Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I rise to advocate on behalf of prudent Australians who work hard, save and invest their earnings over a lifetime to provide for their financial security in retirement. I refer to the aspirational Australians, self-funded and independent retirees in our community. Just because they have the capacity to pay taxes as a result of their effort, diligence and savings does not mean that they should become a target for higher taxation. We must shift the focus on those to deserve to pay and reduce spending on undeserving causes to balance the budget.

Public overhead costs in developed societies are increasing at a rate disproportionate to taxation revenue, leading to budget deficits and ever increasing national debt. There are not many developed and advanced First World nations in surplus. If we want to maintain the income and company tax rates in the 20 to 30 per cent range, we have to create a stricter society with less waste and more social responsibility, like Singapore.

To balance the budget the government must implement a wide range of measures which seek to incrementally achieve savings and efficiencies over time, without being too drastic, giving people the chance to adapt to changes and modify their behaviour. These measures include programs to increase workforce participation, clamp down on law and order issues, recover health costs from those who abuse the system, and ensure that education funding is administered more prudently.

In terms of workforce participation, formerly the ratio of persons in the workforce to those dependent on welfare was 10 to one; today it is estimated that there is a ratio of five working persons to each person on welfare, and this is projected to increase to an unsustainable three to one in the future. The government must encourage the estimated 800,000 unemployed younger Australians of working age back into the workforce through mentoring and training to alleviate this situation.

In terms of law and order, the member for Fraser recently observed that it costs more to keep a person in prison for a year than the annual tuition fees at Harvard University. The effects of crime and drug use are conservatively estimated to cost Australian taxpayers $15 billion per annum, and this is an area that can be targeted for savings.

Our health system is under rising cost pressure from the ageing demographics of our population, advances in medical technology and developments in pharmaceuticals. Spending on health care is justifiable for the aged, those with illness or victims of accidents; however, the cost to the health system of those intoxicated by illicit drugs or the result of criminal behaviour should be the subject of cost recovery after treatment. Courts should be empowered to issue cost recovery orders upon conviction as part of sentencing if a person who is found guilty has caused or suffered injury and incurred medical costs, with property confiscation orders enforced to ensure compliance. Similarly, if drugs are involved in a presentation to a medical facility then the person should be treated and a higher Medicare levy applied to the person's PAYG taxation contributions to recover the cost and act as a deterrent.

Our higher education loans system is very generous by world standards. It is estimated that unrecoverable student loans will exceed more than $11 billion by 2018. Modelling from the Grattan Institute suggests that the total value of student debt will almost double from $33.8 billion in in 2014 to $63.6 billion in 2018, with the government estimating that only $52 billion will be repaid. Reforms should implemented to ensure that students are provided with appropriate career counselling to promote courses which are relevant to workforce demand and for which there are realistic employment prospects on graduation. Contractual conditions should include satisfactory pass marks, completion of the course and repayment if employed overseas.

As I have outlined, to balance the budget the government must consider a wide range of savings measures which seek to incrementally achieve reductions in spending and efficiencies, without being too severe. Hardworking Australians who save and invest their earnings to provide for future financial security for themselves and their families should not always be targeted by governments of all persuasions just because they have the capacity to pay. We need to restore equity and fairness into the taxation system.