Lyn Allison (Victoria, Australian Democrats) Share this | Hansard source

Like most Australians, I have looked forward to this, the first budget of the Rudd government. The economy is booming, the new government has plenty of revenue, and it seemed likely that the serious problems of climate change; water and skills shortages; underfunding of early childhood development, public schools and universities; poor health and housing in Indigenous communities; and the lack of investment in infrastructure—to name just a few—would at last be fixed. The new Prime Minister promised a visionary and bold platform of reform and nation building. The other message that we had been hearing for weeks before the orchestrated leaks was that this budget would be tough, with lots of savage cuts in spending—cuts that were made necessary to ward off the risk of inflation to working families. That did not quite turn out to be the case.

For 2008-09, spending will actually increase by $297 billion—$10 billion up on the previous year—but income in the same period will rise by over $15 billion. The budget is big on handouts, which may well be inflationary. There is little by way of structural reform, too little is being spent on urgent problems like climate change and water, and the money is available far too late. The election promises have certainly been delivered, however ill advised, like the $47 billion in tax cuts, most of it to high-income earners, and the tax rebates for school expenses that also make the tax system more complex—the $5.7 billion for school computers and trade blocks that were certainly not the highest priority of schools. The budget displaces some of the vote-winning stunts of the previous government: summer schools and bonuses for teachers that were driven by a government keen to suggest that a lot of teachers needed retraining and keen to bring in quasi performance pay.

Childcare rebates will be lifted to 50 per cent of a cap that has been almost doubled to $7,500 and paid quarterly. The Democrats support this initiative. In fact, we would sooner see it even higher. But neither this nor the A to E grading on childcare centres will fund better pay and training for childcare staff. We strongly support national standards, but these must improve quality through better trained and paid staff. We see no measure to deal with the shortage of childcare places in inner urban areas where land prices are high and shortages are acute. We hope that the $114.5 million spread over four years to build 38 of the promised 260 new childcare centres will address this problem, but at this rate of funding it will take a quarter of a century to reach the government’s target. We welcome the Jobs, Education and Training Child Care Fee Assistance now covering two years of approved study. The previous restriction to 12 months severely limited the capacity of single parents to finish most courses of study.

In the bigger picture, there is plenty of money for projects, and deficits and government debt are a thing of the past. Over $30 billion in surpluses for the next two years alone will go into the Building Australia Fund. Ten billion dollars is there for new medical technology, research facilities and hospitals, but none of it will be spent before 2009. The Howard government’s $5 billion Higher Education Endowment Fund will be more than doubled and renamed the Education Investment Fund, but it now covers vocational institutions and research organisations, and the capital can be tapped as well as the interest.

The Commonwealth will return to funding its own big-scale road, rail and ports, and fast broadband to 98 per cent of the population—perhaps a new era in investing in Australia’s long-term future needs. The Democrats strongly agree with this objective. We have been calling for it for years. We just hope that future governments do not sell off these new assets as readily as they have airports, the Commonwealth Bank, Telstra and the like. We would sooner see the telecommunications network in public hands, fibre to the node and all, and healthy competition in service delivery instead of the monopolistic monster which was created by privatising our once public carrier.

We are deeply disappointed that over 90 per cent of transport funding will be blown on roads, with freight rail getting the leftovers and public transport getting zilch. Labor seems to have forgotten that it signed off on a Senate inquiry recommendation eight years ago that called for funding for new and improved public transport and FBT reform to encourage its use. It ignored too the recommendation for greenhouse abatement to be incorporated in transport policies and taxation. As we know, Infrastructure Australia does not have an obligation to investigate greenhouse in its deliberations on transport or any other infrastructure.

One of the reasons the government coffers are awash with cash is the resources boom, much of it in the Top End, and yet there is no funding for social infrastructure in places where that cash is being generated. An extra $33 billion of tax revenue is expected from increased commodity prices in 2008-09 alone, but it is not returning to these areas. Wages in the Pilbara, for instance, are very high to overcome the difficulties in living there. The opportunities that urban dwellers take for granted like shops, theatres, libraries, pools and housing choices are just missing.

There were cuts, certainly, worth $6 billion to $7 billion. The bureaucracy will pay with a $1.8 billion dividend efficiency. Cancelling the welfare access card nets $1.2 billion. Cancelling the OPEL contract brings in a billion dollars. Health lost about $2.6 billion, not all of which seems sensible—but there is little detail other than the cuts to GP payments, pathology, after-hours clinics, research, and advertising campaigns. The dental health scheme worth $500 million for 150,000 people with chronic illness is being scrapped in favour of one for teenagers and for public waiting lists. Small business and employment programs have been cut back, including the Commercial Ready program of grants to small and medium enterprises for research and innovation—which seems at odds with government claims of encouraging smart industries.

A lot of the cuts are from means testing, and we tentatively welcome this departure from the previous government’s ‘cheque’s in the mail’ handouts to all, including the wealthy. The baby bonus will come fortnightly from January next year, which is probably not such a bad thing. It and the family tax benefit part B will not go to those families that earn over $150,000, despite Labor’s promise that the threshold would be $250,000. That $150,000 threshold now also applies to tax breaks for workers supporting a dependent spouse, housekeeper, invalid relative, parents or parents-in-law.

We welcome the baby bonus being extended to adoptive parents for children over two—a win for my colleague Senator Stott Despoja, who has campaigned for this for some time. But there is still no publicly funded maternity leave, and I wonder how big the surplus has to be to make $590 million a year affordable—or is there some other objection to giving women in Australia entitlements that are taken for granted in other countries? Women are—rightly, I think—asking how come the means testing mostly affects them and their family responsibilities while measures such as the abolition of tax on retirement income mostly benefit men.

Men are certainly more likely to buy expensive cars, which now are to be taxed at a higher rate of 33 per cent. But surely it would be more strategic to tax according to energy waste rather than dollars, like so many other more enlightened countries do. The photovoltaic panel rebate stays at $8,000, but we were shocked to hear that this is now to be means tested to an absurdly low household income of $100,000. As a non-essential item, PVs are still very expensive at around $16,000. According to solar companies that have contacted me today, 85 per cent of those who have put them on their roofs so far have family incomes of over that amount. The $10,000 in low-interest loans does not come on stream for another 12 months, and solar installers are saying that their clients are dropping off like flies since the means-testing announcement. This is a very serious mistake, and it will be a complete disaster for the industry unless it is reversed—and immediately.

The education revolution in schools mostly consists of capital works, computers and literacy programs, but it does not address the shortfall in per capita funding for running schools, the funding disparity between primary and secondary schools or the inequitable private school funding formula that becomes more irrational every year as more and more schools are given exemption from it.

We look forward to seeing the details of the government’s $577 million literacy and numeracy programs. These need to be spent on effective and flexible programs to deal with a wide range of problems that children have in learning. It is not enough to test children to see where they are in comparison with their peers; we need to understand why it is they do not learn at the same rate as them—and sometimes that will not matter because they will catch up. In other cases, learning difficulty and disability will dog them throughout their schooling unless there are effective interventions.

We are pleased to see 44,000 new scholarships, the abolition of full-fee degrees and incentive for students to study and teach maths, science and nursing—but that is it for student support. The $500 million one-off cash injection in 2007-08 to help universities rebuild campus infrastructure is a very good start, but the backlog of deferred maintenance across the sector is estimated to be in the order of $2 billion. There is no money to revitalise student services and organisations that have almost disappeared under voluntary student unionism, and the government’s review seems to have come to nothing. Labor, like the last government, is not addressing the inadequate indexation of university grants, and this will continue to eat into any gains in the headline level of funding allocated to universities.

There are incentive payments to the states of $200 million a year for three years for elective surgery as long as they meet targets on reduced waiting times, but there is still no decision on how the Commonwealth underfunding of the health care agreements for hospitals will be dealt with. The states will be given a billion dollars in the budget to tide them over.

We welcome the threshold increase for the Medicare surcharge. We doubt the private health insurance industry doomsday claims but even if there was a drop of 400,000 members—just four per cent—they would cease to prop up a very expensive health system. We are disappointed that the government has stuck with its 30 per cent private health insurance rebate. This costs us $4 billion a year—money that would be far better spent on the public system. We welcome the $275 million for GP superclinics and hope these are not more of the same fee-for-service arrangements but instead provide integrated primary care in places that most need it.

The National Health and Hospitals Reform Commission disappears next year—or at least the funding to it does—instead of being an ongoing body with standing committees monitoring the difficult and mostly invisible areas of, for instance, Indigenous health, mental health and aged care. Most Indigenous health spending is a follow-up on the Northern Territory intervention, and most of it finishes next year. It needs to be asked why these measures should not be introduced across the country, because problems also exist in Aboriginal communities in other states. Indeed, Professor Altman points out that the child abuse notification rates in the Northern Territory are about half of those of the national Indigenous average.

Of the 37 new measures identified to help begin the process of closing the gap, the major ones are previous government commitments. A lot of the money goes to government business managers, $31 million; income management, $64 million; and the task force reviewing the intervention, $34 million—but this compares with a mere half a million dollars for consultation on a new national representative body.

There are small sums for child and maternal health services, and it is good that night patrol services, youth alcohol diversion programs, follow-up health care and the promotion of law and order are to be funded.

The Minister for Health and Ageing was presented with a worthy proposal to fund a mobile health unit targeting women’s reproductive health services in very remote communities, which would help prevent the very high death rates from breast and gynaecological cancer. But I do not see this in any of the budget papers.

It is clear that properly investing in Indigenous community health centres and better support for remote area nurses is crucial, and for less than $30 million eye diseases like trachoma could be wiped out in just three years. Thirty per cent of Aboriginal kids in Katherine, 16 per cent in rural Darwin and 53 per cent in the Pilbara have trachoma. A lot of them will go on to have irreversible blindness. The government has a proposal to fix this from the Centre for Eye Research, which has great expertise in this area, but it continues to ignore it. Even Niger, the poorest country in Africa, is controlling its trachoma with an active intervention program—but not us.

We say a large chunk of the new $10 billion health fund should have been earmarked for Aboriginal primary health care, and we support ANTaR’s call for capacity building in Aboriginal health programs.

The $780 million for dental health is a good investment, but it falls short of an overall long-term plan, and the government will need to insist on better accountability from the states for success in delivering timely treatment.

The government has kept and increased slightly the conditional adjustment payment for aged care, which will be welcomed by the industry, but it is only a stopgap measure. And there should be an obligation to the nurses in aged care, who currently earn $20,000 a year less than their colleagues in other sectors.

There is nothing extra in the budget for mental health, despite the yawning gaps in services, particularly in supported accommodation, early intervention and services for young people, as our inquiry is discovering. Some of the previous package is certainly improving services, but it is still only eight per cent of the health budget, a lot less than its 14 per cent of the disease burden.

The MBS item has taken out the bulk of the 2006 health funding, and yet there is inadequate monitoring or analysis of its success.

We warmly welcome the $85 million for perinatal depression. It is irresponsible to have had so little by way of services and support for women and their babies at this vulnerable time at this point.

It would have been good to have seen money for building expertise in the treatment of many conditions that largely go untreated, like eating disorders.

The government persists in the idea that carers can be fobbed off with a bonus handout and a few more qualifying for the carer payment, but this is grossly unfair to individuals making great personal sacrifices in caring. Their contribution needs to be recognised, both to acknowledge their responsibilities and to reward them financially for the job they do and the $30 billion or so that they save governments every year.

Climate change action is now super urgent, but this is certainly not reflected in the budget. Most of the $2.3 billion for climate change will not be spent for four to six years. The budget is also littered with yet more solar pilot programs and small grants projects instead of measures that will deliver the fundamental shift needed to prepare us for the deep cuts we know are going to be necessary to avert the most dangerous climate change.

A mere $55.5 million of the $500 million renewable energy fund will be spent before 2010, and even clean coal, so-called, will only see $158.4 million spent in that time. Whatever you think about the prospects of carbon capture and storage from coal-fired power stations and the public funds being spent on finding the technology that can do it cheaply, this does not suggest that the government or the industry is in any sort of hurry.

There are literally gigawatts of renewable energy projects—solar, thermal, wind—ready to build and to invest in, but those commitments will not be made unless the new increase in the MRET is started this year instead of 2010. The previous target was met four years early, and waiting unnecessarily another two years loses momentum as well as capacity building in the manufacturing industry here.

We need a thorough overhaul of the tax system and the energy and transport subsidies that currently encourage emissions at a time when we must start abating. The green car fund, worth $500 million, is deferred until 2011. We urge the government to use this fund not just for incentives for hybrid petrol-electric vehicles but also for the so far small-scale local importers and converters of vehicles that are fully electric plug-in cars, scooters and motorbikes.

Transport congestion in cities imposes huge costs on business and citizens alike, but despite this the building infrastructure fund will spend only $75 million on transport infrastructure this year. The tens of billions will not start flowing until the end of next year, and only a fraction of it will be spent on rail. We should be modernising track and road-rail interchanges to deliver a substantial shift in intercapital freight from road to rail and investing in public transport, particularly expanding rail services and transport nodes.

On the Murray-Darling, where major investment in water-saving infrastructure is urgently needed, $400 million was announced, but half the spending is next year. Money is being poured into new water sources like desalination, despite the high cost and high energy use of these plants. Spending on water licences, buybacks and conservation of water is minimal and there is nothing to suggest the Murray will get its promised 1,500 gigalitres of water back.

There is a tiny subsidy for rainwater tanks and greywater treatment units for a small percentage of the population—nothing like the national fund needed to drive investment in effluent treatment and reuse, stormwater harvesting, efficient irrigation or household incentives to collect, reuse and save water.

The Democrats give credit to the government for its progress on tax reform and in taking major steps towards a less wasteful and more equitable tax system, but it is apparent to us from this budget that the government has deferred many of the hard decisions. Tax cuts will cost $47 billion over four years. The low-income tax offset goes from $750 to $1,200 from 1 July, but tax will still be paid by people earning just $20,000 a year in 2011. We say the tax-free threshold should now be raised to $20,000 and the rates indexed.

It is disappointing that there has not been any progress on reforming capital gains tax or negative gearing.

First home buyers will get a 17 per cent contribution for the first $5,000 deposited in a first home saver account each year. It remains to be seen whether this will just add to the price of new houses. There is also a $623 million fund for landlords to lower rents for those on low incomes. We hope this works better than the rent assistance that is available in keeping rents affordable.

It is troubling to see $512 million for freeing up land for housing. This usually means greenfield sites on the outskirts of our already sprawling cities where there are no services and people are locked into driving for hours to get to work and school. We would like to see a renewed interest in building regional populations and increasing the density of our cities around good transport and services rather than endlessly spreading our cities.

There is no excuse for the government to delay lifting its overseas aid budget to 0.5 per cent of GDP in 2008-09, rather than waiting for five years, and it must reach 0.7 per cent soon after that. The projected sea level rises will displace hundreds of millions of the poorest people on earth. Our overseas aid budget will have to be higher in the future unless we act now on climate change.

We also need to see far more spending on reproductive health. Our nearest neighbours, Timor and Papua New Guinea, both desperately need this assistance. In Timor, 660 women die for every 100,000 births, compared with just eight in Australia. In PNG, that number is 300. Five Australian babies die per 1,000 born, but in Timor the number is 82 and in PNG it is 65. Only nine per cent of couples in Timor have access to contraception, and it is little wonder that they have on average almost eight children per woman—much higher than in the poorest African countries. The Millennium Development Goals cannot be delivered unless Australia increases its aid to these countries for health and education.

The government’s caring for country program ought to be for maintaining biodiversity. Aside from funds to conserve the Tasmanian devil, however, and to tackle the cane toad menace, the budget gives little for the systematic and comprehensive protection of threatened species and habitats. Australia has 1,800 threatened species that face impending extinction. While welcoming the $180 million for the national reserve system and the $200 million for the Great Barrier Reef Rescue Plan, we cannot see any initiatives on biodiversity conservation in the budget.

We welcome the $2.8 million over two years for public consultation on the need for a human rights charter, but we query whether this is a realistic sum, given the government has pledged to consult far and wide with communities across Australia who are at most risk of having their rights breached. There is unfortunately no significant funding to increase legal aid, despite the fact that the National Legal Aid council says there is an urgent need for an injection of $156 million for a properly funded system.

There are a host of other items missing from this budget, including assistance for people with disabilities, especially those who are young and in nursing homes. There is nothing for the underfunded ABC or SBS. There is nothing to help sole parents caught in the Welfare to Work trap. There is very little for many single age pensioners, mainly female, who will have little or no extra income. There is nothing to increase the superannuation savings of women compared with those of men. Overall, we say the first Rudd budget is too tentative to deal with the serious issues that are facing our country.