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

This is a budget which is fundamentally unfair and it is a budget which was not taken to the Australian people. Why didn't young people get to decide at the last election whether they wanted to vote for higher university fees? Why didn't the elderly get to vote on whether they wanted their pension indexation cut? Why didn't the schoolteachers and parents get to vote on cuts to investment in education? Why didn't the sick get the chance to vote on whether they should make an extra $7 payment in order to see a GP?

The fact is that this government has hurt confidence in our economy. This budget sends a clear message that, if you are doing it tough, if you are a young person, if you lose your job, if you are long-term unemployed or if you are a pensioner, you are on your own. It is little surprise, then, that consumer confidence is now 16 per cent lower than when this government came to power—16 per cent lower. This government sounds eerily like those Vietnam era generals: 'We had to destroy the economy in order to save it.'

The post-budget collapse in confidence has been sustained. In commenting on the Westpac-Melbourne Institute consumer sentiment index data for June, Westpac senior economist Matthew Hassan said:

A very high 74 per cent of respondents recalled news on 'Budget and taxation', with a wide majority viewing the news as unfavourable. That is the highest level of recall for this topic since we began running the survey in the mid-1970s …

This is happening at a time when growth in wages is struggling to keep up with the general increase in the cost of living and households remained worried about their jobs.

The release of the Dun and Bradstreet quarterly consumer financial stress index provides further evidence that the government's woeful budget sell has fuelled a collapse in consumer sentiment and a rise in financial stress across the country. The financial stress index shows that Australian financial stress levels have risen by almost a third since September last year. The ANZ-Roy Morgan consumer confidence survey found confidence began weakening noticeably three weeks before the budget, when government leaks about it started, and fell over the next four weeks by 14 per cent—the steepest decline over a four-week period since the series became weekly in October 2008.

It is incredibly foolish for this government to talk down the Australian economy, hysterically claiming that we have a 'budget emergency'. The fact is that Labor left behind an Australian economy that was fundamentally strong—low inflation, low interest rates, net debt peaking at just one-seventh of the level of the major advanced economies, and a AAA credit rating. Make no mistake: this Treasurer has been talking down the Australian economy ever since he was in opposition. He compared Australia's sovereign debt risk to that of Greece and has seriously exaggerated Australia's debt and financial position—when the reality is that the Australian economy has been one of the strongest in the developed world.

A core element of the Treasurer's talking down of the economy and of his scare campaign—one much beloved by the right of politics as a way of conjuring up fear about our social safety net—is regular expressions of concern about workforce ageing and the accompanying idea that a diminishing number of workers is going to be left with the burden of carrying a population grown old and grey. This kind of thinking and rhetoric lies behind government proposals to increase the retirement age and reduce the incomes and support being received by pensioners and retirees. It is true that the workforce is ageing. What is not true is that this is a problem. In fact, even 50 years from now we will have a higher participation rate than we had as far back as 1966—when there was no talk of a small workforce carrying the burden of a large out-of-work proportion of the population.

Our economy has weathered the global financial crisis in good shape. The greatest threat to it comes from a collapse in confidence precipitated by the austerity measures in this fundamentally unfair budget.

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