Nick Champion (Wakefield, Australian Labor Party) Share this | Hansard source

I am pleased to be speaking in favour of the Appropriation Bill (No. 1) 2008-2009 and its cognate bills, and I note that they allow the government to deliver the budget and important services to the Australian people and the people of Wakefield. It is worth noting the context in which this budget has been framed. That necessarily involves the basic examination of the previous government’s record. The record of the previous government is defined by three facts: it produced the lowest productivity in 17 years, the highest domestic inflation in 16 years and eight interest rate rises in three years. Those economic conditions particularly cost working families, pensioners and those on fixed incomes—and there are many of those in the electorate of Wakefield. These economic conditions, along with radical industrial relations laws, cost the coalition government. In framing the budget, we must also acknowledge the difficult international environment we face: a credit crisis and the prospect of a US economy that is stalling; the rising cost of credit to banks and to consumers; and, contrasted to and contradicted by this, the high rate of growth in China and India; rising commodity, petrol and food prices; and a rising Australian dollar that places pressure on our manufacturing exporters.

The Rudd government’s first budget is framed in a challenging global environment and has four main features to address Australia’s domestic needs. Firstly, it is economically responsible and fiscally conservative. Secondly, it delivers relief to working families through a package for those families and support for older Australians. Thirdly, it provides for the future by establishing three important funds in infrastructure, education and health. Fourthly, and most importantly, it delivers on our election commitments, especially those made in the electorate of Wakefield.

I think it is important to examine these areas in some detail. The first is economic responsibility, and this budget has that feature at its core. We have resisted the temptation to spend the surplus, which many in the Liberal Party have advocated. The budget delivers a surplus of 1.8 per cent of GDP, as opposed to the previous government’s forecast of 1.2 per cent of GDP. We know surpluses are important because they reduce pressure on demand, on inflation and on interest rates—something that has a big effect on working people. As some economic commentators have noticed, the government’s budget has brought fiscal and monetary policy into sync, making the job of the Reserve Bank less challenging than it was in the last years of the previous government when spending was driven by politics and the electoral cycle rather than economics and the future. What the budget does is to send a coherent message from government to markets, to business and to the community that this is a government which is an active partner in meeting the challenges of inflation. It is a sober and careful budget that is designed to meet a complex and challenging environment.

It is also a budget focused on working families and seniors. Labor’s tax cuts are aimed at working Australians rather than the top end of town. They are aimed at truck and forklift drivers, cleaners, shop assistants and child-care workers, teachers, nurses and factory workers—the people who, with other people like them, add great wealth and value to our economy and to our community. What this budget does is to provide taxation relief in an environment where, as I said before, inflation, petrol and interest rate rises have placed great pressure on family budgets. An example of the tax cuts is that a family with a single income of $40,000 would receive a $20.19 per week tax cut, a reduction of 16.8 per cent. A family with a combined income of $100,000 where the primary earner has an income of $60,000 will get $31.73, an 8.8 per cent reduction. The child-care tax rebate is increased from 30 per cent to 50 per cent, covering half of families’ out of pocket child-care costs. We know child care is a big cost for most families. Low income workers on less than $14,000 will pay no tax at all. This is particularly important to those in the retail and hospitality industries, which are dominated by part-time and casual workers who face constant economic uncertainty in their working lives.

Most importantly, this budget ends a tax trap deliberately created by the previous government. The Medicare levy surcharge as levied by the previous government was an inappropriate use of the tax system. When this levy was first introduced, it covered approximately eight per cent of taxpayers, but as incomes have risen over the past decade so have the number of taxpayers caught by the levy. If nothing was done, the levy would apply to over 40 per cent of taxpayers. So the failure of the previous government to increase the income thresholds created a situation in which the tax system was used in a completely unfair manner and was levied on people on very modest incomes in order to prevent them exercising choice. That choice was to join or not join the private health system. I want to state for the record that I have no problem with private health and I am a member of a fund. But to use the tax system in this way in relation to those on modest incomes is unfair, undermines public confidence in our tax and health systems and is an unnecessarily coercive use of a taxation measure and one which any reasonable person would oppose. That is why the government will be increasing the threshold from $50,000 to $100,000 for singles and $100,000 to $150,000 for families: to relieve working people from a coercive coalition tax trap. This budget is about making sure that the tax system is fair and delivers to working families and working Australians.

It is also a budget that provides some relief and support for older Australians. It must be said that many older Australians, seniors and pensioners, in my electorate do it very tough and have very few luxuries in their lives. This situation is often distressing for the individuals, their friends, families and the community. As I said in my maiden speech, nothing is as distressing as poverty amongst the elderly. Economic distress for the elderly has been building for the last 11 years. Our first budget provides assistance in the form of a higher utilities allowance of $500 per year, up from $107.20. It also provides a one-off lump sum payment of $500 by 30 June 2008.

On the Saturday immediately after the budget I made one of my regular visits to the Munno Para Shopping Centre, a very busy shopping centre because it has a good Foodland which provides a lot of specials. A lot of pensioners shop there, many of whom are supporters of mine, and they did provide a fair bit of feedback about the budget. Much of it was positive, and some of it encouraged us to go further. And when I went out to the Port Wakefield Senior Citizens Club last Friday I received similar feedback combined with great hospitality. The budget does deliver support to older Australians, but we are well aware of the situation that many pensioners face. The government is committed to working for pensioners and seniors in an economically responsible way, and this budget is a demonstration of that commitment.

Of course this budget is also about building the nation. It is a nation-building budget for a nation-building government. Labor have always been the party of nation building and the party of the future. That is why we have established Infrastructure Australia and the Building Australia Fund. Infrastructure Australia will be a key part of developing a plan to modernise Australia’s infrastructure assets. Infrastructure is a key driver in productivity, in economic growth and in community confidence. And it is a key indicator of national progress. Infrastructure Australia will complete a national infrastructure audit and develop a priority list to guide public and private investment. It will help to identify projects which will be funded from the Building Australia Fund. In the future I am sure that the Building Australia Fund will be seen as a critical part of the economic achievements of the Rudd government. The fund will finance projects that are beyond the capacity of the states and private investors. The allocation of $20 billion from the 2007-08 and 2008-09 surpluses will ensure that the fund has the ability to undertake its nation-building role. And the good news is that work has already begun: $75 million has been allocated in 2007-08 to undertake immediate feasibility studies on high priority transport projects across Australia. Transport is especially important to my electorate.

For the first time in a long time, the planning and provision of infrastructure is front and centre of a national budget—and that is an important thing—but this budget also delivers on health and education. And just as infrastructure has a critical effect on economic growth, so does education. Especially in the modern, globalised world, education is both an economically and socially liberating force. The Education Investment Fund is designed to finance capital investment in vocational education and training. It will also finance capital investment in higher education systems. Labor knows that both vocational and higher education are critical to the maximum utilisation of our workforce and that individuals are increasingly likely to access both systems over their working lives. These systems are complementary and will both benefit from the Education Investment Fund. As I said before, education is an important force in our economy and our society, and this budget provides the foundation for the future.

The third fund put in place in this budget supports one of Labor’s long-time priorities. The ability of all Australians to access a safe, affordable and modern hospital and health care system has always been a key goal of the Labor Party. The Health and Hospitals Fund has been created to finance infrastructure in hospitals and medical research facilities and to provide for medical equipment and other facilities in these areas. Having visited the Lyell McEwen Hospital in my electorate many times as a candidate and member of parliament—and having been born there and having had a family member stay there with illness a few years ago—I am well aware of the challenges that our health system faces and the excellent work that our local doctors and nurses undertake. This fund will give those workers in the health sector and the community confidence in future investment and future support of our hospitals and our health care system. This is a budget framed with nation building and the future in mind. It is a budget that will resonate decades from now. It improves living standards through long-term investments.

Having grown up in Kapunda in country South Australia, I know how important government services are to regional areas. This is a good budget for those Australians who live in regional Australia. Firstly, it provides $271 million over four years to fund the Australian Broadband Guarantee to ensure all Australians have access to broadband internet services. Access to broadband is, I believe, the single biggest social equity challenge Australia faces. The Howard government approach left Australia behind the times and left many Australians isolated from broadband services. The funding for the Broadband Guarantee and the work being been done on the Australian Broadband Network is critical to all Australians in regional Australia and it is critical to the nation. These policies will allow some of the tyrannies of distance that affect regional Australia to be eliminated.

In addition to this, we have made significant progress on another key issue—water. We are providing funding and leadership in the area of water policy and there is now going to be a 10-year policy framework called Water for the Future. This policy will have a big impact on regional Australia. National leadership, on the one hand, and local solutions, on the other, are the path forward. An example of this in my electorate is Tarac Technologies near Nurioopta, which recently received a grant to expand their recycling of waste water from local wineries for use in local vineyards. They have big plans in the future to harvest some of the methane gas that is produced in the process. This is the type of project that should be encouraged around the country.

The budget establishes the Better Regions policy to provide both funding for regional projects and a program that the community can have confidence in. Two projects in my electorate will have a big impact on the regional communities. These projects are the community and recreation facilities at Angle Vale, which will provide a growing community with their first real community and sports facilities; and the Gawler River junction project in the town of Gawler—which I think the Gawler council will be discussing tonight—which will help to provide access and amenity to this beautiful but underutilised part of the town of Gawler. Both these projects will add to the unique character and lifestyle of these communities. So in the case of my electorate this budget delivers on the key priorities—economic responsibility, support for working families and seniors, nation building, and local commitments. It is a budget that delivers to the nation and to Wakefield.

It is worthwhile to contemplate the alternatives to the government’s budget. It is worthwhile for the Australian people to contemplate the various replies from the opposition. The opposition’s response has been characterised by three factors: weak leadership, division and economic irresponsibility. We should start with weak leadership. The member for Bradfield is in a terrible place. He does not command sufficient support among voters or his own party room to sustain his leadership into the future. Leaders in this position can respond in one of two ways: they can articulate a clear set of beliefs and stand firm, or they can be swept along with other people’s agendas and the events of the day. It is fairly clear that the Leader of the Opposition has never had a belief he was not prepared to jettison for future advancement. So we find him being pushed along by Senator Minchin, by the ambitions of the member for Wentworth and by the shrewd calculations and agendas of those in his party. His leadership is like watching a fish out of water—lots of movement but you know it cannot last. It is this weakness that is driving the divisions within his own party. It is this weakness that is driving the economic irresponsibility of his party. And both division and economic irresponsibility are an insult to the hundreds of thousands of conservative voters who rightly expected something quite different from their party.

We know that the Liberals are divided on so many issues. There is one, in particular, I want to go to—the issue of pensions. On 16 May, the member for McPherson, the opposition pensions spokesperson, went on Steve Price’s program on 2UE:

STEVE PRICE: Let me just be clear there, the opposition is now endorsing an increase in the base rate of the pension.

MARGARET MAY: Yes. Absolutely.

STEVE PRICE: But the leader doesn’t know about it?

MARGARET MAY: Well, the leader doesn’t know that I’m putting that in a petition. A report that we supported, the unanimous report, said that the base rate of pension was not enough, I believe my leader will support me on this, I have discussed it with Brendan, what he doesn’t know is that I’m releasing a petition, but I believe I will have the support of my leader, if I don’t I will be very disappointed, but that’s what I’m prepared to do Steve, because I think these people have been ignored.

What an extraordinary situation it is when a shadow minister’s opinion of her leader is so low that she does not even consult him on a policy change worth billions of dollars. We know there was policy division here because her proposal was not supported by the Leader of the Opposition or the shadow Treasurer. So what we have here is a fundamental economic irresponsibility—raising the hopes of pensioners who do it tough while providing not a shred of explanation of how to pay for it.

We know economic irresponsibility is something that oppositions are regularly accused of, but in this case it is absolutely true. How else can we explain the situation when the opposition makes a great number of extravagant and expensive policies, does not properly cost them, does not nominate any savings measures to offset those uncosted policies and proposes a $22 billion raid on the budget surplus that will cost every Australian through higher inflation and higher interest rates?

This approach to a national budget was last seen during the Peron era in Argentina. That is the last time a commodity-rich country indulged in such economic irresponsibility and it is why the Liberal promises cannot be trusted and cannot be delivered. They are a fiction and a fantasy. They are a figment of the Leader of the Opposition’s imagination and his tenure in the job. Labor’s budget delivers on our election commitments, including on my commitments in the electorate of Wakefield. Most importantly, it is focused on nation building and it is focused on the working people of this country.

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