Kate Chaney (Curtin, Independent) Share this | Hansard source

I rise to speak on Appropriation Bill (No. 3) 2025-2026 and its companion bills. These appropriations give effect to the government's expenditure decisions since the 2025-26 budget, including measures announced in the 2025-26 Mid-Year Economic and Fiscal Outlook, or MYEFO. In this speech, I want to cover three things: first, to acknowledge a number of important and effective programs that deserve recognition; second, to offer some cautions about the risk of excessive, ineffective or opaque future spending; and, third, to suggest practical ways to raise revenue fairly and to improve the quality of our budget decisions.

Firstly, I'll cover important programs worth supporting. I welcome the expanded Cheaper Home Batteries Program, which is doing exactly what it set out to do: reducing the upfront-cost barrier, so more households and small businesses can store their rooftop solar energy, cut bills and reduce emissions at the same time. Australia is already a world leader on solar. We have more than 4.2 million rooftop solar installations—more than a third of all households. We have more rooftop solar panels per person than any other country on Earth. On average, rooftop solar panels save Australian households about $1,500 every year. With a battery alongside solar panels, bill savings nearly double. A household with solar and batteries could save up to $2,300 a year. Often, bills will be reduced to zero. As well as reducing energy bills, batteries and rooftop solar reduce emissions and can stabilise our energy grid. They play an essential role in our net zero transition.

At my Curtin's Pathway to Net Zero—Progress Report event a few weeks ago, we heard from a constituent and a neighbour of mine, Chris Johnson, about his solar journey from a tiny PV system 18 years ago to an updated one with a battery. He now lives in a zero-emissions household, charging his EV with sunlight and paying little more than his connection fee for electricity. He's one of nearly 1,500 Curtin constituents who have taken advantage of the Cheaper Home Batteries Program.

The government has expanded this program in response to unexpectedly high take-up. This bill enacts the expansion from an estimated $2.3 billion to $7.2 billion over the forward estimates. I welcome this expansion and support continued cost-effective investment in reducing energy bills and reducing emissions.

Second, I welcome the government's $1.1 billion investment in mental health care. This continues to be a neglected, yet increasingly important, problem in society. Mental ill-health is now the leading health and social threat to young people worldwide, yet mental health receives roughly two per cent of health budgets globally. This is not enough, given the size of the threat. My Curtin Youth Advisory Groups from the past four years have all reiterated the importance of appropriate supports for young people experiencing mental health challenges. For this reason, I support the government's investment in mental health care, and I hope that it continues.

Housing is the other major pressure on household budgets and productivity. I support the government's plan to invest $10 billion to deliver up to 100,000 homes reserved for first home buyers. But ambition must meet delivery, and, while the government's rhetoric on housing has been good, house prices continue to rise and the affordability crisis continues to worsen. I would encourage the government to look at the 15 policy ideas surfaced by my community in our Curtin Housing Policy and be bolder on this issue. At UWA's orientation day recently, housing again came up as the No. 1 concern for first years on their first day of university.

There are other programs in MYEFO and the appropriations bill that I support, including investments in the net zero plan, CSIRO, and vital skills for the construction and energy sectors. On the big picture, the government is right to point out that this MYEFO improves the bottom line in every year of the forward estimates, reduces gross debt in each year and delivers net savings from policy decisions. The 2025-26 deficit is now estimated to be $36.8 billion, about $5.4 billion better than before the election. These are non-trivial improvements and they deserve credit.

I also acknowledge specific steps to restrain spending efficiency and reprioritisation across the Australian Public Service, including a drive to reduce spending on consultants, contractors and other non-wage costs; attempts to improve the sustainability of the NDIS, including through the Thriving Kids initiative; and introducing reforms to the aged-care system to improve sustainability, including through means-tested copayments for independence and everyday supports. But even with improvements in the forward estimates, the long-term outlook still shows upward pressure from defence, aged care, health, the NDIS and disaster recovery, and government spending is at 26.9 per cent of GDP, the highest level since 1988 outside of the pandemic.

Further, while this mid-year budget reduces debt as a percentage of GDP during the four years of the forward estimates, it increases debt as a percentage of GDP over a 10-year horizon. It's yet another example of short-term political decision-making that we see so often in politics. As usual, governments would prefer policies that look good in the forward estimates, even if they make our spending problems worse over the long-term, simply because people primarily look at the forward estimates. With inflation rising and a continually growing national debt, it's increasingly important that the government makes decisions for long-term budget sustainability. Now, it's easy to call for budget sustainability but much harder to actually talk about where you would cut spending. As soon as any politician puts a potential spending cut or new tax on the table, they're open to attack, but we need to have these hard conversations.

There are a few areas that I would put forward for consideration to improve long-term effectiveness, efficiency and sustainability of our spending. Firstly, we need to prioritise prevention over treatment. Particularly in social services and health care, investment in prevention can reap significant savings in treatment. There are some practical improvements that could support a greater focus on sustainability. Currently, Treasury costings exclude consideration of second-round fiscal effects and do not consider impacts across portfolios. This means that social intervention programs that may drastically reduce costs to the healthcare system or judicial system down the road cannot consider these benefits in their costings because they exist in different departments and are considered second-round fiscal effects. Now, while this policy is designed to ensure costings are conservative and well-evidenced, the government should be investigating ways to prioritise prevention and early intervention over treatment for long-term sustainability in our social services and healthcare systems.

The Victorian Department of Treasury and Finance is trialling the use of the Early Intervention Investment Framework, a policy proposal assessment framework that's used to calculate and bank not just upfront costs and expected outcomes but also an estimate of the avoided cost to the government from the reduction in the use of acute services. This has allowed support to be provided for programs that may have struggled to get up otherwise, such as the Journey to Social Inclusion initiative, which has reduced homelessness by 90 per cent and hospital bed stays by 60 per cent in the intervention group. When considering the second-round fiscal effects, this program is cost negative. It saves more money than it costs. This is just one example of the way the government could consider investing in long-term preventive solutions to support the long-term sustainability of the budget.

There's a lot to be said for investing in prevention in a wide range of areas. Climate change is another obvious one. The government now spends an average of $1.6 billion each year on disaster recovery, but each year forecasts that it will only spend $215 million in the following year. Apparently, each year we're again surprised by the scale and scope of natural disasters, and this is only going to worsen. We need to invest in the net zero transition at home and build momentum abroad to limit the growing impact of disasters on our communities, environment and budget. We also need to properly consider the cost of future natural disasters in our budget projections and find sustainable ways of supporting recovery efforts. These problems are going to worsen, and we need to be ready.

To find other ways to balance the books, there are a number of expensive programs that the government could consider reforming. The Fuel Tax Credit Scheme costs the budget roughly $11 billion per year, with the top 15 claimants alone receiving about $2.9 billion in 2023-24. These top 15 claimants are often multibillion-dollar companies, and yet they continue to receive nearly $3 billion in rebates every year, incentivising them to burn more fossil fuels. Several independent proposals recommend requiring that the rebates for the largest companies be used for decarbonisation, turning a blunt subsidy for wealthy companies into a driver for decarbonisation without impacting farmers or small operators.

There's also been noise about the capital gains tax discount. The CGT discount costs the government about $22 billion per year, while negative gearing costs about $6 billion. These are expensive schemes that in large part support wealthy investors in housing. These two concessions do play an important role in our economy, but there is appetite for reform which could increase budget sustainability and support first home buyers. My community of Curtin is supportive of reform despite receiving a lot of benefits from these tax concessions.

Finally, there are a number of potential future sources of revenue for the government. The Superpower Institute, for example, has recently put forward two concepts. First is a polluter-pays levy on the carbon content of fossil fuels extracted or imported for use in Australia. This would cover around 140 sites, accounting for roughly 80 per cent of emissions, while raising an average of $22 billion per year to 2050, with a substantial share recycled back to households. Secondly, they've suggested a fair-share levy on superprofits in the gas sector, raising an average of $13 billion per year, largely borne by offshore foreign shareholders and designed not to raise domestic gas prices. Together, these two levies are estimated to raise $35 billion per year on average between 2026 and 2050. Now, there is much to consider before implementation of these proposals, but they do show that there are options out there for long-term budget repair while supporting outcomes such as intergenerational equity and the clean energy transition.

Appropriations are ultimately about choices: how we invest scarce public dollars to ease cost-of-living pressures now, build the productive capacity of the economy and honour our obligations to each other, especially to the young and to the vulnerable. There is much in these bills and in MYEFO that helps: cheaper home batteries that cut bills and emissions, a serious expansion of youth mental health care and a housing package focused on first home buyers. But we must also be honest about our long-term fiscal pressures. We keep the budget on a sustainable path by prioritising prevention, by raising revenue fairly, by reducing tax concessions that no longer serve their intended purpose and by considering well-designed levies where the public interest is clear. That is how we protect the next generation's opportunities, how we give people in Curtin and across Australia confidence that their parliament can deliver practical progress, clear priorities and long-term responsibility at the same time.

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