Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

The assistant resources minister's magic-bean acquisition fund.

The same story is true in economic policy. While the government's schools policy certainly has not changed since the member for Wentworth ascended to the prime ministership, on this side of the House we know that education policy is a crucial plank in any government's economic agenda. The investments that we make in human capital, skills and ingenuity today are essential to realising economic growth dividends in the future. You cannot have an ideas boom without investing in the minds of young Australians, yet in the 2014 budget the then Prime Minister defunded years 5 and 6 of the needs based education funding Gonski model.

Since becoming Prime Minister the current Prime Minister has done nothing to reverse those changes. Under the current government an average of $3.2 million has been cut from each and every school in Australia. It is the equivalent of sacking one in seven teachers. It is around $160 million from schools in my electorate alone. It is money these schools desperately need.

We see the same story in higher education. Before the last election Tony Abbott said:

We will ensure the continuation of current arrangements of university funding.

His Minister for Education, now the Minister for Industry, Innovation and Science said after the election:

… we're not going to raise fees …

…   …   …

I am not even considering it because we promised that we wouldn't …

However, in the government's first budget they announced a massive cut in university funding and a proposal to deregulate undergraduate university fees.

The Abbott-Turnbull government has continued with the policy of its predecessor and continues to hold universities hostage. The government still plans to deregulate university fees but has simply postponed the changes. We know what they want to do; they just cannot work out how to get it through the parliament. Indeed, in a statement on 28 October 2015, the Minister for Education and Training, Senator Simon Birmingham, made it clear that these changes had only been delayed. Deregulation remains the official policy of the government; they just cannot work out how to get away with it.

Health policy too remains unchanged. Tony Abbott cut $60 billion from health in the 2014 budget. The current Prime Minister has done nothing to reverse these cuts. He has ignored calls from the industry to reverse the freeze on the Medicare rebate. As of March, Victorian hospitals will be another $73 million worse off after government changes earlier this month. That is on top of the government's $17.7 billion cut to Victorian public hospitals over the next 10 years.

Yesterday the Prime Minister said the federal government would provide extra funding to the states for hospitals and health care, but that is in direct opposition to what the Treasurer said last week when he said:

I don't think states are branch offices of the Commonwealth. I think they are sovereign governments.

…   …   …

… in no business in this country would anyone just accept someone walking into their office and saying the increase in cost is 8 per cent, give me the cheque. We all have to manage our Budgets. The States almost without an exception … are in surplus at the present.

It might strike someone as odd that the Prime Minister and the Treasurer are at direct odds on this issue, but in this parliament we are becoming familiar with this state of affairs.

Who should we believe? We can form a judgement about the Prime Minister's future intentions in health funding by looking at his past behaviour. We should ignore what he says and look to what he does. In his first economic statement the current Prime Minister cut $650 million from Medicare by cutting bulk-billing for diagnostic imaging and pathology, cut health workforce training by $595 million, cut $146 million from health prevention and e-health programs, continued with the Abbott government's $1.3 billion hike in the price of medicines, continued with the Abbott government's freeze on Medicare rebates for GP visits and refused to reverse the Abbott government's $267 million cut to the Medicare safety net. The $650 million that the government cut from diagnostic imaging and pathology by scrapping bulk-billing will mean that patients pay more for CT scans, CAT scans, MRI scans, X-rays, mammograms, Pap smears and other pathology tests.

It is clear what this means. Patients will have to pay the entire cost—often hundreds or even thousands of dollars—up-front. Patients will only be able to claim a portion back through the Medicare rebate. People will be less likely to take preventive healthcare options. It is a short-sighted savings that will end up costing the health budget much more in the long term. Many of these scans are invasive. They are a hassle. People do not need more of a disincentive to have them. We know that prevention is better than cure. It is a far cry from the advocacy and economic leadership promised by the Prime Minister. These are short-term cuts with a long-term cost.

In contrast to the government, Labor has articulated a progressive and comprehensive economic agenda. We have done the hard yards in opposition. We have shown the economic leadership that the current Prime Minister promised but has failed to deliver. In education policy we have announced 'Your Child. Our Future'. It is a plan that will build the education system our children and our nation need for the future prosperity of our economy.

A Labor government will fully implement and fund the Gonski reforms on time and in full, meaning that every student in the country will benefit from increased needs based funding. It will see an additional investment in Australia's education system of $4.5 billion over school years 2018 and 2019 and a total provision of $37.3 billion for the package over the decade. Under Labor's plan every child will benefit.

We have also made the tough calls about how to fund this important investment in our nation's future economic prosperity. Labor has outlined budget savings measures to the tune of over $100 billion over the next 10 years. These include changes to superannuation taxation, combating multinational tax avoidance, increasing the tobacco excise, abolishing the Emissions Reduction Fund, and changes to negative gearing and capital gains tax. It is an unprecedented move from an opposition party. Labor will reform negative gearing and the capital gains discount to ensure that our tax system is fair, sustainable and targets jobs and growth. We have announced that we will limit negative gearing to new housing stock from 1 July 2017. We have also made it clear that all investments made before this date will not be affected by this change and will be fully grandfathered. There will be no retrospective application of these changes. This will mean that taxpayers will continue to be able to deduct net rental losses from their wage income, providing the losses come from newly constructed housing stock.

From 1 July 2017 losses from new investments in shares and existing properties can still be used to offset investment income tax liabilities. These losses will also continue to be carried forward to offset the final capital gain on the investment. Labor will also halve the capital gains discount for all assets purchased after 1 July 2017. This will reduce the capital gains tax discount from the current 50 per cent to 25 per cent for assets that are held longer than 12 months. All investments made before this date will not be affected by this change and will be fully grandfathered. Unlike the government, we are not looking at retrospectivity in these changes.

This policy change will not affect investments made by superannuation funds—another distinct difference between Labor and the government—and the CGT discount will not change for small business assets. This will ensure that no small businesses are worse off under these changes. Labor will consult with industry, relevant stakeholders and state governments on further design and implementation details ahead of the start date for both of these proposals. This is the way you provide economic leadership, this is the way you provide a comprehensive tax reform policy and this is the way you offer an economic agenda to the Australian public. It shows that Labor is the only party with a clear vision for tax reform and Australia's future.

What has been the government's response to the kind of economic leadership that the member for Wentworth himself promised Australians? Unfortunately, it has been a reversion to Abbot-style scare campaigns. Instead of articulating a policy alternative, instead of having the debate of ideas and instead of having a contest of policy alternatives, the Prime Minister reached for the vacuous sloganeering of his predecessor. The Prime Minister told the House, in the crudest terms, 'Vote Labor and see your house price go down,' and, 'Vote Labor and get poorer.' Never mind the modelling done by the Australian National University of this question; never mind the views of eminent economists like Saul Eslake, one of the most preeminent experts on the Australian property market. They both expect Australian property prices to continue to rise sustainably under Labor's negative-gearing policy.

You would expect this kind of scare campaign and argument from the vested interests. You would expect this kind of self-interested argument from groups like the Property Council of Australia, who have a direct financial interest in the status quo. However, I must say that, if I was a member of an industry association like this that chose to use the image of a house of cards to represent the industry that I worked in, I would be a little perturbed. If my industry association was funding an advertising campaign telling the nation and potential investors that my industry was so fragile it would collapse if a government policy providing favourable tax treatment to a class of investors was changed, I would object strongly. This kind of imagery is particularly difficult to understand given that a report the Property Council commissioned from ACIL Allen Consulting said:

… it is not sound analysis to simply consider the effects of taxation arrangements on house prices. The cost of housing is shaped by a range of factors influencing demand and supply and hence it is hard to analyse the housing market in isolation from other markets and without considering the local, national and international interconnections.

That is a reasonable perspective. There are many factors at play here.

But the Prime Minister, the member for Wentworth, has eschewed this kind of rational engagement with the facts. He has ignored the nuance and reached straight for the sloganeering that he promised would leave with his predecessor. Worse, the member for Wentworth does not have the excuse of vested financial interest to explain or justify his misleading scare campaign. The only explanation for the Prime Minister's behaviour is political self-interest. He has found, in his five months on the job, that providing economic leadership is easier to promise than to deliver. It is easier to say than to do. It is easier to talk about tax reform than it is to steer it through his cabinet and his party room. It is easier to hold a national soliloquy and a Hamlet-esque 'to be or not to be' discussion about tax reform than it is to actually roll the sleeves up, make a commitment, articulate a policy and fight for it. It is easier for him to say one thing and do another—and that is the story of this prime ministership.

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