Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Hansard source

It will be a very long time before we see a Labor Treasurer delivering a federal budget in surplus. It has now been 20 years since the last time there was a Labor government with a budget in surplus. In my life, there have only been five budgets which the Labor Party has delivered in surplus in a succession of three different governments—the Whitlam government, the Hawke-Keating government and now the Rudd government. Compare that with the last government. There were 12 budgets, 10 of them in surplus. The current Treasurer has delivered two budgets and it is nought from two. As I said in my opening remarks, it will be a very long time before anyone ever sees a Labor Treasurer deliver a budget in surplus.

When I was first elected, in 1996—and I have been very honoured to represent the people of Boothby for the last 13 years—the outgoing Labor government left a $10 billion budget black hole. It was a budget which was said during the campaign to have been in surplus, and at the time that figure shocked everyone. But that $10 billion budget black hole was just a pinprick compared to the yawning chasm of budget deficit that we face now. It is extraordinary to think that last Sunday represented 18 months since the election of the Rudd government. It took the previous Labor government eight years to get to the point where we are now. We have gone from fighting a war on inflation to promising to create jobs, to supporting jobs, to having a budget in surplus—it was officially still in surplus only last February. I am very confident in saying that this Labor government will never deliver a budget in surplus. They will never pay off this debt.

In the time I have been in parliament there have been 13 budgets, and never has there been a budget deficit as big as this. Never has there been such a sign that a government has completely lost control of its finances. What we see in this budget is the price that future generations will pay for Labor’s reckless spending and their loss of control of the budget. The budget tells us that there will be almost one million Australians unemployed by June 2011. It tells us that this is a budget that is in deficit to $58 billion. People who watched the budget speech on the Tuesday night may not have heard that. The Treasurer was unable to say it. Of course, the Treasurer and the Prime Minister have been famously unable to say what the size of the debt will be—what the size of net debt will be or what the size of gross debt will be.

Record net debt will be $188 billion by 2012-13 while total government debt will be $315 billion. This debt overhang will be a drag on growth for years to come because the annual interest bill on this debt, which will be paid by Australian taxpayers by 2012-13, will be $8 billion. That is more than the Commonwealth government spends in a year on infrastructure and housing combined.

We see a government which has lost control of their finances and lost control of their budget. Never was this more obvious than with the $22 billion that was sprayed around in their two cash splashes. Every dollar of the cash splash was borrowed; every dollar will have to be paid back. The great achievement—so we are led to believe by the Prime Minister and the Treasurer from all of this money which they have spent so wantonly—is that they will keep unemployment to only one million Australians. One million Australians in unemployment is not something to be proud of. One million Australians is a disgrace; it is not an achievement. The previous Keating government had almost one million Australians out of work, and now the Rudd government tells us that their great achievement is to keep unemployment to such a low level.

We see the usual signs of a Labor budget: we have record spending at 29 per cent of GDP; we have a record budget deficit at five per cent of GDP; and, we have a sharp increase in the unemployment rate to 8.5 per cent. We know from past recessions that unemployment rises very quickly: sometimes it can rise in five quarters; sometimes it can rise over three years. We also know that there is a huge social cost for jobless families and it takes an enormously long time for the people who lose their jobs in a downturn to get back into work.

The government will have you believe that this is all due to the global recession. But in one area in particular there is every sign that this government have, by their actions, made things worse. In the way they have bungled their tender for employment services for the new Job Services Australia and in the way they have designed a model which was designed for a period of low employment, strong labour market and strong employment growth, this government have not been unwitting victims of the global economic recession; they have actually made things worse. The real test for this government must be what the official figures show each month on youth unemployment. The real test for the new employment services which begin on 1 July is what they do to unemployment and what they do to keep people active. We know around the world—and in Australia especially so—that when unemployment rises due to a downturn youth unemployment rises twice as fast. The test for this government will be to what extent their employment services system keeps youth unemployment at the low levels we enjoyed until very recently.

We have seen that there are a number of programs—the Productivity Places Program of $2½ billion over four years; the Jobs and Training Compact; a $650 million Jobs Fund. What the parliament and the people need to know is: what are the estimated employment outcomes of these projects? To what extent do we see jobseekers going into jobs after taking up this training? To what extent do we see people upgrading their employment status after taking up this training? These are critical issues because there is a lot of money being spent in this area. But the ultimate success must be to what extent it leads people into a job. The $650 million Jobs Fund will support projects that build community infrastructure and social capital in local communities, much like Work for the Dole. But what we need to see is to what extent this leads into a job.

Before the last election the Labor Party promised that it would maintain all incentives and subsidies to employers and apprentices. It was explicit, it was broken. In this budget, Labor has abolished the apprenticeship training free voucher, which provided up to $1,000 to apprentices to help pay for their training. It is gone. Labor’s focus is on apprentices who have been made redundant instead of helping those apprentices whose employment is in jeopardy. While the spending of money on apprentices is welcome, it is really not targeted in the right place. We need to look at those apprentices whose employment is in jeopardy. To focus on apprentices who have already been made redundant is like shutting the gate after the horse has bolted, especially when we are faced with a situation of one million Australians out of work by June 2011. So this budget offers nothing to apprentices whose employment is in jeopardy.

The Australian Industry Group in a January survey showed that manufacturing firms expected to cut spending on training by 7½ per cent this year, construction firms by 12 per cent and service providers by 12.7 per cent. That is why the opposition, along with other industry groups, has called for the government stimulus package to have both a jobs and a skills focus. Traditional trades will be particularly crucial to our future economic development. For this reason the opposition has proposed employer incentives targeted at the traditional trades to ensure that employers are able to maintain their apprentices during this economic downturn. In their November 2008 review of vocational education and training, the OECD were generally positive about Australia’s system of apprenticeships and traineeships. However, they did note that there were no strategies to mitigate the effects of a potential economic downturn that might lead employers to stop offering apprenticeships. They also noted that the current incentives are presently back-end loaded to help prevent dropout and suggested government funding for only the first three years of the apprenticeship. At present the basic rate for an apprenticeship is $1,500 on commencement and $2,500 on completion. For this reason the opposition proposal focuses on supporting employers to retain their apprentices during this economic downturn. Our proposal is for the basic employer incentives for traditional trade apprenticeships to be brought forward to the first two years of the apprenticeship. Our proposal aims to bring forward the incentives for employers to hold onto their apprentices during this economic downturn, appreciating that once the economy improves we will have a ready trained workforce capable of making skills needs and speeding up our economic recovery.

In the area of sport, there is not a lot to say in this budget. This budget delivered no new initiatives to increase participation and no new initiatives to maintain our international competitiveness. For children there is nothing extra, for community sporting clubs there is nothing extra and for our elite athletes there is nothing extra. It is very much a business-as-usual budget when it comes to sport.

The coalition were able to invest in sport because we kept control of the nation’s finances. By contrast, Labor are running up huge deficits as a result of their ill-thought-out cash splashes. Because we kept control of the nation’s finances we delivered record funding to elite sport, seeing through the 2000 Olympic athlete plan and the 2004 Olympic medal plan and establishing Backing Australia’s Sporting Ability, which provided an extra $122.2 million over four years for Australian athletes.

We put physical education back into primary schools, forcing state governments to provide at least two hours of physical activity to all students. We also established the Active After-school Communities program, which is now providing 150,000 primary school students with quality sporting activities taught by specialist physical education teachers. Next year we will see the budget of the Australian Sports Commission increase by one per cent—less than inflation—and in Labor’s first two budgets we have seen funding to the ASC increase by 2.86 per cent, which is a decrease in real terms.

One of the areas in the budget which is of particular interest to my electorate is Labor’s tax on the private health insurance system. In Boothby there are 93,685 residents who have private health cover. All of these people will eventually pay a price for Labor’s attack on private health insurance. When the Labor Party say that this is a savings measure which grows over time, what they mean is that over time more and more people will be caught up in it. More and more people will have their private health insurance rebate clawed back over time. That is Labor’s agenda. It has always been Labor’s agenda to wind back the private health insurance rebate, which is 30 per cent for most people, 35 per cent for people over 65 and 40 per cent for people over 70. As I said, there are 93,685 residents in Boothby—that includes children—who are covered by private health insurance. This is an attack on every one of them, a pulling back of the private health insurance rebate. After their explicit promise to keep the private health insurance rebate, the Labor Party, after less than 18 months, have brazenly broken it. As a consequence, everyone affected will be facing increased premiums to begin with. But with people dropping their insurance or lowering their level of cover, the remaining pool of people with private health insurance will face higher premiums than they otherwise would. People who drop out of private health insurance will now fall back onto the public health system, putting increased pressure on public hospitals and on public hospital waiting lists.

This savings measure is a result of Labor losing control of spending, losing control of their budget and delivering a record deficit and record government debt. As an alternative, the opposition has suggested increasing the tax on cigarettes instead of changing the health insurance rebates. In doing so, Mr Rudd and the Treasurer could raise the same amount of money and provide positive health outcomes by discouraging people, especially younger Australians, from taking up smoking. There are also some changes in the Medicare safety net which will have wide-ranging effects on Australian families trying to access essential services such as obstetrics, reproductive technologies, including IVF, and cataract surgery. Again, this is a clear breach of an election promise.

In another breach of an election commitment, the Rudd government has cut by one-third the Superannuation Co-Contribution Scheme, which bolsters the retirement savings of low- and middle-income earners. Ultimately, it will be left to a future generation to pay off this debt. It will constrain growth for years to come. It will take a long time to reduce the social impact of having one million Australians out of work. It will take a long time to reduce unemployment to the level that it was at when this government was elected.

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