House debates

Tuesday, 1 December 2015


Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015; Second Reading

4:34 pm

Photo of Mr Tony BurkeMr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

I will not detain the House long in my contribution because I understand there are a number of issues for us to get through in the parliament today. The Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015 before us is one where government amendments have now been circulated. We will be opposing the bill in its current form for the second reading debate, but, if the government then moves the amendments—as we understand they will, after the second reading debate—we will be supporting the amendments and then supporting the bill in its amended form.

The bill itself has four different measures: schedule 1 deals with the conversion of student start-up scholarships into income contingent loans, schedule 2 is the efficiency dividend on higher education funding, schedules 3 and 4 deal with the removal of the HECS-HELP discount and voluntary HELP repayment bonus, and schedule 5 deals with the interest charge on certain debts. We have previously opposed all of these measures on the basis that the first few were originally proposed by the Labor government specifically in the context of the funding for the Gonski education reforms. The government abandoned the Gonski education reforms and, therefore, got rid of any reason that Labor would have had for supporting the measures.

While the government has repeatedly, since that time, used an argument of, 'These were your measures; why won't you still support them?' the answer has always been pretty straightforward. They were supported in order to fund a significant improvement in school education, which the government promised they would keep to but then abandoned. The government having done that, we were no longer going to support the measures to provide the revenue for something that they were not going to do. It is a pretty simple symmetry. So the title of this bill, where it refers to 'Labor budget savings measures' as though there was some automatic obligation for Labor to support these, completely ignored the fact that the context in which they were being supported by Labor in government was the context of the Gonski education reforms, which the government subsequently abandoned.

There are two reasons why, on two of these measures, Labor will be changing its position. The first is the deteriorating state of the budget. Since we first established our position on these different measures, we have seen the deficit double from one year to the next. Let us not forget: the government's figures, where they say the deficit has doubled, have been on the basis that even if they got all of these measures through there would still be a doubling of the deficit. The fiction we hear from those opposite is that, somehow, the doubling of the deficit is the fault of Labor opposing individual measures—no, no, no, it does not work that way, because the budget papers always presume that every single measure will get through.

The second issue is that we have now announced our own higher education policy that does not involve imposing $100,000 degrees on students. In that context, we are making some decisions to further close the fiscal gap. We will therefore support the conversion of students start-up scholarships into income contingent loans. This is a saving of $920 million over the forward estimates. We will also support the removal of the HECS-HELP discount and voluntary HELP repayment bonus, which is a further saving of $200 million over the forward estimates. We will continue to oppose the imposition of an efficiency dividend on higher education funding and the introduction of an interest charge on certain debts.

Last year we supported over $20 billion worth of government measures that improved the budget bottom line. Since this year's budget, we have already supported a further $10.7 billion worth of government measures that improve the budget bottom line. Our position here, as a result of the support we will be providing to the amended bill—not the bill in its current form—represents a further $1.1 billion in improvements to the budget bottom line. I understand that the government will be moving amendments later, at the consideration in detail stage, that will remove the measures that we do not support and leave the measures that we do support. In that specific context, it will be unsurprising that will be opposing the bill at its second reading, because it will still at that point contain measures which we oppose. At the point at which the government amendments have gone through, which I certainly expect they will—unless the mathematics of government and opposition somehow added up to something different—we will be able to support the bill in its amended form.

4:39 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

It is very pleasing to hear that the Labor Party in opposition have finally come on board and started to realise that, as a result of the fiscal mess they have created in this country, there is a need to support the government to undertake the necessary work to repair the budget. Before the member for Watson leaves the chamber, I say that it was very disappointing to hear him peddle that misleading statement about $100,000 degrees for students. I would encourage every Labor member of parliament to refrain from that complete and utter deception, because it scares students.

We want to encourage students to go to university. We want to encourage students to take up degrees. Even with the government's changes, a student will have, on average, half of their degree funded by the Commonwealth. The taxpayer will pay for half of their degree. The student will be asked to fund the other half, and they will only have to do that once their income rises to a certain level, to about the mid-$50,000 mark, and they will pay it back by way of a higher income tax. It is cheap political point scoring to talk about $100,000 degrees. It threatens to deter students from taking on degrees. I would ask members of the opposition not to continue to repeat that misleading statement to the students of this nation.

It is pleasing that the opposition are finally supporting this bill. I hope they at least start to have some appreciation of the fiscal mess and the problems they have created for this government. The history is worth repeating. When the previous coalition government were elected back in 1996, they inherited cumulative deficits that had created a debt of $96 billion. Year after year, the previous coalition government made hard decisions to wind that debt back. For every one of those decisions, they were criticised from pillar to post by the Labor Party, who wanted to continue spending. The previous coalition government, the Howard and Costello government, did the right thing and slowly pegged it back. When they got it back to zero they then had another $40 billion that they were able to put into the Future Fund. It is worthwhile mentioning what the Future Fund is used for.

The inheritances of previous Labor government decisions go back to the Whitlam government. Rather than account for military pensions, military superannuation and certain public servants' superannuation in the year in which the liability was incurred—as is done in the rest of the economy—they decided to put these on the never-never so that the government would not have to put aside any funds. That would just be paid for sometime in the future. For years and years since that time, we in this nation have continued to build up an unfunded liability of what the Australian taxpayer owes retired public servants. There are currently somewhere around $170 billion of liabilities. The Future Fund, started by Peter Costello with money from the Howard government surplus—thank goodness they did that—is now at more than the $100 billion mark, so we still have an unfunded liability of $50 billion. If Peter Costello had never set up that Future Fund, that $167 billion liability would be tacked on to the obligations of future taxpayers of this nation. That is on top of the existing debt.

Getting back to the history, that $96 billion was paid off—we paid that off—but what is often forgotten is that along the way the previous coalition government had to pay off the interest as well. And that interest was $54 billion. So $96 billion was paid off, but then there was another $54 billion in interest on the debt and then there was another $40 billion put in the Future Fund. All up, the coalition government had to take $200 billion from the economy to fix up the previous Labor government's debt. We will never know what could have been done with that $200 billion. We will never know what hospitals could have been funded, what infrastructure could have been built—what roads, what public transport—what schools and what extra care we could have given the kids with disabilities. But we had to fix up the mess that was inherited from previous Labor governments.

As they say, things go around in cycles, and that cycle came back around with the election of the Labor government back in 2007. I remember the previous Prime Minister, Mr Kevin Rudd, standing up and saying that he was that a fiscal conservative and that he was going to keep the nation's finances in good measure. We know what happened—history records what happened: they borrowed and they borrowed and they borrowed and they borrowed and they borrowed and they continued to borrow. They ran up deficit after deficit and they locked in expenditure that will tie the hands of the current government for years. It is very easy for governments to give out money to this group and that group, but it is very difficult to wind it back—it causes a lot of political pain.

Even after doing all of that, today we are still borrowing $100 million every day—we will borrow that $100 million today, we will borrow it tomorrow and we will borrow it the day after. All we are doing is putting the liability on our children, our grandchildren and our great-grandchildren to pay the principal off. We are also tying the hands of future governments in this country to meet the interest liabilities. Already this government faces a interest liability from the previous Labor government's debt of $1 billion every month—every 30 days we need to find $1 billion. We take that from the taxpayers of this nation, hardworking men and women, in higher rates of tax just to pay the interest on Labor's debt.

We have come into this parliament and we have put up proposals to make budget savings that were actually part of the previous Labor government program and they have the hide to block them in the Senate. What fiscal irresponsibility to block their own legislative debt! It is a tawdry political stunt to try and put extra financial pressure on this nation by blocking them in the Senate. Today I was very pleased to hear the member for Watson say that he will finally support this bill. I hope that when it goes across to the Senate that there is no game playing, because we face a very serious issue with our finances. It is going to take a long time and a lot of hard work for us to get this budget back into repair. We have many things down the track that we need to find the dollars for. We want to find funding to the National Disability Insurance Scheme. Both sides of the House agree that is a fantastic initiative, but an initiative is one thing—unless we can find the tax dollars for it, it is worthless.

The other issue that I am greatly concerned about is the story being peddled around that if only we could only tax these large multinational companies, everything would be all right and rosy. There are some multinational companies that could be doing more to meet their tax obligations to this nation, but we need to be careful that we do not drive that investment off overseas. If we were to place higher taxation obligations on them, they would to raise their costs and their prices for Australian consumers. Even if we adopted every single one of the Labor Party's plans that would supposedly crackdown on multinationals—and they had flow-on effects in cost or investment or employment—it would raise $1.6 billion. Yes, that is a significant sum, but it is just a drop in the bucket when compared with the consolidation of this nation's finances we need to get our budget back into repair.

We have seen the opposition make claims about what they will do with their renewable energy target. We know how reckless they have been in handling the finances of this nation, but if you want an example of how reckless they might be in the future, Deputy Speaker, just look at their plans for the renewable energy target. Yes, it would be wonderful if we could have more renewable energy, but it has to be cost-effective. What has been revealed? This plan of theirs is likely to cost $600 billion. Where does the opposition think this nation can get $600 billion from? Money in this country does not grow on a money tree. We cannot just print currency to get out of this problem, and we cannot borrow our way out of the hole that we are in. The only way we can do it is to produce, and to do that we need to do everything we can in this nation to encourage more entrepreneurial activity. Yet, every time members of the Labor opposition stand up, every time they come up with some policy, they undermine the culture of entrepreneurialism in this country—they undermine the very thing we need for growth, employment and investment.

The five schedules of this bill will involve student start-up loans, the efficiency dividend from higher education grants, the removal of the up-front payment discount and voluntary repayment bonus, and the interest charge for certain student income support debts. I am pleased that the opposition have finally come on board—I hope there is more of it. I commend the bill to the House.

4:54 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | | Hansard source

My Labor colleagues and I support two of the measures in the Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015—the conversion of student start-up scholarships into income contingent loans, which will produce savings in the budget of $920 million, and the removal of the HECS-HELP up-front payment discount and the voluntary HELP repayment bonus, which will save the budget $200 million, a total of close to $1.1 billion worth of savings for the federal budget. However, my Labor colleagues and I are opposed to the efficiency dividend for higher education funding and the imposition of an interest charge on certain debts such as Abstudy and Austudy.

We are opposed to these savings measures because when Labor originally proposed them it was on the basis of fully funding the Gonski reforms—the Gonski better schools program. We all know that our education system is in need of more funding, particularly for students in need. The person who prepared this report and did this thorough study into our nation's education system was certainly no slouch. It was David Gonski, a well-respected businessmen, the Chancellor of the University of New South Wales, in my electorate, with a board of experts in the education field that included the likes of Kathryn Greiner. This was not a partisan committee, it was not a biased committee—it was a committee that was specifically looking at how we could improve educational outcomes, particularly relating to literacy and numeracy. They specifically recommended the introduction of a needs-based funding model. Instead of the old funding model with the battle between the state government systems, the private systems and the Catholic system that has plagued our education system in the past, all schools would get additional funding, particularly in respect of the needs of students who have a disability, are from a non-English speaking background, are from small schools, are from regional schools or have an Aboriginal and Torres Strait Islander background. Finally we were going to fund our education system based on the needs of the students. Over time funding on this basis would produce better literacy and numeracy results for students throughout the country. To fund the program Labor needed to divert funding in the federal budget, and we proposed this series of budget savings measures when we were in government in 2012 as a means of implementing that important and necessary reform to our education system.

We opposed the budget measures in this bill when they came before the parliament last year. The reason we opposed those measures was that, as I mentioned earlier, they were proposed by Labor on the basis of funding Gonski. We all know that the Abbott-Turnbull government has withdrawn funding for Gonski. They have ripped $28 billion out of the Commonwealth schools budget over the forward estimates—in particular the important funding for years five and six of Gonski. The original Gonski funding has gone into the budget, and in my electorate it is making a difference. I have seen at schools the additional funding for support for students with disabilities. Yet this government wants to cut back—it has cut back—that funding, importantly for years five and six of Gonski, in the federal budget. As I said, it is a $28 billion cut to schools in this country.

This says everything about the government's values when it comes to education in this country. That is why we oppose what is proposed with a couple of the measures in this bill—because they do not relate to funding the Gonski education years five and six proposal. Those measures purely relate to an ideological attack on education in this country, and I will not be supporting them. We do not support the introduction of an efficiency dividend into our higher education system. This is the proposal from this government to introduce $100,000 university degrees—effectively locking out kids from low socioeconomic and middle-income families. That is something that I do not support, and I have campaigned vigorously on behalf of my community to oppose that. I have to say that I am extremely proud that the new vice-chancellor of the University of New South Wales, Professor Ian Jacobs, has come out and opposed the introduction of $100,000 university degrees—the first leader of the Go8 universities throughout the country to do so. So full credit to Ian Jacobs for the leadership stance that he has taken. He is standing up for higher education in our community and in this country.

What this bill seeks to do in schedule 2 is to impose an efficiency dividend on universities in 2014-15. These are retrospective measures. Universities have already received these moneys. These savings were originally proposed for the purpose of funding Gonski, but, as I said, because this government is not investing in Gonski, we are opposed to them. The government walked away from that Better Schools plan and instead decided to cut $28 billion from the education budget. The coalition has a record of cutting higher education. They have sought to cut 20 per cent from universities as part of their delayed $100,000-degree plan. They have cut equity funding, research funding and science funding. I and my Labor colleagues will not be party to these education cuts. That is why I am opposed to that particular measure in this bill.

The other measure that we are opposed to is interest charges on certain debts. This would introduce certain charges on debts relating to Austudy payments, Fares Allowances, Youth Allowance payments to full-time students and apprentices, and ABSTUDY living allowances. Today we have a government that is intent on piling on debt for students who are seeking to get an education and, ultimately, make themselves more employable and get ahead in our society. This includes the $100,000 degrees that they are attempting to have students shoulder. This would only add to that burden. Again, on this basis, this particular measure is also opposed.

In conclusion: Labor has demonstrated by supporting two of the measures in this bill that we are keen to look at responsible savings measures and we are willing to support responsible savings measures in the federal budget, but those measures need to be fair and they need to be targeted to ensure that they do not affect the poor and middle-income families and people in our society. I mentioned earlier that there are means of raising additional revenue in the budget, particularly cracking down on multinational profit-shifting—the likes of big companies such as Google, Microsoft and others that make whopping big profits here in Australia and offer internal loans to other subsidiary companies, or cousin companies in other countries, as a means of avoiding tax in this country. If this government was serious about cracking down on that sort of thing then we would be able to raise additional revenue for the budget to fund some of these important programs, particularly the important education programs.

Labor is keen to see responsible savings made to the budget. Our support for two of the measures in this bill is proof of that and it adds to the already close to $30 billion worth of savings that Labor has agreed to in the budget. But not only will we agree to savings measures; we will also seek to raise additional revenue, particularly from large multinational companies and particularly by removing the massive tax concessions that were introduced by the former Treasurer, Peter Costello, that were unfunded in the budget. When you talk about a reckless approach to the budget and fiscal irresponsibility, look no further than what Peter Costello did in 2007 by introducing those massive high-end superannuation tax concessions that were unfunded in the budget. There was no means of funding them into the future—that is the record of the previous coalition government when it came to our budget. And that is one of the reasons why the budget is in such a parlous state at the moment and, unfortunately, under this government, is getting worse—and I note that Access Economics predict that the budget deficit is going to blow out to $38 billion. So not only have they doubled the deficit but they have added to it.

In conclusion, Labor will support responsible savings measures. We will support two of these measures in this bill. But we will not support the ideological attack on education which is contained in the other two measures that we are opposing.

5:05 pm

Photo of Melissa PriceMelissa Price (Durack, Liberal Party) Share this | | Hansard source

Another year and yet another 12 months that Labor still has not learnt from their mistakes. I am pleased today to rise to speak to the Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015. As those who frequent this chamber have heard me say before, 'Good economic management is a part of this side of the chamber's DNA. Poor financial management is in Labor's DNA.' We, on this side of the chamber—the Turnbull-Truss coalition government—understand economics and we understand business. This government will have reduced Labor's budget deficit from $48 billion in 2013-14 to just $7 billion in five years. Yes, those opposite sometimes have a knack for producing the glossy posters and, perhaps, the catchy slogans, but it is this government who understands that it is business not governments who create jobs. It is government's role to support business and when you support business you support jobs. It is the excellent management of this government which has presided over a drop in the unemployment rate from 6.2 per cent to 5.9 per cent in the month of October. This year alone, 231,702 more Australians are in jobs. It is worth repeating: 231,702 more Australians are in jobs, and unemployment has dropped to 5.9 per cent. These are key indicators that this government is a superior financial manager.

Last week, the Reserve Bank governor, Glenn Stevens, acknowledged that there were several positive signs of how our economy was performing through the transition to a more diversified economy. Business investment is growing as the Australian economy transitions from the investment phase of the mining boom to a more diversified economy. Mr Stevens said our economy was performing positively through this transition period.

Including defence and public corporations, this government has increased Commonwealth investment to 6.3 per cent of total investment, which is 1.2 per cent higher than under the previous, wasteful regime. When we look more broadly at public investment, there are currently 88 major infrastructure projects under construction in Australia, with a further 95 projects in the pre-construction phase. The Turnbull government is providing $50 billion in infrastructure funding between 2014-15 and 2019-20. This incredibly mammoth drive in investment will not only deliver much-needed amenities and services across Australia but drive growth in this great country of ours, not forgetting the jobs that it will create along the way.

This is real action compared to the Leader of the Opposition's glib infrastructure ideas announcement that we heard in October. Not a single one of Labor's proposed nine projects were in Western Australia. I am disappointed that, despite the member for Perth's nearly 20 years of experience in state and federal parliament, she defended these nine infrastructure projects, given none of them were in Western Australia and, of course, none of them were in my electorate of Durack. I would say that is pretty embarrassing for the member for Perth.

The government's two-year report Sticking to our plan: backing hard-working Australians highlighted many key economic facts about our government. For example, jobs growth in Australia has been stronger than in every other G7 nation over the past year; there have been over 335,000 additional jobs created since we were elected in September 2013; and—something I am particularly pleased about—female workforce participation is at record levels, with over 171,000 more women in jobs since we came to office. And this is just a small snapshot of the government's record.

Hardworking families from right around the vast electorate of Durack—from as far north as the Kimberley to as far west as the Gascoyne, to the deep south of Durack and the great wheat-belt towns like Cunderdin, Tammin, Kellerberrin and Merredin—thank me for the rise in consumer confidence over the last few months. Consumer confidence has risen nine per cent since mid-September. Consumer confidence leads to increased spending, which builds confidence in the business community. This leads to more part-time and casual jobs for people of all descriptions, from senior citizens to students and mothers in my regional, rural and remote towns.

The Turnbull government are working towards getting the budget back into surplus by controlling expenditure and growing Australia's economic pie. That is what good financial managers do. If we had remained on Labor's spending path, the budget would be almost $80 billion worse off over this budget year and the forward estimates.

The Labor Party claim to the party for the working class. However, if this were true, then 98 per cent of voters would vote for them—but of course they do not, because they know that we on this side of the chamber, the government, are truly the team for the working class. We save Australians money. We pay back debt, which reduces taxes for all Australians in the long term.

When those opposite were in office, they funded everything and anything. Who can forget the pink batts installation disaster? Everyone and everything who came a-knocking got a cheque. Irrespective of purpose or priority, the previous, Labor government were the best friends of groups like vigilante protesters and extremist green groups. Small minority groups who stood for little other than self-interest loved the previous, Labor government—and why wouldn't they—while hardworking Australians had to shoulder the burden left by a populist and irresponsible government. While in office, the Labor Party irresponsibly set us on a trajectory towards $667 billion in the red. Their legacy was also $123 billion in cumulative deficits.

Since coming to office, this government has reduced real growth in government expenditure, from 3.6 per cent on average per annum when those opposite were in office, down to 1.5 per cent on average annually over the 2015-16 forward estimates. We have made massive savings for hardworking Australians, to the tune of $9.4 billion in expenditure from the 2015-16 budget. As a result of this government's budget measures, the budget bottom line is around $110 billion better off over the relevant forward estimates period, with many of these improvements structural and improving over time. This is good news for the hardworking people of Durack.

This bill is a necessary reform for higher education students, who are embarking on arguably the greatest investment of all. Part of this bill includes an efficiency dividend for Commonwealth contributions to higher education grants under the Commonwealth Grant Scheme. I believe these reforms are fair. They are also essential in making significant budget savings. While those opposite echo their scare campaign of $100,000 degrees and other aspects of higher education reform—and we have heard it here today—it is worth noting that the Higher Education Loan Program only comes into effect when the former student earns a certain income.

This bill will also allow interest to be charged on certain debts incurred by students on youth allowance, Austudy, ABSTUDY living allowance and fares allowance. It is completely unacceptable and, more importantly, unfair that those who have a debt to Centrelink avoid repaying the debt, and that is also covered in the bill we are debating. These measures, where applicable, encourage those with a debt to repay it if they have the financial capacity to do so. This means those who have a debt have an incentive to make a repayment to avoid an interest charge in the future.

In conclusion, I encourage those opposite to support these budget savings. For my grandchildren's and for their grandchildren's sake, we must continue to find ways to save money in the budget. I commend this bill to the House.

5:14 pm

Photo of Adam BandtAdam Bandt (Melbourne, Australian Greens) Share this | | Hansard source

I rise to speak on the Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015. Labor and the Liberals are joining together to put students into more debt. The average student is going to end up with $6,000 more debt as a result of Labor agreeing today to support the Liberals' way of trying to balance the books. Instead of saying, 'Maybe we could go after unfair tax breaks for the very wealthy, the top one per cent, or maybe we could wind back on some unfair superannuation tax concessions,' Labor and the Liberals have joined together to come after students. It is almost as if they do not understand just how tough many students are doing it at the moment. People are graduating with very large HECS debts. We know that the cost of a HECS debt is forcing some to rethink whether to go to university at all or whether to stay there. But they are doing it, and they are coming out at the other end with a very big debt already. As they are trying to work their way through university, they are doing it at a time when youth allowance and other payments have not been put up for many years. As a result, students are getting nowhere near enough from Youth Allowance. But the cost of rent is skyrocketing, especially in major capital cities, where many of the universities are. Students at the moment are in more debt, they have less money in their pocket from government assistance and the cost of rent is going up. So what is happening to students at the moment? Students are having to work more hours in paid work to try to make ends meet. But, because the cost of rent is so high and because they have to work more, students are often living far away from the campus that they are studying at. That means more time is spent trying to get to and from work and to and from classes. As a result, the idea that maybe the Liberals and Labor have in their heads about the life of the university student being a life of leisure is not the modern-day reality. Students are working around the clock to make ends meet and are doing it under significant pressure.

One thing that gave students a bit of relief was the Student Start-up Scholarship. It was a little bit of money that arrived at the time when you might need it to pay for books, meet some other outstanding bills or meet those fees that are part and parcel of going to university and being a student. It was useful. Anyone who thought that it meant that students could live the high life does not understand the life of a student at the moment. This was going on essentials. Rather than saying, 'How can we make life easier for students?' the government and Labor have now decided to add that money on to students' HECS debts. So now, in an attempt to balance the books because they have not got the guts to stand up to the very wealthy, the top one per cent, and ask them to pay a little bit more, Labor and the Liberals are coming after students. This is going to have a big impact on people. The idea that you can just keep loading up debt on students is not fair and is not right.

When I was a student many years ago, we shared a three-bedroom house in Fremantle, and the cost of rent for me was about half of what I was getting in Austudy, as it then was. The rent was $60 a week and Austudy was $120. That meant I only had to work one shift a week to live a comfortable but frugal lifestyle as a student. Now in my area of Melbourne, if you wanted to rent a very average three-bedroom brick home in Collingwood, you would be lucky to get change out of $600. That is almost $200 per bedroom. That is about as much as people are getting in Youth Allowance. A person's Youth Allowance is gone just on rent, and then come all the other costs. We should be looking for ways to make life easier for students and saying, if we truly believe it, that education is critical for Australia in the 21st century. If we want to be the high-tech, high-value economy that the Prime Minister and others talk about, we are going to rely on an educated population. We are not going to be able to compete with China or India on wages, and nor should we try to. Our big advantages include our people and our smarts, so we should be doing everything we can to try to keep people in education and put more money into it. Instead, we are cutting university funding, budget after budget, and now we are coming after students as well.

There are many better places to look if we want to raise money. At the moment, most people in Australia who fill up their car with petrol are paying about 38c or 39c a litre in tax. When the likes of Gina Rinehart put diesel fuel in their trucks, they get a tax rebate that Australians pay for. Let's keep the rebate for the farmers—no-one is arguing to take the diesel fuel rebate away from the farmers—but, in relation to the miners, it costs Australian taxpayers $2 billion a year in subsidies so that the likes of Gina Rinehart can buy cheap diesel. Then we wonder why there is not enough money and we come after students. Labor joins in with the Liberals to come after students instead of going after Gina Rinehart. If we were really serious about raising the revenue we need to fund the services that Australians expect, we would close that unfair tax break and get rid of that fossil fuel subsidy. We would say to those top few per cent of income earners who get massive benefits from superannuation, 'If you've got a superannuation balance of half a million dollars or so, maybe you don't need more help from the government.' Maybe that money could be better spent somewhere else.

We would start by winding back some of those super tax concessions, because, at the moment, if we do not do that, the cost of superannuation tax concessions alone will soon outstrip the cost of the age pension. In other words, we set up superannuation in order to take the burden off the budget so that people were not reliant on the pension. But, soon, it is going to cost us more to prop up this superannuation system than it will to prop up the pension. So there is a place we could look to save some money. What about asking millionaires—people who earn over a million dollars a year—to pay an extra 5c tax on their marginal rate, just for the money that they earn over $1 million? That would bring in a few hundred million. If we asked millionaires to pay a bit more tax, if we had a millionaire's tax rate, the top one per cent in this country, then we would not need to come after students to help balance the budget.

So the question is: if we have got to raise money, what is the fairest way to do it? Who is in the best position to bear a little bit of extra cost to help balance the books? Well, it is not students. The answer is not to put students into more debt. Any time Labor and the Liberals gang up on a budget savings measure, you know it is going be bad news. In the last parliament it was single parents. They came after single parents to try and balance the budget. This is a group of people who are already working hard at home looking after their kids and who are the highest proportion of people in paid work who receive welfare. They know they need that extra money to make ends meet. Labor, with the support of the Liberals, came after them last time. Why? Unlike the mining industry, single parents do not tend to have a spare $26 million lying around to run an advertising campaign against the government. So the government went after the easy target, and they are doing the same again with this legislation.

We in this parliament have got to stop going after the people who can least afford it and asking them to pay more. It might be easy to do because they do not patrol the corridors of this parliament with well-paid lobbyists and they do not have millions of dollars to threaten running against people in marginal seats and saying, 'You can vote for this measure, if you like, but then I'm going to run a campaign to turf you out.' Our job is not to give in to the special interests, which then have a cost on the budget. Our job is to act in the public interest, and that at times means having the strength to stand up for what is right. It means, especially if you call yourself an opposition, not agreeing to just putting students in more debt in the hope that they will not protest. It means saying, 'No, perhaps there are fairer ways of raising the money.'

I am very, very disappointed to be here speaking on this bill, because I thought it was one that we could knock off in this parliament, that if enough people joined together we could send the government back to the drawing board and say: 'Don't come after students to try and balance the books. Go after some people who can afford it a bit more and who are getting substantial tax breaks.' But, no, here we are yet again finding that it is the Greens who are standing up for the community. We are not standing up for special interests but standing up for the community. So I think students will very clearly know this, as we go to the next election. They will look back at previous governments and understand that $2.3 billion was being ripped out of universities by the previous Labor government. When students look at how much is coming in in their youth allowance or other payments, they will realise that those payments have not gone up for a very long period of time. They will know when they try and make ends meet, when they try to find enough money for rent and see that it is not there and when they have to work more and more or spend less and less time at university that it is only the Greens in this parliament who are standing up for students and it is only the Greens who are saying that there are much fairer ways of raising the money we need to fund the services that people expect than coming after those who can least afford it.

5:26 pm

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Assistant Minister to the Deputy Prime Minister) Share this | | Hansard source

It is always interesting to follow the member for Melbourne, who was brought to the parliament by Labor Party preferences. He says that the Greens are the only ones sticking up for students. Where was he in the last parliament when the independent rural youth allowance debate was happening, when it was raging? Were the Greens in there trying to help rural country students get a fairer deal? No, I think he was siding with Labor. I think he was actually in cahoots with Labor, blocking those important funding measures to help regional students—to help students in my electorate of Riverina. It is all well and good to come in here now like a voice in the wilderness to talk about how he is the only one sticking up for university students. Well, I have to tell the member for Melbourne: there are university students outside the bright city lights of Melbourne and outside the bright city lights of Swanston Street.

The Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015 is important legislation because it goes to highlighting Labor's $52 billion budget black hole. But before I get into the real nitty-gritty, the real context of the bill, I want to also refer to some comments made by the member for Kingsford Smith in his contribution on this legislation. He talked about Gonski—the Gonski cash flow to schools—after Labor, thankfully, justifiably and rightly lost government in September 2013. The member for Kingsford-Smith was not in the House of Representatives in the last parliament but he was in the Senate, and he should know that we are governing for all of Australia. He should know that is why we call it a 'common wealth', because it is not just a few states and one territory. We govern for all of Australia. We govern for all states and both territories. But the Gonski reforms, the Gonski funding, did not cover all states and it did not cover both territories. Indeed, the model put forward by Labor, who suggested that it was going to go in the out years and cover five or six years outside the forward estimates, did not even consider Western Australia, Queensland and the Northern Territory. To come in with a funding model for the Commonwealth, you need to be able to consider all the states and both territories.

I am reading here from a report entitled the educator which talks about how the new Queensland government has changed the funding formula for 2016, implementing the needs based system envisaged by the Gonski review. It talks about Sam Pidgeon, the vice-president of the Queensland Teachers' Union, who says that many successful programs have been enacted across Queensland as a result of Gonski funds. That is correct. They have. But Ms Pidgeon also needs to understand that the Gonski model, as proposed by Labor, was not signed up to by all states and territories.

I have to tell the member for Kingsford Smith for his information that, under the coalition government, nine out of 10 teaching students have passed an Australia-first pilot test to evaluate their literacy and numeracy skills. On the plus side, of the 5,000 teaching students who participated in the pilot program, 92 per cent passed the literacy test, while 90 per cent passed the numeracy test. It would be nice to think that all of them did, but from 1 July 2016 all students undertaking initial teacher education training will need to pass the test before they graduate—and that is fair enough. We need to be able to make sure that our teachers are absolutely fully equipped and fully qualified and have literacy and numeracy skills sufficient to be able to teach our children. You can throw all the money you like at Gonski reforms and schools—certainly, in rural and remote and regional areas—but, under the former education minister, the member for Sturt, and under the new education minister, we are making sure that we have the very best teaching skills and the very best funding model for schools, and it is a little bit rich for Labor to come in and start criticising the coalition when its Gonski reform model did not cover all states and both territories.

This bill talks about Labor's 2013-14 budget savings measures. As I said at the outset, Labor has a $52 billion black hole. Regarding 2015 budget savings, Labor has already said that it would not support $1 billion. Regarding savings and revenue measures proposed by Labor, it is now blocking $6½ billion. Regarding savings and revenue measures put forward by the government, $17.2 billion is being blocked by Labor by an obstructionist Senate. Regarding spending Labor says we must restore from bank savings, Labor is blocking $31.1 billion—and it just goes on. Then we hear the Leader of the Opposition, the alternative Prime Minister, the member for Maribyrnong, talking about how Labor wants to ratchet up another carbon tax. It is the carbon tax that the former Prime Minister, the member for Lalor, said that we would not have on steroids. How are we going to pay for that? How are we going to put that in place and still have a manufacturing sector, a mining industry and agriculture?

The savings and revenue measures proposed by Labor that it is now blocking total $6½ billion from 2015-16 to 2018-19, as I mentioned a short while ago. If you drill down into it, you see that a change in Labor's Student Start-up Scholarship, to make it a loan repayable through HECS rather than provided as a grant is $2.1 billion. Applying an efficiency dividend to university funding is $1.2 billion. Ending the discount for paying HECS fees up-front is $336 million. They are big numbers. Cancellation of the 2015-16 tax cuts linked to the carbon tax is $2.8 billion. The figure for savings put forward by government which Labor is blocking is $17.2 billion. And you can go through the list. Maintaining the payment rates for family tax benefits is $3 billion. Limiting family tax benefit part B to families with children under six years old is $3½ billion. Changes to family tax benefit end-of-year supplements is $1.7 billion. Ceasing the seniors supplement to Commonwealth Seniors Health Card holders is $1.1 billion. Switching under-25-year-olds from Newstart to youth allowance is $504 million. Ceasing the pension education supplement is $315 million. The one-week waiting period for working-age payments is $255 million. Ceasing the education entry payment is $76 million. Commencement of veterans disability payments from date of claim is $40 million.

Under the last parliament, when Labor was in, there were not too many provisions made for veterans—and shame on Labor for that. I represent a huge Defence electorate where all three arms of Defence are represented: Air Force, Army and Navy. Many come back to Wagga Wagga to retire. Many of them come back to the Riverina because of the cost of living, the fact that it is halfway between Sydney and Melbourne and a short 2½ hours drive from Canberra and the fact that it is a great lifestyle. During the previous government I heard endless complaints about Labor and its lack of support for veterans.

I will continue with this list. We go to revised higher education reforms where we see $1.3 billion. Fuel excise indexation is $3.3 billion. Increased co-payments for subsidised pharmaceuticals is $1.5 billion. Maintaining eligibility thresholds for Australian government payments for three years childcare benefit component is $50 million. Abolishing ARENA is $567 million. The list just goes on and on.

Labor just does not want to get on board with fixing the mess it created. When Labor was in government under the former member for Griffith in 2007, it inherited money in the bank by way of surpluses. It received money in the bank by way of the Future Fund—money it squandered; money it wasted. There was no limit to the spending. I appreciate that there was a global fiscal downturn. I understand that and appreciate that.

The economy went into a state where countries which had a bit of fat, which had a bit of money they could call on, were in a far better position than those which were already facing tough fiscal headwinds. Fortunately, Australia was one of those countries which had a bit of excess, which had a bit of a surplus, which was in the black. But, I tell you what, that money went pretty quickly. It dissipated fairly soon under the member for Lilley. I have not seen him in parliament for a few weeks. He is probably off writing another book. The surplus garnered, gained and built up by Peter Costello as Treasurer in the Howard prime ministerial years—alongside good National Party leaders such as Tim Fischer, John Anderson and Mark Vaile, with the good economic responsibility that the Nationals always put forward in a coalition government—soon disappeared.

If you look at the Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015, you will see that schedule 1 talks about student start-up loans. Schedule 1 replaces the current Student Start-Up Scholarship with an income-contingent student start-up loan. The amendments introduce a limit of two loans per year of equivalent value to the Student Start-Up Scholarship. They are currently $1,025 each and will be indexed from 1 January 2017.

Schedule 2 refers to the efficiency dividend for higher education grants. This will apply an efficiency dividend to Commonwealth contributions out of the Commonwealth Grants Scheme for higher education. The member for Melbourne talked of the importance of tertiary education. We on this side of the House understand that. That is why we as Nationals in government are certainly in there—and I know many regional Liberals are too—pushing for a fairer, more equitable deal for country university students. That includes those students who want to do a course which is not available in their home town. Not every course is available at Charles Sturt University in Wagga Wagga and so many of the students in my home town go to Wollongong, Sydney and, indeed, Adam Bandt's home town of Melbourne.

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

It is a good university.

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Assistant Minister to the Deputy Prime Minister) Share this | | Hansard source

I can hear the member for Throsby saying 'Griffith'.

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

Charles Sturt is a good university.

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Assistant Minister to the Deputy Prime Minister) Share this | | Hansard source

It is a good university—Charles Sturt University. If the member was, indeed, thinking about Griffith, I am pleased to say I have just been able to see a cloud arrangement coming into the fine city of Griffith—which I know the member for Throsby is well aware of—to help university students in the Murrumbidgee irrigation area get access to a tertiary education they would otherwise not be able to receive. The member for Throsby rightly points out that Charles Sturt University, Deakin University and universities in Sydney and Wollongong are fine institutions. The member for Throsby, who is from Wollongong, obviously understands how important the university in the Illawarra area is. Many, many Wagga Wagga students avail themselves of the fine law degree that they have in Wollongong. The member for Throsby would know that. But they need help and support.

I will just quickly talk about schedules 3 and 4 and the removal of the up-front payment discount and voluntary repayment loans. Schedule 5 talks about the interest charge for certain student income support debts. This bill is an important piece of legislation that needs to be passed. I certainly commend it to the House. These are savings measures announced by the former government. They have not passed the Senate. They need to. Labor need to understand that we have to pay back the debt. We cannot just put it off. There has to be some sort of sunset clause with the debt and deficit that we as coalition members of a coalition government did not inherit; indeed, it was inherited by the taxpayers of this nation, who are already suffering from overregulation forced upon them by Labor. I urge Labor to get on board with this legislation and help pay back the debt.

5:41 pm

Photo of Dennis JensenDennis Jensen (Tangney, Liberal Party) Share this | | Hansard source

After six years in power, Labor left Australia in absolute disrepair. They produced the sixth largest budget deficit in our history. The debt blew out to $320 billion. That is $13,500 for every Australian man, woman and child. Without a policy change, Labor's debt was projected to reach $667 billion in 10 years. Household costs for health increased 35 per cent. Hospital waiting times increased, and $4 billion was cut from private health insurance. All the while, health bureaucracies thrived and grew. Gas prices increased 71 per cent and electricity prices increased 101 per cent.

Under Labor, the number of unemployed increased by over 200,000. Productivity declined 0.07 per cent per year. The number of working days lost to strikes doubled and business red tape increased. Crucial road infrastructure was announced but then cancelled, delayed or left unfunded. The Defence budget fell to the lowest level as a percentage of GDP since 1938. Labor also imposed the world's biggest carbon tax—a $9 billion per year hit to the economy, costing the average Australian household around $550 annually. More than 800 boats and over 50,000 illegal boat arrivals came in under Labor, causing a cost blow-out of more than $11 billion. Labor left government with a legacy of disorder and disarray.

Since the coalition have come to power we have worked hard to fix the problems we inherited from Labor. The coalition government believe in being agile and nimble. This is clearly evidenced in the work that we have done and the achievements we have made since entering government. We abolished the carbon tax, which was removing $9 billion annually. We are repairing the budget, returning it to a sustainable position. We are helping small businesses, fixing the NBN, tackling union corruption and investing in new infrastructure. We are stopping the boats—in fact, we have stopped the boats—creating a stronger Defence Force and tackling terrorism at home and overseas. We have secured three major free trade agreements, with China, Japan and Korea, creating stronger and more resilient relationships with our close neighbours.

With regard to the specifics of the bill under consideration, the coalition is relieving the Labor Party of another failed promise to the Australian public, by ensuring that the $2 billion worth of savings are afforded in the budget. We are committed to ensuring that the $2 billion worth of savings are secured.

The bill will specifically replace the current start-up scholarship by implementing the student start-up loan. The student start-up loan is income-contingent and runs similarly to the current Higher Education Loan Program. Schedule 1 of this bill will help students pay for the basic needs that study demands, including books, internet access and computers. What this exemplifies, and is shown throughout the bill, is that the bill makes significant savings without taking those costs from the up-front funds of students.

It is important to note that the repayments for these start-up scholarships occur similarly to repayments for students' higher education loans and are only required to be made following the repayment of a student's HELP debt. This bill will not affect those students currently on Youth Allowance, Austudy or ABSTUDY; it will only apply to new recipients after the bill takes effect, providing significant savings in the future.

The Higher Education Support Act 2003 and the Commonwealth Grant Scheme Guidelines 2013 amendments will ensure savings for the future and are part of several measures taken by this government to moderate the growth of higher education expenditure. These savings will also be afforded by the abolishment of the HECS-HELP bonuses and discounts for up-front payments. These bonuses and discounts that are paid by the government will no longer apply, providing important savings in the order of $970 million.

Importantly, schedule 5 permits an interest charge on debts from applicable recipients of Youth Allowance, Austudy and ABSTUDY. The interest on loans will be applied in circumstances where the individual is not honouring their obligation to repay in an acceptable way. Not only does it penalise individuals who are shirking their repayment responsibilities; it also provides individuals with the incentive to honour their repayments where they have the financial capacity to do so.

Prior to this, Commonwealth loans under HELP and HECS did not provide individuals with any incentive to repay the loan. It is important that individuals have the incentive to repay their debts in a timely fashion where they have the ability to do so. This is smart policy and essential to this bill, providing savings in the order of $200 million for this schedule alone. The interest that will be applied to certain loans will be based on the industry accepted 90-day bank bill rate. This will be in addition to the ATO's accepted seven per cent interest for tax debts.

This budget savings measure bill is important in ensuring the efficiency of the Higher Education Loan Scheme. The establishment of the student start-up loan through this bill is essential in providing sufficient savings as well as ensuring moderate growth of higher education expenditure.

I know that actions are more important than words and deeds more than intentions. That is how we are going about fixing Labor's mess. Our country, had it been a business, was making a loss—and a substantial loss—every year since the Howard government left office. These accumulated losses have built up into a debt mountain. Unless we have a profit again, our country will never be able to reduce or pay down the debt mountain.

Labor has its head in the clouds and is hopeless when it comes to economic management. Our mandate is to fix that mess, and I am excited about that task. I know that, even though the challenges are great, the opportunities are greater. It has never been cheaper to borrow to invest. There has never been a better time to have a go, invest or take a risk.

The coalition is building the digital and physical infrastructure of the 21st century. In my electorate of Tangney the Perth Freight Link is a hugely important project that will not only make money for the federal and state governments; significantly, this community required road will reduce air and noise pollution, decrease average journey times and reduce fatalities on Leach Highway by taking large vehicles off Leach Highway altogether. This will be achieved through inventive and innovative new tracking and identification technologies.

We need our fellow countrymen and countrywomen to be excited about the potential of Australia—as excited as those early settlers and as excited as the men who dreamt up the Snowy hydro scheme. As a country, we need to get back to doing great and big things. Australia has always been about big things and big ideas. It is said that a crisis is a terrible thing to waste, so let's not.

Now is the time to look afresh at government support for investment in residential housing stock through negative gearing and other tax incentives. Government moneys need to be directed at sustainable investments that create long-term, local, high-value high-skill jobs. It is reassuring to know that this coalition government is the only administration capable of and committed to securing Australia's high-paying, high-value-added manufacturing goods and services.

The quickest, easiest and cheapest way to get the economy growing is to cut red tape. The coalition has already had two very successful red tape repeal days, throwing 50,000 pages of outdated and obsolete legislation into the dustbin of history. Australia, with our rich immigration tapestry of the past and today, has a lot to learn from best practice elsewhere. We should not be afraid to look overseas for ideas. Why not incentivise investment in science, in small business and especially in small tech businesses? There is no shortage of money in Australia. The high cash savings rate of 10 per cent of weekly income is testament to this. There is no shortage of money in superannuation funds. Compulsory superannuation, a big idea in itself, now has over $1 trillion in it. There has also never been a better time to borrow internationally. The real cost of borrowing is negligible to negative.

Labor's lies and incompetence have saddled this nation with a huge debt burden. Filling in such a massive hole will not happen overnight. When we last held office, the budget was in surplus. We were $50 billion in the black. We were earning interest not paying interest. The interest on their debt alone is $1 billion a month—$45 a month for every man, woman and child. Two months of that interest would be enough to build the Fiona Stanley Hospital in my electorate of Tangney. That hospital is the most modern in the Southern Hemisphere. Just think of what not paying the mortgage on the credit card would mean for infrastructure around the country. Think of what that extra money would do for people stuck in traffic on the Bruce or Hume highways or in Sydney, Melbourne or even Perth. In short, responsible budgeting means living within our means.

Without ameliorative action, the country was on track for $667 billion of debt—$30,000-odd for every man, woman and child in Australia. One of the Labor's biggest policy failures has been one of our biggest successes—that is, border control. Stopping the boats was a key plank in our election platform at the last election. We said that we would stop the boats, and we did. Not only have we restored integrity to our immigration system but we have stopped the needless tragedy of mass drownings at sea. Critically, for this debate, it means that we have also stopped the haemorrhaging of public money. Under Labor, we bled money at every turn in this policy space. Search and rescue is expensive, administration is expensive, and lifetime welfare payments are more expensive still. Many genuine refugees were left waiting as queuejumpers risked paying people smugglers to make that journey to Australia. This injustice has now stopped.

The list of achievements is long and my time short. We have scrapped the carbon tax, saving households $550 per annum. We have scrapped the mining tax so that this vital sector can create more jobs. We have handed down a $50 billion infrastructure package—the single largest infrastructure package in this country's history. We have delivered free trade agreements with Japan, with China and with Korea, and this means more jobs for Australians. We are putting in place long-term structural reforms to fix the budget.

To quote Ronald Reagan:

… the nine most terrifying words in the English language are: I'm from the Government, and I'm here to help.'

Labor has no plan for our country. Our government has a clear vision: free trade and a higher value-added strategy for sustainable growth. I believe that the pivot of this debate is where we are going as a nation. Labor, then as now, on border protection and fiscal prudence is all talk no delivery. It cost us then and costs us now in debt and interest repayments. In the final analysis, our place in the world and our quality of life needs to be earned every day.

5:56 pm

Photo of Alex HawkeAlex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | | Hansard source

I commend the bill to the House.

Photo of Russell BroadbentRussell Broadbent (McMillan, Liberal Party) Share this | | Hansard source

The question is that this bill be now read a second time.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.