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

I rise tonight to speak on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and related bills. Whenever we introduce legislation into this House we need to set out the clear and unambiguous reasons why that legislation is needed. I would like to start by talking about why we actually need a temporary budget repair levy. Over the past six years we have had the sixth largest budget deficits in our nation's history. This debate is not arguing about how those deficits occurred. I know there are two arguments. There is the argument that it was wasteful, reckless and politically motivated spending that ran up all these deficits. Then there is the other argument—that it was actually the economic genius of Kevin Rudd and Julia Gillard, our former prime ministers, and their brilliant plan of sending out $900 cheques and things like GroceryWatch. I could go on and on, but that is not the purpose of this debate. We have that debt as a nation. Irrespective of how we got there, we have had those six largest budget deficits in our nation's history, and we now have a debt of over $300 billion.

One day, sometime in the future, we will have to repay that debt. Taxpayers some way down the track will have to repay that debt. But, until we do, we have to pay the ongoing interest commitments on that debt—exactly the same way as someone who goes out and racks up money on a credit card. They then have the obligation to pay the interest on the debt that they have run up. How much is that today? Remember that we had no interest bill until six years ago. Today that interest bill that we must pay as a nation is $12 billion a year. That is $1 billion a month or $33 million in one single 24-hour period. Every hour, this nation has got to take $1.4 million that we collect from the taxpayer and use that money not to pay for all the things that we need in society but to pay the interest on the debt that has been racked up over the last six years. In fact, the allotted speaking time that we have in this debate is 15 minutes. During a 15-minute speech in this parliament, we have run up an interest bill of $350,000. And that goes on, day after day after day. That is the interest liability that we have as a nation. What is even more scary is that two-thirds of that money goes out of the country, overseas. When the previous government borrowed these record amounts, most of that borrowing was done overseas from foreigners.

That is where we are today—and opposition members get up and say, 'There's no problem; don't worry. There's no crisis'—but that is only half the problem. We need to look at the trajectory of where this debt is going. The previous Labor government made all these politically inspired promises to everyone. It is wonderful to go out and toast everyone champagne and lavish money upon everyone. But the trajectory that they have us on is one of the fastest rates of government spending anywhere in the world—a 16 per cent increase in real terms between 2012 and 2018. So, if nothing is done and we just keep chugging down the road that we are going and we do not make hard decisions, the debt that is now over $300 billion will blow out to $667 billion.

What does that mean? What would that do to those interest repayments that we have to make? It will not be a billion dollars a month; it will be $3 billion a month. So $3 billion every single month will have to be taken from the taxpayer to pay two-thirds of it, at least, to foreigners overseas just to fund the interest payments on the debt—without paying one cent. What would this mean for the average citizen? We have to remember that this debt is all in the names of the average Australian.

We saw students marching in the streets last week concerned about the HECS debts. Fair enough, students have the right to protest and they have the right to complain about an increase in their HECS debt. They are talking about a HECS debt of, on average, around $20,000—but it might go out to $24,000—but, for that investment, the average university student has the capacity to earn a million dollars more in salary over their lifetime. It is about 75 per cent more than the average year 12 leaver. So people are marching in the street because they have a $20,000 HECS debt, but they have the capacity for greater earnings to pay that off.

What the opposition want to do is run up debts of $25,000 for every person or $100,000 for the average family of four. Remember that that $25,000 debt per person—which is where we are heading—is not just to people who have a greater capacity to actually go on to earn a higher income; that $25,000 debt is for every man, every woman, every child and every pensioner in the country. Then of course there are those interest payments of $36 billion a year. That is where we are heading. We are heading towards a cliff. This is why changes must be made.

I think everyone who comes into this parliament would agree that we have obligations to future generations. I had a look at my maiden speech. I said in my maiden speech:

I also understand that I have an obligation—in fact, we all have an obligation—to pass this great nation onto our children and grandchildren in better shape and with greater freedoms and opportunities than we inherited.

But the direction that we are heading is to burden our future generations with $667 billion worth of debt—$25,000 for every man, woman and child in the country. If we go down that track, we are risking impoverishing our children and our grandchildren.

There is a simple question I would put to members of the opposition, who stand up and complain about a cut here and cut there and find something to whinge about, and that is: How much debt do you want to pass on to future generations of Australians and what interest repayments would you like them to have to pay in the future? That is the question. And that is why we have such a challenge here in front of us with the budget crisis that we have.

The other issue that we should be concerned about regarding that debt, that interest repayment, of $3 billion every single month is that we are putting future generations of Australians at the mercy of foreigners, because at least two-thirds of that debt will have to be financed from overseas. We have no guarantee going forward of what the interest rates will be in a decade's time. Small movements in global interest rates could cost the budget $5 billion, $10 billion, $20 billion or $30 billion. This is the reason that we cannot continue down the track that we are going to impoverish future generations of Australians.

In this debate we have heard some absolute, all mighty, hypocrisy from opposition members. They stand here and they complain about this cut and that cut, but they are blocking the repeal of the carbon tax over there in the Senate. If we could get that carbon tax repealed, Madam Speaker, that is $550 for every household in the country. Don't stand there and complain about $7 increases and increases of a few dollars when you are blocking a $550 cut for every household by refusing to repeal the carbon tax.

There is also the issue of what the carbon tax actually does. We know that it forces up electricity prices. Many people in our society today who, when they get that huge hit on their electricity prices, simply cannot afford to heat their home using electricity, so they go looking for an alternative. Some people will either heat their home or eat. But there is another option for people that live in the western and south-west parts of Sydney—they can go to nearby bushland, gather wood, take it home and burn it in a log fireplace to warm their homes. That is what has been happening.

Debate interrupted.

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