Thursday, 15 September 2016
Budget Savings (Omnibus) Bill 2016; Second Reading
I rise tonight to speak on the Budget Savings (Omnibus) Bill 2016. Those opposite have a habit, in this place, of lecturing Labor on fiscal responsibility, yet every time I hear a lecture from those opposite I wonder where they have been for the past three years. Have they been paying attention to the national accounts or are they suffering from some bizarre form of collective amnesia? They have been in control of the finances for the last three years, not us on this side. Since their 2014 budget, the deficit has tripled, debt has blown out by more than $100 billion, and those opposite have put the AAA credit rating at risk. For the last three years Mr Hockey and Mr Morrison have been running the nation's finances. They are responsible for the deficit being $2.6 billion bigger at this year's Pre-election Economic and Fiscal Outlook than it was at the Mid-Year Economic and Fiscal Outlook in December, with net debt blowing out by $7 billion in the same period. And still, after three years in government, the Treasurer and those on the other side continue to try and blame Labor for the coalition legacy of debt and deficit blowouts and run of reform failures. The hypocrisy of this government is extraordinary.
But there is a budget repair job to do and it should be done fairly, without attacking those in our society that are most vulnerable. This bill, as originally proposed, contained 24 measures with combined savings of $5,997 million, announced in previous budget statements. We propose to support 20 of the measures with no amendments. However, a number of measures originally proposed have a particular impact on vulnerable people or are not consistent with our broader election commitments. This government has an overwhelming track record of trying to hurt those that are most vulnerable in our society. Time and time again, in this place, Labor senators and members of the crossbench, have stopped harsh and unfair cuts put forward by this government. Labor is committed to budget repair that is fair. This means taking responsible savings decisions that improve the sustainability of our public finances, reduce the risk of a credit rating downgrade, protect the most vulnerable Australians and ensure we can make targeted investments that achieve inclusive growth.
Budget repair should be achieved in a way which protects the most disadvantaged and people on low incomes, while ensuring important investments—such as those in clean energy—are protected and can promote sustainable economic growth. The amendments, secured by Labor, will bring the total savings to $6.3 billion, around $300 million more than the government put forward in its original legislation. Since the election and the introduction of the government's legislation, Labor has taken the time to carefully scrutinise and consult on the measures contained in the bill, and the agreement today reflects what we believe to be a better, fairer and more fiscally responsible package.
It is not enough to just sit in this place and to oppose everything. The future of the Australian economy and the Australian people is too important to reject sensible compromise when it can be achieved. So, once again, Labor has protected pensioners, single parents, carers and people with disability, and people who have lost their job because of the Liberals' harsh cuts. We have opposed, or amended, three measures: Australian Renewable Energy Agency savings; the cessation of the energy supplement for new payment recipients; and psychiatric confinement. To offset the cost of this and ensure we deliver a similar quantum of savings, targeted changes are proposed to abolish family tax benefit part A supplement for families with income over $80,000.
One issue that I am particularly concerned about is that of child dental care. Labor is opposed to the government's axing of the Child Dental Benefits Schedule, standing up against Mr Turnbull's plan to force over five million children onto long public dental waiting lists. I am glad that the government has agreed to take that measure out of this bill, even though they will bring it to this place separately—and I will oppose it vehemently when it returns.
In government, Labor established the CDBS in response to alarming evidence about the oral health of Australian children. The CDBS provides eligible children with up to $1,000 in dental services every two years, with a strong focus on preventive care. Today, Labor has protected the Child Dental Benefits Schedule by removing it from the government's omnibus legislation. The government's own health department says the CDBS has been a success, with the only failure being the Abbott-Turnbull government's refusal to promote it.
Labor's National Partnership Agreement on Adult Public Dental Services has also helped states and territories provide public dental services to eligible adults. As the government admits, the NPA has funded treatment for an additional 400,000 patients. But now the government wants to scrap these proven programs and establish its own Child and Adult Public Dental Scheme, the CAPDS. If implemented, the CAPDS would force over five million children onto long public dental waiting lists. This will prevent families from seeing the dentist of their choice and lengthen waiting times for children and the adults who are already entitled to public dental services. As the National Oral Health Alliance has noted, CAPDS funding would allow eligible patients to be seen just once every 17 years! People in rural and remote areas would be even worse off, given a shortage of public dental clinics. This is simply not good enough. The government's CAPDS would also allow states and territories to charge co-payments for public dental care. And this is just another attempt to shift costs onto patients by the government that gave us the GP tax, and now the Medicare rebate freeze—a GP tax by stealth.
The government's plan to axe the CDBS and NPA will save $52 million over four years. Labor is prepared to work with the government to deliver the same quantum of savings while protecting patients.
The government has also stated that the Minister for Health and shadow minister for health will enter into formal discussions, with the objective of delivering at least the same quantum of savings in dental care. But Labor will not stand by while the government axes the effective CDBS and NPA and forces children, as I said, onto long dental waiting lists.
Another issue that has been of concern to me in this omnibus bill is the $1.3 billion the government wished to cut from Australians in need by abolishing the energy supplement. This legislation was the first opportunity that Labor had to scrutinise this measure in detail. Labor made it clear during the election campaign that we had not been given the opportunity to properly scrutinise the energy supplement measure or seek advice on its effects. After closer scrutiny of the government's legislation, it became clear that the abolition of the energy supplement would have seen the most vulnerable in our society suffer disproportionately as a result of the bill. This is why we have secured important amendments which protect low-income households.
As a result, Labor will support just $200 million of this savings measure so that all existing categories of recipients, including those on Newstart and pensioners, will continue to receive the energy supplement, except for family tax benefit and Commonwealth Seniors Health Card recipients.
If the government's full abolition of the energy supplement passed the parliament, Australians already living on very low incomes would be hundreds of dollars a year worse off. A single mum on Newstart would have been $4.40 or $220 a year worse off. A pensioner couple would have been around $8 a week or $550 a year worse off. A person with a disability would have been around $8 a week or $350 a year worse off, and so too would carers. This may not seem like much to Mr Turnbull. But, to people on low incomes, every dollar counts.
It was Labor that created ARENA and the Clean Energy Finance Corporation, and under Labor renewable energy boomed; jobs in the industry tripled and growth in the numbers of households with rooftop solar went from 7,400 to 1.2 million. Australia under Labor was rated one of the four most attractive destinations for renewable energy investment, along with the US, China and Germany. This ranking has plummeted under the Liberal government.
Labor has consistently resisted attempts by the Abbott and Turnbull governments to undermine the renewable energy industry, and we are doing so again with important amendments that will save ARENA. After closer scrutiny of the government's cuts to ARENA, and consultation with industry, it became clear that the government's proposal to gut ARENA and establish a new Clean Energy Innovation Fund would have seen investments in earlier stage research and development and demonstration projects suffer, as the Clean Energy Innovation Fund would only be able to finance commercially ready projects.
The government's measure would have effectively led to the abolition of ARENA, one of Australia's flagship bodies that invest in early stage renewable projects. Through Labor's strong advocacy, Labor has struck an agreement with the Turnbull government that provides ARENA with a secured budget of $800 million over five years that ARENA itself has stated will allow it to continue its important work.
This budget is additional to funding that ARENA already has in place to complete around 200 existing projects and to fund the large scale solar projects announced on 8 September. As part of this negotiation, the Minister for the Environment and Energy will meet with the shadow minister to discuss the profile of remaining ARENA funds over the forward estimates, and to develop a forward work program which safeguards Australia's reputation as a world leader in research and innovation in renewable energy, building on the work of our universities and CSIRO, and which ensures that there is support for demonstration or proof-of-concept stage development where debt and equity finance is insufficient to support projects.
The government has also agreed to discussions with the opposition about opportunities for bipartisanship around policies that accelerate the transition to a modern, clean energy system that delivers reliable, affordable energy to Australian households and businesses, and which ensure that this transition is—to use the terms of the Paris Agreement—a 'just transition' for impacted workers and communities.
Labor took a comprehensive package of climate change policies to the election, including $300 million of funding for ARENA, a commitment to 50 per cent renewable energy by 2030 and $300 million for a strategic industries fund to ensure emissions-intensive industries and their workers are able to make the transition to a clean energy economy. Labor will continue to advocate for strong climate change policies from opposition, including non-monetary policies. That is why Labor has secured the government's agreement to commence discussions with us to accelerate the transition to a modern, clean energy renewable energy system.
Another measure that we are opposed to is the one concerning psychiatric confinement. This measure would take income support payments away from people in psychiatric confinement who are charged with a serious offence and who are undergoing a course of rehabilitation. The changes the government wanted to make would significantly disadvantage people with a serious mental illness or an intellectual disability who have been charged with a serious offence, and potentially jeopardise their rehabilitation. The purpose of psychiatric confinement is to rehabilitate, not punish, people who have been charged with a serious offence. In some cases, patients may use their income support payment to contribute to other costs of their care and accommodation, and this measure may impact on their access to services or shift costs to the states. This measure would also stigmatise and disadvantage people with mental illness or intellectual disabilities for a relatively minor amount of money. This is not good policy—there has been no consultation and it has not been thought through. I am very glad the government has finally agreed to drop this measure.
To ensure the level of savings in the omnibus bill is preserved, Labor has agreed to alternative savings. In order to protect the most vulnerable, such as Newstart recipients, Labor will support changes to the family tax benefit part A, meaning that the FTB A end-of-year supplement for families with adjusted taxable income above $80,000 will be removed from this financial year. This measure will save the budget $1.69 billion over the forward estimates.
Labor has prevented the government from making much harsher cuts to family payments. For example, a single parent with teenage children would be over $3,000 a year worse off as a result of the government's full package of cuts originally before the parliament, but they are not impacted by this measure. A family with two young children on an income of $50,000 would be more than $1,200 worse off, but they are also not impacted by this measure. The changes to the family tax benefit A end-of-year supplement that we have agreed to will only impact those with incomes over $80,000. The people Labor has protected are on incomes well below this. Labor does not see the case for any further cuts to FTB supplements and will continue to oppose the government's cuts to family payments, pensions and allowances that have recently been reintroduced into the parliament.
Following negotiations with the government, Labor has also secured further fiscal improvements. The government will no longer proceed with the reintroduction of the baby bonus. This means the government will remove and drop from the budget the proposed increase to the standard rate of FTB part B by $1,000 per year for families with the youngest child under one. This will deliver a $367 million improvement to the budget bottom line. This wasteful spending was part of the backroom deal done between Mr Turnbull and the Nationals to secure his prime ministership, and Labor is pleased to have secured its removal from the budget.
Since the election and the introduction of the government's legislation, Labor has taken time to carefully scrutinise and consult on the measures contained in the bill. The bill we are discussing today reflects what we believe to be a better, fairer and more fiscally responsible package, in keeping with the fiscal commitment we took to the election. While the bill today has made some savings, the government could fund education properly if they listened to Labor on further ways to repair the budget. Labor has put forward a fiscal repair package which delivers more than $8 billion in budget improvements over the forward estimates, and more than $80 billion in budget improvements over the medium term. Mr Shorten, at the National Press Club, put forward $80 billion worth of savings that Labor has proposed—we took constructive positions on superannuation and put forward tough decisions that we were prepared to argue the case for on capital gains tax and negative gearing.
Further savings Labor has proposed include: reforming negative gearing and capital gains, to save $37 billion; restoring integrity to vocational education and training, to save $7.9 billion; increasing the tobacco excise to stop kids smoking, adding $28 billion, which the government has agreed to; and $1 billion from cracking down on private health insurance subsidies for natural therapies. We could also save $160 million dollars or more by not having a divisive plebiscite on marriage equality that government members and senators will ignore the results of.
Finally, the best thing the government could do to improve the budget bottom line is to get rid of their ridiculous $50 billion tax cuts for big business—tax cuts that will be paid for by cuts to health, cuts to education and cuts to social services. Labor supports the cuts to small business tax, but the Australian people do not want—do not want at all—to give a $7.4 billion gift to the big four banks, and especially not when it is our schools, our hospitals and our universities that could be receiving these much-needed funds instead. Mr Turnbull has backflipped on so many of his policies and on so many of his core beliefs. This is one idea that he needs to admit he got wrong, and dump, if he truly cares about budget repair.
Labor is committed to budget repair, and this deal proves that savings can be achieved without hurting the most vulnerable and without sacrificing important investments in renewable energy. I just hope that the government will agree to the sensible measures that Labor has put forward in order to improve the budget bottom line further.