Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

I welcome the opportunity to make some remarks about Appropriation Bill (No. 3) 2017-2018 and Appropriation Bill (No. 4) 2017-2018, which, as always, are required to ensure the ordinary functions of the government continue for, in this case, the remainder of the 2017-18 financial year and to facilitate a number of the measures from the 2017-18 Mid-Year Economic and Fiscal Outlook. In this case, the package of bills appropriates something like $1.5 billion from consolidated revenue. This is in addition to the appropriation acts passed in June 2017 after the budget, and these amounts are already incorporated into the budget bottom line as presented in the 2017-18 MYEFO. I should say, at the outset, that obviously we're not in the business of standing in the way of supply, although I think there are some very troubling aspects of the government's broader economic management that the House should understand and note.

These bills do go to those broader issues around what I consider to be the mismanagement of the nation's finances. I'd like to begin by quoting not somebody from this side or a well-known critic of the government but the Prime Minister himself. The Prime Minister, when he was opposition leader in 2009, described a gross debt of $200 billion as 'frightening'. He promised that the Liberals wouldn't 'run willy-nilly into debt'. He later described $300 billion in projected gross debt as 'gigantic' and an 'almost inconceivable level of debt'. He had an analogy that he would trot out from time to time—I remember it well—where he'd say: 'There should be no lead weights put in his pockets or heavy backpacks put on his back.' Yet that is what this government is delivering to us with these higher and higher levels of debt.

So he said a debt projected at $300 billion was 'frightening', 'gigantic', 'almost inconceivable'. It shouldn't surprise us, then, given that was his view in opposition, that he's been a bit quieter lately about the total amount of debt on his government's watch. That's because gross debt—remember, at $300 billion it was going to be gigantic and inconceivable—has crashed through half a trillion dollars for the first time in Australian history on the Prime Minister's watch. It's currently about $515 billion with no sign, really, of slowing down. In the government's own budget papers, which we're talking about as we debate these bills, gross debt doesn't even peak over a 10-year horizon. So, for the next 10 years, after all the lectures we got about debt and deficit disasters and gigantic levels of debt at $300 billion, we are talking about $515 billion which goes up and up and up for 10 years and doesn't even peak in the next decade in the government's own budget papers. That's a pretty extraordinary thing. For a government that likes to pretend that they are somehow superior managers of the budget, we've got this record, growing debt which doesn't even peak over the medium term in the government's own budget papers. It is not an opinion; it's a fact. That's in the government's budget.

Similarly, in the same budget papers, we have got a deficit for this year which is eight times higher than the Liberals predicted in their first 2014 budget. Joe Hockey stood at that dispatch box on a Tuesday evening in May and said that the deficit for this year was going to be $2.8 billion. Then the current Treasurer, Treasurer Morrison, stood up in December, the week before Christmas—obviously very proud of his mid-year budget update; he dropped that out a few days before Christmas—and had to admit that the deficit was $23.6 billion, eight times bigger than Joe Hockey predicted in 2014.

We might have a Prime Minister who is a little less keen to talk about gigantic levels of debt but, thankfully—and always thankfully—we've got the Assistant Minister to the Treasurer, the member for Deakin, who always helps us out on this side of the parliament. He's the gift that keeps on giving. He has described the debt under the Turnbull-Morrison's government's watch as, 'A truckload of debt' and 'An extraordinary, absolutely extraordinary, amount of debt.' I couldn't have said it better myself. But what's more extraordinary, and probably something that not a lot of people out there in the community appreciate—probably because of the message that the government and some of their cheerleaders in the media like to send—is that debt is actually increasing. Debt, gross debt and net debt, is increasing faster under this government in good global economic conditions than it was under the former Labor government, despite the fact that we had a global financial crisis.

Again, these are not opinions. I will give you the hard numbers and people can go and check them if they like. Take gross debt, for example. Under this government, gross debt is currently being racked up $1.2 billion a month faster than it was under Labor. It is being racked up $286 million a week quicker and $41 million a day quicker under this government compared to its predecessor. If you prefer to think about net debt: net debt is being racked up $710 million a month quicker—accumulated, $163 million a week quicker and $23 million a day quicker. So both measures are being accumulated much faster than they were under the Labor Party.

Until quite recently, the old excuse from the Treasurer—whether it was Treasurer Morrison or Treasurer Hockey—has been the global conditions. If you want to talk about difficult global conditions, obviously you'd be talking about the period that the former Labor government confronted the global financial crisis, the sharpest synchronised downturn in the global economy since the Great Depression. But there was a period when Joe Hockey or the current Treasurer would talk about global conditions being the reason that they had so substantially overpromised and under delivered on debt and deficit. That excuse has well and truly gone. This is the best global economy we have had for a decade.

If those opposite don't want to take my word for it, they can look at the Reserve Bank's Statement on monetary policy which they put out on Friday. Their statement was very, very up-beat about global conditions. In fact, at the start of the overview, they say:

Global economic conditions picked up further over the course of 2017.

They talk about the strength continuing into 2018. They are talking about the global economy. They talk about growth in a lot of those big economies being above 'estimates of potential'. They talk about favourable commodity prices, 'stronger than expected growth' in advanced economies and 'synchronised improvement in global growth' boosting commodity prices. There are all sorts of indications in the Reserve Bank statement on monetary policy that this global economy that we are in right now—leaving aside, of course, some of the actions and over-reactions to it in the stock market, but just in the real economy of growth and jobs and all of that—the global conditions are quite spectacularly positive. So, there's no excuse for the sorts of budget outcomes that we're getting at the moment. The IMF's most recent world economic outlook—last month, 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.

So the IMF is revising up its forecasts. All of this is a way of saying that when it comes to the deterioration in the budget we cannot point to global conditions as being at fault. The global economy is in pretty good nick, certainly the best nick it's been in for the last 10 years or so.

So, if it's not the global economy that's driving some of these horrific debt numbers—record and growing gross debt and record net debt—then we have to look somewhere else for an explanation. I think the explanation is pretty simple. Beyond that, I think the community understands that there's a pretty simple explanation for what's going on here, and that is that those opposite, particularly the Prime Minister, have this obsession with pandering to the top end of town. This is an approach that hurts the budget. It hurts the economy as well, and I'll get to the economy in a moment, beyond the fiscal settings. But it's also unfair, because it comes at the expense of middle Australia and people who work and struggle to provide for their families

I think the latest midyear update gave us a really a perfect window into the way those opposite approach the budget and the economy: higher taxes for 7 million working people, lower taxes for multinationals and millionaires and, as I said before in some detail, record and growing debt. I think it is worth noting, whenever we talk about the budget and certainly since that 2014 horror budget that I mentioned before, that what we see is a pattern of behaviour such that when they do want to repair the budget—or say they want to repair the budget—it's always at the expense of the most vulnerable people in society: students in universities in the midyear update; the $44 billion income tax hike on 7 million low- and middle-income Australians; ditching the energy supplement, leaving pensioners up to $366 a year worse off; or the thing that's still on the books every time, which is increasing the pension age to 70, which is the oldest in the developed world.

A real pattern has emerged. We're up for budget repair on this side, but it has to be fair on that side. They give these big tax cuts to multinationals and millionaires at the same time that they expect the most vulnerable people, the people on modest incomes, to carry the can for the fact we've got that record and growing debt. I think the best example of that, which has been in the news—and I think it's good that it's been in the news the last little while, certainly the last couple of months—are those company tax cuts that those opposite want to impose on the country: a $65 billion tax cut for big multinationals, and I think the big banks as well; I think they get something like $10 billion or $12 billion out of that $65 billion. It is a pretty extraordinary ramraid on the budget when you think about it. We've got this record and growing gross and net debt and we've got a $65 billion handout. It doesn't take a genius to work out that, when you give $65 billion to foreign multinationals and big banks and the like, that's $65 billion that you can't use on budget repair, that you can't use on investing in productivity and that you can't use on investing in human capital, education and health—all of those sorts of things that really matter if we are to grow the economy in this country.

If you look at the economics of the company tax cut it's pretty clear, even according to the Treasury department, that there's just not enough bang for 65 billion bucks. We've got Treasury modelling which shows a one per cent boost to GDP in 20 years time, which is an average of 0.05 per cent a year. If you compare that, for example, with the return on investment in infrastructure, that same Reserve Bank statement on monetary policy that I referred to that was released last week said that a $1 billion increase in public investment would boost GDP by $1.1 billion to $1.3 billion. The multipliers from investing in infrastructure and, I'd also suggest, from investing in people's skills, abilities, productivity and capacity—the multiplier for that kind of public investment is far greater than the return that, according to the Treasury, we get from these tax cuts for big business in this country.

If you don't want to take my word for it, the Grattan Institute warned that national income would be reduced for years by committing to this tax cut for big businesses before fixing the budget. They said that it risked reducing future living standards, which is a pretty important conclusion by the Grattan Institute. They're not associated with either side of politics—a terrific outfit. They've said, 'If we do this company tax cut before we fix the budget and do the other things that we need to do, we actually risk a reduction in future living standards.' Their quote was:

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.

That's quite a stunning observation from the Grattan Institute and one that those opposite would do well to acknowledge, consider and reflect on.

Instead, we get this willingness, this hankering, this obsession with copying the Trump tax cuts in the US, as if you can make some kind of useful comparison between the headline rate over there, where they have state corporate taxes and all the rest of it, and the fact we have dividend imputation here—all of these reasons why you can't make a straight comparison between the headline rate in the US and the headline rate in Australia. But even leaving that aside for a moment, if you want to take the word of the International Monetary Fund, they looked at the Trump tax cuts just last month—after the passage, I believe, of those Trump tax cuts—and concluded:

Due to the temporary nature of some of its provisions, the tax policy package is projected to lower growth for a few years from 2022 onwards.

In America we have this sugar hit of company tax cuts associated with Trump and the Republicans in the Congress, and the IMF is saying even if you get some growth from those in the near term, it will detract from growth in the medium term. It will be like a sugar hit to the economy. The way that it's constructed, it will actually be a problem from 2022 onwards—so only four years of what former opposition leader from this dispatch box John Howard said about five minutes of economic sunshine. All of that outlay in the US, but it will only be four years before it starts to detract from growth.

Here on our own shores, those tax cuts—the company tax cuts proposed by the Prime Minister and the Treasurer—have become a symbol for a lot of ordinary people that this is a government that is out of touch with their daily lives. They don't get the sorts of needs and aspirations that people have in middle Australia. Their obsession is to shower largess on the top end of town. There is heaps of evidence of that. I'm not fond of quoting opinion polling in this place, but every piece of market research that has been published that I've seen shows very clearly that middle Australia does not want these tax cuts inflicted on them, particularly when it comes at the expense of their own living standard. That's an entirely reasonable position for them to adopt.

Unfortunately, that sort of pandering to the top end of town at the expense of middle Australia is not limited to that big business tax cut. It applies to a whole range of other areas as well in the budget and blocked in the midyear update as well. There are also the income tax cuts to those who need them least—$16,400 a year if you make a million dollars a year. So you have these weird, bizarre, out-of-whack priorities where you have a big tax cut for the people earning the most by removing the deficit levy and yet you have seven million workers on low and middle incomes who are being asked to pay more income tax at the same time as all this other stuff is going on with big business tax cuts and the like.

The other area which has received a lot of attention in the last couple of years, really—and I think it is a tribute to the opposition leader, the member for McMahon and the member for Fenner in particular when it comes to our tax reform proposals—is that we've still got this absurd situation where the biggest tax concessions are actually going to those who need them least. Think about things like negative gearing, trusts, capital gains and some of the concessions in super which do so much to advantage people in this country who are already wealthy at the expense of other people. In a perfect world, obviously a lot of people would prefer to pay less tax and they'd like to find ways of doing that. That's an entirely understandable human reaction. But when you've got a budget that is in the condition that it's in, you have priorities that you need to fund. In our case it's human capital, investing in people and making sure people are getting rewarded for their effort, earning, providing for their families, spending in the economy, creating demand with disposable income and all these sorts of things. You have to work out what your priorities are, and our priorities are very different from those opposite. We don't think we can continue to pay the biggest tax concessions to those who need them least.

I think Peter Martin from Fairfax summed it up really well in a recent piece about tax concessions when he said:

… the beneficiaries aren't always as deserving. 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.

I think that's a really important point. If you explained to the Australian people what a lot of these tax concessions mean in dollar terms for an individual person and asked them, 'Would you support that being just handed to them as a cheque or in cash?' a lot of people would be appalled by it. But because it's in a tax system it's not as obvious to people what's going on and how our budget is so substantially out of whack. I think the members for Maribyrnong, McMahon, Fenner and others who have worked on our tax policy proposals have done the country a real service by making announcements about tax and defending them well in advance of elections and well in advance of people making a judgement on them, saying, 'We've got a problem in the budget: the biggest tax concessions go to those who need them least and we need to have the courage to address those issues.'

That's the fiscal part of the story. That's the budget part of the story in these appropriations bills and in the mid-year update. There's also, of course, the economic story. I've already touched on the global conditions which have disappeared as an excuse for the mismanagement of the budget and the fact that we've got record and growing debt. I think it's also important that we acknowledge that we have had some good headline figures in our economy, too. I think the national accounts showed GDP growth for the year to September was 2.8 per cent. That's not amazing. That's not outstanding. It's not the kind of economic triumph that Australia has become accustomed to, but 2.8 per cent is not terrible. The real issue, though, is underneath that headline. It doesn't really give you a sense of how we're slipping in the global context. We've gone from leader to laggard when it comes to our performance, even on GDP growth, which is the government's preferred measure. Let's think about some comparisons. Between 2008 and 2010, Australia had the fourth-highest GDP growth amongst OECD countries. We had the US, the UK, Japan and Germany all contracting. We had the fourth-highest GDP growth amongst those 30-plus OECD countries. Now in the same group we are 20th. We have slumped to 20th. We are behind Mexico, Estonia, Finland, Latvia and a whole range of countries. So we've gone from leader under the former government to laggard now when you look at the global league table. Again, that's not an opinion; it's a fact that you can easily look up and verify.

I think that headline rate, apart from the way that we are underperforming in good global economic conditions, also masks some enduring and concerning problems and trends in our economy which are disproportionately hurting some people more than others. To summarise the way a lot of people feel, with some justification, about how the economy really is—the economy that they actually experience rather than the economy they are lectured about from that dispatch box—it is that the rules of the economy are written to benefit others. That makes sense when you consider inequality is at a 75-year high or that the gender pay gap is widening—I know that that's something that is deeply concerning to our entire side of the parliament but especially to my friend, the member who's at the table. The gender pay gap should be a source of real shame in a country like ours. We are ranked 42nd out of 144 countries. We were in 12th position—a lot closer to the front of the pack—a decade ago.

This economic disconnect that we talk about between outstanding global conditions, pretty good headline figures and the economy that people experience is most prevalent in the world of work and wages. It's fair to say that a lot of people feel that the link between their work and the reward they receive for that work has been severed. The best example of that is the fact that company profits have gone up 20 per cent in the last year at the same time over the same period that wages grew by two per cent. Whenever those opposite say, 'If only we can shovel some more money in the direction of the biggest companies in this country, they will jack up wages', we say, That's not been the experience.' Profits have gone up in this country in the last year—20 per cent; pretty extraordinary company profit growth. We want our companies to be profitable, but we want to make sure that the growth is inclusive and that people are rewarded for their work. Unfortunately—shamefully, really—in this country over the last year, we've had 20 per cent increase in company profits; two per cent increase in wages. That is a problem that would only be turbocharged if those opposite could implement their full agenda for tax cuts for big foreign multinationals and the big banks.

There are a whole range of reasons: insecure work; the fact that people can't get the hours they want; the underemployment in this country is extraordinarily high—near historic highs; and wages growth of course is at record lows. All of these sorts of figures, when you combine them, paint a picture of the kind of economy that people are actually experiencing in middle Australia.

One of the unfortunate things about the conversation we're having about wages in this country at the moment is that people assume or pretend that it's some sort of ideological thing. We're proud on our side of the parliament, of course, that we have always historically represented working people. However, beyond the usual fault lines of domestic politics, there's a substantial economic problem, objectively, when it comes to low wages in this country. It won't be fixed by company tax cuts for the reasons I've gone through in some detail. It certainly won't be fixed by cutting people's wages for working on the weekends.

The problem can be summed up like this: when millions of working people in this country can't get the wages growth that they need to provide for their families and keep up with the cost of living, they don't have the money to spend in the shops, they don't have the money to invest in the future of their kids and they don't have the disposable income which creates demand—the demand that we need if we are to have enduring and inclusive growth in this country.

If you look at the last national accounts, household consumption growth was very weak—0.1 per cent; the worst quarterly reading since the GFC. Household debt-to-income ratio is the highest it's been since the GFC, and what that shows is that people are feeling the strain. There is a disconnect between those headline growth figures and what people are experiencing. As I said, cutting wages, jacking up taxes on middle Australia—all of these sorts of things—would be a disaster for these trends that we've seen emerge that we should be dealing with.

It was terrific to see Michael Blythe, the CBA economist, in one of his recent economics issues notes—terrific publication, a good piece of economic analysis—talk about a wages recession. He described that weakness in wage growth as 'a significant economic risk' because it impacts on households who defer their spending and focus on balance sheet repair, which is another way of saying: trying to pay off the credit cards. It focuses on businesses who react by cutting capital spending and slowing labour hiring.

Stagnant wages growth in this country is not a problem that should only trouble one side of politics. It's not an ideological thing. It's an economic thing. It's a challenge. It's probably the most substantial threat to growth in this country at the moment that people do not have the income they need to make the economy whirr, and I think that this parliament needs to deal with that as a matter of urgency—at the very least, not by cutting wages, not by taking money out of the pockets of seven million Australian workers.

So, whether it's the budget, whether it's our approach to the broader macroeconomy, I think there are substantial differences between that side of the House and this side. We both want growth, we both want fiscal repair, we both want our businesses to succeed, but we're going about it in very different ways. I think only our way will succeed. I don't think it will succeed with the strategy of hoping that by showering largesse on the top end of town—the strongest in our economy—it will somehow trickle down to everybody else. I don't think that will work; it hasn't worked historically. It hasn't worked here; it hasn't worked overseas. It's a flawed economic model. You don'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, that seven million working Australians pay too little tax and that people get paid too much to work on the weekends. That tells us everything we need to know about the approach of the Prime Minister and the Treasurer and their colleagues in the cabinet. We in the Labor Party take a different approach. We know 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 being rewarded for effort; you have to ensure people have money to spend in the economy and can provide for their families. That also underpins our approach to the budget.

So we will, of course, be supporting the appropriation bills. That's the convention in this place. But that doesn't prevent us from pointing out the facts that we've got record and growing debt, that we've got a government which is spectacularly out of touch with middle Australia. We see that in their big business tax cuts and their tax hikes for ordinary people.

Stephen Jones (Whitlam, Australian Labor Party, Shadow Minister for Regional Services, Territories and Local Government) Share this | Link to this | Hansard source

Australia's a great country, but we really do face some big challenges, and now more than ever Australia needs a Prime Minister with a vision for this country and a vision for its people. But instead we've got a Prime Minister and a government which have completely run out of ideas. Not only have they run out of ideas; they are distracted and divided, and completely bereft of any vision for this country. They say one thing and they do exactly the opposite.

Their plan for Australian workers is breathtaking. They are supporting pay cuts for Australian workers at the very same time as they are supporting tax cuts for their bosses and the big companies. Their plan for the future of our workforce is to cut funding for our TAFEs at the very same time as they are importing skilled workers from overseas to do the jobs that Australian companies need to be done. The government has cut more than $2.8 billion from our TAFEs, from skills and from training.

As to their plan for universities—now this is going to kill you—we've got a Prime Minister who runs around the country and will talk to anyone with two eyes and a pair of ears about the importance of innovation while at the very same time they've cut $617 million from the very institutions that are training Australians in how to innovate! From my own university, Wollongong University—and I'm a proud graduate of that place—$45 million is being cut. This government has lost the plot.

Their plan to close the gap on Aboriginal and Torres Strait Islander inequality is to pretend that the $500 million that they have cut out of Aboriginal and Torres Strait Islander programs over the last four years and their five years of inaction just did not happen. Over the last 24 hours, we've seen the ridiculous thing where they're asking us to give them credit for reopening an antismoking program that they closed down only three years ago. They are going to have another conversation with Aboriginal and Torres Strait Islander people, while the memory of the Prime Minister closing the door on the Uluru Statement from the Heart is still fresh in the minds of those very same people. He has dithered and dallied on reconciliation while making grand speeches about the need for urgent action. He talks about the importance and the need for Australia to respect women and girls, but we see so few of them on his own front bench. He nobbles regional universities with funding cuts and increased enrolment fees. He says, 'We need to unite as one Australia,' while presiding over ever-growing inequality.

In Australia today, wealth is more concentrated than at any time in the last 60 years. The richest 10 per cent of Australians own 45 per cent of all wealth, and the gap between city Australia and regional Australia is widening. If you're in the top 20 per cent, you probably live in one of our capital cities. If you're in the bottom 20 per cent, you probably live outside one of those capital cities. If you're in one of those regional areas and you're represented by a Labor MP, you'll find somebody coming to Canberra and, with every breath they take, they will fight against the pernicious attacks of the government on the very programs and the very institutions which are driving at reducing inequality in this country. But, if you are unfortunate enough in one of the regional areas to be represented by one of the Liberal-National Party MPs, you'll find an MP who fights like a lion in his own electorate and says the most outrageous things about what he or she will take on when they come to Canberra, but they file in here and vote, day after day, against the very interests of their own electorates.

Let's look at what's going on in some of the regional areas. It doesn't matter which indicator you look at: there is a growing gap. There is a health gap, whether you measure it in access to medical care, whether you measure it in access to the necessary pharmaceuticals or whether you measure it in the prevalence of chronic diseases like diabetes. Diabetes is 3.5 times more common in working adults from the poorer areas, the majority of whom are in regional Australia—a whopping 3.5 times more common. What's the answer from the geniuses opposite? To make it harder for a person in regional Australia to go and see a GP. This is a government bereft of ideas. But it's not just about health. If you look at life expectancy, there is a three-year gap. For the average white Australian—and I'll get to Aboriginal and Torres Strait Islander Australians—living in regional Australia versus one living in one of the capitals or in one of the metropolitan areas of the country, there is an average three-year life expectancy gap. That blows out to 10 years if you go to rural and remote Australia. We all know, after reading the 10-year Closing the gap report yesterday, what the unacceptably high gap in life expectancy is between Aboriginal and Torres Strait Islander Australians and other Australians in those communities.

Education is the tool that we use to improve the life expectancies and the life opportunities available for people who come from a modest background versus those who are born with every opportunity in life. But, when you look at the data, the gap in the participation rate between the city and the country is also growing. The gap in secondary education between major cities and outer regional areas is a whopping 7.3 per cent. We've got to ask ourselves whether LNP representatives from regional electorates were aware of the 7.3 per cent participation gap in secondary education when they filed into this place and voted in favour of cuts to school education.

The Prime Minister and his government say that they care about rising electricity costs, while rejecting every single sensible plan, including the sensible plans that were commissioned by their own ministers. It takes a special kind of wisdom to get some of the smartest people in the country to prepare a report on how we can have a clean energy future with stable and reliable electricity prices and then send it off to some of the daftest people in your party room and accept the recommendations that come from those very same people. It takes a special kind of genius, a special kind of government, but that's exactly what this mob over here have done. Is it any wonder that electricity bills in the last quarter alone were up by up to 20 per cent? This is the result of their dithering and their do-nothing approach when it comes to energy policy.

Let's talk about housing and housing affordability. The federal government could do something. They could reach across the table and join in a bipartisan effort with the Labor proposals to remove the excessive subsidies that are currently going into the housing sector to support people who are buying their second, third, fourth or fifth house and take some heat out of the housing market at the same time as they do something more productive with that money, but they have rejected Labor's proposal. They are completely bereft of ideas when it comes to housing affordability and, worse than that, when it comes to supporting housing in Aboriginal and Torres Strait Islander communities—tearing up the national partnership agreement which made such tremendous progress in providing both housing and skills in those communities throughout Queensland, Western Australia, the Northern Territory, South Australia and other places.

We had a Treasurer once who said that the answer to housing affordability is to go out and find some rich parents. Well, if that wasn't bad enough, you've got a Deputy Prime Minister who says the answer is to go and move to regional Australia because rent's pretty cheap there. Not everybody has the opportunity of having a rich mate who is going to provide an apartment for them rent free. Most Australians have to struggle hard to put a roof over their head. This government is doing nothing to support them in that. The Prime Minister likes to talk about infrastructure but he has fundamentally failed to fund infrastructure projects in Tasmania, in Victoria and in South Australia—the states which are crying out for massive injections of infrastructure spend.

The great Gough Whitlam once said that Labor governments see election victories as instructions to perform, while Liberal governments see them as a right to preside. Since the last election, we have seen nothing more than the truth of this saying in the performance of this government. There are only two things that unite a divided coalition government: attacking industrial rights and the industrial relations system and providing big business tax cuts. Let's have a look at the decision to support wage reductions through penalty rate cuts throughout the economy. At the same time as you have a Treasurer who is saying the most urgent economic reform that we need in this country is a pay rise, they are cheering on the Fair Work Commission as it reduced and removed penalty rate rights for thousands and thousands of Australian workers. Over 700,000 workers are likely to be affected by that decision. Cutting penalty rates will see a pay cut for low-, middle- and working-class families of up to $77 a week. That's not a very good way to go about increasing wages—by putting them up to $77 a week behind. In my own electorate, there are over 7,000 workers in the retail sector who are affected by this and around 4,200 workers in the accommodation and food sector who are affected by this. But it's not just electorates like mine; it is the same right throughout regional Australia. I happen to have the figures for Capricornia. There are about 13,000 retail workers in the Rockhampton and Gladstone areas and around 8,700 food and accommodation workers. In fact, if you look at the data, around one in seven workers in the electorates of Capricornia and Flynn are affected by direct decisions of this government and their agencies: a pay cut for these workers, supported by members opposite, with not a plan to do anything about it.

I want to say something about trickle-down economics because the Prime Minister is fond of lecturing us on what he calls the fundamental laws of economics, which he says have not changed. He says that if we give corporates and the wealthy more money, it will somehow trickle down in the form of pay rises. He's willing to take a $65 billion gamble on federal finances to give this old chestnut of trickle-down economics a go. He could legislate for it, of course. He could put in the legislation that he has before the Senate a requirement that to receive the tax cut you've got to pass it on to your workers, but he won't do that. He won't do that, because he doesn't even believe his own rhetoric and he knows that this tax cut is not going to lead to a pay rise for ordinary Australians.

Ordinary Australians know that it's not the pay that is going to rise. It's not the pay and the money that are trickling down to households. It's the bills—increases for health insurance costs, increases for school fee costs, paying more money for energy, paying more money for everything. In fact, ordinary Australians know that, when the Prime Minister is talking about trickle-down, they have this vision of him standing on a balcony somewhere and he's pouring scorn down on them. It's certainly not the pay and the money trickling down to them; it's something else indeed.

There is no credibility, and he can't point to a country on earth where massive tax cuts to the biggest and wealthiest corporations in this country are going to lead to a pay increase for workers. If the government want some ideas, they should look to what Labor's doing. We have a vision for this country. This government is bereft of ideas. They are divided. They have not got an idea for the future of the country.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I'm pleased to follow the member for Whitlam, channelling Bernie Sanders and Jeremy Corbyn at the dispatch box, ranting on about all those good, hard socialist policies. However, the one thing we see time and time again from Labor spokesmen on the economy and why they always get it wrong is: they think the size of the economy, the size of the economic pie, is fixed. They don't understand that the size of our economic pie, the total wealth created in the economy, can grow and shrink. The problem is, which they don't understand, every time that you step in and try and redistribute the wealth, you destroy the very incentives to create that wealth in the first place. This is why we see policy after policy from the Labor side fail.

The member for Whitlam talks about wage increases from tax cuts. I think the member for Whitlam should actually go and read a few things about what's happening in the USA, because they have reduced their corporate rate of tax. What's happened? Millions upon millions of workers in the USA are receiving pay increases. Many of them are receiving $1,000 cash bonuses from their employees. That is what is happening. That is the evidence of what is happening when you reduce the corporate rate of tax.

If we go back in our nation's history and we look at every single time we have reduced the percentage rate of corporate tax, do you know what's happened? Without fail, we have ended up with not only more tax revenue but more corporate tax as a percentage of GDP at a lower rate of tax. So we've not only grown the pie; we've ended up with a bigger slice of that bigger pie in taxation revenue.

No-one knows and no-one can guarantee that that will be exactly what happens in the future, but we have seen it every time in our nation. We saw it recently in New Zealand, where their conservative government lowered the rate of corporate tax. What happened in New Zealand? Wages rose, revenue rose and the government ended up with more revenue, not less. Everything tells us that the same will happen here in Australia.

We've also heard the member for Whitlam rant on about electricity prices. It's so timely that the member for Port Adelaide is in the chamber at this time. You learn as a young child that if you put your hand in the fire you get burnt and then you don't put your hand in the fire again. The way we progress—whether it's in business, as a society or even as a species—is by a series of small-scale experiments where we try something a little bit different. If it fails, we stop immediately and go down another track. If it works, we duplicate it and we roll it out. There has been a thought that a 50 per cent Renewable Energy Target—or should I correctly say a 50 per cent compulsory, forced government mandate for generation of intermittent and unreliable energy—would actually lower the price of electricity. That's what many theorists thought, and that's fair enough. If you're thinking about a new idea, it's good that people put their different views and opinions forward.

We've had this experiment of a 50 per cent Renewable Energy Target conducted before our very eyes in South Australia. It has ended in tears. It is probably one of the greatest policy failures in our nation's history at any level. It has delivered that state the most unreliable energy, forcing them to spend half a billion dollars in a state of 1.7 million people in a desperate attempt to keep the lights on by bringing in emergency diesel generators to have on stand-by. Not only that, on top of that it has delivered that state the highest electricity prices anywhere in the world.

Common sense would tell you that if you've tried that experiment and it has been an unmitigated disaster, you'd say, 'Yes, we failed,' you'd pull back and you'd go down another track. That's how we progress. As I said, if you put your hand in the fire and you get burnt, you learn as a young child that you don't do it. Yet we have seen the Labor Party look at South Australia and say, 'Let's copy the 50 per cent Renewable Energy Target and take it nationwide.' This is insane. This is completely nuts. And yet this is the Labor Party's policy on energy—to copy an unmitigated disaster, a failed experiment. It will see pensioners in this nation being unable to heat their homes in winter, it will turn air-conditioning into a luxury good; and businesses will be no longer viable so will be forced to move offshore because of the high cost of energy in this nation. That is what the Labor Party wants to copy.

I call on good members of the Labor Party to speak up in your party room—put aside trying to attract a handful of Greens inner-city votes. Think of the pensioners, the workers and the coalminers that the Labor Party used to stand up for. Ben Chifley would be rolling in his grave if he saw the plans of what they did—a Labor policy that pushed electricity prices up—and how they were selling out the pensioners and workers of this country just to attract a few inner-city Greens votes.

In the time left on this appropriation bill, I'd quickly like to raise the issue of electric cars. There's been quite a bit of debate about this recently in the media. In fact, even the Chief Scientist has chipped into the debate. He's taken the role of chief subsidy seeker in an article he wrote for the Sydney Morning Herald the other week. The Chief Scientist gets it wrong in many respects. The first place he gets it wrong is that the debate is not for or against electric cars. We're not arguing against electric cars. The debate is: should electric cars be subsidised in Australia? That's what the debate is about. Let's take a simple proposition. If electric cars are so great—and they certainly are; they have many wonderful benefits, and I'm the first to acknowledge that—why do they need a subsidy? Why do they need to be subsidised if they are so great?

Our job in government should be to level the playing field between technologies, to let them compete against each other as vigorously as they possibly can, to let them put the best offer they can to the consumer and to let the consumer decide. We shouldn't suppose that we know better down here in Canberra what car the consumer should buy. We should just level the playing field and let the consumer decide. But we already have a substantial range of subsidies for electric cars in this country. We have subsidised finance. We have the fact that electric cars make no contribution to the fuel excise. We have a luxury car tax break. We have subsidised registrations and stamp duty. There's subsidised charging, and we have a tax office ruling that allows very generous deductions.

The argument that's put forward for these subsidies and for more subsidies the electric car industry is asking for is that electric cars will lower emissions—that it's good for the environment. To take the words of the Chief Scientist, we should test this hypothesis with the evidence. And we can look at the evidence, because we can use the science and the maths to make a calculation of the grams of carbon dioxide emitted per kilometre travelled. That is something we can do. In fact, we do that with the Green Vehicle Guide that the government puts out. It is very handy; it does a good job. But it does, unfortunately, leave out a few things. I doesn't make any allowance for the losses for the transmission and distribution of electricity. That should add an extra 10 per cent onto the CO2 emissions of electric cars. It also makes no allowance for the fact that there are substantially higher manufacturing emissions for electric cars. And that's not just my supposition. That's from a study titled 'Comparative environmental life cycle assessment of conventional and electric vehicles' published in the Journal of Industrial Ecology, where the authors estimate that emissions from electric vehicles produce between 87 and 95 grams of CO2 per kilometre, compared with 44 grams of CO2 associated with a standard petrol or diesel car engine.

The other thing it fails to look at is that when you charge your car from the grid you'll mostly charge it at night, and the carbon intensity of our grids, especially in Victoria, New South Wales and Queensland, is substantially higher at night. For example, over the last few nights in New South Wales 99 per cent of the electricity came from coal. We know that our hydro plants and our gas plants in New South Wales are used as peaking plants. And, of course, we have no solar at night. Also, it makes no allowance for the fact that when you turn the heater on in an electric car you use substantially more energy than you do in a petrol car. That is because in a petrol car the heat from your heater comes from the passenger engine, and in an electric car it is an almost purely electric heater. When you factor all those things in, there is simply no case for subsidies for electric cars in this nation.

The CO2 emissions, almost on a like-for-like basis, are higher in almost every circumstance. Even the good old Toyota Corolla, our most popular selling car, has lower emissions than a Tesla. I know the Chief Scientist says in his article, 'Oh, yes, but there's the Renault Zoe, which only emits 121 grams per kilometre.' But what he doesn't say is that Renault has another vehicle called the Megane, which is a petrol/diesel car that has lower CO2 emissions at 115 grams of CO2 per kilometre driven. We're often told that the future will be all electric. Earlier this week, we had the publication of the Annual Energy Outlook for 2018 from the US Energy Information Administration. It makes projections out to 2050, the middle of this century. They predict that plug-in electric vehicles in the US, by 2050, will only make up 14 per cent of the US passenger car fleet. Over 80 per cent of the vehicles—

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | Link to this | Hansard source

Who said that?

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I hear the member for Port Adelaide. Obviously he is uninformed in this case and I'm happy to send it to him. This is from none other than the US Energy Information Administration. That is their latest projections out to 2050. That is what they project. You may have other projections, you may have other information or you may be making it up, like you've previously done. I notice the member for Grayndler is another culprit in this. The two gentlemen sitting at the table have talked about how thermal coal is in rapid decline. I hope they've looked at the evidence over the last 12 months and seen we've had record exports of coal. Both of you sitting down there have stood up in the media and made ridiculous comments about the decline of exports of thermal coal, and yet we have had the largest increase in coal exports in our nation's history. Everywhere around the world—Japan is importing more thermal coal; China's coal consumption last year was up by 5.2 per cent. I will leave my remarks there. I'd be more than happy at any time to give the two gentlemen at the table a briefing so they don't make so many silly comments in the media and embarrass themselves.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

Australians are a reasonable people. With only one exception in our history, Australian voters have given federal governments at least two terms in office. That's enough time to implement their policies and for evidence to emerge as to whether those policies have worked as promised. Voters listen to what we say as parliamentarians. They want proof that the government can actually deliver what it promises. They want a government with a sense of purpose, with a narrative for what it wants to do in office and where it wants to take the country. They want a government that not only anticipates the future but, by its actions, helps to create that future. What is very clear is that for this Prime Minister, in particular, his only objective has been to occupy the Lodge. You can see the lack of foresight and forward thinking when it comes to infrastructure investment, and that is what I want to concentrate on in my contribution to this appropriations debate in the parliament this evening.

The fact is that this government has cut infrastructure investment and it will continue to cut infrastructure investment into the future. The Parliamentary Budget Office estimates that, based upon the government's own figures, infrastructure investment as a proportion of GDP will fall from 0.4 to 0.2 per cent over the next decade. It will halve.

If you look at the specific budget figures, you can see why that's occurring. The estimate of what the government would invest on infrastructure in the 2016-17 financial year, as announced on budget night, was $9.2 billion. If you look at the actual investment, it was $7.5 billion—or a $1.7 billion underspend—in circumstances when, because of the mining boom moving from the investment to the production phase, we should have been stepping up investment in infrastructure. But over the forward estimates it gets worse. Over the forward estimates, the amount of infrastructure investment will fall off a cliff to $4.2 billion.

We raised these questions this week in parliament with the hapless and helpless infrastructure minister, who happens to be the Deputy Prime Minister of Australia. What we've learnt is that the Deputy Prime Minister, Barnaby Joyce, does not have a clue about this portfolio, despite the fact that he was appointed to the position last year after a long period of stalking the former minister for infrastructure, the member for Gippsland. We asked the minister why, for example, Victoria, home to one in four Australians, receives only nine per cent of the Commonwealth infrastructure budget. Victoria is Australia's fastest-growing state. Melbourne is Australia's fastest-growing city. Yet this government chooses to allocate under 10 per cent of the budget.

In fact, in his answer he raised the $1.5 billion that was forwarded under the East West Link project, determined by the Abbott government in 2014, which the people of Victoria rejected when they elected the Daniel Andrews government. It's not surprising that they rejected it, given it had a benefit-to-cost ratio of just 45c return for every dollar that would have been invested in that project. But, of course, because of the incompetent way in which the government have dealt with infrastructure and their budgetary policies, they'd already forwarded $1.5 billion as an advance payment to Victoria for this project before it had its business case.

This is a government that says that it had a policy of only making milestone payments once something was actually being built. But that $1.5 billion was, of course, reallocated to a range of projects just last year when they realised that it was unsustainable to have that money simply sitting in the bank account of the Victorian government and not building anything, which is what had occurred over the previous couple of years. But the infrastructure minister didn't seem to know that that was the case—just like today, when, in answer to a question from his own side, he then went through and claimed rail projects such as the Regional Rail Link that were funded by the former Labor government and projects like the M80 as well.

We also asked him why he was cutting infrastructure investment in South Australia from $921.4 million in the current year to just $95 million in 2019-20. That represents South Australia receiving just two per cent of the national infrastructure budget in spite of the fact that the government have said they support the upgrading of the entire North-South Corridor road; in spite of the fact that the project between Torrens to Torrens and the South Road Superway is the next one ready to be progressed; in spite of the fact that the Prime Minister says he supports public transport, but the Gawler line electrification is ready to go and is waiting for funding; and in spite of the fact that the South Australian government has developed the AdeLINK light rail expansion to improve mobility and deal with urban congestion in that state. His response was to simply talk about the portfolio of the Minister for Defence Science and Personnel and defence spending rather than infrastructure and transport spending, which is what he's actually responsible for. We asked why the government allocated $100 million to the Northern Australia Roads Program last year but actually spent $12 million, so there was an underspend of 88 per cent in that program at a time when they say they care about northern Australia. I note that the member for Solomon, who is in the chamber, can certainly identify roads that could have been funded in his electorate around Darwin and Palmerston and could have benefitted from that program. What we heard from the infrastructure minister was quite revealing in that he talked about the Nullarbor Plain. He wasn't quite sure where the Northern Territory and northern Australia is. He talked about the Nullarbor, which says it all about his failure in this area.

Perhaps the worst response from the infrastructure minister, who showed that, frankly, he's out of his depth in that portfolio, was his response to a question we raised about infrastructure investment in Tasmania. Since the change of government in 2013, we've seen a funding cut for the Midland Highway upgrade and a funding cut for the rail revitalisation program. Remarkably, for Tasmania, not a single new major infrastructure project funded by the federal government has begun—nothing in 2014, 2015, 2016, 2017 or 2018. The infrastructure minister referred to the Inland Rail project. If you look at a map of Australia, between the north island, where we are now, and the south island of Tasmania is the Bass Strait. I've got news for the minister for infrastructure: inland rail does not cross the Bass Strait. He should know that because, in fact, inland rail goes nowhere near water at all. It doesn't go to the Port of Melbourne and it stops 38 kilometres short of the Port of Brisbane, at Acacia Ridge. It's quite remarkable.

Today we asked why the government had spent $1 billion less than promised in Queensland in the past four years. Again, there was no response. There was no understanding that what we were talking about wasn't what Labor thought should happen in Queensland. What we were talking about were their own budget papers in their first four budgets and what they said they would spend, and matching that up with actual investment. That cut is due to a failure to invest in programs in Queensland and right around the country. Money was allocated for things such as the Mobile Black Spot Program and the Heavy Vehicle Safety and Productivity Program. At a time when, after decades of a declining road toll, we've had the road toll increase, we have an underspend of half the funds that were allocated for heavy vehicle rest stops. That is a remarkable indictment of the incompetence of this government. That is this government's record on infrastructure.

The total underspend between the 2014-15 budget—its first budget—and 2017-18 has now hit $4.8 billion. Now, occasionally, it may well be that a road project or a rail project has to be deferred slightly because of weather events or because of circumstances beyond the government's control. I accept that that can happen. But this is happening across every state and territory every year, for road and rail projects large and small. That comes down to a simple case of incompetence. The difference between the budget that they announced in May 2017 and the MYEFO that they put out at the end of last year showed a reduction of $914 million—and we're not even there yet. That's what they cut from when they made the big announcements in May, and now we see what's actually happening. On major road projects alone, the underspend is $2.8 billion. That is why Infrastructure Partnerships Australia said, 'The budget confirms the cut to real budgeted capital funding to its lowest level in more than a decade—using a mix of underspend, reprofiling and narrative to cover this substantial drop in real capital expenditure.' There are two ways you can grow an economy: invest in infrastructure or invest in people through education and training. This government is doing neither, which is why it's not creating the conditions for growth in the future economy and for future employment and opportunity for Australians.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I'm very pleased to talk about a very important economic development initiative in my electorate, the Myalup-Wellington project. This is a significant economic development project. It is an industry-led initiative and it will do a number of things in the irrigation space. It is about substantially increasing production capacity. It will create jobs. It will provide economic uplift in what is the underdeveloped Collie River Irrigation District and the Myalup Irrigated Agricultural Precinct.

The project is a major opportunity to help diversify Western Australia's regional economy through irrigated agriculture. Anyone who understands irrigation understands the capabilities of irrigated agriculture. Currently, just 6,557 hectares of the available 34,600 hectares of the Collie River, Harvey and Waroona districts are actually irrigated. The Myalup-Wellington project is an industry-led initiative. It will see saline water that's currently flowing into the Wellington Dam diverted from the Collie River east branch to a mine void, with that water then treated in a new desalination plant. A new, smaller Burekup weir will be built upstream to enable water delivery to be powered by gravity—what a great way to go; environmentally sustainable because it is powered by gravity. The irrigation channels will be replaced with a new, pressurised pipe network. So it is a simple concept. It's about desalination. It's about piping. It's about a delivery network. It will boost horticultural, agricultural and forestry opportunities—what a great combination! It will create jobs and an economic uplift. It will attract even further investment in the region and it will diversify the south-west regional economy.

The old Wellington Dam was built back in 1933 with Commonwealth funding. The salinity in that amazing dam has risen significantly. The Collie River east branch contributes up to 14 per cent of the annual flow and up to 55 per cent of the annual salt load into the Wellington Dam. When you put that in other terms, this means that each year this east branch is delivering between 60,000 and 110,000 tonnes of salt into the Wellington Dam. That's what part of this project is about—the increase in the salinity over the years and how we manage that. There are districts that are choosing, because of this salinity below the Wellington Dam, not to actually irrigate their properties or irrigate as much of them. The productivity isn't there in the same way. That is because of that possibility and risk of soil degradation. So it's important that we deal with the salinity issue as well as the piping process for the delivery of the water ahead.

Existing open channels created in 1960 will be replaced with a closed pipe network. This will save at least 15 gigalitres of water a year currently lost through seepage, leakage or evaporation. The pipe network will replace the open channel system and allow expansion of the amount of land that's currently under irrigation. This will see a piped system from the Collie River Irrigation District to the Myalup Irrigated Agricultural Precinct which will re-inject water from the Wellington Dam into aquifers in the Myalup area to address the issues around volume and salinity concerns in that area.

There's also an idea to re-inject stormwater collected in the Harvey diversion drain. That's also part of the proposal. This is a very sound proposal. It will bring incredible opportunities to the south-west. Around 10 gigalitres a year of potable water from the desal plant will be sold into Water Corp's Great Southern Towns Water Supply Scheme and stored in the Harris dam. There will be ongoing opportunities. It is a fantastic irrigation system, a series of dams in the hills, with water delivered in a gravity-fed pipe-and-channel system. It's simple, it's effective and it delivers. There have been many innovative solutions as part of the sustainable techniques in this multi-awarded delivery system.

I also want to talk about the Bunbury outer ring road. A major development is needed to finish the whole of the Bunbury outer ring road. At the moment, it's like a stranded T-junction. The federal government recently committed $10 million to complete the planning and the project development of the unbuilt sections—the northern and southern sections. This is currently underway. There are new developments in the area proposed. The planning and project development for the bypass will help to reduce congestion, improve safety and—this is the key issue—provide an efficient freight route. It is a major economic driver in the south-west as well.

Of course, we need to deliver on issues around the Forrest Highway, Robertson Drive and Bussell Highway, which are experiencing congestion and safety challenges, mainly with access to the Bunbury Port for road freight. It's currently inefficient, with trucks having to negotiate over and over again several low-speed roundabouts. They compete constantly with local commuter traffic. We need really to reduce the congestion on the existing roads, reduce that dangerous mix of heavy freight and local traffic, and encourage sustainable, economic growth in residential and industrial development so they can get on with what they do around Bunbury and support planning. This is part of the proposal for pedestrian, cycling, public transport and passenger rail and freight solutions and that safe and reliable freight route to the port of Bunbury. We need to seriously improve the efficiencies in the supply chain.

We have a growing population in the south-west. We have the highest population in the state outside of Perth, and we need to make sure that we keep developing in this region. Those freight accesses are really critical. There are around 300 truck movements a day into the port. That tells you about the mix between local and freight traffic. The port traffic needs to get on with what it does, and local people need a safe way of getting to and from where they're going.

The port is of such huge, often underestimated, economic importance to Bunbury, the whole of the south-west and the state of Western Australia. It's existed since the 1800s, and we are now seeing the amazing—I think it's amazing—export of alumina. It is the biggest alumina export port in Australia—in Bunbury, in my electorate. I'm very proud of that. I'm proud of the people who produce it, deliver it and ship it out of the port of Bunbury. There are also woodchips, mineral sands, spodumene, silica sands, grain and bauxite, a new export, out of Bunbury, and I'm hoping we'll see lithium as well.

There are over 10 million tonnes of alumina going out of Bunbury. Every time I see a shipload going out, I think how great it is for our regional economy and the jobs that we are so focused on as a government. Of course, added to that, there are all of the services around the port: the transport services, the maritime services. When the tugs go out, you see how well those men do their job, and the precision of what they do with the vessels that come in is extraordinary to watch.

Of course, part of this is some of the volunteer groups that operate in and around the port. I want to mention the Bunbury Sea Rescue group. They do a fantastic job. They have 35 volunteers and do so many callouts on a regular basis. They are absolutely vital to ensuring the local marine environment is safe. All those people who choose to go out and enjoy themselves need the Bunbury Sea Rescue group of volunteers. The group are very, very proud—and they should be—of their 11-metre Elite Marine aluminium cat. It has twin—which is the bit I like—740 horsepower Volvo Penta diesel engines and, when that vessel starts up, she's got all the power she needs to do the job that sea rescue need her to do.

All of these volunteers dedicate an enormous amount of time and effort to their sea rescue efforts. They work very closely with the Western Australia Police in search-and-rescue operations. They are totally volunteer. We often see these people, but we don't think about the amount of time that goes into their training and their efforts. They also educate people on safe boating and survival at sea. They train volunteers as skippers, crews and radio operators. I want to thank all of those at the Bunbury Sea Rescue group for what they do. It's an incredible commitment you make to the safety not only of people who live in our community but also of those who visit. I saw recently where some of the skippers, particularly Michael Cooper and Brett Ladhams, had been doing some work. Michael received an award recently for the amount of time he's spent as a volunteer and, each time one of these members receive a long service recognition, I cannot believe how much time they've spent volunteering.

The Busselton Volunteer Marine Rescue Group also does a fantastic job. They run out of a state-of-the-art control room, housed in the Busselton Volunteer Marine Rescue Group's headquarters. It is very well located. It has the latest radar, marine radios and weather station and it is also equipped with an AIS—an automatic identifying system tracking device. There is a fabulous group of volunteers. They don't even expect to be thanked for what they do; they're just there. They're absolutely dedicated to safety at sea. It's a simple ambition for these people, but what a wonderful thing to deliver. Their core function is rescuing people. That's what they do: they rescue people; they save lives. And they also help with yachting regattas, outrigger races, the Busselton Jetty swim, the IRONMAN of Western Australia and whale rescues. They are a great group of people. Busselton has 85 volunteers. Of course, there are very active members and others who are not so active. They are such a welcoming group of people that so many others want to be part of this organisation. That's because of the sense of family and the purpose they have in rescuing people and providing what is an invaluable service. They answer approximately 300 callouts a year. These are all volunteers.

I spoke a couple of days ago about our surf lifesavers and the extraordinary service and the thousands and thousands of hours of their own that they give to make sure they are trained and ready to provide these extraordinary emergency services. For all of those who are involved in emergency services, but particularly the Bunbury Sea Rescue Group and the Busselton Volunteer Marine Rescue Group, I want to say a special thankyou to each one of them. You give up your time, and it costs you money to be a volunteer. What you're doing is rescuing good people, but you're saving lives, and it's one of the most important contributions that you can make—whether it is St John Ambulance, with its extraordinary number of volunteers, or whether it is our volunteer Fire and Rescue people. Our volunteers were amazing with the fire at Augusta. They were on the job straightaway and they saved so many homes and so many people. That fire could have been well out of control but for the work of our volunteers. As always, I'm very supportive of the volunteers who do an extraordinary job right around Australia, but particularly in my electorate. Thank you.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I too would like to participate in this debate, but I would like to draw some attention to what I see as shortcomings within this government. One thing I've learnt since viewing the activities of the Turnbull government is that we should pay attention not to what they say but to what they do. And I think there's a clear measure of that when you look at what this government has done. Bear in mind, this is the government of Work Choices—that was their origin; that was their commitment. They wanted to reduce the workers' ability in respect to wage rises; they wanted employers to pay people below award rates of pay. It's in their DNA.

None of this has changed. Work Choices moved to lower the standard of living, and this government continues to do that. They certainly have made a move to cut the standard of living of pensioners, those on disability support, the unemployed, young people. And now they want us to believe that they've changed; that they've turned over a new leaf, as it were. It wasn't that long ago that this mob opposite were banging on about how what we need is budget repair. That's putting it mildly. They talked about a budget emergency or a deficit disaster. They pounded on about that before the last election. But what do we see now? Under this government's watch, the deficit is blowing out and the debt has now crashed through the half-trillion dollar mark.

This is a government of misplaced priorities, with a signature policy of handing out $65 billion to multinationals and big business. This policy is all inspired by the government's misconceived views about trickle-down economics. I'll tell you what: that wasn't one of the terms in any of the economics books I had to read when I was studying. But they have placed all their faith in that—that the more we give the top end of town, the more they'll pass it on. As I said last week, pigs might fly. Yet this is their signature policy with which they want to take the Australian community under their wing, saying, 'Trust us; this'll be all okay.'

Well, as I say, don't listen to what they say; look at what they do. At this time we have unemployment and casualisation at an all-time high. We have stagnant living standards. We have a diminished number of apprenticeships. We have a housing affordability crisis. And the only plan the government has is, quite frankly, to make it hard for families who are battling already. Just a piece of advice for those opposite: if you can't afford to give, straight out, business $65 billion, simply don't do it. But don't do it at the expense of the most vulnerable Australians. That's not what government is about. This is not Robin Hood taking from the rich and giving to the poor. From what they're doing, they misread that book; they're taking from the poor to reward the rich. The government's approach is unfair and ill considered. The type of growth they are targeting is not the right type of growth that this country needs. And it is unaffordable, particularly at a time when this government has the budget in a big mess.

Since this government's economic plan was first introduced, we have talked about the extremely minimal impact that these proposed tax cuts for big business will have. We are talking about giving $65 billion to the top end of town—the top corporates and the multinationals. But the economists have reminded us that it will have negligible economic benefit. As a matter of fact, they have modelled this. It has a benefit of one per cent over the next 20 years—that's to say, in terms of wages, a $2 a day increase in the wages per person in 20 years time. That's what they're basing all this on. No wonder they want to move to cut pensions or make it more difficult for pensions and why they want to move on family tax benefits, and why they are moving on universities and on schools. This is all to pay for this unfunded $65 billion tax cut to big business.

The Treasurer's economic modelling certainly is a one-trick pony. He expects that, if he can give away this money, we are going to see miraculous results within the community. As I say, he believes—as I presume those opposite, if they are shaking their heads, do too—that the more we give the top end of town, the more they're going to feel obliged to expend that in higher wages for their employees. I just don't think the world works that way. This is the same trickle-down approach that has dominated, quite frankly, the last three budgets delivered by the Treasurer.

I've found a comment by a person who I know is friends of people on both sides of this parliament, and I am referring to Father Frank Brennan. He is the CEO of Catholic Social Services. He succinctly summarised this position that the government's wedded to, about their tax cuts. He said:

Our tax and transfer system is critical to ensuring a fairer Australia … Placing the burden of budget repair on those who can least afford it, while providing tax cuts to the wealthy and businesses, is wrong morally and economically.

We agree with that. If Father Frank is making comments like that, he is sure as hell talking to those on the other side and making sure that they understand that.

I am not sure how rusted on those opposite are to this. We would like to think that they will take this to the next election, because those of us who spent a bit of time in our electorates over Christmas know that this is totally unpopular. People get what's occurring here. People get that the government are making cuts that affect families and hardworking people all to further their tax cuts for business. At the same time, the government want to take $17 billion from our schools, $2.2 billion from our universities and almost $650 million from vocational education through our TAFE system—and all of this when we are moving from crisis to crisis in health. In that environment, is it worth giving the top end of town $65 billion? By the way, in the last 12 months, the top end of town has averaged a 20 per cent profit. Does that trickle down anywhere? Wages growth has flatlined, so it hasn't trickled down too far.

I will just highlight some of the ramifications of these cuts. I have spoken a number of times about our schools. I would expect that all members here would, from time to time, visit their schools and their principals to get an idea of how they are going and get an understanding of the practical ramifications of the cuts that the government is now making. In my electorate, under the cuts that the government proposes, our schools will lose $24.8 million in funding. In my discussions with the Western Sydney University last week they told me that the government's proposed cuts, which they are instituting through the freeze on Commonwealth funding grants, in this year alone will amount to $5.7 million. The university told me that they are going to have to take a lot of their focus away from business and, for example, their start-up incubator.

All the things that the Prime Minister once said were essential for growth in Western Sydney are going to be ratcheted back because of these cuts. These cuts are unfair and are painful for communities such as Western Sydney. This just goes to prove that the government can't be trusted when it comes to the most important investments for our nation. An investment in education is an investment in our future. We need to have the best and brightest if we are going to compete in the world. But that is lost on this government. You don't make cuts to institutions that are responsible for developing skills and training and all those things that we are going to need in an advanced economy to be able compete with the rest of the world—but the government is slashing those institutions.

We see this same sentiment reflected in the government's health policy, where the government failed to reverse their unfair 2020 Medicare freeze. They are effectively asking Australians to pay more for their health care than they should be paying. Over the next four years this amounts to a cut of about $2.2 billion from Medicare, and that is in addition to the savings already banked by the government. The Turnbull government has been cutting Medicare and threatening bulk-billing. I would just remind the House that this is the same bunch that, when they had half a chance, wanted to move to privatise parts of Medicare—and now they want us to believe that they've changed their position. The fact is that the Prime Minister cares only about his own political health, not about the health of those in our community.

The government claim that we have an NDIS emergency and, in a rather cynical way, they are now pretending that there is only one way to address this—through a good old-fashioned tax hike for low-income earners. They want to tax the seven million Australians earning less than $87,000. They say, 'This is the only way we can do it, yet we still want to hand out $65 billion to the top end of town.' What does it mean for the real workers out there? The average household income in my electorate is just a tad over $65,000. For a worker on $55,000, it means that they will be paying an extra $270 a year, and someone on $80,000 a year will be paying around $400 extra tax a year. This is all happening when we know that the corporate profit level is running at around 20 per cent—average profits at 20 per cent over the last 12 months. Yet they still want to think that the only way ahead for our economy is to give big business a bigger slice of the pie, a bigger tax cut, in the belief that it will trickle down to everybody else. While they're doing that, as I said earlier, wages growth has largely flatlined. It's at a record low. Currently it's at 1.9 per cent. That's not the environment in which you want to go out and reward big business that's already making big profits. They're not distributing that to their workers; otherwise it wouldn't be running at 1.9 per cent, as it is now.

Our families are facing rising electricity costs and significant unemployment; 1.1 million Australians are experiencing underemployment. And this government has nothing better to offer than a $65 billion corporate tax cut. When you've got stagnant wage growth and rising inequity, on a background that's already felt the wrath of antiworker legislation passed by this government, no wonder this is a government that did not lift a finger to stop the slashing of penalty rates that now affects 700,000 Australian workers. By the way, these are some of the most low-paid Australian workers, and it's going to cost them up to $77 per week.

We need a government that actually understands community and puts community first. Clearly that's not what this government's doing. This government fails to see the real value of people's pay packets going down and electricity and private health care skyrocketing. We are in a housing affordability crisis, with household debt at record levels. We have high unemployment and job insecurity and a government that is wagering our futures on trickle-down economics.

Lisa Chesters (Bendigo, Australian Labor Party, Shadow Assistant Minister for Workplace Relations) Share this | Link to this | Hansard source

Appropriation Bill (No. 3) 2017-2018 is an appropriation bill, and, while Labor has said that it will not block supply, this debate gives us a chance to talk more broadly about the government's agenda and the impact that the government's agenda is having in regional communities, particularly my own community of Bendigo.

A couple of surprises were in the MYEFO this year that hit regional communities tough. One that I particularly wish to highlight is the way in which funding has been ripped away from universities—the freezing of university places. At the Bendigo campus of La Trobe University, in my electorate, they were very concerned about the impact that this cut in support for students would have on all of their regional campuses. In Bendigo, in Shepparton, in Wodonga they feared that with a freezing of university places people would chose to go to the city first, and once the city was full there'd be no places left for the regions. It is typical of this government: they randomly put out these policies, these blunt instruments, without really consulting with the sector, without really asking what impact this would have. The Bendigo campus was hoping that because they have some flagship courses, like dentistry, and because their rural school of health is world-class then that would help attract people to Bendigo as their first choice.

We also know that freezing university places would make it harder for regional students, people who are re-entering the work force and seeking to upgrade their skills, and mature-aged students—who are a large proportion of our regional campuses—to go to university. The fact is that if you live outside of metro Melbourne you can knock points off your ATAR score; you can knock points off your university entry level score. In Queensland, if you go to school in some regional areas, like on the Sunshine Coast or in Gympie, they say that you knock two points off your OP. If you go to an average school—a state school, not an elite school—you can knock points off of your OP because of the way in which the system has been designed. Kids that are equally as bright, but disadvantaged because of their school marking, could miss out on university places because of this government's freeze—a random arbitrary freeze with no proper consultation with the sector about how it would happen.

The MYEFO also confirmed this government's addiction to their $65 billion in handouts and tax cuts to multinationals. This is at a time when they keep talking about budget repair. Rather than getting the companies that are making the profits—that are making the most money—to actually contribute towards our common wealth, they're making working people on low to middle incomes pay more in the way of tax. The rhetoric of this government—they twist themselves up. Regarding the $65 billion in tax cuts, they actually believe, or they're trying to mislead the Australian people by saying, that, if you give the companies more profits, they'll give it to workers. That is nonsense. It has never happened. The only times that workers actually get a pay rise is when they bargain for it or when it's awarded to them by the Fair Work Commission. It is so rare for a company to say, 'Here is a wage increase just because we like you.'

Talk to the mining workers in Queensland. We found out last week that many of these multinationals who will get a handout under the government's plan have had a massive increase in revenue in the last 12 months. The returns are in and their net export value is up. In coal, it's up 35 per cent. Across all of the mining sectors, including gold from my electorate, it is up 52 per cent. These companies are making mega profits, yet we haven't seen the wages for their workers go up at all. In fact, we've seen the reverse. More and more workers are being told: 'You've lost your job. You have to re-apply for labour hire. It's less money.' I've met coalminers in Central Queensland who've lost 80 per cent of their entitlements—the extra bonuses that they get. They've gone back to the basic-wage structure. I've met people who have been told: 'You no longer work directly for BHP'—or Glencore or Anglo American—'You now work for a labour hire company. It is full-time equivalent, with similar responsibilities, similar expectations of you and the same uniform, but you're getting paid $30,000 to $50,000 a year less.' This is what's happening in Australian workplaces, yet the government wants us to believe that if we give companies money they'll give it to workers. Bring in the instrument. Bring in the legislation to make companies do it, because they won't. We know that they won't, because they never have without us having robust enterprise bargaining rules.

What is also contained in the MYEFO is the government's plan to increase tax on low- and middle-income earners. This comes back to priorities. Rather than asking the companies that are making all of the profits to help contribute towards our common wealth, they're increasing the Medicare levy, which is basically increasing the taxes for low- and middle-income earners, the same group of people that has not had a decent pay rise. Australians need a pay rise. These are the same people that may have had their penalty rates cut. Again, this government—I nearly said 'company', because it acts a bit like a company—did nothing to stop the Fair Work Commission cutting penalty rates. It is this place that sets the rules for the Fair Work Commission. When they make a decision that is not in the best interests of working people, when they make a decision that sees 700,000 Australian workers cop a pay cut, this place should reset the rules to make sure that those workers do keep their penalty rates. These are some of the lowest-paid workers that we have in our community, yet this government did nothing. They stood back, let their penalty rates be cut and then doubled down and said, 'For those of you working full time and earning more than $20,000 a year, we're actually going to hit you with an increased tax by increasing the Medicare levy.'

We also saw in the MYEFO an attack on our pensioners. I guess we shouldn't be surprised, because we had the minister responsible for this area stand up in question time and say, 'The solution to the deeming rates for pensioners, because they're so low, is for them to go out and get a job.' They're now saying to people over the age of 70, over the age of 65, 'The reason why we're not going to look at your pension is we think you should go out there and get a job, and that's the role of government.' They've worked hard enough. It's time that they get a chance to enjoy their retirement. It's already hard for people to keep working to the age of 70, particularly in industries which are labour intensive, whether it be carpentry or nursing. Any job that involves physical movement is very hard to do to the age of 70. It's not like being a politician or working at a desk.

Not to mention it's an equity issue. They've worked hard. They deserve respect in retirement. But what we've seen from this government is not only are they not doing anything about deeming rates but they've also continued their pursuit to ditch the energy supplement. At a time when gas and energy prices are spiralling high and continue to go high, this government wants to ditch the energy supplement, which will leave pensioners $366 a year worse off. They also still want to increase the pension age to 70. It demonstrates again how out of touch they are with older Australians. Despite all of the guarantees of the government, all they've guaranteed are high energy prices. That's all this government has guaranteed.

I met with some pensioners in my electorate during winter. They brought their winter bills in to talk about how they'd gone up. Let's remember the rhetoric of this government when they were in opposition. All their ranting about debt and deficit, all their ranting about the carbon tax, all their promises of '$550 back in your back pocket', all their promises to get debt under control—they've failed on two of their key election campaigns. The pensioners that I met with didn't have an extra $550 in their back pocket because of this government. No. Many of them were saying, 'We're actually paying more than we ever have for our energy bills, and they continue to go up.' I've mentioned the push of the pension age to 70. This again demonstrates that they have very little understanding of what kind of jobs people can do until they're 70. If people want to work until they're 70, we should encourage them, but we shouldn't make it mandatory. It's hard to be a plumber, a carpenter, a nurse or a cleaner until you're 70. We should show older Australians respect and support them.

This government is also failing spectacularly at helping connect jobseekers with the jobs that are available. I was in Tasmania last week talking to some of our berry, apple and fruit industry. Some of their jobs are seasonal. They are concerned about what's going to happen in the peak picking season for them. They need about 2,000 workers in this part of Tasmania. In the north-west, they need about 6,000 workers for harvest, which is eight weeks. But what I did learn by being there is that a lot of their work—their pruning work, their packing work—is ongoing. It is almost full time—11 months, 12 months of continuous work. Yet the job agencies in those areas—jobactive, whatever name you want to give it—had failed to match people looking for work with the jobs that are available.

Another example in my own electorate is a meatworks in Kyneton that is keen to employ locals looking for a job. All the job agencies, the job networks, had failed to connect the jobseekers. The people that they kept bringing out were vegans, vegetarians and the long-term unemployed. It took Bendigo Community Health Services resettlement officers and myself meeting with the company, doing the walkthrough and basically being the matchmaking service to get recently arrived migrants of Karen and Afghani descent working there—and now they are working!

It's a great news story, but it should be something that happens automatically because of the priorities of a government that invests properly in supporting people to work. The job agency, jobactive—whatever fancy name this government gives—aren't working.

The other area where this government is failing is on jobs. They say all these new jobs have been created under their watch, but what jobs? How many insecure jobs are there? How many casual jobs are there? How many jobs are full-time but working for labour hire so people can be sacked at any minute? We have a real crisis going on in our economy when it comes to jobs. Young people can't get entry-level jobs. Companies are now looking overseas, because they can get experienced overseas workers to come here, before investing and training in our own workers.

Just yesterday we had this government push through a bill in this House that stripped labour market testing out of our 457 visa system. Why would you do that? Why would you give companies the opportunity to bring in whoever they want and not do labour market testing? They've taken it out of the legislation and said, 'Don't worry, we'll do it. We're going to create an instrument. Don't worry, trust us.' Not that that instrument is disallowable; we just have to trust them. Australians do not trust this government, and they do not trust them to stand up for jobs, health and education, and to make sure that multinationals pay their fair share of tax and are accountable.

This government is failing on education. We've just gone back to school in central Victoria, and a number of schools wanted to run programs this year that won't run because of this government's funding cuts to schools. I'm talking about senior secondary, which is $1.2 million worse off because this government did not honour the original Gonski funding model. A school like Weeroona College—$800,000 a year worse off. Just imagine the programs they could have had. Just imagine the support and the opportunities they could have given to those students. Meanwhile, Girton Grammar, just up the road, is a very good school. The parents do pay a lot in fees. That school actually got an increase in funding, close to a million dollars extra from this government. Yet the school that has the disadvantaged students, the kids most at risk and the most diverse student population gets a funding cut.

It always comes back to priorities in budgets and budgeting, and all I can say is that this government's priorities are wrong. They're not prioritising our schools. They're not prioritising our hospitals. They're not prioritising Victorian roads and rail. They are not prioritising young jobseekers. They are not prioritising TAFE and university. Instead, what they are prioritising is big tax cuts for multinationals and making sure millionaires pay as little tax as possible.

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

In the time permitting, this could be the final in my series on the by-election of Bennelong. I have previously spoken about the tenor of the debate and some of the volunteers who stood out. However, there are many more people to thank, and I would like to try to name some more of them today.

As with all campaigns, we would never have been successful without volunteers. Over 700 people came out to help us in this by-election—from making phone calls, handing out leaflets at train stations and standing in the baking heat of the West Ryde pre-poll or the combustible footpath of the Epping pre-poll and, of course, on polling day itself. Our hundreds of volunteers made the difference.

Some of these people have been with us for every election. Some have just joined the Bennelong family, but every one of them raised the bar of this campaign, giving their all and making the difference at the end of the day. I would like to say thank you from the bottom of my heart to every one of you.

It's always dangerous to identify individuals as I will most certainly forget some people who deserve special praise. I have already called out Helen Russell, Bob Lawrence and Daryl Maguire MP, for they turned up every single day at the pre-poll and every night to make phone calls rain, hail or shine. Elizabeth Frias was a constant smiling presence at prepoll too, while local stalwart Kevin Pagadinimath was at every station and bus stop every morning. As with every year, the local Young Liberals were the difference. One silver lining of the national spotlight on this campaign was that Young Liberals came from all over the country and I was able to see that our young volunteers—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Bennelong will resume his seat. The member for Bennelong will be able to continue his remarks tomorrow.