House debates

Monday, 2 May 2016


Supply Bill (No. 1) 2016-2017, Supply Bill (No. 2) 2016-2017, Supply (Parliamentary Departments) Bill (No. 1) 2016-2017; Second Reading

12:14 pm

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

This package of supply bills is required to ensure the ordinary functions of government continue in the context of a double dissolution election. Funding is being provided to see through the ordinary functions of government till the end of November. These bills essentially provide about five-twelfths of the year's appropriations for government entities with two exceptions—the Australian Electoral Commission, on the basis that they have to conduct an election, and the Australian Bureau of Statistics, on the basis that they have to conduct the quinquennial census.

Labor, as is our wont, will not block supply. The appropriations in these bills do not contain any 2016-17 budget measures, and as these bills presume the rolling forward of the budget bottom line from this financial year to the next they also assume the budget bottom line as it currently stands—as at the 2015-16 Mid-Year Economic and Fiscal Outlook, which includes the impacts of measure which have not yet passed the parliament but still remain on the books. That means that the bottom line includes cutting $30 billion from schools; a plan to inflict $100,000 university degrees on Australian students; a plan to increase the cost of medicines for everyone by increasing co-payments as part of the Pharmaceutical Benefits Scheme; a plan for Australia to have the world's oldest pension age, by increasing eligibility for the pension to age 70; calling parents 'rorters' and 'double dippers' through changes to the Paid Parental Leave scheme; cutting the bulk-billing incentives for diagnostic imaging and pathology services; making young job seekers wait four weeks before receiving income support, leaving many of them to potentially end up homeless; and cutting the pension of 190,000 pensioners through the plan to limit overseas travel for Australian pensioners, hitting migrant pensioners the hardest, a particularly cruel blow in a country where a quarter of the country was born overseas.

This is not to mention the fact that under this government the deficit has doubled between the 2014 budget and the 2015 budget, and the deficit increased again in the 2015-16 MYEFO. Net debt is estimated to be $100 billion higher next financial year than it was at the election, increasing from $217 billion in the 2013 Pre-Election Economic and Fiscal Outlook to $317 billion in the 2015-16 MYEFO for the 2016-17 financial year.

Spending is at global financial crisis levels and spending as a share of GDP is on average higher under this government than it was under Labor. A useful piece by Bernard Keane in Crikey on 15 April laid out the situation. He set out two government lies which have led him to feel so frustrated with what the Treasurer was saying that he needed to take them to task—using nothing more than their own numbers. He said the first lie is 'the government isn't taxing Australians more', but points out that as a share of GDP:

… the tax burden on the economy has risen from 21.5% of GDP in the last full year of Labor to 22.3% this year and is planned to be over 23% in 2018-19 -- putting the Commonwealth tax take at—

more than $100 billion above the final year of Labor. Treasurer Morrison will therefore be the highest taxing Treasurer since Peter Costello.

Bernard Keane points out a second lie: 'the government is showing expenditure restraint'. This year spending will be 25.9 per cent of GDP, higher than it was in 2014-15 and significantly higher than in Labor's final year. In Labor's final year spending as a share of GDP was 24.1 per cent of GDP. This year spending will be 25.9 per cent of GDP.

The government keeps on promising that it is going to show expenditure restraint but is demonstrating the precise opposite, demonstrating that it is unable to follow through on its fiscal promises. It used to be that, in opposition, the coalition would drive around flat-bed trucks with 'Too much debt' ads on the back of them. Frankly, they need to trade in their flat-bed debt truck and get a B-double or a road train for the increase in debt that we have seen under this government. It is no wonder that the government had to do a dodgy deal with the Greens upon coming to office to remove the debt cap, to allow Australia to have unlimited debt, because under this government we are seeing record levels of debt and deficits doubling and doubling again.

Most concerning is what is happening to the real economy. We keep on hearing about the 25 years of uninterrupted economic growth in Australia will clock up this year. What is often ignored is that this is based on GDP—the total output of the economy, not divided, for example, by the number of people in Australia. When you are a nation with some of the fastest population growth rates in the world it makes little sense to look at aggregate output. Instead, many economists argue that we should look at real net national disposable income per capita, a measure which is down four per cent since the election. That measure, a far better measure of living standards, demonstrates that the typical Australian's living standards are worse today than when the coalition won office, that living standards have gone backwards under this government, and the average Australian living standards, accounting for inflation, are four per cent lower than they were in 2013. Over that period we have also seen a fall in consumer sentiment. The Westpac-Melbourne Institute consumer sentiment measure is down 14 per cent since election.

We have challenges in innovation. Just six per cent of ASX 300 firms describe Australia as being a highly innovative nation. According to former Chief Scientist Ian Chubb the typical OECD country has 10 to 40 per cent of firms producing new-to-the-world innovations; in Australia that figure is just two per cent. Larry Summers has warned that we might be entering an era of what he calls 'secular stagnation'. Paraphrasing Keynes, he compares the economy to a car and says:

A car with a broken alternator won’t move at all—yet it takes only a simple repair to get it going.

The problem in Australia is that we do not have a government willing to make those simple repairs. We do not have a government willing to get living standards rising again. We have a government who are too keen to pat themselves on the back for being innovative, without realising that there is nothing innovative about ripping needs based funding out of schools and putting young Australians in a situation where their schools cannot give them the education that they need to participate in an increasingly technologically driven economy.

Another significant headwind, which Labor is speaking a great deal about, is inequality. Since 1975 we have seen earnings rising three times as fast for the top tenth as for the bottom tenth. We have seen a doubling of the top one per cent share. We have one in five families saying that they cannot even afford a week's holiday away from home. Jenny Macklin's critical social policy report, Growing Together, charts an important path towards a more egalitarian nation. My colleague Brendan O'Connor has shown the importance of talking about penalty rates and minimum wages—a crucial bulwark in the fight against widening wage inequality. In the area of education, Kate Ellis has been speaking about the important role that teachers play, saying, 'Teachers don't just help students build skills, they change lives'. Labor recognises the need to tackle inequality and build an economy which is ready for the innovation challenges. We recognise too the global headwinds that are facing Australia—the challenges of a Republican frontrunner in the US presidential campaign who favours greater 'unpredictability' in world affairs, and the risk of Britain exiting the European Union and the impact that would have on the trading relationships of Britain with other countries.

We have just heard Chris Bowen, the member for McMahon, speaking about the humanitarian catastrophe in Syria, a catastrophe that has flow-on economic consequences. We have the challenges of the Chinese leadership, which is managing the economic transition from export-led growth to consumption-led growth while at the same time accumulating more power at the centre than under any leader since Mao. Labor is aware of these challenges: falling living standards and rising inequality; challenges to innovation and challenges of international events. That is why we have released more than 70 practical policies on education, health, tax, housing affordability, climate change, infrastructure, start-ups, innovation, marriage equality, domestic violence, the sharing economy, competition policy and more. We recognise, as this government does not, the challenges for the Australian economy go beyond the debt and deficit crisis that we have seen getting worse under this government. We have the policies to deal with the big economic challenges, and if this government is not willing to step up, Labor, led by Bill Shorten, will do so.

12:24 pm

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

It is my pleasure to follow my colleague the member for Fraser, who is right to point out that these supply bills are about funding the ordinary course of government for a few more months while the nation makes a big decision about who is to govern it in the three years ahead. It is worth noting though that this is a highly unusual thing to be asked to do—to pass these interim supply bills so that the government does not go broke in this period of uncertainty. It is an unusual thing to do. It might be about funding the ordinary course of government, but it is still an unusual thing for the House to be asked to consider.

It is an illustration, a symbol, of the dysfunctional way that those opposite have been going about this budget in an election year. It has been a complete shambles from go to woe, the way that this budget has been put together. This is the sort of thing that you are required to do when you do things like move the date of a budget without telling the Treasurer. These are the sorts of things that you have to do when you create all this uncertainty in the economic policy machinery in this country. These bills are about keeping the wheels of government turning while the people of Australia make their choice at the election in 61 days time, while the Australian people make their choice between a Liberal agenda, which is written and authorised by the top end of town, or positive Labor policies, which, as my colleague the member for Fraser said, underwrite health and education and improve people's lives in this country.

Tomorrow, the Treasurer will stand right there and announce—or reannounce—a grab bag of Abbott-era cuts. He will announce a whole series of agendas written and authorised by big business, and he will announce some policies that his party intends to copy from the Labor Party, after of course spending the best part of three years going around the country saying how damaging those policies are. We have some indications that some of those policies will be copied. So while it will be a grab bag of those three different types of policies, there will be a hole in the middle of the budget. The hole in the middle of the budget will be the economic leadership that the Prime Minister of this country promised when he took over from the member for Warringah. At the time he said the whole reason for it was that we needed to supply and provide economic leadership in this country. That was his whole rationale for knocking over the member for Warringah. And all indications so far, in the months and months that have passed since then and on the day before the budget is handed down at that dispatch box over there, are that that economic leadership will be sorely lacking from this budget.

It is fair to say that when it comes to economic policy, the Prime Minister, as he is known to do, promised so much and delivered so little. This is one of the reasons why the regard for the Prime Minister out in the community is fizzling out. It is one of the reasons why people are so disappointed, because they believed him when he said, 'I will provide economic leadership in this country.' They were prepared to give him a chance and their hopes have been dashed by the Prime Minister's performance.

This is precisely the wrong time for people in this building to vacate the field of economic policy leadership. Australia's remarkable quarter-century of continuous growth is in jeopardy unless we give more of our people a chance to benefit from the big changes in our economy and our society by giving people a genuine stake in that economy, by teaching and training them for the jobs of the future, giving them the tools to succeed, getting the technological infrastructure right, getting the energy mix right—not by encouraging the accumulation of wealth into fewer and fewer hands and attacking schools and hospitals, which seems to be the agenda of those opposite.

I will take a moment, as the member for Fraser did, to salute the member for Jagajaga, who is here in the House, for the terrific work that she has done, along with senior colleagues on our side of the parliament, in really highlighting the dangers of an agenda where wealth is accumulated in fewer hands and an agenda that does not invest in people—that does not try and get as many people as possible into the workforce and does not invest in their skills and capacity to play a genuine role in the Australian economy in the years ahead. So, as many members of this House have done, I mark, acknowledge and pay tribute to the work of the member for Jagajaga in that respect.

The bills before us keep the wheels of government turning, as I said, but they also carry over so much of the damaging agenda of the Abbott era that has been picked up now by Prime Minister Turnbull and the Turnbull cabinet. There is a direct line between the 2014 budget, what we are discussing today and what will be in the budget tomorrow. For example, still in the budget, still on the books, are those big cuts to family payments, big cuts to paid parental leave, $100,000 degrees, cuts to the guarantee of employee entitlements, cuts to Medicare, cuts to the pensions of 190,000 elderly migrants who want to visit family overseas and, of course, increasing the pension age to 70. That is just a flavour of the sorts of things that we are talking about today and that we will be talking about tomorrow, of course—the direct line that can be drawn from the member for Warringah's 2014 budget to the member for Wentworth's 2016 budget.

Unfortunately, tomorrow we will see more damage done to the aspirations of middle Australia by a budget where the highest priority is placed on tax cuts for big business and for the wealthiest among us, at a time when others are told to tighten their belts or accept inferior schools and hospitals. That is what makes people in our community so livid about the approach of those opposite. They are lectured time and time again about how they have to accept an inferior version of Medicare, billions of dollars being ripped out of local schools and billions of dollars ripped out of hospitals all in the name of budget repair, at the same time as those opposite contemplate giving money to the wealthiest people amongst us and giving tax cuts to big corporations. It does not square away with the way that Australians think of their own country. This is not the country that people want to live in—the type of country that is promoted and encouraged by those opposite. That is why there is such a sense of disappointment in the community about where this government is headed.

This will be a budget by the top end of town, of the top end of town, for the top end of town. In recent days, in the papers, a shabby, cynical attempt has been made, by dropping stories into the papers over the last couple of days, to make the Australian people believe that all a sudden the government care about low-income earners. Today's example was superannuation. After 2½ years of freezing the superannuation guarantee and smashing the low-income superannuation contribution, there it is on the front page of the Fin. Review. All of a sudden, 61 days out from the election, they want people to believe that they care about women and super and that they care about low-income earners and super. It is cynical and it is offensive that they think they can get away with that at five minutes to midnight in an election year.

There are many examples of the government trying to pretend they are something that they are not. They pretend to care about the average Australian out there, working hard, doing their best for their families, at the same time as they go out of their way to diminish people's aspirations and attack their ability to make ends meet. For 2½, almost three, years now, that has been the agenda of those opposite. Now they want us to believe, 61 days out from an election, that they are different. I think Australians will see through them. I think Australians are onto them. I think they know that the Prime Minister, Mr Turnbull, will never, ever govern in the interests of low- and middle-income earners in this country, and I think that is well accepted in the Australian community.

With all the damage done by the government—all the cuts to schools, hospitals and Medicare; all the attacks on low- and middle-income earners—you would think that they could at least get budget repair right. Their reason for being was supposed to be to fix the budget bottom line. They cannot even keep that promise. There has been a substantial deterioration on their watch. They are still repeating all the tired old slogans from 2013 about how we have this serious budget situation. They should concede, they should fess up to the Australian people, that the budget has deteriorated substantially since they took over. Whatever they say about the position of the budget in 2013, the facts in their own budget papers will show tomorrow night that there has been a substantial deterioration in this country's budget position since those opposite took over.

Nine weeks before the last election, at this exact time in the electoral cycle, all they would talk about was budget repair. It was their whole reason for being. They promised lower taxes, no cuts to education and health, and a surplus of one per cent by 2023-24. It is clear now that all those promises have been broken. Much worse than that, as at the midyear update, this year's budget deficit has blown out by $33 billion—$33 billion in one year—and, next year, net debt is expected to be $100 billion higher than it was at the last election.

The inevitable result, the predictable result, of all this is that the AAA credit rating that Labor earned while in office—for the first time, from all three major credit ratings agencies, and it was stable—is at real risk. Just a couple of weeks ago, Moody's absolutely humiliated the Treasurer when they warned that our credit rating is at risk unless we address both the spending and the revenue side of the budget. That is at the same time as the Treasurer has been running around the country saying that there is nothing that needs to be done on the revenue side of the budget. No wonder the Treasurer of this country is not taken seriously anymore when it comes to economic policy or, more specifically, budget policy. So many things have been ruled in and then out, ruled in and then out again, such as capital gains tax on super, and negative gearing—the excesses in negative gearing that he conceded not that long ago, but now they say they will not touch it.

I was very pleased to see the member for Bennelong in the last couple of days having what I described this morning as his Kelly O'Dwyer moment. He said that negative gearing is part of the problem when it comes to housing affordability. That is now two members of Mr Turnbull's government who have come out with the truth about house prices and negative gearing in this country. I commend the member for Bennelong for his honesty in saying that. It is very embarrassing for the Treasurer and for the Prime Minister.

There are too many examples. In the three minutes remaining to me to speak, there are too many things to go through all the things that the Treasurer has ruled in and out, in and out, in and out, as he stumbles around in a sort of haze of economic policy confusion, not knowing if he is for or against an issue from one day to the next.

While the Prime Minister and the Treasurer dither, Labor has been working hard to offer the Australian people a real alternative. The member for Fraser, who spoke before me, did a terrific job of running through the many positive policies that Labor has out there on the table. For at least 20 years or more, in people's recent memory, this opposition has done more policy work than oppositions in the last, at least, couple of decades to put out their early, fully costed, fully considered and well thought out policies well in advance of an election. We say to the Australian people, 'Hey, this is where we stand,' so that you know where we stand, and you can compare that against the policies of the government.

We have been taking the lead on this side of the House when it comes to economic policy in this country. We will stand up for middle-income families and working-class families with our positive policies for the future, whether it be in schools with our 'Your Child. Our Future' program, the most significant improvement in school education in Australia for two generations; real and meaningful action on climate change ensuring that at least 50 per cent of our electricity comes from renewable energy by 2030; or productivity enhancing infrastructure, including that notorious southbound M1 Gateway merge in my electorate, which has $168 million of federal money promised by Labor and $42 million from the state government. Let's get that fixed.

I notice that the Treasurer put into The Courier Mail today that he intended to fix the Ipswich Motorway. He said nothing about the M1 Gateway merge southbound, so the people who live in the member for Forde's electorate, and certainly the people who live in my electorate and further south, will be very troubled to see the M1 Gateway merge missing from that list of things dropped into The Courier Mail by the Treasurer today.

We will also stand up for better paid and protected jobs, supporting TAFE and penalty rates. The list of our properly funded and costed policies goes on and on. On top of that, we will fund $100 billion worth of budget improvements to fund these policies and improve the budget position over the medium term. There are a whole range of savings measures and, yes, some revenue measures as well.

The choice at the election will be pretty clear. These supply bills are a symbol of that choice. The choice is between better paid and protected jobs, our policies versus cuts to penalty rates, better schools and better teachers versus cuts to schools and $100,000 degrees, health care that people need and deserve versus cuts to Medicare and hospitals, and a Shorten-Labor government that puts people first versus a Liberal government that prioritises the top end of town—fronted by a Prime Minister who dithers but does not deliver.

These are the issues at the very core of these bills we are discussing today. They will be at the very core of the budget that the Treasurer hands down tomorrow, and they will be at the very core of the election campaign in 61 days time.

12:40 pm

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

Today Westpac posted a $3.9 billion profit. What is the response from the Liberals? To come in here, introduce an urgent bill and call an election during budget week to say, 'Let's give the billionaires more tax cuts.' In the face of pressures on government revenue, which means less money available for schools and hospitals, the government's response is to turn around to the big banks and the likes of Gina Rinehart and say: 'You deserve a tax cut. How are we going to fund it? We'll just continue to rip $80 billion, out of schools and hospitals, that we are seeing enshrined in this bill.'

This budget has all the hallmarks of being a budget for the billionaires where there is not enough money for schools and hospitals but, apparently, we can find enough to give a tax cut to Gina Rinehart and the big banks. It is no wonder that they want to call an election early, and it is no wonder that the government has brought everyone back here for an early budget, to call an election during this week and to minimise the amount of scrutiny that the parliament is going to be able to put on the budget, because they know that they are ridiculously out of step with where the Australian people are at now.

This is not the time for company tax cuts. This is a time for asking big business and multinationals in Australia to pay their fair share of tax. For some companies, they will be looking at this saying: 'The Liberals want to offer us a tax cut. It probably doesn't matter to us because we pay zero tax at the moment anyway.' Let's not start talking about how we can offer tax cuts to big business; let's ask them, first, to pay their fair share of existing tax. Once we have done that, then, we should have a debate about how we are going to spend it.

Now is also not the right time to be offering tax cuts to people on above-average incomes. Taxpayers earning above $180,000 a year, as a result of the figures contained in this bill and the budget that we are going to see tomorrow, are going to get a tax cut of a couple of per cent when the so-called deficit levy comes off. You are going to benefit if you are earning above $180,000. People like politicians—people like me—are going to benefit, while the burden is going to fall on others.

Now is also not the time to be offering personal income tax cuts to the top 25 per cent of income earners, which is what the Treasurer is out proposing to do today. He says, 'Of course you're on an average income if you earn $80,000.' He may not have spoken to the Australian Bureau of Statistics recently, because what they tell us is that it is only the top 25 per cent of income earners who earn $80,000 or above—not everyone works full-time and not everyone has two wage earners in their household. The government comes here pretending that they are offering something to average income earners in this budget when, in fact, they are talking about the top 25 per cent.

Of course, there is the thing about changing the tax rate to deal with the problem of so-called bracket creep. The thing about changing the tax rate is that the benefit flows up to everyone else as well, so people on $200,000 who get an additional benefit as well as getting a two per cent tax cut from this government are also, potentially, going to get a tax cut from them by dealing with bracket creep. Even with these changes only applying to the top 25 per cent of income owners, for someone on about $85,000, you are talking about a tax break of $5 a week. You are talking about $5 a week by changing the marginal tax rate.

If you asked people, 'Would you rather that the top 25 per cent of society get a tax break, potentially in the order of $5 a week if they are on $85,000, so that they can buy an extra half a sandwich at an expensive cafe or would you rather that public schools are well funded and that the hospital down the road from you in your city or country town is well funded so that if you or your family get sick there are nurses, doctors and other staff available there to look after you or them?', I know what most of them would say.

Instead of coming here with this bill, the government should have paid attention to a recent poll that showed 64 per cent of Australians would rather not have a few dollars a week extra in tax cuts if they knew the money was going to health care or if they knew it meant Australia would remain a place where, when you get sick, you get looked after no matter your bank balance or income or if they knew that money was going to be used to make sure Australia does not become like the United States where there is a two-tiered health system, one for the rich and one for everyone else. And the United States spends about three times as much money on health care as us. I will stand corrected, but that is my understanding. They spend about three times as much money on health care as us as a share of GDP and yet they get worse outcomes. Sixty-four per cent of Australians said, 'We would rather have a strong health care system and a strong education system in this country, even if it means paying a little more tax.'

That is the debate we should be having—not how we can have a race to the bottom on tax in this budget but how we can stop the tax cut arms race. If this budget and this election turn into a tax cut arms race, that will mean less money that is available to spend on schools and hospitals. You only have two choices then. We have seen this government choose both of them. You only have two choices if there is less money. One is that you put up the cost of going to the doctor by having a GP fee or you cut the amount that you get from Medicare. So what appears as a tax cut is actually just illusory because what they give you with the one hand they take away with the other.

The other alternative is that you just stop spending on these things at all. We have also seen that from this government. We have seen funding for schools and hospitals pulled out to the tune of $80 billion a year. We have also seen critical things pulled out like funding for legal services that look after people who are responding to the ads we are seeing on television about who might be at risk of domestic violence. We have seen this government cut their funding. We have seen this government cut funding to Aboriginal legal services. We have seen this government cut funding right across the board. That is what happens when you have a tax cut arms race.

I would hope that the opposition does not take the bait from the government and join in a tax cut arms race, because otherwise where will it stop? If every election becomes about who can offer the most in tax cuts, it will mean whoever comes along next will have less money to spend on the kinds of social services that people in Australia expect and deserve.

There is a distinction between keeping the ordinary machinery of government going, which is what supply bills are about—and that is what we are debating now—and, on the other hand, how we deal with the budget. The Greens will block unfair budget measures. The Greens will not support tax cuts in this budget while our schools and hospitals are struggling to find the money that they need. People can be assured that the harsh and unfair impacts of this budget that require separate legislation to this bill we are dealing with at the moment will be blocked in the next parliament if people vote for the Greens in enough numbers.

The closer that we get to the election, the more attention will turn to the Senate because the Treasurer has said, 'I am not going to try to legislate any of this before the election is called.' That may be as soon as this Friday. That means it will be coming up in the next parliament. We are sending a clear warning shot to this government, saying, 'If you are re-elected, don't expect to get this through the Senate by relying on us because we will stand up to you.' We will not support these measures, because we the Greens know that to have a caring society and to make society more equal you need to fund social services, and that means taxes. We are unafraid to go to this election as a party that will not support tax cuts. I hope that Labor joins us. I hope when people are thinking about where they will vote in the Senate they have a look at some of the other people who are standing and ask, 'If I vote for them, are they going to side with a re-elected Liberal government if that is what happens and give big companies and the rich a tax break?'

Increasingly, people are going to have to make a clear choice. They understand that. This budget and this election should be about what kind of society we want and whether we want to be able to talk proudly about Australia as a place where everybody gets good-quality education and good-quality health care no matter how much they earn. We want to be able to talk proudly about Australia as a country that is grasping the opportunities of the 21st century. This government have said this budget is going to be a new plan, but it is straight out of the old Liberal playbook. There are tax cuts for billionaires while they are asking everyone else to do more and they are turning a blind eye to the biggest issue of our time, which is how to deal with climate change.

We have an opportunity in this budget, in this bill and in this election to say, 'Why not start this task of so-called budget repair at the top rather than at the bottom? Why not ask the likes of Gina Rinehart to pay the same for her diesel as everyone else pays for their petrol by getting rid of the unfair tax rebate for wealthy miners who frankly do not need it? Instead of propping up the fossil fuel sector, let's put that couple of billion dollars a year into building more solar plants and more wind farms around this country. Let's make Australia a renewable energy superpower.' Those are the kinds of debates we should be having. That is exactly what this election should be about.

Someone in the government must have a great sense of humour because they started running ads during budget week supposedly about terror but which could be about Scott Morrison's first budget speech. They are saying, 'If it doesn't add up, speak up.' Whoever decided to do that has a great sense of humour!

What is absolutely clear is that this government is going to take a leaf out of the old Liberal playbook and say, 'Tax cuts for the wealthy, and we're going to try and scare everyone else into voting for us by running terror ads on television.' Let's stop that; we have had enough of elections being about a race to the bottom, when they should be about reaching the stars. This budget and this election should be better. This budget in this election should be about setting Australia up as a new renewable energy superpower, which is the envy of the world and which makes Australia a place people want to come to because they know that in Australia people are looked after, no matter how much money they have or where they have come from. That is the kind of country most people want; it is the kind of debate they want to see. All indications are that these supply bills are going to enable the government to run to an early election, hiding their budget because it is the budget for the billionaires. The Greens will stand up to this government.

12:53 pm

Photo of Pat ConroyPat Conroy (Charlton, Australian Labor Party) Share this | | Hansard source

I am pleased to make a contribution on the supply bills. As has been said previously in this debate, Labor will not be blocking supply, but it should be noted that the whole purpose of these bills is to ensure the continuity of government during the period of a double dissolution election. Of course, the reason for the double dissolution election is a political decision of the Prime Minister, who has started to panic and, in order to appear decisive, has pursued a double dissolution. In the process he has used the federal parliament as his political plaything. It is very clear that the Prime Minister had a plan on how to backstab the member for Warringah and achieve the prime-ministership but he had no plan to govern. That is why we are barrelling along towards a double dissolution election. Regardless of the political facts that got us here, Labor will not block supply. Unlike other parties in this place, we have a proud record of allowing the normal operations of government to go ahead.

These bills assume the budget bottom line, as it currently stands, as at the last MYEFO. This includes the impacts of previous measures that have not passed the parliament. These measures are part of the radical right-wing agenda of the Member for Warringah, when he was the prime minister, that are being continued and expanded by the current Prime Minister. Let's look at some of these draconian and cruel measures. There is still $30 billion in cuts to schools, regardless of the thought bubble from the education minister yesterday. There is still the plan to inflict $100,000 university degrees on young Australians. There is still the plan to increase the costs of medicines for everyone by increasing the co-payments as part of the PBS there is still the plan to have a backdoor GP tax through freezing the rebate for GPs. There is still the plan to keep the world's oldest pension age; and there is still the plan to make young job seekers wait four weeks before accessing crucial income support, which is the conservative compassionate approach for our youth. I say that very ironically, Mr Deputy Speaker.

These are the same draconian right-wing policies that have been rejected by both the parliament and the Australian people. They are hostile to our Australian belief in a fair go for everybody and they make the greatest demands on Australians who are least able to afford it. I will say one thing about the discredited 2014 budget: it placed fairness squarely back at the heart of Australian politics—it reinserted the concept of fairness back into the heart of Australian politics. The 2014 budget so egregiously breached that fundamental principle of Australian society. The burden was borne by those who could least afford it; the burden was on those who were poorest and on the lowest incomes, while the wealthy got off comparatively lightly. It is right that those measures have not passed the parliament, and Labor will continue to oppose those measures and fight for economic fairness and social justice, as we always have.

In discussing the supply bills, I want to address the issue of economic management and competence, which is at the heart of the supply bills and the heart of the budget that will be delivered in this place tomorrow. The Prime Minister, in explaining his move on the member for Warringah, said it was because the previous prime minister had failed to provide economic leadership. I agree with him on that point—the member for Warringah had clearly failed to provide economic leadership—but unfortunately the current Prime Minister, the member for Wentworth, is also failing this vital test. This is despite the fact that the Liberal Party always asserts that they are superior economic managers to the Labor Party. Yet nothing could be further from the truth.

Australia is now in its record 25th year of economic growth. This is a truly remarkable statistic: our economy has grown every year for a quarter of a century, including during the biggest international financial crisis since the great depression—a crisis that those on the other side always seem to forget. Yet the Liberals cannot airbrush away this history. This growth period began during the Hawke-Keating period and, of course, I acknowledge that it continued under the Howard government, but it was under the stewardship of the Rudd-Gillard government that we faced the greatest test, the GFC. Had we followed the austerity measures of the Liberals—or at least those who were awake during the debates—we would have been plunged into a recession that would have cost hundreds of thousands of jobs. That is not just the opinion of the Labor Party; it is the opinion of esteemed economic professionals such as the Reserve Bank of this country and Treasury in testimony to Senate estimates. I again acknowledge the economy has continued to grow since 2013, but, unfortunately, most economic indicators demonstrate a fundamental weakness in the economy, and the growth rate was downgraded at the most recent MYEFO. I will return to the current economic situation in a minute.

I do want to draw the attention of the House to the recent detailed analysis by a respected economist, Stephen Koukoulas, who, following a thorough examination of GDP and employment growth since 1972, concluded:

Contrary to perception, the data for GDP and employment growth over the past 43 years suggest a stronger economy with a faster pace of job creation when Labor is in power than when the Coalition is in power.

The statistics are: on average GDP growth has been 0.1 per cent higher per annum under Labor and on average 25,000 more jobs have been added in each year of a Labor government than under the Liberal government.

Economic competence will be a key issue at this election, and I have every confidence in the economic leadership of the Leader of the Opposition and the member for McMahon in presenting an alternative government to Australians. The truth is that the Abbott-Turnbull governments have not been competent economic stewards. Under the Liberals, growth is down, investment is down, the deficit has greatly expanded and government spending has significantly increased. The economic figures do not lie. In MYEFO, economic growth was downgraded from 2.75 per cent to 2½ per cent. We have sluggish employment growth, we have flat wages and we have actual deflation. The last ABS-CPI data shows that underlying inflation was a negative figure. In our economy, prices are deflating. This demonstrates the sluggishness of the economy under the leadership of the Liberal government. Inequality is at the highest it has been in 75 years. Let me repeat: Australia is now a more unequal place than it has been in the last 75 years. This is important not just from a social justice point of view in terms of the benefit for all Australians. High inequality is bad for economic growth. Research from the IMF and from the OECD demonstrates that an economic emphasis on boosting equality helps growth; it does not detract from growth. Yet, we have sluggish economic growth and we have some very poor economic indicators. On top of this, government spending has increased to 25.9 per cent of GDP. In the next financial year, it is estimated that net debt will be $100 billion higher than at the last election. The budget deficit has more than doubled under the Liberal's watch.

This government, before it came to power, promised a surplus in year 1. Then they tried to airbrush that from history. The shadow Treasurer, who then became Treasurer—the former member for North Sydney—promised a surplus in year 1 of an Abbott government. That government failed abysmally to deliver it. They then promised it over the term of the government. I am going to go out on a limb and predict that they are not going to announce a surplus tomorrow. Most economic forecasters project a deficit of somewhere north of $40 billion. So, not only will they not deliver a surplus; they will deliver some of the highest deficits in Australian political history, only rivalled in real terms by what John Howard delivered when he was Treasurer under Malcolm Fraser.

The truth is that the Liberals cannot manage the economy. We now have a Treasurer who makes the former member for North Sydney look positively Keatingesque in his abilities. We have got the very definition of a tabloid Treasurer—a man who thinks that appearing on the Ray Hadley show and getting the occasional front page of TheDaily Telegraph is a way of managing the economy; a man who thinks in thought bubbles; a man who gets rolled constantly by a Prime Minister who is scared of his own shadow when it comes to economic issues. This is a Treasurer who still does not understand that workers earning over $80,000 are the 25 per cent highest income earning Australians in this country. This is a man with no real plan for this country; a man with no real plan for our economy; a man who, in the negative gearing debate, compares existing housing stock to a used car; a man who thinks that, just because he mouthed platitudes and appeared to be strong on border protection as immigration minister, somehow that has made him qualified to be Treasurer; a man who underperformed in every role he had before entering parliament, whether he was on the tourism council or Liberal director in New South Wales. Unfortunately, this superficiality will be continued in tomorrow's budget.

I will be, like all my Labor colleagues, supporting the supply bills. I will be supporting the continuation of government, unlike what the Liberals and Nationals did in 1975. But let us be under no false impression that this government can manage an economy. We have deflation in this country. We have ballooning deficits and debt. We have economic management that makes the Fraser period of economic management look positively glorious by comparison. I look forward to this election. I look forward to this election being fought on economic ideas. This party, the Labor Party, has been bravely putting forward some great, progressive economic policies, while all we see with those on the other side is thought bubbles, hollow scare campaigns and no real plan for Australia.

1:04 pm

Photo of Ed HusicEd Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | | Hansard source

Why are we here? The most important feature of the parliamentary calendar occurs this week. It is the week when we see the budget being delivered—an outline of what the government is intending to do to help manage the economy, to manage finances and to meet community expectations. It is supposed to be a considered, thorough process, yet it has been scrambled a week forward. Why? Effectively, the reason is that this government knows its political fortunes are sinking like a stone and therefore it has to have this mad scramble to bring forward the budget so that it can bring forward an election to save as many skins from that side of the House as possible. In actual fact, there are not too many of them in this debate on the supply bills and what the government is going to do in its budget. There is, like, no-one—absolutely no-one—from their side, other than the assistant minister, who is here, who will stand up and defend the government's economic record, defend the government's budget strategy and advance or advocate on behalf of this government as to why they believe they should be in control of the nation's finances. There is not one present. And why would they? It is a hard sell. They do not want to have to be in parliament after the budget is brought down. They want to be as far away as possible from this place where they are required to actually speak for themselves, defend their decisions and stand up for their actions. They will not do that—no way, no how.

Can we expect any sort of demonstration of real economic leadership in this budget? I doubt it. Remember the promise of new economic leadership that was the cornerstone of the Prime Minister's pitch for his new job back in September last year? He promised new economic leadership—and when he said it, he said it deliberately. What he wanted to do was convince people that the change from Tony Abbott, the member for Warringah, to him would signal a shift. By saying that he would be delivering economic leadership he signalled that there would be something different, something unique, something new, something altered from the trajectory that the previous administration or regime under the member for Warringah and the then member for North Sydney—which was just simply chaotic—was on. There would be something different. As it is always with this government, it is all about style. It is never about substance.

What people are finding out very quickly is that statement about new economic leadership has turned out to be misleading. It has evaporated its luck with everything that has to do with this government. It is founded on false expectation. For example, under new leadership will we see, in this budget, a change to the $30 billion that has been cut from schooling in this nation? Will we see a move away from a plan to inflict $100,000 university degrees? Will we see a change from the plans to increase the cost of medicines for everyone by increasing the co-payments as part of the Pharmaceutical Benefits Scheme, the PBS? Will we see a change or a move away from a plan to make us have the world's oldest pension age by increasing our pension age to 70? Will we see the end to calling parents rorters and double dippers, through changes to the Paid Parental Leave scheme? Will we see a move away from cutting bulk-billing incentives for diagnostic imaging and pathology services? Will we see young job seekers no longer forced to wait four weeks before receiving income support? On all of those things you will not see one change.

There has been very little move away from the hardline economic decisions that were suddenly foisted on us by the member for Warringah and the member for North Sydney, the former Prime Minister and the former Treasurer, respectively. Those things will stand. They will remain the same—every single thing. It is Tony Abbott's agenda, just delivered with a flashier smile. This bloke, the new Prime Minister, is simply a Cartier copy of Tony Abbott, delivering the same version of hard nosed economics—a reality that was never delivered and a promise that was never given to the Australian public, before they went to vote, that this is what would happen. In fact, the opposite was suggested: a whole lot of things that were going to happen were said to keep people calm and reduce their nerves about what the member for Warringah would be like as Prime Minister. All those promises—no cuts to health, no cuts to education, no changes to the GST, no changes to pensions and no cuts to the ABC or SBS—were ditched the minute they got into office.

Then, we have a Prime Minister who says he will promise a change of economic leadership. For example, in recent days—after, a few weeks ago, stunningly signalling that he would walk away from supporting public education along the lines advanced by the Gonski review and the report that David Gonski put out—he suddenly backtracked and announced on the weekend leading into the budget that they would have some money and that they would find some funds to back schooling. But when you look at it, when you go beyond the style, when you go beyond the glitz and you see what is happening, it is a pittance relative to what is required under the Gonski plan—an absolute pittance. And people have been ripped off. Parents who were expecting a better deal out of this government have been ripped off. We are just seeing the same thing.

Before the election we saw the coalition say that, for instance, it would stand on a unity ticket with Labor when it came to Gonski. If you voted for Labor, because of the fact that we made a commitment to funding better educational outcomes in this country, you could vote for the coalition because 'we would do the same thing', according to them. What did they do when they got into office? In their first budget they cut $30 billion from schools. We had a chance to change educational opportunity and outcome in this country by getting on with this plan early, quickly and thoroughly. It was ditched by those opposite: a stunning reversal of a commitment that they had given at an election.

To try and calm down the type of anger that is been felt as a result of moving away from that commitment—and some of the stunning comments that were made by the Prime Minister a few weeks ago, where he shocked everyone saying that he would move away from public education entirely and leave that as something that should only be managed by the states and territories—he has come up with this. It is, again, an absolute pittance and a disgrace.

There is nothing new about this form of economic leadership. It is merely a copy of what we have seen before. People are realising that this government is not delivering on the expectations that they raised: that the Prime Minister would be different, and that his team would be different. The promise that there would be an altered course is not materialising. As a result, they are scrambling. That is why have we have this package of bills before the House today: to ensure that the ordinary functions of government continue while we are headed off to a double dissolution election that has been sprung on people and has only been manufactured to save as many people as possible on that side of the fence.

It has not been done to have a considered, measured approach to the budget or to deal with the types of things that those opposite said they had to deal with. Remember when they always used to talk about debt and deficit dramas that they thought they had fixed? Now, the deficit has doubled and debt is growing. Net debt, next financial year, is estimated to be $100 billion higher than what it was at the election, increasing from $217.3 billion in the 2013 pre-election fiscal outlook to $316.5 billion in MYEFO, of 2015-16, for the 2016-17 financial year. Spending is at global financial crisis levels: 25.9 per cent of GDP. Those opposite promised so much and have failed to deliver. In fact, the result is way worse since they have taken over.

We have said we will not block supply. We will not impact on the smooth management of government in this period. This has to provide the five-twelfths of the year's appropriation for the government entities, with the exception of the Australian Electoral Commission and the ABS. However, the appropriations in these bills do not contain any of the budget measures that will be announced. We will be interested, in the next 24 hours, as will the nation, to see if we are going to have new economic leadership or more of the same: cuts, pain and broken promises.

1:14 pm

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

In summing up I would like to thank those who have contributed to the debate on Supply Bill No. 1 2016-2017, Supply Bill No. 2 2016-2017 and Supply (Parliamentary Departments) Bill (No.1). They seek appropriations from the Consolidated Revenue Fund for proposed expenditure for the first part of 2016-17 broadly until about the end of November. The total of appropriations being sought through these three supply bills is just over $41 billion. These supply bills must be passed in this session to ensure funding is available to all entities from 1 July 2016, thereby ensuring the continuity of program and service delivery of the operations of the parliament. I commend these bills to the House.

Question agreed to.

Bill read a second time.