Chris Hayes (Werriwa, Australian Labor Party) Share this | Hansard source

It was 12 months ago—almost to the day—that I stood in this place and delivered my first speech to the parliament. During that first speech I took time to share with other members a little about my electorate and the people that I represent—the aspirations of residents in Werriwa. The electorate of Werriwa is filled with young families and those young families want nothing more than opportunities to make the lives of their families better. Not only do they seek to make life incrementally better for themselves and their families but they use the resources they have available to them to improve the lives of their children, in the immediate and the longer term.

Mr Deputy Speaker Barresi, as—I gather—a parent, you would no doubt appreciate that a parent’s ambition is to give their kids a better position than the one that they grew up with, and I guess that is basically the general position behind society. The vast majority of residents in my electorate—and, I have no doubt, in Australia generally—are investing their time, their efforts, their energy and their financial resources to make their families’ futures better. They are using their family budgets to invest in the future for their families. They are looking towards their kids. They are looking towards the future.

Families throughout Australia—and families in my electorate are no different—carefully consider the resources available to them and what they have to develop. They are certainly taking every step to plan how they can best use their limited resources to improve their lot and the lot of their family into the future. Sure, this may include the purchase of a range of consumer items that lead to a general level of satisfaction, but more often than not it also encompasses investment in their kids’ education and their kids’ futures; for example, investment in computers and access to broadband—things that kids need to be able to equip themselves for the future. That is what families all over this country are doing.

It is interesting to contrast the behaviour of Australian families and what they are doing with their family budgets with the behaviour of this federal government in the budget that has just been delivered. The attitudes and approaches could not be further apart. While families are considering their budgets over the medium and long term, they are not being supported by budgets from this government—which, in any assessment, are being delivered with a time horizon not exceeding 12 months. This government is obsessed with the here and now. It is obsessed with approval ratings and with the Treasurer’s personal popularity.

Despite the tax cuts and increases in family payments, this budget failed the critical test of supporting Australia and Australian families as they look to incrementally improve their lives and the lives of their children. This budget has not delivered an economic strategy for the future and this government has not used this unique opportunity to shape our nation’s future and lock in the prosperity we are experiencing today.

Only recently, Michael Chaney of the Business Council of Australia stated after the budget: ‘This was a budget for the short term only ... The underlying issues that will shape our economy require us to think about, plan for and implement reform around anticipating change, rather than reacting to it.’ It is a sad reflection on the state of this government that it has not taken the opportunity presented to it—to use the budget to introduce a longer term strategy that will take us beyond the end of the election cycle and beyond the end of the forward estimates contained in the budget—to clearly address the future of all Australians.

The fact that the government has failed to use this opportunity to invest in the future, to use the budget to address the issues surrounding the skills of our workforce and to travel down the path of locking in our prosperity, sadly comes as no surprise. It is merely another example of this government looking to the short term while neglecting the long term. The contrast between the government and the opposition when it comes to education could not be more stark. Labor considers investing in people to be just as important as investing in our physical infrastructure. Investing in assets should be considered as on a par with investing in the education of our people. It all contributes to our economic strength.

By contrast, the government is more than willing to use short-term migration programs to paper over the cracks that are emerging in Australia’s economy. It believes that it is more important to get the immediate job done than to invest in education and training to make sure that we can always get that job done and always have that job completed by Australian workers.

The skills shortage and its impact on business is certainly not a new phenomenon. In a recent study, the Australian Industry Group identified seven out of 10 businesses that indicated that the inability to secure skilled staff was the single most important barrier to success. That was seven out of 10 major businesses in this country. The same study noted that eight out of 10 companies believe that building Australia’s skill base is the key to achieving international competitiveness. That is quite a telling piece of information. That is something that the Labor Party has been saying for quite some time. It is interesting that this is borne out by the Australian Industry Group itself, not necessarily friends of the Labor Party.

Given that, what is the government’s response? Their response is a reduction in public investment in education—not just over this year but over a number of years. Public investment in universities and TAFE has fallen by eight per cent since 1995. In isolation it is a telling statistic, but when you compare it with other OECD countries, the government’s dereliction of duty when it comes to education is really put into context. The next worse performing country has increased its investment by six per cent, while the others that make up that cohort have increased education investment by up to 38 per cent. Compare that to our fall of eight per cent over the period.

We have cut public investment in our universities and in our TAFEs. At the same time as the government has cut public investment in education, it has expanded short-term immigration. Last weekend’s Financial Review reported comments by academic Bob Birrell. I want to quote what Mr Birrell had to say:

The government is relying more and more on immigration to solve workforce problems, but we haven’t seen a crisis response in the education system ... It is obvious that we’re no longer addressing the skills of locals because there has been no support at all for opening up spaces at universities since they came to office. Nor do companies undertake training or education themselves.

While families are looking to take an already stretched family budget and stretch it a little more to improve the educational opportunities available to their children, they are not being supported by this government. This government, flush with cash, is doing nothing about the funding problems being experienced by TAFE and universities. It is doing nothing to invest in the training of Australian workers.

This budget has failed young people by refusing to invest in them. The budget spends $11.6 billion of new money in 2006-07 but only $40 million in apprenticeships. There is no new money going to TAFE colleges. The overall percentage of the federal budget spent on vocational education and training has been reduced and is set to decline over the next few years.

Despite the dramatic underspending on the Australian technical colleges, this government is persisting with its failed plan to introduce Australian technical colleges. The reason it is doing that and the reason why it is trying to duplicate the TAFE college system is simply that this government sees this as the opportunity to ram home its industrial relations through the staff at these new colleges. In setting these colleges up, this government has introduced a requirement that personnel who work in the new colleges, whether they be in administration or tutorial and teaching staff, will be on the government’s Australian workplace agreements. The government should admit defeat when it comes to the implementation of the Australian technical colleges and instead dedicate the money towards improvement in our TAFE system. Tackling the skills shortage, encouraging greater participation and locking in prosperity means making sure that people have the skills that they need not only to enter or return to the workforce but to develop in the Australian workforce. Sadly for Australia, this budget has failed on this measure.

The budget has also short-changed Australians on tax reform. Tax reform is often talked about in this place—as words—but, to a dispassionate bystander, it has not been delivered by this government. The only tax reform the government has managed to undertake is to add new taxes like the GST and to chop out a few redundant clauses from the old tax act. The introduction of new taxes and getting rid of some unused pages of the tax act hardly constitutes real tax reform.

Labor will be supporting the tax cuts proposed in this budget. It will be supporting the concept of Australians sharing some of the benefits that have accrued through the current resources boom with middle Australia. It will support giving back what the highest taxing government in Australia’s history has taken away from middle Australia. I will not be supporting the changes because I think they are enough or because I think that tinkering with rates and thresholds is all that can be done; I will be supporting them because it is about time that Australian taxpayers got something back.

It is interesting to note that the forward estimates reveal that, as a proportion of GDP, government receipts will be maintained, while the surplus measured as a proportion of GDP will gradually increase. The alleged tax reforms contained in this budget are nothing more than tax cuts dressed up as reform. It is about time that the highest-taxing government in Australia’s history decided to reduce the tax burden on middle Australia. In addition to reducing the burden on middle Australia, it is about time that the tax system were constructed in such a way as to reward effort. Australia needs a tax system that boosts productivity and participation.

It is interesting that many on the other side have spoken in the past about the need for tax reform, but when push comes to shove the government is gun shy. It has gotten away with merely handing back some of the surge in tax revenue experienced through the resources boom, and it has not taken the bold steps needed to put in place a tax system that will support Australia into the future.

As was reported in the Australian last week, for low- and middle-income earners the tax cuts contained in this budget will be gone within a couple of years unless bolder reforms are introduced. That was probably quite a conservative approach for the Australian to take. In my electorate, many of the tax cuts that were introduced were gone long ago with the increase in petrol prices and the change in interest rates that forced up mortgages for my constituents and for constituents throughout this country.

It is no longer good enough for this government to stand by and hope that the persistently high effective marginal tax rates experienced by many Australians will simply go away. The effective marginal tax rates upward of 50 per cent that are experienced by many Australians need to be fixed. They act as a disincentive. The tax rates experienced by many families crush incentive, and people start to question why they should continue to put in, why they should continue to take the extra shift and why they should do that little bit of overtime when they get only a few extra cents in the dollar in their pay packets as a consequence.

The changes to taxation arrangements contained in this budget—and I am reluctant to call them reforms because, in truth, they are poor facsimiles for reform—are best described as modest and do little to remove the tax grab from Australian families. Despite the Treasurer crowing about the impact that the combination of changes in the family tax benefit system and the tax system will have for Australian families, closer consideration leads one to the conclusion that there is a lot to be desired in our tax arrangements.

Australian families will still face an effective tax rate well above the new top rate of 45 per cent, because the change to the family tax benefit threshold shifts the taper zone rather than reduces it. The removal of these high effective marginal tax rates and the simplification of our system of taxation and family payments must be the priority for reform into the future if we are truly to have a tax arrangement that encourages participation and gives incentive.

This budget is a budget of distraction as well as a budget of inaction. There is no doubt in my mind that this budget was crafted with the sole purpose of distracting people’s attention away from some of the more insidious policies that this government has pursued in recent months. The one that requires most attention to be drawn away from it is, of course, the government’s extreme industrial relations agenda.

I mentioned earlier that there is a need to invest in education and skills development because that is the best way to improve our competitive position in the world and on world markets and to compete with emerging economies in China, India and elsewhere. Sadly, this government does not believe that Australians are up to the task. It has no faith in Australians to compete on the international stage at a level of endeavour well above that of our competitors; instead, this government believes that Australians are only capable of competing when they are paid less.

This government has no faith in working Australians. Instead of getting behind Australians and putting in place longer term strategies to take advantage of Australians’ natural abilities, this government believes that the only way Australians can compete on the world stage is by slashing take-home pay and removing people’s employment protections. The government believes that that is the only way forward if we are to compete with those emerging economies. This country needs an investment in our future and an investment in our people’s education, because they are the things that are going to help us to be competitive on the world stage. (Time expired)

See this speech in context