Pat Conroy (Charlton, Australian Labor Party) Share this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2015-2016 and related bills. This budget is not an exercise in fairness; it is an extension of last year's ruthless budget and it continues to have the most negative impacts on those who deserve it least. Just like it did last year, this budget hurts families and working people and does little to address the inequality built into our tax and superannuation systems. Just like it did last year, this budget cuts vital funding from schools and hospitals, scraps family payments and makes young people wait for income support if they are out of work. Visits to the doctor and buying medicine will be more expensive because of this budget. The plan to deregulate universities, which could lead to $100,000 degrees, is still there. There are no plans to tackle the challenges of an ageing population and to work and engage in a digital age, nor to address climate change.

This is a political document from a government that loves to chase a headline. But here is the thing about headlines: they are always followed by the details. In this and in the details is the truth about this government and where their values lie. Who could forget the 'budget emergency'? Those opposite loved that headline. As opposition leader, Tony Abbott travelled the country holding 'budget emergency' press conferences, posing for 'budget emergency' photos and feigning solemnity in 'budget emergency' interviews. The Treasurer played his part too. He was the wingman, warning all who would listen of a 'budget blowout', a 'budget freefall' and a 'budget out of control'. 'We are onto a winning headline with this,' they thought—and they ran with it. The problem was of course the facts, and these are the facts: Australia was one of only 10 countries in the world with a AAA credit rating from all three agencies; we had a low debt to GDP ratio; the deficit was comparatively low; and spending was at its lowest in decades.

In government, we know that the Prime Minister and the Treasurer then embarked on a series of nifty accounting tricks. They doubled the deficit and they shocked the RBA with an $8.8 billion payment they had not asked for. Having manufactured a budget emergency and cooked the books to justify it, they marched into the 2014 budget confident that their dodgy figures and 'just blame Labor' strategy would see them fulfil their destiny as the great conservative rulers they were born to be. Unfortunately for the Liberals, last year's budget was seen for what it was: an assault on broad sections of the Australian community; a budget to destroy the egalitarian principles that our society is built upon. When John Howard has a go at you for being unfair you know you have overstepped the mark.

So this time around they are chasing a different headline—understandable, really. This time they want to be seen as responsible, measured and fair. You know that because it is written in the Treasurer's budget speech. This time they desperately want us to think that the budget is fair. They even created a booklet about it. They are so desperate for some good headlines this time about child care, about small business and about tax evasion. But they have forgotten that every headline must be followed by the facts, and the following are the facts. Unemployment is up and forecast to grow even further under this government. For every sweetener in this budget there is a range of cuts somewhere else. Child care is boosted but the family tax benefit is gutted. Small business gets an incentive to spend, but workers will pay more tax. Wealthy superannuants will continue to get a tax break, but part-pensioners will lose out. And here is the fine print: the 2015 budget contains all but two of the universally condemned unfair measures that were contained in last year's budget.

Let's examine one of the biggest headlines sought by this budget—the one which relates to child care. I know that this sector is under immense pressure. Our cities are growing and families now choose to have, or in many cases rely on, both parents working to make ends meet. We know that women are integral to our workforce and we need to get better at supporting them to work and to raise a family. We also know that the early years are the most critical in terms of a child's development and that early childhood education supports the work parents do to prepare their children for school. Nobody begrudges a screaming headline that $3½ billion will be injected into the childcare system, but let's look at the details. The coalition cut $1 billion from child care upon coming to government; they refused to address the chronic undervaluing of childcare workers as a result of pay rates in the sector; and their budget headline '$3½ billion for child care' will only proceed if cuts to the family tax benefit and paid parental leave go ahead.

Earlier this week The Sydney Morning Herald ran a front-page headline that is unlikely to be the kind the government wants. It said: 'NATSEM analysis shows federal budget to hit the poor hardest, while rich benefit'. This modelling found that families with children whose income is in the lowest 20 per cent of households will lose up to 7.1 per cent of their total disposable income over the next four years, while those in the top 20 per cent will see their disposable income increase slightly. In the worst-case scenario, some families would lose around $6,000 per year. This modelling was conducted by NATSEM—the modelling outfit endorsed by the Prime Minister when he was in opposition. Analysis by the Australian Council of Social Service paints a similar picture. They say a combined $15 billion cut from families and middle-income Australians over the next four years will have dire consequences. This budget resurrects the plan to kick families off family tax benefit B when the youngest child turns six and to freeze family tax benefit rates. There around 9,000 families in my electorate who receive family tax benefit B and still more who receive family tax benefit A. Every single one of these families will be impacted by these budget measures. It is this inequity, this skewing of the cuts against the poorest 20 per cent of those in our community, that is at the heart of this budget and at the heart of the extreme ideological approach of this government.

There is another unfortunate fact undermining the families package in this budget, and that is the proposed changes to parental leave payments. There have been a few headlines on this one! The Prime Minister chased the glory on his signature policy, his rolled-gold paid parental leave scheme, for a long time and in the strangest of circumstances, through dissent from his party room, through bemusement from parents and through unflattering analysis from economists and journalists who saw it for what it was: an outrageously generous idea at a time when outrageous generosity could be least defended. But now he is chasing a new headline: one that has words like 'double dippers', 'rorters' and 'fraudsters' in it. They even wrote it in the budget papers. But the facts are these: around 80,000 new parents will be worse off each year as a result of these changes; some will lose up to $11½ thousand. These are people who work hard and want to continue to do so while raising a family. They are not rorters and fraudsters. They are the beneficiaries of a modernised employment system that has seen conditions improve and adapt in line with the needs of workplaces. The government is trying to strip workers of an entitlement that has been decades in the making and has been hard-fought for. Many workers, both men and women, have forgone pay increases to secure this entitlement.

The government is also making it harder for employers who want their employees to have the best possible support when they have a baby, particularly small and medium-sized businesses whose people are their greatest assets. There are more than 22,000 women working in health care in the Newcastle and Lake Macquarie regions. Many of them are nurses who can access an employer-provided parental leave scheme. Are they rorters? There are more than 4,000 women working in the public sector in the region, such as ATO employees or emergency service workers, who could access employer-provided parental leave. Are they fraudsters? There are more than 11,000 women who work in retail, such as department stores and supermarkets, in the region who could access a modest employer-provided scheme. Are they double dippers? Every single new mum who works at the Woolworths at Cardiff near my electorate office will suffer if this scheme is implemented. Every single one of those people, if they have a baby, will lose the eight weeks paid parental leave, which they bargained for and sacrificed pay rises for, as a result of this scheme—and that is grossly inequitable. It demonstrates a hypocrisy that is at the heart of this government. The Prime Minister and this government spent years telling us that paid parental leave schemes that have been operating in Australia for the last five years were grossly inadequate. Now they are telling us that the paid parental leave scheme that has been operating for the last five years is far too extensive. Worse still, they are telling us that we cannot have a strong and adaptive childcare system unless families and new parents suffer to provide it. They are setting up a false binary choice.

The other headline from the budget is the proposed increase in the instant asset write-off threshold to $20,000. Those opposite probably hoped for headlines that read: 'We are the party of small business'—and they may believe themselves to be just that. But here are some pesky details. When Labor increased the threshold for accelerated depreciation to $6,500, the Liberals got rid of it. When Labor proposed to further increase the threshold to $10,000, the Liberals refused to do this. When Labor introduced the loss carry-back, which helped business trade through hard times or take a short-term hit to expand their business, the Liberals repealed it. When Labor proposed a tax cut to small business the Liberals opposed it. Small businesses are exactly that—small. They are made of people, sometimes teams, sometimes individuals. They work really hard and at all hours to get their job done. What is left at the end of the month, after all their overheads have been met and after everyone else is paid, is the income they survive on. Cash flow is paramount. So of course a major increase to the depreciation threshold is a good thing for small business. It reduces tax payments sooner rather than later, which frees up money for other things.

I spent some time last week speaking with small businesses in my electorate about the budget. They know that the instant asset write-off is good for businesses that are profitable and seeking to invest. But they also tell me there is a lot more work to be done on tax reform and to level the playing field between small businesses and their larger competitors. They welcome Labor's offer to work with the government to reduce the rate of company tax for small business to 25 per cent. But they also tell me that there is more to supporting small businesses than dollars and cents. Take the hairdressing salon that I went to last week. To the owner, Kim, the most important issue is apprentices. For her, skilled workers are what makes her business great. Conversely, training takes time and time is money. This government has cut more than $1 billion from skills and training and, combined with deregulation at a state level, the vocational education system is changing fast. This is having a real impact on small businesses in my electorate. If this government were truly committed to supporting the economy and, by virtue of doing so, supporting the businesses within it, they would be focused on ensuring we can adequately meet the workforce needs that are present both now and in the future.

Turning to superannuation, Labor recognises that the budget must be put on a sustainable basis. This budget makes no effort to tackle unfair and unsustainable superannuation tax concessions. It is an absolute no-brainer, if you are serious about fairness, that the 15 per cent tax rate currently applied to superannuation contributions is skewed to benefit those who have more ability to divert income into retirement savings. It is also a critical step towards restructuring the economy as we manage an ageing population. The budget shows that the accumulated cost of concessions for superannuation earnings and contributions will top $50.6 billion by 2018-19.

Mr Nikolic interjecting—

By contrast, the age pension will cost $50.4 billion. What is more concerning is that 40 per cent of the concessions go to the wealthiest 10 per cent of Australians. Members opposite, particularly the member for Bass, should answer this question. Why should someone with $2 million in superannuation enjoy all the income from those investments tax free when a retail worker starts paying tax after the first $18,000?

Mr Nikolic interjecting—

What the member for Bass and the entire coalition are arguing for is a tax break for those who have millions in superannuation while they slug ordinary workers.

Mr Nikolic interjecting—

See this speech in context