Steve Hutchins (NSW, Australian Labor Party) Share this | Hansard source

When Howard came into office in 1996 national household debt was $289 billion. When he left office in April last year it was five times that. When Howard was elected to office in 1996 the average home repayment was $955, which was 28 per cent of the average wage. In September 2007 that figure was $1,949 or 36 per cent of the average wage. You ignored 20 Reserve Bank warnings about the way you conducted the economy. Between 1999 and 2004 the cost of living outstripped inflation by eight per cent. Between 2002 and November 2007 there were 10 consecutive interest rate rises. Under the Howard government, childcare payments doubled. One hundred thousand people were prevented from joining the workforce because they could not afford child care under your stewardship. Health care was affordable when you wanted to visit a doctor under the Keating government. It doubled when you were in power. The cost of a loaf of bread rose by 26 per cent over five years under your watch. Petrol prices have risen more than 53 per cent since 2001.

As Senator Hurley mentioned earlier, we are all aware that there is a global downturn. No-one is going to say that there are not responsibilities. I was reading Lloyd’s List Daily Commercial News during question time and I read that there is a five per cent reduction in container freight into the United States so far this year. Considering the millions of containers that go into the United States, that is a significant downturn. We need to be well aware of that impact not just on the Americans but also in our own part of the world. We are also aware of the oil prices. Senator Bushby and I had the opportunity to visit our sailors and our airmen in the Middle East and we saw two of the oil platforms there that supply 14 per cent of the world’s oil production. We do not produce the oil we need and have to bring it in from elsewhere, which is a fact of life.

Today we face many difficulties. The government understands that many Australians are doing it tough as interest rates, high global oil prices, food prices and the effect of the credit crunch impact on family budgets. That is why the government has been responsibly addressing domestic inflation pressures, which have been made worse by global factors. That is why we delivered a strong surplus to give the Reserve Bank room to move. That is why we made room in the budget for a $55 billion Working Family Support Package. The government’s tax reforms outlined in the budget will provide $46.7 billion of personal income tax cuts over the next four years and they will provide significant additional relief to household budgets. For a taxpayer earning $50,000 a year the tax cuts will deliver an additional $19.23 per week from 1 July. This will increase to $25 a week from 1 July next year and to $33.65 a week from July 2010. When fully implemented, they amount to an almost 20 per cent reduction in their tax bill.

In addition to these tax cuts the government’s decision to increase the Medicare levy surcharge will provide significant additional assistance to those who cannot afford private health insurance. For a single taxpayer earning just over $50,000 a year the Medicare levy surcharge will result in a further saving of around $500 on their tax bill. Those with children also stand to benefit from the $4.4 billion education tax refund and the $1.3 billion 50 per cent childcare tax rebate.

I might add that these policies were not put forward by the coalition. Not even Senator Coonan could accuse us of doing that. A family on $58,000 with two children aged between four and six is worth an extra $1,630 a year or $31.34 a week on top of the tax cuts that they would also be entitled to. Extra help is on the way. The government is confident that these changes will make a real difference to working Australians who are struggling with higher petrol and grocery prices. The Rudd Labor government budget will be based on sound principles of fiscal discipline, just as Father Mariana would have it.

In opposition, the Prime Minister made a solid commitment to the Australian people. He said that he was an economic conservative who could be trusted with the Australian economy. The Prime Minister delivered on this promise. But, as we all know, the budget will not be delivered in an environment without challenges. In fact, the legacy of the time on the Treasury benches of those opposite is an inflation problem at its worst since the early 1990s. Government spending was out of control, with a cost of living legacy that is hitting working families hard right now. There was massive underinvestment in education, health and infrastructure and a complete rejection of the realities of climate change. None of this is good enough for a modern, efficient Australian economy. None of this can be ignored in our modern world.

Fighting inflation is the central challenge facing our economy today. The government’s five-point plan to tackle inflation is focused on fiscal restraint and improving the quality of government spending, expanding the economy’s productive capacity by addressing skills shortages and infrastructure bottlenecks, lifting national savings and lifting workforce participation.