Senate debates

Monday, 5 February 2018

Questions without Notice: Take Note of Answers


3:01 pm

Photo of Helen PolleyHelen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Collins today relating to the Medicare levy.

We've seen, time and time again, government senators—even this morning—talking down the fact that this government will increase income tax for Australians. The question that was asked related to the over $1.7 billion a year that Australians pay in Medicare levy and how much of that the Turnbull government's so-called tax cuts will give back to low- and middle-income earners in this country. We know that it's been the government's policy and that it's in their DNA to continually attack and undermine Medicare. It's who they are. It's what we have seen from each and every government of a Liberal persuasion that's come to power in this country since the introduction of Medicare.

People in our communities are talking to us about the challenges in getting access to GPs and hospitals. All of this comes down to the fact that this government is bereft of any real policy on dealing with the health crisis in this country and on ensuring that Medicare is available and that people can see a doctor when they need to. We know that because of the Turnbull government here in Canberra and the Hodgman Liberal government in my home state of Tasmania there is a health crisis in that state.

Senator Duniam interjecting

We have a crisis when older Tasmanians are being left on the floor in accident and emergency. Yes, it did happen. Senator Duniam can confirm that, yes, that is exactly what is happening in the hospitals. Only last week the head of surgery at Launceston General Hospital resigned—he is now heading for Queensland—because the state Liberal minister failed to negotiate with him to ensure that his duties and responsibilities were not taken away. That's exactly what this government has done in Tasmania. What does it all come back to? It comes back to the fact that the Liberal Premier of Tasmania is gutless and is unable to stand up to the Minister for Health under the Turnbull government.

What we are seeing in this country is that unless you've got a big credit card and come from the right postcode you don't have the access to health that you should. Australians pride themselves, and have for decades, on ensuring that everyone has a fair go, that they have fair access to health. We don't want an American system. We don't want that in this country. Your credit card shouldn't determine whether or not you are able to access a doctor, get into a hospital when you need to, or access pharmaceuticals.

What we see with this government is a government that has its priorities all wrong. It's attacking Medicare. It's increasing the contribution it expects from low- and middle-income earners. It's increasing taxation on these people at the same time that it's giving a $65 billion tax cut to the big end of town. It's really hard, I know, for Mr Turnbull to relate to the concerns of people in this country, but there are far too many people, in particular a lot of older people, who are unable to access good health care.

Senator Duniam interjecting

For Senator Duniam and others on that side to deny the true and evident facts of what's happening in Tasmanian hospitals is an outrage. I would invite the Tasmanian Liberal senators to go back to our home state, go back during the election campaign, and stand up and defend the Liberal government's cuts to health; to say to the older people who have been left on the floors at Royal Hobart Hospital and Launceston General Hospital—those patients who have had to stay in accident and emergency for up to 48 hours and even beyond—that this is acceptable. We on this side do not find it acceptable and we will always fight to ensure that Medicare is protected. We did it at the last election and we will continue to do it, because we believe in universal health care. We believe that every Australian, irrespective of where they live or how much money they earn, should have access through Medicare, because that's why it was originally introduced—by Labor, I might add. (Time expired)

3:06 pm

Photo of Linda ReynoldsLinda Reynolds (WA, Liberal Party) Share this | | Hansard source

I would first like to say, 'Congratulations and welcome,' to my new colleague, Senator Molan, and also wish the previous Attorney-General, who is also in the chamber, all the best in his new career.

Starting off the year on motions to take note of answers, I always find it a little amusing to hear the doom and gloom from those opposite, and this year is absolutely no different. Yes, we all agree with universal health care, but the difference between those opposite and us is the fact that we actually understand that taxpayers' pockets are not a magic pudding.

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party) Share this | | Hansard source

Oh, aren't they?

Photo of Linda ReynoldsLinda Reynolds (WA, Liberal Party) Share this | | Hansard source

No, apparently they're not. If you want to spend money on health care and the NDIS, you actually have to raise the money first. So I thought, in the context of guaranteeing the NDIS and of the government's bill, the Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill, I would remind those opposite and those in the gallery of the history to this.

This scheme is supported by all sides of parliament, but unfortunately when we came to government it was not sufficiently funded, so the government have worked very carefully to make sure that the program is fully funded for the 460,000 Australians who will benefit from this long overdue scheme. Again, the money doesn't just come out of nowhere. There is no such thing as government money. As those in the gallery know full well, the money the government spends is their money. To help fund this scheme, the government is asking Australians to contribute to it through an increase of half a percentage point in the Medicare levy, from two per cent to 2½ per cent of taxable income. This means that one-fifth of the revenue raised by the Medicare levy, along with any underspend in any year in the NDIS, will be directed to the NDIS savings fund—a measured and prudent approach. Of course, low-income earners will continue to receive relief from the Medicare levy through the low-income threshold for singles, families, seniors and pensioners.

This motion gives me cause to reflect on why we've had to do this and the legacy those opposite left us when we came into government. I was working in this place during the years of the Howard and Costello government, and when the Labor Party came into office in 2007 they had a budget surplus and not a cent of government debt—no debt, which meant that the taxpayers of Australia had no debt to pay back. If the coalition had continued building debt at previous levels, the gross national debt would now be over $1 trillion. The coalition has acted responsibly to cut our growth in gross debt by two-thirds to nine per cent in this year's MYEFO.

What else has this government actually done that those opposite will never ever acknowledge? It is not all doom and gloom. Some of the measures the government has introduced to actually fund the NDIS have also created jobs. Last year, in 2017, how many jobs do those opposite think were actually created? How many new jobs were created last year for Australians—brand new jobs? What those opposite will never tell you is that over 403,000 new jobs were created for Australians—the most jobs ever created in a single year. In fact, this government has now created nearly, but not quite, one million jobs since it came to office four years ago. Those opposite sit there like Chicken Little, saying the sky's going to fall down, we're going to ruin the earth or ruin the economy, but the statistics speak for themselves. The best form of welfare, and the best way to fund welfare, is by having Australians in jobs: having jobs, paying taxes, being able to look after their own families, having that sense of pride and providing money into the coffers.

What else has this government done over the last 12 months? We've cut taxes for 3.2 million small businesses which employ over 6½ million Australians. The instant asset write-off was used by 300,000 small businesses last year alone to invest in their businesses, to buy new equipment, to buy machinery and to employ new staff. We've invested a record $75 billion in national infrastructure, which, again, is money into the Australian economy and money which creates jobs. Rural exports, due to the free trade agreements and other measures this government has taken, went up 19 per cent in the last year alone. That is more money for the economy. (Time expired)

3:11 pm

Photo of Chris KetterChris Ketter (Queensland, Australian Labor Party) Share this | | Hansard source

Whilst I congratulate Senator Cormann on his appointment, I do have to express my disappointment with the rather lacklustre response that was provided today to Senator Collins's very important question. This was the opportunity for Senator Cormann to provide some light on the issue that the Prime Minister ducked yesterday on the Insiders program, where the Prime Minister refused to concede the truth about the impact of the coalition's tax policies on low- and middle-income Australians.

On our figures, we've said that income earners of about $55,000 per annum face a $275 tax hike. Income earners on $80,000 per annum face a $400 per annum tax hike. On our figures, this means low- and middle-income Australians face an increased tax bill of $1.7 billion. There was an opportunity—if our figures are wrong, let's hear from the coalition—but instead Senator Cormann resorted to the tired old furphy that taxes will always be higher under Labor. That furphy is just that. I have raised this issue in the chamber on a number of occasions previously. The facts do not bear out that statement.

I do agree with one thing that Senator Cormann said: if you repeat a lie over and over, it doesn't make it true. This is exactly what's happening with this particular statement. I refer to the research that's been done by Stephen Koukoulas, which I've repeated in this chamber. I know Senator Macdonald is here in the chamber and I know others who like to make these sorts of stereotypical statements about Labor's economic record. Stephen Koukoulas has shown that if we look at the tax to GDP ratio since 1980, we find that in the 10 years with the highest tax to GDP ratio eight of those 10 years were under Liberal administrations. There were only two under Labor governments. If you look at the 10 years of lowest tax to GDP ratio, you find that 10 out of 10 of those years are under Labor governments. In 1992-93 we saw tax to GDP at 20 per cent, going up to 21.5 per cent under a Labor administration in the 2013-14 year. Whilst I know that this is probably not going to stop Senator Cormann from making the same tired old comments in the future, let's just keep the facts on the table. With this particular issue, it's quite clear that Labor has a record of having a very low level of tax to GDP. Let's not hear that furphy anymore in this place.

Now, it's quite clear that this government is looking after the top end of town. They've abolished the budget repair levy. Under the Abbott government, higher income earners paid an extra two per cent on the 45 per cent tax rate, and this has been cut. They're looking out for multinationals. They're attempting to pass the $65 billion in company tax that is a ram-raid on the budget and they've ignored our calls for tax transparency and closing debt deduction loopholes. They've ruled out negative gearing and capital gains tax reforms, despite evidence that these tax breaks mainly benefit the wealthy. Up until recently, they've run a protection racket for the big banks, that have ripped off ordinary Australians, until they were dragged kicking and screaming to a royal commission this year.

Why is this stealth attack on the tax of ordinary Australians necessary? Labor fully funded the NDIS in government. The Productivity Commission said that the NDIS costs were broadly on track, and so any claims by this government that the NDIS is underfunded are absolutely not true.

Whilst the Prime Minister is making plans to take back what he gives out, workers are suffering. Wage growth is at historically low levels. Penalty rates have been cut for thousands of casualised workers, affecting job security for individuals and families. The workforce is becoming more casualised. Enterprise-bargaining rates, which have proven globally to correlate positively with wage growth, have fallen dramatically. The cost of living is going up—medical expenses, private health insurance, energy bills, groceries and education. Only Labor has a plan to restore penalty rates, cap private health insurance premium increases, address the energy crisis and tackle the rising cost of living.

3:17 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

In my first speech to the chamber this year, I want to wish everyone a very happy and successful 2018. I particularly welcome my new colleague, Senator Gichuhi, to the Liberal Party and to this side of the chamber. It's lovely to have her here. Senator Molan has joined us this morning as well. I wish even the Labor Party all the very best as they try to find some policies that they can afford and that are truthful.

I appreciate Senator Ketter mentioning me, pre-empting that I might talk about Labor's financial record. Senator Ketter, I have been here a long time now. I was here in the Hawke-Keating days and then in the Rudd-Gillard days. I've seen firsthand what Labor does with a budget. The bobby-dazzler of all was when Mr Keating legislated tax cuts before an election. He unexpectedly got elected. The first thing he did when he came back as Prime Minister was to repeal the legislation giving the tax cuts. Of course, we all know the famous, 'There will be no carbon tax under a government I lead.' What was the first thing Prime Minister Gillard did when she was also elected unexpectedly? She introduced a carbon tax. That's just the by the way.

My colleague Senator Reynolds has already reminded the House that when the Howard government left there was $60 billion in credit—$60 billion of Australians' money in credit for a rainy day and to allow good things to be done by the new government. What happened was that the Labor government came in and, as usual, spent and spent and spent without any regard for where the money was coming from. As a result of that we ended up in a situation where the finances of our country went from $60 billion in credit to what would have got up to about $700 billion in debt if the Labor Party had continued in government on the same trajectory.

The argument, or the mention, today of the Medicare levy and the NDIS is just a subset of Labor's inability to properly manage money. Look, anyone can go out and be popular—go out to the world and promise anybody whatever they want to hear, and win votes from a public that isn't always quite as astute as perhaps they should be. The public doesn't really look at or understand how these things are paid for. So, Mr Shorten goes out and promises his audience of the day what they want to hear—and I know that to my detriment in North Queensland. Mr Shorten is in Batman, where he's having the fight of his life with the Greens political party. So, to try to win or stop the Greens candidate winning, Mr Shorten is now saying he's not going to support Adani. But when he comes to Queensland and Townsville, he's all in favour of Adani. He's all over the shop, depending on which particular audience he's talking to.

Similarly with the NDIS: Senator Cormann, on his first day as leader—and I congratulate him on his appointment, and the very lucid, clear and explanatory way he answered the questions—pointed out that the Labor Party had a good idea about the National Disability Insurance Scheme; it's just that they didn't bother to fund it. They went around and said, 'Yes, we're going to do this,' but not anywhere in the budget papers could you find where Labor had set any money aside for what was and is a very, very expensive process. I'm glad the coalition government is proceeding with the NDIS. It is now fully funded, and it means that people with disabilities will actually have a funded scheme that will assist them into the future. That's the difference between coalition governments and Labor. We don't just talk about things; we actually manage the finances so that they can be paid for. (Time expired)

3:22 pm

Photo of Kimberley KitchingKimberley Kitching (Victoria, Australian Labor Party) Share this | | Hansard source

Three-quarters of a century ago Robert Menzies made what became a famous speech about Australia's forgotten people. I've been told by some senators across the chamber that they actually enjoy hearing Robert Menzies quotes from me, because they don't hear them on any other occasion. Robert Menzies said that those forgotten people were forgotten because:

… they were not rich enough to look after themselves, but nor did they receive the protection that trade unions gave to the working classes.

That speech not only helped shape politics in the postwar years but also, apparently, is a central tenet of the Liberal Party.

But here we have today, this year, this Prime Minister, this Liberal Prime Minister, from the party of Menzies—the party of one-time lower taxes—who has actually increased taxation on Australians. They have increased the Medicare levy. The increase in the Medicare levy has the greatest impact on individuals in the third, fourth and fifth income quintiles. The second quintile—those earning $21,000 per annum—will also have their tax burden increased: $21,000 and paying more tax under this government. Let me be clear and give some examples. Someone earning $60,000 will pay an extra $300 in tax. Someone earning $80,000 will pay an extra $400. This is a tax hike on over seven million Australian workers earning less than $87,000 each year. Yet this government, this Prime Minister, is going ahead with $65 billion in tax cuts for big business. It's clear that low- and middle-income Australians are paying for the government's $65 billion handout to big business in the form of rising personal income taxes.

Now, those opposite, and Senator Cormann during question time, attempted to rubbish the ALP on some of these figures. But let's go to the Parliamentary Budget Office and the report they put out last July, called 2017-18 budget:medium-term projectionsand I'm sure the Minister for Finance has a copy. This is what they said:

Personal income tax receipts are projected by the PBO to increase by 1.6 per cent of GDP over the medium term, from 11.1 per cent in 2016-17 to 12.6 per cent of GDP in 2027-28.

…   …   …

Once the tax 'cap' is reached, personal income tax receipts are projected by the PBO to continue to rise as a per cent of GDP as company tax receipts decline from 2023-24 as a result of the Government's Enterprise Tax Plan. The PBO projects that the average tax rate on personal income will rise from 22.7 per cent in 2016-17 to 25.9 per cent in 2027-28.

The report states that in 2023-24, personal income tax is 12.4 per cent of GDP while company tax is 4.5. By 2027-28, personal income tax is 12.6 per cent of GDP, while company tax is 4.2 per cent. So from 2023-24 to 2027-28, when the company tax rate is meant to decrease for all companies, personal income taxes rise 0.2 percentage points of GDP while company taxes decrease by 0.3 percentage points. That position was only reinforced by the PBO at the end of last year, where in another report they showed that middle-income earners are set to suffer the greatest tax burden under this government's policies.

What does this mean? First, let's consider how disheartening and frustrating this must be for Australians. What it does show is it's a government with no understanding of the effect that its policies are having on the living standards of lower- and middle-income families, and no amount of bluster from ministers opposite will conceal that fact. Healthcare costs are one of the largest items in the expenditure of ordinary Australian families. Healthcare costs are rising faster than overall CPI and faster than the incomes of most lower- and middle-income families. But I guess if you are a believer in Richie Rich economics, or if you're the Prince of Point Piper, as the Prime Minister is, you don't actually care. (Time expired)

Question agreed to.