Tim Hammond (Perth, Australian Labor Party) Share this | Hansard source

What an honour it is to be following the esteemed member for Swan in this debate on the appropriation bills. I wish I could speak for the full time that is allocated to me on the way in which this budget delivered measures they will have a positive impact on my local community. Unfortunately, I cannot. The reason I cannot is that this budget does anything but deliver any form of meaningful, positive impact on my local community in Perth, regardless of the waxing lyrical that my friend the member for Swan might make you believe is the case for his electorate, just south of the river.

I will touch on five points in relation to the way in which this budget fails to deliver a meaningful outcome for my local community: firstly, the flawed assumptions upon which this so-called march to surplus is due to land; secondly, the way in which this budget fails local communities on education; thirdly, the ways in which this budget fails to deliver to communities, in relation to some flawed analysis as to revenue that it is thought will be raised from the banks; fourthly, address this place in relation to the ways in which this budget falls down insofar as my portfolio responsibilities are concerned; and, fifthly and perhaps most sadly, focus on the way in which Western Australia misses out under this budget.

The situation we find ourselves in is incredibly stark. Growth is down, wages growth is down and unemployment is up. The real concern we have is that the figures that are projected by the Treasurer to be relied upon in relation to this budget's supposed march to surplus are based entirely upon a false premise. The false premise in relation to growth relies upon wages growth being in the range of three per cent to four per cent. The problem we have is that growth at the moment is going backwards: we are barely at two per cent. What would be required would be for us to get to a position of wages growth that would see us at or about levels we have not seen since the construction phase of the mining boom. We all know the truth in relation to that: those days are gone, and we are unlikely to see them again in any shape or form that otherwise resembles the massive influx of demand for employment, mainly as a result of the enormous hive of activity happening off the northwest of Western Australia—Gorgon, Wheatstone, Browse, North West Shelf, and the like.

We are going to see gross debt pass the half a trillion dollars mark in the coming months; a total of $20,000 for each Australian man, woman and child. It is going to continue to rise and we will see the deficit for this year triple since the Liberals' first budget increase from $10.6 billion to $37.6 billion. We have also seen net debt blow out by over $100 billion since the Liberals first came to government, and it will be at record levels for the next three years. It is in that setting that we see the decisions that have been made by this government really show it up for what it is. By choosing to focus on such significant tax relief for major corporations, we see a flawed set of assumptions that will not land us a surplus. To the extent that there is any relief in this budget for any aspect of the community, that relief is going to major corporations.

But I hear you ask, Mr Deputy Speaker, how can this be the case when all we read about in the mainstream media is a purported $6 billion levy that is supposed to be deducted from the banks in order to fund the measures in the budget? Well, like most things about this budget, all is not what it appears to be. The supposed $6 billion saving to be gained by the bank levy is falling apart at the seams in relation to the design and the implementation of the levy. Let us have a look firstly at the dollar number that is likely to be gained as a result of this levy. It is looking more and more like a black hole every day. The most recent figures see that black hole being as much as $2 billion, or, putting it another way, $2 billion out from the supposed $6.2 billion saving over four years.

We see now that Westpac, the Commonwealth Bank, ANZ and NAB have released estimates that suggest only $965 million will be raised after tax in the first year of the operation, and things do not get much better from there. This was reinforced by the Commonwealth Bank only yesterday, when Ian Narev, the CEO of the Commonwealth Bank, told a luncheon in my hometown of Perth that the onus is now on the banks to refute the claim that they can absorb the levy because they are very profitable. When we look at the question as to who are 'they', Mr Narev actually does put it relatively well; that is, at the end of the day, the 'they' we are talking about is every one of us—mums, dads and shareholders. Using a breakdown of CBA's $13.1 billion income in December as an example, Mr Narev argued that the tax would inevitably affect individual Australians and the national economy, on the basis that the breakdown included $3.1 billion for salaries for 50,000 staff, $1.9 billion for tax, $2.6 billion in expenses—including to about 5,000 small to medium enterprises—and $3.4 billion in dividends to about 800,000 families.

Mr Narev's commentary proves the point that the opposition has been making right from the get-go: the design of this levy is more likely than not simply going to affect the community in the form of affecting mums and dads who are paying higher fees and charges, or retirees or those who are trying to get ahead by investing modest sums in blue-chip shares via reduced dividend payments. There is no confidence whatsoever from anything being said by the government that this so-called $6 billion bank levy is at all likely to deliver any form of net benefit to the community.

As if that were not bad enough, as if the design of this levy were not poor enough, we then look at the overall package in relation to the treatment of the banks. What also gets missed by the mainstream media when looking at the low-hanging fruit of a supposed $6 billion levy is the overall treatment of the banking industry insofar as tax cuts for companies go. It has been made abundantly clear that, over the course of 10 years, there will be $65 billion in tax cuts as a result of reducing the company tax threshold for companies with turnovers, on a sliding scale, of up to $1 billion.

What will that deliver the big four banks? While on the one hand they purportedly have been slapped with a $6 billion levy, on the other hand they will create $7 billion in savings as a result of the benefits gained from the tax cut. So, even if the government had got their act together and were not rushing something through to try desperately to salvage a couple of Newspoll points that might stave off the inevitable, which is the slow-moving car crash that you could otherwise describe as the Prime Minister's clumsy and desperate grasp on his leadership—even if this were not designed to try to stave that off—what we see here is a $1 billion net benefit to the banks either way. This defines in such sharp detail that we can muck around with all these notions of how to shave a bit here or prop up a bit there in the banking sector, but the best way through all of this, to give some clarity and confidence to the community, is a royal commission into the banking sector. Again, that has been a very consistent narrative from the opposition, both prior to the election and after the election, and it reflects the needs and desires of the community.

We have already heard in very stark fashion of the diabolical cuts to the education system in public schools and Catholic schools, which will have a profound impact upon our kids and the ability of our families to have confidence in our school system being able to deliver the education that our children deserve. There will be over $22 billion in cuts, if the Labor model is compared to the paltry offering we have seen from the government in this budget.

I said that I would move on to issues that are pertinent to my portfolio insofar as the way in which these budget bills, Appropriation Bill (No. 1) 2017-18 and related bills, are letting the community down. Firstly, after all the criticism that we levelled—in my view, fairly—at the government, it was good to see on page 33 of Budget Paper No. 2, under 'Strengthening penalties under the Australian consumer law':

The Government will increase the maximum financial penalties under the Australian Consumer Law 2011 by aligning the penalties with the competition provisions of the Competition and Consumer Act 2010 from 1 July 2018.

In layman's terms what does that mean? It actually is a good thing. It is something that Labor advocated for prior to the election and continued to advocate for after the election, because it means that corporations that breach the Australian Consumer Law and engage in conduct that is likely to, or does, mislead and deceive will not be hit with the maximum penalty available at this stage, which is about $1.1 million per breach, but up to $10 million per breach. That is a good thing for corporations to have to realise. A $1.1 million maximum penalty, regardless of how profitable your corporation might be, can be absorbed into the cost of doing business, as opposed to a $10 million penalty, which is more likely to have a meaningful impact in making companies think twice before they engage in conduct that will mislead or deceive or that is likely to mislead or deceive. The government should be applauded for taking up that initiative in relation to changes to the Australian Consumer Law.

What would be lovely to see, though, is action on the tranche of recommendations that sit behind that change to the Australian Consumer Law. The recommendations were recently reviewed and made public by the consumer affairs departments of Australia and New Zealand in their formal review of the Australian Consumer Law, and they were endorsed by the Productivity Commission in their review, which was also released around March this year. There are a whole suite of recommendations that, if implemented, could strengthen the Australian Consumer Law, giving consumers more of a level playing field when it comes to seeking redress against manufacturers and others who sell faulty goods. I will not be holding my breath, but it would be wonderful to see a bit more action and a little less conversation in relation to those reforms.

In the remaining time I would like to address another matter very dear to my heart. My other area of portfolio responsibility is resources. I must say again—bouquet before the brickbat—it was heartening to see that there will be money spent over a number of years on feasibility assessments for how we might be able to solve the current gas crisis. We see about $20 million over four years for the Gas Market Reform Group to accelerate reforms and $7.6 million in 2017-18 for some prefeasibility studies about pipelines. This is good stuff, but I have to say that I do quiver with fear about the government's Western Australian representatives and wonder how much confidence we can have in them making sure that Western Australia gets its fair share.

Our foreign minister, a Western Australian herself, quite frankly, should have known a bit better. She gave an outwardly confident answer in question time the other day about a wonderful $45 billion LNG project led by INPEX in the Browse Basin. 'This will be a great story not only for WA but also Australia,' the foreign minister said. She also took ownership of it on the basis that she said:

This project came about because of positive engagement by the then Liberal Western Australian government and the coalition federal government, underpinned by long-term supply contracts.

One might have thought as a result of the foreign minister's answer that this would be delivering great results for Western Australia. There is just a slight problem—the pipeline does not go anywhere near Western Australia. The project the foreign minister was talking about goes completely around and bypasses Western Australia. Whilst it might start in the Browse Basin in north-west WA, it goes all the way to Darwin and not a single cent goes to Western Australia. So here we have a senior government figure spending so much time overseas that she does not get her basic geography right in relation to her home state. On that basis, my real concern is: what hope do we have for Western Australia?

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