Tuesday, 1 December 2015
Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015; Second Reading
After six years in power, Labor left Australia in absolute disrepair. They produced the sixth largest budget deficit in our history. The debt blew out to $320 billion. That is $13,500 for every Australian man, woman and child. Without a policy change, Labor's debt was projected to reach $667 billion in 10 years. Household costs for health increased 35 per cent. Hospital waiting times increased, and $4 billion was cut from private health insurance. All the while, health bureaucracies thrived and grew. Gas prices increased 71 per cent and electricity prices increased 101 per cent.
Under Labor, the number of unemployed increased by over 200,000. Productivity declined 0.07 per cent per year. The number of working days lost to strikes doubled and business red tape increased. Crucial road infrastructure was announced but then cancelled, delayed or left unfunded. The Defence budget fell to the lowest level as a percentage of GDP since 1938. Labor also imposed the world's biggest carbon tax—a $9 billion per year hit to the economy, costing the average Australian household around $550 annually. More than 800 boats and over 50,000 illegal boat arrivals came in under Labor, causing a cost blow-out of more than $11 billion. Labor left government with a legacy of disorder and disarray.
Since the coalition have come to power we have worked hard to fix the problems we inherited from Labor. The coalition government believe in being agile and nimble. This is clearly evidenced in the work that we have done and the achievements we have made since entering government. We abolished the carbon tax, which was removing $9 billion annually. We are repairing the budget, returning it to a sustainable position. We are helping small businesses, fixing the NBN, tackling union corruption and investing in new infrastructure. We are stopping the boats—in fact, we have stopped the boats—creating a stronger Defence Force and tackling terrorism at home and overseas. We have secured three major free trade agreements, with China, Japan and Korea, creating stronger and more resilient relationships with our close neighbours.
With regard to the specifics of the bill under consideration, the coalition is relieving the Labor Party of another failed promise to the Australian public, by ensuring that the $2 billion worth of savings are afforded in the budget. We are committed to ensuring that the $2 billion worth of savings are secured.
The bill will specifically replace the current start-up scholarship by implementing the student start-up loan. The student start-up loan is income-contingent and runs similarly to the current Higher Education Loan Program. Schedule 1 of this bill will help students pay for the basic needs that study demands, including books, internet access and computers. What this exemplifies, and is shown throughout the bill, is that the bill makes significant savings without taking those costs from the up-front funds of students.
It is important to note that the repayments for these start-up scholarships occur similarly to repayments for students' higher education loans and are only required to be made following the repayment of a student's HELP debt. This bill will not affect those students currently on Youth Allowance, Austudy or ABSTUDY; it will only apply to new recipients after the bill takes effect, providing significant savings in the future.
The Higher Education Support Act 2003 and the Commonwealth Grant Scheme Guidelines 2013 amendments will ensure savings for the future and are part of several measures taken by this government to moderate the growth of higher education expenditure. These savings will also be afforded by the abolishment of the HECS-HELP bonuses and discounts for up-front payments. These bonuses and discounts that are paid by the government will no longer apply, providing important savings in the order of $970 million.
Importantly, schedule 5 permits an interest charge on debts from applicable recipients of Youth Allowance, Austudy and ABSTUDY. The interest on loans will be applied in circumstances where the individual is not honouring their obligation to repay in an acceptable way. Not only does it penalise individuals who are shirking their repayment responsibilities; it also provides individuals with the incentive to honour their repayments where they have the financial capacity to do so.
Prior to this, Commonwealth loans under HELP and HECS did not provide individuals with any incentive to repay the loan. It is important that individuals have the incentive to repay their debts in a timely fashion where they have the ability to do so. This is smart policy and essential to this bill, providing savings in the order of $200 million for this schedule alone. The interest that will be applied to certain loans will be based on the industry accepted 90-day bank bill rate. This will be in addition to the ATO's accepted seven per cent interest for tax debts.
This budget savings measure bill is important in ensuring the efficiency of the Higher Education Loan Scheme. The establishment of the student start-up loan through this bill is essential in providing sufficient savings as well as ensuring moderate growth of higher education expenditure.
I know that actions are more important than words and deeds more than intentions. That is how we are going about fixing Labor's mess. Our country, had it been a business, was making a loss—and a substantial loss—every year since the Howard government left office. These accumulated losses have built up into a debt mountain. Unless we have a profit again, our country will never be able to reduce or pay down the debt mountain.
Labor has its head in the clouds and is hopeless when it comes to economic management. Our mandate is to fix that mess, and I am excited about that task. I know that, even though the challenges are great, the opportunities are greater. It has never been cheaper to borrow to invest. There has never been a better time to have a go, invest or take a risk.
The coalition is building the digital and physical infrastructure of the 21st century. In my electorate of Tangney the Perth Freight Link is a hugely important project that will not only make money for the federal and state governments; significantly, this community required road will reduce air and noise pollution, decrease average journey times and reduce fatalities on Leach Highway by taking large vehicles off Leach Highway altogether. This will be achieved through inventive and innovative new tracking and identification technologies.
We need our fellow countrymen and countrywomen to be excited about the potential of Australia—as excited as those early settlers and as excited as the men who dreamt up the Snowy hydro scheme. As a country, we need to get back to doing great and big things. Australia has always been about big things and big ideas. It is said that a crisis is a terrible thing to waste, so let's not.
Now is the time to look afresh at government support for investment in residential housing stock through negative gearing and other tax incentives. Government moneys need to be directed at sustainable investments that create long-term, local, high-value high-skill jobs. It is reassuring to know that this coalition government is the only administration capable of and committed to securing Australia's high-paying, high-value-added manufacturing goods and services.
The quickest, easiest and cheapest way to get the economy growing is to cut red tape. The coalition has already had two very successful red tape repeal days, throwing 50,000 pages of outdated and obsolete legislation into the dustbin of history. Australia, with our rich immigration tapestry of the past and today, has a lot to learn from best practice elsewhere. We should not be afraid to look overseas for ideas. Why not incentivise investment in science, in small business and especially in small tech businesses? There is no shortage of money in Australia. The high cash savings rate of 10 per cent of weekly income is testament to this. There is no shortage of money in superannuation funds. Compulsory superannuation, a big idea in itself, now has over $1 trillion in it. There has also never been a better time to borrow internationally. The real cost of borrowing is negligible to negative.
Labor's lies and incompetence have saddled this nation with a huge debt burden. Filling in such a massive hole will not happen overnight. When we last held office, the budget was in surplus. We were $50 billion in the black. We were earning interest not paying interest. The interest on their debt alone is $1 billion a month—$45 a month for every man, woman and child. Two months of that interest would be enough to build the Fiona Stanley Hospital in my electorate of Tangney. That hospital is the most modern in the Southern Hemisphere. Just think of what not paying the mortgage on the credit card would mean for infrastructure around the country. Think of what that extra money would do for people stuck in traffic on the Bruce or Hume highways or in Sydney, Melbourne or even Perth. In short, responsible budgeting means living within our means.
Without ameliorative action, the country was on track for $667 billion of debt—$30,000-odd for every man, woman and child in Australia. One of the Labor's biggest policy failures has been one of our biggest successes—that is, border control. Stopping the boats was a key plank in our election platform at the last election. We said that we would stop the boats, and we did. Not only have we restored integrity to our immigration system but we have stopped the needless tragedy of mass drownings at sea. Critically, for this debate, it means that we have also stopped the haemorrhaging of public money. Under Labor, we bled money at every turn in this policy space. Search and rescue is expensive, administration is expensive, and lifetime welfare payments are more expensive still. Many genuine refugees were left waiting as queuejumpers risked paying people smugglers to make that journey to Australia. This injustice has now stopped.
The list of achievements is long and my time short. We have scrapped the carbon tax, saving households $550 per annum. We have scrapped the mining tax so that this vital sector can create more jobs. We have handed down a $50 billion infrastructure package—the single largest infrastructure package in this country's history. We have delivered free trade agreements with Japan, with China and with Korea, and this means more jobs for Australians. We are putting in place long-term structural reforms to fix the budget.
To quote Ronald Reagan:
… the nine most terrifying words in the English language are: I'm from the Government, and I'm here to help.'
Labor has no plan for our country. Our government has a clear vision: free trade and a higher value-added strategy for sustainable growth. I believe that the pivot of this debate is where we are going as a nation. Labor, then as now, on border protection and fiscal prudence is all talk no delivery. It cost us then and costs us now in debt and interest repayments. In the final analysis, our place in the world and our quality of life needs to be earned every day.