Tuesday, 1 December 2015
Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015; Second Reading
It is very pleasing to hear that the Labor Party in opposition have finally come on board and started to realise that, as a result of the fiscal mess they have created in this country, there is a need to support the government to undertake the necessary work to repair the budget. Before the member for Watson leaves the chamber, I say that it was very disappointing to hear him peddle that misleading statement about $100,000 degrees for students. I would encourage every Labor member of parliament to refrain from that complete and utter deception, because it scares students.
We want to encourage students to go to university. We want to encourage students to take up degrees. Even with the government's changes, a student will have, on average, half of their degree funded by the Commonwealth. The taxpayer will pay for half of their degree. The student will be asked to fund the other half, and they will only have to do that once their income rises to a certain level, to about the mid-$50,000 mark, and they will pay it back by way of a higher income tax. It is cheap political point scoring to talk about $100,000 degrees. It threatens to deter students from taking on degrees. I would ask members of the opposition not to continue to repeat that misleading statement to the students of this nation.
It is pleasing that the opposition are finally supporting this bill. I hope they at least start to have some appreciation of the fiscal mess and the problems they have created for this government. The history is worth repeating. When the previous coalition government were elected back in 1996, they inherited cumulative deficits that had created a debt of $96 billion. Year after year, the previous coalition government made hard decisions to wind that debt back. For every one of those decisions, they were criticised from pillar to post by the Labor Party, who wanted to continue spending. The previous coalition government, the Howard and Costello government, did the right thing and slowly pegged it back. When they got it back to zero they then had another $40 billion that they were able to put into the Future Fund. It is worthwhile mentioning what the Future Fund is used for.
The inheritances of previous Labor government decisions go back to the Whitlam government. Rather than account for military pensions, military superannuation and certain public servants' superannuation in the year in which the liability was incurred—as is done in the rest of the economy—they decided to put these on the never-never so that the government would not have to put aside any funds. That would just be paid for sometime in the future. For years and years since that time, we in this nation have continued to build up an unfunded liability of what the Australian taxpayer owes retired public servants. There are currently somewhere around $170 billion of liabilities. The Future Fund, started by Peter Costello with money from the Howard government surplus—thank goodness they did that—is now at more than the $100 billion mark, so we still have an unfunded liability of $50 billion. If Peter Costello had never set up that Future Fund, that $167 billion liability would be tacked on to the obligations of future taxpayers of this nation. That is on top of the existing debt.
Getting back to the history, that $96 billion was paid off—we paid that off—but what is often forgotten is that along the way the previous coalition government had to pay off the interest as well. And that interest was $54 billion. So $96 billion was paid off, but then there was another $54 billion in interest on the debt and then there was another $40 billion put in the Future Fund. All up, the coalition government had to take $200 billion from the economy to fix up the previous Labor government's debt. We will never know what could have been done with that $200 billion. We will never know what hospitals could have been funded, what infrastructure could have been built—what roads, what public transport—what schools and what extra care we could have given the kids with disabilities. But we had to fix up the mess that was inherited from previous Labor governments.
As they say, things go around in cycles, and that cycle came back around with the election of the Labor government back in 2007. I remember the previous Prime Minister, Mr Kevin Rudd, standing up and saying that he was that a fiscal conservative and that he was going to keep the nation's finances in good measure. We know what happened—history records what happened: they borrowed and they borrowed and they borrowed and they borrowed and they borrowed and they continued to borrow. They ran up deficit after deficit and they locked in expenditure that will tie the hands of the current government for years. It is very easy for governments to give out money to this group and that group, but it is very difficult to wind it back—it causes a lot of political pain.
Even after doing all of that, today we are still borrowing $100 million every day—we will borrow that $100 million today, we will borrow it tomorrow and we will borrow it the day after. All we are doing is putting the liability on our children, our grandchildren and our great-grandchildren to pay the principal off. We are also tying the hands of future governments in this country to meet the interest liabilities. Already this government faces a interest liability from the previous Labor government's debt of $1 billion every month—every 30 days we need to find $1 billion. We take that from the taxpayers of this nation, hardworking men and women, in higher rates of tax just to pay the interest on Labor's debt.
We have come into this parliament and we have put up proposals to make budget savings that were actually part of the previous Labor government program and they have the hide to block them in the Senate. What fiscal irresponsibility to block their own legislative debt! It is a tawdry political stunt to try and put extra financial pressure on this nation by blocking them in the Senate. Today I was very pleased to hear the member for Watson say that he will finally support this bill. I hope that when it goes across to the Senate that there is no game playing, because we face a very serious issue with our finances. It is going to take a long time and a lot of hard work for us to get this budget back into repair. We have many things down the track that we need to find the dollars for. We want to find funding to the National Disability Insurance Scheme. Both sides of the House agree that is a fantastic initiative, but an initiative is one thing—unless we can find the tax dollars for it, it is worthless.
The other issue that I am greatly concerned about is the story being peddled around that if only we could only tax these large multinational companies, everything would be all right and rosy. There are some multinational companies that could be doing more to meet their tax obligations to this nation, but we need to be careful that we do not drive that investment off overseas. If we were to place higher taxation obligations on them, they would to raise their costs and their prices for Australian consumers. Even if we adopted every single one of the Labor Party's plans that would supposedly crackdown on multinationals—and they had flow-on effects in cost or investment or employment—it would raise $1.6 billion. Yes, that is a significant sum, but it is just a drop in the bucket when compared with the consolidation of this nation's finances we need to get our budget back into repair.
We have seen the opposition make claims about what they will do with their renewable energy target. We know how reckless they have been in handling the finances of this nation, but if you want an example of how reckless they might be in the future, Deputy Speaker, just look at their plans for the renewable energy target. Yes, it would be wonderful if we could have more renewable energy, but it has to be cost-effective. What has been revealed? This plan of theirs is likely to cost $600 billion. Where does the opposition think this nation can get $600 billion from? Money in this country does not grow on a money tree. We cannot just print currency to get out of this problem, and we cannot borrow our way out of the hole that we are in. The only way we can do it is to produce, and to do that we need to do everything we can in this nation to encourage more entrepreneurial activity. Yet, every time members of the Labor opposition stand up, every time they come up with some policy, they undermine the culture of entrepreneurialism in this country—they undermine the very thing we need for growth, employment and investment.
The five schedules of this bill will involve student start-up loans, the efficiency dividend from higher education grants, the removal of the up-front payment discount and voluntary repayment bonus, and the interest charge for certain student income support debts. I am pleased that the opposition have finally come on board—I hope there is more of it. I commend the bill to the House.