Wednesday, 14 September 2016
Budget Savings (Omnibus) Bill 2016; Second Reading
Australia needs budget repair, and it needs budget repair which is fair. That is what this bill will deliver after government amendments are moved which reflect the agreement between the Labor Party and the government. This bill will deliver $6.3 billion of savings to the budget bottom line over the next four years. Of course, originally the government said that it would deliver $6.5 billion, then it became $6.1 billion, then the member for Rankin found a little $107 million problem in the bill, which brought it below $6 billion; but the arrangements entered into by the government and the opposition, thanks to some stipulations put on this by the opposition, now see the savings delivered rise back to $6.3 billion.
These savings reflect policies which have been aired in the recent federal election. I will not go through all the details, but I will just take one example: the Australian Renewable Energy Agency. The Labor Party took a very comprehensive renewable energy policy to the election. It was a very comprehensive and robust policy in relation to renewable energy targets and proper investments in renewable energy. We had the change to ARENA funding as part of that overall picture. The government has brought in the cut but not the good parts of the policy—not the renewable energy targets, not the investments. So it has been necessary for the opposition to work with the government to deliver the same savings but in a way which reflects the reality that this government is in office and will not be engaging in good renewable energy policies.
This is the context for this debate. As I said, I understand that the government will move amendments which reflect the arrangements entered into by the government and us. They will reflect primarily changes to ARENA funding. The government was proposing a $1.3 billion cut. We are very pleased that it has been agreed that $800 million will be put back into ARENA. ARENA is a very important organisation for our nation's future and for our investment in renewable energy. Australia can and should be a leader in renewable energy, and ARENA has a very important part to play in that. We know that the government has previously tried to abolish ARENA. This is a significant change, which sees $800 million put back into ARENA. Of course that is a reduction in funding, but, as ARENA has made clear, it enables it to continue with its job. It is the investment that it needs to continue with its job.
In addition, a process has been agreed by which the Minister for the Environment and Energy will meet with the shadow minister for climate change, the member for Port Adelaide, to discuss the profile of remaining funds over the forward estimates and a forward work program, and also, importantly, to establish whether there are opportunities for bipartisan agreement surrounding policies to accelerate the transition to modern and clean energy systems.
There are other points. Of course, the government and the opposition disagree about dental care in Australia. The previous Labor government put in place a very good scheme. We want to protect that scheme. It is a scheme which works. The government has a different approach. I am pleased that the government has withdrawn, through its amendments, the changes to the dental scheme. We have agreed that there will be discussions between the minister and the shadow minister to assess other ways of finding savings. The government reserves the right to pursue its scheme under separate legislation and we, of course, reserve the right to oppose that. We, of course, reserve the right to defend the existing scheme, although we have indicated we do think there are savings which might be possible. The psychiatric confinement measure, which the Labor Party had actually opposed previously, we will continue to oppose. I am glad the government has withdrawn that from the bill.
Then there is the change to the clean energy supplement. This is in relation to the government's plan to remove the clean energy supplement for all new recipients of a whole range of payments. We have made a very sensible proposal to the government that the clean energy supplement be withdrawn for new recipients of income which is additional income, not primary income—family tax benefit recipients and holders of the senior health card—but that we protect and defend the clean energy supplement for recipients of Newstart, the age pension, the disability support pension and other payments. This is appropriate. This is budget repair which is fair. This is not saying to Australia's unemployed people and Australia's age pensioners, 'All the burden is on you;' this is saying, however, 'We recognise that budget repair requires difficult decisions.' That is why, in order to ensure that we get a saving better than the one proposed by the government, we have agreed to remove the family tax benefit A supplements for families with income more than $80,000.
Importantly, I am very pleased that the government accepted and agreed to Labor's insistence that the baby bonus not come back. The baby bonus is unsustainable in modern Australia, where we are talking about budget repair. The previous Labor government took the difficult decision to deal with it. Remember, when we first said that the baby bonus would only apply to firstborn children, that the then shadow Treasurer, the holder of my office, said it was akin to the one-child policy. That was their constructive approach to budget repair. It was akin to China; he said, 'It's just like the one-child policy.' He compared us to the Chinese communist party. Well, we take a more constructive approach. We are happy to say to the Australian people, 'There are difficult decisions which are necessary for budget repair, and the baby bonus is one of them.' The Prime Minister can put it into his deal with the National Party all he likes, but this deal takes it out, because Australia should not have a baby bonus—it cannot be afforded. Whereas we have made our agreement with the government public, the agreement between the Liberal and National parties remains secret. That is a matter for them, but we have made public our agreement in a very transparent way which says the baby bonus will not come back.
I am going to be brief today in the interests of the expeditious passage of this legislation through the House so it can get to the other place in an expeditious fashion and allow them the time to pass it, but I do want to say that the Labor Party has led the debate on budget repair and today we lead the way as well. We led the debate when it comes to superannuation. We announced our superannuation policy last April. The government and the now Treasurer railed around the country saying it was an unfair attack on the retirement incomes of Australians. The now Treasurer said he would never tax superannuation; he would never touch superannuation. Of course, on budget night, up he hopped to that dispatch box and launched an attack on superannuation. We have been consistent on superannuation, and a couple of weeks ago the Leader of the Opposition outlined our plans on superannuation, which avoid retrospectivity and raise another $1½ billion for the budget, a more fiscally responsible plan than the one the Treasurer in office has. So we are prepared to help the government out of its mess on superannuation.
And there is more that can be done. If the government deals with the VET FEE-HELP rorts, we will help it with that. The Leader of the Opposition announced our policy in his budget reply—a very good policy; a fiscally responsible policy which cracks down on the rorts. The government should take it up and the government should talk to us about expeditious passage through the parliament. Private health insurance rebates can be fixed as well. We announced our policy in the election. It can be done. If the government chooses to do what it did on this omnibus legislation, there is more that can be done. We can fix VET FEE-HELP; we can fix the private health insurance rebate—and we can fix superannuation, as well, and the mess that this government has created. So, just as we have led the debate, we have led the way.
I do, in all seriousness, want to thank the Treasurer and the Minister for Finance for their engagement in this debate. I want to thank all my colleagues on this side, particularly the member for Rankin, the shadow minister for finance, who has been a very good contributor and a very good source of advice and counsel to me during this process, and the members for Ballarat, Jagajaga and Port Adelaide, who have also made very important contributions to a good result—here comes the member for Jagajaga to receive the accolades that are her due.
I want to thank my colleagues for what has been a good process. I commend the legislation to the House and I commend its expeditious process through the House.
I also rise to make some comments on the Budget Savings (Omnibus) Bill 2016. This is a piece of proposed legislation in our parliament, worked on across the government and the opposition, that has, indeed, led to a much better outcome than if we had accepted the government's original proposals in this omnibus bill. The fact that we have taken some time—some weeks—and worked constructively to find not just the savings that the government initially proposed but larger savings than the savings that the government proposed shows that, with cooperation and constructive engagement, we can not only find measures to repair the budget but do it in a fairer way that is in line with Labor values.
We know that it is important to find savings over time and to reduce spending. This government have added $100 billion to net debt. They have tripled the deficit. We are at risk of losing our AAA credit rating, which affects our ability to invest in the things that we care about in the future—in health, in education, in infrastructure and in all of the things that make our society and our economy stronger. I want to pay tribute to our shadow Treasurer, our current shadow finance spokesperson and our former shadow spokesperson—Chris Bowen, Jim Chalmers and Tony Burke—for the very disciplined and methodical way they have gone about finding savings here.
But I want to spend a minute also talking about our spokesperson for family and community services, the member for Jagajaga, Jenny Macklin, who, during her time in government and in opposition, has had probably the biggest impact on social policy in this country of any person in the last century or this century, with the new programs she has constructed like the National Disability Insurance Scheme, the funding that she has found to support those programs and, most particularly, in recent weeks, the fact that she has managed to find savings that protect the poorest and most vulnerable people—those going onto Newstart, pensions, age pensions, disability payments and other allowances—to protect them from the cuts that this government proposed. These are people who are just making it now. The idea that we would actually cut support for these people in the future is a sign of how heartless this government is. I am proud to be a colleague of the member for Jagajaga and proud of the work that she has done methodically over many months to find a better, fairer package of savings.
I also want to pay particular tribute to our health shadow, Catherine King, who has managed to fight off the attack on the Child Dental Benefits Schedule. This is an appalling policy from the government. The Minister for Health and Aged Care says that this is an under-utilised scheme. I would like to ask her: what advertising and promotion of this scheme has she ever done? It is like the secret scheme that the government does not want your children to find out about. The shadow health minister has done a fantastic job of ensuring that this is not included in our program.
I just want to make a few very brief comments about the higher education measures in this omnibus bill. We did take some difficult decisions before the last election as part of our budget repair strategy. We did that in the context of Labor investing an extra $13 billion in higher education. We will always oppose $100,000 university degrees, we will always oppose deregulation of the university sector and we will continue to oppose the more than $3 billion of zombie measures that are still there from the 2014 budget because we believe a stronger and better-funded higher education sector is not just critical for our individual students but is absolutely critical for the wealth, the productivity, the economic strength and the growth of our nation. So we will continue to fight $100,000 degrees and we will continue to fight the cuts that are still there—the 20 per cent cuts that the government continues to propose which are left over from the 2014 budget. That is an important thing to remember.
I want to finish by saying that as well as protecting the most vulnerable people in this omnibus bill, we have also protected something else that is fundamental to our values set, and that is our commitment to reducing carbon pollution and reducing carbon emissions. Mark Butler, our shadow environment and energy spokesperson, should be proud of the fact that he is the man who saved ARENA.
I am very pleased to be able to speak on the Budget Savings (Omnibus) Bill. I think it is true to say that our cautious and careful approach in looking at this bill has been justified. We have looked at all of the measures through the lens of our Labor values. I will not talk on all of the issues that are in the bill; I will just concentrate on those that have been most significant to me, particularly in making sure that we protect the most vulnerable Australians.
We do have some very serious reservations with some of the measures that were proposed in the original bill. Most significantly, Labor does not support the abolition of the clean energy supplement that goes to pensioners, people with disability, carers, job seekers and many others. Labor also does not support cuts to people in psychiatric confinement. Others will talk about the scale of cuts to ARENA. After negotiations with the government—I want to particularly thank Chris Bowen and Jim Chalmers—we have reached an agreement to have these measures amended or in some cases removed from the bill that is currently before the parliament.
My primary objective has been to protect the most vulnerable Australians, and I am very pleased to say that we have done so. We on the Labor side do believe in budget repair that is fair. We believe that the budget bottom line can be fixed without making cuts to the most vulnerable Australians. The task of fiscal repair must not fall on those who have the least to give. We support sensible reforms when they do align with Labor values, and cutting the energy supplement to pensioners, carers, people with disability and the unemployed does not align with Labor values. We certainly do not accept that these people—pensioners, people with disability and the unemployed—should be forced to accept cuts in the budget while the government gives $50 billion away in tax cuts to big business.
Given the time, I will not go through the detailed history of the clean energy supplement. I will just emphasise the impact of this cut if it is ever to go through this parliament. It certainly will not go through with our support. The analysis shows that a single mother on Newstart would be $4.40 a week or $220 a year worse off. A pensioner couple would be around $8 a week or $550 a year worse off. It cannot be argued that it is fair to take $220 a year from someone who is unemployed, and it cannot be argued that it is fair to take $550 a year from an old age pensioner couple. The government has suggested that they may bring back the cuts to the energy supplement in a new bill. If they do, Labor will oppose it. We will protect these vulnerable people.
I want to really emphasise that there is no more vulnerable group in Australia than those living on Newstart. We already indicated before the election that we believe the Newstart allowance is already too low. It is equivalent to just 28 per cent of the average wage, and as a consequence of the low rate of Newstart many recipients of unemployment benefits are living in poverty. That is nearly 800,000 Australians. So it is a large number of people living on a very low incomes and, of course, that very much goes to our decision to oppose any further cuts as proposed by the abolition of the clean energy supplement. We even have the Business Council of Australia saying that the rate of Newstart allowance for jobseekers no longer meets a reasonable community standard of adequacy, and of course there are many others in the community who take the same view.
Newstart is clearly not the safety net that it is supposed to be; it is neither keeping people out of poverty nor providing them with the financial resources they need to look for and find work, so cutting the energy supplement from Newstart would have made an already bad situation even worse. It is bad public policy, it threatens to entrench disadvantage and inequality in this country and it is something that the Australian Labor Party cannot support.
We cannot accept that it is fair to cut a payment that is widely recognised as already being below the poverty line. Labor took a policy to the last election to review the adequacy of the Newstart allowance. We think that is the place the government should start, not to cut this already very low payment.
The original omnibus bill also included a measure that Labor has opposed in the past and will continue to oppose. The government wants to take income support payments away from people in psychiatric confinement who are charged with a serious offence and who are undergoing a course of rehabilitation. This would apply to people who have been found to be suffering with very serious mental health issues like schizophrenia, bipolar disorder, intellectual disabilities, acquired brain injuries and so on. We do not believe the government's proposal is good policy and we are concerned that this cut would jeopardise the mental health support that people currently receive from state governments. We have opposed this in the past. I am pleased that it is going to be removed from this legislation, but the government should actually take this proposal out of the parliament altogether.
Just to summarise, I do want to emphasise again that the difficult decisions that we have had to make to get to where we are today have really been led by Bill Shorten. He really has shown that Labor is taking an approach to fairness that is serious—that he is going to make sure that the most disadvantaged people in our country are protected. I want to thank him for his leadership. It is not easy to find the savings that we have. We understand that many families are doing it tough, but I do appreciate the way in which he, Chris Bowen and Jim Chalmers—
Thank you, Mr Speaker, I will do it. I think that the Leader of the Opposition has really shown just how important it is to stand up for those who need it most. That is why so many of us were elected to this place—particularly to stand up for those who are the most vulnerable—and he has done that.
We are, of course, also concerned about the Turnbull government's continuing determination to further cut family payments. That will hurt around 1.1 million families in this country and in some cases take thousands of dollars out of the pockets of low- and middle-income families. Labor have made it clear that for those families earning under $80,000 a year in family income we will not agree to any cuts to their family tax benefit A or B end-of-year supplements. It is not fair and, as the Leader of the Opposition has indicated in the past, we will continue to stand up for those families.
I think that is the most important message that I have for the government. We will continue to stand up for vulnerable Australians. That is why we are here. We have done so by securing very important amendments to this bill. Should the government reintroduce legislation to cut family payments further, especially to low-income families, Labor will oppose it and we will oppose any further effort by the government to remove the energy supplement from pensioners, people with disability, carers or the unemployed. We will do everything we can to support the needs of those we have come here to support.
Three years ago, Australia was riding high in the transition to a cleaner energy system. Over the period of the last Labor government, wind power tripled in this country. The number of jobs in the renewable energy industry tripled during a period that included the global financial crisis. The number of households with rooftop solar soared from just 7,400 when we came to government to over 1.2 million when we left government in 2013. In our last year of government, we approved the largest wind farm in the Southern Hemisphere and the largest PV solar farm in the Southern Hemisphere. Unsurprisingly, the leading global business index in renewables, the Ernst & Young renewable energy country attractiveness index, rated Australia in 2013 as the fourth most attractive destination for renewables investment in the world, up there with China, the United States and Germany.
Over the past three years, though, this industry has endured attack after attack, and each of those attacks has been seen off by the Labor Party. In 2014 and 2015, the then Prime Minister, the member for Warringah, went after the renewable energy target, in spite of promising at the 2010 and 2013 elections to keep the RET in place. The Labor Party saw off that attack. The then Prime Minister, the member for Warringah, tried to abolish the Clean Energy Finance Corporation on a number of occasions, and again the Labor Party saw off those attacks. In the latest attack, we have seen this government seek to abolish the entire budget of the Australian Renewable Energy Agency, a move that would see it remain as nothing more than a shell, and with this bill, the Budget Savings (Omnibus) Bill 2016, Labor has seen off that attack as well.
This bill saves ARENA; thank you to the strong advocacy of the Labor Party and many other stakeholders and other members in this place as well. As the shadow minister for social services has done, I want to acknowledge particularly the leadership of the Labor leader and the Labor deputy leader but also the sheer hard work of the shadow Treasurer and the shadow finance minister, who is new to his role but is a person who has a strong commitment to climate change and energy policy. This work reflects our unshakeable commitment to ensure that, through this period of a government which, it would appear, does not support a transition to clean energy, the renewable energy industry is able to survive and do whatever it can so that, when a government returns that does have strong clean energy policies, it can get back to the position it was in in 2013.
This bill secures an additional $800 million over five years in grants. This is additional to the more than 200 existing projects that ARENA is already auspicing and additional to the 12 large PV solar projects that were announced by ARENA last week but are not yet contracted. ARENA has stated that this sum, $800 million over five years, will provide it with a budget that allows it to continue a strong work program into the future. As part of the agreement underlying this bill, the government has agreed to sit down with the opposition to ensure that our priorities are satisfied—those priorities being, first of all, to ensure that the ARENA budget preserves Australia's world-class, leading research and innovation capability, particularly seen in our universities and CSIRO, and also to ensure that there is a budget for demonstrational proof-of-concept stage developments in the industry.
The protection of our research budget in this industry is Labor's first priority and I want to particularly mark out a couple of major contributions by members of the Labor caucus. The member for Kingsford Smith is lucky enough to represent an electorate which includes the University of New South Wales. At that university the Australian Centre for Advanced Photovoltaics for years now has been the world-leading research institution in solar PV. This bill secures ACAP's ability to continue their world-leading work. The member for Fenner has strongly advocated for the interests of the Australian National University, which partners with UNSW and a number of other universities around Australia, making sure that Australia leads the transition around the world to solar PV. The member for Newcastle has been strongly advocating for the work that CSIRO's Energy Centre in Newcastle does as a leading institution in the Australian Solar Thermal Research Initiative, an initiative that includes universities and a number of other institutions not just here in Australia but in the US as well.
In addition to securing our research capability, this agreement between the opposition and the government will also allow ARENA to support demonstration and proof-of-concept stage developments in this industry that ensure that the findings by those universities and by CSIRO scientists are able to be shown to be commercially viable and are then able to be presented to lending and equity investors and become a reality across the Australian landscape. It is also important to point out that there is no change—no reduction at all—to the $10 billion Clean Energy Finance Corporation Fund that is overseen by that very expert board at the CEFC.
The final matter I quickly want to allude to is that there was also a commitment made by this government as part of this agreement to sit down with the opposition and explore opportunities for bipartisan agreement around policies that would accelerate the transition for Australia to a modern clean energy system and to ensure that that transition is, to use the words of the Paris agreement, 'a just transition for workers and impacted communities'.
We know through experience that there really is no democracy across the world that has a serious, enduring climate policy framework that is not underpinned by a strong level of bipartisan agreement. For three parliaments now, we have not been able to find that bipartisan agreement in this policy area. I point out that the Australian Climate Roundtable has been strongly advocating for this approach that we have achieved through this agreement. The roundtable includes organisations as diverse as the Australian Aluminium Council, the Australian Industry Group, the Climate Institute, the Australian Conservation Foundation, the Business Council of Australia, WWF Australia, ACOSS, the Energy Supply Association, the ACTU and the Investor Group on Climate Change. It will not be an easy discussion between the government and the opposition, but the opposition will come to the table on those discussions with constructive goodwill.
I commend the bill to the House.
I too rise to join my colleagues in supporting the now amended Budget Savings (Omnibus) Bill 2016. At the outset, I particularly want to acknowledge the strong leadership on our side of the Leader of the Opposition, the shadow Treasurer, the shadow finance minister and my colleagues in the areas of family payments and environment, who have all worked very hard to ensure that we do support budget repair that is necessary and that we do so in a way that is fair.
We have always said that this exercise should not come at the expense of cutting payments for some of the most vulnerable families in this country. I am particularly pleased that Labor was able to fight so hard to have the axing of the Child Dental Benefits Schedule and the National Partnership Agreement on Adult Public Dental Services removed. The government will have a significant fight on its hands if it attempts to abolish the Child Dental Benefits Schedule. It is a schedule that has assisted one million children already and it is providing dental services every two years, with a very strong focus on prevention. The government's own Department of Health has said that this is a very successful program, with the only failing being the government's failure to actually promote it to parents.
We also very strongly believe that the National Partnership Agreement on Adult Public Dental Services—the initiative that Labor in fact put in place—has also been important in treating an extra 400,000 adults through the public dental scheme. The government's proposal to scrap both of these schemes and replace it with a scheme which, frankly, would see five million children added to the already long public dental waiting list is an absolute farce and not something that anyone in the sector supports.
The National Oral Health Alliance has basically said that, if the government has its way with its scheme, people will be getting one treatment every 17 years, or it would be $40 per patient, according to the government's own rhetoric about how many people are now to be eligible under the scheme—$40 per year for their care—which is an absolute joke. The Australian Healthcare and Hospitals Association have, arguably, also said that it will add significantly to public dental waiting lists.
I am very proud that Labor have fought hard to protect a scheme that we established—a scheme that was put in place to ensure that we would have good oral health into the future. We already have over 42 per cent of children under the age of five experiencing decay in their baby teeth and some 62 per cent of nine-year-olds experiencing decay in their baby teeth. We know that 20,000 children are hospitalised each year because of tooth decay that is avoidable. This scheme is working. It is a scheme that is important, and it is one that Labor is very proud to have stood up to this government on in this bill.
I am very pleased and very proud to support what will be a far superior version of the omnibus bill than the one that it will replace. The Budget Savings (Omnibus) Bill 2016 is superior because it is bigger, in terms of savings, and infinitely fairer, and it also ensures that we are investing in the future, as it relates to renewable energy.
We have been saying for some time that the bill that we support in this place will reflect the quantum of savings we took to the election, be consistent with our values, as it relates to things like protecting the vulnerable—people on Newstart and the like—and also invest in renewable energy, particularly with what we have been able to achieve through the ARENA part of the bill.
This bill is also infinitely superior because of the leadership provided by the member for Maribyrnong, the Leader of the Opposition, who has done an outstanding job in leading a team which has made this bill fairer than it otherwise would have been. It is a superior bill because of the consultation that has taken place with good people in the community and with peak groups like ACOSS and LEAN—the Labor Environmental Action Network—an organisation I am proud to be a patron of in Queensland.
This bill is infinitely superior because of the consideration of the colleagues in our broader caucus—the people that the member for Port Adelaide ran through. There are many people on this side of the House with a view on this bill who have encouraged and allowed us to get to this far superior outcome.
It is a better bill because of the work done by the member for McMahon, the member for Sydney, the member for Jagajaga, the member for Port Adelaide, the member for Ballarat—all of the colleagues in the shadow cabinet. The member for Port Adelaide mentioned I am new to the shadow cabinet—I have only been there five minutes or so—but I am very pleased to see the way that the team worked together so effectively under the member for Maribyrnong's leadership. He and all of his colleagues here did such an extraordinary job making this bill infinitely superior to the one that it will replace.
What we have shown on this side of the House is that budget repair can be fair. It can be in the finest traditions of the Labor Party. It can stand up for the vulnerable people in our community and not ask them to carry the can when it comes to budget repair in this country. What we did on this side of the House was seize the initiative, because something needed to be done about the mess that the budget is in.
Debt has blown out by more than $100 billion under the watch of those opposite. The deficit has tripled since that disastrous 2014 budget—and, perhaps most importantly, our coveted, hard-won AAA credit rating is in serious jeopardy. We on this side of the House will do what we can to defend that AAA credit rating. If we lose it, it will be on the heads of those opposite, because we are playing such a constructive role, helping them out of the mess that they have created in the budget.
In the absence of the economic leadership that was promised a year ago by the member for Wentworth but which never eventuated, we will continue to take that initiative. There are fairer savings in this bill—that is true—but there are more where they come from. There are more savings of this nature that add up to budget repair that is fair. There is more to be done in private health insurance. There is more to be done in capping the VET FEE-HELP arrangements.
We have offered a constructive way out of this humiliating impasse that those opposite have come to on superannuation. We invite them to pick up these fair savings and to run with them. They can have the credit for them. They should build them into the budget. We call on them to do that so that we can continue to fix their budget mess in a fair way—a way that does not ask the most vulnerable people to carry the can.
If they are serious about defending the AAA credit rating and they are serious about improving the budget bottom line, they should abandon the $50 billion tax giveaway to big, multinational corporations in this country. That is the biggest piece of fiscal vandalism on the table at the moment—$50 billion out of our schools and hospitals and into the pockets, onto the bottom lines and into the profits of the biggest companies in Australia at a time when the country cannot afford it.
There is a right way and a wrong way to fix the budget. The wrong way is to lecture people about moral responsibility while you give $50 billion away when the country cannot afford it. The wrong way is to ask the most vulnerable people to do the heaviest lifting. But there is a right way. We are proud of what has been achieved here in this omnibus bill because it is the right way. It is a bigger savings package than the one contemplated in the original bill. It is infinitely fairer than the one it replaced and it invests in renewables. This side of the House has shown again that we can make concessions, we can consult and we can negotiate with the government. I again want to pay special tribute to the member for McMahon for doing the negotiations from our point of view, as he carried that duty from our side of the House. But we have shown that, while we can make the concessions and do the consultations, we will not compromise our values. That is why what we are supporting here, when the bill is amended, is in the finest traditions of the Labor Party. It is a product of our shadow cabinet and our broader caucus that we can be proud of.
I rise to support the amended Budget Savings (Omnibus) Bill 2016. There is no doubt that the issue of budget repair needs to be dealt with. The government has tripled the deficit since it came into office. The fact is that the debt has increased since this government came into office, at a time when spending has not increased in terms of productivity-boosting expenditure such as investment in infrastructure. If, to boost future economic growth, that had occurred, then there might be some justification; but we know that in the first two years of this government public sector investment in infrastructure fell by some 20 per cent. We know that during the recent election campaign the government refused to commit to important congestion-busting investments like the Cross River Rail project in Brisbane, Metronet in Perth, the AdeLINK light rail project or Western Sydney rail.
The fact is that issues around recurrent expenditure do have to be dealt with. They require tough decisions. I have been saying for some time that those tough decisions and Labor's position on them need to be determined on the basis of Labor values, on the basis of how these changes meet the fairness test. It is very clear that the government's earlier proposal to abolish the energy supplement for pensioners, people with disabilities, carers, recipients of Newstart and single parents was unfair. It was unfair on a range of measures. A range of compensation measures were put in place when the carbon price was implemented by the former Labor government.
We dealt with the issue of the impact on the working poor by tripling the income-tax-free threshold. Middle-class people received income tax cuts. Companies received direct support for the transition to a carbon-constrained economy. As proposed by this government, all of those measures would stay in place. All of the middle-income and high-income earners would keep the tax cuts that were part of the compensation measures. The only people who would be hit by the wind-back of those compensation measures were the poorest people in the community. What made it even worse was the fact that, as a result of the then Labor government not wanting double compensation, we discounted the next normal CPI increase for recipients of income security payments by the next CPI increase, which, of course, would have been impacted by the flow-on from the carbon price. So, in fact, these low-income earners would have been worse off in real terms than had the carbon price not been implemented, and that is why it was unfair to cut these payments by between $4 and $8 a week.
That is bad macro-economic policy because, at a time where the Reserve Bank has cut interest rates in order to stimulate demand and to use monetary policy as a stimulus, it makes no sense for fiscal policy to work in the opposite direction. That is precisely what a cut to real incomes for the poorest people in our society would have done because these people spend all of their income, every dollar, on getting by from week to week. We know that Newstart is already too low. It is not just that people in this parliament suggest that; even the Business Council of Australia suggests that. That is why this clawback of compensation was unfair, and Chris Bowen, the Shadow Treasurer, and others—Jenny Macklin in particular, who always has looking after the most vulnerable in our community at the forefront of everything that she does—deserve credit for negotiating a proposition that can now receive the support of both sides of the parliament. To give the government due credit, the fact that they were prepared to be flexible deserves acknowledgement as well.
We need to give people appropriate respect and not just regard people who are on low incomes and who are vulnerable as people who are expendable. If we do not give them a voice who will? It is the Labor Party that historically has stood up for those people and stood up for Labor values—and, once again, we have done this with this package today.
I will also mention briefly the change to ARENA funding. As a result of the measures negotiated, ARENA will have an $800 million budget over the next five years to continue its important work. This is critical work. The promotion of renewables is consistent with Labor's position of 50 per cent renewables by 2030. We do not think this goes far enough, and it is important that there will be negotiations between the shadow minister and the Minister for the Environment and Energy in order to see if we can get further agreement in the shift away from fossil fuels and towards renewables that is so necessary. It is important to acknowledge that climate change is real. It is happening. The quicker we transition to a clean energy economy the cheaper that transition will be. Importantly, this will also support jobs, and the renewable energy sector has seen jobs triple in recent years. The work of ARENA is aimed particularly at early stage developments, and it is important that, as a result of this negotiated outcome, support for clean energy and the renewable sector has been ensured.
Without amendments, the Budget Savings (Omnibus) Bill 2016 is a bad bill because it attacks low-income earners and kids dental, and it is a bad bill with amendments because it attacks clean energy. At a time when we should be putting more money into clean energy, we are being asked to quickly pass through parliament a dirty deal done between Labor and Liberal that takes the axe to renewable energy.
It is no excuse to say, 'Oh, well, somehow these cuts aren't as bad as they might have been.' Labor found it in its heart to say no to some of the measures but apparently not to all, because apparently it is okay to cut half a billion dollars out of renewable energy—which is what Labor has just done. Apparently it is okay not to say no to the cuts to research and development, which is what Labor has just done. And apparently it is okay to give the green light to cuts to student support, to aged care, to newly-arrived migrants and to student scholarships, because that is what Labor has just done.
We have been saying for some time, as the Greens, that we need to secure this country's revenue base. If we want to fund the services that Australians rightly expect and to invest more in clean energy then, yes, we need to find the money from somewhere. The question is: where do you find it from? At the moment we spend several billion dollars a year just so that the likes of Gina Rinehart can put cheap diesel into trucks on their mining sites. We give a tax break to the very wealthy in sectors that, frankly, do not need it.
By removing one simple measure, by saying to the likes of Gina Rinehart, 'You should pay the same tax on your diesel as everyone else in this country pays on their petrol,' we could have raised three times as much as the saving in this package. That is the kind of spine that Labor could have shown to the government, because that is what the Greens have said to the government. This package is not the right way to balance the budget, because in 2016 there are fairer and better ways of balancing the budget than taking the money from clean energy, or taking the money from students or taking the money from newly arrived migrants. But no: Labor has said, 'We are happy to rip half a billion dollars out of world-leading renewable energy research in this country.'
Let us talk about ARENA. What is ARENA? The Australian Renewable Energy Agency is something that was set up by the Greens and Labor in the power-sharing parliament back in 2010. Its job is to take new and innovative projects in the renewable energy space. One might be the printable solar cells that they are developing, where you can print solar cells onto surfaces as diverse as banknotes or fabric. You can print them straight onto corrugated iron so that your roof becomes a solar panel—you do not need to put a solar panel on your roof; the roof is the solar panel. That is the kind of thing that ARENA funds.
ARENA looks at battery technology and says, 'How can we make sure that instead of building new coal fired power stations we can put batteries into businesses and households and make those affordable so that we can store the power that our solar panels generate during the day and save it overnight?' That is the kind of thing that ARENA does. ARENA also says, 'Let's look at some of these large-scale solar projects that can now, and will be able to in the future, replace coal fired power stations.' That is what ARENA does. It gives money to projects that are in an early stage so that they can prove themselves and then become commercial and viable in their own right.
That is exactly the kind of thing we should be doing, and it is exactly what Australians want government money to be spent on. The government says, 'Well, we don't like that. We want to rip over a billion dollars out of it.' And Labor says, 'Well, we kind of like it. Let's just only rip half a billion dollars out of it and call it a victory.' It is not a victory when you take half a billion dollars out of renewable energy. That is not a victory; that is handing a blank cheque to the government to gut renewable energy in this country.
And the more that we find out about this dirty deal that Labor and the Liberals did yesterday the more we understand why they did not want to have a public inquiry into this bill—one of the very few instances that I can remember where Labor and Liberal have got together and said, 'There will be no public hearings into this bill. We don't want any sunlight shone on it.' Well now we see why, because not only is half a billion dollars ripped out but it seems that almost all of that half a billion comes in the next three years. So on our analysis, of the $517 million that Labor has said they are going to give the government a blank cheque to cut, $514 million comes in the next three years. At the very time when this agency is saying, 'We need the money now to give confidence to the industry so that we can grow renewable energy projects and grow renewable energy jobs'—things like solar thermal in Port Augusta or large-scale wind farms just outside of Canberra—Labor signs up to a deal to gut half a billion dollars, almost all of the savings, in the next three years.
That is the dirty deal that has been done, but it gets even worse—we have not even spoken about the con. No sooner had Labor signed up to this deal from the government than two government ministers go out yesterday afternoon and say, 'Actually it's all right because, yes, we've left $800 million in the ARENA bucket, but we're going to find that $800 million from another clean energy project.' Labor says, 'No, that wasn't the deal,' and the government says, 'Well, we're the government and that's what we're going to do.' Finance minister Cormann and energy minister Frydenberg said yesterday, 'We're going to offset this money that Labor has supposedly saved for ARENA by not spending it on another project over here in the Clean Energy Finance Corporation.' So this amazing deal that has been done has allowed, in the government's mind, no net change. You have not saved renewable energy, Labor; you have helped kill it. If you had the courage to stand up and say, 'No cuts to some of the low-income earners'—not all, mind you; you are happy in this bill to take the axe to students and newly arrived migrants—why did you not have the courage to stand with the Greens and say, 'No cuts to renewable energy'?
It is very, very easy, as Labor and Liberal are wont to do, to talk about bipartisanship and the benefit of it, but the only bipartisanship we are seeing is cuts. When it came to the question of renewable energy, Labor and Liberal agreed in the last parliament to cut the Renewable Energy Target. In most countries if you set yourself a target for renewable energy and you are on track to exceed it, you would see it as a sign of success. The government said, 'Oh, we've got too much renewable energy—it's doing more than we expected; we need to cut the target,' and Labor went and agreed with them. That was the first outbreak of bipartisanship: a cut to Australia's Renewable Energy Target. Now we are seeing another outbreak of bipartisanship where they are cutting the amount of money going to renewable energy in this country. When the climate groups and the country call out for bipartisanship on climate change they want more action to be taken, not less. It is very easy for Labor and Liberal to agree on cutting renewable energy; what is harder is getting Labor and Liberal to agree to put more money into renewable energy or to have higher targets and to get more renewable energy.
So then we have these crawling words coming from Labor afterwards, suggesting, 'Oh, it's all right, we're going to have discussions with the minster and at some point in the future we might be able to get more money back into renewable energy.' The first thing the minister did after you signed this deal was go out with his finance minister and say, 'We're taking $800 million from somewhere else,' sending a strong message to their backbench: 'It's okay; we've conned Labor.' Labor has been conned. They have fallen for a pea-and-thimble trick, and you need look no further than the boasting of the finance minister and the energy minister to see that.
So what would it mean to have budget savings that come from the top end of town? We can start by saying: 'Maybe in our superannuation system, where it costs us $30 billion a year in tax breaks, most of which go to very wealthy top income earners, we do not need to be giving people on over $100,000 a tax break to save for their retirement at quite the same level as we have so far; let's wind that back a bit.' There is a few billion dollars a year. We have talked a bit about fuel tax credits before, but maybe we can say to wealthy mining companies, 'You do not need to get a tax break for accelerated depreciation of your property; you're doing all right, we think.' There is another couple of billion dollars. Maybe we could say to the big banks, 'You make world-leading record profits off the back of implicit subsidies that the IMF has valued at a couple of billion dollars a year.' The IMF—not the most left-wing organisation that I know of—has said: 'Australia gives the big four banks effectively a couple of billion dollars in subsidies every year. Maybe you should look at winding back some of it or charging them for it.' If you did that—if we stood up to the big banks—there is a couple of billion dollars a year. There are plenty of ways of finding money without hitting everyday Australians, but it requires the courage to stand up to the top end of town.
It requires courage. That is what is remarkably lacking from this government, but you would expect that from this government because they do nothing more than the bidding of big business. But you would expect a bit more courage from Labor. You would expect Labor to say, 'Instead of taking money from students by taking the axe to student start-up scholarships or other forms of student support, maybe we will go after Gina Rinehart.' But, no, quite happily, despite all the bluff and bluster during the election campaign about Malcolm Turnbull being unfair, they have just agreed to Malcolm Turnbull's measures. And it is worse than that because many of those are Tony Abbott's measures.
Many of these measures are from the former Prime Minister, the member for Warringah, Tony Abbott. These were the zombie measures that he could not get through the last parliament, because in the last parliament people had the courage to stand up to the former Prime Minister and say: 'No, the way that you are raising money is unfair. You should be taking it from those who can afford to pay, not those who can't.' We fended him off for a couple of years but, as soon as the election is out of the way, in the second week of parliament, what does the opposition do? They crawl over to the government benches and say: 'How can we sign up to some of those measures? We opposed them for a couple of years, but that was just for the election. Now that the election is out of the way, let's get on with it and sign up.' That is why they are trying to push this bill through with very short speeches from them, because they know in their hearts that they are signing up to measures that they fought for a very long time and for good reason. They know that they have taken the easy way out by cutting funds for renewable energy instead of winding back the subsidies that the likes of Gina Rinehart gets.
We are calling them out. The Greens will not be supporting this bill. There are too many measures in this bill that attack those who cannot afford it. There are too many measures in this bill that attack clean energy and attack research and development at a time when we should be putting money into those areas. We will not be supporting this bill. I heard some talk from the opposition benches about having saved ARENA and I have explained why that is not the case. In the detail stage of this bill, we will give the opposition a chance to actually do that. I will be moving an amendment to remove the cuts to ARENA, full stop. We can find the money from other places. So I urge the opposition to rethink their willingness to cut half a billion dollars out of renewable energy, because it is not too late. The money can be found from elsewhere. When I move the amendments, I hope that all those words about saving ARENA are put into practice, because we can do it right here, right now. It is a bad bill with or without amendments.
The Budget Savings (Omnibus) Bill 2016 is a black-hearted bill, and Labor are a pack of quislings for supporting it. Just when the opposition should act like an opposition and stand up for the community and the environment, it has rolled over to have its tummy tickled. It is terribly disappointing and it betrays a great many people who voted Labor. This is a black-hearted bill. Well may people come in here and talk about what a good bill it is. Well may the ALP come in here and say how they have amended it to ensure that it is a fair bill, but it is not. Indeed, it contains 20 of the 24 original measures. I will say that again: this bill contains 20 of the 24 original measures. It still cuts over half a billion dollars from ARENA. It abolishes the family tax benefit part A for some people. It cuts the supplement for new mothers. It cuts the energy supplement for some Centrelink recipients. It fails to clarify the future of dental care for the children of low-income families. Every way you look at this bill, it is not supportable, and I will not support it.
I associate myself with the comments from the member for Melbourne, particularly on the environment and the effect of ARENA—I will come back to that in a moment. I will dwell on another issue that the member for Melbourne spoke about—that is, the other ways to repair the budget. I am the first to agree that we need to re-engineer the budget. We are spending more than we are earning. Our debt is increasing. It needs to be re-engineered and it needs to be put on a pathway to balance over the economic cycle. The question is how you balance the budget over the economic cycle. Do you go after the most disadvantaged people in the community? Do you attack the disadvantaged, those on low incomes and the people who cannot stick up for themselves, or do you go after the money where the money is to be had in a fair economy and in a fair community?
What about a superprofits tax? The big four banks, in the first six months of this year, have posted combined profits of some $16,000 million, an enormous sum of money in simple terms and an enormous return on investment. Rather than going after low-income people or their families in the community who are doing it hard, why don't we go after the big four banks and say: 'You are doing all right. You get a lot of support from the government and from this parliament. So when you are doing all right, pay a bit more tax.' That would be the action of a fair government. That would be something for a decent opposition to support.
What about high-wage earners, people like politicians? The sort of money we earn is an almost unfathomable amount of money for most people in the community. Why can't people like us pay a little more income tax? That would be another way to help repair the budget. That would be another fair act of a fair government. That would be something that a decent opposition could support.
What about this bizarre capital gains tax discount? There is a lot of talk about negative gearing but next to no talk about this bizarre arrangement where, after a very short period, people get an inexplicable discount on their capital gains tax. Yes, I do acknowledge that the Labor Party has had something to say on this, and that is good, but what has the government done about it? Nothing; absolutely nothing. These are all the sorts of areas where we can gain additional revenue.
Then we can turn our minds to expenditure. It is very timely that in recent days a report has been released by a number of organisations who have found that the cost of mandatory detention, offshore processing, turn-backs and the failed Cambodia resettlement plan has been almost $10,000 million just in the last three years. Yes, that is right, Mr Deputy Speaker: $9.6 billion to pay for our response to asylum seekers just in three years. It is forecast to be another $5.7 billion—that is, $5,700 million—over the next four years. In other words, it has cost almost $16 billion just to respond to people who are fleeing for their lives and coming to our shores seeking protection. A good government—a government with a heart, a government with a sense of fairness and respect for international law—would not be busting $16,000 million to deal with asylum seekers. That is one area of expenditure which could be reined in immediately, starting with the closure of the Nauru immigration detention centre.
What about our defence build-up? I do not think I could be called a dove. I served this country in uniform for 20 years and I served in the intelligence community for some years after that. I have a realistic understanding of national security and of the need to have a defence force and equip our soldiers properly. But what on earth are we doing talking about spending $30 billion over the next 10 years on top of our existing Defence budget? There is no way that can be defended. When we are trying to get the budget back into order, when we are taking money off some of the poorest and most disadvantaged members of our community, there is no way we can turn around and say, 'By the way, we are going to spend $30,000 million extra over the next 10 years on a defence build-up.' We are not keeping the budget at existing levels and replacing platforms as they reach their use-by date but building it up. Then we will look at our neighbours and criticise them for joining in our arms race.
What is this about doubling our submarine fleet? At a time when we need to get the budget back into good shape, at a time when this government, supported by the quisling opposition, is going after some of the most disadvantaged members of the community, we are going to double our submarine fleet—when we can't even crew the fleet we have now! It does not make any sense.
Yes, let's re-engineer the budget, let's rein in unnecessary and wasteful expenditure, let's look for efficiencies and other ways in which we can raise additional revenue to fund the needs of this country, but let's do it in a fair way. Let's not go after disadvantaged people and people on low incomes. Let's not go after the children with crook teeth in low-income families. Yes, I note that the ALP, to their credit, have sought to address this in some way in their negotiations with the government, but no-one knows what the answer is yet. No-one can have any confidence that there will be a good outcome from this or, indeed, that there will be an effective dental scheme for the kids in low-income families.
Now let me turn my attention to the environment. I am very pleased that the member for Melbourne spent quite some time on this, because when you look at all the challenges facing this country there can be no doubt that the greatest single challenge, the one thing that jeopardises our future and the future of our kids and their kids, is climate change. Kevin Rudd was quite right to call it the greatest moral challenge. I do not think people in this place have their minds around that. I think too many people in this place still think that climate change is 'crap', or they believe in it but they do not understand the enormity of the problem and the challenge that faces us, or they understand it a bit but they like to say the right thing now and then just to keep the community happy. I do not think that, as a parliament, we get it. I do not think we understand the changes that are coming our way in our lifetime, the changes that are coming the way of people right around the world, in particular in many countries in our region, and the need to do everything in our power to deal with climate change.
Yes, let's set ambitious goals. When I talked at the recent election about the sorts of targets I personally want, I was always greeted with approval and applause—or approval at least; sometimes applause. I would say to my community back home in Hobart, in my electorate of Denison, 'We should be aiming for 100 per cent net zero carbon emissions by 2030 and 100 per cent reliance on renewable energy by 2030.' Some people would say to me: 'Don't be silly! That's beyond what all the parties say. It's just not possible.' I would say to them: 'It is possible. It is possible for a country with ambition. It is possible for a country led by inspiring leaders.' For heaven's sake, the United States, 50 years ago, put someone on the moon from scratch in about half a decade, all because a president and a government said: 'Let's go for it! Let's do it!' And they did it. If we had that sort of mindset in this country, if we went for it, we could do it. We would be the global leader. Not only would we be doing the right thing for our community and our environment; we would be leading the rest of the world and showing them what can be done in a rich and lucky country with inspiring leadership.
Instead, what are we talking about today? We are talking about the government, with this black-hearted bill supported by the quisling opposition, cutting $550 million from ARENA. That is a remarkable betrayal of the Australian community and the public interest and the environment. But then, why would I be surprised? Because it was the Labor opposition that voted with the Liberal-National government to reduce the mandatory renewable energy target from 41,000 gigawatt hours to 33,000 gigawatt hours. So it turns out a lot of people like to come in here and give all the grand speeches and say all the right things, but when the big decisions are to be had, when the votes are to be put, everyone just turns to water and worries about money and the budget. That is why they are cutting $550 million from ARENA. That is why the government during the election campaign basically wanted to gut the Clean Energy Finance Corporation, to turn it into a slush fund for its election promises, because at the end of the day neither the government nor the opposition are really fair dinkum about the environment. If they were fair dinkum about the environment, if they were fair dinkum about our very existence as we know it is threatened by climate change, they would not be putting this in the bill and the opposition would not be supporting it. This is a terrible betrayal.
Let us just think about climate change for a minute. We are already seeing it. We are already seeing in Australia more extreme weather events more often, and that will become more and more commonplace. There will be more droughts. There will be more bushfires. There will be more cyclones. There will be more flooding. We will start to see more and more diseases appear in parts of the country where they have never been seen before. In our region we will see increasing instability as sea-level rise results in mass dislocation of communities, particularly in the low-lying microstates in the Pacific and the low-lying river deltas in places like Bangladesh, Indonesia and Vietnam. We will see wars over water supply. We will see all this because of climate change. When my two little daughters are older and they ask me: 'Dad, what did you achieve in your life? What did you fight for? What you have to say when it really mattered?' I will have to say that far too often I walked into a room and worked with men and women and debated issues about which that group failed our nation and our community.
If I seem to be spending a lot of awful time on climate change in a debate about the omnibus bill, it is because I, like the member for Melbourne, want to make it absolutely clear that at the end of the day it is vitally important to look after community, to provide the essential services and income for disadvantaged and low-income people. To do all of those things is a vital role for government, as is keeping them safe. But the biggest threat coming down the highway at us is climate change, and when I look at the omnibus bill I see the cut of $550 million from ARENA as being biggest single betrayal in the bill. For that reason alone, I will not support this bill. I would hope that I am joined by others—I suspect the member for Melbourne and I hope others will join me.
I started by describing this as a black-hearted bill. I think it gives us an insight into a government that also is black hearted. It gives us an insight into the approach of the opposition in this parliament. I called them quislings and I mean that. This was a time to take a stand; to stand and fight for the people who voted for you, like I am trying to do right now. Your coming in here and supporting a bill which you spent so long criticising and which still contains 20 of its original 24 measures makes you a pack of quislings.
I wish to speak briefly about the Budget Savings (Omnibus) Bill 2016. Whilst a deal has been reached between the government and the opposition, it is important that those who did not vote for a major party in the election—almost a quarter of all Australians—have a chance to have their voices heard on this important bill.
I am encouraged by the news that the proposed $1.3 billion cut to the Australian Renewable Energy Agency will not go ahead as planned but I am disheartened that the compromise between the major parties will still see $500 million worth of funding cuts from the agency. Australia, as a leading developed nation, has a responsibility, not only to those of us who live here but as a global citizen, to face the challenges of climate change. ARENA, since its establishment in 2012, has funded a number of worthy renewable energy projects and feasibility studies. One proposal that has been funded for a feasibility study is that of the Repower Port Augusta alliance in South Australia. Replacing the outdated and polluting coal plant dinosaurs with modern solar thermal plants would create 1,800 jobs for my state, and my state needs those jobs. It would save five million tonnes of greenhouse gas emissions, improve the health of the local community and ensure energy security and stable electricity prices. South Australia has been a leader in embracing renewable energy, and I am proud of how my state has faced the demands of a changing world. It could not do so without the support of bodies such as ARENA.
There is scope to change the way ARENA currently operates. I believe that there should be change in the funding mechanism to ensure that if renewable energy technology has commercial success the grant ought to be repaid, and there ought to be the ability for ARENA to take equity in the project so it can reap the benefit. If the government is fair dinkum about innovation and agility, it would ensure that ARENA remains fully funded into the future.
I would like to talk about the student start-up scholarships. The purpose of the student start-up scholarships is, and was, to help higher education students in need to meet the up-front costs of study. We should not fool ourselves; the students who are receiving this are students on Abstudy, on Austudy and on youth allowance. Many of those students who received the student start-up scholarships were from disadvantaged rural and regional backgrounds and thus faced significant additional costs in commencing study. These included but were not limited to the significant costs of relocating to a major capital or regional city, where they could not rely on local support from family or friends. And that is many people in my community of Mayo.
Many of the 80,000 recipients of the scholarship will have made major and important financial and life decisions based on the knowledge that they were in receipt of such a scholarship. As it currently stands the bill provides students on start-up scholarships less than one year to make the necessary significant adjustments to their financial and life circumstances to compensate for the removal of the scholarship payments. It is unreasonable to provide the proposed short time frame for these students to make such major financial adjustments to their life. The simple solution to this problem is to delay the repeal of the student start-up scholarships by at least 18 months to 1 January 2019.
I would like to briefly talk about the carbon tax compensation. The Nick Xenophon Team recognises that the budget needs to be set on a solid trajectory towards repair; however, repairing the budget should not be achieved off the backs of the poorest in our society. It was encouraging to learn that the deal struck between the government and the opposition allowed compensation for the carbon tax to continue for those on payments like Newstart, youth allowance, the disability support pension and the age pension. It was, on the other hand, so disappointing that it was those doing it the toughest who were so clearly targeted in the first place.
Admittedly, according to simple logic, if there is no longer a carbon tax then the carbon tax compensation—the energy supplement and single income family supplement—should eventually be phased out. However, this simple logic ignores the effect that the removal of these supplement payments would have on our most disadvantaged communities. In addition to the basic social compassion there are also good economic arguments for ensuring that income supplement payments keep Australians out of poverty. Income and wealth inequality is rising in Australia, which is putting pressure on the demand side of the economy. The poorest in our society must by necessity spend a greater proportion of their incomes on goods and services than the richer end of the income distribution.
Businesses also require consumers to purchase their products in order to prosper. Given the continued uncertainty and weakness of global demand, it would seem a highly inauspicious time to be placing more pressure upon Australian businesses by deliberately cutting social security to the poorest and thus domestic demand. This is of particular concern to small businesses which do not enjoy the same economies of scale as large businesses and thus cannot weather adverse conditions for as long. So, whilst I support this bill and acknowledge that the government has a job to do in repairing the budget, I am concerned about how such savings are being achieved.
I thank members for their contribution to this debate on the Budget Savings (Omnibus) Bill 2016. I think it has been a good opportunity this morning to be able to move with some haste to ensure that this matter is dealt with in the parliament this week. So I thank members for their contribution.
The challenge before this parliament is to arrest the debt that risks the living standards of not just future generations of Australians but also the current generations of Australians. This is the government's task. This is the task that the Turnbull government are focused on. The Turnbull government are interested in getting outcomes. We will leave the politicking and the commentary about the politics to others. There were a few grandstanding speeches here earlier in the debate and a few laps of honour made by those opposite. We will leave the politicking there.
We are interested in outcomes. We were elected to get outcomes in this 45th Parliament and this bill is getting those outcomes. So the Turnbull government are getting on with governing. The agreement reached on this bill demonstrates the ability of the Turnbull government to get the things done that we were elected to do in this parliament.
As a government we inherited accumulated deficits in 2013 of some $240 billion and a debt curse from the previous government of some $317 billion. In the last term Labor did engage in budget sabotage for three years, not only opposing urgent budget repair measures but promising to reverse measures passed and to engage in even higher spending. Over the past year Labor proposed and then walked away from some $50 billion or thereabouts in expenditure measures. This bill though I hope brings that process to an end. This bill I think provides a new way forward from what was going on in the past. This bill brings to book that process. Labor are now supporting things that they previously opposed, and what they called zombie measures are being included in this budget. We welcome that. We welcome the change of heart, but we in this place, particularly we on this side of the House, know it will not be enough.
Some $40 billion in budget improvement measures are before this parliament. The $11 billion of those measures included in what is agreed in this omnibus bill and what will pass in terms of tobacco excise means we are making significant progress on those issues, working in this parliament with the agreement of the opposition. But the balance and focus of these savings measures must be on savings on outlays, and $25 billion of our $40 billion in budget improvement measures are on savings. So, where there are measures that have not been picked up and supported in this bill, the government will continue to pursue those measures because they are necessary for the job of budget repair, and we will seek to do that in partnership with other parties and individuals in both this place and the other place to ensure that we can achieve that job of arresting the debt.
I will be moving a series of amendments in the third reading, which summarises the agreement that has been reached with the opposition.
I want to particularly put on record my thanks to the shadow Treasurer for his engagement in this process, as well as my team member Mathias Cormann, Senator Cormann, the Minister for Finance, and for the strong work that has been done between the two parties. That has been done in good faith. I do acknowledge the strong work that has been done by the shadow Treasurer on behalf of the opposition. We look forward to continuing to work on issues moving forward, wherever that is possible to be done. I would commend that process to the House. And I commend this bill in the form that we will get to. I am confident, as we move through the third reading stage, for an outcome that will deliver $6.3 billion in budget savings and arrest the debt by some $30 billion over the medium term. That is an outcome that the Turnbull government can be rightly very proud of, and we will continue to govern.
As there are fewer than five members on the side for the noes in this division, I declare the question resolved in the affirmative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings. The second reading is therefore carried.
Question agreed to, Mr Bandt, Mr Katter, Ms McGowan and Mr Wilkie voting no.
Bill read a second time.
I have received a message from His Excellency the Governor-General recommending, in accordance with section 56 of the Constitution, an appropriation for the purpose of this bill.