Wednesday, 3 April 2019
Statement and Documents
Fairness is not a proposition that comes readily to the mind of ministers in this government, as this budget once again reminds us. The Treasurer's overnight backflip on the energy assistance payment is yet more evidence of this government's insensitivity to the need to enhance fairness and reverse inequality. That insensitivity comes at a time when many Australians on low and middle incomes are confronted with sluggish wages as they struggle with their food and power bills. I did, of course, vote for the energy assistance payment today. But I was appalled that, when the payment was unveiled in the lead-up to the budget yesterday, people on Newstart were explicitly excluded and—if that's not bad enough—that the value of Newstart and associated payments has not increased in real terms in a quarter of a century. Some of the poorest people in the community were to be denied help to keep themselves warm and cook their food. Overnight, the government thought better of its stinginess, not because it genuinely cares about the most unfortunate in our society but because there is an election around the corner.
Something is better than nothing, but a one-off payment of $75 is little more than a slap in the face to the less well-off in our community, who have been struggling with rises of much, much more in their energy bills in recent years. It is also a tacit acknowledgement that the price of energy is too high for comfort for most consumers. Despite that, this budget contains no measures to seriously address the issue.
Australians are paying a high price, literally, for the failure of this government to get its act together on energy and climate change. It shows how little the government cares for the future health of the environment or for the wellbeing and prosperity of the generation of Australians now voting for the first time. How else do you explain the fact that the government still won't rule out wasting taxpayers' money underwriting new coal-fired power generation? This is despite the fact that renewables are the cheapest form of new power generation in Australia. With our old, inefficient, increasingly unreliable and expensive coal-powered fleet set to retire in coming years, the government should be doing more to encourage new clean energy generation. On that score, the government should be using competitive market-based approaches and not picking winners, as it has shown a tendency to do.
My home state of South Australia has an incredible contribution to make in this field. But what we have in the wake of the budget is a one-off payment of $75, rather than long-term policies to encourage the development of cleaner and cheaper power into the future. Young voters in particular are understandably fed up with this appalling lack of leadership on climate and energy policy from this government—so don't be surprised if, when they come to vote in a few weeks time, younger voters take it out on the final remnants of the boomer generation who are still in charge of policy in Canberra.
But the story of the energy assistance payment is not the only indication that fairness has been far from top of mind for the government in the budget or elsewhere. In fact, last night's budget is a tacit admission from the government that last year's personal tax cut package offered too much to the well-off and did not do enough to assist low- and middle-income wage earners. The decision to give priority to the less well-off in the community in last night's tax program vindicates my decision to oppose stages 2 and 3 of the original package last June. On that score, I'm pleased the Prime Minister and Treasurer are seeing their way to double the maximum relief provided by the low- and middle-income tax offset which was part of stage 1 of the original tax package. It was a course I argued for last year, and I am pleased that in some measure the government accepted my conclusions. However, I am disappointed that the revamping of stages 2 and 3 now will see even more benefit for people on higher incomes but little for the less well off. We can get a sense of the government's long-term priorities by looking at their numbers: $19 billion through the forward estimates is the cost of tax relief for low- and middle-income earners. But to get an idea of just how much the overall tax package favours the well off we need only go to the 10-year figure: fully $300 million.
The time is long overdue for Australians to be rewarded with a government and parliament that put fairness right at the top of the agenda. In developing policy, fairness ought to be the first thought, not an afterthought. The government's initial apathy on energy assistance was bad enough, but I am even more disappointed that neither the government nor Labor is prepared to commit to an increase in the criminally low level of Newstart, which has not increased in real terms for fully a quarter of a century under any government, both sides included. In a nation as prosperous as Australia, this is simply a disgrace.
At its current level of just $40 a day, Newstart and associated payments condemn many jobseekers to a life of poverty without the means to seek work in a realistic fashion, which is, after all, their primary purpose. From my earliest days in the Senate last year, I have used every opportunity and avenue to advocate for an increase in Newstart and associated payments to a more humane, realistic level—not generous but realistic. More than once I have supported the push from ACOSS and others for an increase of $75 a week—just over $10 a day. That would hardly buy a sandwich and a milkshake, to use the Amanda Vanstone index. It's not just ACOSS leading the charge; to her credit, Jennifer Westacott from the Business Council of Australia has been advocating an increase for some years now. As she has repeatedly pointed out, at just $40 a day Newstart has itself become a barrier to effective jobseeking. What a bizarre and perverse contradiction: a payment supposed to get people back into work is actually making it harder because the level is so low that jobseekers cannot afford clothes to make themselves presentable or bus tickets to get to job interviews.
Then there's John Howard, who says that the Newstart freeze has gone on too long. I am not forgetting his former chief of staff, now Senator Arthur Sinodinos, who, in various capacities, has been at the centre of more fiscal reform and budget preparation than anyone else here. On Monday he told Q&A on the ABC that over time it should be higher—cautious, for sure, but we get the message and so should his coalition colleagues.
Modelling by respected economist Chris Richardson of Deloitte Access Economics last year estimated that an increase of $75 a week would cost the budget $3.3 billion but produce a prosperity dividend mainly through increased spending of $4 billion and also provide a significant fairness dividend—targeted at low-income earners, of course, and especially in regional areas. It sounds like a pretty sensible transaction, especially when the budget papers indicate consumption is sluggish. So it's appalling that neither major party is prepared to commit to a Newstart increase that would stop many people living in poverty as they try to get a job. Maybe there aren't enough votes among the jobseekers. If that is the calculation of the major parties, they ought to stand condemned.
The government is very pleased with itself that, if current economic trends continue, all debt will be paid off by 2030. Perhaps the Prime Minister and the Treasurer might take a moment to thank those crossbenchers in the Senate who braved their scorn last June for opposing the full suite of the government's proposed company tax cuts. Not only did we save the budget $35 billion in revenue forgone but the money saved is also making a massive contribution to the task of reducing debt. Calculations by the Australia Institute today estimate that fully $90 billion of the projected reduction from the current net debt level of $374 billion over the next 10 years comes from the fact that the tax cuts to the big end of town were defeated in the Senate last year. It's another reminder of the value of the crossbench to the Senate. The government seem to be slow learners, because this budget now bakes in tax cuts worth $300 billion for a decade, regardless of economic circumstances and their lack of fairness. The symbolism is stark, as is the absence of any real action in the budget to make Australia a cleaner and healthier place for the generations who will follow us, who will have to clean up the mess we have made of the environment. The generations who follow us will pay a heavy price for the government's years of inaction, opposition and internal conflict over real action on climate change, just as they may for rash commitments to tax cuts to the well-off two and three elections into the future.