Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

Sorry, it was worse—'Imagine wanting to fund schools and hospitals!' We see Labor members saying, 'Imagine'—I assume dripping with sarcasm—'wanting to fund schools and hospitals!' Implying, once again, as Labor has done in an explicit fashion through the Leader of the Opposition, that we have cut funding, $80 billion, for health and education. But unfortunately the facts just do not accord with Labor's rhetoric on this. Once again we have a situation where Labor is deliberately going about with a campaign of misinformation in a deliberate attempt to try to misrepresent the facts.

Mr Frydenberg interjecting—

As a member for Kooyong rightly points out, the facts in the budget papers are very clear. We are in fact going to put an additional $1.2 billion into education funding over four years. We know what the Labor Party—and I say this as a representative of the great state of Queensland—was going to do in terms of education funding for Queensland and Western Australia. It was going to rip $1.2 billion out of education funding. They never highlighted it, they never said it before the election but when the Pre-Election Economic and Fiscal Outlook was outlined and actually taken to the Australian people we saw sneaky little Labor with $1.2 billion ripped out of education funding. We put that money back in.

Let us talk about health funding.

Mr Frydenberg interjecting—

What we know about health funding is that health funding, as the member for Kooyong helpfully points out, is going up by 40 per cent over the forward estimates. In fact, funding to hospitals is going up, compounding, nine per cent, nine per cent, nine per cent and six per cent in the final year. How extraordinary that the Labor Party can say, when you are putting in nine per cent plus nine per cent plus nine per cent plus six per cent, that that is a cut to health funding. Only the Labor Party can do that. Only the Labor Party can say that a 40 per cent increase is a cut. We don't really know how they do maths on their side. We have never really understood Labor's approach to finances. But I think the Australian people do.

The final point in relation to pension changes is that we continue to hear the Labor Party say, 'But the coalition is going to cut pensions.' Once again, fundamentally untruthful and wrong.

Ms Kate Ellis interjecting—

The shadow minister at the table just turned round and said, 'Correct.' So we see once again that Labor is deliberately, and unfortunately, trying to manipulate the fears of the community by saying that we are cutting pensions. It is simply untrue. The coalition is actually making structural reforms to the pension so that the rate of growth is slowed. Make no mistake, it will still grow but the rate of growth will slow. Let me spell it out for the Labor Party why we are doing it. Labor do not understand why, because if Labor understood why they would support us.

So it is pretty clear that Labor do not understand the reason. The simple reason is that the Labor Party's policies are unaffordable. The policies of the Australian Labor Party are what got Australia into a situation where we went from zero net debt to being on a path to reach $667 billion of gross debt. Thanks to the Australian Labor Party, in six short years that was the path that they put us on. So when the Australian Labor Party asks, 'Why are you doing it?' we can say that that is the reason. Those on this side of the House will stand up not only for today's Australians but for the next generation of Australians as well.

We understand the rank political opportunism of the Australian Labor Party, who run around and say, 'These reforms are unnecessary. These are cruel, heartless reforms; they do not need to be undertaken. Let me make it clear to members of the Australian Labor Party: they do need to be undertaken. They need to be undertaken to ensure that the next generation of Australians do not spend decades trying to pay off the debt burden that has been left to them by the Australian Labor Party. So the news flash to members of the Australian Labor Party is this: you have got to live within your means. Households do it and we expect governments to do it.

In terms of summing up the bill I would like to touch upon a couple of points. The first is to thank members of the government for their eloquent contributions to the House. Anybody listening to the debate—anybody who takes the time to read the transcript of the debate—will see the difference in approach between the popularism of the Labor Party and the necessary heavy lifting that the government has put forward in terms of government members' contributions. They would also know that, as a consequence of these reforms, the underlying cash deficit is projected to be $60 billion over four years to 2017-18, compared to $123 billion over the four years to 2016-17 that was released in the 2013-14 mid-year economic and fiscal outlook.

Let's make that clear. Under Labor the cash deficit was going to be $123 billion over the forward estimates—the four years to 2016-17—and now, as a result of the changes it will be $60 billion. That is less than half, as a result of the reforms that we are putting forward. So instead of gross debt reaching $667 billion by 2023-24 we are now forecast to have gross debt of $389 billion—a saving of some $300 billion. That, in essence, underscores the reason we are doing not what is politically popular but what is necessary so that Australia does not continue to have a massive mountain of debt and deficit going forward.

The 2014-15 budget is the first step in our action plan to return the budget to a more sustainable footing. The steps we have taken to improve the sustainability of the budget in the longer term, however, by themselves are simply not enough. It will take time to generate the necessary savings over the longer term. And that is why we have also introduced a range of temporary savings measures to help with the immediate task of budget repair. It is in the context of the immediate task of budget repair that we have introduced these bills—that is, the bills related to the temporary budget levy. The temporary budget repair levy will start from 1 July 2014 and remain in place until 30 June 2017. It is progressive and will apply at a rate of two per cent on individuals' annual personal taxable income above $180,000. This measure will raise some $3.1 billion over the forward estimates period.

In 2014-15 around 400,000 taxpayers—that is, less than four per cent of taxpayers—will directly incur the temporary budget repair levy on their personal taxable income. This package of bills introduces the temporary budget repair levy on high income earners, ensuring that they are also making a contribution to reducing the budget deficit.

This package of bills also makes important consequential amendments that will maintain the integrity and fairness of the tax system, and minimise the opportunities for taxpayers to avoid the levy during the three years that it is put in place. The government does not support the amendment moved by the member for Indi, as we are committed to the temporary nature of this levy. I also point out to the member for Indi that we have pursued a range of structural savings that will grow over time. Full details of the bills are set out in the explanatory memorandum. I commend the bills to the House.

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