Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Hansard source

I speak in relation to the Appropriation Bill (No. 3) 2016-2017 and the Appropriation Bill (No. 4) 2016-2017. Labor will support supply; we always do—not like those opposite. They have not, by the way, blocked supply since 1975, but they have frustrated Labor governments repeatedly. We are always committed to supporting supply, so we support this legislation. In 2016-17, MYEFO announced $2.7 billion of net expenditure saves. Many of them, of course, were a carryover from the 2014-15 budget, which is a bit like Lord Voldemort in Harry Potterwe dare not speak its name. That budget was full of zombie cuts, and they are still there, lurking around. Even today we have seen that those zombie cuts remain. I noticed a press release from the shadow minister for families and social services today. The Treasurer, in an interview on Sky News with Peter van Onselen, made the point that those cuts continue to stand as government policy. They include cuts to paid parental leave. Seventy thousand new mums will be worse off. The government are trying to scrap the energy supplement and make a $1 billion cut to pensioners, people with disability and Newstart recipients. The five-week wait for Newstart, which will force young people to live on nothing for five weeks, will continue if the Liberal and National parties have their way. The cuts to young people between 22 and 24 years of age, pushing them off Newstart onto the much lower youth allowance, will see them $48 to $49 a week worse off. Of course, they are continuing to support the scrapping of the pensioner education supplement and the education entry supplement, and they continue to support the cut to the pension for migrant pensioners who spend more than six weeks overseas.

These cuts continue. This is the policy of the government, confirmed by the Treasurer this afternoon. They might have split the bill, but this remains the policy of the government. The government, when in opposition, claimed, in relation to the debt and deficit under Labor, that the budget was 'in freefall'. They promised to 'stabilise and repay Labor's debt'. The debt was 'skyrocketing' and 'spiralling deeper and deeper'. They identified $50 billion of savings for a reduction of $30 billion in debt and claimed that they would deliver a surplus in their first year of government and every year thereafter. That is what the former member for North Sydney, the former Treasurer, Joe Hockey famously said—apart from the fact that he also thought poor people do not drive cars, and, of course, before bringing down the budget, decided to enjoy himself with tobacco by having a cigar just before he cut the funding for pensions, young people and so many people across the board.

This is a government that promised big when it came to office. They did an audit and talked about the fact that there would be a disaster: we were maxing out the credit card, there was a debt time bomb that was terrible and there was a debt blowout spiralling out of control. And what have they done since they came to office? It is always interesting to talk about appropriations. They have tripled the deficit since 2014. Their first budget predicted that the deficit for 2016-17 would be $10.6 billion. They did not actually get that surplus in the first year or any year thereafter. It is now going to rise to $36.5 billion this year. Having promised a surplus in their first year and every year thereafter, they predicted that for 2016-17 the deficit would be $10.6 billion and now it is going to rise to $36.5 billion. The debt has risen! The Pre-election Financial and Economic Outlook—PEFO—in 2013 is not done. Entirely independently, before we lost office, the net debt was confirmed at $184 billion. The 2016 Mid-Year Economic and Fiscal Outlook—MYEFO—shows that it has blown out to $317 billion this year.

This is a government that promised big but has not delivered, and they have lost all focus. They are a government that seems to be completely out of touch. They are driven by division and dysfunction and seem to be at war with each other. It seems that every year, every month and every week when they are in government, before we return to this place there is another blowout from the member for Warringah or the putative leader, the member for Dickson. They all seem to be jostling to get the position—that is what seems to be happening. You can see the angling and the auditioning in question time, certainly by the Treasurer.

This is his appropriations bill, but where is their surplus? Where is the reduction in debt under these guys? They have just not looked at it. They gave up government funds, such as from the carbon price, which was bringing in about $13 billion per annum—they gave up that resource. They lifted the debt ceiling and they blew the debt off—with the concurrence of the Greens, I might add. So they gave away revenue sources and then decided that their big election campaign would be about jobs and growth. How they would do it would be to give away $50 billion in corporate tax cuts and by not looking at other potential areas of taxation reform that might be fair. Their logic is, 'We will give away $7.4 billion to the big banks'—that will go down well in marginal seats—'and $50 billion in tax cuts to big business,' a lot of which will go overseas in multinational tax avoidance.

At the same time, they do not fulfil their previous election commitment of needs-based funding, like Gonski funding. Remember those signs on election day that said they would match Labor's funding dollar for dollar if they won the 2013 election? They did not fulfil that. We know that in the middle of 2018, budgetary funding for education goes off the cliff. Since the last federal election, I have visited almost all of the schools in my electorate—I have close to 80 schools—and what I get from the school principals and the school committees when I visit them is that they have used the funding that we put in—which is contingent, and goes off the cliff—for literacy and numeracy upgrades to improve the standards of those kids who have been left behind, professional development for teaching and putting on extra teacher's aides. Investing in education should be the priority. The Gonski funding investment will give three times the benefit to the Australian economy as the tax cuts they want to give to big business.

Now, we had the member for Page talking about evidence and about the importance of these $50 billion in tax cuts to big business; the importance of it for economic growth, for jobs, for attracting investment into the country. But not a shred of evidence was given by the member for Page about that.

Let's look at what The Australia Institute said about the plan of the government to give $50 billion in tax cuts to corporate Australia, including up to $1 billion for companies earning a billion dollars a year. The Australia Institute said:

… that there is no evidence to suggest that lower rates increase economic growth. Secondly, a historical analysis of Australia’s own corporate tax rate shows that, if anything, lower rates have a negative impact on the kind of economic indicators spruiked by their proponents.

Furthermore, The Australia Institute said:

The evidence presented here suggests that if there are any growth dividends of lowering the company tax rate they are so weak as to be outweighed by other factors. Neither cross-country comparison nor Australia’s own history lend any support to the ‘tax-cuts-are-good’ thesis. If the aim really is increased economic growth, then Australians would be better advised to ignore the business lobby’s call for lower company tax rates and look seriously at other policies.

Let's look at what the Treasury said in their various assumptions. They looked at a number of assumptions—and we are talking about a decade or more away—and said that in the long term, employment might increase by 0.1 per cent. We are potentially talking about a 1.1 per cent increase in GDP.

This is in circumstances where we have a real problem at the moment in this country in relation to unemployment. We saw the figures that came out: the unemployment rate increased from 5.7 per cent to 5.9 per cent, the highest in more than 12 months. And that was just on 16 March this year. There were 6,400 fewer jobs last month, including a decrease of 33,500 part-time jobs. There are about 135,000 fewer apprentices since this mob came to power; unemployment is up and about 1.1 million Australians are underemployed and saying that they would like more work; and the answer to all of this seems to be to put at risk the AAA credit rating by giving tax cuts to big Australians—to big corporate Australia—and at the same time not being prepared to protect the penalty rates of about 700,000 Australians, who would lose $77 a week.

How is it possible that Australians are going to spend more money, consume more services and buy more goods if they have less money in their pay packets and if unemployment goes up? It is now higher than it was during the GFC, when we, by our stimulus, not just once but twice, managed to avoid a recession. We had negative growth not that long ago under this mob—just the previous quarter to the current one. So at risk is our economy, and our fundamentals are quite tenuous. We have high unemployment, low growth—the lowest wages growth on record—and the highest, the worst, inequality in the country in nearly 75 years. And these people think that we are going to fix it with some ideology of trickle-down economics? Honestly, these are parties—the Liberal-National parties—which pride themselves on their alleged economic experience and management. But the economy has gone backwards in so many areas under this mob—whether it is employment, apprenticeships, jobs, training or investment. Now, they do not look at proper sources of revenue, such as negative gearing and capital gains tax reform, which together cost more than $10 billion to the budget each year, they do not look at an emissions intensity scheme and they do not look at a whole range of areas which might improve equity as well as the economy of the country. Economies which are more equal are often fairer and also more progressive, and actually invest in jobs and achieve things. They do not achieve things if people are losing their jobs, if their kids are not getting apprenticeships and if people do not have the money in their pay packets to purchase items.

So how about this government finally stand up for middle-class people who are doing it tough and ditch this idea of a corporate tax cut to big Australia. But, hang on a sec, today we have seen speakers in the House making speech after speech in relation to the Treasury Laws Amendment (Enterprise Tax Play) Bill 2016 and talking about the fact that there would be $50 billion in tax cuts for small business—small business being $1 billion in revenue every year—and thinking that this 10-year tax plan is going to be achieving a lot of things. But perhaps they were not actually in the House during question time when the Treasurer again and again refused to commit to this enterprise tax plan.

My thinking is that what will happen is that the government will have to split the bill. They will not leave the bill in its current form, because they probably will not get it through the Senate. I think they probably know that they cannot. So what they will do is gut the centrepiece, the raison d'etre, for their re-election. I said in a speech earlier today that this mob, in rugby league terms, got up by a field goal in the last minute. That is how close the election result was. In AFL terms it would probably be a behind in the last minute. The centrepiece of everything they talked about was jobs and growth. They are not achieving anything on jobs. And, if they think $50 billion in tax cuts is going to get growth, they are not listening to the evidence which clearly demands a verdict the other way.

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