House debates

Tuesday, 27 May 2014


Appropriation Bill (No. 1) 2014-2015, Appropriation Bill (No. 2) 2014-2015, Appropriation (Parliamentary Departments) Bill (No. 1) 2014-2015, Appropriation Bill (No. 5) 2013-2014, Appropriation Bill (No. 6) 2013-2014; Second Reading

5:23 pm

Photo of Kelvin ThomsonKelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

The member for Murray made some important points, and I am pleased to associate myself with many of them. The OECD has developed a really interesting alternative method of measuring social performance and wellbeing to the widely discredited GDP. As part of this they have been asking people to tell them what issues concern them the most. The issue that concerns people around the globe the most, it turns out, is health. Given that I have said a number of times that we as members need to be more responsive to our constituents and do what people want, I have decided to make it my business to become more expert in health issues and health policy.

One of the key features of this budget is its impact on health. These impacts are extremely adverse. Do not take my word for that; do not take the word of other Labor personnel; do not even take the word of Liberal premiers; look at the comments of those who work in this area and who are most familiar with the probable impacts of the government's proposals. The welfare agency Anglicare said it is particularly concerned about the $7 Medicare copayment levy. For families and individuals on Newstart and on very low incomes, this represents a significant proportion of weekly income. People with a disability, families with young children and the elderly have higher access rates to medical services. Copayments for these groups and for low-income households generally will lead to delays in seeking medical assistance. The end result will be reduced access to medical support for those most in need and, in the longer term, increased costs for the health system. That was Anglicare.

The Mental Health Council of Australia said that any changes to the assessment of eligibility for the disability support pension will have a significant impact on people living with psychosocial disability and those who care for them. What did MS Australia say? They said they were deeply concerned about the effect of budget measures on people with multiple sclerosis. They said it was a major concern that people under the age of 35 on the disability support pension will be subject to medical reassessment and may be moved onto Newstart or youth allowance. They seek an exemption from medical reassessment for people with MS. The chief executive of the Consumers Health Forum said:

The introduction of a $7 co-payment to see the GP , the prospect of charges to attend public hospital EDs, plus a $5 increase in PBS fees, shatters the notion of universal access to primary care under Medicare … Other shocks are the $635 million cut to dental spending over four years when poor oral health is widespread among low income Australians, $121 million cuts for indigenous health "rationalisation" and nearly $100 million in cuts to eye health services.

The Consumers Health Forum chief executive said:

This is a retrograde health Budget … The removal of the Australian Preventive Health Agency and proposed shrinking of Medicare Locals reveal a disturbing absence of recognition of the pressing health needs of Australia in 2014.

The Rural Doctors Association of Australia said:

… the introduction of a $7 Medicare patient co-payment for GP consults is of serious concern to rural patients and rural doctors.

The $7 Medicare co-payment—together with patient co-payments for pharmaceuticals, out-of-hospital pathology tests (like blood tests) and diagnostic imaging services—will impact significantly on rural patients and could lead to much greater costs on the health and hospital system in future years…

The Services for Australian Rural and Remote Allied Health described the budget as a:

Horror budget for rural and remote Australians

In the lead-up to the federal budget, Treasurer Hockey made a point of saying that everyone in Australia had to do the heavy lifting in order to bring the budget back into surplus. But this budget is not within a bull's roar of the Treasurer's stated intention. It is about draconian savings measures and an ideological crusade against the social wage and universal health care. It is not equitable; it is regressive.

The ramifications of the cuts are that a newly unemployed university graduate or retrenched worker must live with no income for six months before claiming Newstart, forgoing benefits of more than $7,000. Interest payable on student HELP loans will increase from the CPI—2¼ per cent in 2014-15—to 6 per cent, and there will be a 20 per cent decrease in the government contribution to university funding and deregulation of course fees. Hospitals and schools—vital pillars of our society—will lose projected funding of $80 billion on the rationale that they are state responsibilities, creating a pretext for an increase to GST, a regressive tax. There will be a $7 tax on GP visits, an increase to PBS co-payments of $5 for general payments and 80 cents for concessional payments, and provision for state governments to introduce emergency room or hospital taxes. There will be $534 million cut from Indigenous affairs programs and cuts in indexation for the aged pension and the disability support pension. This will lead to the bottom one-fifth of earners losing around five per cent of their disposable income, compared to the top one-fifth who will lose only 0.3 per cent, based on modelling undertaken by the National Centre for Social and Economic Modelling, who point out that the burden of this budget overwhelmingly falls upon people in the most precarious position.

In a litany of cuts to our social wage it is the changes to Newstart that really stand out. In relation to the proposed changes to Newstart for under-30s, we are told that young people should be earning or learning. It is fine in theory. But the reality is otherwise, with those applying for Newstart having to wait six months while still having to service their rent or mortgage. If that is not bad enough, when you do receive it but do not find a job in six months you are booted off it again. This is a recipe for misery, poverty, physical and mental health problems and crime.

Youth unemployment is at 12.4 per cent, and the budget is projecting that unemployment will rise. So where are the jobs going to come from? The situation is compounded by cuts in the budget to organisations like Youth Connections which specialise in helping young Australians who are unemployed.

There is the distinct possibility that the problem of homelessness will be exacerbated. Advocacy groups are warning that thousands of young people living in community housing and low-rent private apartments face eviction if their Newstart and Youth Allowance is cut off as a result of new measures in this budget.

It is alarming that long-term youth unemployment in Australia has tripled in the past six years. In 2008 there were 19½ thousand long-term unemployed young people in Australia. Now there are over 56,000. In Victoria, there are now over 81,000 unemployed young people, and 14,000 of them have not worked at all in the past 12 months.

It is not that young people do not want to work. Many of them apply for dozens or even hundreds of jobs without success. If, through structured training, the long-term unemployed can gain formal skills in areas where demand from employers exists, then there are likely to be positive employment spinoffs. However, for such programs to be effective, employers would need to be willing to provide the necessary training—and yet the government's loosening of 457 visa rules will undermine employer incentives to train the long-term unemployed. Long-term unemployment is likely to become a growing issue in the event that the labour market deteriorates as the mining investment boom unwinds and the car industry turns out the lights.

It is outrageous that we make it so hard for young people to break out of this trap by bringing in ever-increasing numbers of migrant workers on both the permanent and temporary migrant worker programs. Last year, net overseas migration was 240,000, and we now have over a million people from overseas in Australia on temporary visas which give them work rights. How can we seriously expect to bring down the unacceptable number of young people who are long-term unemployed when they are subjected to such ferocious competition for entry-level jobs? Australia is not short of people or short of workers. What we are lacking is the sense to realise that our migrant worker programs are way too high, given the number of people here who are ready, willing and able to work.

Increasing the age pension eligibility to 70 is another regressive measure in the budget, with the IMF noting that adverse increases in retirement ages disproportionately affect the poor. Australia is one of the wealthiest developed countries, and its share of age pension spending is comparatively low. Age-related spending in 2013-14 was estimated to be 2.6 per cent of GDP, against an average spend among developed economies of 3.9 per cent. The idea that we have a budget crisis caused by welfare spending on the age pension is a sham and a nonsense. Those receiving an age pension are being targeted with indexation changes which will cut the real value of pensions, which, in today's terms, will be a cut of about $200 a fortnight by 2030 to people who can ill afford it.

This will be made worse by the introduction of the Medicare copayment which will lead to the process of unravelling universal health care. The Liberals and Nationals have always hated universal health care—as far back as the Whitlam government, forcing the government then to a double dissolution and joint sitting of parliament before it was passed. The copayment represents the thin end of the wedge.

As the Consumers Health Forum of Australia research shows, copayments will result in people delaying treatments, leading to higher health costs overall. There is a significant body of international evidence to show that copayments create barriers to access to health care for many consumers without decreasing overall healthcare costs. The eight-year-long RAND Health Insurance Experiment found that greater cost-sharing reduced appropriate or needed medical care as well as inappropriate or unnecessary medical care. In fact, the experiment also found that the poorest in society are most likely to defer medical treatment when the price increases, meaning that the health costs of this policy will disproportionately fall on our poorest citizens, including the unemployed and the elderly. This longer-term impact will be compounded by the $5 copayment for PBS-listed medicines, and the abolition of, among others, the National Preventive Health Agency, which is focused on promoting preventive health approaches and primary health care designed specifically to reduce pressure and costs in hospital and acute settings.

The myth that everyone is doing the heavy lifting in this budget is also apparent with the money that has been slashed from clean energy innovation and the protection of nature in favour of subsidies for polluting industries. There was no reform of the fuel tax credit subsidy—the cost of that to the taxpayer over four years is a cool $28 billion—and no change to the accelerated depreciation statutory effective life caps rules that allow resource companies to claim that their equipment lasts half the time it actually does, with a cost to the taxpayer over four years of $6.9 billion. The fuel tax credit subsidy alone costs more than the federal government provides to public schools.

The government managed to make the following cuts, however: $1.7 billion from the abolition of the clean energy measures, including the Australian Renewable Energy Agency; $150 million from research programs, including CSIRO, the National Environmental Research Program and the Australian Climate Change Science Program; and a $438 million loss to Landcare. These cuts are deeply damaging to the environment. As the Australian Conservation Foundation has pointed out:

The government had a chance to continue cutting pollution through a carbon price that works. It has chosen to forego $18 billion in revenue, instead handing taxpayers' money to polluters through the Emission Reduction Fund.

… The cuts to renewable energy risk keeping Australian workers and businesses using 19th Century technology to address a 21st Century challenge.

… Rather than boost investment in clean energy jobs and innovation, the government chose to scrap the profitable Clean Energy Finance Corporation.

In a speech to the parliament earlier this year, I outlined how the richest one per cent in Australia have doubled their share of national income since 1980 and inequality has widened significantly. We were told before this budget that everyone needed to do some heavy lifting, but, with a nod and a wink to those vested interests that could do more, they were spared, and the heavy lifting will be done on the backs of the working poor, students, pensioners and the unemployed. Economic disadvantage for the overwhelming majority translates into ill health, missed educational opportunity and, increasingly, the familiar symptoms of depression: alcoholism, obesity, gambling and criminality.

What matters is not how affluent a society is but how unequal it is. Sweden and Finland, two of the world's wealthiest countries by per capita income or GDP, have a very narrow gap separating their richest from their poorest citizens, and they consistently lead the world in indices of measurable wellbeing. Conversely, the United States, despite its huge aggregate wealth, always comes down low on such measures. This budget is about greedy, well-funded, vested interests looking after themselves through the Commission of Audit, driven by a narrow and discredited ideology rather than a nation-building, burden-sharing policy solution for all.


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