Wednesday, 22 March 2017
Social Services Legislation Amendment Bill 2017; Second Reading
I present the explanatory memoranda and I move:
That this bill be now read a second time.
The Social Services Legislation Amendment Bill 2017 seeks to secure the next instalment of remaining unlegislated savings from previous budgets.
This bill secures further savings of $2.4 billion over the 2017-18 forward estimates period building to a $6.8 billion dollar saving over the medium term.
This new bill contains three measures from the original omnibus bill, including:
1. Maintaining income free areas and means test threshold for certain payments and allowances at their current levels for three years;
2. Automating the income stream review process which will lead to improvements in the accuracy of income support payments and reductions in customer debts; and
3. Extending and simplifying ordinary waiting periods for the parenting payment and for youth allowance for a person who is not undertaking full-time study and is not a new apprentice.
The bill also includes a new schedule to maintain the current family tax benefit payment rates for two years at their current levels from 1 July 2017. This measure will achieve savings of about $2 billion over the 2017-18 forward estimates which will build to $5.5 billion over the medium term.
It is important to note that under this new measure there will be no cuts to family tax benefit payments. Indeed, over the two-year maintenance period many families will still see some increase in their payments as a result of increases to particular income thresholds for family tax benefits.
The government has also reversed a previous decision to increase FTB payment rates to offset in part the effect of the phase out of FTB supplements, which was contained in the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill. Not proceeding with that increase in FTB payment rates will reduce costs by a further $2.3 billion over the current forward estimates period compared to the previous social services omnibus savings bill and will reduce costs over the medium term by about $11 billion.
This bill further builds on the $6.3 billion in budget improvements achieved over the forward estimates through the first omnibus savings bill which passed the Senate on 15 September 2016—which included a saving of $1.6 billion over the forward estimates and $7.1 billion over the medium term from abolition of the family tax benefit supplements for households with income of more than $80,000.
It is the government's intention to secure the passage of both this bill and the child care bill through the Senate this week.
I would like to acknowledge the positive way in which the crossbench has worked with the government to deliver this significant reform package that will make a real and positive difference to nearly one million Australian families.
I commend the bill to the Senate.
Labor opposes this bill. This bill goes to indexation, to incomes stream review processes, to the ordinary wait periods and to family tax benefits. It is simply another example of this government being uncaring, this government having no understanding of what is important to ordinary families in this country and this government being completely out of touch with the battles that normal people have day in, day out to ensure that they can put food on the table and put clothes on their kids to send them off to school. This is a mean-spirited government. This is a government who does not care about the poor and disadvantaged in this country. This is a government who would give $50 billion in tax cuts to big businesses and at the same time support penalty rate cuts for 700,000 of the poorest workers in this country.
When Senator Brandis came in this morning, nobody had seen the bill. The bill had not been presented. There had been no discussions about the bill. A secret deal was done, and in they came to change the hours with no-one knowing what was in the bill. The first I saw of the bill was about 10 minutes ago, when I was handed the explanatory memorandum. This shows the lack of process and the contempt this government has not only for due process but also, more importantly, for families that are battling day in, day out to eke out a living in a time when living standards are declining, wages are being frozen and prices are going up. Yet this mob, they do not care.
And we had Senator Brandis saying this is an 'orderly dispatch of business'. Nobody puts this government and 'orderly' in the same sentence. They are anything but orderly. They have got no plan. They have got no strategy. They have got no economic credibility. Their only approach—and that is all it is, an ideological approach—is to attack the poorest in this country. Whether it is through the social security system, whether it is through the penalty rate system or whether it is through the industrial relations system: all they want to do is attack ordinary families in this country.
The most chilling aspect of the speeches we heard this morning was from Senator Cormann. Remember Senator Cormann after the 2014 budget that he was a key player in? Remember that budget that hammered pensioners, hammered welfare recipients? Remember that terrible budget that they have had to crab walk back day in, day out since it was introduced, the budget that gave us 'lifters and leaners'? If you were in a tough situation as an ordinary family and you required some welfare support, then you were a 'leaner'. But if you were former Treasurer Joe Hockey and you had to leave because you were so disgraced in terms of your budget, you end up—you are not a 'leaner', you are a 'lifter'. You get lifted off to Washington, to get about $400,000-plus a year in salary, plus a $150,000-plus pension. This guy had the cheek to call ordinary families 'leaners'. I know who was leaning: it was the economic team of the coalition.
Senator Cormann and Treasurer Hockey—remember the picture? Sitting there with their big Havana cigars, celebrating cutting key aspects of workers' security and social security? The big Havana cigars probably cost more than the $38 a day that someone on Newstart has to survive on. They were so happy, so proud, that they cracked out the Havana cigars to celebrate that 2014-15 budget. But what Senator Cormann said, the chilling part of what he said today is that there is 'more work to be done'. This is not the end of the attacks on poor people in this country. 'More work to be done'. I am not sure, as part of the secret deal with One Nation, Senator Xenophon, Senator Hinch and Senator Leyonhjelm, whether Senator Cormann told them what more work has to be done. What more cuts can we expect in the future? What more attacks on ordinary families are sitting behind this bill?
I can tell you: go back to the 2014-15 budget and look at the aspects of that and the attacks on pensioners. The changes to the indexation of pensioners would have left them $80 a week worse off over a 10-year period. That is why you crack out the Havana cigars: for attacking pensioners. They told young people with no capacity to find a job in areas where there is up to 20 per cent youth unemployment that they had to live with absolutely no income support for six months. What kind of mob is this sitting over there? This is what they really wanted to do. With Senator Cormann saying there is more work to be done, you can bet that all the nasties are waiting to come back in. They will cuddle up to One Nation, to Senator Xenophon, to Senator Hinch and they will work away to try to get the worst aspects of their attacks on working people implemented. Make no bones about: One Nation, Senator Xenophon, Senator Hinch and Senator Leyonhjelm are simply delivering for the Liberal and National parties. They are delivering all of the worst aspects of their budget approach.
And how dare Senator Xenophon try to stand up and be the pragmatic person of the people. Senator Xenophon has done more deals in here in this term of government than any other crossbencher. He makes the Democrats look like amateurs! This guy will always do the deal. He will always get this government out of trouble and put poor people in trouble. That is what Nick Xenophon is about. That is what his modus operandi is. I have never seen Senator Xenophon really act in the interests of working people. During the debates on industrial relations legislation, where did Senator Xenophon go? Straight to the Liberal Party, with a few amendments here and there to justify his capitulation on the protections for working people.
What about One Nation? Senator Hanson is out there telling everybody that she listens to the people, that she is there for the people. I have not seen her do one thing in this Senate that promotes decency or a decent social approach on any aspect of any bill that has come through this parliament. Senator Hanson is a reliable vote for the Liberals and the Nationals. She will deliver the cuts to welfare. She will deliver the attacks on penalty rates. She will deliver an uncaring attitude to the poor in this nation.
Senator Hanson is a fraud. Senator Xenophon is a fraud. If they were not frauds, they would be in here battling to support ordinary Australians against the attacks that this coalition government mounts on them day in day out. Whether it is welfare, industrial relations or penalty rates, the frauds of the Nick Xenophon Team and One Nation are over there cuddling up to the Liberal-National Party and delivering really bad outcomes for ordinary Australians in this country.
In the bill we have the freeze on indexation. What that really means is a cut; when you freeze indexation you actually cut back. We heard from the Attorney-General, Senator Brandis, who is quite diverted at the moment. He is packing his bags and looking for a job anywhere else but in the Senate. His colleagues do not want him here and big business do not want him here; they are prepared to send him overseas. He is talking about a $6.8 billion saving. Remember, that $6.8 billion comes out of support for the poorest people in this country. It is an absolute outrage; it is the poor people in this country that are being belted up. The more work that has to be done, as Senator Cormann has indicated, in my view means they will revisit their terrible 2014-15 budget and will continue to work to deliver all the attacks on the poor people of this country that it contained.
How can the National Party simply be capitulating to these attacks when, in many of their seats pensioners, welfare recipients and unemployed young people are the ones that are going to get hammered? Many of the seats in which workers are going to be hit hardest with cuts to penalty rates are National Party seats. For instance, in Page, retail is the second biggest industry and employs nearly 8,000 local workers. There are 12,200 in retail, food and accommodation, with 7,700 in retail and 4,498 in food and hospitality. Have you heard the local member for Page actually saying, 'Don't cut the penalty rates of tens of thousands of workers in regional Australia'? There has not been a word. The National Party, the sycophants that they are, talk big when they get out in the bush and are lambs when they come in here. They are simply capitulating to the Liberal Party on all these attacks on ordinary families and workers in their seats.
There are nearly 12,000 workers affected in the Liberal seat of Gilmore. There are nearly 7,000 in retail, which is the second biggest employer in Gilmore. There are over 5,000 workers in other areas that are affected by penalty rate cuts. What did the local member, Ann Sudmalis, say about it? She said it was 'a gift'. She said it was not cutting wages but opening the door for more hours of employment. In a regional area like Gilmore, with almost double the national youth unemployment, she said it is a gift. She said it is a gift for our young people to get a foot in the door of employment.
That is the stupidity of the coalition. They think that by cutting the wages of the poorest paid workers in our country, on base annual salaries of $35,000, who depend on their penalty rates on the weekend, they will actually lift their standard of living to a reasonable standard—not even a good one, just a reasonable one. The workers will get a $4,000 cut if their penalty rates go, and there is not a word from rural and regional MPs in the coalition. There is not one word, except to defend the cuts to penalty rates because they have a pathological opposition to workers getting access to penalty rates, decent collective bargaining and decent health and safety on the job through access to their unions. They have got a pathological hatred for the trade union movement. If the trade union movement cannot deliver on wages and conditions in this country, you should understand that minimum rates will never rise and we will end up like the US with no decent welfare system, with no decent underpinning for rates of pay and conditions, and with retail workers having to depend on tips to bring home a decent wage.
That is the type of society that this mob want and that is the type of society that they are delivering day in day out, supported by Pauline Hanson's One Nation, supported by Nick Xenophon and his team and supported by Derryn Hinch. Derryn Hinch—give us a break—is the guy who used to go: 'Shame, shame, shame!' Well, shame, shame, shame on Derryn Hinch because he has never voted for working people on one decent issue in this parliament since he has been here. He is an absolute captive of the coalition.
This is a government in absolute chaos and crisis. We have got a Prime Minister who does not have the confidence of his party and does not have the confidence of the nation. He promised so much and has delivered so little. Prime Minister Turnbull is the biggest disappointment as Prime Minister that anyone has ever seen in this country. He has capitulated to the right wing of the Liberal Party. Tony Abbott is still calling the shots.
Prime Minister Turnbull is the weakest, jelly-backed Prime Minister ever. He cannot concentrate on any economic way forward. What has he done? He wanted a capital gains tax. How long did that last? A few weeks. Then he wanted to give powers back to the states. I think that lasted 48 hours. Now he has this idea that they will let people access their superannuation to buy a house. That will simply drive house prices up and will mean that workers will have no decent retirement. The guy is a fraud. The guy is hopeless. The Prime Minister of this country has no standing and this bill is an absolutely disgusting attack on the poorest people in this country.
The National Party sit there—the sycophants that they are, the weak people that they are and the unhelpful people for their own electorate that they are—and give in every time. The National Party are a disgrace. They should be on this side opposing these cuts to their electorates.
On it goes. The coalition are continuing to try to hurt the Australians who can least afford it. They are happy to let the big end of town go without paying the tax that they should rightly be paying and are instead attacking the most vulnerable people in our society. That really sums up the ideological bent of this coalition government. It has continued from day one until today. What we see today is a belligerent attempt to ram this Social Services Legislation Amendment Bill 2017 through at any cost without any consideration for what came through the recent inquiry into the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 by the Senate Community Affairs Legislation Committee.
Labor listened to the evidence provided to that inquiry on the omnibus bill and could reach no other conclusion but to provide a dissenting report. That bill has now been split into two. A lot of that bill is now before us in the bill we are debating. We could not support it. We listened to all of the evidence that was put forward and read the submissions that were put forward that reiterated we should reject the cuts that are included in this bill. Why? Because of their impact on low- and middle-income families. In particular we are talking about single parents, pensioners, jobseekers, young people, people with disabilities, and carers. These are the people that this government wants to attack. These are the people that this government wants to make life harder for. The government does not even acknowledge how hard they are currently doing it yet it wants to make it even harder for them.
What does that actually mean? A young person on the Newstart allowance will now have to wait up to five weeks before they can get any kind of income. Where is the fairness in that? Again there are cuts to paid parental leave, leaving 70,000 new mums in Australia worse off. Where is the fairness in that? There is no fairness in the measures that this government puts forward. There is simply pain, suffering and hurt for some of the most vulnerable people in our society. What is having to wait five weeks for the Newstart allowance, forcing young people to live off nothing for five weeks, going to do to homelessness levels in our country? What is that going to do to those suffering mental illness in this country who need the support of their state to do the right thing and provide that safety net for them? Labor will never support such unjust and unfair laws that will hurt the most vulnerable in our society and that is why we strongly oppose and condemn these hurtful changes.
If the government needs to find revenue, we are all up for that. We are all up for working with the government in finding the revenue it needs for its budget. We know that as each day passes the government's budget deficit keeps blowing out of control—something you never hear them talking about anymore. It has increased astronomically since 2013, since the Liberals took office. Of course, they do not want to talk about that. They do not want to talk about where they can find genuine savings that do not hurt the most vulnerable in our society, because they do not understand what it means to be vulnerable—at least we know the Prime Minister does not.
Instead of the government looking at the big end of town, instead of looking at making sure multinationals pay their fair share of tax, instead of looking at the fact that their ideological corporate tax cut policy is simply ludicrous in providing $8 billion a year more to the budget bottom line by giving corporations a big tax cut, instead of looking at all of that—they do not want to do any of that—they want to go straight to single parents, to people on a disability payment, to people seeking Newstart, to young people, to job seekers and to aged pensioners. They are the people they are focusing on. They are the people that they are attacking. Their way of finding money for the budget is by cutting the basic means by which a lot of these people try to make ends meet, to get that leg up so that they can get back into the job market or make their life decent and meaningful and live with some kind of dignity. It is in fact the dignity that they are taking away from them, and that is absolutely outrageous. It is not something that Labor would ever, ever support.
It does not even stop at some of the measures that are in this bill, even though it is certainly bad enough. What this government has done in relation to cuts to some of the most vulnerable has been going on now for some years. We only have to look at community legal centres, which we know are used by some of the poorest people in the country. Community legal centres turn away around 160,000 people per year due to a lack of resources. Why do they have a lack of resources? They are facing a 30 per cent cut from 1 July this year. Again, the ability to access legal support should be a mainstay in our society. There is also not enough money in that realm for family violence support—something that I think both sides of this chamber agree needs a further focus on so that we can end family violence in this country and its effect on so many women and children. Also, if you look at the clients that access community legal centres, 50 per cent of them receive government benefits. If 50 per cent are receiving government benefits, we know already that they are some of the most vulnerable people.
Why, I ask, is our government in this country trying hurt the Australians who can least afford it? They are the questions that Australians are asking out there on the streets. They are not asking: 'Gee, we need to reform our Racial Discrimination Act so that we have more of a right to be a bigot. We think our Racial Discrimination Act does not give us enough free speech.' That is not what Australians are talking about on the streets. If the government would actually listen to Australians, hold a town forum like our leader has done on so many occasions and listen to the people, they would find out how out of touch they are. They would find out that the idea of cutting family payments, cutting pensions, attacking the rights of people with disabilities and limiting access to community legal centres and family violence support is not what people want. People want to ensure their government is providing those basic services that governments should provide for.
Instead, this government is living in some kind of Canberra bubble where it thinks: 'What are we going to do today? How about we bring the Racial Discrimination Act back on the agenda. It's only been three years since we did it last time. Why don't we bring it back on again? We've got a different Prime Minister now. Maybe we can convince him to move on this.' This is despite the numerous times Prime Minister Turnbull has said he would not make changes to the Racial Discrimination Act. It was a slight moment of wisdom when former Prime Minister Tony Abbott threw out the idea of making changes to the Racial Discrimination Act. He knew the huge backlash that the government was receiving from so many within the community against such changes—changes that go to the heart of the idea of a country based on social inclusion and multiculturalism. But no; instead, we are back here again debating the same old pet issues that the far Right of the Liberal Party seem so fixated on. Now they have new helpers with the 'lite' Liberals in One Nation, who are ready and willing to support them and who are probably egging them on to do so. Labor will not stand for the types of measures that break down the social inclusion of our society. We will not stand by measures that hurt some of the most vulnerable people in our society. That is why in our dissenting report we make clear the fact that we cannot support the majority of savings measures in a bill that have such a massive effect on those who certainly need our protection.
Labor has been very constructive. We secured a number of amendments that resulted in the government caving in and dropping its baby bonus payment and amendments that secure $800 million in funding for ARENA, the Australian Renewable Energy Agency, over five years. We got the amendment for the energy supplement measure to protect those pensioners and people on Newstart allowance.
We also, very importantly, worked hard to protect Labor's child-care dental scheme—I know that is a scheme used often and importantly so in my home state of state of Tasmania—by having that removed from the legislation. It does not just stop, as I said, at attacking some of the vulnerable people in our community, as this bill does at its very heart. It actually then goes on to attacking children—children who need at the first stages in their lives the best start possible, and that means accessing a dentist. We all know that good dental hygiene sets us up for everything else in life. If you have good teeth and good dental hygiene you are going to then have that opportunity to get a good job and have those opportunities presented to you. Yet that is something the government wants to get rid of. Why? It all comes back to this user-pay system ideology this government is based on. That is, if you have a big, fat wallet you can afford to pay. If you do not, too bad for you.
That dog-eat-dog attitude is not Australia. It is not the Australian way. It may be the American way. We all know how their health system has gone down and the attempts made by former President Barack Obama to change it. But that is not the Australian way. The Australian way is that we provide for all. We provide a safety net for all. That is what Medicare was about and what Labor provided. That is why we have Medicare. That is another piece of public policy legislation that this government has tried to attack. These are the things Labor stands solidly for. That is why I am proud to be a member of the Labor Party—we stand up for people. No matter your background, no matter where you come from, no matter where you live and no matter your circumstances, you should be able to have the same opportunity as someone else.
That is why we stand for a good, decent public education system. This morning I was so proud to join my Labor caucus colleagues outside the front of Parliament House with our leader, Bill Shorten, and our deputy leader, Tanya Plibersek, to stand up for Gonski. This government certainly does not want to talk about the Gonski reforms because, again, it does not suit their ideological agenda that if you have a big wallet and lots of money you can pay, and if you do not it is too bad.
What are they in government for? To me, the whole idea of being part of my party and being in government is to provide for people. It is to provide that basic safety net for people and to build our economy. They are the two things that make our country work. One would think the government would have some understanding of that because it went to the last election with a slogan of 'jobs and growth'. Do not talk about jobs and growth anymore. If we look at jobs, we do not want to go near jobs because they are attacking jobs. They are attacking penalty rates for some of the lowest-paid workers in the country—retail workers and hospitality workers—and it will affect some 700,000 Australians. So jobs are out the window because jobs are something they want to attack; they do not care about them anymore. As for growth, growth is not going to happen because, again, they are cutting the fundamentals for some of the most vulnerable people in the country, so they are not going to be able to spend money. That is not going to add to our economy; that is going to limit their opportunity to even get a job. You will not hear 'jobs and growth' from this government anymore because they have completely lost the plot on that one.
They have completely lost the plot full stop. That is why yesterday, on Harmony Day, the government picked out of its hat the reintroduction of the debate on racial discrimination and watering down protections against race hate speech. If this government had some kind of plan for the country or some kind of agenda for this country they would not be just picking here and picking there or introducing bills here and introducing bills there—bills that do not get through this place because, of course, there is not much consultation with any of us and also because they do not fit with any plan or any strategy for our country.
It is such a disappointment that with the change of leadership this government went through from former Prime Minister Abbott to now Prime Minister Turnbull we have had a shemozzle of any plan for our future. Even those of us on this side of politics thought that things would change. We actually thought we now had a Prime Minister that believed in climate change, believed in marriage equality and actually wanted to make some kind of a difference. Maybe he would even move Australia towards an Australian republic; we knew that once upon a time he certainly invested a lot in wanting to make that happen. But every issue one would have thought Prime Minister Turnbull stood for he has sold out on. He has completely sold out. Now, with this bill, he is selling out on the most vulnerable people in our country. What kind of legacy does he want to leave for this country from his term in office? At the moment, he is going down in history as the biggest fizzer of a Prime Minister that I think we have ever had, and the biggest seller-out of his values. He certainly does not believe, I think, in the things he is doing. He is simply hamstrung because he chooses to be hamstrung by those far right members of his cabinet, party and caucus, and by the fringe dwellers, as I call them, in One Nation.
We on this side of the chamber will always stand up for all Australians in the hope that we will win government at the next election and be able to implement some of the ideas, policies and values that Labor stands for and holds. They are ideas, policies and values that we have been consistent on for many years. They are things we debate within our party, within our caucus and with the community. We know we are on the right track because we listen to people and people tell us how they are living and what is important to them. What is important to them is that their kids get a decent education, that they can access affordable health care and that they can get a decent job with decent pay and conditions.
It is not rocket science to go out there and talk to people and find out what is important to them. But this is not something this government wants to do. It wants to live in a little bubble here in Canberra, away from the real people, protected by the walls in this place and instead bring in legislation that is so out of touch to everyday Australians that it is hurting them. We will fight tooth and nail for that legislation not to pass, because we want Australia to be recognised and listened to in our democratic systems. The only way to do that is to prevent the government from getting its way in its strange ideological obsession with the bills that are currently before us today. (Time expired)
I can indicate that I and my colleagues will support this bill, and I want to put this in context in terms of what has occurred. The government's previous measures included a range of cuts involving billions of dollars worth of cuts to family tax benefits, family payments and the like. It would have meant that a sole parent with a low single income of well under $100,000, of below average weekly earnings, depending on how many children they had and their age, would have been hit with thousands of dollars worth of cuts, which could have been quite devastating for that family.
This is a country that is built on migration. One in four Australians were born overseas, and one in two were either born overseas or have a parent who was born overseas. The government's previous measures would have meant that those who are migrants would have been disadvantaged by having benefits cut off after a certain period if they went to visit family and friends. In many cases, that is the final journey that people take to say goodbye to their loved ones in another country. We resisted those changes because of the very clear representations made by those in multicultural communities in this country. I thought that resist those changes was a fair thing to do.
There were also issues in respect of the pensioner education supplement. I know that ACOSS and Cassandra Goldie, and many others, raised concerns about the impact of those cuts to the tens of thousands of Australians who rely on that supplement. It is an important supplement in respect of their educational advancement—learning new skills and being able to advance their ability to work in the workforce. That is something that we said was a measure that went too far.
There was also the issue of the energy supplement. Notwithstanding that the carbon tax was removed, energy prices in this country are going up and up; and they are going up because of the absence of a descent energy policy in this country. For many years, I have advocated that the cheapest and most efficient way to reduce carbon pollution to ensure that we meet our Paris agreement targets would be to have an emissions intensity scheme. I and the now Prime Minister, when he was opposition, commissioned Frontier Economics to design a scheme which we thought was a smarter approach than that of the former Labor government. The great paradox is that, back then, Labor called it a mongrel of a scheme but, since then, has had the position that that scheme is 'top dog', that it is the best way to pursue an effective carbon emissions policy which will also ensure energy security and reduce prices. Unless we had something like that in place, where we actually saw a reduction in energy prices for consumers, then I cannot countenance removing that supplement whilst energy prices are so high and going up and up.
What we saw in relation to the omnibus bill prior to negotiations with the crossbench was a series of measures that would have hit many families very hard. The counterbalancing issue is: how do you pay for the $1.6 billion package of childcare reforms—a worthy package that will help hundreds of thousands of families in this country—and all the good things child care does for our social fabric? That is a vexed issue. The tax cuts that were supported by the opposition, which were opposed by the Greens and by my colleagues and I, were worth $4½ billion for those earning over $80,000 a year. It would have been better for those tax cuts not to have gone through. That would have been a much better fiscally responsible approach, in my view, but I had to deal with the envelope provided to me by the government. In other words, the government would not countenance tax increases in relation to these measures.
As a result of negotiations with the government, we have come up with an approach that leads to a freeze in indexation for two years. That is the principal measure. That means people will not get an increase in their family tax benefit for a period of two years. We are in a low inflation environment, and it is something that is more tenable than if we were in a high inflation environment. It means people would not be any worse off in terms of the actual income that they are receiving. That is important. It also means that many families would be better off because of the improved childcare package, which I think strikes that balance. This is not ideal but in my view it is the 'least worst' option in dealing with these issues in a way that would not cause severe hardship to many thousands of families as was proposed in the omnibus bill. So I believe it is a significant improvement and much more equitable than the previous measure that the government was pushing. The alternative would have been a stalemate. The alternative would have been a childcare package that would have been held up. As imperfect as this solution is, I believe it is the best solution given the circumstances and given the constraints that we have had in negotiating with the government in respect of this.
I believe that this bill is a significant improvement on what we had previously. I believe it is much more equitable, and it has removed the worst aspects of the impact that the omnibus bill would have had on families and particularly on sole-parent families. For that reason, we support it. We have made it clear that we support this bill for the second reading stage, and particularly for the committee stage, not being constrained. If the Senate wants to debate this all day today, tomorrow, the next day and into the weekend, we will not support any restriction on the debate for this bill to be dealt with and for questions to be asked in the committee stage. That is something that I think is important to deal with substantive issues in respect of this bill.
So that is our position. We believe that this is a breakthrough that will ensure that a childcare package that is broadly supported in this place will proceed. It will minimise the impact on families around the country, and it will be a much fairer package of measures than was previously proposed by the government.
We know that this government is utterly incapable of consulting before putting forward legislation, but what a sadly disappointing situation we find ourselves in today, and what an utter, utter farce it is. Labor does not oppose the orderly dispatch of government business, but this government is forcing Labor to debate a bill that we have only had for half an hour or so. I have only had it for half an hour or so. They are so badly disorganised on that side that, you will note, there are no government speakers. They are so disorganised that they do not know what they are doing. They have capitulated. They have done a deal somewhere with the Nick Xenophon Team, which I am very disappointed about, and One Nation, which does not actually surprise me, to debate a bill with half an hour's notice. We have had this bill for half an hour. It is an utter disgrace. They want us to agree to the bill that they did not even have last night, when they were doing deals on it. I would love to know what the deals are; I am sure eventually we will find out.
What we were supposed to be debating this morning was the Social Services Legislation Amendment (Omnibus Savings and Childcare Reform) Bill. The government has now finally, after being taken kicking and screaming, decided to split that bill. So now we are debating, as I said, an entirely new bill—a bill that has not faced the scrutiny of a Senate committee, that has not had public input and, as I said, that on this side we have only just seen.
We are going to sit till midnight tonight, probably till midnight tomorrow night and probably into Friday because the government have to be taken kicking and screaming when they change their mind on something. When they finally capitulate on something that we have been telling them for months is a bad idea and that we were not going to support, they go off, do their shonky little deals and then come in here and say, 'Right, this is what we're debating now.' But when we want to debate penalty rates they say, 'Oh, no, can't debate that.' That is taken off the agenda.
I am wondering if anyone remembers that when the government first got elected they made a couple of promises, and those promises were no cuts to health and no cuts to education. But now they are cutting assistance to families in a secret way, as I said. They have done their secret little deals that we do not even know about. Australia has record low wages and penalty rates are being cut, as are payments that low-income families rely on to fund childcare packages, all making life more difficult for many Australians. I have to ask again: what is the deal that is being done with One Nation and the Nick Xenophon Team. I cannot believe that One Nation do not care that a third of families will be worse off.
The government wants us, as I said, to immediately debate these cuts. I have been here for a number of years. This is my ninth year, and I know that the process of the Senate can be difficult to follow for everyday Australians. But I want to make it very clear to everybody listening out there that today we are expected to debate and to vote on legislation before the Labor Party have been given a chance to look at it properly. These are changes that can hurt families and pensioners. Without the ability of this chamber to properly review and stop these changes, that damage can be very, very bad. It is not a fair go. In fact, I would go so far as to call it an act of political bastardry.
One Nation say they are a party of the fair go. Well, they are not. They are puppets to this government, and any pensioner, single parent or low-income family thinking of voting for One Nation or the Liberal Party needs to take a really hard look at the cuts the government wants, and they need to say, 'No, One Nation and the Nick Xenophon Team are not acting in the interests of my family.
I have had some disappointments in this place. I have had legislation go through that I have not agreed with. But I have never been so disgusted as I feel today. I am at the stage where I think, 'What else will the government do?' We know they have made lots and lots of bad decisions, and they have to be taken kicking and screaming every time because 'sorry' is obviously not a word in their vocabulary. They cannot admit to mistakes, but they will do shonky side deals to cover up the errors of their ways. Well, I will say this: the Labor party will not ever support changes that hurt families. We will not hurt pensioners, and we will not hurt the most vulnerable in our community.
I do not know where this saying originates, as it has been variously attributed to many historical figures including Albert Einstein, Mark Twain and Benjamin Franklin: 'The definition of insanity is doing the same thing over and over and over again and expecting a different result.' Well, guess what happens: with this government, that is what happens. I think this government is a little bit insane, because time and time again they attack the living standards of struggling Australian families and expect that the public, and the Labor Party, will fall in behind them. Have they not learnt anything from the backlash to their 2013 and 2014 budgets? Have they forgotten the massive public outcry that made Mr Abbott so unpopular? Are their memories so short?
I know that in question time Senator Brandis has a very short memory. He often has not heard of something, remembered something or read something, but the whole of the government's side cannot all have such short memories. Rather than learning from their past mistakes and dropping their attacks on vulnerable Australians, Mr Turnbull and his Liberal Party have had the gall to ramp up their attacks. They tried to introduce, into this place, a bill which was unprecedented in its savagery, a bill which was an all-out assault on families, new mothers, pensioners, students and young job seekers. I think the Australian public would be very sensible to carefully watch the cruel cuts that the government keeps trying to implement and to stand up against them, like they did to the cuts in the previous budget. I call upon the Australian people to stand up against One Nation and Nick Xenophon and say, 'You betrayed us. You claim to care for the battler, but you are just as cruel and as unfair as the Liberals.'
It is absolutely shameful that the government would link these cruel and savage cuts to investments in an area such as child care. In the previous bill that is what it was doing. Just to be very clear to everyone: childcare funding issues were related to the whole of the bill. For years this government has failed to deliver any child care relief. I should know about child care. I worked as an early childhood educator for 12 years before I came to this place, so I know a little bit about child care.
Since the package's original announcement in 2015, the government has said they would not pass their childcare package unless cuts to family payments were first passed by the parliament. Since 2015, they have been saying that, and we have opposed the linking of childcare reform to cuts to families ever since it was first announced. It is unfair, it is unjust and it is simply a case of robbing Peter to pay Paul—but making sure that Peter has no support whatsoever.
Between the original bill—the Omnibus Savings and Child Care Reform Bill, which we were supposed to have been debating until an hour or two ago—and this bill there are definite links. With that bill that we were due to debate, the government was holding not just families to ransom to pay for child care but also pensioners, young Australians and new mothers. The bill would have ripped $5.6 billion from the household budgets of low-income Australians. The bill would have taken more than $3.30 a week from pensioners, families, new mums and young Australians for every $1 in proposed childcare assistance. I am not sure whether those on the other side are unknowing or unfeeling. I am often conflicted about this, about whether this government does not know what impact their changes will have on the least well off in our community or whether they simply do not care. We will stand up for low-income and middle income Australians, as we have done since this government began its attack on them in its cruel budget of 2014.
To add insult to injury, in the original bill the government admitted that its family payment cuts would leave 1.5 million Australian families worse off. Families that were going to lose their family tax benefit part A supplements would be $200 worse off per child, and families receiving family tax benefit part B would lose $350 each year. What those on the other side do not understand is that these cuts add up for families who are struggling to make ends meet.
I mentioned the previous linking of the childcare reforms in the package. Having worked, as I said, for 12 years in that industry, I am amazed that this government would even consider linking a childcare package to reform, in that sense. As everybody knows, child care is one of the most important issues that the government needs to deal with. We have all heard the old saying 'give me a child until they are five'—some people say give me a child until they are seven—'and I will show you the adult.' That is where the importance of child care comes in. To cut the hours in which children are able to access child care is completely self-defeating. I do not get why the government would want to do that. Child care and access to child care are so important that it should have been its own bill all on its own.
I am not saying that there are not things that need changing in the childcare sector; I think there are things that need changing. If they want to reform the childcare sector, I would like to see childcare workers get paid more, for starters. I would like to see childcare workers being acknowledged for the hard work that they do. I would like people in this chamber to stop making comments about childcare workers just wiping noses and stopping fights, as has been said. Surely, to any parent their child is their most important and most valuable asset. Their child is the most important thing to any parent. Surely, in that case, all parents would want the best for their child. But this government looks at things like cutting access to child care and halving the amount of hours for which some children can access child care. It just makes me shake my head.
This government would rather take money from the pockets of pensioners, jobseekers, people with disability, new mothers and families than make multimillionaires pay their fair share of tax. We have all seen how happy they are to give big business a $50 billion tax cut. It is the one thing that they will not renege on; it is the one thing they will not go backwards on. I am sure they will try to do a deal with people on it. I just say, 'Why?' Why would the government even think that when you have people in need and when you have people struggling? It is atrocious, and Labor will not stand by and let this happen. We will continue to fight any of these cuts.
We will oppose the areas of the original bill. The cuts were cruel. It is pretty shameless the way the government have come in here today with only an hour or so for us to have a look at the bill. In fact, I did not even get an hour to look at the bill before standing here today. They do deals with the One Nation team and the Nick Xenophon Team. We do not know what those deals are yet. I am sure eventually we will find out and eventually it will all come to the fore and you will all be able to see what you have been sold out for.
As I said, we support reform of the childcare industry in some areas—we certainly support additional investment in child care—but we do not support it being held to ransom. This government is more committed to cuts that will hurt pensioners, families, new mums and young Australians, than they are to delivering on their promise of increased childcare assistance. A wide range of organisations have called on the government to drop the cuts to family tax benefits, but the government simply has not listened. Despite hearing warnings about the serious flaws in the childcare changes for years, they have done nothing to fix them. An analysis by the ANU shows that these childcare changes, the ones in the original bill, will leave one in three families worse off: 330,000 families would have been worse off and 126,000 would be no better off. That is almost half of all families—555,000 families—that will be worse off or no better off. Over 71,000 families with an income below $65,000 will be worse off. The harsh activity test will leave children in 150,000 families worse off. I have not had a chance to look at the new separated childcare bill so I will be reading that with avid interest, but if it is anything like what was in the omnibus bill, I will be very disappointed.
The government wants to cut access to early education in half for many vulnerable and disadvantaged children and wants to, effectively, cut access for families earning less than $65,000 from two days a week to one day. Cutting access to early childhood education will only exacerbate problems. Early childhood education needs to be recognised for its powerful ability to solve social problems and to address disadvantage in the long term. I just do not think this government gets that. I think they see the big end of town and think: 'Let's not touch them. They're our friends. We need to look after them.' And they see children, people on pensions, unemployed people and new mums as targets. And they do not mind targeting them, let me tell you.
One of the things I am worried about too is the impact that the government's changes will have on Indigenous children. In every state and territory Indigenous children already have lower early childhood education enrolment rates than average. These services are often small and in remote locations and they will not be financially viable without ongoing support. Deloitte Access Economics have found that changes to the budget-based funded program will disadvantage Indigenous children. Fifty-four per cent of families will face an average fee increase of $4.40 an hour, 40 per cent of families will have their access to early childhood education reduced, and over two-thirds of Indigenous early childhood education services will have their funding cut. Do you know what that means? That means that the potential of those children to make a smooth transition to school will be diminished. That is what that means. And that will compound the likelihood of intergenerational disempowerment and unemployment. They will not be that interested in school. They will not have had the start that other kids can get. It is well known that, if you put money into those very early years, where children can enjoy the environment and learn through play, they are more likely to enjoy school. I just do not understand why this government wants to make it harder for them.
We will have children falling behind before they have even started school and they will be at greater risk. What else did they have in the omnibus bill? I am going to run out of time to tell you all the things that I thought were bad in the omnibus bill. (Time expired)
I rise to make a contribution on a bill that we know very little about, because we did not even have it as the government was introducing it. I had to run up the end of the chamber to try and get a copy. It was the only copy. I got the Clerk's copy. It was the only copy I could get my hands on. And now we are debating it. Great! We know nothing really about the impact of some of these measures. Yes, some of the omnibus measures are recycled from before, the so-called 'zombie measures'. But the changes to the family tax benefit—Senator Xenophon said, 'This might be slightly better than the other changes that were being made to family tax benefit'.
Well, the fact is that we just do not know, because it has not been to an inquiry. They are putting a blanket indexation freeze on family tax benefit payment rates. I will come back in a minute to other contributions from some of my colleagues trying to justify why we should be supporting a bill that we have had no time to look at and no Senate inquiry about, why we should be passing that right now—feeble attempts to justify doing that to enable childcare measures to be debated. That, of course, has now been split off. We are going back to the original childcare bill that the government introduced, and we will obviously be debating that at some stage over the next couple of days and looking at what the government are prepared to fix in terms of some of the flaws that are in that particular bill.
But the proposition here is still that we should make families suffer and young people suffer. We should basically effectively cut Newstart—and I will come to that in a minute—so we should make all the people who are currently trying to exist on the very poor rate of Newstart keep existing on that poor rate for longer. It is trying to justify again why the government is targeting vulnerable Australians for these savings to pay for child care—in other words, robbing Peter to pay Paul—when there are plenty of other revenue-raising measures that this government should be and could be tackling, such as negative gearing, capital gains tax and more income tax reform. How about not paying the $4 billion that it is paying to high-income earners in tax cuts? How about we start there rather than taking—what are we talking about—$5.5 billion over the medium term out of the family tax benefit? How about we do that? How about Senator Xenophon and Pauline Hanson's One Nation think about those sorts of revenue-raising measures instead of attacking, again, some of the most vulnerable members of our community?
Let us get to the Social Services Legislation Amendment Bill 2017, which we have had limited time to consider. The government say that they have secured 'further savings of $2.4 billion'. This is in the minister's second reading speech, which was tabled—and which is not even two pages, folks—to justify these cuts and justify this approach. What they are doing is taking three of the omnibus measures. They are 'maintaining free-income areas and means-test thresholds for certain payments and allowances'—in other words Newstart and a couple of other payments. They are 'automating'—and doesn't that send shivers up your spine, folks?—'the income stream review process', which will lead to improvements, they claim, in 'the accuracy of income support payments and reductions in consumer debts'. What we have seen so far in automation is an increase in people getting debt notices, many of them inaccurate, of course. They are 'extending and simplifying ordinary waiting periods for the parenting payment and for youth allowance', and then of course we have the cuts to the family tax benefits. I will come back to all those measures in a minute.
Let us just focus, yet again, on where the government wants to really go, and that is evidenced from the omnibus cuts. I do not know what genius in the government came up with the approach: 'We want to do something about child care. We want to reduce paid parental leave, PPL. Let's tie it in with a whole lot of these zombie cuts, and maybe Australians won't notice that we're trying to cut at least $5 billion from various forms of income support, from our social safety net, and trying to use child care and paid parental leave as an excuse to do that.' Fortunately, Australians and this place saw the massive problems with that approach and saw what the government was trying to do. Unfortunately, Senator Xenophon and Pauline Hanson's One Nation have now caved in and agreed to still rip, in the first instance, $2.4 billion worth of funding out of our social safety net, but it actually goes much higher than that, because it goes up to $5.5 billion over the medium term.
For this particular measure, the family tax benefit, the government is including 'a new schedule to maintain the current family tax benefit payment rates for two years at their current levels from 1 July 2017'. The government is saying that it will result in savings in the first instance of $2 billion over the 2017-18 forward estimates and then build to $5.5 billion over the medium term. In other words, that money is coming at the expense of families in this country. But, wait, there is a little bit more. The government says:
It is important to note that under this … measure there will be no cuts to family tax benefit payments.
Of course there will be cuts into the future! The government is taking $2 billion worth in the medium term out of family tax benefits. That is out of the pockets of families in this country. And who does it hurt the most? Of course, vulnerable families, families on low incomes, young families, single-parent families—that is who it hurts the most. 'Oh, but don't worry; you get it back in child care.' No, they do not. They will not get equal value back in child care. Certainly single-parent families, for example, who have children who are not in early years education do not, by and large, access the childcare system so will not get those benefits back but will suffer the cuts to their incomes. When you are on a low income, every dollar this government cuts has an impact on your income. This money is not coming out of thin air; it is coming at the expense of families in this country.
And then the government is taking $69 million worth of funding—or it is suggesting it will save that sort of funding—by maintaining the income-free area and the means-test threshold for certain payments and allowances 'at their current levels for three years'. What that means is that people who are on Newstart—remembering that Newstart already means that people are living below the poverty line; it should be significantly increased, and we have been campaigning for that for years—will effectively have less money as this measure kicks in and the income thresholds remain the same. It means they will have less money in their pockets.
Once again, this government is doing over the most vulnerable members of our community, people who are struggling, literally, to put food on their tables, because food is seen as a discretionary item. People have to pay their rent. They have to pay their power bills. They have to pay their water bills. You are not really able to negotiate all those things, other than negotiating the payment period sometimes—let this bill run for a little bit while you pay that one; that one is arrears, so then you have to pay it. But you can actually decide not to buy food. That is why it is called a 'discretionary item' and that is where, we know from the evidence, people make cuts. Repeatedly, people have come before Senate committee after Senate committee, telling us, presenting us with the evidence, that what parents do is make sure that their kids always get to eat, but the parents go hungry. They are the ones who do not have meals. They are the ones that skip meals. So we know that that has a direct impact on people's lives.
We know also from the evidence that poverty is a barrier to employment. Here is the government once again blaming 'bludgers' and having a go at people because they cannot find work—which is why they wanted to try and keep young people off work. The excuse is, 'We will try and just make them work a little bit harder to find a job.' They obviously still do not get that there are not enough jobs out there for young people, who keep trying and trying. It is not because they do not want to work; it is because they cannot find work. Fortunately, that disgusting measure in the omnibus bill is off the agenda for the time being. The government need to hear what the Australian people are saying—that they think that is unfair—and never bring back that zombie measure. Call it dead and buried so that they do not continue to attack young people with it.
This measure, however, will impact on young people, because they will also be subject to this freeze on income-free areas and thresholds. Single parents will also be subject to it—single parents that the last few successive governments have kicked off parenting payment and onto Newstart, which has already had a significant impact on payment rates and their ability to work and support their families. There was another go at them through the cut to family tax benefit. Now this measure will have an impact on, literally, the money they have in their pockets. That is $69 million coming out, again, of the pockets of those most vulnerable members of the community who are unemployed, who are trying to survive on Newstart or other allowances.
The second measure is automating the income stream review process, which, according to the government, 'will lead to improvements in the accuracy of income support payments and reductions in customer debts'. Well, that has been a brilliant success for Centrelink so far, hasn't it! It has been so successful that we have a Senate committee inquiry to look at the massive problems that are going on. Why would we move to automate anything else until we solve the massive problems that we have with the Department of Human Services and with Centrelink? Not only do we have the evidence, over the last couple of months, of the massive failure of Centrelink's automatic debt-recovery process; we also have the Auditor-General's report that came out a couple of weeks ago that shows Centrelink's failure in trying to apply the previous compliance measures. We have plenty of evidence to show that this measure should not be contemplated until those issues that have caused massive problems are addressed.
Then we come to the third measure:
Extending and simplifying ordinary waiting periods for the parenting payment and for youth allowance for a person who is not undertaking full-time study and is not a new apprentice.
This means that, if you are applying for a parenting payment, you have a new ordinary waiting period. The very nature of the term 'parenting payment' means that there are children involved. So, what the government is saying is that that waiting period now has to apply to parenting payments. They are going even further than that, saying in the explanatory memorandum:
This Schedule also provides that the current exemption on the basis of severe financial hardship will only apply if the person is also experiencing a personal financial crisis.
In other words, they have upped the bar. Not only is there the ordinary waiting period but the bar has been raised for exemptions. In fact, it has been raised so high that, by the time you gather all the evidence for it, you are through the ordinary waiting period anyway. In other words, you have been subject to this period of no income support.
There are a couple of corollaries to the exemptions, such as if the person who makes the claim has been affected by domestic violence in the four-week period before they make the claim. Anybody who knows anything about domestic violence knows that in most cases it has been happening repeatedly and it takes someone a long time to leave the home. There are many factors that stop somebody leaving a situation where domestic violence is involved. So it may take somebody longer than that four-week period since the last episode to, for example, leave and find somewhere to go. There are so many issues involved in that very complicated situation that it is, quite frankly, obscene that the government is trying to make people wait an extra week. It means that the government will save $184 million on the backs of parents who need support for themselves and, most importantly, obviously, for their children.
That measure is one of the omnibus measures that certainly should not have been supported. And, quite frankly, I am surprised that Senator Xenophon is trying to use the excuse that this, along with some of the other measures, is slightly better than the omnibus cuts. It is just not on. He is just not right. These will significantly impact on families, on single parents, on young people and on older Australians. A third of the long-term unemployed now are over the age of 45; they are trying to survive on Newstart. So this also impacts older Australians.
The government have been fair; they have managed to have a go at all Australians. But they are having a go at the most vulnerable—vulnerable parents, single parents, and young families on low incomes will be particularly affected, along with young people and older people that make up large cohorts of those on Newstart—and having another go at parents and single parents in particular by making them wait an extra week.
We will not be supporting these measures. We will not be supporting cutting, over the medium term, $5.5 billion out of family tax benefit payments that support vulnerable people. We do not know the impacts this will have, because—guess what?—it has not been to a Senate inquiry. We reported on the other measures through a very short Senate inquiry into the omnibus bills. Some of the measures we have just been talking about were the subject of a Senate inquiry, but this one, which will take out $5.5 billion over the medium term, has not been to a Senate inquiry. That is why I move the following second reading amendment to this bill:
At the end of the motion, add:
", and the bill be referred to the Community Affairs Legislation Committee for inquiry and report by 8 May 2017"."
We will be able to look at what impact this freeze on payment rates for two years will have on families. Over the medium term, $5.5 billion will have a significant impact on the families of this country.
We also need to be looking at the total of the impact of these measures on vulnerable Australians: on young families, on single parents, on young people, on older Australians—all of whom are affected by these measures. When you look at the omnibus bill and you look at the impact of some of these measures—for example, on single parents—you must look at it cumulatively. You cannot look at some of these measures in isolation, because the impact on people adds up. For example, some of the single parents that were affected by a number of the measures in the omnibus bill were going to be $50 a week worse off. For people who are struggling on a low income, $50 a week is a hell of a lot of money. It means that they have to make even tougher decisions about what payments they can afford to make for school excursions, extra little treats, school uniforms, paying the rent, paying the power bills. All of these things are affected by these measures that put people out of pocket by $50 per week. These cuts will occur at the same time the government is busy processing the cuts to income tax for wealthier Australians. It is refusing to address issues like negative gearing and capital gains, which would not only mean that it has more money but also help to address the issue of housing affordability, which also affects the cohorts of people that we are talking about here. The measures in this bill are not justifiable.
The government keeps talking about 'bloated welfare bills' in those and similar terms. We do not have overspending on income support. We have a well-targeted income support system. Our social safety net is much more well targeted and we spend less as a percentage of GDP than many, many other countries in the OECD. That there is overspending is a myth made by the coalition government because it does not support an adequate social safety net. It is intent, through its repeated cuts to it, on ripping great big holes in our social safety net. It is trying to con Australians into thinking that there is this massive spend, when the money that is spent is ensuring that people get better support, that should guarantee that they are not living in poverty, that those barriers to employment are not there, that it is doing what it is meant to do, support vulnerable Australians in periods of crisis—when they are unemployed and when the single parents need support. (Time expired)
In rising to support the Social Services Legislation Amendment Bill 2017, Australia Conservatives feel it is necessary to point out that successive Australian governments have been living beyond their means. There is a time when we have to arrest that dramatic erosion of fiscal responsibility. That can only be addressed by making savings in government expenditure. There are those, and we heard one of them on the other side in Senator Siewert just then, who say, 'That's not necessary. This is unfortunate. It's going to have detrimental impacts on some people who can least afford it.' But the idea, the very concept, that somehow we can get by without addressing the spending problems of successive governments and pretend we do not have a moral obligation to our children and successive generations to deliver them a financially responsible balance sheet is an appropriation of our responsibilities in this place.
There is no doubt at all that the last 10 years have done an enormous disservice to our children. There is now close to $500 billion worth of net national debt, when in 2007, at the ascension of the Rudd spendthrift government, there was zero net national debt. Five hundred billion dollars has been racked up because governments would not address spending commitments over the last decade or so. That is $90,000 for every child in this country today, and yet the people on the other side of the chamber refuse to accept any responsibility for it. They do not want to address it. Their answer is to tax people. Well, my response to that is that people are taxed enough already in this country.
We have high rates of taxation. But we have even higher rates of spending, because people are not mindful of the obligations we have to the next generation. This bill, whilst it can be criticised as not going far enough or targeting the wrong people, takes a very modest step in the direction of returning our current account and our balance sheet by repaying some debt and having government live within its means. This has modest savings of $2.4 billion over the forward estimates. Part of that comes from the freezing of indexation in regard to family tax benefits.
I support the freezing of indexation, including the freezing of indexation when it comes to politicians' pay, which, most notably, only half a dozen of us supported in this place yesterday. The rest said, 'We don't want to freeze indexation of our pay; we just want the dollars to keep rolling in.' I find that a tad hypocritical, that we can say we want to stop families from getting indexation for their family tax benefits, but we don't want to stop politicians from having their pay frozen until the budget is returned to surplus. There is a huge disconnect between the rhetoric that happens in this place and what is delivered outside of the beltway.
Who can forget the world's greatest Treasurer? No, it was not Paul Keating; it was apparently Wayne Swan. Wayne Swan, in his legendary comments in 2010, after he apparently fixed the budget with a temporary deficit, said:
Every dollar of new policy in this Budget has been offset across the forward estimates, as we meet the strict confines of our responsible fiscal strategy.
A strategy that will see the budget return to surplus in three years' time, three years ahead of schedule, and ahead of every major advanced economy.
That was in 2010. Do you know what he said in 2008? He said there would be a $21 billion surplus in 2009. In 2010 he said it was going to be three years down the track. In 2011 he said:
We will be back in the black in 2012-13, on time, as promised.
Guess what? That did not happen. In 2012 he said:
This budget delivers a surplus this coming year, on time, as promised, and surpluses each year after that, strengthening over time.
That is why no-one believes what politicians say any more, because they do not tell the truth.
Every single person in this place knew that Labor was never going to deliver a budget surplus, notwithstanding the nonsense that Senator Polley and her ilk go on about, saying, 'The world's greatest Treasurer', and 'We're fiscally responsible'. It is nonsense, and the nonsense has continued because five years later we have got a growing deficit. Last year, the government spent about $37 billion more than it received in taxes.
I can assure you the Australian people cannot afford an additional $37 billion worth of taxes. Families are already struggling. I admit that. I know that. They have high utility bills, brought about, might I add, by inane and stupid government policies—most notably in South Australia where the Weatherill government has adopted Labor's mantra of having 50 per cent renewable energy targets, which is also the Nick Xenophon Team's mantra. This has delivered the most expensive and unreliable electricity anywhere in the country and it is going to get worse. Rather than admit it is an inane policy and filled with flaws, their cure for climate change is to get big diesel generators in for the summer so that they can turn them on, stop the blackouts and run diesel generators to make up for the shortfalls in wind and solar power. This is how the theoretical concept of those on the political left—and, unfortunately, often supported by those without too much brainpower on the political right—results in a huge detriment to the people who have to live with these concepts that come out of this place, the groupthink that sometimes emanates from here. No-one can really defend it. In fact, in South Australia, when it comes to electricity, every political party is now saying it is someone else's fault. They are blaming the feds, they are blaming the states, they are blaming whoever. The Liberal Party in South Australia supported all of these programs, supported blowing up the coal-fired power stations, and they are now saying, 'It's got nothing to do with us'. We are on a hiding to nothing when people do not have principles applied to some of the major challenges that we face in our country today.
It is not just about electricity. It is about returning our budget into surplus so that we can pay back the $500 billion worth of debt that has already been accumulated; so that government can stick to its knitting, which is about defence and ensuring that we have reliable and efficient laws in this country; and so that we can assist those who truly require assistance because they are unable to help themselves. That does not mean giving money to dead people, as Mr Rudd did. That does not mean giving money to foreign backers or people who live overseas, as Mr Rudd did. That does not mean borrowing money from future generations and asking them to pay back the largesse that we are enjoying today because we do not want the impact on our lifestyles. The reality is that we are on a trajectory from which there will be no return unless it is arrested very, very soon.
I regret to say that by the time I finish in this place—unless I can grow the Australian Conservatives well past the single parliamentary member it has now and we can actually put a stop to some of this inanity—I suspect we will have $1 trillion worth of net national debt before my term expires in five years' time. That is a tragedy for our future generations. And yet the only thing we hear from those on the other side, the supposed alternative government and their alliance partner of the Greens, is that we should be putting taxes up, which of course will only shrink the economy over the longer term, and that we should be giving people more money. I am here to say it has got to stop.
The greatest thing we could do in this country would be to cut taxes, to allow people to be responsible for themselves, to have more self-reliance. And for those people who are concerned about capital gains tax exemptions and negative gearing and those principles that have been applied for many, many generations, for those people who want to cut back on those rorts, the greatest you can do it is to remove the tax encouragement and incentives for it. You do that by having lower tax rates. The reason people pursue tax breaks is because they feel they are paying too much tax already. Of course the incentive is diminished if you are paying a fair and reasonable amount of tax. The big problem we have is that not enough people in this country are chipping in with their tax bill: some people because they are living off the system, because this place and the programs that come out of it encourage them to, but many people are pursuing tax schemes, which they are allowed to do entirely legally, because of the punitive rates of tax that are applied. The Australian Conservatives think there is a better way. If you lower taxes, you provide less support to those who have jobs and do not need them. You can provide greater support, or sufficient support, to those who are truly in need, including the unemployed and families. You can rejig the family tax benefit system through the tax system by income splitting or by tax free thresholds. You could reform child care by allowing it to be tax deductible rather than subsidised. You could stamp out the rorts in child care, which shamefully have been allowed to continue for far too long. There are any number of ways we can cut our cloth to fit our purse, and that is very important for our country.
When those on the other side have no solutions about making cuts to the budget, because it might upset one of their focus groups or their special interest groups, the only answers they have is to put taxes up. My response to that is it is short-term thinking; it is thinking that will diminish our competitiveness and our economy. We need to think about cutting the size, scope and reach of government so that we can support those truly in need. That is why Australian Conservatives are happy to support this bill. In many areas it does not go far enough; I think there are many more areas of tax savings we could accommodate. But the government is grasping for the branch that is within reach. That means it is going to save $2.4 billion over the forward estimates.
Additionally, they also withdrew from their previous incarnation of this bill a decision to increase family tax benefit rates to offset in part the phase-out of the FTB supplements. This is a significant change because it saves a further $2.3 billion over the forward estimates period and, over the medium term, arrests a potential $11 billion future expenditure. It is uncomfortable—people do not like it and it is going to affect individuals—but it is simply impossible for us to make the changes that are necessary without impacting individuals.
Everyone in this country needs to do their bit. I would suggest that those on the top marginal tax rates are already doing their bit by paying nearly half of their income over a certain threshold in tax. Those who as a consequence of this bill are taking haircuts on some of the benefits they may receive will also be doing their bit. But those on the other side of the chamber do not want anyone to feel any pain. They do not want those who are wearing the greatest burden of tax to have any relief from that. They just want to put taxes up and up, thinking that will solve the problem. But it does not solve the problem, and history as a guide demonstrates that.
It is the same wilful ignorance of history that has allowed those on the other side of the chamber to say that our debt problems are temporary, that they are going to be fixed. It is like a magic pudding, a fairytale of economics, and somehow the problems we are creating today are going to be solved at some point in the future. That is exactly how massive problems start—whether it be personal addictions or spendthrift governments, they all begin with making excuses for the little things. 'I'll just do this little thing now and it'll be okay. We'll fix it up next year.' The time to fix it is upon us, and the only way that I see it can be fixed is for the major parties to have a responsible and principled handbrake, a responsible and principled conscience on the implications of their decisions for future generations. That conscience has to take effect here in the Senate.
I know we come from different political strands—the Xenophon team, the Hanson team, the Hinch team, the Leyonhjelm team and the Australian Conservatives team—but we have united to say this is an important step forward for our country to save some money. We do not like everything about it, but it does save money. It will assist the government in restoring balance to the budget. It will assist the government in, hopefully, repaying some debt in future years. That is our current crisis. That is our obligation to the people, for whom we are custodians of this country and this economy. It is for our children and their children.
For the people who are suffering today from the high cost of utility bills and taxes—
Senator Farrell interjecting—
I note that Senator Farrell has interjected. Of course, he is the architect of the South Australian Labor government. He is the godfather of the South Australian Labor government. He is the one who gave the blessing for Premier Weatherill to become the premier and indulge in this flight of fancy called green power. They have the highest rate of green power anywhere in this country. But the people of South Australia cannot afford to pay for it because it is intermittent, unreliable and darned expensive. I am suggesting that the South Australian people, when they cannot pay their utility bills, contact Senator Farrell's office and say, 'Where is my subsidy?'—just like he is subsidising the wind farms.
I have a point of order. Senator Bernardi is completely misleading this house. It was his former mates in the Liberal Party, who sold the Electricity Trust of South Australia, who have caused all of the problems—
Mr Acting Deputy President, I know how difficult it is to stand in the way of a powerful faction boss like Senator Farrell, but congratulations for having the intestinal fortitude to do that! I am surprised that Senator Farrell did not rise on a point of order to say thank you to me. I will leave it to him to explain why he needs to offer me a humbling apology a bit later on.
The reality is that government decisions are what is making the cost of living very difficult for families. That is notwithstanding the fact that some families are struggling through lack of employment opportunities or through personal circumstances. But the environment for employment opportunities is provided by government. The cost of electricity, while not prescribed by government, is influenced by government policymaking, and that is evidenced by the green experiment in South Australia. It is a Petri dish of their failed green dreams and it is a dud. It has not grown some positive culture; it has created a virus that is infecting the whole country. It is now creeping across to Victoria, where they are about to shut down the Hazelwood power station. We are going to have a massive power crisis in this country directly attributable to federal and state government policies. It is time we woke people and governments up to that. I digress, but part of that is to highlight the fact that we need governments to not only live within their means in spending but also ensure that the long-term implications of policy decisions are considered. That is where I think successive governments have failed.
There may be some on the other side who want to defend some of those decisions, but I think morally it is very difficult to do so because we have got, as I said, $500 billion worth of debt already accumulated that none of us in this place have any real hope of paying back. We are actually leaving it for the next generation of workers to pick up the pieces. The answer from those on that side is: 'Let's just tax them more.' That is to ignore the reality of economics, the demographics of our country and the process of immigration, which they sustain as well and which is on an unsustainable path and putting pressure on our infrastructure and our social cohesion. All of these things are intertwined.
Ultimately, we have to take even the most modest of steps to arrest the problems that we are creating. That is why as an Australian Conservative I support this bill, notwithstanding the fact that there are going to be challenges for people who are affected by it. We need to start to deal with the issues that we have created. With that, I commend this bill to the Senate.
Senator Bernardi, it has been a real pleasure to listen to the Australian Conservatives' party platform. We have not had an opportunity till this stage to do so in this place. In your contribution on the Social Services Legislation Amendment Bill 2017, whose name I do not think you managed to get into your contribution—
I must have been so caught up in your arguments about tax and how we should operate in the brave new world that I missed you mention the actual bill that is before us. That is no surprise because most of us seem to have missed the content of the bill in front of us today because we will not see the bill we are debating now—according to the government, for extensive periods of time—until we actually conclude the debate. With due process, the government has brought forward an amended bill. It did not just split the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017. In the series of Senate inquiries over the last three years we have consistently talked about the government's plan to make cuts and savings—and Senator Bernardi did admit that this bill may have some impact on some people. Of course it is very easy to say that when the impact is not on you. In this place as a series of government pieces of legislation have come out around some of the measures we have before us we have talked about the value, the issues and the impact of individual cuts and we have balanced that with the issue behind the cuts, which is to save money.
Indeed, there is no question that we should be looking effectively to ensure that the budget is in as strong a position as it possibly can be. It is the role of parliament to ensure that governments look at budget processes. We on this side of the chamber have never moved away from that, despite some of the rhetoric that has been thrown across in the series of debates we have had. We have questioned consistently the priorities being put forward by the government, which groups of Australians these savings are going to be imposed on, at what cost, how they are going to be supported through the processes implemented by the changes and then on the other side exactly how much savings we are going to have.
Until this morning we were being told that the necessary savings in the omnibus bill were going to be immediately important for the child-care package. A divide was consciously created by the government between some people in the community on whom the savings would be imposed and those who would benefit. We questioned sometimes the amount of that benefit, but there was a clear divide. Until 9.30 this morning that was the debate we were engaged in. It was the debate in the Senate Community Affairs Legislation Committee, which I still visit from time to time and did in consideration of the previous bill. That took up a considerable amount of the time of the committee—the thought and the preparation—and the concerns and the contributions of people who gave up their time to come and talk to senators about the legislation in front of them. There were hours of discussion.
In a relatively short time, as often happens, people were asked to think about the proposed legislation and to give their opinion. Unfortunately, despite people giving their opinions, often there is not much change in what comes to the parliament. Until 9.30 this morning we had not seen much change in what was coming to the parliament as a result of a proposal that the government had followed by producing legislation. In the lower house there was significant discussion around the elements of the bill, the objectives of the bill and why the savings in this bill were absolutely necessary to fund the child-care package. That was the bottom line of the debate we were engaged in until 9.30 this morning.
So we have two new pieces of legislation in front of this chamber. We know that part of the reason we are here is that we are concerned and engaged in legislation and we have the competence, I hope, to be able to react quickly to what is happening on the floor of the chamber. However, I am not too sure that I have the competence to react as quickly as we are being expected to do on this bill, because it is not just the bill that we had before us split into two. We now have changes to the original bill on savings—and we had not seen these changes until this morning—and elements that had been discussed in the committee over weeks are now no longer there, and no explanation has been given by the government to the wider chamber.
We do understand the processes of effective negotiation in this place. That is how we operate. I feel sure that there has been considerable negotiation between the government, crossbenchers and other people who may have interest in this bill, but not with the shadow minister and not with the Labor senators in this place, who have shown genuine interest in the process—genuine interest in the bill.