Zed Seselja (ACT, Liberal Party, Assistant Minister for Science, Jobs and Innovation) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

APPROPRIATION BILL (NO. 3) 2017-18

Today, the Government introduces the Additional Estimates Appropriation Bills. These Bills are:

Appropriation Bill (No.3) 2017-2018

Appropriation Bill (No.4) 2017-2018

These Bills underpin the Government's expenditure decisions.

Appropriation Bill (No. 3) 2017 -2018 seeks approval for appropriations from the Consolidated Revenue Fund of approximately $1.4 billion.

I now outline the significant items provided for in this Bill.

First, this Bill would provide the Department of Home Affairs with approximately $576 million, including for further support for regional processing arrangements and additional support for processing increasing numbers of visa applications.

Second, the Department of Education and Training would receive approximately $95 million. This includes just over $69 million for enhancing the current National Computational Infrastructure supercomputer at the Australian National University to bring it to current world-class standards.

Third, the Attorney-General's Department would receive approximately $70 million. This includes approximately $38 million in 2017-18 for the Royal Commission into misconduct in the Banking, Superannuation and Financial Services industry.

Details of the proposed expenditure are set out in the Schedule to the Bill and the Portfolio Additional Estimates Statements tabled in the Parliament.

I commend this Bill.

APPROPRIATION BILL (NO. 4) 2017-18

Appropriation Bill (No. 4) 2017 -2018, along with Appropriation Bill (No.3) 2017-2018, which was introduced earlier, are the Additional Estimates Appropriation Bills for this financial year.

This Bill seeks approval for appropriations from the Consolidated Revenue Fund of just under $133 million.

I now outline the significant items provided for in this Bill.

First, this Bill would provide the Department of Education and Training with just over $27 million. This includes approximately $24 million for payments to the States and Territories to implement national reforms in the non-government school sector and to help schools facing funding reductions transition to the new schools funding arrangements. This forms part of the additional funding for the Quality Schools reform package.

Second, the Department of Human Services would receive just under $16 million in 2017-18 including capital funding of around $11 million to implement three projects being brought forward to Tranche Two of the Welfare Payment Infrastructure Transformation program. This program will progressively replace Centrelink's ageing technology platform.

Third, the Office of National Assessments would receive approximately $12 million in capital funding as part of the establishment of the Office of National Intelligence.

This Bill also proposes the repeal of 15 old annual Appropriation Acts from 2012-13 and 2013-14. This is simply a house-keeping measure, as the appropriations in these Acts either have been exhausted or are no longer required.

Schedule 3 of the Bill provides a list of the annual Appropriation Acts proposed for repeal.

Details of the proposed expenditure are set out in the Schedules 1 and 2 to the Bill and the Portfolio Additional Estimate Statements tabled in the Parliament.

I commend this Bill.

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

I rise to speak on these two bills, the Appropriation Bill (No. 3) 2017-2018 and the Appropriation Bill (No. 4) 2017-2018, before us in the Senate today, which are required to ensure the ordinary functioning of government continues for the remainder of the 2017-18 financial year and facilitate a number of 2017-18 MYEFO measures. The package of bills appropriate about $1.5 billion from consolidated revenue in addition to the appropriation acts passed in June 2017. These amounts are already incorporated into the budget bottom line as presented in the 2017-18 MYEFO—I can see Senator Leyonhjelm laughing already. I wonder how he pronounces it. I'm sure we'll find out next.

Of course, we won't stand in the way of supply. These bills also go to the government's broader management of the nation's finances. We remind those opposite of what the Prime Minister has said on debt in the past. When he was Leader of the Opposition in 2009 he described $200 billion in debt as 'frightening' and promised the Liberals wouldn't 'run willy-nilly into debt'. He described $300 billion in projected gross debt as 'gigantic' and an 'almost inconceivable level of debt' and tried to scaremonger about the debt level with his runner analogy: 'There should be no lead weights put in his pockets or heavy backpacks put on his back.' Yet that is what the government is delivering to us with these higher and higher levels of debt. Surprisingly, the Prime Minister hasn't been as colourful about his own record on debt. On the Turnbull government's watch, gross debt has crashed through half a trillion for the first time in the country's history.

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

Shame!

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

Yes, it is a shame, Acting Whip. Gross debt is currently above $518 billion with no signs of slowing down, and doesn't peak in the government's own budget papers. Net debt has doubled under this government and will hit record highs for the next three years. That is not to mention that the deficit for this year is $23.6 billion, eight times higher than the $2.8 billion the Liberals first predicted in their 2014 horror budget. I know you are interested in that, Madam Acting Deputy President, so I'll repeat those figures. The deficit for this year is eight times higher than the Liberals had predicted in their first horror budget of 2014.

I note that the Prime Minister is more reluctant to speak about debt and deficit blowouts on his watch than he was back in 2009. But his Assistant Treasurer, the member for Deakin, was happy to help out, saying it was 'a truckload of debt, an absolutely extraordinary amount of debt'—I don't think the opposition could have said it better! But what is more extraordinary is how quickly the coalition have racked up this truckload of debt. The coalition, under Mr Turnbull and Mr Abbott, have racked up debt much faster than during the Rudd-Gillard years. Gross debt has increased by $39 million a day quicker. Net debt has increased by $21 million a day quicker. And the government can't blame this on the global economy as global conditions are the best we've seen in a decade. The International Monetary Fund's most recent World Economic Outlook Update—this is for January 2018—says:

Global economic activity continues to firm up. Global output is estimated to have grown by 3.7 percent in 2017, which is 0.1 percentage point faster than projected in the fall and ½ percentage point higher than in 2016.

Yet the government is still racking up debt quicker, in good economic conditions, than occurred under Labor, when we had the global financial crisis to contend with.

The state of the budget under the Liberals comes down to one key point: the Liberals are obsessed with pandering to the top end of town. This attitude hurts the budget, hurts the economy and comes at the expense of people who work and struggle to make ends meet. The latest Mid-Year Economic and Fiscal Outlook is a perfect example of the Liberals' elitist and out-of-touch approach, with higher taxes for workers, lower taxes for multinationals and millionaires, and record and growing debt. Whenever the Liberals do attempt fiscal repair, it is always at the expense of vulnerable people. They are ripping away funding and support for students and universities. There is a $34 billion hike on the seven million low- and middle-income earners in Australia. They want to ditch the energy supplement, which would leave pensioners up to $366 a year worse off, and increase the pension age to 70, which will mean Australia will have an older pension age than the US, the UK, Canada and New Zealand. It will also mean that 375,000 Australians will have to wait longer to access a pension in the first four years alone.

But for the clearest example of the Liberals pandering to the top end of town we need look no further than the $65 billion tax cut for big multinationals and the big banks. This is a $65 billion ram raid on the budget. It is $65 billion taken out of funding for education, health and the pockets of middle Australia—and $10 billion of that is going to the big banks. The economics of this don't stack up. Treasury modelling shows a one per cent boost to GDP in 20 years time—an average of 0.05 per cent a year. A report by the Australia Institute highlighted the lack of evidence between the tax cut and increased jobs or growth. The Grattan Institute has warned that national income would be reduced for years and that, by committing to the handout before fixing the budget, the government risks reducing future living standards. To quote that think tank:

An unfunded company tax cut would add to already-large budget deficits … any cut to the company tax rate should only be implemented as part of a wider tax (and spending) reform package that does not increase budget deficits.

The tax cut is a kick in the face for people struggling to make ends meet. Ordinary Australians don't want to see the biggest companies get tax concessions they don't need at the expense of their own living standards. Polling from The Australia Institute also shows that the majority of people—that is, 58 per cent—don't support the $65 billion big business tax cut. And, more significantly, I guess, a recent Guardian Essential poll showed that 42 per cent versus 30 per cent rejected the claim that a corporate tax cut would lead to higher wages. It also showed that more people—38 per cent to 32 per cent—thought that cutting the company tax rate would simply deliver more profits to the business bottom line, rather than attract investment and create more jobs and higher wages.

The coalition's pandering to the top end of town is not just exclusive to the big business tax giveaway, it applies to other areas as well. The government has given tax cuts to those who need them the least: a $16,400 tax cut to millionaires. It's also not willing to reform other areas, like trusts, negative gearing, capital gains tax and superannuation, that advantage the top end of town.

For example, under the Liberals, more than half of the superannuation concessions go to the top 20 per cent of income earners. Peter Martin from Fairfax summarised it well recently, when he said in an article:

The biggest superannuation and capital gains tax concessions are directed towards the highest earners, something we wouldn't tolerate if they were delivered as cheques, paid into accounts.

This government's elitist and out-of-touch approach is as concerning for the economy as it is for the budget. As I said, the global economy is going strong, and our domestic headline rate would suggest that things are good here too. The national accounts show that Australia's GDP growth for the year to the December quarter was 2.4 per cent. However, the headline figure doesn't give a sense of how we're slipping in a global context. Australia has gone from leader to laggard.

Our response to the global financial crisis meant that we overperformed in what was an horrific global context, and we were only one of two advanced economies to do so. Between 2008 and 2010, Australia had the fourth-highest GDP growth among all OECD countries, with the US, the UK, Japan, and Germany all contracting over that period of time. The latest comparative data shows that Australia has now slumped to 20th among the OECD, behind likes of Mexico, Estonia, Finland and Latvia. I can see that you are shocked, there, Madam Acting Deputy President Reynolds, and I am too! I'll repeat those countries: we've now slumped to 20th among the OECD, behind likes of Mexico, Estonia, Finland and Latvia.

The headline figure also masks some enduring, and indeed concerning, underlying trends in our economy which are disproportionately hurting some more than others. A lot of people feel, with some justification, that the rules of the economy are written to benefit others at their expense. That makes sense when you consider that inequality is at a 75-year high and that the gender pay gap is widening, with a recent World Economic Forum report ranking Australia 42 out of 144 countries, falling from 12th position a decade earlier.

This economic disconnect is most prevalent in the world of work and wages. The link between hard work and reward has been severed. Wages grew by two per cent, consistently hovering around record lows. The unemployment rate is at 5.5 per cent, a level comparable to the peak of the global financial crisis. With near-record underemployment, Australians want more work, but they cannot get it. On top of these economic pressures, the Liberals are worsening the situation by supporting penalty rate cuts. These cuts hurt our lowest-paid workers—with some 700,000 impacted—with workers losing up to $77 a week, and have a disproportionate effect on female workers.

The Commonwealth Bank of Australia's chief economist, Michael Blythe, wrote about the wages recession in his economic issues note. He spoke about the weakness in wages growth as a significant economic risk, with impacts on households and businesses. Mr Blythe notes that weakness in household incomes remains a major threat to consumer activities.

The Liberals are simply pandering to the top end of town, and it's best displayed with their $65 billion big business tax cuts. This policy sharpens the difference between the Labor Party on this side and those opposite. We know you can't grow the economy by favouring the top end of town at the expense of middle Australia. This is a government that thinks big multinational corporations pay too much tax, seven million working Australians pay too little tax and people get paid too much to work on weekends. These are all absurd propositions, and they are the reasons why ordinary Australians reject the Turnbull government's trickle-down economic agenda.

We in the Labor Party know that growth has to be inclusive. If you're serious about growing the economy, you have to invest in people and their productivity, you have to make sure people are rewarded for effort and you have to ensure that people have money to spend in the economy and can provide for their families. That attitude to growth also underpins our fiscal approach: we believe in budget repair, but it has to be fair. Unlike those opposite, we don't ask the most vulnerable to carry the can when it comes to getting the budget back to balance. That's why we've announced a raft of responsible savings that significantly improve the budget over the medium term. No opposition in recent memory has been as committed to leading the policy agenda as the Labor Party. Our determination to repair the budget in a fair way is the driving force behind that.

Labor has already committed to changes in taxations of trusts; reforms to negative gearing and capital gains; reforms to dividend imputation; changes to superannuation concessions for the top end; crackdowns on multinational tax avoidance; and other measures, including a cap on deductions for managing tax affairs. All up, we have put forward tens of billions of dollars in fair budget repair measures that don't ask the most vulnerable in our community to carry the can through higher taxes or stripping away funding they rely on.

We are pleased that our determined approach to setting the policy agenda, particularly when it comes to the economy and fiscal repair, hasn't gone unnoticed. To again quote Peter Martin from an article late last year:

… this time next year we will be faced with a choice between a government that makes things up as it goes along and a government in waiting that knows what it wants to do.

Laura Tingle, soon to be 7.30's new political correspondent, wrote last year in an article titled 'A useless bunch of indulgent politicians who deserve to be turfed':

… Labor frontbenchers have been going back and having a think about what it is they and their party should actually be trying to achieve in government: what values they are trying to promote.

In conclusion, we support these bills and won't stand in the way of supply.

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

This is a budget bill, and if I could I would block the budget. I know the opposition won't be joining me, given what happened to Gough Whitlam in 1975 and having just heard Senator Farrell say as much. But this budget should be blocked. It gives rise to high tax, deficit and debt, and it's causing great damage to our country. If the budget were blocked, the government would be forced to go back to the drawing board to prepare a budget with reduced government spending. While this occurred, government spending would be interrupted. This would cause short-term pain. But the benefit from a new budget with reduced government spending would be significant and enduring.

As this budget will pass, despite my opposition, I also propose an amendment. In presenting these two budget bills before the Senate today, the government is violating the Constitution and usurping the rights of the Senate. The Senate Standing Committee for the Scrutiny of Bills alerted the Senate to this in its second digest of 2018. In this digest the committee noted that the government's policy to spend $7 million on the Menzies Institute and Library is a new policy announced in December's Mid-Year Economic and Fiscal Outlook—and Senator Farrell's not here, so I don't have to pronounce that more appropriately than he did! The committee noted that as it is a new policy the Senate should be able to amend the appropriation for this policy. The constitutional bar on the Senate amending appropriation applies only to appropriations for ongoing policy. Yet the committee noted that the government has decided not to insert the appropriation for this new policy into Appropriation Bill (No. 4), which contains other appropriations for new policy. Instead, the government has inserted the appropriation for this new policy into Appropriation Bill (No. 3), which contains appropriations for ongoing policy. Section 54 of the Constitution makes it clear that bills containing appropriations for ongoing policy should contain only such appropriations. Only then are such bills immune from amendment by the Senate.

My second reading amendment, which I now move, simply points this out:

Leave out all words after "That", substitute:

"(1) The Senate notes that, contrary to section 54 of the Constitution, the bill includes funds which are not "ordinary annual services" as they relate to new policies not previously authorised by legislation, including $7 million for the Menzies Institute and Library.

(2) The Senate reaffirms its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the government.

(3) The bill be withdrawn and redrafted to comply with the constitutional requirement that proposed laws which appropriate revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriations."

The amendment that I will move in committee simply removes the appropriation for the Menzies Institute and Library from Appropriation Bill (No. 3) and inserts it into Appropriation Bill (No. 4). If you believe the Senate Standing Committee for the Scrutiny of Bills, which is chaired by Labor Senator Polley, co-chaired by Nationals Senator Williams and includes members such as the Greens' Senator Rice, then you must consider the spending on the Menzies Institute and Library to be a new policy. If you believe that the Constitution should be upheld, then you must support removing the appropriation for this new policy from the No. 3 bill, which contains appropriations for ongoing policy. It should instead be placed in the No. 4 bill, which does not contain appropriations for ongoing policy.

When my amendment is debated in committee, I would appreciate contributions from Senators Polley, Williams and Rice, given their membership of the committee that has raised this serious issue. I commend my second reading amendment to the Senate.

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

I rise to speak on Appropriation Bill (No. 3) 2017-18 and Appropriation Bill (No. 4) 2017-18. These two bills provide appropriations from the Consolidated Revenue Fund for the annual services of the government for the remainder of 2017-18 and facilitate implementation of a number of 2017-18 Mid-Year Economic and Fiscal Outlook, or MYEFO, measures. The government is seeking to appropriate a total of around $1.5 billion for the remainder of the 2017-18 financial year. These amounts have already been incorporated into the budget bottom line as presented in the 2017-18 MYEFO.

While the Labor Party will be supporting these bills, the debate today gives us an opportunity to highlight the flaws in the 2017-18 budget and the misplaced priorities of this chaotic Turnbull government. Let's be clear at the outset: it's big multinational businesses and millionaires who get all the goodies from the Turnbull government, not the low- to middle-income Australians who could do with some additional support. The recent MYEFO confirms that, instead of making the right decision to rein in generous tax breaks for the top end of town, Mr Turnbull, Mr Morrison and Senator Cormann are once again asking those who can least afford it to carry the can for the government's budget failures. The government prefer to rip away funding and support for students and universities in an attempt to fix their budget mess rather than ditch their tax breaks for the top end of town. They are effectively delivering their $65 billion handout to multinationals and the banks by increasing the tax burden on low- and middle-income earners. Not only is Mr Turnbull's budget elitist and out of touch; it doesn't make any fiscal or economic sense either. The government's budget delivers tax handouts for multinationals and millionaires while hurting Australian families. The mid-year budget update is, at its core, a triple whammy of higher taxes for workers, lower taxes for the top end of town, and record and growing debt. It also shows that Liberals still want to ditch the energy supplement for pensioners and increase the pension age to 70.

The Liberal government, like all Liberal governments, continue to perpetuate the myth that they're better economic managers than Labor, but they have overseen an exponential increase in Australia's levels of debt and deficit. This year's deficit has blown out by a factor of eight times. In the 2014-15 budget, the 2017-18 deficit was projected to be $2.8 billion; however, the deficit is now $23.6 billion in the 2017-18 MYEFO. Net debt has also more than doubled since the Liberals took office. Net debt was $175 billion in September 2013 and had risen to $353 billion in January 2018. Net debt is also expected to reach new highs over each of the next three years. Gross debt has also spiked under this government. It's now more than half a trillion dollars. It has never been higher and is growing, with no peak in sight. While those opposite inherited gross debt of $280 billion, it has blown out to $518 billion as at 9 March 2018. Gross debt is currently estimated to reach $684 billion in 2027-28. Both gross debt and net debt are also growing faster under the Liberals than under Labor—and this coming from a government who in opposition told Australians that they were facing a 'budget crisis' and a 'debt and deficit disaster'.

These figures absolutely rubbish any argument that those on the government team are better economic managers. Rather than fixing Australia's debt, the Liberal-National government's policies are making it worse. As at 9 March 2018, gross debt was growing at $1.2 billion a month quicker, and net debt $575 million a month quicker, than when Labor was in power. This is despite the positive global conditions the government is currently working within, after Labor saved the country from the global financial crisis. The government has tried to talk up some modest and expected minor improvements in the budget, but the substantial uptick in global economic conditions in recent times means they should have expected nothing less.

The fact remains that the headline numbers in this year's MYEFO are nothing to be proud of. International comparisons show other countries are capitalising on improving global conditions better than we are. According to the latest OECD data, Australia ranks 20th in terms of GDP growth among member states, behind the likes of Mexico, Estonia, Finland and Latvia. I say we can and we must do better. As a comparison, understand that in the two years to 2010, during the peak of the global financial crisis, we were ranked fourth highest in the OECD with GDP growth of 4.6 per cent over that period. At the same time the economies of similar countries like the US, the UK, Japan and Germany were contracting. Given this current underperformance, it does makes sense why the Liberals chose to release the update just before Christmas, when Australians were more focused on their festive season than they were on the nation's finances. Sadly, our nation's economy is underperforming in the best global conditions in a decade, when it wasn't long ago that we were overperforming in a very difficult global context.

At the same time, some of the underlying data gives us cause for concern, particularly in how it reflects the economic reality for large swathes of the community. Wages have stagnated under this government, yet there are greater and greater tax cuts to multinationals and to millionaires. This government shouldn't be cutting company tax for those huge companies; it should be making them pay their fair share in the first place. Australia's philosophy of the 'fair go' that guarantees fair wages for a fair day's work has been severed. The fact is that, over the past year, company profits have grown by 20 per cent but wages have grown by just two per cent. Isn't the rising tide meant to lift all boats equally? According to the flawed trickle-down theory of economics that those opposite subscribe to, that's how it's meant to be.

The latest national accounts show that in just the last two years the wages share of income has fallen 1.5 percentage points while the profits share has grown 2.3 percentage points over the same period. We want strong profits and we want sustainable wages growth as well. On top of that, more precarious and insecure work and very high underemployment, which has almost 1.1 million Australians not getting enough hours of work, are making life harder for many people on modest incomes.

The effects of all this are really obvious. Household consumption grew just 0.1 per cent in the September quarter—the worst quarterly result since the global financial crisis. The RBA points specifically to the decline in the growth of discretionary spending, on things such as eating out and recreation, as an indication of increased pressure on household finances. On top of that, the household-debt-to-income ratio is the highest it's ever been, and the household savings ratio is around the worst it's been for about a decade. All of this tells us that people don't have money to spend in the shops or to save for bigger purchases and are bogged down by debt—all of which has repercussions for businesses and the wider economy.

It's very clear that this government doesn't want to do anything to make the tax system fairer. It doesn't want to reform trusts or stop wealthy property investors from using tax concessions they don't need to lock first home buyers out of the housing market. All the while, the nation's debt keeps growing and growing. In fact, it's not well known or understood that debt is actually growing faster now under Mr Turnbull in favourable global economic conditions than it did under the former Labor government, which had the global financial crisis to deal with.

In contrast, Labor has announced responsible savings that significantly improve the budget over the medium term, including ensuring multinationals pay their fair share and reforms to negative gearing, capital gains tax and trusts. Labor has found tens of billions of dollars in fair budget repair measures that don't ask the most vulnerable in our community to do the heavy lifting.

Labor's recently announced reforms on dividend imputation credits will also redirect an unsustainable tax refund, for people who pay no tax, into more productive areas. Dividend imputation is a proud Labor achievement. Paul Keating, as Treasurer, re-engineered capital formation in Australia by eliminating double taxation on company profits. Imputation is, and will continue to be, a vital part of our financial infrastructure. But John Howard and Peter Costello decided—

Scott Ryan (President) Share this | Link to this | Hansard source

Order, Senator Bilyk. The time for the debate has expired. You'll be in continuation.