Senate debates

Wednesday, 4 May 2016

Budget

Statement and Documents

8:00 pm

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | Hansard source

This budget, Malcolm Turnbull and Scott Morrison's first, is a massive let-down for the people of Australia. Just as they have been let down by Malcolm Turnbull as Prime Minister, the people of Australia have been let down by this budget. It is a budget that does not properly address the fact that we have a revenue problem. It is a problem that was brought to us by John Howard and Peter Costello when they wasted the rivers of gold from the resources boom through round, after round, after round of tax cuts. It is a budget that hands out corporate tax cuts while locking in cuts to hospitals. It is a budget that hands over money to the highest income earners but cuts support to the most vulnerable families. It is a budget that spends billions harming people by locking them up on Nauru and Manus Island. It is a budget that continues to subsidise fossil fuels but rips funding away from clean energy. And it is the Treasurer who cannot even mouth the words 'global warming'—the biggest economic and environmental challenge of our generation. Australia needs and deserves better. It deserves some courage and vision.

The budget projections in the Treasurer's speech are heroic; some would say fanciful. While revising near-term growth figures down to 2.5 per cent, the government banks on them magically rebounding to three per cent in 2017-18. Consider the context: we have low commodity prices, we have a slowdown in housing construction, we have wages that are flat and we have low inflation. Worse still, the government banks on investment in the non-mining sector growing to 3.5 per cent in 2016-17 and a magical 4.5 per cent by 2017-18—all this on the same day that the Reserve Bank cut the interest rate in an effort to stimulate lending. I know whose projections I trust, whose advice I trust, and it is not this government's. The growth forecast is magical thinking. The fairies do not live at the bottom of the garden anymore; they live at the top end of town in Liberal Party headquarters.

Australians deserve an honest budget, a fairer budget, a better budget, and that is what the Greens would deliver. Malcolm Turnbull promised that he would lead a transition to a new economy. He likes talking about the new economy a lot, does Malcolm Turnbull. He says that this budget is a plan for jobs and for growth. Well, at the heart of a transition to a new economy is the need to move away from those polluting sources of power to clean, cheap renewable power. We need steelworkers and manufacturers to make the blades and turbines that will capture the energy from the wind. We need tradespeople to install those turbines and the solar panels that capture energy from the sun. We need scientists to continue to work and develop concentrated solar, thermal and wave technology. We need to be installing batteries to bring on the energy storage revolution. We need workers to manufacture the electric cars and the electric buses and trucks of the future. We need people to maintain this infrastructure to keep things humming along. And we need to ensure that workers, their families and communities are not left behind as coal goes into terminal decline. But this budget has no plan for that transition. It is completely silent.

The Greens have a plan. We have a detailed plan to renew Australia—a plan that would see 15,000 jobs across Australia in the design and construction of clean renewable energy projects right out to 2030. It is in line with global trends, which saw clean energy employ more than 7.7 million people across the world in 2014, according to the figures published by the International Renewable Energy Agency. The rest of the world knows that this future is coming and that this century belongs to those nations that embrace this challenge, that embrace the transition, but our Prime Minister and Treasurer are stuck in the last century. Scott Morrison's budget uses the language of transitioning but it leaves huge fossil fuel subsidies for dirty, polluting industries intact and it shovels more money into the exploration for more mining, more drilling and more fracking right across northern and southern Australia.

Following the signing of the Paris agreement, as we experience the shattering of records for global temperatures and witness the bleaching of our reefs and the burning of those ancient forests, a better budget would transition away from those old polluting industries to bright, new, clean renewable energy. And we have choices. We do not have to rely on an arbitrary two per cent of GDP defence spending target or $30 billion on armaments to support jobs in manufacturing. We can be building turbines rather than tanks. We can be building solar cities rather than strike fighters.

Given this government's track record, it is hardly surprising that they are not up to the task, but I have to say that Labor's position is disappointing. They express concern for global warming but their clean energy and emissions reduction targets take us to the brink of two degrees and possibly beyond, triggering catastrophic global warming. We had both the government and the Labor Party on a unity ticket slashing the renewable energy target and we have them on a unity ticket when it comes to expanding our coal export industry. I call on Bill Shorten, tomorrow night in his budget reply speech, to categorically rule out any support for Malcolm Turnbull's slashing of $1.3 billion from the Australian Renewable Energy Agency—funding that has helped create renewable energy technologies that are so vital for job creation, and investment that Australia so desperately needs. I commit the Greens to fighting tooth and nail so that we have a better budget that ensures that we have renewable energy to create a better, jobs-rich future.

The Australian Greens will stand up for a fairer Australia. This budget should have been about reducing income inequality and securing the government's revenue base to fund schools, hospitals and other vital infrastructure. But instead, what did we get? We got growing inequality by providing huge corporate tax cuts and income tax cuts for people on high wages. We have our schools and hospitals desperately in need of investment. We have economic challenges ahead. Now is not the time for unaffordable and unfair tax cuts that are effectively election bribes. The government is ripping $4 billion out of schools and hospitals for a $6-a-week tax cut for people on above the average wages—offering them the old sandwich-and-a-milkshake tax cut without the milkshake. The budget flagged $3.3 billion for schools and hospitals, but that does not come close to bridging that huge hole, that $80 billion that was ripped out of health and education.

I ask the Prime Minister and the Treasurer: how can you look Australians in the eye and rip $6 billion out of universities, out of social support, out of Medicare and out of public sector jobs when you are giving more than $12 billion in tax cuts and tax breaks to businesses, to high-income earners and to the super wealthy?

The Greens welcome the government's very small steps towards cracking down on multinational tax avoidance, including the Google tax, the beneficial owners register and the whistleblower protections. They have taken some of the ideas that the Greens released only two weeks ago in our comprehensive 18-point tax plan. That is a good thing.

I have to tell you that I am really proud to be leading this team; a team of people who are, in fact, at the forefront of the economic debate in this country. Whether it be on tax avoidance, whether it be on reform to superannuation or whether it be negative gearing, the Greens have been leading the economic debate in this country.

We welcome the one-off injection to the Australian Taxation Office for their crack team of specialists, but let us also look closely at the budget papers and realise that what we see is a continued reduction of the resources to the ATO. We know that the ATO has suffered from huge cuts over time, allowing those companies and individuals to avoid paying their fair share of tax. We think more needs to be done. There need to be more efforts in diplomacy to force tax havens to share information, greater penalties for companies that use secrecy jurisdictions and real, genuine support for whistleblowers.

The change to superannuation is welcome, but it is also a missed opportunity for much bolder and much fairer reform in the super system. Malcolm Turnbull and Scott Morrison had the support and goodwill of business groups, civil society, the unions and indeed the whole parliament to clamp down on those unfair tax breaks in the super system and to raise the money we desperately need to fund schools and hospitals. They were not up for it.

Just think about this: someone on $250,000 continues to pay the same 15 per cent tax rate on their contributions as someone on $60,000. That is not fair, yet we have the two old parties in this place who continue to support it. Genuine reform of our super system would have brought in four times as much revenue, made the system fairer and ensured that super worked in the way that it was intended.

Schools, vocational education, higher education and research sectors should be the engine room for ideas, for innovation and for growth in the new economy that the Prime Minister just loves to spruik. But this budget starves all of these sectors, all for that tax cut worth a sandwich a week. High income earners, like those of us who are politicians in this place, get two tax cuts out of this budget—two of them! We get the removal of the deficit levy and we get the change in the marginal rate from $80,000 to $87,000. I can tell you, we do not need it. Our colleagues: we do not want it. We think that those people, the average Australians—three-quarters of them on less than that $80,000 figure—deserve something under this plan, and yet they get nothing. They get absolutely nothing. This government is the very epitome of an unfair budget.

Consider those people who receive income support. They will get less money because of the removal of the Clean Energy Supplement. How is it that it is morally right to be reducing the income of people already on very low incomes and raising the incomes of people like us—those of us on higher incomes—with a double tax cut? That is not right; it is not fair.

The Treasurer talked a lot in his budget about growth. The IMF actually tell us that if we are concerned about growth, then the most effective strategy is to reduce inequality and raise incomes at the bottom end of the income scale, yet this government has none of it. It is a budget that pays no heed to the advice of the IMF, or to other leading economists, to reduce that income inequality, because we have a Prime Minister and a Treasurer who just do not care.

As a result of this budget, large corporations will benefit from a lower company tax rate. It is a tax cut that is purported to target small business, but let us look a little closer. Over the next four years the government is proposing to increase the turnover threshold to $100 million. That is a weekly turnover of close to $2 million. Within eight years the threshold will increase to a billion dollars—a weekly turnover of $19 million a week. Tell me how many small businesses turnover $1.9 million every week, let alone $19 million every week? That is not a small business. The government's company tax cuts are simply Liberal corporate welfare for big business disguised as support for small business. What do they do? Of course, they disadvantage small businesses because they lose the tax advantage that they have compared to medium and large companies.

The Greens will not support these tax cuts at a time when so many Australians are doing it tough and we do not have the revenue to fund schools and hospitals.

We call on the Labor Party to change their position and reject this government's tax cuts.

Also, one of the centrepieces of the Treasurer's economic plan is a new initiative for youth employment. We welcome the government finally recognising that Work for the Dole has been an expensive experiment, one that has failed to provide meaningful employment for young people. It is overdue, but it is a welcome development.

But we have very, very serious concerns about the internships proposed by the government in an attempt to reduce youth unemployment. It is open to young people being exploited and it will deliver very dubious long-term employment outcomes.

Our proposition is very simple: surely if a job exists, a young person deserves to be paid a decent wage for it. It also raises some serious questions about people already in employment losing their jobs to make way for a young person who comes with a subsidy for an employer. This has the potential for some very serious unintended consequences.

This budget is yet another attack on the higher education sector, cutting 20 per cent of funding from the university sector in the 2017 forward estimates and beyond. The government keeps saying that deregulation is off the table, that deregulation is gone, that it is dead. We think it is simply hibernating until after the next election.

The budget confirms that the government has abandoned the Gonski needs-based funding formula as well. We know that it has only restored $1.2 billion of the $30 billion that Tony Abbott ripped out of schools over the next decade.

Sadly, students with disabilities have been treated under this budget with complete contempt. The paltry additional funding of $118 million is a shortfall of $2.3 billion over what we know is required for the next two years. It is a massive underfunding in the future potential of this nation and it lets down students and their families.

The Greens have a fully costed plan to assist young students who have disabilities. It is a plan that is costed by the Parliamentary Budget Office at $4.8 billion and, again, we call on the Labor Party to support it where the government has failed.

The government's stubborn refusal to act on evidence that negative gearing is forcing people out of the housing market shows just how out of touch they are. Negative gearing has created a housing market dominated by speculative investors, a housing market where first-time buyers are increasingly shut out. We are one of the few countries that make it easier for someone to buy their second, third, fourth and fifth property than to buy their first.

The current capital gains tax discount encourages negative gearing and speculation in the property market. It drives up housing prices, it locks out first home buyers as well as creating a rental market that is stacked in the favour of investors rather than tenants.

The Greens have long argued for the removal of negative gearing and capital gains tax to end that subsidy for property investors and help ease the way for renters and new buyers.

This budget also ignores the needs of social housing supply and, indeed, homelessness. We have annual funding for homelessness services worth $115 million ending next year, creating massive uncertainty for vulnerable people.

We have a budget that locks in Tony Abbott's harsh cuts of $600 million to the affordable rental and housing programs, and we have an extension of Tony Abbott's asset divestment program, selling off hundreds of government-owned buildings and land that could have been used for affordable housing. We believe that much more needs to be done in this space.

In addition to the Greens policies on negative gearing and capital gains tax, we agree with the majority of economists that stamp duty should be abolished and replaced by a much fairer and more efficient land tax. Land tax is economically efficient, it is progressive, it cannot be avoided by fancy accountants and, importantly, it is a potential mechanism to generate greater public investment in infrastructure. That is what real reform looks like. It just takes a bit of courage and a bit of vision.

On the question of infrastructure, let me turn to the Governor of the Reserve Bank, who recently said, 'We are reaching the limits of monetary policy.' The budget papers do show that investment in the mining sector and the non-mining sector went backwards last year, and they project a big slowdown in housing construction.

Against that backdrop, the Greens have a plan for the government to borrow and invest in productivity-enhancing infrastructure. It is a common-sense position. It is a position that is held by most economists and, indeed, by the International Monetary Fund.

The Prime Minister himself has said that infrastructure is absolutely critical to Australia's future. A lot like the Prime Minister's words, if only this budget was true to his word. The budget includes only $1.2 billion in new money for infrastructure.

The Greens would get the Australian Infrastructure Bank established to get money flowing where we need it—into clean energy projects, into public transport projects and into the import local government projects.

The Greens welcome the funding to progress the east coast inland freight rail link, but this is one bright spot on an otherwise very, very gloomy landscape. The government has stuck with its misguided toll road agenda, continuing to support traffic-inducing projects—projects like WestConnex in Sydney for goodness sake, what a lemon; and the Perth freight link in Western Australia, another dud.

They have included a nod to the East West Link in Melbourne, despite the fact that Victorian voters have said, 'We don't want it.' Building these mega roads to fix congestion is fixing obesity by loosening our bowels.

The budget extends the freeze on Medicare. This is a freeze that has been going so long it is now more of an ice age. We have a GP co-payment being introduced by stealth, by freezing the indexation on Medicare. What is does is that it forces GPs to charge higher out-of-pocket costs to stay afloat, passing those costs on to patients, making it harder for them to see the doctor.

We have got the government's dental plan, which rips over a billion dollars out of the system. It abolishes Medicare funded dental care, which should be built up rather than torn down.

This is a budget that locks in the $50 billion of cuts to health. We have seen $180 million cut from front-line health services through reductions in the flexible funds program, which provides money for drug and alcohol treatment and illness prevention—those cuts building on a billion already gone. There is now tripartisan support for an increase in the tobacco tax. That is a good thing. But let's now turn our attention to other areas, like alcohol taxation for the same reason.

The Treasurer used the word 'Indigenous' just once in his budget speech. When you consider that Aboriginal life expectancy and incarceration rates remain a source of national shame and for all the fine rhetoric on closing the gap, there is still no funding for the National Aboriginal and Torres Strait Islander Health Implementation Plan. We have to do better. The budget also leaves women and children in danger, because it fails to reverse the harsh cuts to front-line domestic violence services and leaves other crucial Aboriginal and Torres Strait Islander services underfunded and facing an uncertain future. Crucial specialist homelessness services for women fleeing domestic violence have again been left in limbo.

Despite the community—and, indeed, the Senate—rejecting cuts to family tax benefit B, it remains on the government's agenda. The budget also reveals plans to drop more people off the disability support pension to help pay for the National Disability Insurance Scheme. Why is that we feel the need to hurt one vulnerable group in order to help another one?

After the gutting of Australia's foreign aid budget by over $11 billion since 2013, the government has savaged it by a further $224 million, plunging our aid investment to a shameful 0.22 per cent of GNI. This is the lowest level of Australian aid since records began over 50 years ago. It is an indictment of the coalition. One of those submarines—just one of them—at the cost of $4.17 billion, is more than our foreign aid will be in 2016-17. The government talks a lot about national security. The best investment in our national security is poverty alleviation in the region and around the world.

Billions of dollars continue to be spent on keeping people in offshore detention centres, despite the fact the Nauru and Manus Island camps are in crisis. Next year the government is planning to spend approximately $400,000 to detain each man, woman and child in Nauru. There is no increase next year to Australia's humanitarian intake, despite the biggest global flow of refugees since World War II. A better budget, a more decent budget, would close Manus and Nauru and invest in safer pathways for asylum seekers.

Last week the Greens Treasury spokesperson, Adam Bandt, and our finance spokesperson, Senator Peter Whish-Wilson, released the party's Budget Principles for the 2016 Budget and Federal Election. They are very simple and very straightforward. We will raise the revenue we need so that everyone can get world-class public health care, education and other services. We will increase GDP, by growing the new, clean economy. We will get money moving from unproductive areas—like those unfair tax breaks and the huge fossil fuel subsidies—and we will get that money working in the new economy. We will grow the new economy and restore revenue before returning to surplus. We will bring forward budgets that promote sustainability and wellbeing that reduce inequality.

The Greens' statement of economic principles represents a coherent, progressive and responsible approach to economic management. We are the ideas boom in Australian politics. We are the disruptors. We are the innovators. We have led the way for the other parties to follow, where we chip away at those sacred cows of public policy long before it is popular. We have already announced fully costed policies by the Parliamentary Budget Office: let's make the deficit levy permanent—worth $1.5 billion; the removal of fossil fuel subsidies—$21 billion; the Buffet Rule for a high-income tax guarantee so that people pay their fair share—$7 billion; the removal of negative gearing and the capital gains tax—another $7 billion; the most comprehensive tax avoidance plan this country has seen to raise a minimum of $5 billion; and an infrastructure bank to release up to $75 billion into nation-building projects over 10 years. Those policies are fully costed by the Parliamentary Budget Office.

If we had a government with courage and vision, we would be able to enact this plan. If we had a government with courage and vision, we would see some leadership and work to establish a financial transactions tax, sometimes called a Tobin tax or a Robin Hood tax, at an international level. Putting a tiny levy on financial transactions would discourage those high-frequency transactions that add no benefit to the economy—pure speculation for no-one's benefit—and help stabilise our financial system by pricing the risk that financial transactions pose to the broader economy. It would bring in billions.

I call on the government to reconsider its budget priorities and bring forward programs that fast-track vital renewable energy investment. Let's bring the clean energy generation online. Let's phase out coal-fired power. And let's also recognise that battery storage is where the future lies. Tomorrow the Greens will announce a plan to drive the uptake of batteries for households and businesses at a cost of approximately $2.8 billion. How will we pay for it? It will be completely offset by removing accelerated asset depreciation for aircraft in the oil and gas industry. Now is the time to jump-start the battery industry, to encourage the uptake of storage technologies and to help make Australia a leader.

I will finish by saying that the Turnbull budget fails the challenge to transition our economy to the jobs-rich, clean energy economy. It starves our schools and hospitals of funding. It chokes our cities with traffic. It prices young people out of the housing market. It wastes money on the brutal and harmful policy of offshore detention.

I call on the Labor Party: please join us in ruling out a tax cut arms race and oppose cutting corporate and income taxes in the upcoming budget and election. This is a budget that lets Australia down. It is not a credible or fair plan for our future. The Greens will stand up for a better budget, one that takes us into a fairer, more decent, clean energy and jobs-rich future.

Comments

Mark Duffett
Posted on 5 May 2016 12:14 pm (Report this comment)

Apparently Di Natale does not realise that wind turbines, solar panels and battery storage will all require much more mining: http://www.nature.com/ngeo/journal/v6/n11/full/ngeo1993.html

"If the contribution from wind turbines and solar energy to global energy production is to rise from the current 400 TWh to 12,000 TWh in 2035 and 25,000 TWh in 2050...about 3,200 million tonnes of steel, 310 million tonnes of aluminium and 40 million tonnes of copper will be required...This corresponds to a 5 to 18% annual increase in the global production of these metals for the next 40 years...This rise in production will be added to the accelerating global demand for ferrous, base and minor metals, from both developing and developed countries, which inflates currently by about 5% per year"

That last growth estimate has probably come back a bit since that forecast was made (2013), but not that much.

The Tobin tax is a good idea, though.

Log in or join to post a public comment.