Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I finish in continuation from last night on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014. In the remaining time I would like to address why the amendment moved by the member for Indi is a mistaken amendment and why it is dangerously mistaken. Firstly, going back to the specifics of this bill, it lifts our marginal tax rate, the highest rate of our marginal tax rate, on incomes above $180,000 from 45 per cent to 47 per cent. But we do this as a temporary levy—it is temporary. It will take effect from 1 July this year and end on 30 June 2017. It is important that it is temporary because, if you continue to lift marginal tax rates, you do not necessarily increase the total tax take. We live in a global society, a global economy, and we need to ensure that the marginal tax rates that we have in Australia—those highest marginal tax rates—make us as a nation internationally competitive.

If we go from 45 to 47 per cent plus the Medicare levy, plus the NDIS levy, the highest marginal tax rate in this country will now approach 49 per cent, which will make Australia have the eighth highest marginal tax rate in the world. We need to look at what our competitors in nations nearby have as their marginal tax rate. For example, across the Tasman in New Zealand, their highest marginal tax rate is only 33 per cent; in Singapore it is 20 cent; and in Hong Kong, it is 15 per cent. So if we think that we can go on forever with a marginal tax rate, the highest marginal tax rate at 49 per cent, so far above our nearest neighbours that we compete with, this is a dangerously mistaken idea.

The reason I say that is that we have to remember we could have a 100 per cent marginal tax rate and, of course, there would be no income. There is a certain point you reach when you raise the marginal tax rate when it becomes a disincentive for entrepreneurs in our society to go out there and take risks and put their own money on the line if they have to give half of that back in tax. This is why other countries across the world throughout the last several decades have actually lowered their highest rates of marginal tax, because they realise that is the best way not only to increase the total tax take but to stimulate the economy. So the proposed amendment is very poorly thought through, it would actually damage the economy in the long term and we cannot support it. But overall this is, unfortunately, a necessary measure. As a member of the government I say we cannot impoverish future generations of Australians and that is why the measure is necessary.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I congratulate the member for Hughes for being one of the few members of the government that seems prepared to talk on this budget in this chamber. I remember the last three budgets, and the last two Labor budgets in particular, when all of us that are now on this side of the House were incredibly keen to get out and speak about the budgets and were incredibly proud of them. We took every opportunity to rise to our feet in this House in the times for three-minute and five-minute statements and 90-seconds statements in order to talk about the budgets and how proud we were of the many measures that the Labor government took to improve opportunities for Australians, particularly through education, through funding innovation, through building high-speed broadband for the future.

Members of the current government seem willing to interject, but they are not really willing to rise to their feet and speak proudly about this budget. That is not surprising because of course it is an incredible breaking of promises that were made less than a year ago before the last election. In fact, when the member for Hughes spoke about the bill we are talking about now he failed to mention that before the election the government—the opposition at the time—promised no new taxes. There were ads clearly saying no changes to pensions, no cuts to education, no cuts to health, that Labor would raise taxes but the Liberals would lower taxes. Yet here they are raising taxes in a clear breach of a commitment made to the Australian people. I wonder too, when they do rise to their feet, whether they actually believe what they are saying. I listened to the member for Hughes last night and I heard him refer to figures that are clearly inaccurate. I wonder whether he knows that or whether he is simply repeating words that he has been told to say.

Let me make a few things clear—and you do not have to believe me, you can just check this by going back to the Pre-Election Economic and Fiscal Outlook and the budget papers from last year and comparing them to the budget papers that were presented to this House last Tuesday. Just do your own research before you keep repeating things that are clearly false in this House and to your electorate. For a start, if you take the outlook of the budget position in 2014-15 and through the forward estimates from the pre-election fiscal outlook and compare it to the government position, the government position on both debt and deficit is actually worse, not better. For all the savage cuts to pensions, to education, to health, to families, for all the pain that is going to be inflicted by this government on the people of Australia, the government has not done the thing that it claims is the primary reason. It claims the primary reason is to pull back the debt and deficit, and yet it has not.

The budget debt in 2014-15 is worse than that outlined in the pre-election fiscal outlook—which, incidentally, was the last time that the Treasury and Finance prepared budget statements without any influence at all. I do not agree with the current Treasurer that Treasurers are able to convince Treasury to massage their figures in a remarkable way, but the Treasurer, Joe Hockey, seems to believe that they do. But the pre-election fiscal outlook was prepared by the Treasury and Finance without the influence of either side of politics. If you look at those figures and the figures in the budget papers presented last week, the deficit for 2014-15 is slightly worse and the deficit continues right up to 2017-18.

Mr Craig Kelly interjecting—

Madam Speaker, it was extremely difficult for me to listen to the member for Hughes last night in silence, but I did. I would appreciate it, really, if I could have a little bit of politeness from the government. They are the government—a little bit of grace in government would actually be rather pleasant.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

I think the honourable member knows that there are interjections throughout, but they need to be kept in a moderate way.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

Thank you Madam Speaker. Let us talk, too, about this debt which the interjector just raised. If you look at MYEFO—I call it 'Joe's-EFO' by the way, because I think it well and truly is his—compared to the pre-election fiscal outlook, what you see is a government that came to government in September last year and began increasing its spending. In fact, the debt level increased by a factor of two.

It did that for two reasons: firstly, because the Treasurer began spending—he actually increased spending by $10 billion in that period. Ten billion dollars! While talking about debt, while talking about this disaster that he had to fix, he actually set about making it worse. And then he changed the assumptions so that it looked much worse—so that between the pre-election fiscal outlook in September and MYEFO in December the debt level doubled on paper.

In reality it went up anyway because there was real spending in there and the reversal of some tax increases to high-super earners as well. So he did a few things, but basically he doubled the debt between PEFO and MYEFO. And then he extrapolated that, and then he said that if the government went on holidays for five years and did nothing that in five years' time the increased debt—which he created—would be even bigger.

Then people come into this chamber and use these fictional figures that have been created by the Treasurer to defend the most savage cuts that we have seen—by their own account—in decades. These are the most savage cuts that we have seen to average families and low-income earners in decades and they are on the basis of faked, fudged figures—and I am being incredibly polite in using that language.

And for all the cuts they are making—for the cuts to pensions, the cuts to education and the cuts to health; the cuts that make a single-income family on $50,000 a year $5,000 worse off—there is not an improvement in the bottom line. The rationale for doing it, which was to improve the bottom line, has not been delivered. Rather than improve the bottom line, which they claim is the great reason for all this stuff, they have actually spent the money elsewhere. They have spent $20 billion on a Rolls-Royce paid parental leave scheme. They have given $9 billion back to mining companies. If they manage to repeal the carbon price they are giving billions of dollars back to the biggest industries in this country. They have given back whatever money they have cut from the lowest and most vulnerable people in this country to the people who need it least.

This is a sham, and every time one of them gets up in this House and talks about how it is a tough budget because it needed to be, I urge them—seriously, if they have any consciences at all and if they care about truth and honesty at all—actually to go back and have a look at the figures and prove for themselves that these cuts did not result—did not result!—in an improvement in Australia's fiscal position. In fact, it is worse.

This particular bill is the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014, even though it does not repair the budget, because whatever money they get they will spend elsewhere and make it slightly worse. We could change that title perhaps to Tax Laws Amendment (Temporary Budget Damage) Bill—I do not know. It does not matter much; there is so much fraud in this. This bill raises the top tax threshold by two per cent for a period of three years—again, something that the government swore blind that they would not do before the election but they did. But it was seemingly drafted in such a rapid and incompetent way that there are loopholes in this that you can drive freight trains through. You can drive freight trains through the loopholes in this.

For a start, it is nine months before the fringe benefits tax rate rises to match—nine months. So that is not quite the first year, but nine months of the first year being really easy for anyone on over $180,000 to adjust which bit of their salary comes in their pay packet and which part comes through salary sacrificing to bring their salary back below $180,000 and avoid this altogether. In fact, if members really want to know how this is likely to work, there is a great article by Nassim Khadem in The Sydney Morning Herald on 16 May which gives a page and a half of quite small writing on how not to pay the debt levy if you are on over $180,000 a year. There is a nine-month loophole in this. We also know, of course, that people on higher salaries who have more disposable income also have a whole range of other ways to reduce their taxes. So this is a short-term levy for the better off, those earning above $180,000, with loopholes you can drive a freight train through.

I am hoping that in the budget papers, in the calculations that Treasury made, they understood how many people earning over $180,000 would manage to avoid paying this; otherwise, there will be another hole in the budget, and the debt and deficit position that the government claims to be trying to fix will be worse again under this government. Nevertheless, it is a fig leaf of a policy, while cutting savagely from the lower end—up to $5,000 from a family with two children on a single income of about $50,000. This levy is a relatively modest rise in the tax for a temporary period.

I would like to talk about a few other things in this budget as well, just to get to the level of the fraud that is in this. Pensions are an absolute example of this. To pretend that reducing the indexation—

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

I would remind the member that this is specifically the temporary repair levy. There is ample opportunity on the appropriations bills coming up to address the budget generally, so perhaps you could keep your remarks to this bill.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I will do that, Madam Speaker, but I did listen carefully to the speakers yesterday and noticed that very few of them spoke about the levy at all, so again I—

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

In that case, I am sorry; I was not in the chair when that happened, but—

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

No, I can see that you were not, but I will accept a different set of rules for me today than for those who spoke yesterday.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

No, we will not give you a different set of rules. If that was the precedent earlier, you can be wide ranging.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

A different set of implementation of the rules, perhaps, Madam Speaker.

An honourable member interjecting—

Yes. I will continue on. This, of course, is a fig leaf of a policy which pretends that the burden is shared between those on $180,000 and those in the vulnerable and less well-off section of the community. Again, it is interesting to compare the treatment of pensioners to the treatment of people who earn an income of over $180,000. Pensioners, for example, will have their indexation reduced permanently, according to the government, from male average weekly earnings or CPI to just CPI—not temporarily for three years with giant loopholes but permanently, according to this government—which over time will reduce their spending capacity relative to the cost of living.

We have seen what that looks like. We saw what it looks like under the Howard years, the last time that pensions were indexed to the CPI that way, and we saw at the end of the Howard years pensioners in desperate straits. When we came to government, we had to take some really quite emergency measures. A single pensioner was on $250 a week at the end of the Howard years, absolutely not enough, so we had to take emergency measures. To pretend to the Australian people that you can put pensioners back on that old indexation method and not see the same cost-of-living pressures on pensioners within five, seven or 10 years is just fraud. There is no way, given the way that prices rise relative to wages, that you can index pensioners on a lesser rate indefinitely and not put unbearable cost-of-living pressures on them and have to adjust at some point. There will have to be a catch-up. This is not a change that will last, as the government says, through to 2050. It simply cannot.

There is also the other side of it. If you actually want to reduce pension payments, one of the ways to do that is to reduce the number of people who need the pensions. But, rather than trying to encourage increasing superannuation contributions, the government have actually delayed the increase in superannuation contributions, so they have made it more likely that people will need the pension, and then they have cut it. That sort of contradiction is through everything.

Again, look at the burden that young people will pay—a temporary levy for people on over $180,000 but, for people under the age of 30, a six-month wait for unemployment benefits, Newstart as it is called these days. If they lose their jobs—six month's wait. But rather than introduce programs that help young people get into work, they have actually cut the programs that help young people get into work—cut the programs that help them get into work and then refuse them assistance if they lose their job. The contradictions and the nastiness of it are quite extraordinary.

It is the same with health. Cut funding to preventative health, cut the Health Prevention Agency, cut funding from my community of $700,000 to fight obesity and then, when they go to the doctor, charge them more.

A government member interjecting—

For the member who is interjecting, there was money for CCTV cameras: the government cut it and now they are giving it back, apparently. So get the facts right before you interject. Speak the truth. Please check your facts; you are not.

Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

I will just reflect and say before I start my speech: it is sad that members of the government are not informed about what the real facts are. It is sad that they are relying on the leadership of the Treasurer and the Prime Minister to advise them what the facts are. I would advise all members of the government to go to the OECD website, go to International Monetary Fund, and see what the real situation is in relation to Australia's debt.

There is no need at all for a debt levy. It is just to create a fear among Australians that we are in a difficult position so the government can introduce a lot of retrospective situations that we do not need. The true situation is, in the OECD, Australia is the third lowest debt nation. Our debt is about 12 per cent of our GDP, and the debt in the average advanced economies in the OECD is 73 per cent of their GDP. So we are five times better off, and maybe that is the reason why Australia is only one of 13 nations in the world that has a triple-A credit rating. It is as simple as that.

When the Treasurer and the Prime Minister made their promises before the election, they were aware of these things and that is why they made the promise that there would be no cuts to pensions, no changes with Medicare and all the rest of it.

As Australians we do not want to sit in this place and talk rubbish and lies about what the real state of the economy is. There are tried, tested and proven means which are available to every member of the government on the OECD and the IMF to say what our true position is. So why then doesn't the backbench in the government hold their leadership to account? Why don't they raise these irrefutable facts in the party room and get the explanation from the Treasurer and see what he has got to say about it? And why do the Treasurer and the Prime Minister lie to the Australian people? Aren't they responsible for that?

I joined the Liberal Party many years ago—40 years ago I was a Liberal-National Party member. I was here in Canberra when we had the Field affair, the Gair affair. I have been through more elections than most of the members of the government would ever know. But I remember Bob Menzies as Prime Minister of this country who stood for a Liberal Party that was a low-taxing party. I remember Malcolm Fraser as Prime Minister of Australia who stood for a low taxation, and John Howard. The Liberal Party in its history has believed in low taxation, so to bring in a debt levy, to tax anyone, to push our taxes higher is just a sound that the Liberal Party are moving more and more to become a socialist party, no longer different for Australians and not providing any leadership for the business community of Australia.

It is not about small government; it is about bigger government. That is why you need taxes, and this debt levy of two per cent, breaking a promise that the Liberal Party made to all Liberals of Australia that they would not increase taxes, is tantamount to a misrepresentation.

As a director of a company for many years, I know that, if I lie to my shareholders when raising money or doing something, I risk the proposition of being charged for deceptive and misleading conduct. The Prime Minister, whom I supported very strongly in the 2010 election, went out there and made a lot of promises to the Australian people. For three years, he criticised Julia Gillard, the former Prime Minister. For three years he said that she broke one promise, which she did to the Australian people. That was the basis of getting rid of the Labor Party. But now we have got a Prime Minister who has not broken one promise; he has probably broken 30 of them.

Last weekend I was approached by four members of my electorate—elderly women, aged between 70 and 83 years of age—who said that every month they give their pension cheque to the nursing home where they live. They did not vote for me at the election, but for 50 years they have been loyal members of the Liberal Party and they have voted for the Liberal Party at every election because they were loyal Liberals. Their husbands had fought for this nation in World War II, and were now deceased, and they were placed in the nursing home.

After they give their cheque to the nursing home they are left with a sum of $15 a week, which the nursing home gives back to them. And every Friday they get that money and they pool it together. They have enough to buy a taxi to go down with their concession cards and go to the movies. And sometimes they have some other money that the family might give them so that they can have a coffee or a chocolate.

But there will be no more coffee or chocolate for these women; they will not have an outing every week. Their lives will be diminished by the party that they have supported for 50 years; by the nation that their husbands fought for in the Second World War. They will lose all of that because of the betrayal of the Liberal Party and the Liberals of this nation. And they wonder why they will get opposition in the Senate. They will get more than that until they wake up to themselves.

The Liberal Party should be a broad church. It should be representing all sections of society, not just one narrow view. It should not be based upon lies, deceit and deception. The Liberal Party should be greater than that and stronger than that, and it has been for many years. It should not be disrespectful for the Liberal leaders who have gone before—people like Bob Menzies, Malcolm Fraser and John Howard—who had real character. That is what they should be doing, and caring about Australia. The Liberal Party is not a high-taxing party. How can they bring in a debt levy and tax us higher and higher again? Is this a return to the Whitlam era? They should wake up to themselves. And how can they lie to the Australian people?

In my state of Queensland—

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Member for Fairfax: the word 'lying' and accusing the Prime Minister and Treasurer of lying is an parliamentary, and I would ask you to withdraw those words.

Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

I withdraw that, Madam Speaker.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

And you did it earlier as well.

Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

I completely withdraw that, Madam Speaker.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Thank you.

Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

I think the Prime Minister was untruthful. He did not tell the truth. If I were a director, as I said before, and I were untruthful to my shareholders about what I would do and what money I would raise, they would have every right under Australian law to take action against me for misleading and deceptive conduct. And if I were found guilty I would be thrown into jail, as I should be.

Should we expect any lower standard for the Prime Minister, or the Treasurer or the government of the day? Shouldn't politics be about honesty? What sort of an example do we want to be to the children and the young people of Australia? When I left school at 18 I was on unemployment benefits for about 4½ months. I did not know what the future held for me. I was not capable; I did not have the skills and I did not really know what I wanted to do. But I was able to get my act together because of the investment that the Australian people made in my life. And over the years I was able to contribute millions of dollars in taxation to the government, employ thousands of people and provide billions of dollars worth of exports. And we want to stop these sorts of people being supported!

Do we want to increase youth suicide? Is that what it is all about? Or do we just want to keep people starving and having to turn to crime? Is that the sort of society that Bob Menzies envisaged when he founded the Liberal Party? Is that what he wanted to do? Is that what the government wants to do?

And this whole gambit to deny the states of $80 billion of funding for hospitals and schools is just really designed to make the states not be able to function and have to sell their assets to others, through lobbyists. How could you deny the community decent hospitals and decent schools, based on a lie? We spend around nine per cent of our GDP on public expenditure for health. Look it up—it is on the OECD site. The United States, with their great health system, spends 15 per cent. So we spend nearly two-thirds of what they spent.

We pay five per cent of our GDP in pensions. The United States, that great socialist economy, pays six per cent of their GDP in pensions. So not only are we one of the lowest-debt countries in the OECD, our expenditure on social and public welfare is less than most of the countries in the OECD.

They are the facts. That is not debate: go to the website and look it up. I advise members of the government to take it to their party room and say, 'Treasurer, Prime Minister, why do we say these untruths to the Australian people if we know that it is false? Will that win us any votes? Will that get us back to the election? Is that good, responsible government?' That is what we need to ask them.

Secondly, the whole idea politics to me, since I became a member of this House, seems to be that in year 1, regardless of which party you are from, you blame the other side for the mess they have left you in. You then say you have to get control of as much money as you can because things are really bad, when they are not. In year 2, you have to maintain that position, so you have to keep up the fight and get control of more and more funds and deny people more and more of a reasonable standard of living so that in year 3 you can let the money go and win the election. How cynical is that?

How many members of the government really know what the true figures are? I remember a conversation that I had with a National Party senator back in 1998, I think it was—maybe it was a bit earlier; it was when Paul Keating was Prime Minister. He said there were only two people in the parliament at that time who knew anything about the economy, and they were John Stone, who had been the Secretary to the Treasury, and Paul Keating. Everyone else did not know anything; they just went along with what they were given to read when they turned up on watch duty. But the Australian people are more important than that. We now live in the age of the internet, the age of information. All members of the government can go to the website of the OECD and see what the real situation is. They can go to the International Monetary Fund and see what the real situation is. So why don't they do it?

Anyway, I will just say that, when these measures get to the Senate, Palmer United senators will just be voting against them.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I suspect that the member for Fairfax and I have very different outlooks on a number of things. I think that we would consider policies and issues from very different perspectives, and our backgrounds are probably very, very different. But the one thing that I agree 100 per cent with him about is the fact that honesty in politics is so important. We must be honest. We are role models for all Australian people. If they cannot look to their government to be honest, I do not think that as a country, as a nation, we have much of a future.

It is very interesting when you look at this budget and particularly this component of the budget—and I will talk a little bit about it in a moment—and you consider that it is based on a manufactured crisis. It is based on a false premise. It is based on information that is totally incorrect, a manufactured crisis that is saying that the world is about to end, that we are in a terrible financial situation in Australia. It is simply not true. I join with the member for Fairfax in encouraging members of the back bench to actually visit some of those sites that he was talking about to gather the data. Look at the fact that we have the third-lowest debt in the OECD. Look at the expenditure on health and welfare and compare it to other countries. And look at what we get for our expenditure on health: universal health care, so that nobody in Australia has to die because they do not have money. Look at the US and compare ours to their system, where, if you do not have the financial ability to pay for treatment, you quite often die. Is this the kind of country that we as a nation are aspiring to be?

I certainly was not elected to parliament to deliver that to the Australian people. I was elected to parliament to make this place a better place, and I do not think that this budget does that. I do not think this budget delivers anyway, and I would have to agree with the member for Fairfax 100 per cent that it is based on untruths; it is based on lies; it is based on false premises; and members of the government are perpetuating those lies and ensuring that the Australian people are not given the true picture.

But I have news for them. The Australian people are not believing what the government says. In my street stalls and through the internet and while meeting with constituents, I am being told that they do not believe what this government is saying. They think that they have been lied to. They feel that they have been deceived. They do not believe that a government, or a Prime Minister, or a political party, should say one thing before an election and another thing after the election. And that is exactly what this government has done.

I listened to the member for Fairfax's contribution to the debate. He is a man that has always been committed to the conservative side of politics; a man that has his roots in the Liberal Party; a man who started out as an 18-year-old who, for a while, relied on a Newstart or unemployment benefit or whatever it was called at that time—and I look at the great success that he has had in life, and the enormous contribution that he has made to this country. I look at families where the major breadwinner may lose their job—they may be under 30 and they may have three children. What redress will they have when there is no money coming into the house? How do they fit into this government's stereotypical ideological picture of who a person under 30 years of age is and what they should be doing? This creates real hardship for real people. This is an uncaring government, a government that really does not get the big picture.

The legislation we have before us today, the Income Tax Rates Amendment (Temporary Budget Repair Levy) Bill—once again, based on that fallacy that there actually is a need for repair, and that we are in a crisis—looks to put a levy on people with income that is over $180,000 a year. Once again, I emphasise: it is a manufactured crisis. Australia has a AAA rating with all rating agencies. That is not always the case. There are only 13 other countries in the world that enjoy this AAA rating. It is not something that is handed out based on the fact that it would be nice for Australia to have that rating; it is earned. It is strong economic management that leads to a AAA rating. It is a strong economy that leads to a AAA rating—not a manufactured crisis that says that Australia is in a dreadful situation.

Deputy Speaker, if you look at why we have a deficit, there is one event in Australia's history that those on the other side of this parliament seem to have forgotten—that is, the GFC or global financial crisis. At that particular time, if action had not been taken to prevent Australia going into a recession, thousands of Australians would have lost their jobs. Our economy would have come to a standstill. There is one conversation that I remember vividly. I had a builder come into my office. He had a company where he employed in excess of 20 people and he said to me: 'I don't vote Labor. I have never voted Labor'. But he said that the actions that the Labor government had taken—in investing in infrastructure, in creating a situation where there was building work available—meant that his company continued to operate. He said he would have gone bankrupt if that investment had not been made. His company continued to operate. His employees continued to be employed and, as such, Australia rode out the global financial crisis.

If members of the government would like to do a bit of research and compare the taxing regime of a government with the taxing regimes of the opposition, you will find that the Howard government was a much higher taxing government than Labor. If you compare what this government has done, you will find that it is a higher taxing government than Labor. The legislation we have before us today is a testament to that.

I cannot stand in this parliament and be in a situation where I see so much hardship, so much pain, being delivered to people in the electorate that I represent. This is a broken promise. This is a lie. This is just a further example of a lie that was told before the election. The hurt and hardship that is going to be inflicted on Australians who are on an average income and who go to work each day, and on pensioners like the member for Fairfax spoke about—people who have made an enormous contribution to our country—is much greater than a two per cent levy on high-income earners who will be able to work out a way to avoid it.

I would like to share with the House an email I received last night from one of my constituents. She wrote:

I am a concerned grandmother writing with regard to the FTB B changes in the Abbott Government's budget. Actually I am concerned and outraged about much of the budget, however will focus on this particular issue for now.

She goes on to say that she has a son, a daughter-in-law and a four-year-old granddaughter who live in Perth, the most expensive city in Australia. Her son is a fly-in fly-out worker. He does eight days on, six days off. Her daughter-in-law stays at home for a very good reason: she cares for their daughter who suffers from a rare and complex form of febrile convulsions, so she is making a big contribution by caring and loving her child who is not well.

Her son earns $102,000 a year. They pay $30,000 for a small three-bedroom house. Her son pays $27,000 tax and $8,000 HECS. They have got a personal loan that costs them $5,000 a year and that leaves them with $577 per week to keep a motor car on the road, utilities, clothes, health costs, food and medication. If you have got a child who has febrile convulsions, obviously you need to invest in life-saving medication. This grandmother goes on to say that she finds this particular aspect of the budget—and all of the budget—outrageous and a gross inequity. I think this example shows the inequity that will exist. They will be losing Family Tax Benefit B, and somebody on $180,000 a year will be paying two per cent on a temporary levy.

This budget as a whole makes me sad. There is a tax on pensioners. I had pensioners ringing my office before the budget was brought down, terrified about what it would contain. Since the budget has been brought down, the office has been contacted on an ongoing basis by pensioners who just do not know how they are going to make ends meet.

On the changes to Medicare: universal health care is imperative to ensure the health of our nation. If you do not address health needs when they occur, if a person is sick, does not go to the doctor and puts it off, it means that they are going to get sicker and the cost is going to be greater. A $7 GP tax is just going to make it harder for families, harder for pensioners and harder for Australia as a whole. This is a backward-looking budget. This is a backward-looking tax. This is something that the government should hang its head in shame about.

The Australian people will judge the government at the next election. They do not have short-term-memory problems. They will understand how harsh, how cruel, this government has been and how it has attacked the Australian people at every turn. It is not good enough, and I condemn the government.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

It is my privilege to follow a very good speech by the member for Shortland about the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and the 14 other bills required to implement the tax increases proposed in the government's budget of broken promises and messed-up priorities. This bill implements the temporary two per cent tax increase on workers earning more than $180,000 a year over the next three years. Right off the bat, let us call this for what it is. It is a token attempt to pretend that the budget is fair and that the burden of the broken promises and cost-of-living increases has been somehow fairly shared. Give us a break.

There is a very good reason why Australians reject that notion and why the government is falling apart after this budget. That is because, like so many measures being proposed, it is based on a con. To pretend that a temporary levy that a lot of wealthy people can afford to avoid makes up for the brutal assault on low- and middle-income earners is offensive in the extreme. It takes for mugs a lot of good people who are just trying to make ends meet in the face of this attack from a government that promised, hand on heart, to be part of the cost-of-living solution—until the ballots were in, and then they turned into a big part of the cost-of-living problem.

We have already said publicly that we will not stand in the way of this specific measure in the parliament, only because we have so many more important battles on our hands in this budget, like the fight to save Medicare. I want to acknowledge the member for Ballarat and the member for Throsby here in our health team, who are doing such a good job defending Medicare from the attacks of those opposite. We also have other big fights in defending the safety net for Australians and the fight for an affordable higher education system that will fuel social mobility and economic growth.

Other speakers have mentioned that this tax increase is one of the many broken promises that are at the core of this budget. Australians who are affected by the levy will feel let down by the government, which promised one thing before the election and did the exact opposite after the election. It is worth recapping some of the things that the coalition took to the Australian people at the election. For example, on 14 March 2012, the now Prime Minister said:

What you'll get under us are tax cuts without new taxes.

That is a broken promise. On 20 November 2012, the now Prime Minister again said:

We are about reducing taxes, not increasing taxes.

That is another broken promise. On 22 May 2013, at the National Press Club, the now Treasurer said:

We have to end the wild ride of new taxes, undelivered tax cuts, on again/off again payments, and knee jerk reactive decision making.

That is another broken promise.

Now, to hear speaker after speaker on their side on this bill and other bills pretend that they have kept their commitments just rubs salt in the wound for a lot of people in our community and in our country. This tax increase on high-income workers is designed to provide political cover for the Treasurer as he introduces the most unfair, most divisive budget in memory, targeted at low-income families, the sick, the frail and the disabled. Analysis done by NATSEM—not by the ALP, not by a political player, but by one of the most credible economic modellers in the country—proves that the budget burden will fall most heavily on the poorest families, regardless of this tax increase for high-income earners that we are talking about now.

The poorest 20 per cent of families earning less than 35 grand a year after tax will lose almost five per cent of their disposable income as a direct result of this budget. At the same time the top 20 per cent of households earning $88,000 or more after tax see a decline of only 0.2 per cent of their incomes. There is no way that this budget can be described as equitable or fair. People in my community and in lots of communities cannot afford the cruelty and the nastiness in the budget. There was some other analysis released the week before last that showed that, unfortunately, when it comes to the impact of this budget my electorate of Rankin is the hardest hit in Queensland. People do not need economic modelling or studies like that to tell them that they are in the gun when it comes to the measures in this budget.

The fact of the matter is that this is not a budget striving to be fair, as the Prime Minister has claimed. Instead, the heavy lifting is being done by the pensioners, who stop me in the street worried they will not be able to pay their bills; it is on the parents who are already fighting to make ends meet and fear they will not be able to afford the kids' uniforms when they grow out of the old ones; is on the sick and the vulnerable, who are being forced to cough up an extra $7 for every trip to the doctor and an extra $5 for every script when they just cannot afford these sorts of cost-of-living hikes. This budget is an extreme and ideological attack on low income and working Australians and this temporary increase of tax on the wealthy does nothing to change or camouflage that very simple fact. It is the most divisive budget in memory from the most divisive Prime Minister in memory. It pits Australian against Australian in a harsh and unnecessary way.

The government justifies this cruel, unfair and deceitful budget by manufacturing a budget emergency. Let me make this very clear: that budget emergency is a con. This government inherited a budget, as the member for Shortland said, with a Triple-A credit rating from all three major ratings agencies, one of the few major economies in the world to hold this title and something that neither Peter Costello nor any Liberal government has achieved before. They inherited a budget in a responsible condition after the last government made more than $180 billion of savings over that term in office. If the budget were replete with wasteful spending that could be cut, as the Prime Minister claimed before the election, they would be relying on cuts rather than tax hikes like the one we are describing now. In actual fact, when this government got into office they did all they could to double the budget deficit and make the figures look far worse than they inherited. Before the midyear update they took a $13.7 billion hit to the budget bottom line to give, among other concessions, tax breaks to large multinational companies, big tax breaks to people with super balances over $2 million and tax breaks for those who borrow to invest overseas. They paid the Reserve Bank reserve fund almost $9 billion that was not asked for. And the Treasurer chose the most pessimistic economic forecast available to him for the midyear update to make the budget look like it was in a worse position than it actually was.

This budget emergency has been confected in an attempt to justify a budget of broken promises and twisted priorities based on extreme ideology. Even the government from time to time show that they do not really believe their own spin about a budget emergency. If they did, there is no way they would have reintroduced that huge suite of tax concessions for companies and for the ultra-wealthy before the midyear update. There is no way they would have cut the Clean Energy Finance Corporation, which is not just good for the environment and the economy but was also doing a good job for the budget bottom line. Absolutely critically, there is no way they would be proceeding with a $21 billion Paid Parental Leave scheme if they truly believed there was a budget emergency. We sit here in question time each day and hear the Prime Minister and the Treasurer puff themselves up about this budget emergency but there is one question they cannot answer: if there is a budget emergency, why are they slinging $50,000 to millionaire parents just to have a baby?

The paid parental leave system is not only a huge hit to the budget bottom line but also clear demonstration of the unfairness of their approach to budget reform. While the poor are being forced to pay a GP tax for the doctor and while the young and vulnerable are being cut off from government assistance for six months, millionaires will be paid up to $50,000 just to have a baby. There is nothing that more starkly demonstrates this government's twisted priorities than that. To be clear, Labor believes in a reasonable and affordable system of support for new parents and we introduced Australia's first-ever Paid Parental Leave scheme. But we do not support it being done in this inequitable and unfair way, especially when it has to be paid for by cuts to the pension, cuts to schools and hospitals and the increase in income tax that we are debating today.

We also do not support these cruel cuts to average Australians being used to finance the huge superannuation tax breaks, and multinational tax breaks, which were introduced by the government. As I said before, the government backed down on something like $300 billion worth of tax reform measures that had been announced but not enacted. That includes concessions for the wealthiest 16,000 people in Australia—those with super balances over $2 million. The government also caved into multinationals by ditching the thin capitalisation reforms and other measures designed to combat multinational profit shifting—and there is even more about that in the papers today. After this budget, low income workers, the sick, the frail and the disabled are being forced to pay for this government's backdown on some of the responsible tax reforms that were made by the previous government. As the shadow treasurer said at the National Press Club last week, in a very good speech, even with what we are opposing in this budget in terms of savings and tax hikes, decisions elsewhere in the budget would make the bottom line stronger under Labor. When you look at the whole package of the coalition's fiscal position versus Labor's, the coalition is spending those billions of dollars on paid parental leave and tax concessions for the wealthy, which we would not do—and at the same time, we would retain the revenue streams from the carbon price and the minerals resource rent tax.

Mr Deputy Speaker, when you strip away the con that is the budget emergency, you are left with a budget that is driven by cruelty, brutality and ideology—but not by the need for budget repair. This government lied their way into office by promising to lower taxes and to lower public spending and now, nine months later, we are standing here in the chamber debating 14 bills to raise taxes. Despite the coalition's rhetoric, their own forward estimates show that Australia's tax-to-GDP ratio will be higher every year under the Abbott government than it was any year under the former Labor government. They will collect billions of dollars more in extra tax—more every single year than Labor collected in their six years. The 2014-15 tax-to-GDP ratio, which is the most credible measure, will be the highest since the days of Howard and Costello—the time identified by the IMF as the period of greatest government waste in Australia's history.

Now, after raising taxes in this budget, the government appears to be paving the way for further increases in taxes as well, including the GST. And the not-so-secret motive for the government's 80-billion-dollar cut to schools and hospitals—the one that the Prime Minister denied yesterday despite it being in his own budget documents—is a campaign to get the states to call for an increase to the GST. The Prime Minister is trying to distance himself from that discussion by claiming it is a tax which belongs to states, when he knows full well the GST is governed by Commonwealth legislation and collected by the Commonwealth. Try as the Prime Minister might, any change to the GST would be a reflection on his government. It would be yet another broken promise. And when those opposite deny they have a plan to jack up the GST, just remember: that is the same thing that they said before the last election about all of these other taxes, and about the cost-of-living hikes that they said would not happen.

Despite our concerns with the gross unfairness of this budget in its totality—a budget founded on broken promises and twisted priorities—the opposition will not be standing in the way of this particular piece of legislation. As I said before, we have much bigger battles to fight defending Medicare, higher education, and pensions. But the opposition does have serious concerns with the shabby and rushed way this tax measure has been together. As has been discussed widely in the media, the treatment of fringe benefits tax in this bill creates a loophole that wealthier taxpayers can exploit with some crafty accounting. The fact that this has been rushed and that this was a surprise decision that was obviously made late the budget process means that we have concerns that these tax loopholes have not been closed with better design of the legislation and a bit more thought.

We will not be standing in the way of this legislation today but we also will not be distracted from the main game—as I said, defending Medicare, and standing up for people who are just trying to make ends meet and who rely on family payments, who rely on pensions, and who cannot afford, every time they go to the doctor, to spend seven dollars and then even more on the script on the way home. We will fight against the measures that hit average Australians—like so many people who live in my electorate that cannot afford the cruel cuts and the cost-of-living hikes being inflicted by the Abbott government in this budget. On these issues, I will be standing up on behalf of my community against the government's broken promises, against their lies, and against their twisted priorities which have such dire consequences for good people who are just trying to make ends meet and to raise their kids.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

It is my great pleasure to follow the member for Rankin, who had some insightful things to say about this legislation before the House and the context in which we debate the bill. I would like to add to that. Before the election the Prime Minister had this to say:

I will say what I mean and do what I say.

He tried to paint himself as the patron saint of political honesty. How quickly this self-styled patron saint has fallen. It is not that the halo has slipped; it is the fact that it has been completely extinguished! This is a budget which is built on deceit. They say one thing before the election and then after the election they go and do the complete opposite.

The Abbott government is slapping themselves on the back for halving a budget deficit that they themselves only two months ago doubled. They did this by introducing an unaffordable Paid Parental Leave scheme, by giving tax cuts to mining companies, a $9-billion gift to the reserve bank, and scrapping the only Carbon Pollution Reduction Scheme which is likely to work. If there was a real budget emergency, why has the deficit doubled under this government and why are they taking longer to pay it down? If there was a real budget emergency, why would the international credit rating agencies still give us a AAA credit rating. It is because of this deceit that the Australian people are asking themselves: 'What's gone on here. Why is the government asking us'—through measures like this before the House today—'to pay for this deceit?' Before the election in March 2012 the Prime Minister was quite clear:

What you'll get under us are tax cuts without new taxes.

He went on again in February 2013:

I absolutely guaranteed to the Australian people, absolutely guaranteed to the Australian people, that the tax burden will be less under a Coalition Government.

Again, in August 2013:

No country has ever taxed its way to prosperity.

Further, in his book, Real Solutions:

We pledge to the families of Australia we will never make your lives harder by imposing needless new taxes.

Against this backdrop you would have to ask yourself, 'Why is this legislation before the House at all?'

The debt levy bill seeks to amend a whole raft of tax acts. It will slap Australians with a three-year increase on the taxable incomes, starting 1 July. Before the introduction of these bills you could see the spin doctors on the other side of the House rifling through the pages of their political thesaurus trying to come up with another word to describe what the Treasurer himself has had to concede, after being backed into a corner—he tried to call it a rabbit, he tried to cause a whole range of other things!—but he has had to concede that these are new taxes.

But it is more than a tax increase—it is much more than that; it is a $600 million smokescreen to try to detract attention from what is really going on in this budget. It is a feeble attempt to let those members on the other side of the house try and look their constituents in the eye and say: 'I know before the election we said that we weren't going to do this. I know we told you that we weren't going to do this. But we are going to try to spread the burden evenly.' The truth is something very, very different. They are not going to be able to look their constituents in the eye and make that claim, because the truth is something very different. They are hitting low- and middle-income earners much harder than hitting the big end of town.

You do not have to take our word for this, Deputy Speaker Mitchell. The member for Rankin outlined this in his address before the House. He told us that just last week the National Centre for Social and Economic Modelling published its analysis, which found that the poorest 20 per cent of Australian families would pay $1.1 billion more than the richest households as a result of this budget. That is $1.1 billion more as a result of this budget from the poorest families in Australia. These are families with $35,000 or less in disposable annual income. They will forego $2.9 billion over four years thanks to the changes to the family benefits pensions and other payments. We stand here and we can look out constituents in the iron and we can say, 'We will not support those changes.'

By contrast, let's look at the big end of town. Let us look at the wealthiest 20 per cent of households. They will be paying $1.78 billion. That is 40 per cent less than the lowest income families. So how can the Prime Minister, let alone every backbench member who has been given their pep up speech in their party room meeting a few days ago, how can everyone of those backbench members go back to their electorates and say, 'I know we lie to you, but for give us because we're spreading the pain evenly.' The truth is they are not and they cannot make that claim to their constituents.

Let us look at the case of single parents. For every dollar a single parent loses someone on $500,000 a year is only paying 20c. For every one dollar a single parent is losing, somebody on half a million dollars a year is paying 20c. You have got to ask yourself, 'Is that fair?' It is not the first hit this government has made it is very short nine-month history on low-income earners. It comes on top of the coalition scrapping the low-income superannuation contribution, hitting those same workers, the same households that I have just spoken about, with a 15 per cent super tax. This will leave more than 45,000 workers in my region in the Illawarra up to $500 a year worse off. These are not millionaires; they are retail workers, cleaners, shopkeepers and hospitality workers. They are definitely not the big end of town. They say that a budget is a demonstration of the government's priorities. You can see the government's priorities on display with measures like this.

I will talk about the government's proposed changes to higher education, because that is the context in which we are debating these taxation bills before the House today. If you look at their proposed changes to higher education you can see that at the heart of it there is a snobbery. They think that our graduation halls are somehow overcrowded with uncouth and undeserving kids.

When Chris Pyne, the Minister for Education, closes his eyes he imagines a perfect world of higher education that is full of strapping lads in boaters and blazers, sipping their Pimm's and lemonade before they go off to their university lectures. He cannot stand the idea that there might be precocious kids from the suburbs and the regions darkening the halls of the hallowed sandstone institutions. His proposal is to put roadblocks and barriers in the way of kids from regions like mine and like yours, Deputy Speaker Mitchell, entering those universities.

He tells us that it is the only way that Australia can ever aspire to have its own version of an Oxford or a Yale University. I have no problems with Australia having its own version of an Oxford or a Yale, but the minister is going about this the wrong way. We are for excellence. There are over 190,000 more students enrolled in universities today because of the reforms put in place by the former Labor government. We believe students should exceed on the basis of their abilities, and not on the basis of the wealth and privilege of their families. This is a government that went to the last election saying there would be no change to university funding arrangements. Now we are staring down the barrel of a policy that will double interest rates on university loans and significantly increase university fees. The problem with this government is that they cannot see the difference between excellence and elitism. We are for excellence; they are for elitism.

These changes are going to hit women the hardest. We can look at some recent modelling that was published this week by the National Tertiary Education Union. The cost of a three-year accountancy degree is currently a little over $30,000 a year. With no interest payments other than those to keep up with inflation this will rise to around $75,000 a year. For graduates who take time off to have children, raise a family and work part time, the total repayments could rise to around $120,000 a year. Compare the figures: $30,000 versus $120,000 for one bachelor's degree. The interest alone is over $45,000, taking 36 years to pay off.

Only a bloke who has no understanding of what it is like to juggle work, study and family could dream up such a plan. Only a bloke who has no idea what real life is like for those people—particularly women—could dream up such a plan. We know that when women leave university their wage expectations are much lower than those of a male and they have periods of interrupted work. Only a bloke who has no concept of that could dream up such a plan.

This proposal has attracted a lot of criticism and a lot of concern. In my own region the Vice-Chancellor of the University of Wollongong, Paul Wellings, says that international student fees are the yardstick for what our domestic students could pay. He has some experience of this because he was the Vice-Chancellor of Lancaster University in 2010, when the United Kingdom brought in changes similar to these, allowing university fees to triple. He has this to say:

I expect we will see fee rises across the country. This will drive the level of HECS debt and I’m sure that will be a concern for students and their families.

You can say that again! If we follow the UK experience with the tripling of university fees it is going to hit hard in a region such as mine.

I would like to say a few words about the men and women who staff the buildings and offices around this town in particular, and in just about every region around the country—the men and women of the Australian Public Service. The people on the other side of the chamber like to refer to them in denigrating terms as bureaucrats but I like to refer to them as the people who serve the public. I see the member for Fraser alongside me in the chamber. I am sure he will agree with these words, because he has had a lot of experience and he has been a strong advocate for the men and women who work in the Public Service in his constituency. You would think that, after working hard to ensure that the change of government went as smoothly as possible—working around the clock to deliver the work that enables the Treasurer to stand at the dispatch box and deliver his first budget—the people in the Public Service could expect the Treasurer to have a bit a greater appreciation of the work that is done within the Australian Public Service than the appreciation that was on display on budget night. Nobody says thank you to the men and women of the Australian Public Service like the coalition and the Treasurer. There have been 16,500 cuts in the first year alone. That is a fine way to say thank you to people who have worked around the clock helping the government deliver their budget. It is an absolute disgrace.

Those on the other side of the chamber, particularly the new backbenchers, are nervously awaiting returning to their electorates. They stand in this place and demand that we vote for something that they did not have the courage to put to the Australian people and let the Australian people vote on. It is a bit rich! I heard them on the airwaves this morning demanding that the member for Fairfax do the very same thing, and that all his members in the Senate do the very same thing. It is a bit rich to stand here and demand that we vote for something that they did not have the guts to let the Australian people vote for just nine months ago. That is a bit rich.

So if those on the other side of the chamber have problems when they go back to their electorates trying to sell what those on their own side are calling a dead carcass, they can only have themselves to blame. We will not be supporting these harsh measures. We on this side of the chamber will be standing up for Medicare. We on this side of the chamber will be standing up for a fair higher education system. We on this side of the chamber will be standing up for the men and women who work in the Australian Public Service. We will be standing up for a responsible budget that does the right thing by the Australian people and does the right thing by the economy, not the reckless, harsh, mean and deceitful cuts that this government has brought to this House and is demanding we vote for.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

In the appropriations debate, I argued that the first Abbott-Hockey budget represented an attack on fairness in this country, the like of which we have not seen before. People in my electorate are asking me why this government seems so intent on inflicting pain on average Australian families. People out there are confused and bewildered by this budget. And why would they not be? It is just months since the Leader of the Opposition—and now Prime Minister—prior to September promised there would be no cuts and no surprises. No-one forced him to go on television and say 'no cuts to health, no cuts to education, no cuts to the ABC or SBS and no changes to the pension'. But what we have seen with this budget is mean-spirited across-the-board cuts, a succession of nasty surprises, making the people of Australia feel neither relaxed nor comfortable—cuts to universal health care by introducing a charge every time people visit the doctor, cuts to end equality of access to education, cuts to public-transport funding, cuts to child care and cuts to family assistance. The common theme here is that these cuts impact on the vulnerable.

The coalition say that these are necessary to address a so-called budget emergency, but in the Senate estimates process we have discovered something very different. In my area of infrastructure and transport we have found a $1 billion payment will go from the Commonwealth to the Victorian government, in the next month, for stage II of the East West road project. Stage 1 has not even commenced yet. Stage 2 has no business case, no plan and no traffic projections; indeed, in Senate estimates, they are not even sure where the tunnel from stage II will come out, and yet there is a $1 billion payment. The profile is pretty interesting. I have seen some budget profiles over the years, on infrastructure. I have never seen one before that read $1 billion in the current financial year, then zero next year, then zero the year after, then zero the year after that and then $500 million four years down the track. Why is that the case? It is because the project is not ready to commence and, according to Senate estimates, the earliest it will commence is not this financial year when this billion dollars is being paid, it is not even next financial year, it is the financial year after that.

You cannot say there is a budget emergency on the one hand and on the other hand pay $1 billion dollars for a phantom project that is not ready to commence for a number of years down the track. You cannot say to the pensioners, young people, unemployed and students: 'You just cop this pain, because we need to do it,' when, quite clearly, there is $1 billion floating around that they are happy to just put into the Victorian government's bank account—to make their accounts, when it comes to the state election later this year, look better than they would have otherwise. The whole premise of the so-called budget emergency is based upon a falsehood.

This government inherited a growing economy, a growing economy that is the envy of the industrialised world with comparatively low debt levels, with low unemployment, with low interest rates, with low inflation and with a AAA credit rating. It is the case that, at all times, governments should seek to ensure that spending is just for necessary measures, to keep the economy strong and to reflect the sort of country that we are, to create opportunity. But this government has not even acknowledged that it was Labor's actions that ensured they inherited such a strong economy, Labor's actions in government that kept people in employment and Labor's actions that charted a path back to surplus.

The government is exaggerating the nature of the current fiscal challenge's cover for its rigidly ideological approach to this budget. This bill, in having a temporary increase of those people who are above $180,000, who do not use the time and window that the government has created to minimise their tax and ensure that they do not pay this, is cover for the breathtaking attack on those who can least afford to pay. Members of parliament will see a very small decline in their position, for a brief period. Those people who are most vulnerable in the electorates that we represent will see permanent cuts, much larger, and therefore for a continuous time, because they are permanent cuts.

The truth is that this is a Prime Minister who is more comfortable with the values of many decades ago—a time of imperial honours, of knights and dames, of smaller government and of social conservatism. His real agenda is to wind back the social gains that have been made since the 1950s. When you consider the key concepts that are under attack in this budget, there is a common theme—they were all put in place by Labor governments: universal health care; equity of access to education; government engagement in public transport and urban policy for our cities; and a decent safety net to ensure the welfare of the disadvantaged.

As opposition leader, Mr Abbott took a conscious decision to turn the coalition into the noalition—rejecting anything proposed by Labor. Now that he is in government, the Prime Minister seems to feel compelled to dismantle everything even remotely related to previous Labor governments. The only agenda of this government and this Prime Minister is to tear down what Labor governments have built.

This budget is a declaration of cultural and philosophical war, as the extreme right seeks to undermine the social and cultural assumptions of the 21st century. It wants to turn people against each other to create the opposite of the politics of envy—the politics of contempt; the politics of blaming those people in our community who are most disadvantaged rather than seeking to lift them up and to give them opportunity. For example, while most Australians have come to accept that education is a basic right, this government is encouraging taxpayers to resent university graduates on the basis of the cost to the budget of their education, ignoring the fact that education does not just lift the individual; it lifts the entire nation. If we are going to compete in this century in our region we must be the smart nation.

Labor is the builder; the coalition is the wrecker. The dirty truth about this budget is that it is all about regression—winding back previous Labor reforms. It is not about a plan for the future; it is about destroying the gains of the past. We see represented in so many of the measures in this budget the prejudices of those people opposite. Australians do deserve better. They do not expect to be targeted by a Prime Minister who has embarked on this cruel ideological crusade.

As worrying as these spending cuts are, there is another here which many Australians might have so far missed. It is the return of the blame game. During the Howard era, when the current Prime Minister was a senior minister, Australians became increasingly frustrated with the lack of accountability over the quality of basic services like health and education. There are a range of measures in this budget that are designed to allow the government to blame the states, to blame local government, to blame families—to blame anyone else but them—for the predicament.

The cost-shifting that is in this budget, more represented of course by the $80 billion of cuts to health and education, will ensure a reduction in service quality. But it is there in other measures as well. The cuts of some $1.3 billion to funding that is given to the states for concessions to pensioners for areas like public transport, at the same time as they are cutting all public transport funding for any projects that are not already under construction, will ensure that pensioners are hit again. On top of the reduction and the cuts that are being made to pension payments and on top of the pauses in service delivery and funds, of which areas like health are so critical, there is a cut in terms of support for public transport concessions and other concessions that are given to state governments. That is an example of an underlying feature of this budget.

In my area it is exemplified by the complete abandonment in this budget of funding for projects like Cross River Rail, Melbourne metro, Tonsley Park, and Perth public transport projects. The government says that we are funding roads and that that will lead to state governments being more able to fund public transport projects. But of course they are also cutting road funding. There is a cut to projects like the M80 in Melbourne—a very important road that has been identified as a priority by Infrastructure Australia. State governments, if they are faced with the options of funding a public transport project or a road project, Infrastructure Australia has identified through the Senate estimates process again that their view is that it will lead to a reduction by the states in public transport funding as well. They will be looking for co-funding and, when faced with options, they will pick the option that will enable them to receive some of that co-funding through roads—thereby distorting transport strategy in our major cities right around the nation.

This budget is also a challenge to our values. I believe that people need the opportunity that is granted through education. This government wants to make it harder for people from humble circumstances to take on university study. I also believe that every Australian has a right to decent health care and that, if you get sick, you should receive the same treatment whether you are a millionaire or a pensioner. Most Australians agree with me. The Prime Minister does not agree. For as long as he occupies his current office he will be trying to persuade his fellow Australians that our nation cannot afford universal health care. This is an attack on the fair go.

For this government, though, it is a fair go for those who already have means and no go at all for the poor. To this government, adequate health care, access to education, a decent retirement income and a workable public transport system are all manifestations of what the Treasurer has condemned as the 'age of entitlement'. This is all about a government prepared to take Australia back to where opportunity and security were not as available as they are in today's modern society.

I like the idea that in this country, if you really want to work at it, it is possible to rise from humble circumstances to become Prime Minister or, indeed, Deputy Prime Minister. That is about to change with the measures in this government's approach—a range of measures which will make it harder for people and a tax in direct contravention, which is the theme of this budget. (Time expired)

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The question now is that the amendment be agreed to. Before I call the member for Fowler, I will just let the member for Grayndler know that I am backing Butler! Member for Fowler.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I too rise this morning to speak on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and the supporting budget repair levy bills. In effect, we are here to talk about the government's amendments to the income tax laws, the fringe benefits tax and other aspects of Australian tax law. But the reality is that we are talking about a long list of broken promises by this government, a government that repeatedly said one thing before and during the election campaign and then, after the election, did a U-turn and introduced a good many changes.

You do not have to be on this side of politics to remember what the Prime Minister said just before the last election: 'A coalition government will keep the current income tax threshold;' 'What you will get under us are tax cuts without new taxes;' 'There should be no new tax collected without an election.' It is all very good to say that before and during the election campaign but, Mr Deputy Speaker Mitchell, as you know, that is totally wrong in terms of what has occurred here today. The government have introduced this legislation as well as the appropriation bills, being discussed elsewhere, to do just that—to introduce new taxes and to provide for tax increases. That is being done by way of the temporary tax levy, but, particularly for low-income earners and families, tax changes are being made on a permanent basis.

The so-called temporary budget repair levy is nothing but a tax increase. It is a tax increase of two per cent on Australians earning more than $180,000 a year. It will come into effect on 1 July this year and will be in place for three years. This tax increase will affect about 400,000 Australians or about four per cent of taxpayers.

I checked with the Parliamentary Library before coming here this morning, but I could not find out how many people in my electorate are earning over $180,000. My electorate consists of about 92,000 voters, along with family members. The Parliamentary Library can advise that only 1,700 of those people earn more than $104,000.

My electorate has many things to be proud of. It is a very vibrant, colourful and diverse electorate. But, in many respects, it is also an electorate with significant pockets of disadvantage. By no means are the people I represent rich. The average personal income of my constituents is about $20,000, which is almost equivalent to the current age pension. The average household income is $55,000. So the temporary budget repair levy being proposed for people earning over $180,000, which will only be in existence for three years, will not affect a lot of people in my electorate; nor will the changes to the fringe benefits tax.

When this bill was being introduced by the Parliamentary Secretary to the Treasurer, he said, 'This is not a large tax increase and it is not a permanent tax increase,' and I would agree with that. People earning $180,000 a year probably do not regard this tax increase as large; what is more, they know that they only have to bear it for three years and then it is gone—there is no further impost on high-income earners. But if you are relying on family payments or you are a young person needing support or you are a pensioner, the changes being proposed are all permanent.

We are going to permanently redefine family tax benefit B, which will no longer be provided until a child turns 16; instead, it will be rescinded once the youngest child turns six. We have permanently changed the mode of calculation of indexation of pensions. Yesterday in question time the Treasurer and others were going to great lengths to say that pensioners are going to get their adjustment every six months. But they did not say that that adjustment would be made at a different rate. The indexation rate will change. Pensions will be indexed to the CPI as opposed to male total average weekly earnings.

I have concerns for some of the most vulnerable people in my electorate, particularly young people and the unemployed. Regrettably, my electorate has an unemployment rate of approximately eight per cent, so unemployment is a significant concern, particularly for people in Western Sydney. Even more concerning is that the youth unemployment rate is 24 or 25 per cent. We know there are a lot of issues there to be addressed. Yet, under this budget, if you are under 30 and unemployed, you will not get any benefits. You will not get access to Newstart for six months.

I have received approaches in my electorate, and I imagine those opposite would have got them as well, from organisations such as St Vincent de Paul, Mission Australia and others who are out there doing various good works for people and look out for people who have fallen on hard times. They are saying: 'How do you as politicians expect people are going to live for six months if there is no provision for them?' It is not a bad question. They think that what is implied in all this is that they as charities, as faith based organisations, will be expected to pick up the slack and look after people. They wanted to let me know that their business models, as much as they are charitable organisations, do not run on the smell of an oily rag. They understand that, in electorates like mine, where there are a high number of pockets of disadvantage, where there are great levels of unemployment, it is not just about finding a person a job, although that is very important and we understand that; it is also about looking after people who have fallen through the cracks and giving them a helping hand.

It is important to help people find jobs. But, having gone through this budget, I find that Job Services Australia providers have had their funding restricted so they are limited in how much work they can actually go and find for people. One provider in my electorate—and I know it is not just in mine; they certainly operate throughout south-west Sydney—is called South West Connect. This organisation goes out and finds ways to transition young people from school to the workplace. They do a wonderful job. I think they have been praised by both sides of this House for what they do. But they woke up to find their total funding had been cut. They approached me last week about going to talk to local government and other organisations, even schools, to see whether they can play a part—because it is not just about the work that they do; they give people hope, they give young people opportunity. But that is gone.

It seems a pretty callous act by a government that said, 'One of the things we want to do with these young people, one of things we want to do for the unemployed, is give them an incentive.' But the 'incentive' is through taking money off them and not providing them with help into the workforce or from education into employment. They have been deleteriously affected by this budget.

In my electorate, there are about 15½ thousand families that depend on family tax benefit part B. As I said earlier, that has been adjusted in this budget. Families on family tax benefit B will no longer receive it once their youngest child has turned six. I cannot give you the actual figures, Mr Deputy Speaker Scott, but I ask you to accept that I do have a lot of single-parent families in my electorate. That is born out of the high levels of disadvantage in my electorate as well as the number of families who have children with disabilities—and, regrettably, where those children have autism, they tend to be single-parent families. It is normally the mother and the child or children. For those single-parent families, this budget is very, very harsh. Single-parent families will miss out on the $750 supplement per child once the parent earns more than $48,000. If they earn anything over that, they lose it. Families, including single-parent families, will lose the $3,000 for family tax benefit B once their child is over six. A single-parent family with two children will lose $1,500 because of the $750 that applies per child.

This is not an incentive; this is a punishment. It is punishment for those who took the current Prime Minister at his word as he went to the last election. The government cannot come along now and say: 'We've had a look at the books, we need to balance this budget and we have to put in place all these draconian measures—sorry about that. If you're a high-income earner, don't worry; it's only going to apply to you for three years. But we are making permanent changes for everyone else.' The government knew precisely what the financial position was prior to taking office. They made their manifesto known to the community and they made promises. They made promises not to introduce new taxes and they made promises not to increase taxes. It is one thing to make these changes that affect the most affluent families, the top 20 per cent of wage earners in the country; but to do this to working-class people, including people who depend on a helper, is just diabolical.

With regard to pensioners, I had the opportunity last week to attend and speak to the national seniors forum. They asked me to let all the politicians down here in Canberra know that when you are elderly, when you are living on $20,000 a year, you are more than likely going to have to visit the doctor far more often than if you are young and fit and you are probably going to have to buy medicines a lot more often than a person who is young and fit. They do not think that we in Canberra understand that, having seen this budget come down. Their pensions are not going to be adjusted at the same rate and they are now effectively going to be taxed every time they go to a doctor, with an additional $7 per visit and $5 per medication.

For all those who want to contribute and make speeches about this, I know it can run off the tongue, but in my case, my mum lives with me. She is 85. I know how often I have to take her to see a GP. I know how often I have to change medications for her, because I go and get them. Fortunately for her she is living on Dad's retired police superannuation, but nevertheless, if you are on a pension of $20,000 and have to go and pay every time with the same frequency that my mum needs to go and see a doctor, this is a huge impost for those at that end of the scale in terms of income. It is not as if you have got the option to say, 'Look, I'll have to make it up by working another shift, or I'll do a bit of overtime next week.' This is about people who have no opportunity to acquire any further income or to make good what this government has taken away from them. This is a very harsh, unreasonable budget which affects people deleteriously. (Time expired)

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak to the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 that is before the House. Yes, it is true that Labor is supporting this, but it needs to be noted that, whilst we support it, this levy is a token effort to basically hide who is doing the heavy lifting in this budget. We have had a lot about heavy lifting in this House and in this debate. What we need to do is focus on who is doing the heavy lifting. This levy is a token effort to pretend that all in Australia are, but the facts just simply do not back up that statement. The heavy lifting is not being done by those who earn the most in our economy; it is actually being done by those who earn the least.

Here are four case studies that demonstrate this particular point. For example, for an individual on an income of $250,000 this budget will cost about $1,500. Yet for a family who have two children and a combined income of $95,000, this budget will cost them about $5,000. So we start to look at the proportion of income that this budget costs individuals and families. Another example is an age pensioner whose income is just less than $22,000 a year. This budget will cost them about $3,700. Then we have our young job seeker with an income just over $13,000. This budget will cost that young person almost $7,000. As a proportion of income, individuals and families on the lowest incomes are paying the most whether it be as a percentage or in real dollar terms. The heavy lifting in this budget is not being done by those at the top end of town; it being done by those surviving on the smallest and most modest incomes. In my electorate of Bendigo, like much of regional Victoria, that is the vast bulk of people living in our communities. In my electorate of Bendigo roughly 30 per cent of the electorate is trying to survive on less than $600 a week. They are the ones who will be asked to do the heaviest lifting in this budget.

That is where the language the government has used in this budget is so misleading. It is such a lie to the Australian people to say that we all need to do a bit of heavy lifting while, as I have just demonstrated, it is those on the lowest and the most modest incomes, the most vulnerable, who are doing the heavy lifting. This budget attacks the most vulnerable in our community. The government claims that they have introduced a budget of cruel cuts, tax increases and new taxes because they believe that there is 'budget emergency'. They believe that Australia is 'drowning in debt'. But this is just simply not true. This is just more rhetoric and silliness and an attempt by the government to hide their neoliberal ideological approach to the Australian economy and our society.

The facts are that there is no budget emergency. Labor left Australia with a AAA credit rating. I am not the first person on this side, nor will I be the last, to remind the current government of the legacy that Labor left behind. We left behind an economy with a stable outlook with three ratings agencies actually rating the Australian economy with a AAA credit rating. Labor left a budget which was the envy of the world with net debt well below most advanced economies. This was proven in the MYEFO, which is a true reflection of where the budgets of Labor left the state of the Australian economy. In MYEFO, Mr Hockey moved the goalposts for budget estimates just to make Labor's record look worse. An independent assessment of the Labor budget, however, proves that these changed goalposts did blow out the budget. MYEFO also included all the government's election commitments and spending promises including their gold-plated $5.5 billion-a-year Paid Parental Leave Scheme, which is an unnecessary hit on the budget. It also included the unnecessary $9 billion injection into the Reserve Bank.

The true state of the budget as left by Labor was independently verified by the secretaries of Treasury and Finance in the Pre-election Economic and Fiscal Outlook, which was part of Peter Costello's Charter of Budget Honesty, and it said that the economy was sound. It said that Labor had in fact done what needed to be done to ensure that we as an economy and as a society were able to avoid recession. It is because of the decisions that Labor made in government to invest and not to follow the path of austerity that our economy avoided recession. It was the 'recession we didn't have to have', because of the decisions that were made by the Australian government.

Any high school economics student can tell you through their own studies in high school economics that a government should invest during the down times and save during the boom times. It is the simple foundation of basic Keynesian economics. Governments have historically gone into debt to fund projects to avoid recessions. When the market takes a hit it is up to governments to turn to public investment to ensure that the pain caused by that private downturn is not prolonged. It sounds basic, yet it is a significant ideological difference between those on this side of the House and those on the other side of the House.

The world experienced a global financial crisis because of private sector decisions that led to macroeconomic outcomes. To ensure that Australia's pain was not long felt it required active policy responses by the public sector; in particular, around monetary policy actions. It required the government to invest to ensure that people remained employed. That is what Labor's response to the global financial crisis did. It ensured that people that in our communities—and in particular, regional communities—remained employed.

This budget attacks those most in need of our support. It is worth just focusing on the attacks on Newstart, and the suggestion that somebody who is under 30 can survive on nothing. Let us just be clear about who the under-30s are. I do not like using the word 'youth', because to me 'youth' suggest somebody in their late teens or early 20s—somebody who may still be studying, or undertaking an apprenticeship or looking for work. It is somebody who has not yet bought their first home, somebody who does not have a family. People in their late 20s and their 30s predominantly do.

I am unusual for my generation because I do not have children. But many people in their late 20s do, particularly in my electorate. It is rare to meet someone who has a house, two kids in primary school and one full-time income earner and one part-time income earner, aged 29 and 28 respectively, who would consider themselves as 'youth'. 'Youth' is a term that we think should be kept to describe people who are finishing high school, who are starting a TAFE course or who are at university—somebody in their early 20s or late teens.

I do note that the Young Liberals and the Young Nationals consider people under 30 to be Young Liberals and Young Nationals, whereas for Labor they are under 26. It may go to the ageing demographic of the Liberal and National parties, why they have considered young people to be those under 30.

The Australian economy did experience a downturn as a result of the global financial crisis, and youth unemployment has risen significantly since then. Broader unemployment is rising slowly, particularly in the regions. That is why, within our economy, we need to make sure that we are doing more to support those young job seekers. Hitting them with a very big stick and saying, 'You can live on nothing,' will not create the jobs that they need. It is why, if we acknowledge that there will always be people looking for work, we need to have a progressive tax system to ensure that we have the money in the system to support those people who are looking for work. I believe that in a progressive tax system people on higher incomes should be paying a higher percentage of income tax than those on less. If not, if we have the situation where those on the highest incomes are paying less as a percentage of those on a lower income, it will actually create greater inequity within our system.

A progressive tax system is a way to mitigate the societal ills associated with higher income inequality. A progressive tax system is a tax structure that actually increases equality. It ensures that all within our community and our society are able to step up. This is a concept that the Liberal Party has always struggled with—it goes against their ideology.

An example of this is that during the boom times when Australia was doing well, rather than banking the savings, as is suggested by a sound economic policy—saving for when we do take a hit in our private sector—the former Treasurer, Peter Costello, introduced further inequity within our taxation system. In his budget in 2004, the big-ticket item was a reduction in tax rates for the highest income earners. Just as an example, the income tax cuts that he introduced at that time for the top threshold were equal to a net decrease of $42.21 per week. Yet somebody on a smaller income—average weekly earnings—would receive roughly a $7-a-week reduction. This, again, is an example of how there has always been a focus on the government's side of politics to give the smallest proportion of a tax giving back to the economy to those at the top end.

It is very similar to what they have done in this budget, where they say that the heavy lifting is spread to all. But as I demonstrated earlier, those on the highest incomes are paying the smallest proportion towards this heavy lifting, and those on the smallest incomes are not only paying a bigger proportion but more in real dollars.

Finally, I would like to touch on the fact that this budget is one that is built on broken promises. It needs to be noted that the income tax increase—while we do support it—does represent a clear broken promise by the Prime Minister. Before the election Tony Abbott said over and over again that there would be no new taxes. He said this on the occasion that he came to Bendigo, and it was repeated several times by the then shadow Treasurer and today Treasurer on visits to the electorate.

Joe Hockey stood in front of Liberal House, which is their headquarters in Bendigo, and said that there would be no new taxes under their government. That is clearly a broken promise and a lie to the people of my electorate and my community. This is just the first of many new taxes that this government will seek to pass following the cruel and deceitful budget. Other taxes and increases that will hurt regional people include the increase in the fuel excise. It is understandable why somebody in inner Sydney may not understand the hit that this will have on people in the country. The simple fact is people living in the country have further to travel. People living in the country pay more for their fuel. In one part of the electorate on a Saturday the petrol price is $1.65. In another part of the electorate the petrol price is $1.50. So this fuel excise compounds the difference and the higher rates for fuel that we already pay in country and regional Victoria. Those prices are just in Bendigo, which is an hour and 40 minutes north of Melbourne, let alone as you go further and further away from the city.

The compound effect of the broken promises in this budget will hurt people in regions. Despite the fact of the inequity, the government are hiding behind rhetoric. It is time they came forward and were honest with the Australian people. This Prime Minister and his government wish to tear down everything that Australians have worked hard to build. This is a budget of broken promises. It is a budget that is unfair. This token levy basically aims to pretend that all are doing the heavy lifting when that is not true.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

I call the member for Lingiari.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker, and how the hell are you?

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Pardon?

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

How are you? Good?

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

On this State of Origin day, I can say I am feeling like we are going to win in Queensland.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

You might be feeling blue tonight, though!

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

You have the call.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Can I thank the member for Bendigo for her contribution and just say that they're not Keynesians, they're more like Friedmanites, so don't be surprised at what they end up doing.

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Milton?

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Absolutely.

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

We like Milton.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Here we have it: we know precisely what they're about. My God!

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Smith, Milton.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Mate, mate! You come here saying this? Smilton Milton—that'd be right! We need to remind ourselves what this bill, the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014, and related bills are about. The purpose of these bills is to introduce an additional income tax in the form of a three-year progressive levy on taxable incomes in the 2014-15 financial year and the two following years so that individuals with a taxable income of $180,000 or less will not pay the levy except where their income, or part thereof, is subject to some other tax rate based on the top personal marginal tax rate or based on a calculation comprising the top personal rate, and individuals with a taxable income of more than $180,000 will pay a two per cent levy on that part of their taxable income above $180,000.

Of course, we know why this bill has been introduced. It is because of the perversity of the Prime Minister in trying to tell us all before the election there would be no new taxes and then after the election introducing a suite of new taxes and charges on the Australian community. We all know a lie when we see one—and we got a barrel full of them before the election. I note the member for Solomon is leaving the chamber.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I've got chair duty.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

You are still leaving the chamber. I hope she actually tells the families in Solomon who are beneficiaries currently under family tax benefit B—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

You're a disgrace!

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

what they are losing. And, as she leaves, she might write to them all and say: 'As a result of the decisions of this government you're losing X thousand dollars a year of your personal income because of decisions supported by me'—that is, you—'in the House of Representatives.' I know what they will tell her.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Order! The member will not refer to me as the person he is speaking about. The use of the word 'you' is a reflection on the chair.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

I beg your pardon, she slipped out unnoticed.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

It often happens in this chamber and it is a fault on both sides.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

And I know you are not the member for Solomon.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

You have been in the chamber an awfully long time and I would ask you to refer your comments through the chair and not about the chair.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

I am so sorry, deputy chair, and I would hardly refer to you as the member for Solomon. You are nothing like the member for Solomon. Thank God for you, is all I can say.

This bill is because the Prime Minister wanted us to share the burden, somehow or another. He said:

What I don't want is for a pensioner to be able to look me in the eye and say 'I'm bearing pain and you're not,' because it's got to be fair.

Then he says

We will do it in ways which are fair, which are equitable, and which I believe will be seen to be fair by the Australian people.

Well, on any judgement, this piece of legislation and the budget that it is part of tell us very clearly that the Prime Minister and the Treasurer and his accomplices on the front bench, and all the backbench supporters of them, are telling the Australian people one thing before the election, something after, and doing something which is very inequitable and totally unfair to the Australian community. It is based on a farrago of absolute lies, that somehow or another we are in some sort of budget crisis—which of course we are not—and on the premise that the people who need to pay are those who can least afford to pay. That is what the budget and this piece of legislation epitomise.

We know what the Prime Minister said before the election because he said it on a number of occasions. On one occasion he said:

There is one fundamental message that we want to go out from this place to every nook and cranny in our country: there should be no new tax collection without an election.

He said this in August 2011 when he was speaking at an anti-carbon tax rally. I wonder which rally that was. I can just see the placards behind him. Can you? The imagery is therefore ever. That is the sort of Prime Minister we have got leading this country. He gets up in front of a rally and says there should be no new taxes unless there is an election, goes to an election telling the Australian people there will be no new taxes, and then immediately introduces a suite of new taxes and charges.

We in the Labor Party believe in progressive taxation. We are not unhappy about supporting this particular element. But why is it only temporary? All the other measures in the budget bills are permanent. This is a temporary levy so that the Prime Minister can look pensioners in the eye and say, 'I'm temporarily doing my share—and, by the way, on my 500 grand a year it's going to cost me what? Five per cent?' Five per cent of 500 grand a year? Give me a break! What reasonable person could say that is a fair way of dealing with the Australian community.

We know what happens when we go into the other measures in this budget. NATSEM modelling shows that families with children, those in the richest 20 per cent, see a reduction of 0.3 per cent in their disposable incomes. Those richest people in the country will pay 0.3 per cent; the poorest 20 per cent in the community will see a reduction in their incomes of five per cent. How is that equitable? How can the Prime Minister look people in the eye—as he said he would—and say: 'I am going to be doing my fair share.' He is not doing his fair share, and he is making it very clear to the Australian community he does not care how they feel nor what travesty he is perpetrating upon them as a result of this budget. They know; they are not silly. The member for Solomon scurried out of here with some excuse of chairing a committee but let me tell her and every other member opposite: the people in your communities know what is going on. They have worked you out. They have worked out the Prime Minister; they have worked out the Treasurer; and they have worked you out. You know precisely what is happening in your communities and you know that they are saying this is a very unpopular budget. They are saying this is a very unfair way of dealing with the Australian community.

My electorate, Lingiari, is among the poorest in the country. It also has one of the highest costs of living in Australia. It is bad enough to tell fibs and lies to the Australian people but it is even worse to take actions that are cruelly unfair—actions that will have a devastating impact on household budgets. Let us just go for a moment to families. Prime Minister Abbott said in 2011:

A dumb way to cut spending would be to threaten family benefits or to means test them further.

And in Our Plan: Real Solutions for All Australiansremember that great tome?—he said:

We pledge to the families of Australia we will never make your lives harder by imposing needless new taxes.

In 2013 he said:

I absolutely guarantee to the Australian people, absolutely guarantee to the Australian people, that the tax burden will be less under a coalition government.

Let us make it very clear: there are 10,487 Lingiari families in receipt of family tax benefit B. Under Labor, these families received the benefit until their children turned 16. Now, under this government, those families will be cut off from family tax benefit part B when the youngest child turns six. This cut on its own—on its own—will leave one child families $2,268 a year worse off. If they have two children they will be worse off by $5,000 a year. These are families who are struggling to make ends meet.

It gets worse. They will also lose the schoolkids bonus; it is no longer going to be paid to them. They will be paying $7 when they visit a GP. It has become very clear over the last couple of days through the comments of the health minister, the Treasurer and the Prime Minister that this is really a demand reduction strategy. This is about trying to turn people away from the health system. It is going to do that—but it will not be the likes of me or the minister opposite who will not go to a doctor, because we can put our hands into our pockets. It will not be him, or me, or any of the other members of this parliament who will not be able to afford to take their children to a doctor, get medicines for their children, send them to get a pathology test or get them X-rayed. It will not be us. It will be those poor blighters who are the poorest in the country. They are the ones. We know from people involved in medicine around this country that people are already making a judgement about not going to see a doctor when they need to see a doctor. How is that in the interests of this nation?

What this tells us is this government's short-term political fix is belting Australian families when there is no need to do so. It is going to determine for many whether or not they go and get a check-up, whether or not they take preventive health measures and whether or not they live longer. It is as basic as that. Yet this government stands up proudly and says: 'This is a fair budget for all these reasons'—all of which we have exposed as blarney. The people who are going to suffer are the people who are least able to afford to do the things they need to do: put bread in their children's mouths and go to a doctor. When they get slugged for fuel for their family car in a constituency like mine, where fuel prices are on average 22c a litre higher than the national average, it has a compounding impact. One thing I will say about this budget, which is clear to all Australians now, is that the government has no comprehension—none at all—of the impact this will have on people living in regional and remote Australia. Tony Abbott is using this budget and this bill as a smokescreen to hide the real extent of the cruelties he is inflicting on battling families. Families in Lingiari are going to have their own budgets savagely cut as a result of Mr Abbott's mean, brutal attitude towards them and the community.

And what about pensioners? They have talked about looking pensioners in the eye. We have had the minister responsible getting up here in the chamber and saying: 'They will still be getting their increase in pensions twice yearly.' We all know that; pensioners know that. But they also know that the indexation rate will change and, over time, their incomes will fall. They are not silly. How can the Prime Minister look them in the eye and pay his 0.3 per cent? I think it ends up costing him five grand out of $500,000. How can he look them squarely in the eye, the pensioners of this country, and say this is somehow fair? They are not silly.

We had the whole debate about the indexation rates of military pensions. Do you remember it? They indexed them at the same rate as that of other pensioners around the country then, not three months later, they cut the pension rate. Service pensioners, prior to the last election, were being led to believe that somehow or other this government was going to do them a great favour. What this government has done is told them it has sold them down the river. What this government has told them, by its very actions, is that their pensions are going to be affected in precisely the same way as the pensions of all other Australians. We will oppose this cruel tax on the standard of living of 3.2 million Australian pensioners. Fifteen thousand of them live in my electorate and I know what they want me to do in this place: they want me to speak up on their behalf. The member for Solomon has gone. The pensioners in her electorate and in every other electorate of government members want to know what they are doing to protect their interests. They know precisely what you are doing—sweet nothing.

That I think epitomises the concern we have about this budget and its attitude to carers and job seekers. It was pathetic the way in which the minister responsible said it is okay for people under 30 to be penalised in the way they are proposing to penalise them because they should be working or earning even in places where there is no prospect of a job or no prospect of any training. What is going on in this country when we have this government introduce this legislation trying to tell the Australian people that somehow the rich buggers are suffering some sort of penalty and it is fair? It ain't fair. It ain't reasonable. The Australian community will cast their judgement. If the Prime Minister has the gall and the guts to come into this place and say, 'We really do want an election over it,' then let us have it, let us call it on. (Time expired)

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

I am very pleased to be able to speak on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and related bills because they are a testament to the Prime Minister's inability to be straight with the Australian people. I remember the last federal election well. I will remember it for the rest of my life because it was my first as a candidate for this place. I remember the promises made by the current Prime Minister and my Liberal opponent in the seat of Gellibrand during the election campaign. I remember the coalition's Real Solutions policy pamphlet that was mailed to every one of my constituents during the election campaign that said, amongst other things—it was not heavy on detail, but it did say this:

We pledge to the families of Australia that we will never make your lives harder by imposing needless new taxes …

I remember the then opposition leader's countless promises on tax. In doorstops around the nation, we heard time and time again from the then opposition leader:

What you'll get under us are tax cuts without new taxes.

We are about reducing taxes, not increasing taxes. We are about getting rid of taxes, not imposing new taxes.

… there should be no new tax collection without an election.

And even in one interview, when asked if lower taxes was a promise, he responded:

This is my whole reason for being in politics, in the Parliament.

Most damningly, in last year's budget-in-reply speech, the then opposition leader said:

A coalition government will keep the current income tax thresholds … The carbon tax will go but no-one's personal tax will go up …

And even more explicitly on the Today show last year he said:

Personal income tax will be lower under a Coalition government in its first term than it is now …

We now know that every one of these promises, and dozens more like them, were lies, fibs, fictions, falsehoods, fabrications, deceptions and deceits.

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Tax take is down.

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

That is not true. Your budget papers show that the tax take is up under this government. It is up under this government, Member for Kooyong.

Their hypocrisy even stunned members of their own party. When news of the proposed deficit tax first broke, even Liberal MPs could not believe that the Abbott government were going back on their promise not to increase taxes. Liberal MPs described the introduction of the tax to The Sydney Morning Herald as a 'shock'. It was unimaginable to members of their own party that they would go back on such a fundamental commitment. These Liberal MPs pointed out the madness of such a move. They told the press—anonymously at first:

If it's wrong … why would you scare the electorate? And if it's right, then it's even worse because we said before the election there'd be no new taxes.

It is extraordinary to think that there are some sitting opposite who are more honest when they are talking off the record than they are when they are speaking publicly.

It was not long before some Liberal MPs were willing to put their name to their ideological distress. The member for Brisbane condemned this bill as 'a breach of a promise' that will have 'devastating impacts on the economy'. The member for Leichhardt signalled that he had 'very major issues' with this bill. This was the natural reaction of a party that were coming to terms with the fact that they were about to break one of their most fundamental promises. The backflip on tax was then widely condemned by everyone who was previously in the Abbott opposition's corner. The Chief Operating Officer of the Australian Chamber of Commerce and Industry, John Osborn, blasted the policy, stating:

Any income tax—

increase—

would be an unwelcome surprise from a new government that promised no new taxes and no surprises before the election.

The President of the Victorian Young Liberals appeared on Sky News condemning the move, brandishing a placard with the government's 'Plan to lower taxes' in disgust. It was probably not a great career move, but good on him. Even Peter Costello, the name lionised by some of those opposite when it comes to the economy, pointedly warned the government. He warned of the political fallout of breaking tax promises. He said:

If the government put such a levy in place, then long after this budget has been forgotten, the press and the opposition would still be attacking the prime minister over credibility.

We all know that we ought to listen to Mr Costello on this point, as he has long experience in attacking the current Prime Minister's economic credibility. Mr Costello further included his own increase in taxes as a breach of faith with the Australian people. He said:

In 1996 I announced a surcharge on superannuation for higher income earners.

…   …   …

The surcharge was one of the worst things I ever did.

Both MPs and the wider Liberal community knew what this Abbott government seemed intent upon denying—that you cannot define your political platform on the basis of lower taxes, you cannot say that lower taxes are your whole reason for being in politics, and then in your first budget introduce a great big new tax.

To make matters worse, the government cannot even be upfront about the fact that they are breaking their election promises even today. First we heard that this bill was not a broken promise because a levy was not a tax. We then heard that this bill would not be a broken promise because the tax increase would not be permanent. We then heard the Treasurer claiming that the last two years were all just some kind of a mass delusion and in fact the opposition had never promised that they would not increase taxes. In the face of literally dozens of statements to the contrary by the Prime Minister, this was surely the longest bow since Agincourt.

All the while, as the Treasurer and the Prime Minister stretched the boundaries of the space-time continuum to try to construct a universe in which they had not spent the last three years lying their way into government, the discomfort from those opposite, who all remember the promises that they personally made to their constituents in the last election campaign, continued to grow. You can just see them listening to the Treasurer on the radio telling the Australian people that they had not really promised that they would lower taxes, digging himself further into a hole that he had created, and shouting in frustration at the wireless, 'Dig up, Stupid!' The smartest thing that the Prime Minister and the Treasurer could do at this point would be to, finally, level with the Australian people and just tell them straight out that they are breaking their election promises and then try to start rebuilding their credibility with the Australian people from scratch. It is time to give the Australian public a bit of respect and stop treating them like mugs.

Unfortunately, the bill before the House is just more of the same dissembling.

The name of this bill seems to have been written in weaselese. Instead of simply calling this bill the 'income tax increase bill' or, even more accurately, the 'bill to break the Prime Minister's promise not to increase income tax', the government has sought to muddy the waters by naming this bill the temporary budget repair levy bill. Now the title of this bill was at least worth a laugh for those of us on this side of the House as we digested the government's latest set of linguistic contortions to try to wriggle their way out of their election promises. But on further reflection, I got the feeling that I had laughed at the name of this bill before seeing it on the Notice Paper. It gave me a sense of deja vu; I had heard this joke before. After a bit of thinking, I realised that I had seen this bill before on an episode of The Simpsons. The fans of the show in the chamber will know it is the one where Lisa becomes the President of the United States and is trying to work out how to describe her own tax hike. She turns to her trusty political advisor, Milhouse—just as you can imagine the Prime Minister turning to Senator Cormann during budget preparations—and says:

… I'll have to raise taxes, but in my speech I'd like to avoid calling it a, "painful emergency tax".

After a bit of strategising, Milhouse suggests:

Well, if you just want to out-and-out lie we could call it a, "temporary refund adjustment".

A temporary refund adjustment! Surely this was the inspiration for the strategic geniuses in the Liberal Party who thought that they could get away with describing an increase in income taxation as a 'temporary budget repair levy'. Sophistry of this kind worked briefly in the fantasy world of Springfield—it worked on Lenny and Carl in Moe's Tavern—but unfortunately for those opposite, in the real world everything is not 'coming up Milhouse' for the Prime Minister.

Australians have seen through the Prime Minister's weasel words and they are angry. They are angry about being lied to before the last federal election and they are angry about being taking for mugs after the election. They are also angry because this budget slugs the most vulnerable in our community the hardest. The $80 billion in cuts to education and health; the attack on Medicare through the GP tax and the prescriptions tax; the pension cuts; the Newstart changes—the 'learn, earn or starve' changes; the Americanisation of our higher education system; the family tax benefit changes; the increase to the petrol tax: cumulatively these changes will hit the most vulnerable in our community the hardest.

This bill is supposed to be the government's fig leaf that shows that it is not just going after the vulnerable but that high-income earners are also contributing. This is, to put it bluntly, nonsense. NATSEM has done modelling that shows that among families with children, those in the most affluent fifth of our society see a 0.3 per cent reduction in their disposable incomes as a result of this budget, while those in the poorest fifth see a five per cent reduction in disposable incomes. Instead of sharing the burden equally, this is a budget that redistributes income from the poor to the rich.

I can speak personally on this matter. As the Prime Minister and Treasurer have repeatedly stated, this increase in income tax will apply to the federal parliamentarians in this chamber. Well I dare anyone in this room, earning close to $200,000 a year and being asked to pay at most an additional few thousand dollars in tax each year, to look a 25-year-old with no source of income as a result of this budget in the eye and tell them that we are sharing the burden equally. Are any of us facing homelessness as a result of this budget? Are any of us reconsidering our future career options as a result of the changes to higher education? Are any of us now looking at our future with alarm as the pension that we had planned on in our retirement decreases over time, and cuts to pensioner concessions means substantial increases to our cost of living?

To add insult to injury, this last-minute PR exercise is a botched job too. As already indicated by other speakers on this side in the House in this debate, Labor has serious concerns about the shabby and rushed way this tax has been put together, particularly in relation to the fringe benefits regime. It is a quirk of our tax system that the fringe benefits tax year and the income tax year run to different schedules. This means any changes to the tax system should be structured so that taxpayers cannot avoid paying higher taxes by cleverly reconfiguring their affairs. Unfortunately, the rushed nature of this deficit tax means that Treasury has not been able to put these precautions into the legislation as I am sure they would have liked to have done given more time. What this means is that wealthier Australians will have a full year to shift their assets into fringe benefits so as to avoid the increase in tax. We will see a large amount of Australians who earn over $180,000 a year using the difference in the calendars to avoid paying this debt levy. And we will see a large number of Australians earning under $180,000 who will be whacked by their employers.

So once again, under the Abbott government it may be the Rolls Royces pulling into the work car spots that are better off than the battered old Toyotas. It is the fitting outcome of a budget process designed to make ordinary Australians suffer. It is a process that confected a 'budget emergency' when no budget emergency existed. It is a process that claimed to fix this 'budget emergency' by breaking one of the Abbott opposition's most fundamental promises to the electorate: not to raise taxes. Most significantly, this budget process is one that will hurt ordinary Australians.

We need to take a big picture approach to reducing our budget deficit in a way that does not overly harm ordinary Australians. We need to ensure that taxes and spending decisions work together to protect our economic prosperity while giving Australians the fair and equal society that they want to live in. What we do not need is a budget that hits vulnerable Australians the hardest; a budget that fundamentally attacks the tenets of Australian society, including a fair go, exemplified in policies such as universal health care and a quality, accessible education; or a budget that thinks that temporary taxes on the super-rich are enough to justify such an assault on the Australian way of life. The Abbott government's attack on Australian values should be condemned for the sham that it is. Australians did not vote for this and they do not want it.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

That was quite an extraordinary contribution from the member for Gellibrand. In particular, it was the sheer hypocrisy of his statement talking about how he disagreed with the reform to the tertiary education sector, when he himself went through a private university. How extraordinary that once again we have another Labor member come into the chamber and rail against deregulation of the tertiary sector and say how inappropriate it is and how dare students be required to pay fees for their university education, when he himself went to a private tertiary institution. The hypocrisy seems to know no bounds.

But it is more than that. The member for Gellibrand, like other Labor members in this debate, stand up—you would have thought, having listened to that contribution, that Labor are opposed to these bills. I bet there are very few members in the public gallery who thought that that was a speech in support of the bill. The notion that Labor members would contribute in the way that they have, but actually not be opposing this bill, is extraordinary.

But the thing is, Deputy Speaker Vasta, you have got to ask the question: why is Labor doing it? Why are Labor members adopting this approach where they rail against it and they say how bad it is but then they will just sweep it through. The reason why—let me explain—is because, for the Labor Party, this is not about policy; it is about politics. We see Labor member after Labor member both in the chamber and in the media get on their high horse about this budget and rail about how it is unfair to working Australians and talk about how the cuts are unnecessary and make claims about how there should be no tax increases, and talk about how the fuel re-indexation is going to add 40c to the average cost of a tank of fuel for the average Australian family. But they never mention the fact that we are trying to cut the carbon tax and save households $550 a year. They never mention the fact that, as a result of Labor's reckless spending over the last six years, we have seen Australia reach the point where we had the fastest growing rate of government expenditure out of the 17 surveyed IMF countries in the world. They never mention the fact that, thanks to Labor's spending, Australia is going to face a situation where the next generation of Aussie kids will be paying off Labor's debt for 20 or 30 years.

Instead, we get the Labor Party coming here and saying: 'We don't like this budget. This is a very nasty budget. We don't like the cuts that have been made. These aren't appropriate. We don't like the changes to the growth in pensions. That's not appropriate. We don't like the temporary budget repair levy. That is not appropriate. Oh, but we are all about fiscal responsibility.' You know what, Deputy Speaker Vasta, the Australian public can see straight through the sham that is the Australian Labor Party. Because whilst Labor likes to run around the countryside and make out that they are all about standing up for average Australians, the truth of the matter is that Labor's position on the budget, and Labor's response to the announced changes that we made in the budget, represent nearly $40 billion of additional spending that Labor wants to put back into the budget. This is at a time when this government is doing what it can to try to save the next generation of Australians from inheriting a country with more debt that we did and at a time when we are trying to stop Australia continuing on the pathway where this country was left borrowing $1 billion a month just to pay the interest on the debt that Labor accumulated.

Is it any wonder that we say the Labor Party cannot be taken seriously? Because, unfortunately, there is one inescapable fact, and that is this: we cannot continue with the status quo. We cannot continue to live beyond our means. We cannot continue to borrow $1 billion a month just to pay the interest. As I often say to constituents, that example is the same as saying to a constituent, 'You keep paying your monthly instalment of your mortgage on your credit card.' The Australian public know that that is not a long-term solution. They know that that is not a sustainable solution. They know that that is not the approach that makes sure they live within their means. But the Australian Labor Party says that is absolutely fine. The Australian Labor Party are happy for us to continue borrowing a billion dollars a month. They will say that they are not; they will say that they are all about responsibility. But, unfortunately, when the rubber hits the road Labor never puts forward any solutions. Instead, they rail against our changes, they rail against our reforms and they, as a consequence of their decisions, have Australia in a situation, if they were in power, of wanting to put $40 billion spending back into the budget. So I certainly don't take the Labor Party too seriously.

Ms Kate Ellis interjecting—

I take the interjection from the shadow minister opposite, who said, 'They would not want to find themselves in hospital.'

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I didn't say that at all.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Well, what was it you said?

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I said, 'Imagine wanting to fund schools and hospitals!'

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Sorry, it was worse—'Imagine wanting to fund schools and hospitals!' We see Labor members saying, 'Imagine'—I assume dripping with sarcasm—'wanting to fund schools and hospitals!' Implying, once again, as Labor has done in an explicit fashion through the Leader of the Opposition, that we have cut funding, $80 billion, for health and education. But unfortunately the facts just do not accord with Labor's rhetoric on this. Once again we have a situation where Labor is deliberately going about with a campaign of misinformation in a deliberate attempt to try to misrepresent the facts.

Mr Frydenberg interjecting—

As a member for Kooyong rightly points out, the facts in the budget papers are very clear. We are in fact going to put an additional $1.2 billion into education funding over four years. We know what the Labor Party—and I say this as a representative of the great state of Queensland—was going to do in terms of education funding for Queensland and Western Australia. It was going to rip $1.2 billion out of education funding. They never highlighted it, they never said it before the election but when the Pre-Election Economic and Fiscal Outlook was outlined and actually taken to the Australian people we saw sneaky little Labor with $1.2 billion ripped out of education funding. We put that money back in.

Let us talk about health funding.

Mr Frydenberg interjecting—

What we know about health funding is that health funding, as the member for Kooyong helpfully points out, is going up by 40 per cent over the forward estimates. In fact, funding to hospitals is going up, compounding, nine per cent, nine per cent, nine per cent and six per cent in the final year. How extraordinary that the Labor Party can say, when you are putting in nine per cent plus nine per cent plus nine per cent plus six per cent, that that is a cut to health funding. Only the Labor Party can do that. Only the Labor Party can say that a 40 per cent increase is a cut. We don't really know how they do maths on their side. We have never really understood Labor's approach to finances. But I think the Australian people do.

The final point in relation to pension changes is that we continue to hear the Labor Party say, 'But the coalition is going to cut pensions.' Once again, fundamentally untruthful and wrong.

Ms Kate Ellis interjecting—

The shadow minister at the table just turned round and said, 'Correct.' So we see once again that Labor is deliberately, and unfortunately, trying to manipulate the fears of the community by saying that we are cutting pensions. It is simply untrue. The coalition is actually making structural reforms to the pension so that the rate of growth is slowed. Make no mistake, it will still grow but the rate of growth will slow. Let me spell it out for the Labor Party why we are doing it. Labor do not understand why, because if Labor understood why they would support us.

So it is pretty clear that Labor do not understand the reason. The simple reason is that the Labor Party's policies are unaffordable. The policies of the Australian Labor Party are what got Australia into a situation where we went from zero net debt to being on a path to reach $667 billion of gross debt. Thanks to the Australian Labor Party, in six short years that was the path that they put us on. So when the Australian Labor Party asks, 'Why are you doing it?' we can say that that is the reason. Those on this side of the House will stand up not only for today's Australians but for the next generation of Australians as well.

We understand the rank political opportunism of the Australian Labor Party, who run around and say, 'These reforms are unnecessary. These are cruel, heartless reforms; they do not need to be undertaken. Let me make it clear to members of the Australian Labor Party: they do need to be undertaken. They need to be undertaken to ensure that the next generation of Australians do not spend decades trying to pay off the debt burden that has been left to them by the Australian Labor Party. So the news flash to members of the Australian Labor Party is this: you have got to live within your means. Households do it and we expect governments to do it.

In terms of summing up the bill I would like to touch upon a couple of points. The first is to thank members of the government for their eloquent contributions to the House. Anybody listening to the debate—anybody who takes the time to read the transcript of the debate—will see the difference in approach between the popularism of the Labor Party and the necessary heavy lifting that the government has put forward in terms of government members' contributions. They would also know that, as a consequence of these reforms, the underlying cash deficit is projected to be $60 billion over four years to 2017-18, compared to $123 billion over the four years to 2016-17 that was released in the 2013-14 mid-year economic and fiscal outlook.

Let's make that clear. Under Labor the cash deficit was going to be $123 billion over the forward estimates—the four years to 2016-17—and now, as a result of the changes it will be $60 billion. That is less than half, as a result of the reforms that we are putting forward. So instead of gross debt reaching $667 billion by 2023-24 we are now forecast to have gross debt of $389 billion—a saving of some $300 billion. That, in essence, underscores the reason we are doing not what is politically popular but what is necessary so that Australia does not continue to have a massive mountain of debt and deficit going forward.

The 2014-15 budget is the first step in our action plan to return the budget to a more sustainable footing. The steps we have taken to improve the sustainability of the budget in the longer term, however, by themselves are simply not enough. It will take time to generate the necessary savings over the longer term. And that is why we have also introduced a range of temporary savings measures to help with the immediate task of budget repair. It is in the context of the immediate task of budget repair that we have introduced these bills—that is, the bills related to the temporary budget levy. The temporary budget repair levy will start from 1 July 2014 and remain in place until 30 June 2017. It is progressive and will apply at a rate of two per cent on individuals' annual personal taxable income above $180,000. This measure will raise some $3.1 billion over the forward estimates period.

In 2014-15 around 400,000 taxpayers—that is, less than four per cent of taxpayers—will directly incur the temporary budget repair levy on their personal taxable income. This package of bills introduces the temporary budget repair levy on high income earners, ensuring that they are also making a contribution to reducing the budget deficit.

This package of bills also makes important consequential amendments that will maintain the integrity and fairness of the tax system, and minimise the opportunities for taxpayers to avoid the levy during the three years that it is put in place. The government does not support the amendment moved by the member for Indi, as we are committed to the temporary nature of this levy. I also point out to the member for Indi that we have pursued a range of structural savings that will grow over time. Full details of the bills are set out in the explanatory memorandum. I commend the bills to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The original question was that the bills be now read a second time. To this the honourable member for Indi has moved as an amendment to the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Ms McGowan, Mr Bandt, Mr Wilkie and Mr Katter voting aye.

Pursuant to the resolution agreed to earlier, I will now put the question on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and 14 related bills.

Bill read a second time.