House debates

Monday, 9 November 2020


Appropriation Bill (No. 1) 2020-2021; Consideration in Detail

12:04 pm

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

Before I give the call to the minister to propose the schedule for the order of consideration of the portfolios, I would like to remind all members of the purpose of the consideration-in-detail stage and outline the way it is expected to proceed. Shortly, the Federation Chamber will be asked to agree to a proposed schedule for consideration of portfolios. This may need to be varied, but it is a useful guide to assist ministers and members to arrange their commitments. Consideration in detail is a debate, and the call shall be alternated between the government and non-government sides, as always. Even though this debate sometimes takes the format of question and answer, this is not question time. Ministers and government backbench members both will be considered as speakers on the government side and should bear this in mind when they seek the call. All speakers are required to be relevant to whichever portfolio is being examined, but there is no requirement of direct relevance in respect of any response. It might be practical for ministers to respond to more than one speaker when they seek the call. I note that this general arrangement has applied in recent years and has seemed to allow maximum participation at this stage of the debate. Each minister and member will have up to five minutes to speak each time they are called, but they may wish to speak for a shorter time. Ministers may wish to make an introductory statement when debate for their portfolio begins, but, as they are not moving amendments, that is a matter for them to decide. Members might also be aware of some administrative documents that are circulated when consideration in detail begins. To avoid confusion, let me say that any documents showing times allocated for debate on portfolios are informal and indicative only; chairs will not be seeking to enforce these times strictly. Those are the terms of reference for us to conduct this consideration in detail now.

The Federation Chamber will now consider the bill in detail. In accordance with standing order 149, the Federation Chamber will first consider the schedule of the bill.

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | | Hansard source

It might suit the convenience of the Federation Chamber to consider the items of proposed expenditure in the order and groupings shown in the schedule which has been circulated to honourable members.

The schedule read as follows—



Education, Skills and Employment

Education, Skills and Employment—Employment, Skills, Small and Family Business

Industry, Science, Energy and Resources


Infrastructure, Transport, Regional Development and Communications

Infrastructure, Transport, Regional Development and Communications—Communications, Cyber Safety and the Arts


Defence—Veterans' Affairs/Defence Personnel

Social Services

Social Services—National Disability Insurance Scheme/Government Services


Foreign Affairs and Trade

Agriculture, Water and the Environment

Agriculture, Water and the Environment—Environment

Agriculture, Water and the Environment—Resources, Water and Northern Australia

Home Affairs

Prime Minister and Cabinet

Prime Minister and Cabinet—Indigenous Australians

I indicate to the Federation Chamber that the proposed order for consideration of portfolios estimates has been discussed with the opposition and there has been no objection to what is proposed.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

Is it the wish of the Federation Chamber to consider the items of proposed expenditure in the order suggested by the minister? There being no objection, it is so ordered.

Treasury Portfolio

Proposed expenditure, $1,203,774,000

12:05 pm

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | | Hansard source

As you have outlined, I rise to speak today on the Appropriation Bill (No. 1) 2020-2021, in particular to highlight some of the measures contained in the bill, including the appropriations to the Department of the Treasury, the Australian Taxation Office, the Australian Bureau of Statistics and other significant portfolio agencies. Obviously, we all know that, this year, the Australian economy has been hit catastrophically by COVID-19. The hit to our economy has been devastating in its nature. As was outlined in the budget forward estimates, we're expecting that unemployment will peak at eight per cent in the December quarter. The government has of course responded in an unprecedented way, with $299 billion worth of direct economic support measures to help cushion the blow and to save jobs and livelihoods.

The 2021 budget builds on this work that has been put in place throughout the year, delivering a number of key measures and programs to help propel the Australian economy through the recovery phase of the pandemic. Most notably, this includes the $74 billion JobMaker Plan. Of central relevance to the JobMaker Plan is the JobMaker hiring credit. This is a $4 billion program over three years, being administered through the ATO, to establish a hiring credit. A key component, as I said, of the JobMaker Plan, this hiring credit will encourage tens of thousands of Australian businesses to employ new staff. The money is payable for up to 12 months for employers who hire a recipient of the JobSeeker payment aged between 16 and 35. New hires under the scheme are required to work for at least 20 hours per week to be eligible, and the expectation, as outlined on budget night, is that the hiring credit will support around 450,000 positions for young people, helping them bounce back from the effects of the pandemic.

In my own portfolio of housing, the appropriations bill will also support budget measures designed to boost support for housing and to support jobs in the residential construction sector. In the budget, we've built on the great success of the First Home Loan Deposit Scheme, which allows first home buyers to purchase their first home with a deposit of as little as five per cent. On budget night, we announced the creation of an additional 10,000 guarantees, up until 30 June 2021, which can be used by first home buyers to purchase a newly constructed home. This measure is not only supporting first home buyers, as the First Home Loan Deposit Scheme has done so successfully, but also ensuring that those purchases fuel jobs in the residential construction industry. We believe that these measures, along with the $688 million HomeBuilder program—the First Home Loan Deposit Scheme measure in particular—will support a continued pipeline of activity.

Obviously tax reform was a significant component of the budget, with $17.8 billion in personal income tax relief to support the economic recovery. Of this, $12½ billion will be delivered in the next 12 months. Around 11.6 million individuals will receive a tax cut in this financial year, 2021, and Treasury estimates that it will create an additional 50,000 jobs by the end of 2021.

We've also put in place significant measures to support businesses to invest. As part of the Economic Recovery Plan, we've put in place temporary full expensing for businesses with turnover of less than $5 billion. This will of course improve cash flow for businesses and encourage those businesses to invest in productivity-enhancing and business-growing plant and equipment. We've also put in place temporary loss carry-back so as to ensure that, rather than having to wait years to get the benefit of their tax losses, if they do make it through the pandemic, businesses will be able to get access to the benefits of those tax losses immediately. We've also put in place superannuation reform and a range of other measures, all designed to get Australians back into work and to get businesses investing again.

12:10 pm

Photo of Jason ClareJason Clare (Blaxland, Australian Labor Party, Shadow Minister for Regional Services, Territories and Local Government) Share this | | Hansard source

I want to ask the minister about construction jobs. The Australian Bureau of Statistics has reported that in the first six months since the pandemic hit the number of carpenters employed across Australia has dropped by more than 12,000. The same report from the Australian Bureau of Statistics has said that in the six months since the pandemic hit the number of bricklayers working has dropped by more than 9,000, the number of painters working has dropped by more than 10,000 and the number of sparkies, electricians, working has dropped by more than 11,000. That's a lot of tradies out of work, and the projections for the next six months and beyond aren't crash hot either.

The minister would be familiar with a story that was published in the Australian on Friday, 'Builders facing jobs carnage'. That report refers to a report commissioned and published by the Australian Construction Industry Forum that came out last week. It's forecasting that another 42,000 tradies could lose their jobs in the next seven or eight months. That's a lot of tradies who work on building sites building houses and apartments for other Australians. Now, I know that the minister will say what he always says—that is, that HomeBuilder is the miracle cure-all for all of this. He'll say, 'It's fantastic.' He'll say, 'It's extraordinary.' But the problem is this: even if the HomeBuilder scheme meets the targets that the government has set for it, and 27,000 people sign up by Christmas, that in and of itself is not enough to save these tradies' jobs.

Treasury, the minister's department, have told us—they said it a couple of months ago and they repeated in estimates only two weeks ago—that they forecast the number of homes built this financial year will be substantially lower than last financial year. Last financial year, we built 170,000 homes across the country. Treasury are predicting that that will be as low as 140,000 homes. If fewer homes are built, that means that fewer tradies will be needed to build them. It's important to remember here that these Treasury forecasts have the HomeBuilder scheme factored into them. In other words, even with the HomeBuilder scheme working as expected, the housing industry will still shrink, and that means job losses. That's why I'm asking the minister and I'm asking the government to do more here. The housing industry has called for the scheme to be extended, and so have I. But that, in and of itself, is not enough. The scheme needs to be amended and fixed to deal with some of the problems inherent in it.

Sydney is a good example. Sydneysiders aren't getting their fair share out of the scheme at the moment. New South Wales makes up about one-third of the country, but it's only getting one-fifth of the grants. It's not hard to understand why. It's not easy to get a house-and-land package in many parts of Sydney for $750,000 or less. Members here will know that very, very well. So I'm asking the minister to consider making the same sorts of changes to this scheme that he recently made—and that we supported—to the First Home Loan Deposit Scheme. Lift the cap in places like Sydney where it's needed, and the scheme will be more successful. But it's not just that. Changes also need to be made to how the scheme works for apartment construction. If there's one part of the housing industry that's suffering more than most, it's apartment construction. The HIA predict it to drop by about 40 per cent this financial year. If you're buying an apartment off the plan, this scheme doesn't work well for you at the moment. So I ask the minister to consider changes to that as well.

If the government really wants to help save these tradies' jobs, it needs to invest more in social housing. Our international borders are shut. Migration has stopped, at least for a while, and that means that the population isn't growing as fast. That suppresses demand for new housing. If you want to keep these tradies working, and demand for private housing is down, it makes sense to invest in public housing. There's no lack of need or lack of demand there. I know the minister will say the same thing that he always says—that this is the job of the states. The states have already put an extra billion dollars into social housing. Ultimately, it's not about whether it's the job of the state government or the federal government; it's about the jobs of those tradies: carpenters, electricians, plumbers, bricklayers—people who are running out of work, and the HomeBuilder scheme is not doing enough to save all those jobs. So, I ask the minister again: will the government consider investing more in social housing to protect the jobs of those tradies?

12:15 pm

Photo of Celia HammondCelia Hammond (Curtin, Liberal Party) Share this | | Hansard source

I'd like to take this opportunity to raise a number of issues with the minister regarding the government's measures to rebuild the economy from the COVID-19 recession. I'm sure that the minister is aware that, prior to the COVID-19 pandemic, the rate of employment in my electorate of Curtin was extremely high and, outside the city of Perth, it had the highest number of small to medium sized businesses in WA, being in excess of 26,000. Like the rest of Australia, the pandemic has hit the people in my electorate extremely hard. To get some sense of that, in February, there were 1,981 people in Curtin receiving JobSeeker. By May, the number of people in Curtin receiving JobSeeker had, sadly, climbed to 5,297. And, while the number of people on JobSeeker in Curtin is slowly coming down and stands at roughly 4,800, these figures show that there are still many people in Curtin who are actively looking for work.

The 26,000 businesses in my electorate have worked very hard to keep their businesses going and to keep people employed. They are grateful for the initiatives which have been put in place to support them. I note that the government's JobKeeper payment has supported 7,300 businesses in Curtin, making sure that they kept connected to their employees through the worst of the months that we had. The cashflow boost has helped around 6,500 small and medium businesses, helping businesses in Curtin to stay afloat. One business owner told me that, in the very week he received the cashflow bonus, he was just about to close the doors and sack everybody, but this enabled him to keep going and get through the worst time. I'm really pleased to say that he's now back trading to about 85 per cent of his pre-COVID levels. Thousands of businesses have used the instant asset write-off to do things ranging from upgrading their facilities, which was a great initiative when they were shut down, to installing new IT operating systems and replacing old and outdated equipment. I note that none of the business owners I've spoken to want a handout. They don't want to have to rely on government. One told me, 'I set up my own business so that I could do something I love on my own terms and to be financially independent.'

Australia has benefited from 29 years of economic growth and this puts us in a good position to address the economic downturn we are now facing. However, having had 29 years of economic growth also means that the economic recession we are now facing, not just here in Australia but globally, is actually more confronting. For good reason, the people in my electorate, like the majority of people across Australia, are concerned about their own financial security in the years ahead and, more generally, about the economic future of our country. In order to assist everyone facing the brunt of this economic downturn right now, the government has implemented numerous measures, which the minister has outlined. However, to ensure that our recovery is as fast and as thorough as it can possibly be, we also need to implement new measures which will give people confidence in the future. It is only with this confidence that people will take the steps they need to take to rebuild the economy, whether that's increasing consumer confidence and encouraging people to spend money personally or increasing business confidence and encouraging businesses to continue to invest in business and employ people.

There are approximately 150,000 people in my electorate of Curtin and more than half of them pay income tax. As I said before, there are in excess of 26,000 small and medium sized businesses and all of those businesses pay a multiplicity of direct and indirect taxes. I ask the minister to inform the chamber how the Morrison government is supporting hardworking Australians across Australia by providing simpler, fairer and lower taxes.

12:19 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | | Hansard source

On budget night, the Treasurer spruiked that this budget was all about jobs. What a load of rubbish! Millions of Australians are out of work, and, this government expects—from its own budget figures—that 160,000 additional Australians will lose their jobs before the end of the year. But this budget does very little—in fact, next to nothing—to get those people back into stable employment. In fact, the early withdrawal of support for jobs by this government is only going to prolong the downturn for many in our community and exacerbate the pain for many who are doing it tough at the moment.

I will give you an example. I represent the electorate of Kingsford Smith, which of course, has Kingsford Smith airport in it. It's the economic powerhouse of our area—with 30,000 direct jobs. At the moment, the airport is on its knees. A couple of weeks ago, I met with a delegation of Qantas workers who had recently been sacked by the airline—2,500 loyal, hardworking Qantas employees, who had been sacked by our nation's carrier, are having their jobs contracted out to a foreign corporation for lower wages and conditions. This is corporate immorality at its worst. And what does this government do to support those Qantas workers? Zilch—absolutely nothing. There is no support for them whatsoever in this budget.

Many of those that I met with are older workers. Four of the employees that I met with had more than 20 years service for Qantas. A couple of them said to me, 'Aviation is all that I know.' They're in their late 50s and early 60s, and they were asking me, 'What support is there for me from this government to get me back into the workforce?' I had to say to them, 'Unfortunately, for older workers like yourselves, there is nothing in this budget to support you.' So I ask the government, on behalf of those Qantas workers and the hundreds of thousands of other elderly workers in our community: what are you going to do to support them to get them back into work as quickly as possible?

The government will say, 'Oh, we've got the JobMaker hiring credit.' It comes with a $4 billion price tag, but it's only available for those workers under the age of 35. Of course, we know that older workers fall back onto JobSeeker, but the government, again, plans to reduce the rate of JobSeeker back to poverty levels. So, instead of people being able to have the income to support them to get out into the workforce and try and get work, they're spending all of their time simply scrounging around trying to make ends meet and survive—instead of being out there in the jobs market.

The electorate that has the most Qantas workers of any of all of our representatives in the House of Representatives is guess who's? It's the Prime Minister's—the electorate of Cook. He has more Qantas workers than all of us, yet he refuses to meet with a delegation of Qantas workers and hear their story about how they've been affected and why they're not getting support from this government. It's an absolute disgrace. Those who've worked for this company for decades, paid taxes and helped build the credible name of this airline, are out on their backsides and on the unemployment queues with no support from this government at all from. There is no support for older workers in the budget, and I ask those opposite: what do you say to those older workers when they come asking you for support?

As I said, the government claim that they're all about jobs. But one of the groups that's been dramatically affected by the recession is women. What has this government done to support women in the workforce? Well, I'll tell you what they've done: they cut penalty rates. Who are the people who work predominantly in the hospitality and service industries? They're women. And that's the thanks that they get from the government—cuts to penalty rates, so that they take home less pay every week to support their families. That's this government's support of women in this budget. And now you've got a group within the coalition who are now walking around saying that women shouldn't get an increase in their superannuation as well. Well, that's just great—let's make it even harder for women to retire with a credible nest egg into the future by cutting the compulsory rate of superannuation for those who are doing it tough during this recession! It doesn't make any sense at all. If this government was all about jobs, it would put something in the budget that supports older workers and supports women, instead of the continuing rhetoric that it is supporting jobs when we all know it's complete rubbish.

12:24 pm

Photo of Jason FalinskiJason Falinski (Mackellar, Liberal Party) Share this | | Hansard source

Thank you to the member for Kingsford Smith. I will tell the member for Kingsford Smith what really doesn't make sense. It doesn't make sense that you would force people to put more money into industry super so that millionaire fund managers can get paid more money. It doesn't make sense that the regressive left come into this parliament day after day after day and lecture us about people on low incomes and people who are from disadvantaged backgrounds, so they can give more money to their mates in industry super so they can pay themselves more money. The answer of the regressive left is always the same: look after our donors and everyone else can go to hell.

You can stand here and talk about women retiring into poverty, but what you don't want to talk about, what IFM doesn't want to talk about, what industry super doesn't want to talk about, is the tens of millions of dollars that they pay year in and year out in corporate sponsorships, in corporate facilities, quaffing on wine, throwing back the food at the AFL—they all went up there to Queensland. What do their members ever see? Don't come into this chamber and lecture anyone about how they're interested in the retirement of their members. How many of their members could get into Queensland in the last six months from New South Wales? The answer's none. From Victoria? The answer is none. But somehow everyone from industry super who wants can go up there, no doubt with the tens of millions of dollars in corporate advertising. Greg Combet is more famous now than he ever was when he was the minister for climate change under the regressive left.

That's the problem with you guys on that side—sorry, members opposite. You keep talking about how you want to help people, but everything you do only makes their lives worse. This parliament should be all about expanding—

Dr Leigh interjecting

The member for Fenner raises facts. Let's go to the facts.

Mr Sharma interjecting

Thank you, Member for Wentworth.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

The member for Mackellar might be wise to listen to the chair rather than his colleagues.

Photo of Jason FalinskiJason Falinski (Mackellar, Liberal Party) Share this | | Hansard source

As always, Madam Chair! The member for Fenner wants to know about facts. Here are some interesting facts. The interesting fact is there this: as Treasury pointed out, our superannuation system saves about $9 billion in pension payments, but costs $38 billion in fund management fees. That, by the way, is three times what Australian households pay for electricity and energy prices—three times. And do those opposite come in here and demand we get a better deal for the people on low incomes and from disadvantaged backgrounds? Or do they stand up for the ongoing fees and charges of the multimillionaire funds managers in industry super. We know what they do. I'm sure it has nothing to do with the tens of millions of dollars that they will receive in political donations over the next 10 years.

An honourable member interjecting

Unfortunately it's not garbage. I wish it were untrue, but the truth is that's exactly what's happening. They are putting their donors ahead of the interests of ordinary Australians, and they do it every single time. We know that if you actually want to increase the health and welfare of ordinary Australians, you do that through economic settings that encourage innovation. We know that that happens when you allow people to take a risk and when the risk pays off they get to keep the rewards of that risk. Those opposite, if anyone is ever successful, the first thing they stand up here and do is say 'We need to increase taxes on those people.' It was $387 billion at the last election that they wanted to tax them more. You also need to allow people, when they fail, to at least have the capacity to be forgiven for that failure. This government has introduced innovations in insolvency laws, which are still to be passed, that will allow people to get forgiven when they make mistakes. My question to the minister is—

An honourable member interjecting

Thank you for the prompting! My question is: can the minister update the chamber on the economic recovery plan for Australia?

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

We got there!

12:29 pm

Photo of Andrew LeighAndrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | | Hansard source

In her book Generation Less, Jennifer Rayner talks about the impact on young Australians of the economic policies that have been pursued under this government. As she points out, younger Australians have suffered rising underemployment rates. Their wealth, relative to older Australians, has fallen. They've suffered through experiencing higher student debt, a tougher housing market and a tougher labour market. It used to be that the typical university graduate could count on going into a full-time job. Many now find themselves going into part-time work. The educational debt and the housing debt that has been accrued by what she calls generation less has only increased.

Coronavirus has hit the labour market for young Australians, particularly hard. As a labour market snapshot by Jeff Borland—summarising his work with Michael Coelli at the University of Melbourne—points out, there's been a substantial deterioration in employment outcomes for young Australians, with their employment-to- population ratio falling by four percentage points in the decade to 2019, while the rate for people 25 and above has increased by one percentage point. They point out that it's a matter of the crowding out of the young, and that you see higher part-time employment and long-term unemployment rates for young Australians.

This is reflected in work overseas. Write-ups of research by Eduardo Porter and David Yaffe-Bellany note the impact on young Americans of scarring in the labour market, the impact of entering a labour market at a time of recession. The impact of scarring, according to research done by Treasury, headed by Daniel Andrews—then at Treasury and now at the OECD—can still be seen up to a decade later. Jesse Rothstein's research on US college graduates shows that, by 2018, those who landed jobs in 2010-11, following the 2008 financial crisis, had a lower employment rate than people the same age who graduated before the recession hit. That impact can see people stuck, increasingly, in insecure low-wage jobs.

We've also seen significant education shocks. Research by Lee Elliot Major and Stephen Machin for the Centre for Economic Performance looks at the learning losses for disadvantaged pupils in British schools. Building on the work that's been done on the summer learning loss, with pupils lagging when they return to school after the three months summer break, they're suggesting that that could be significantly exacerbated for disadvantaged students. That holds true for university students whose universities are doing their best in the face of funding cuts from the government to maintain online learning, but students know that 'Zoom University' is no substitute for proper face-to-face tuition.

The risk for young Australians is very real, and yet we've seen from this government a series of policies which has acted to disadvantage young Australians. In their book What Happens Next? Reconstructing Australia after COVID-19, editors Emma Dawson and Janet McCalman outline a whole series of interesting research findings, many relating to the impact on young Australians. In her chapter on population policy, Liz Allen says, 'The sad reality for too many young Australians is it takes the bank of mum or dad … to break into the housing market.'

The government has population projections which look heroic when it comes to considering the rollout of the vaccine. I ask the minister what the assumptions are about vaccine rollout that underlie the budget's population projections. Population projections under the budget have net overseas migration falling 71,600 in 2020-21, but only 21,600 in 2021-22. I ask the minister: did Treasury model different scenarios in this in the event that a vaccine wasn't in place by late 2021?

12:35 pm

Photo of Dave SharmaDave Sharma (Wentworth, Liberal Party) Share this | | Hansard source

The federal budget delivered last month lays out a comprehensive economic recovery plan for the nation. The COVID-19 pandemic, on top of the tragic loss of life that it's caused, has also been the biggest shock to hit the global economy since the Great Depression. The global economy is forecast to contract by some 4½ per cent in 2020. In the last major economic crisis to hit this world, the global financial crisis, the world economy contracted by only 0.1 per cent.

There have been 32 million cases of coronavirus, in nearly every country in the world. So far this year COVID-19 has killed well over one million people. In a normal year, malaria kills around 600,000 people, HIV-AIDS kills 950,000 people and suicide results in around 800,000 deaths. COVID-19 has already exceeded each of those. The economic shock of COVID-19 has been equally profound. It has been the biggest shock to hit the global economy since the Second World War. As I said earlier, the IMF expects the global economy to contract by some 4½ per cent. The US economy is expected to contract by around four to five per cent, Japan by five per cent, the euro area by eight per cent and the UK by around 10 per cent, and New Zealand has already contracted around 13 per cent. In fact, the only major economy that is forecast to grow through 2020 is China.

The 2020-21 budget outlines measures to help cushion the blow of the pandemic to accelerate the recovery and to help rebuild our economy for the future. It builds on previous support measures, including JobKeeper, JobSeeker, cash flow relief for small businesses and early access to super. All up, these measures will amount to some $507 billion in government fiscal support since the onset of the pandemic. This is one of the biggest fiscal stimuluses ever delivered by a government.

I know this year has been hard for many Australians, but we are emerging from this crisis intact and together. Of the 1.3 million Australians who lost their jobs or had their hours reduced to zero in April, over half of them are now back at work. 446,000 jobs have been created over the past four months. Consumer confidence has been up for four months straight. Just this month, consumer sentiment jumped 11.9 per cent in a month-on-month basis following an 18 per cent jump in the previous month. While the economy is expected to contract by 3.75 per cent in calendar year 2020, it's expected to recover in 2021 and grow by 4.25 per cent. Unemployment is expected to peak at around eight per cent in December and then begin to come down.

These are sobering figures, but without direct government support it's estimated that unemployment would have reached 12 per cent and stayed there. And though it's little comfort to those Australians doing it tough, Australia has fared well in terms of managing both the health and economic impacts of this crisis. Our deaths from COVID-19 are significantly fewer than other developed countries and our economy has weathered the storm better. We entered this crisis in a strong fiscal position, having restored the budget to balance, and even with additional spending our net debt to GDP ratio will remain low by world standards. Just last month Australia had its AAA credit rating reaffirmed. We will manage this debt burden by restoring jobs, by growing the economy and by positioning Australia for future industries.

This budget lays out our strategy to rebuild our economy and secure Australia's future. The budget's supporting households, bringing forward stage 2 of our income tax relief, increasing the low-income tax offset and lifting the tax thresholds. As a result, more than 11 million Australians have gotten a tax cut backdated to 1 July. The budget's helping with job creation. There's a new JobMaker hiring credit to encourage businesses to hire younger Australians, payable for up to 12 months and available to those employers who hire Australians on JobSeeker aged 16 to 35. The budget is providing investment incentives, with businesses having a turnover of up to $5 billion able to write off the full value of any eligible assets they purchase for their business, with no limit on the value of assets eligible for full expensing. Businesses will also be able to offset losses from this year against profits made in prior financial years back to 2018-19.

The budget's caring for the vulnerable, providing record funding for hospitals, schools, aged care, mental health and disability services, with additional money for the National Disability Insurance Scheme, the doubling of the number of Medicare funded psychological services available, 23,000 additional home-care packages and supplementary payments for age pensioners. The budget's also providing help with affordable housing, with an expansion of the First Home Loan Deposit Scheme and an additional $1 billion in low-cost finance to support the construction of affordable housing, on top of the $4.6 billion provided annually in rental assistance.

My question for the minister is: can the minister please update the chamber on how the government's JobMaker plan, including the JobMaker hiring credit, will lead to our jobs recovery from the COVID-19 pandemic?

12:40 pm

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

My question is to the minister is: why does this budget actively choose a future of high unemployment and low wages for the Australian people when it could be bringing down unemployment to the level that we had in this country in the years between World War II and the 1970s? Why is the Treasurer satisfied with a goal of six per cent unemployment instead of two per cent unemployment, which is what used to be considered full employment in this country?

One of the things that we've learnt throughout the response to this pandemic is that government expenditure can bring down the level of unemployment. The last government speaker just made a big point about how it was forecast to be 12 per cent—but government expenditure and finally realising that a surplus wasn't the be-all and end-all—but the government decided to put jobs first. When the government did that it brought down unemployment—that could have been 12 per cent—to eight per cent. The last government speaker made a big point about that. If the government can bring down unemployment by four per cent why aren't we aiming for a target of well below three per cent unemployment in this country? Why are we content, in this government, with a high unemployment future of at least six per cent for the foreseeable future, which is what the Treasurer has said would be his goal?

This is going to have a huge impact for young people in particular, because going into this pandemic, nearly one in three young people either didn't have a job or didn't have enough hours of work—and that figure has gone up to closer to four in 10. It is going to stay high if the government continues with its approach of actively choosing high unemployment.

There are things this country needs. We need more social and public housing so that people have a roof over their head. If we invested in public housing we'd create jobs. Build half a million new public housing homes and you create 40,000 jobs, plus 4,000 apprenticeships, over the next 10 to 15 years. Build us to get to 100 per cent renewable energy, expand the aged-care and university sectors instead of cutting them and you lift unemployment.

My question to the government is: why persist with at least six per cent unemployment, which translates to two million people in this country either not having a job or not having enough hours of work when we have learnt from this pandemic that government investment can bring down the level of unemployment? So why not?

My question is: why does the budget not include a jobs guarantee for young people? Young people could be guaranteed a job on nation-building, planet-saving projects that would tackle the climate crisis, tackle the inequality crisis and help us get out of the economic recession that we are in as a result of coronavirus. In other words, if the doctor tells you that you have got three things wrong with you and that they can give you a medicine that fixes all three or a medicine that just fixes one of them you take the medicine that fixes all three. We have got that medicine. It is called government investment, government investment in nation-building projects that could help bring down our emissions, reduce inequality in this country and get unemployment back to two per cent. That's the level that it was for decades between World War II and the 1970s. This government is now actively choosing an unemployment level of closer to six per cent. It says it is comfortable with a target of closer to six per cent.

I want to reiterate the point that the government is choosing two million people either having not enough work or having no job at all, when it has just admitted that through investment it could bring it down even lower. It's going to be a devastating blow and create a lost generation of young people. Imagine being a young person at the moment trying to find a job in your area if you are in the area of hospitality, arts or entertainment? It is goings to be a long road for you to find secure and stable employment.

The government has just admitted, through its speakers, it could bring down the level of unemployment lower if it wanted to. It is just choosing not to. Not only is that going to be bad for young people and for the one million Australians at the moment who don't have a job—that this government has turned its back on and decided to keep them unemployed—but it's going to be bad for everyone else's wages as well, because the higher unemployment is the harder it is going to be for people in jobs to get good and decent wages. This is going to put a brake on wage growth. My question to the government is: why are you actively choosing to lock in high unemployment and low wage growth in these budget papers when with significant government investment we could get back to full employment in this country and tackle the challenges this country is facing?

12:45 pm

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | | Hansard source

I thank all of the speakers who have asked questions—the members for Wentworth, Curtin, Mackellar, Fenner, Kingsford Smith, Blaxland and Melbourne. I might touch on a few points. The member for Curtin asked a series of questions in relation to how our tax plan is supporting businesses and individuals. As I said at the outset, $12½ billion in tax cuts are flowing to 11.6 million Australians in this financial year and a further $5 billion or so in the following financial year as part of bringing forward our tax plan and tax reductions. That of course is going to support aggregate demand throughout the economy. In addition, for businesses, the instant expensing of assets for 99 per cent of Australian business, which ensures that tax losses are able to be utilised essentially immediately as opposed to having tax losses that may or may not be available in future years, is going to ensure that businesses have the cash flow that they need.

In relation to the members for Wentworth and Mackellar, they are right in their statements, particularly the member for Wentworth, that Australia has weathered the crisis well by international standards. We've had our AAA credit rating reaffirmed—one have only nine countries to do so—and we've seen 446,000 jobs created over the last month. This shows that not only the JobMaker plan outlined in the budget but the work on successive economic policies that the government has put in place throughout this calendar year have cushioned the blow and have set us up for recovery.

In relation to some of the other contributions, the member for Fenner asked a series of questions, and he also quoted a number of very notable people. One person he quoted was Jeff Borland, who I might say is somebody whose opinions and writings are known to many people in this chamber. I note that Jeff Borland said:

… JobMaker hiring credit is a definite hit: the timing is right, the target group is right and it is reasonable to think that the program will work.

It's wonderful to see the member for Fenner quoting the work of somebody who has been so complimentary of the JobMaker hiring credit.

The member for Kingsford Smith spoke about affected workers in the airline industry and about women more broadly. I would say to the member for Kingsford Smith: the 11.6 million individuals who will benefit from income tax cuts will benefit from tax cuts that are gender neutral. To suggest that women will not benefit from them is, I think, quite insulting.

To the member for Blaxland, who spoke about the housing industry and a range of other issues, I'd say that the HomeBuilder program and the First Home Loan Deposit Scheme are doing precisely what the government and what the industry have asked for in ensuring that in the second half of 2020 the industry, which was hitting a cliff, has had sufficient demand—indeed, in some parts of the country, record demand—to ensure that their workforces can be maintained. In some jurisdictions, workforces are not just being maintained; they're growing. Perhaps where the member for Blaxland and I agree is that there is no set and forget in this policy space. We will be watching the industry very closely, but we're very pleased to see thus far that the industry—their words not mine—have benefited greatly and are indeed, in some instances, flourishing under the policy settings, including, as I said in my opening remarks, the First Home Loan Deposit Scheme, which will be helping not just first home buyers with an additional tranche of 10,000 guarantees but the industry as well.

The member for Melbourne spoke about employment. As I said in my opening remarks, we are expecting to see unemployment peak in the December quarter of this year at eight per cent. Over the forward estimates, we expect, based on Treasury estimates, unemployment to be getting back to six per cent, at which point in time the fiscal strategy of the government will naturally change. The idea we can turn it on a dime, which seems to be the suggestion from the member for Melbourne, I think, is wishful thinking and obviously comes from somebody who's part of a political party that never has to make these decisions or live in the real world of what would realistically happen.

We are very keen to make sure that we get unemployment down as low as we possibly can. That's what everything contained in this budget is focused on doing—empowering individuals, increasing aggregate demand and supporting businesses who employ those Australians and create the wealth that we all rely on.

Proposed expenditure agreed to.

Decisions by the government, prior to the COVID pandemic hitting, improved the budget bottom line by some quarter of a billion dollars over 10 years, to 2023, and this has put us on a better and more sustainable fiscal trajectory. This position of fiscal strength has enabled us to provide record levels of crisis support into the economy in response to the pandemic. We've provided unprecedented levels of support for businesses, families and individuals. Without the important repair work that we undertook in our first six years of government, we wouldn't have been able to throw this fiscal firepower at it. Australia therefore stands out amongst advanced economies for its low infection rates and comparatively strong economic outcomes. The budget is therefore our plan to get our country out of recession and back into jobs.

Importantly, consistent with our values, the budget also recognises the need for a private sector led recovery. Jobs aren't created in a vacuum. In this budget, we've seen $74 billion worth of support measures, as part of the JobMaker Plan, which will drive the strongest possible private-sector-led economic recovery. This aims to support around one million jobs over the next four years. The JobMaker hiring credit, which I've spoken about in relation to appropriation bill No. 1, is a $4 billion commitment essentially providing a wage subsidy for businesses who employ somebody between the ages of 16 and 35 on JobSeeker. It will ensure that those businesses are able to invest in skilling, upskilling and reskilling Australians. There's a $1 billion JobTrainer Fund to create more than 340,000 free or low-cost training places and, importantly, $1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them. Since the start of the pandemic, the government has also committed to investing an additional $14 billion in new and accelerated infrastructure projects over the next four years, and we expect that these projects will support a further 40,000 jobs.

The pandemic has also accelerated Australia's acceptance and use of digital capabilities. In November 2019 the Prime Minister recognised the opportunities that a digitally enabled economy presented, when he established the Digital Technology Taskforce. In 2021 the government is seeking to boost Australia's productivity further, including through support to transition Australia into a leading digital economy and to invest in training to prepare Australians for the inevitable jobs of the future, which will be part of the recovery. The $796 million Digital Business Plan will drive adoption of digital technologies by supporting SMEs and their enterprising capability, reducing regulatory barriers and making it easier to do business digitally with government as well.

As we've all seen, the pandemic has also brought forward demand for faster broadband speeds, making it feasible to enhance the NBN network where emerging demand in the market justifies it. The ultra-fast service will help stimulate economic recovery and add more than $6.4 billion to annual GDP from 2024. As I outlined in relation to appropriation bill No.1, bringing forward a significant tax relief for hardworking families, focusing on low- and middle-income earners in particular, puts more money into their pockets and supports aggregate demand throughout the economy. As I've said, it's significant that $12½ billion of those income tax reductions will flow through the economy in this financial year and the remainder in the next, which ensures that the support is being provided when the economy and confidence requires it the most.

The ATO and a number of agencies are also investing heavily. The ATO is providing information to business and private-sector suppliers on amending their own systems to ensure that businesses, tax agents and others are able to engage with the tax office in a more digitally focused way, reducing the compliance burden and ensuring, from a revenue collection perspective, greater transparency and, of course, greater following of the rules.

12:54 pm

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

I thank minister for his contribution. I note the minister has two big white folders on the desk over there and I note that there are staff supporting the minister with several volumes of white folders with lots of red tabs and lots of information in them. I would like to ask the minister, who is so well supported, if he can tell us: how much is his government spending each year on contractors and consultants? We have asked the Department of Finance officials on several occasions how much they are spending on contractors and consultants and they cannot tell us. Perhaps the minister, who has some big folders in front of him, can assist us with that question. It's no small issue.

The government like to tell us how good they are at managing money. This is the same government that managed to blow $27 million of taxpayers' money on the Leppington triangle that was valued at $3 million. The Prime Minister got outraged that the head of Australia Post spent $20,000 on some very expensive watches, but didn't get outraged that his government had spent $27 million—I retract that—wasted $27 million in what looks like a very dodgy land deal in western Sydney. That's not cause for outrage. The same government was roundly condemned by the Australian National Audit Office for its sports rorts affairs, and I'll have some further questions on that. But we'd like to know why they cannot tell us how much money they're spending on contractors and consultants. It's a very good question. It goes to the heart of good management. We know that 40 per cent of the Department of Veterans' Affairs workforce—that's four in every 10 workers—are external consultants. If you have any veterans in your electorate who are wondering why they can't get a decent or consistent answer from the Department of Veterans' Affairs, four out of every 10 of the staff are external consultants. The National Disability Insurance Agency has 200 senior executive service staff employed by labour hire agencies. You would think that might be an outlier, but it's not. Right across the service, we have similar examples of massive spending on consultants, labour hire companies and contractors, and the government can't even tell us how much it's costing. We can tell you what it is costing the patients and what it is costing the customers.

There's no better example than in the agency that is charged with the job of overseeing aged care in this country. During the height of the crisis we saw the importance of this. More than 700 people died in aged-care facilities and many more were kept in conditions that left them alone, scared and isolated. It was a national tragedy. There wouldn't be a member in this place who wasn't touched by it. Oversight of aged-care homes is the responsibility of this government. This is the cost of the policy, and they can't tell you how much they're spending on contractors and on labour hire, but it's going up and up. Thirty per cent—that's three in every 10—of the staff working in the Aged Care Quality and Safety Commission are casuals. Is it any wonder they can't get a policy out? Is it any wonder they can't oversee quality within the aged-care sector? Thirty per cent of the staff in the Aged Care Quality and Safety Commission are casuals. Most of them are employed by labour hire companies.

It gets worse. Staff at the commission are being provided to the commission by the very same labour hire company which provides the staff to the aged-care homes—a red-hot conflict of interest. If they could argue that this was good value, maybe they could convince us that this was good economic management. What makes it worse is that we are paying more for less. We're paying more for these contractors, more for these consultants—more for the labour hire—than we would if they were directly employed. So my question to the minister is: how many, and isn't it true that it's going up? (Time expired)

1:00 pm

Photo of Andrew HastieAndrew Hastie (Canning, Liberal Party) Share this | | Hansard source

On 1 July this year, at the Australian Defence Force Academy, the Prime Minister gave a speech, the 2020 Defence Strategic Update. In it he outlined a 10-year plan—a funding model for the ADF which would give certainty in a changing strategic environment. A total of $575 billion will be committed to defence over the next 10 years, including $270 billion of new spending towards complex defence acquisitions. In that speech, the Prime Minister said that, post-pandemic, the world in which we live will be poorer, more dangerous and more disorderly, and that, as a sovereign country and a regional power in the Indo-Pacific, we are going to see increased geopolitical competition, we're going to see rapid military modernisation across the region and we're going to see more grey-zone tactics being employed.

In other words, we need to be prepared for a tough decade ahead, and the government's funding model provides certainty to the Australian Defence Force over the next 10 years. In fact, by 2021, we are going to increase our defence spending budget to two per cent of GDP. This is necessary in a changing world where our security and sovereignty can never be taken for granted. Critical to this shift in our defence posture will be a strong economic recovery post COVID-19. The 2021 budget advances the government's plan for Australia's economic recovery.

The first phase of the government's revised economic and fiscal strategy is the COVID-19 economic recovery plan. It helps get Australians back to work and boosts our prosperity as we emerge from this crisis. Critical to the plan is the JobMaker plan and the COVID-19 response package. This budget provides $74 billion in measures under the JobMaker plan to drive stronger economic recovery and to drive down the unemployment rate. It will help drive and boost private sector growth and job creation, recognising that a strong economy is critical to a strong sovereign Australia, with a strong Defence Force to safeguard our interests over the next decade.

There some key things in the JobMaker plan and the 2021 budget which will help get Australians back into jobs. We're spending $310 million on research and development and we're introducing a tax incentive to support Australia's economic recovery. We have the Modern Manufacturing Strategy. We talk a lot about defence sovereign industry. We need to increase our manufacturing base here in Australia. If we're going to be truly self-sufficient and sovereign, we need more manufacturing jobs in this country, and we're committing $79 million this coming year towards that. We have a research package. We've investing in new energy technologies. We have a digital business plan. We're helping out our agricultural exporters, which I know is important for you, Deputy Speaker, in your part of the world, improving their ease of doing business with markets, particularly in Asia. We're securing Australia's liquid fuel stocks. We're deregulating and, of course, we're funding a gas fired recovery. Gas is critical to delivering low-cost, reliable base-load power, not just for manufacturing but for hundreds of thousands of small and medium businesses across this great country of ours.

Importantly, procurement is a critical part of what we do as a government, and the COVID-19 situation has put a lot of pressure on small to medium businesses. The economy is an ecosystem, and one impact in one sector affects the whole thing. So some suppliers to government are struggling to meet their contractual obligations with agencies, and this in turn puts at risk their financial viability, their ability to retain staff and also their supply chains. I know the government has responded. The former Minister for Finance, Mathias Cormann, has done a lot in this space. We've engaged with industry stakeholders, represented on its procurement consultative roundtable, on matters directly affecting industry. But my question to the minister today is, because the finance portfolio is responsible for procurement policy, I have a question regarding the government's approach to paying its bills to suppliers as fast as possible. Can the minister representing the finance minister please advise what steps it has taken this year to lift its game in paying suppliers, including speeding up payments to small business suppliers?

1:05 pm

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

The government has provided $5.7 billion in funding to over 30 grants programs or funds, some of them new, some of them existing, in the 2020 budget. Some of these funds have themselves been the subject of what can only be described as notorious pork-barrelling. In earlier contributions I've referred to the sports rorts program. The Australian National Audit Office did a review of this scandal ridden program and found that 73 per cent of the projects had not been recommended to government by Sport Australia. That's 73 per cent! We know that there was a communication between the minister's office and the Prime Minister's office. We can be absolutely certain that this money was distributed not on the basis of sporting or community need, but on the political needs of the coalition running into a hotly contested election. We know that in this case the former Deputy Leader of the National Party and the former minister responsible for sport was asked to fall on her sword on behalf of government, to cop the bullet and resign her position because of this notorious sports rort affair.

We also know that the tentacles of rorts extended far beyond the Deputy Prime Minister's office. We know that the National Party has been asked to take the heat for the Liberal Party in this instance, and we know that the Deputy Leader of the National Party was forced to resign. Many may say that this was, perhaps, unfair because the real culprit in this affair was the Prime Minister. The real culprit in this affair was the head of the Liberal Party, the Prime Minister, who was calling the shots in this notorious sports rorts affair, where more than seven out of every 10 program grants were not recommended.

We saw the examples. We saw the example of monies being granted to sports clubs for female change facilities where the club didn't have a female team; whereas you had other eligible grantees who did have female sports teams and who were after a change room for their facilities because they didn't want their daughters having to get changed in the bush behind the paddock. They got overlooked. They got overlooked because they didn't meet the political criteria which were determining the allocation of funds under this notoriously rorted program.

We also know that the government has fought tooth and nail against establishing a federal anticorruption commission because they do not want these sorts of programs interrogated by an independent body. We know that the government set up a whitewash inquiry to fit up the former Deputy Leader of the National Party in relation to the sports rorts affair.

In the context of all of that it is deeply concerning that the government has set up another $4.7 billion in grants programs, tipping more money into these buckets that already have a big question mark over them. Can the government confirm that it has provided $5.7 billion in funding to over 30 new or existing programs in these areas? Can the government confirm that 94 per cent of the grants from the Building Better Regions Fund issued in the months leading up to last year's election went to coalition-held seats? I'll say that number again: 94 per cent of the disbursements from the Building Better Regions Fund, in the lead-up to an election—absolute coincidence, I'm sure!—went to coalition-held seats. The $207.7 million allocated to this fund in this year's budget is at risk of further pork-barrelling. So the question to the government is: what processes is it going to put in place to ensure that we don't see a repeat of the notorious 'sports rorts' affair? Are we going to see another example of Leppington Triangle, where a Liberal Party mate and donor gets $27 million for a $3 million program— (Time expired)

1:11 pm

Photo of James StevensJames Stevens (Sturt, Liberal Party) Share this | | Hansard source

It was my pleasure, in the second reading debate on Appropriation Bill (No. 1) 2020-2021, to make some comment about the response to the budget as I was able to go and meet with businesses, particularly, in my electorate in the week or two post the budget being delivered by the Treasurer and the measures being understood, absorbed and communicated throughout my community. I just want to briefly make it clear that business sentiment in my electorate, and in the whole state of South Australia, has only increased since then, in the last few weeks.

Last week we had a very reputable business confidence survey in South Australia released that showed the largest increase in business confidence in the history of that polling process, that market research, which is conducted by BankSA, which is obviously a significant financial institution in South Australia. The business community in my electorate and my home state has responded so overwhelmingly positively towards the measures in this bill. In particular, I have to say that it so enjoyable to hear stories from businesses who are now saying, 'I am proactively making investment decisions that I would not have made if it weren't for the measures in the budget that are making a huge difference,' particularly the instant asset write-off, the uncapped write-off, which has led so many businesses to have the confidence to go out and incur expenditure. They know, of course, they'll be able to immediately write off the value of those eligible assets. That makes it a huge incentive to bring expenditure forward.

The tax clawback measures as well, mean businesses are going to be receiving cash flow they hadn't anticipated much sooner, by applying current accumulated tax losses to a previous period instead of a future period. It's these sorts of things that are going to lead—as they already have and will continue to, in my view—to an unlocking of business investment that is going to be a key driver for bringing us out of the economic challenges that have been thrust upon us because of this coronavirus pandemic. In fact, some of the statistics we're seeing in my home state are showing that, in some sectors, we're seeing a dramatic improvement on this commensurate period last year, before the pandemic challenges confronted us economically.

The budget has been extremely well received by small businesses in my electorate but also more generally in my community. There is a strong sense from the people that I speak to in my electorate that we are saying to the private sector, 'We want you to create the jobs that we need to bring us out of the struggles that we've had and make us, in fact, more prosperous and stronger than we were before we went into this challenge in March.' What we've done is say to the private sector, 'We want to back you, to give you confidence to make decisions, to give you incentives to make decisions, particularly significant investment decisions. We want to help you employ people.' The incentives to employ someone who is currently on JobSeeker and under the age of 35 are really important, because we can never forget that traditionally it is younger people, who go onto the employment queues very quickly, who can take the longest to come off them, and, whether it's fair or not, there is at times some stigma from employers towards people in this category. So the incentive payments that we've announced for businesses that employ people off the JobSeeker roles in that category, I think, is completely commendable, and I look forward to seeing the evidence of the success of that. It will make a huge difference in making sure we don't have engendered youth unemployment for a long period of time, which was certainly the case as we came out of the early 1990s Keating recession.

As someone who takes a keen interest in electoral matters, and being a member of the Joint Standing Committee on Electoral Matters, I'm pleased to see we're putting some important resources towards the Australian Electoral Commission, the AEC. We've been asked to consider what challenges they may confront if we have to conduct a future federal election where some of the current challenges such as social distancing and community restrictions are still in place. It may be that, by the time we go to the next election, we need to provision for that. So I would like to ask the minister a few questions on the main finance portfolio budget measure that provided $96.7 million to the Australian Electoral Commission for ICT upgrades. Can the minister representing the finance minister please explain what kinds of projects will be included in this upgrade, how has the COVID pandemic impacted election staffing and other election logistics challenges, and how will new IT tools provide an improvement on the present methods for managing collection operations?

1:16 pm

Photo of Peta MurphyPeta Murphy (Dunkley, Australian Labor Party) Share this | | Hansard source

On the Department of Finance website, it describes the Department of Finance as a partner in 'public sector governance and managing public resources'—two incredibly important roles which, under this government, have been undermined time and time again. The federal government has a procurement policy, and when one looks at procurement on the website of the finance department, it says:

In 2018-19 there were 78,150 contracts published on AusTender with a combined value of $64.5 billion.

That's a huge amount of taxpayers money, but also a huge amount of money to wield in our economy, in our country, for the benefit of our people; to grow our economy; to have an economy that is sustainable, and investment that mitigates the impact of climate change and doesn't increase it; and to use taxpayer money wisely. But, sadly, under the current government, we have seen undermining and cuts to parts of the Public Service that should be delivering those things for the Australian people, and, importantly, to the parts of the Public Service that oversee the delivery of those things, to make sure that they are done fairly, properly, without pork-barrelling and without corruption.

We all know, because we've heard about it time and time again over the last few months, about the way this government has punished the Auditor-General for uncovering things like sports rorts. It has taken an extraordinary public intervention, one might think, from the Auditor-General to point out that the ongoing cuts to the ANAO will have ongoing limits on his ability to do his job properly. And that's not important for a political reason; it's important for democracy. It's important for the people who vote for those of us privileged enough to be in this chamber to believe in the system and to have trust in the system. The Auditor-General isn't just there to uncover wrongdoing, although he has been incredibly successful at that lately, it must be said; the Auditor-General is also there to safeguard trust and therefore to safeguard democracy. We only have to look at what's happened to other Western democracies around the world over the last few years, and the election that we've all just witnessed in America, to know what happens when a significant part of your community loses trust and faith in not just the people who are in public institutions, but in the public institutions themselves. That's why it's so important that the government establish an integrity commission that is real and that has teeth, because to do anything other than that would be to continue down that path of undermining trust, as well as undermining the capacity of institutions to hold government to account.

The Mandarin , in October, suggested that, based on reports, about $1.4 billion in real terms has been cut from accountability institutions over the last decade or so federally and that funding as a total percentage of federal budgets has dropped from what I would say is a paltry 1.1 per cent or so, to 0.6 per cent. That's a trend that has to stop. My question for the minister is: will this government commit to using its procurement policy, that $64 billion or so of investment opportunities that are on the tender website, to do what our regulators, APRA and ASIC, are asking other investors to do and to commit to reducing climate emissions and to commit to ESG principles—environmental, social and governance principles—to make sure that government money is spent not just on the infrastructure and the projects that are needed at any one point in time but also on the infrastructure and the projects that will deliver long-term ESG benefits to the taxpayers in this country?

1:21 pm

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | | Hansard source

I might deal with a number of the questions in a job lot. I want to thank the members for Canning and Sturt as well as Whitlam and Dunkley for their questions. In relation to the specific questions from the member for Canning, the government obviously agrees with his points that the earlier payments of government bills contribute to a faster flow of capital throughout the economy and of course have a greater benefits for those recipients of those government services. So ensuring that the government pays our bills on time to private sector suppliers is important. That's why, from 1 January 2020, some of the larger Australian government agencies started to pay their electronic invoices to suppliers within five days. This applies to contracts valued up to $1 million where a supplier and Commonwealth agency both use the internationally recognised framework for delivering these e-invoices. If an Australian government agency fails to meet this requirement of paying that bill within five days, then it's liable to pay interest on any of those late payments.

The ATO is providing information to businesses and private sector suppliers in relation to the use of various accounting software. This means that suppliers have the technology they need to send invoices in the correct form—again, ensuring that there are no unnecessary delays. This has led to many accounting systems providers adopting the new international standards for e-invoicing, allowing their clients to exchange data directly. Again, government is mandating to some extent and then driving a greater uptake of that particular technology, not just with those who are contracting with government but also more broadly in the private sector.

The member for Sturt had some specific queries in relation to the Australian Electoral Commission and ICT upgrades. This is the most significant measure for the Finance portfolio in the 2020-21 budget. As we've all seen—and have probably been reminded of in recent days—the Australian electoral system is one of the best-regarded electoral systems in the world, and we need to invest in our system if we're to manage risks and live up to contemporary public expectations. The AEC has worked with the government to actively plan for modernisation of its ICT systems for the past three years. We've, of course, provided previous funding to support this work, and the further allocation of $96.7 million over three years will facilitate that modernisation agenda. The first tranche of upgrades will modernise key election capabilities for supply chain management and a temporary election workforce.

The member for Whitlam had a succession of questions. I might just touch on the use of consultants, which I think he commenced with in his first question. And of course the government's committed to delivering services as efficiently and effectively as possible, and this will include the use of consultants to deliver special services. I might just note, though, to the member that it's already mandatory to include data on consultancy spending in agency reports. This is a requirement imposed by section 17AG of the Public Governance Performance and Accountability Rule. We recently made bipartisan changes to extend this requirement to all contracts so that they have to be published in the 2021 annual reports, and some agencies are already doing that.

I might also remind the member for Whitlam—not remind him, probably inform him, given his statements seem not to understand this—that the value of consultancy contracts in real terms in 2018-19 is in fact $91.6 million lower than it was in 2009-10. I'm not an expert on the member for Whitlam's career, but if he was a member of that government then the government of which he was a member had higher real spending on consultants than this, which obviously means his criticisms apply much more harshly to the government of which he was a part of. So I'm very pleased to inform him that, in real terms, that spending is down.

I'd say to the member for Dunkley: on procurement, of course, we're balancing a number of objectives, getting the best bang for buck for taxpayers and fuelling industry wherever possible and that's what our procurement policy does.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

I thank the minister. I call the member for Whitlam. Before you start, I'll inform you that the Federation Chamber debate will be interrupted at 1.30.

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

The government has an unfortunate habit of saying one thing but doing the opposite, and we see in this budget the very same thing. I'd like to remind the minister that the government has presided over a doubling of the debt before the pandemic hit, despite saying that they were going to get the debt under control and have a surplus in their first budget—that was back in 2014. They've never delivered a surplus, and the budget is in deficit for as far as the eye can see.

The government was elected on a promise of getting the budget under control, but clearly it's no longer under control. It's out of control. Both net debt and gross debt have doubled, and that was before the pandemic hit. Does the gross debt or the net debt, Minister, peak in dollar terms at all over the medium term; and what is the government's plan to fix this?

1:27 pm

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | | Hansard source

As I outlined in my opening remarks, the incredible work that the government did in the six years leading up to the pandemic ensured that Australia had a sound fiscal position from which to respond. It was that sound fiscal position that has allowed us to provide unprecedented support throughout the pandemic. Firstly, to cushion the blow, we saw the succession of economic packages which culminated in the $101 billion JobKeeper program that then moved into the budget, which outlines the pathway back to economic growth and job creation. And there's been a significant cost associated with that.

If the member for Whitlam is suggesting that the government should spend less, then he should outline what programs we put in place in response to the pandemic was spending that shouldn't have been undertaken. The member for Whitlam doesn't have the courage to ever suggest that so therefore no-one can take him seriously with his claim. The reality is—and Australians understand it; we all understand it in this room—that the fiscal position that was put back on a strong foundation by this government over six years has enabled us to do what we're doing. Yes, the fiscal support that we've put in place is monumental. We don't shy away from that for one moment, but we are able to do it. It will fuel economic growth. It will fuel jobs. That's what Australians expect, and in the end that will be the pathway back to fiscal rectitude because, without a strong economy, without a strong labour market, you don't have a strong budget. We understand that. That's why this budget is so important for Australia's future, and I commend it to the House.

Proposed expenditures agreed to.

Proceedings suspended from 13:30 to 16:00