Lisa Chesters (Bendigo, Australian Labor Party) Share this | Hansard source

I also rise to speak to the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 that is before the House. Yes, it is true that Labor is supporting this, but it needs to be noted that, whilst we support it, this levy is a token effort to basically hide who is doing the heavy lifting in this budget. We have had a lot about heavy lifting in this House and in this debate. What we need to do is focus on who is doing the heavy lifting. This levy is a token effort to pretend that all in Australia are, but the facts just simply do not back up that statement. The heavy lifting is not being done by those who earn the most in our economy; it is actually being done by those who earn the least.

Here are four case studies that demonstrate this particular point. For example, for an individual on an income of $250,000 this budget will cost about $1,500. Yet for a family who have two children and a combined income of $95,000, this budget will cost them about $5,000. So we start to look at the proportion of income that this budget costs individuals and families. Another example is an age pensioner whose income is just less than $22,000 a year. This budget will cost them about $3,700. Then we have our young job seeker with an income just over $13,000. This budget will cost that young person almost $7,000. As a proportion of income, individuals and families on the lowest incomes are paying the most whether it be as a percentage or in real dollar terms. The heavy lifting in this budget is not being done by those at the top end of town; it being done by those surviving on the smallest and most modest incomes. In my electorate of Bendigo, like much of regional Victoria, that is the vast bulk of people living in our communities. In my electorate of Bendigo roughly 30 per cent of the electorate is trying to survive on less than $600 a week. They are the ones who will be asked to do the heaviest lifting in this budget.

That is where the language the government has used in this budget is so misleading. It is such a lie to the Australian people to say that we all need to do a bit of heavy lifting while, as I have just demonstrated, it is those on the lowest and the most modest incomes, the most vulnerable, who are doing the heavy lifting. This budget attacks the most vulnerable in our community. The government claims that they have introduced a budget of cruel cuts, tax increases and new taxes because they believe that there is 'budget emergency'. They believe that Australia is 'drowning in debt'. But this is just simply not true. This is just more rhetoric and silliness and an attempt by the government to hide their neoliberal ideological approach to the Australian economy and our society.

The facts are that there is no budget emergency. Labor left Australia with a AAA credit rating. I am not the first person on this side, nor will I be the last, to remind the current government of the legacy that Labor left behind. We left behind an economy with a stable outlook with three ratings agencies actually rating the Australian economy with a AAA credit rating. Labor left a budget which was the envy of the world with net debt well below most advanced economies. This was proven in the MYEFO, which is a true reflection of where the budgets of Labor left the state of the Australian economy. In MYEFO, Mr Hockey moved the goalposts for budget estimates just to make Labor's record look worse. An independent assessment of the Labor budget, however, proves that these changed goalposts did blow out the budget. MYEFO also included all the government's election commitments and spending promises including their gold-plated $5.5 billion-a-year Paid Parental Leave Scheme, which is an unnecessary hit on the budget. It also included the unnecessary $9 billion injection into the Reserve Bank.

The true state of the budget as left by Labor was independently verified by the secretaries of Treasury and Finance in the Pre-election Economic and Fiscal Outlook, which was part of Peter Costello's Charter of Budget Honesty, and it said that the economy was sound. It said that Labor had in fact done what needed to be done to ensure that we as an economy and as a society were able to avoid recession. It is because of the decisions that Labor made in government to invest and not to follow the path of austerity that our economy avoided recession. It was the 'recession we didn't have to have', because of the decisions that were made by the Australian government.

Any high school economics student can tell you through their own studies in high school economics that a government should invest during the down times and save during the boom times. It is the simple foundation of basic Keynesian economics. Governments have historically gone into debt to fund projects to avoid recessions. When the market takes a hit it is up to governments to turn to public investment to ensure that the pain caused by that private downturn is not prolonged. It sounds basic, yet it is a significant ideological difference between those on this side of the House and those on the other side of the House.

The world experienced a global financial crisis because of private sector decisions that led to macroeconomic outcomes. To ensure that Australia's pain was not long felt it required active policy responses by the public sector; in particular, around monetary policy actions. It required the government to invest to ensure that people remained employed. That is what Labor's response to the global financial crisis did. It ensured that people that in our communities—and in particular, regional communities—remained employed.

This budget attacks those most in need of our support. It is worth just focusing on the attacks on Newstart, and the suggestion that somebody who is under 30 can survive on nothing. Let us just be clear about who the under-30s are. I do not like using the word 'youth', because to me 'youth' suggest somebody in their late teens or early 20s—somebody who may still be studying, or undertaking an apprenticeship or looking for work. It is somebody who has not yet bought their first home, somebody who does not have a family. People in their late 20s and their 30s predominantly do.

I am unusual for my generation because I do not have children. But many people in their late 20s do, particularly in my electorate. It is rare to meet someone who has a house, two kids in primary school and one full-time income earner and one part-time income earner, aged 29 and 28 respectively, who would consider themselves as 'youth'. 'Youth' is a term that we think should be kept to describe people who are finishing high school, who are starting a TAFE course or who are at university—somebody in their early 20s or late teens.

I do note that the Young Liberals and the Young Nationals consider people under 30 to be Young Liberals and Young Nationals, whereas for Labor they are under 26. It may go to the ageing demographic of the Liberal and National parties, why they have considered young people to be those under 30.

The Australian economy did experience a downturn as a result of the global financial crisis, and youth unemployment has risen significantly since then. Broader unemployment is rising slowly, particularly in the regions. That is why, within our economy, we need to make sure that we are doing more to support those young job seekers. Hitting them with a very big stick and saying, 'You can live on nothing,' will not create the jobs that they need. It is why, if we acknowledge that there will always be people looking for work, we need to have a progressive tax system to ensure that we have the money in the system to support those people who are looking for work. I believe that in a progressive tax system people on higher incomes should be paying a higher percentage of income tax than those on less. If not, if we have the situation where those on the highest incomes are paying less as a percentage of those on a lower income, it will actually create greater inequity within our system.

A progressive tax system is a way to mitigate the societal ills associated with higher income inequality. A progressive tax system is a tax structure that actually increases equality. It ensures that all within our community and our society are able to step up. This is a concept that the Liberal Party has always struggled with—it goes against their ideology.

An example of this is that during the boom times when Australia was doing well, rather than banking the savings, as is suggested by a sound economic policy—saving for when we do take a hit in our private sector—the former Treasurer, Peter Costello, introduced further inequity within our taxation system. In his budget in 2004, the big-ticket item was a reduction in tax rates for the highest income earners. Just as an example, the income tax cuts that he introduced at that time for the top threshold were equal to a net decrease of $42.21 per week. Yet somebody on a smaller income—average weekly earnings—would receive roughly a $7-a-week reduction. This, again, is an example of how there has always been a focus on the government's side of politics to give the smallest proportion of a tax giving back to the economy to those at the top end.

It is very similar to what they have done in this budget, where they say that the heavy lifting is spread to all. But as I demonstrated earlier, those on the highest incomes are paying the smallest proportion towards this heavy lifting, and those on the smallest incomes are not only paying a bigger proportion but more in real dollars.

Finally, I would like to touch on the fact that this budget is one that is built on broken promises. It needs to be noted that the income tax increase—while we do support it—does represent a clear broken promise by the Prime Minister. Before the election Tony Abbott said over and over again that there would be no new taxes. He said this on the occasion that he came to Bendigo, and it was repeated several times by the then shadow Treasurer and today Treasurer on visits to the electorate.

Joe Hockey stood in front of Liberal House, which is their headquarters in Bendigo, and said that there would be no new taxes under their government. That is clearly a broken promise and a lie to the people of my electorate and my community. This is just the first of many new taxes that this government will seek to pass following the cruel and deceitful budget. Other taxes and increases that will hurt regional people include the increase in the fuel excise. It is understandable why somebody in inner Sydney may not understand the hit that this will have on people in the country. The simple fact is people living in the country have further to travel. People living in the country pay more for their fuel. In one part of the electorate on a Saturday the petrol price is $1.65. In another part of the electorate the petrol price is $1.50. So this fuel excise compounds the difference and the higher rates for fuel that we already pay in country and regional Victoria. Those prices are just in Bendigo, which is an hour and 40 minutes north of Melbourne, let alone as you go further and further away from the city.

The compound effect of the broken promises in this budget will hurt people in regions. Despite the fact of the inequity, the government are hiding behind rhetoric. It is time they came forward and were honest with the Australian people. This Prime Minister and his government wish to tear down everything that Australians have worked hard to build. This is a budget of broken promises. It is a budget that is unfair. This token levy basically aims to pretend that all are doing the heavy lifting when that is not true.

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