Don Farrell (SA, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2018-2019 and related bills. These bills provide appropriations from the Consolidated Revenue Fund for the annual services of the government for 2018-19 and for the remainder of 2017-18, and facilitate the implementation of a number of 2018-19 budget measures. A total of around $108 billion is sought for the 2018-19 financial year and around $7.9 billion for the remainder of the 2017-2018 financial year. These amounts are already incorporated into the budget bottom line, as presented in the 2018-19 budget. The Labor Party will support supply.

This budget is just like every other Liberal budget in that it fails the fairness test. The Liberal's budget looks after big business at the expense of people who work and who struggle. The budget gives an $80 billion tax handout to big business, including $17 billion for the big banks, at the same time as it hits schools and hospitals with savage cuts. The Liberal's budget is sneaky and unfair, and all the old nasties are in it—not only cuts to schools and hospitals but also plans to axe the energy supplement for pensioners and some of the most vulnerable people in our community, plus increasing the pension age to 70.

Any budget that gives an approximately $80 tax handout to business big, while cutting from schools, hospitals and pensioners, is an unfair budget. The only way to protect schools, hospitals and pensioners is to kick those opposite at the next election. The Liberals say they want to deliver tax relief for low- and middle-income Australians, but their income tax plan held those people hostage to tax cuts at the high end of the income scale. Those tax cuts, which won't come in until 2022 and 2024, will cost the budget $122 billion over the next 10 years. This is a huge hit on the budget—and many things can change between now and then.

The Grattan Institute—and, in particular, Mr John Daley—made a submission to the Senate inquiry, arguing that the tax cuts should not be legislated more than a year or two in the future and that supporting stages 2 and 3 leaves the budget less able to respond to shocks that may emerge over the coming years. In particular, the submission said:

Six or seven years is a very long time and, economically, the chances of a significant economic downturn over the next six or seven years are pretty large … we do not think it is prudent to be providing tax cuts of this magnitude that far in the future—certainly not to be legislating them—when there are so many economic uncertainties between now and then. And there is no need to legislate them.

We know that stage 3 of the government tax cuts will become the most expensive. They're the fastest-growing stage of the package and they are the most unfair. Thanks to Labor, we know from information provided for the Senate by the Parliamentary Budget Office that stage 3 of the government tax cuts is set to grow at a staggering 12 per cent per year. Stage 3, which is heavily skewed towards higher income earners, begins in 2014-15, about the same time as the government's company tax cuts flow to big businesses at an annual cost of at least $15 billion a year. Taken together, if implemented, the government stage 3 tax cuts and company tax cuts for big businesses will cost them a budget of at least $25 billion a year by the end of the medium term.

The government has not only failed the fairness test set by Labor and the community but it also failed the fiscal responsibility test for itself. The Liberal Party used to rail against debt and deficit and now there's barely a peep from them. On the back of the best global economic conditions in more than a decade, net debt for the coming year is double what it was when the Liberals came to office. Gross debt, which crashed through half a trillion dollars on their watch for the first time in history, will remain well above half a trillion dollars every year for the next decade. Both types of debt are growing faster under this government than under the previous Labor government, which had a global financial crisis to contend with. This year's deficit, for 2017-18, is 6½ times bigger than the Liberals' predicted in their first horror budget of 2014.

Labor's approach to the budget is fairer for middle Australia and the most vulnerable in the community and more responsible when it comes to budget repair. Our plan will deliver lower taxes for 10 million working Australians through a bigger, better and fairer tax cut. Our tax refund for working Australians will provide almost double the tax relief being offered by the government. Labor's plan will see those earning up to $125,000 a year paying less tax than they would under the Liberals. More than four million people will get a tax cut of $928 a year. We will deliver extra funding for public hospitals and 20 new MRI machines to regional centres in outer suburbs. We will abolish Turnbull's cap on university places and abolish up-front fees for 100,000 TAFE places in courses where we still need those skills. Labor can deliver on these commitments because, unlike Malcolm Turnbull, we won't give $80 billion in tax handouts to big business and the banks.

A Shorten Labor government will achieve a balanced budget in the same year as the government's budget. It will deliver bigger cumulative budget surpluses over the forward estimates, as well as substantially bigger surpluses over the 10-year medium term, and will put the majority of the savings raised from our revenue measures over the medium term towards budget repair and paying down debt. A Shorten Labor government will also be guided by clear fiscal principles. These include repairing the budget in a fair way that doesn't ask the most vulnerable to carry the heaviest burden; more than offsetting new spending with savings and revenue improvements; and we will bank changes in receipt and payments from changes in the economy—parameter variations—to the bottom line if this impact is positive. Because Labor has made tough and big calls on tax reforms—and I can list some of them: negative gearing, capital gains tax, trusts, dividend imputation refundability and multinational tax avoidance—to close loopholes to those who least need them, we will have a debt reduction plan that is superior to that of the Liberals. Our plan is fairer and more responsible, because we've made the big calls and we've got them right.