David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I make the point that not only is the government not opposed to paid parental leave but also we proudly stand here as the first government in Australia’s history to implement a paid parental leave scheme. An alternative scheme was proposed which sought to raise the funds to deliver the scheme by way of an impost—a levy, as I recall. I do not want to go through the entire history of that, but we all remember that the first thing that the Leader of the Opposition said when he came into that role was that he was not going to increase taxes; yet the first policy he announced was an increased levy. There was a bit of a fudge during the election campaign suggesting that it was not a levy at all or was only a temporary levy, but at the end of the day it was a levy.

Those on the other side proposed a levy for a worthy cause. We believe that paid parental leave is a worthy cause, but it was not something that required an immediate and urgent response. Indeed, I think there is a much stronger argument that those sorts of expenditures should be covered through general expenditure restraint or expenditure cuts, but that levy was not going to be covered that way. So on the other side we have those who supported six levies—in fact, they supported seven levies, including the levy that we never got because the Australian people got in the way of it—yet they are opposed to this levy. I think the truth is that they are opposed not to levies in general but to a Labor levy. Liberal levies are good; Labor levies are obviously not so good.

A stream of economists have come forward to indicate that they believe that this levy is a balanced package. Craig James from Commsec said it best:

This is the right levy for the times—modest in size, temporary, progressive and applying to those on higher incomes.

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The fact that the Government is cutting spending and applying a new levy on Australian consumers may reduce the need or urgency for the Reserve Bank to lift interest rates over the year.

There is an important element in the government’s response to the disaster relief effort—that is, the way in which the infrastructure deferrals that have been put on the table will not only reduce the expenditure of government and give us the capacity to meet the rebuilding task but also take some of the pressure off the capacity constraints that the Australian economy is facing and thereby take some pressure off interest rates. The opposition’s response to the floods was, ‘We’re going to make a whole series of cuts.’ In fact, they were not cuts; they were all deferrals. They are unlike the deferrals that we have proposed, however, which are specifically infrastructure deferrals, the purpose of which is to take some of the heat out of the economy so that where there are capacity constraints and skills shortages we will not as a result of the rebuilding effort put more pressure on interest rates, inflation and the cost of living.

That is a sensible, rational approach to economic policy, and I think that the underlying rationale of the response from the opposition falls a long way short. A number of the cuts, particularly those to the aid funding to Indonesian schools, were not motivated by anything other than some of the more malicious intent that we have come to know about thanks to leaks. We now know that there was a discussion going on in the shadow cabinet around what might be in the national interest, and that discussion had nothing to do with the rebuilding effort but a lot to do with stirring up resentment and sensitivities in communities that may well be very far away from the areas affected by the floods.

This is not only a temporary levy but also a modest one. A bit earlier, I heard the member for Mitchell’s contribution and was intrigued by it. On the one hand, he complained that higher income people did not receive handouts when the government made its stimulus payments and, on the other hand, said that he is a great advocate of small government. Somehow he wants to reconcile a commitment to small government with big, fat, middle-class welfare contributions. His contribution was interesting, but thankfully for the Australian people he is a long way from the Treasury bench—in fact, he is a long way from his party’s front bench. That is probably a good thing for the debate around the management of economic policy in this country.

As I said, this levy is of a modest nature. The point has been made that those earning under $50,000 will not pay anything, while those earning above $50,000 will pay incrementally. But one of the points that has not been made very clearly throughout this debate is the relationship between the tax cuts that have been delivered over the last few years and the modest, temporary amount that will be required over the coming year. For example, someone on $120,000 a year will pay $8.65 per week under the levy, but through the tax cuts of 2008, 2009 and 2010 they have received a cut of $52.88. This levy is temporary in nature, and people will not be subjected to that imposition at the end of the following financial year. So we think it is an important measure and a sensible one as well. On 9 March 2010, the opposition leader, in defending his paid parental leave scheme, said:

Sometimes, for very, very important social reasons, for national interest reasons, you’ve got to say, ‘We need the money.’

If a levy was good enough then, it is good enough now. (Time expired)

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