cruel. It is harsh. How do you expect young people under the age of 25 to eat, have accommodation and gain employment when they are living in poverty—on nothing for a month?

They are also extending the age for Youth Allowance to 25. They are on even lower money, living below the poverty line. Did they address the gross unfairness of Newstart and its payments? They have not been rising to meet the cost of living. People are living below the poverty line and will drop further below the poverty line because the indexation of Newstart does not keep up with the true cost of living. They are not increasing Newstart and people are still existing on $260 a week below the poverty line. If the government were really about addressing fairness and a good quality of life for people and helping people gain employment, they would be investing in helping people much more than they are. They would not be locking in unfairness by not committing to increased payments, like Newstart and Youth Allowance, so people can live above the poverty line. We know that poverty makes it even harder for people to gain employment.

Another unfair component of this budget is the fact that we knew we had to upgrade the IT system for Human Services—but what did they do? They said this is all about collecting revenue from those people who are not compliant and are fraudulently claiming benefits. That is not the approach we should be taking. The IT system should be helping people gain employment. (Time expired)

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I rise to speak on the matter of public importance on the Abbott government's 2015 budget, which locks in the unfairness of last year's budget. We know that last year's budget was one of the worst and most unfair in history. It hit pensioners, it hit students, it hit families and it made savage cuts to health and education. The budget handed down last night is simply more of the same. It is unfair. The unfair measures in last year's budget live on in this budget. The $80 billion of cuts to health and education live on. The cuts to the family tax benefits are still there. The $100,000 university degrees are still there. Unfairness remains at the core of this latest budget. The language may have changed, but the cuts remain.

In the last budget we were told that the family tax benefits had to be cut because we had to repair the budget and get the budget back to surplus. Now we are told by the government that the cuts to family tax benefits are needed to fund the childcare package. As the shadow Treasurer, Mr Bowen, said this morning:

The alibi has changed but the cuts have remained.

The Abbott government's second budget simply locks in the unfair cuts to family payments that were made the first time around. We know that this government cannot be trusted. It said that the family budget would not be hit in this year's budget, but that is not true. The Abbott government still wants to cut families off Family Tax Benefit B when their youngest child turns six. Kids do not get cheaper when they turn six. Mr Abbott still wants to freeze family tax benefit rates, which will erode the value of these payments. For example, a single-income family on $65,000 a year with two children at school will be $6,000 a year worse off. The Large Family Supplement will be abolished and the Low Income Supplement will also be abolished. These cuts are still in the budget, and these cuts will have a huge impact on the lives of low- and middle-income Australian families. They will hurt millions of families across the country and I can assure you that Labor will continue to oppose these cuts.

To add insult to injury, Mr Abbott wants to rip a further $967 million from paid parental leave in a new cut that will push around 80,000 mothers off PPL, leaving them up to $11,500 worse off. This will also leave them with less time with their babies in the early years of their child's life. One of the most unfair and cruellest cuts in the Abbott government's first budget was the move to force jobseekers to live on nothing for six months. His second budget will leave jobseekers under the age of 25 with nothing to live on for one month. This is unfair and will continue to hurt young Australians who are struggling to make ends meet. The government has learnt nothing from the cuts that they sought to make in their last budget. They moved from six months because they knew that it was deeply unpopular within the Australian community and now they are trying to trick the community into accepting that maybe one month is okay. Well, it is not. It is unfair and it is not okay.

We need to support and encourage our young people, not treat them unfairly and leave them out in the cold. We need to make it easier for them to find a job, not harder. There is no justification for this measure, as the Australian Council of Social Service chief, Cassandra Goldie, said after the budget was handed down. No amount of sugar-coating, spin or glossy brochures will change the fact that this budget fails the fairness test. It certainly will not help one Australian family. (Time expired)

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

I regret feeling the need to stand here and maybe give those opposite a lesson in economics 101. The fundamental basis of it is that you cannot just keep spending money and constantly putting more and more programs into your public budget if you cannot actually afford to pay for them. Senator Brown made the comment that we need to support and encourage our young people. The best way that we can support and encourage our young people is to allow them to be able to get a job. The best way for them to be able to get a job is if we put confidence back into our economy so that our businesses start employing people, and, if they employ people, there will be more jobs for our young people. By spending more and more money in the public sector and constantly putting more and more pressure on the public purse to pay back the interest that is on the money that we owe is no way to run our economy.

As someone more famous than me said: 'You can't tax your way out of a recession.' And the public sector cannot spend its way out of a recession. We need to give business the confidence, the incentive and the tools so that they can make our country more prosperous. Instead of standing opposite and talking about all the things that may not have been in the budget that you would have liked to have given people so that you could buy their vote at the next election, maybe a more responsible approach would be to come up with suggestions about how you are going to deal with the debt and deficit problems this government has inherited from you.

I think that the budget that was brought down last night was eminently sensible, balanced and reasonable. I do not believe that in any way it was unfair. I am a small-business person. I come from a community that is run on small business. Many people in this chamber, if they actually bothered to have a look, would realise that small business is the engine room of this country. By putting in some programs and some initiatives and allowing them a 1.5 per cent tax cut, maybe small businesses—remember that every big business was a small business once—will have the confidence and the incentive to employ more people. Employing more people, Senator Brown, will mean that young people will have greater opportunity and access to a greater job market.

It is not just tax relief of 1.5 per cent that is being given to small business—it is a whole package of $5.5 billion. With accelerated depreciation, those of you who have been involved in small business, as I have, will know that one of the greatest things to give you the encouragement to make that decision to purchase a new piece of equipment is knowing that you are able to depreciate it over a much shorter period of time. If I had to go and buy myself a lawnmower and I knew I could depreciate it over the first 12 months of owning it, I would be much more likely to buy it. But that does not just benefit me because I am able to get that depreciation benefit immediately; it also benefits the local dealer who sells me the lawnmower. Of course, this continues to have a flow-on effect in our economy. This is what you call stimulating growth. You are not putting a blanket on growth by just trying to use the public sector to spend your way out of the situation, you are using business and using your economy to drive the growth of the Australian economy. Certainly, the small business package is something that has been welcomed in the electorate and in South Australia, because it is seen as a stimulus to our economy.

The other area that was particularly welcomed was the $4.4 billion families package. Certainly, in the discussion after the last budget in relation to the Paid Parental Leave scheme it appeared that the women of our country were keen for childcare support and believed that it was an important way of assisting them to get back into the workforce. We need to look at this as a productivity measure and encourage the 50 per cent of our population, or thereabouts, that take some time off to have children to get back into the workforce. Up until now, they have found it particularly restrictive because they have not been able to access child care at affordable levels. For those opposite to come in here and say that this is an unfair budget, when they were advocating that child care be included in the budget, seems rather ignorant. It is contradictory for them to come in here and say that the childcare and $4.4 billion families package is unfair.

I want to touch quickly on my home state of South Australia. I would like to put on the record that annual Commonwealth funding to South Australia will increase by $2.4 billion over the next four years. That is an increase in hospital funding; it is an increase in school funding. I would like to put that on the record. It does not matter how many advertising campaigns Premier Weatherill in South Australia decides that he is going to run to try and bluff the South Australian public into believing that the federal government is somehow cutting funding to South Australia, he cannot cover up the fact that he has been a totally incompetent fiscal manager in our state. The budget measures and the fiscal inadequacies of his government are the reasons he has had to cut programs in South Australia. The federal government has not taken money out of the South Australian bucket. As I said, it has increased overall funding. It has increased school funding and increased hospital funding. For Premier Weatherill to spend millions of dollars of South Australian taxpayers' money running what would have to be described as misleading at best and dishonest at worst advertising campaigns, and to suggest that the federal government is in any way to blame for the fact that he is no longer able to fund some of the initiatives that are the purview and responsibility of the South Australian government, I think is reprehensible and entirely recklessly irresponsible on his part. To add insult to injury, we had a question today criticising this government about hospital funding. It is the South Australian government who intends to shut down the repat hospital for our veterans in South Australia. This is a fair budget, and it is ridiculous to say otherwise.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Order! The time allotted for the discussion has expired.