Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Hansard source

Can I indicate at the outset that the coalition will oppose this legislation. We will oppose it because it is bad policy. It is bad policy for a number of reasons—

Ms Macklin interjecting—

If the minister at the table would be quiet for a moment I will explain to her and to anybody else who happens to be listening to this broadcast why this is bad policy. It is bad policy because when you look behind the spin of a Treasurer last night in his budget speech, and you look behind the spin of the minister in her second reading speech of this bill today, then you can see what is actually going on here. The first reason this is bad policy is because this is essentially a sleight of hand by the Labor government. Look at the current situation in relation to this education payment. If a family who is eligible has a child at primary school and they have receipts for educational expenses as set out in the legislation, for that child at primary school they can currently claim $410. And if they have a child at secondary school, in the same circumstances they can claim $820. So the current situation—what operates right now; what would operate for this financial year without this legislation being passed—is that parents around Australia with primary school children can claim $410 and with secondary school children can claim up to $820. That is the situation that exists right now. Without this legislation, parents in that circumstance would be eligible to claim that amount and they would have it repaid at the end of the tax year. That is the situation that applies for parents right now.

After the passage of this legislation are those eligible parents who make a claim going to get a cent more? No. They are still going to get $410 if they have a primary school student and they are still going to get $820 if they have a secondary school student. That is why I say this is a sleight of hand. This is taking one payment, abolishing it and replacing it with the same payment in terms of what parents actually receive, so there is a sleight of hand here. A targeted program that exists at the present time is therefore being replaced by one which is untargeted—and any pretence, as we have heard in the speech this morning by the Minister for Families, Community Services and Indigenous Affairs, that this is about offsetting education costs is simply denied by the facts that there are no changes in the amounts of payments that go to the eligible parents. So the first reason that this is bad policy is that this is simply spin. It is taking a payment that already exists—which this coalition supports and will continue to support into the future; in other words, we support parents of primary school children getting up to $410 and we support parents of secondary school students getting up to $820—and that is made through the tax system and saying, 'We're now going to make this a welfare payment.'

What this shows is that the Labor Party have learnt nothing from the incompetence of administration in the past. Remember the expenditures that they have paid over the past few years: the cash handouts, the pink batts, the cash for clunkers, the set-top boxes—and one could go on and on and on about poor and incompetent administration by the Labor Party over the last few years. So what are they doing with this payment? Instead of having a targeted payment, where all that is required is for parents to keep the receipts of their expenditure on the list of allowable expenditures, they are saying, 'We'll just give you the money.' What is the consequence of that? There is no connection between the money that is being handed out and educational expenditure.

Parents can go and spend the money on what they like. If they want to go down to the local club and put it through the poker machines they can do that. If they want to go and buy some new electrical gear from the electrical retailer they can go and do that. Of course, we know from the past when payments were made by the Labor Party that payments were made to dead people, that payments were made to people living overseas and that a lot of the money was simply wasted.

If this was genuinely an educational expenditure, if this was genuinely about saying that we should provide for children and some of the expenses that their parents have for their education and schooling, then we have a targeted program that does that—and all that requires of responsible parents is that they keep the receipts and make a claim on their tax. But that is no longer the case so far as the Labor Party is concerned. It is not about a targeted educational expenditure. This, in reality, is a handout in order to help cook the books, which this budget is all about; a handout in relation to offsetting what they know is coming by way of the cost increases under the carbon tax from 1 July.

So the first reason that this is a bad policy is that it takes a properly targeted educational expenditure, a properly targeted program which is working quite well at the present time, and then changes that into something that is simply a handout, where there is no connection between the educational expenditure and the handout itself. And we know from past experience of the poor and incompetent administration of these programs by this Gillard-Swan government that some of this money is going to be wasted. I ask the ordinary, hardworking taxpayers of Australia, the men and women who are working hard and putting their children through school in this country and who are able to list their educational expenses and make a proper and genuine claim, do they think it is reasonable if somebody cannot be bothered to do that or somebody just wants to take the money and spend it however they like? Do they think that that is actually connected to enhancing education and schooling and training in this country?

Go down to the front pub and apply the pub test to this by asking people. I will have a bet with anybody on the other side what the answer will be. The answer will be that they think it is quite reasonable the way the system works at the present time. If this is genuinely about educational expenditure then there ought to be a connection between that expenditure and the payment being made, but that is being ripped up so far as this piece of legislation is concerned. So the first reason why the coalition will oppose this measure because we believe it is bad policy is that it disconnects the existing nexus between the educational expenditure and the payment itself. For that reason it is bad policy. It is bad policy for the additional reason that this government has shown itself totally incompetent in administering these sorts of programs in the past, and there are numerous examples which I will not continue to rehearse in this debate today.

The second reason this is bad policy goes to the heart of the accounting tricks in this budget. This budget accounting trick is one which will unravel in the coming days. Why was there an indecent haste, and there still is, to introduce this bill? Yesterday afternoon the minister came in here before the budget was delivered to seek leave to introduce this bill. The budget had not even been delivered: this is a bill of which the Treasurer made an announcement in the budget last night. But hours before the Treasurer even stood on his feet at the dispatch box here at 7.30 last night to announce this measure, amongst other things, the minister was in here seeking leave to introduce this bill. Why was that? Why the indecent haste to introduce a measure that is in the budget but has not yet even been announced in the budget? The reason is this: it goes to the accounting tricks at the heart of this budget.

Currently, this payment would be in next year's financial accounts. I will go back to explain how the system works at the present time. At the end of this financial year a parent, if they have a primary school student and if they have the requisite receipts for educational expenses, could put in a claim on their tax for $410, or $820 for a secondary student. They would put their tax in after the end of this financial year, as we all do, and that claim would be accounted in their tax for this year, which of course means that any refund or any allowance would be actually paid by Treasury next year. Currently this means that the amount which the government expends on this measure would be accounted for in the 2012-13 financial accounts of the Commonwealth.

But what is this measure doing? Why this indecent haste? The minister has just said he wants to pay this money out before the end of this financial year. What is the consequence of that? It is that that expenditure by the government will be in this year's financial accounts. That expenditure will be part of the $44 billion deficit that this government predicts it will have by the end of this financial year—it will probably be more given the way it has blown out, but based on the words of the Treasurer last night, the projection was of a $44 billion deficit this financial year. It will be part of this year's financial accounts because of the passage of this legislation; whereas, if people were still to receive the money which they would otherwise have received, it would be in next year's financial accounts.

Why is this an accounting trick? Because it is moving what normally would have been an expenditure by the government in the next financial year into this financial year. And what are the consequences of that? It helps the Treasurer to achieve his paper thin, and probably paper only, $1.5 billion surplus next year. If this amount of money was in next year's financial accounts then that would probably reduce by about half the $1.5 billion surplus that the Treasurer is claiming he will achieve next year. This is financial accounting trickery. This is why, as someone said, this is a 'fudge it not a budget'—because it is moving expenditure that would have normally occurred next year, and would have been accounted for next year, into this year. He is not worried if there is an extra half-billion or so on what is already a $44 billion deficit this year. He is worried, politically, that he will be able to say, 'I'm going to get a surplus next year.' Of course, nobody believes that. But if he did not have this measure being paid out in this financial year, then it would be paid next year and so the pretend surplus that he announced last night would be halved overnight.

This is not the only example of this sort of accounting trickery that we have in this budget. We see that flood payments to local government, which would normally have been made next year, are being made this year. That is $1.1 billion that would have been in next year's expenditure now being brought forward into this year's expenditure. The Treasurer says, 'I'm going to have a $1.5 billion surplus.' However, if you take the 1.1 billion away from that, it reduces his surplus to $400 million just like that. Just one simple accounting trick. That is what we have throughout this budget.

Let me take another example: the clean energy advance of $1.5 billion. That is exactly the same amount that the budget is projecting will be a surplus. The clean energy advance, which would have been paid next year and therefore would have been a cost to the finances of the Commonwealth government next year of $1.5 billion, is being brought forward and paid before the end of June so that it is in this year's budget rather than next year's budget.

So there are just three examples of the financial and accounting trickery that is at the heart of this budget. That is why this surplus being projected by the Treasurer is simply unbelievable. If you took that payment of the clean energy advance of $1.5 billion alone, and it was made next year, as it was meant to be made, then the surplus disappears—with just one payment! But add to that the payments to local government of $1.1 billion and the payment under this bill that we are debating now—probably in the order of half a billion dollars—and there is no surplus; there is a deficit. The reality is, when next year's financial accounts come in, there will not be a surplus, there will be a deficit, no matter what trickery is engaged in cooking the books by the Treasurer.

This bill is not the only example of accounting trickery. There is other expenditure which normally—as would have been forecast in the forward estimates before last night—would have been made next year but has now been pushed out beyond next year. In other words, expenditure for next year is either being brought forward, so it does not show up on the books next year and so this paper surplus can be claimed, or pushed out to years beyond that, so again it does not show up on the books next year and so again the Treasurer is able to claim that he is getting a surplus.

That is not to mention the NBN, which is not even in the financial accounts. It is not even part of the bottom line. If you add the NBN in, there is another $8 billion or so that would have to be taken into account and would add immediately to the deficit of this government. So the surplus is an illusion. It does not exist, except on the paper of the Treasurer's statement and in the mind of the government.

If you look at the borrowing from the future, this year the government spending is increased by $25 billion. It falls by $7 billion next year—the year he wants to achieve a surplus—and yet on his own figures and data it then goes up by $23 billion the following year. These bottom line figures just show what is happening: expenditure is being brought forward into this year so that it can fall next year and then the year after that it goes up to about what it is this year. So this is trickery—trickery at the heart of the Treasurer's budget and at the heart of the financial accounts—and this bill is an example of that trickery simply by bringing this forward to this year. So the surplus is illusionary—and it would not be believable anyway, because this time last year the Treasurer was telling all and sundry who would listen that we would have a deficit of $22 billion. I remind the House that his first estimate was $12 billion and that he later revised it upward to $22 billion. Fast forward 12 months to last night, and he says, 'No, the deficit is not going to be $22 billion; the deficit is now going to be $44 billion.' So you cannot believe what this government says about the deficit. It may be more than $44 billion. We still have almost two months to go before the end of this financial year, and we will not know until September whether it is a $44 billion deficit or even higher. The point is: how can you believe now what the Treasurer says about the deficit when last year he was telling us it would be $22 billion and it has blown out by 100 per cent to $44 billion?

Put this in the context of what has happened under this government. Last year the deficit was $47 billion; the year before it was $54 billion; and in the first year of this government it was $27 billion. The cumulative total of these deficits, even if the $44 billion is correct, is about $174 billion over four years. Yet we are told, assured and led to believe that we are simply to say, 'Yes, Treasurer, you are going to produce a $1½ billion surplus next year.' The cumulative total of the deficits is $174 billion over four years, and we are going to turn it around and produce a $1.5 billion surplus next year? As I have already explained, part of that apparent surplus will be achieved through financial trickery. If anybody believes on the basis of the evidence of what has been done over the last four years that this $44 billion deficit is going to lead to a surplus then they can find fairies around Lake Burley Griffin.

If they have been unable to control the budget for four years, how is this government going to control the budget in the fifth year? It is simply not going to happen. If you want further evidence of this, there is the fact that we found out last night that elsewhere in the budget papers the government has increased its debt ceiling. The government currently has the legislative authority of this parliament to borrow up to $250 billion. The government says, 'We're getting things under control. We're not going to have any more deficits; we're going to have a surplus. We're all back on track. Forget the last four years. Forget all of that; this is a new start.' That is effectively what Mr Swan was saying last night. It was: 'Forget that; we're all under control. We've got the spending under control. We've got tax under control. We've got our programs under control.' But, if that is the case, why does the Commonwealth need to increase its debt ceiling for borrowings from $250 billion to $300 billion? If somebody says, 'I've got the household expenditure under control—I'm not expending any more than I'm bringing in by way of income,' would you believe that person when they then said, 'But I'd better go out and increase the bank card limit from $250 to $300'? That is what the government is doing. In this budget they are seeking the legislative authority of this parliament to increase their borrowing ceiling to $300 billion, yet they are trying to tell us that somehow everything is under control.

This government is borrowing $100 million a day and projecting an interest bill next year of $8 billion. What could you spend $8 billion on, when in the last years of the Howard government we had surpluses? Last night the Treasurer was trumpeting that he is putting $1 billion over four years into the National Disability Insurance Scheme. The scheme is going to cost $4 billion, according to the Productivity Commission, so we are yet to find out where the other $3 billion is going to come from. The Treasurer is trumpeting that he will put $1 billion into the scheme over four years, but in reality it is probably going to cost closer to $8 billion to put the National Disability Insurance Scheme in place. If you did not pay $8 billion worth of interest each year, you would be able to do something socially useful that this country needs, such as have a proper national disability insurance scheme rather than have it on the never-never, which is what you are proposing.

The government says to us that there are 400,000 profoundly disabled people to whom the scheme should apply in the first year. Do you know how many of these people are going to be covered by what the government announced last night? In the first year there will be just 10,000 packages, and in the second year there will be 20,000 packages.

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