Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I will take that interjection from the member for Durack. I do remember that. Do you know what you do? I am sure the member for Durack would know that you look at the circumstances. They brought in a deficit levy, which Labor supported, because there was a deficit. Is there still a deficit? Yes. As I am sure the member for Durack would well know, there is still a need for budget repair. In 2014, Treasurer Joe Hockey said, 'The deficit levy was brought in to ensure higher-income Australians contribute to the budget repair.' That is a quote from the Treasurer of the day. Well, the budget is not repaired—far from it. The deficit for 2017-18—it is hard to believe this—is 10 times bigger than that predicted by Treasurer Hockey in his first budget, that horror budget. And he was of course punished for that budget by being sent to some place called Washington—I am not sure where that is!

Gross debt is equivalent to $20,000 for every man, woman and child in Australia. Yet the Turnbull government is lifting the deficit levy from higher income earners. You do not need to be Einstein to work out that if you take a half a per cent of someone's wage and then give them back two per cent of their wage, they will end up with more money. So the effect of the Turnbull government budget is very simple: it gives more money in the hand to people earning over $180,000 and less to those earning less than $180,000. Suddenly, according to the Turnbull government, high-income earners do not need to contribute to help repair the budget. This is at a time when the damage done to the budget by the coalition government has left it in a state that obviously is diabolically worse.

This government thinks middle- and low-income families should be doing the hard lifting to repair the budget mess that they have created. They are about to enter their fifth year of government. Remember that. This is not a group that are fresh to government; they are about to enter their fifth year of government. Under the Turnbull government, 10 million working Australians will be paying more tax. Under the Turnbull government, low-income earners will be taking home less pay after they have their penalty rates cut from 1 July. Under the Turnbull government, high-income earners and big business will be paying less tax because of the bizarre commitment to a $65 billion tax giveaway.

Increasing the Medicare levy across the board is a flat tax. It is unfair. It is unfair to make a cleaner pay a higher tax rate, which may mean they cannot afford to see the dentist. It is unfair to make a nurse pay a higher tax rate, which may mean they cannot pay for their children to play sport. It is unfair to make a teacher pay a higher tax rate, which may mean they cannot afford to get their car repaired or buy extra equipment for their classroom. It is unfair to give a tax break to those who have a greater capacity to pay when those who have little capacity to pay, and less disposable income, are asked to pay more. That is fundamentally unfair, fundamentally un-Australian, at a time when we have the greatest level of disparity in terms of income distribution since the Great Depression.

For wealthy Australians, being asked to contribute a fraction more may only be the difference between spending two weeks overseas this year or 2½ weeks. And good luck to them. But the wages of low- to medium-income earners are stagnating. They have the lowest annual wages growth on record—ever since the ABS started publishing data in 1997. But, for high-income earners, the income of the top one per cent of income earners, and that includes politicians, has doubled. The income of the top 0.1 per cent has actually tripled.

What is Labor's approach? What would we do that is fairer? We would confine the Medicare levy increase to only those with incomes over $87,000. I am not suggesting that you are wealthy if you are making over $87,000; I am just saying that you would have more capacity to find a few extra dollars. This would protect 10 million people from paying more income tax. To make up for that lost revenue, because we do believe in responsible budgets, Labor would retain the deficit levy for those earning over $180,000. Over the medium term, our proposal would actually raise more revenue than the coalition's. The budget would be $4.5 billion better off over the next decade. Our position is fairer and better for the budget.

Budgets are all about choices and priorities. It is clear that the Turnbull government's priorities are to make the rich get richer and the poor get poorer, and that is un-Australian. The ANU Centre for Social Research and Methods has done modelling on the Turnbull government's budget decision, and found that twice as many households would be worse off than under the Labor Party's fairer plan—twice as many. The ANU modelling shows that 60 per cent of households would be worse off, 39 per cent would see no change and only one per cent would be better off if the Turnbull policy were in place. Alternatively, the ANU modelling shows that under Labor's policy only 27 per cent of households would be worse off and 73 per cent would see no change at all. The modelling also shows that over four years Labor's policy would raise $300 million more in tax than the Turnbull government's proposal. So, over 10 years Labor would raise an extra $6.8 billion. This is a fairer solution.

It is not fair to make battlers pay more and have millionaires getting a tax cut of $16,400 at a time when wage growth is at record lows, when energy prices are rising and when young Australians are struggling to get together a deposit for a house and are concerned about going to university. Imposing a flat tax would be cutting the income of people who are struggling to make ends meet right now. Even more troubling is the data from the National Foundation for Australian Women, which found that women on around $50,000 could face an effective marginal tax rate of—believe this—100 per cent. This would mean that a woman who has graduated from university and is earning $51,000, who is relying on child care and is receiving family payments, will have less take-home pay than a man earning $32,000. How could those opposite argue that that is fair?

The priorities of this Turnbull government are clear for all to see in their policies. They will always look after the top end of town. They will never protect Medicare. They claimed on budget night that they were lifting the Medicare freeze, but what did we find out later? The freeze will not be lifted until 2020. There are 113 Medicare items that will stay frozen for another three years. These items were accessed 23 million times in the last financial year. Important health services like consultations for mental health plans and chronic disease assessments will stay frozen. These are services that are essential to keep Australians healthy.

If that is not enough, we also see that their plans involve a significant cut to public hospital funding and abolishing the private health insurance rebate. The Liberal government cannot be trusted with our health care. At Senate estimates, it has been revealed that senior health bureaucrats have been actively working on options to attack our universal healthcare system for years. The task force proposal was discussed as recently as a few weeks ago. We should have learned by now that the Liberals will attack Medicare every chance they get. It is unfair to the universal health care that we all cherish and that keeps so many people from going down the road that the United States has. Do you know the No. 1 cause for bankruptcies before the Whitlam Labor government stepped in and brought in Medibank and Medicare? It was health costs. It is unfair that universal health care, which we all cherish, is again under attack by this government. Our universal health system is fair; it is very, very egalitarian and very, very Australian. It is the envy of the world. Medicare, the legacy of the late, great Gough Whitlam, will be under threat as long as we have a coalition government that is blinded to the benefits that it brings. Labor will always fight to protect Medicare. I guarantee that.

Ms Husar interjecting—

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