Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

Budgets are always marker points and a time when governments have a chance to report what they have or have not achieved and to set targets for the future, and so it is with this budget. The Abbott government was presented with arguably the worst set of books ever handed over to an incoming government in Australia—around $170 billion in net debt and a projected debt peak of $667 billion. The big sting was in the tail: the hypothetical spin beyond the forward estimates. The vague—and sometimes not so vague—extrapolations of ever, and speedily, increasing government expenditure across almost every portfolio, with a few notable exceptions like Defence. The NBN was one example. The Rudd and Gillard governments had broadcast to the nation that Australia had more than enough money for everything. The trouble was, and is, that we do not. We do not have more than enough money for everything. We have to live within our means and work out what is most important to this nation so we can spend it in those areas. The myth that Australia could have everything was built on borrowings. That has led us to the place that we are today.

There are those, like the member for Fairfax, that say that Australia's borrowings are low by world standards and that we have nothing to worry about—that other nations' debts are 100 per cent of GDP and, in some cases, even higher. Who says that those nations can ever master that debt? Who says that they could ever shake it off? Why is it that those nations around the world that we have traditionally looked to for leadership of the world economy are unable to shake off the effects of the GFC and get their economies back on a path of reasonable growth which can absorb the extra numbers of workers coming into their workforces?

The fairly obvious answer to that is that they are struggling with their debt levels—because if you owe 100 per cent of your GDP, you will be borrowing approximately five per cent of your GDP each year just to keep up the interest payments.

Last year, the Abbott government attempted to set in place reforms that would bring the budget back to surplus by 2018-19. This year, as had already been telegraphed in December's MYEFO, it is now expected to be a year later. Now I must say that is disappointing—it is disappointing to me. But it is not for lack of trying. The government has lost a considerable amount of paint, if you like, over the last 12 months: trying to get those savings through the Senate, and trying to set a path for Australia's prosperity; not just for today but for the future. But the Senate has chosen to block a number of measures and, while we can and should debate issues such as the Medicare co-payments, the Labor Party continues to block more than $5 billion of its own savings. It is unbelievable, really. And so we are left to deal with what we are left to deal with, and we have to move on. Some of the measures from last year's budget have been abandoned; many in my party are quite happy that they have been abandoned, let me say, because they were not popular measures. But we have to do what we can. It is no good to keep just banging our heads against the brick wall and hoping that we are going to burst through. And the economy is a large beast—we cannot turn the Queen Mary on a 20c coin; it takes time. We cannot turn the economy that quickly. We cannot pull the handbrake on too hard. If we come to a stop in a car—at least in a manual car—the motor stops. The motor stalls. And if we stall the motor of the economy, then we are in deep trouble: in fact, there is a very big chance of rolling back down the hill. So we need to return to surplus with purpose, and not just smash our heads against the dashboard, as it were.

Despite having suffered enormous revenue write-downs, largely associated with the resources industry—$51 billion over the forward estimates—so over the next four years that amount will go missing from the federal budget; that is $51 billion which was anticipated 12 months ago. Given those two parameters—the refusal of savings in the Senate, and the dramatic fall in revenue—the projections that the Treasury and the Treasurer have come up with for this budget are really quite remarkable. And returning to the surplus is a challenge, but it is simply the end of the first phase. It is now projected that we will return to surplus in 2019-20—and that is not the end of the challenge; it is the end of the first phase. The time when we can actually pay off the debt—it is projected that debt will peak in 2020 at $283 million; that is, 283 thousand million dollars. No wonder most of the general Australian population do not really understand the issues we are dealing with. That is when we can begin to pay down that 283 thousand million dollars. And—for those who do not think that is an issue—that would need us to run a $20 billion surplus for over 14 years. That will affect everything that Australian governments do over the next 14 years. Sure; it will probably lead, at some stage, to higher taxes—higher taxes than we would have paid—but it will certainly lead to lower levels of services than we might have otherwise expected.

So this budget is about balance. We need Australian businesses to grow and flourish—to grow the economy, to grow employment, and to have confidence in their future. Because if we can do those things, if Australia businesses can grow beyond the expectations that are projected in the budget at the moment, that means we can shrink those projections ahead of time—and that will be so important to our children and our grandchildren.

I come now to the small business package that has been announced in the budget. I point out that part of my electorate; a significant part—the Upper Spencer Gulf, at the moment; this is what used to be called the Iron Triangle cities, but we do not use that term any more—that is, Whyalla, Port Pirie, and Port Augusta, are now approaching unemployment levels across the region of 11 per cent. That is a very big concern to me because we know that the most important part of people's welfare is having a job. Governments cannot simply fill up those gaps.

So this government, if you like, has put its money, or the taxpayers' money, on the best horse in the race—the best chance of turning Australia's economy around—and that is small business. Small business is the backbone of our economy. It is the single biggest sector if you divide the economy up in that manner. Ninety six per cent of all Australian businesses are small businesses and they employ almost five million people. In the end, of course, the greatest way for Australians to get ahead is to get a job, and let me tell you, Madam Deputy Speaker—I am sure you know this already—governments do not make jobs. Governments do not create jobs; all governments do is shift jobs within an economy, because, if they create a job for someone and use taxpayers' money to pay them, they have taken that job away from somebody else. But what governments can do is try to assist the people who do provide jobs in the economy to grow faster, in this case small business. Just imagine—of course, this will not happen—if every small business in Australia took on one extra employee. We would be searching for people to fill the jobs. We would not have enough people to fill those jobs.

One of the main packages in the budget is the 1½ per cent cut in taxation from 30 to 28½ per cent for small businesses with under $2 million turnover. It is very substantial. I would love to see that go further, of course. I would like to see a lower taxation rate—we all would because we know that in other parts of the world taxation rates are lower, and we are in a competitive world environment—but, given the parameters of what the government faced, which I have been through, it is as far as we can go today. This is not just for registered businesses, because many are not, but for those single-entity businesses and for partnerships. It is not exactly the same mechanism but pretty much the same result. There is the $20,000 immediate tax write-off. As I have been travelling around the electorate, this measure is being very warmly welcomed by various businesses. Let me tell you about a young couple who came into my Port Pirie office, only last week, in fact. They were starting up a private ambulance service. Of course, I do not think they will be able to buy their ambulance for $20,000, but certainly most of the equipment that will go within it they will be able to buy for $20,000. For someone trying to get a new business off the ground, this is a godsend. Companies like hairdressers will be able to buy new machines. Restaurants will be able to buy new tables. Sparkies will perhaps get a new ute or some tools. Clothing retailers might put in some new tills or computer programs. Engineering workshops could get new welders. All of these things proliferate throughout my electorate. Computer programs, solar panels, sound systems, lawnmowers, air conditioners—you name it, it is in the crosshairs of this policy.

At the moment, for small businesses—and this is another reason the government has great confidence in our small business sector—money is the cheapest that it has ever been in living memory. So it is a great time to get a boost out of this sector of the economy. They will build confidence and they will spend money, and that in turn will lead to other small businesses and large businesses benefiting from that turnover in the economy.

Of course, I was a farmer before I entered this place and still have an interest in that area. I remember saying many years ago to my brother-in-law, who contributed to the computer design systems for the Collins class submarines at one stage, 'Agriculture is a sunrise industry.' He looked at me a bit strangely, because most people had been describing agriculture as a mature industry. I said, 'The opportunities of the future for Australia will be in agriculture.' It was probably three or four years later that he came back to me and said, 'I know what you mean now,' because by that time he was working for a bulk grain handler in South Australia called Viterra and he understood more about the system. And so it is. Some people say Australia will become the grain bowl of Asia. That is patently not true, but increasingly the world, and that part of the world, is looking to Australia for food quality and for assurance that the food is safe. The investment—if you like, the incentives—that the government has offered into this industry provides the ability to write off water systems and fencing in 12 months, and to bring fodder and grain storage in from 30 years. I have silos on my property which are still depreciating on this never-ending schedule—30 years, for crying out loud! They will be able to do that in three years. Because the grain handling system in Australia is changing daily, it will lead to a change of emphasis on the way that we handle our national crop. It will lead to us being able to enter new markets with new products, such as hay and whatever into China and Japan, and deliver them through new mechanisms. That is all very good.

Regarding other things that are happening closer to home, in my electorate, I am very pleased that we appear now to have a solution to the RET. There is an engineering company in Whyalla, E&A, which put off 100 workers, because they had been building wind towers. I expect that to start again. That will be a very important start-up. There is a large defence spend going on at Cultana near Port Augusta, at Whyalla and up at Woomera. There is a lot of work beginning to happen in the electorate now with the NBN. This will all lead to more employment and more jobs for people.

The doubling of the Roads to Recovery is welcome and a boost to councils. Green Army projects are gathering speed and proliferating. The news in the budget that in fact private enterprise will be able to access work for the dole programs is a huge boost, because there are only so many jobs you can do that are community based jobs, and it is very important that people in the work for the dole programs actually have a little bit of experience and firsthand contact with an actual real business that is making a profit and headway in the world. The changes to the qualification period before youth can go onto Newstart will be welcome. The changes to the youth allowance qualification is particularly welcome—as someone who has spoken many times in this place about the inequities between country and city education. The fact that now, for all intents and purposes, small businesses and farms will be exempt from the asset test for qualification for youth allowance is a huge boost for country students. I would like to see it go further, but this is a great improvement. It actually delivers on something that many of us from rural and regional areas have been on about for some time.

On balance, I think the Treasurer, Joe Hockey, has got it about right. We are doing what we can, as fast as we can, to fix the deficit and start paying down Australia's debts. We are putting our chips in small business as the driving factor to get Australia out of the fix that we are in.

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