Thursday, 10 May 2018
by leave—I move:
That the Senate—
(a) acknowledges that the Turnbull Government's budget:
(i) cuts the energy supplement for pensioners – costing pensioners $14 a fortnight,
(ii) forces Australians to work until they are 70 before they are eligible for the pension,
(iii) locks in $17 billion in cuts to schools, $2.2 billion in cuts to universities and cuts to hospitals,
(iv) cuts Medicare by keeping the rebate freeze on specialists for one more year,
(v) introduces $270 million in new cuts to TAFE and apprentices,
(vi) breaks a promise to not cut funding to the ABC by slashing more than $80 million,
(vii) announces a $1.5 billion cut to remote housing by ending the national partnership agreement and $40 million cut to dental care for veterans, and
(viii) confirms $80 billion tax handout to big business, including $17 billion to the big banks; and
(b) calls on the Turnbull Government to immediate reverse these unfair measures.
Tasmanians have a right to feel extremely disappointed by this federal budget. While the government would like you to think that it's a budget with something for everybody, in reality the tax rates after the first couple of years are overwhelmingly skewed towards those on the highest incomes. It's clear that in this budget Mr Turnbull has failed. He has failed to address the fundamental structural problems in our economy and the challenges that ordinary Australians face. It's a budget with a short-term focus on winning the next federal election, rather than one mapping out a future economic agenda for our nation. Hidden in it are cuts to essential public services to our schools, hospitals, families and pensioners. It's clear that Mr Turnbull and his party colleagues are completely out of touch. He does not and cannot understand the concerns of those who live outside Point Piper, and he certainly does not understand the concerns of people in my home state of Tasmania, particularly those on the north-west and west coasts. They're doing it tough up that way, and the federal Liberal government has been completely missing in action when it comes to fixing issues in those communities. The government may make promises in the lead up to the election, but people need to remember that Mr Turnbull has failed the people of Tasmania, not just on Tuesday in the budget but over the whole of the five years in government. Short-term, pre-election pork-barrelling is not enough to overcome this government's years of neglect.
I know my good friend Justine Keay has been working very hard in the communities on the north-west and west coasts of Tasmania, and I sincerely hope that the people of Braddon will give her the opportunity to keep on working and fighting for them, because only Labor can reverse the neglect of this government. Let me give an example. While the government wanted to talk a lot about senior Australians in the lead up to the budget, their past actions are the ones that they need to be judged on. The task of fixing Australia's aged-care system is critically important, but, sadly, the Turnbull government are not doing enough. In the north-west of Tasmania alone there are 243 older Tasmanians waiting for care—that number is based on the latest data from the Department of Health. These include 160 older Tasmanians waiting with high-care needs, many of them with dementia. The aged-care portfolio is in crisis, and that is absolutely unacceptable. This situation will worsen with the ageing population on the north-west and west coasts, too. We have to remember that in my home state of Tasmania we have the oldest population, and it is ageing faster than the national average. How is it fair that these older Tasmanians have to wait for care while the Turnbull government continues to pursue an $80 billion tax handout to big corporations and to the banks?
Senior Tasmanians are also set to lose the pensioner energy supplement of around $7 a week. We've got to remember that 1,570 local pensioners in Braddon alone are worse off due to previous cuts: 1,170 lost part of their pension, while 400 lost their pension entirely. More and more Tasmanians will have to work for longer, with the government hiking the retirement age to 70. I'm sure that these Tasmanians won't trust a government that previously promised no changes to pensions. We don't forget. We've got long memories in Tasmania, and we do not forget.
Young Tasmanians also feel that the government has completely failed them. The government in the budget has done absolutely nothing to address the biggest concern that young people in Tasmania face, and that's affordable housing. According to Anglicare's Rental Affordability Snapshot Tasmania 2018 there were no private affordable rentals in Tasmania for people on youth allowance—none. And, for a single adult with a Newstart allowance, there was only one affordable rental property in the whole of Tasmania—just one in the whole of Tasmania. That is a disaster. Yet this government doesn't see there's an issue. This government's so utterly blind that it can't see the wave of homelessness that's approaching. We've had recent protests in Tasmania, with people camping on the lawns of Parliament House and crown land because there's nowhere else for them to go. As a result of the actions, or nonactions, of the Liberal federal government and the Tasmanian Liberal government, that's what it has come to. We're coming into winter, we've got a really bad weekend coming on weather-wise, and we've got people living in tents. It's atrocious. In the north-west in the seat of Braddon there was a 45 per cent drop in advertised properties since 2017. That means that many Tasmanians in the north-west and across the state with a job, good references and a solid credit history are now unable to find a rental property. And yet this government's done nothing, and it has done nothing in the federal budget to make any improvements to the dire housing situation facing Tasmanians.
They've also failed utterly on the issue of youth unemployment. The youth unemployment rate in Braddon has just dropped below the national average. It's around 11 per cent still, and that's not good enough. The overall level of unemployment in Braddon on the north-west and west coast of Tassie is at six per cent, which is above both the state and the national averages. One in five workers in the electorate of Braddon could have been affected by the government's penalty rate cuts—one in five. While the government's focusing on giving $17 billion to their mates in the banks and $80 billion to their mates in big business, including multinationals that will funnel those funds offshore—we know that—Labor has a plan to create jobs. In Braddon alone, 6,611 local businesses will benefit from Labor's Australian Investment Guarantee, and that's including 6,147 small businesses. While the Liberals just want to give away money to line the pockets of foreign shareholders, we want to generate real investment and create real jobs.
This budget also locks in the government's cruel cut of $715 million to hospitals over the next two years. Once again, if we look at the seat of Braddon, that includes $730,000 from the Tasmanian North West Regional Hospital. The budget also contains further cuts to hospitals for the five years from 2020. Mr Turnbull's cuts will see $11 million less to public hospitals in Tasmania from 2017 to 2020. There's a crisis in Tasmanian hospitals at the moment, an absolute crisis, and these cuts will only make things worse. Surgeries will be delayed; nurse and doctor numbers will decline. We've got people resigning left, right and centre in our public hospitals. Emergency department wait times—and we have ramping in Tasmania constantly—will increase as a result of Mr Turnbull's cuts.
I've mentioned previously in this place that the government has locked in $17 billion worth of cuts to schools. This includes cuts of up to $14.7 million from local schools on the north-west and west coasts of Tassie. I think we're all pretty aware of the importance of education in creating better employment outcomes for people, but this government would rather give money to Mr Turnbull's mates in the big banks than spend it on good, local community schools in Tasmania. I would be embarrassed and I would be ashamed if I were part of the government. They're handing out $17 billion to their mates in the banks but they're cutting resources from our classrooms and from our children's education. Tasmanians, particularly those on the north-west and west coasts, should remember, every time their school can't afford something, that the money was ripped from their schools to inflate bank profits.
And then we face the issues around higher education. Higher education is on the chopping block as well, with $58 million cut from the University of Tasmania. The University of Tasmania has three campuses, and one of them is in Burnie on the north-west coast of Tassie. This is vital to ensuring that the young people on the north-west coast are able to gain skills and qualifications to participate in growing the economy of the region. So I hope those cuts won't directly impact on the courses provided by the Cradle Coast campus, but I'll be watching because I've got my doubts.
Tasmanians on the west coast—over there in Queenstown, Rosebery and Zeehan—should also be furious about the second-rate NBN they're being left with under this out-of-touch government. I know my colleagues Senator Anne Urquhart and Justine Keay pushed very strongly for upgraded NBN services on the west coast, but the government have failed them. Households and businesses on the west coast are screaming out for improved broadband. The region has some of the highest rainfall in the country, and much of the copper is heavily degraded. While some premises on the west coast will now get fibre to the curb, Mr Turnbull needs to direct NBN Co to immediately change the designs for Queenstown, Rosebery and Zeehan to deliver fibre to the curb to all premises in these towns. While he's there, the government should make sure the people in the towns on the west coast of Tassie have an opportunity for employment when the rollout gets to them, if ever it does. Mr Turnbull's ego should not leave the west coast of Tasmania with a dud NBN service.
Mr Turnbull wants to distract people with pre-election promises while the rest of his budget has locked in cuts to schools, cuts to hospitals and cuts to pensions. It's absolutely clear that this budget has failed Tasmanians. It's particularly failed people on the north-west coast of Tasmania in the seat of Braddon. That's why Tasmania needs a Shorten Labor government, which will govern for all Australians. The north-west and the west coasts of Tasmania need Justine Keay, who will continue to be a great representative for the electorate of Braddon, and I'll be very happy to go and support Justine in her campaign.
I rise to support this government's budget measures this year. I think it is an outstanding budget. It is an outstanding budget for our nation and it is also an outstanding budget for the future and for our children. It is a particularly good budget for my home state of Western Australia in a number of its measures. One of the reasons I'm most proud of being a senator from Western Australia in this place is that my great friend and colleague Dean Smith and I, coming from Western Australia, know what it takes to generate national wealth and know what it takes to grow the economy. Unlike what we've just heard from those opposite, we know that it takes a lot of hard work to generate national money and general income.
Before I go into the benefits of the budget for Western Australia, I would just like to remind those opposite of several facts about the Labor Party and also, in particular, the Greens. What happened to the budget under Labor? When you're having a look at framing and assessing what those opposite are saying somewhat shrilly today, just remember this: Bill Shorten and the Labor Party want to increase taxes on every Australian so that they get a tax take of more than $200 billion. That is $200 billion, but they have not said a word about how our economy is going to generate that beyond taking money from the economy and from taxpayers. Labor have said how they're going to do that: they will impose new and increased taxes on electricity, small and family business, incomes, housing, investment and also retirees. This means, from what we already know from Labor—and we know it will have the support of the Greens—that everybody will pay more and be at greater risk. We hear the rhetoric now, but in government Labor racked up six deficits in a row. They inherited government with zero debt and in fact money in the bank, but after six short years of Labor and six deficits we had $240 billion worth of debt. Unemployment was decreasing and the economy was not doing well. They plunged Australia into debt and deficit, despite, as I said, inheriting zero debt and a $20 billion surplus. They squandered the benefits that came from the once-in-a-century mining boom.
I well remember, as would many in this place, that Wayne Swan promised four years of surpluses, but they have not ever delivered a surplus since—how long since they haven't delivered a surplus, would you say?
A government senator: The never never?
It was 1989. The last time the Labor Party delivered a budget surplus was 1989. The bottom line is Labor are addicted to taxing and spending and, at the last election, they actually promised to increase the deficit by $16.5 billion.
Again, we've just heard the previous speaker going on ad nauseam about problems we have in Australian society. Those on this side of the chamber, of course, do not deny that. We see the same figures, but what I'm so proud of—being a Liberal member and sitting on this side of the Senate chamber—is that we know that to deliver anything, anything at all, you need to raise the money. We do not, like those opposite, believe you raise money simply by taking it and recycling it amongst taxpayers.
So what are some of the benefits for Western Australia? Western Australia does very well out of this budget because it is a budget tobuild a stronger economy which will create more jobs and pay for more of those services those opposite go on ad nauseam about but never say they're going to pay for. The government's plan for a stronger economy will support more jobs for WA families and their children, and it will assist Western Australia to set itself up for the future. Already in Western Australia over 20,000 more people are in work since the coalition was elected, but those of us from Western Australia know we need to do more to develop new industries to create new and more sustainable jobs in Western Australia's economy.
So what has the Commonwealth government done for Western Australia in this budget? It's providing $9.8 billion for vital infrastructure projects, including $2.8 billion for new major projects—such as the $1.1 million METRONET rail project, which takes the government's commitment to more than $3.2 billion for the project and will support $17,000 direct and indirect jobs in Western Australia. I'm particularly delighted that it will include the Thornlie to Cockburn rail link, which is something I've been advocating for for a long time because residents of Perth who live in the eastern suburbs need far greater access to jobs in the south metropolitan area.
We've heard about the $944 million Perth congestion package, including $581 million for the Tonkin Highway extension. As someone who drives regularly on the Tonkin Highway, I know just how important this is and what a difference it will make to not only industries in the area but also the families who live along that route. There is $560 billion for the Bunbury Outer Ring Road, which is something all of my Liberal colleagues in Western Australia have fought for—and no-one more so than the great Nola Marino. She has fought tirelessly to deliver this essential piece of infrastructure for the South West.
We've also provided $220 million for the Great Northern Highway Bindoon bypass as part of the Roads of Strategic Importance initiative. Like my colleague Dean Smith, I regularly travel in that part of northern Perth, and it will make an enormous difference for industries—existing and new industries—to find a new home in the northern parts of Perth.
This budget also guarantees the essential services that Western Australia relies on, with record funding for hospitals and schools, and a comprehensive approach to aged care for older Australians to live healthier, more independent and safer lives. It will also guarantee funding for disability services, which is something that I could not be happier about.
Despite what those opposite say—somewhat untruthfully—under the fully-funded hospitals agreement, public hospitals in Western Australia will receive more than $14.3 billion over the next five years out to 2024-25. The agreement will deliver an additional $3.42 billion in funding compared to the previous five years. That is a funding increase of 32 per cent from the federal government to Western Australian health. Despite, again, the suggestions of those opposite that we are not doing everything we can for primary health care in Western Australia, last financial year there were 3.4 million more bulk-billed GP attendances in WA compared to when Labor were in government. I believe bulk-billing rates in Western Australia are now well over 90 per cent. That has been under a coalition government. Why have we been able to do that? Because we are growing the economy, creating new jobs and creating new national wealth to pay for those resources. At the end of the day, we on this side know that everything in our nation—our lives, what we do and how we do it—rises and falls on a stronger economy. We on this side know that, and that's what we've been working tirelessly for over the last six years.
The security of all Australian jobs, all Australian businesses, all salary earners and all Australian incomes relies on a strong economy. We hear endlessly about essential services from those opposite, as if they're telling us we somehow don't realise these are services that are required. Of course we do. Of course we are compassionate. Of course we want our children to get the best education. We want all young people and all Australians who can work to work and to have the opportunity to work. We want to fund the National Disability Insurance Scheme. We want to do all of these things. But we know we have to pay for it. The essential services that I've gone through for Western Australia—hospitals, schools, Medicare, disability services, affordable medicines, aged care—have all been funded and delivered because we have a growing economy and we have more people in jobs. One of the many things in this budget I am particularly impressed about is that we are not only funding more of these services that we all want funded and getting nearly one million people into new jobs in this country but also bringing the budget back into balance, and a year earlier than we were expecting.
I listened with some interest, and a great deal of dismay, to those opposite during question time mocking the government and the finance minister for taking a long-term view to economic planning. I almost don't have the words to describe how ridiculous that is and how much of a difference that shows between the two sides of the Senate. Those opposite mocked the Minister for Finance for not taking a one-year or a four-year planning process for our nation's economic future. The fact that those opposite thought it was outrageous and funny that this government was committing and planning for the long term filled me with despair. The long term is the world in 10 years that my nieces and my godchildren will be coming out to. I think it is brilliant that this government is being conservative with its figures, and planning for the longer term.
What will the economy be as a result of this budget and the 10-year plan that the government is putting forward? What will it be for students who are currently going into high school or studying at university in their early 20s? What I don't want is for these children—again, my relatives, my godchildren and others—to come out to the same economy that I came out to in the mid-eighties, when I graduated high school. Times then were very tough, but I was one of the lucky ones who graduated high school and managed to get a job. I started off waiting tables and I sold office supplies. But times were tough; there were few jobs, high interest rates and low wages.
The only way for this generation of students is to graduate, get a great education and know that if they study hard and work hard—and study the right subjects—they will get a job in a growing economy and will not have to do what so many of us had to do when I graduated from university, or high school to start with. It was so difficult to get by and difficult to find a job. Not only do I want to have that future certainty for the next generation of school students but, like all of my coalition colleagues, I also want our small-business owners, young couples planning to have families and older Australians who are preparing for retirement to know that they can have a plan for the next 10 years and beyond with confidence.
Plenty of those opposite think that this tax relief is meaningless. I think they are clearly of touch. As the Treasurer said so aptly yesterday, they're caught in an almond latte fog. Our tax relief will provide help for those bills to be paid. As we heard from Nicole yesterday in that great video clip, it will allow her family a bit more freedom in budgeting and also allow her to give the kids something extra for what they would like to do. At the end of the day, what we are doing is giving people's money back for them to spend at their own discretion, with what their priorities are and how they want to spend it. We're giving them more freedom.
Our seven-year tax plan also runs a sword through bracket creep. What we've seen today in the media and in a lot of commentary, uniformly, is that it's a great thing for Australian families. If those hardworking Australians, whatever age they are, work more hours, do more overtime or get a pay rise, they get to keep more of their own money. It gives them more freedom to spend the money how they see fit with their own families, instead of paying it to the government.
When the second-highest tax bracket is eventually abolished, most Australians earning over $41,000 will never, ever face a higher marginal tax rate in their entire working lives. The fact that those opposite could not think that that was a universally great thing for the majority of Australian working families, again, has me beat. I'll just say this again, because of the implications for Australian families: when the second-highest tax bracket is abolished, most Australians earning above $41,000 will never, ever in their working lives face a higher marginal tax rate. So they can work more, do more overtime or get pay increases and they will get to keep more of their money for themselves and for their families.
But how has this government managed to do this when it inherited such an enormous debt and a very obstructive Senate in terms of budget reform? We've done this because we have single-mindedly worked very hard to grow the economy and to grow new industries and new trade opportunities. And guess what? When businesses, small and large, do well they employ more—they've now employed over a million new Australian workers. Again, that is what we aspire to on this side of the chamber. When business does well, employees do well and they earn more. And now, with the government getting rid of bracket creep, hardworking families can actually keep more of their well-earned money.
In summary, this budget is clearly a plan for a stronger economy. Again, it sounds almost self-evident to those on this side of the chamber, but it is the biggest differentiator between us and those opposite. We know, as the great Maggie Thatcher said over 30 years ago, that there is no such thing as government money. There is only the money that comes from taxpayers. If people want increased government expenditure, they pay for it. They either pay for it in taxes or they pay for it as loans to the government, which they pay back in tax. There is no free money; there is no government money.
Under this government we are creating a bigger economy. We're bringing more money into our economy. We have more money to spend on services. But, most importantly, we are creating jobs and a much stronger future, not only for older Australians in retirement but also for the next generation of students who are looking forward to whatever job, whatever career and whatever future they want. They'll be able to have it if we have the money for it.
As I said at the beginning, everything in our lives here in Australia relies on our economy. Our lives get better or they get worse according to the strength of our economy. Our economy only ever has strength when we create national wealth and we distribute it fairly, but we do it in a way that does not de-incentivise people to work and does not disempower them in all aspects of their lives.
I do agree with the previous speaker, just a little bit, that our economy is very important. It is pivotal. It affects people's lives. The economy affects people's material concerns and it affects their day-to-day lives. It affects whether people can afford to keep a roof over their heads, to feed their children and to get health care—which are, of course, fundamental—and that is why this budget is such an abomination.
I'm somewhat moved to support this motion but I would like to say that I'm disappointed because it lists some of the things that are wrong with the budget. It's a bit short. I think it could be a good 10 times as long and it still wouldn't get through all of the things that are problematic about this budget.
Let me firstly go to the core issue of inequality. Inequality is something that, finally, most people—clearly not those in the government, unfortunately—in the wider community recognise is a serious social problem. It is a serious problem in terms of justice and fairness—that old Australian ethos of egalitarianism that sometimes still gets quoted. It's sounding very musty and dated these days because it certainly hasn't been followed. In fact, it's been deliberately destroyed by this government.
Also, equality is a crucial thing with regard to making our economy work properly. There's ample evidence around from economists demonstrating that once you get to the sort of stage of widespread and increasing inequality—income inequality and, most particularly, wealth inequality—it starts to become extremely harmful to the fundamentals of your economy and it also then starts to become extremely harmful to the foundations of your society.
Alongside the need to emphasise the significance of having an economy that delivers the basics for everybody, for all of us, is the need to ensure that we have a healthy environment because there is not much point having people with some jobs if they can't breathe the air and if their water is poisoned. Their jobs will disappear—as they will in my state of Queensland, and in northern Queensland, in particular—if something is not done to stop the rapid global warming that is happening and that is cooking the Reef.
I saw quite an interesting thing in these budget papers, in amongst everything. The government tried to make a big deal of it with $535.8 million over five years for the delivery of a Reef 2050 action plan. Out of that, $443 million is delivered this financial year, as in the next couple of months. That's front loading in a big way. If it were actually going to be delivered to help ensure the survival of the Reef then that would be great, because it is urgent. But if you look at the government's own wording in the budget papers, they're talking about using this money for a range of things, including to progress a research and development program for science innovation, for coral reef restoration and for adaptation to rising ocean temperatures.
Half the time we have people from the government saying that it's a myth that we've got rising temperatures. But they're now saying they need to spend very significant amounts of money to deal with adaptation for rising ocean temperatures. That on the surface would be a good thing, but a much, much better thing would be to stop doing the things that are creating the rising ocean temperatures and putting at threat tens of thousands of jobs and the long-term sustainability and cultural viability of communities along the Queensland coast.
Instead, what they're also using this money for is a reef communications plan. I had the pleasure—perhaps I shouldn't call it a 'pleasure'—of being in a committee hearing with Senator Macdonald the other day in Yeppoon. It was educational. It was just down the road from Senator Canavan's office. It was an inquiry into tourism. It was very useful. It was looking into the job opportunities for Central and Northern Queensland that come through tourism and that absolutely all of them—150 per cent—rely on the health of not just the reef but the marine park, the rivers, the wetlands and the coastal strip in general. All of those are being put at risk by the continual environmental vandalism of this government. It is reiterated in this budget, as there's pretty much nothing to address it. In fact, there are cuts to environment funding, cuts to the jobs of people who are trying to ensure our threatened species don't go extinct and cuts to the jobs of people who are trying to monitor water quality and the health of the water around Queensland and the country. I heard Senator Macdonald in that hearing openly saying, 'This money for the reef action plan is coming forth to have advertising overseas to combat the lies.' These are the so-called lies of people wanting to let people overseas know that the health of the Great Barrier Reef is at risk.
I hope I am proven wrong on this, but I think we're going to have this massive front-loaded spending of money to run a propaganda campaign overseas to say, 'The reef is all healthy and it's all good,' whilst at the same time this government is putting more money into digging up more thermal coal around Queensland and around the country and trying to get more people to put more money into building coal-fired power stations that will further destroy the reef, the marine park and the jobs that are all attached. That's the absurdity at the heart of this budget. That's just one example amongst many that shows just how much of a myth it is that these government members can call themselves good economic managers.
Poll after poll shows that Australians these days, if they're given that basic choice between tax cuts or investment in social infrastructure and social services, will say, 'We want the money invested in health care, education, housing, public transport, our environment and our communities.' That is what the Australian community want. We don't want greater inequality. But we actually had the previous speaker from the government—and I think I got this right—saying: 'It's a universally great thing that someone will never have to pay a higher tax rate again once they hit $41,000. Even if they get to $200,000, they still won't have to pay at a higher tax rate.'
I can remember the Joh Bjelke-Petersen days. I am old enough to remember when Joh Bjelke-Petersen—one of Senator Canavan's heroes, I think—made his great run for Canberra. He ran on his flat tax program. There were probably a couple of things that blew that whole campaign up, but that was probably the key thing—that he ran on something that was so clearly unjust and so clearly economically insane and stupid. Yet this government is really trying to push us down to not quite total, absolute ground-zero flat tax but pretty close. It is really trying to push us right down to as close to flat as it can get. It thinks it's a universally good thing for somebody earning $200,000 a year to be in exactly the same income tax bracket as somebody earning under the median wage. I accept the government is being honest about that. At least it does create a clear indication of the stark choice here. But it shows there is an ongoing, clear-cut commitment to not just maintaining but increasing the inequality that is threatening our society and our economy in the long term.
I draw attention to the analysis. There is an interesting case study after every budget, and probably this one in particular, of how people can use numbers and statistics in all sorts of ways to create very different pictures. But the simple fact is, when you're looking at the basic issue of equality and whether you're increasing it or decreasing it, you're looking at who's getting more money out of it. We already know the big corporations, the big banks, and the Liberal, National and One Nation alliance are still committed to giving big tax cuts to the banks. We've seen the analysis—and there's been plenty of it; I'll pick the one from the Australia Institute—somebody earning $40,000 a year will get a tax cut of $455 a year; and someone earning $200,000 will get $7,225 a year. That is five times more—they earn five times more, but their tax cut is 16 times bigger. The inequality from the tax cut grows by a factor of three, if these tax cuts ever do come into law. I urge, as part of this debate, all of those in the Senate on the crossbench to do what they can to make sure that this rampant inequality does not get locked into law.
I want to draw attention to the comments from organisations working in the area of housing. St Vincent de Paul, for example, have stated that this budget locks in future spending cuts and leaves people on the lowest incomes worse off. People are already struggling, and it leaves them worse off. There is still no increase to Newstart. Even John Howard is finally agreeing with the Greens. We heard people from the Liberal side of the chamber saying, 'If you want to see what Labor's position will be in five years, look at what the Greens are saying now.' On some issues, there's truth in that. I wish they'd speed things up a bit sometimes. But we're even seeing John Howard getting to where the Greens are, and there are others.
The Business Council of Australia says that we need an increase in Newstart. We needed it many years ago, and this budget has not delivered it. Inevitably, the inequality will get worse as will the social harm that comes from not being able to afford to survive or to keep paying the rent and being forced into homelessness. Where is there anything in the budget to try and address homelessness? Last year there were quite inadequate measures, but at least there was the pretence of acting on the issue of housing affordability, the crisis of housing affordability. This year there's nothing, nothing at all—nothing to reverse the massive tax breaks that go to the richest when it comes to housing deductibility, negative gearing and capital gains tax discounts. Instead, there is a cut to remote housing—a $1.5 billion cut—and I'm pleased this cut is mentioned in this motion.
We should be investing in public housing across the board, not trying to tweak the broken housing system the free market fundamentalists have delivered. We've gone past that. We should be saving the revenue and, instead of giving massive multibillion-dollar tax cuts to the banks who make their profits by gouging people through the housing market, building the housing directly. We can afford to build significant amounts of public housing, and the government's own report showed the funding program for remote housing for Aboriginal communities has delivered great results, particularly in my state of Queensland, where on every measure it went off the charts. And this government stops the funding. What on earth?
You've got a program that works, that's reducing overcrowding with all of the positive flow-on social benefits—improved school attendance, reduced child safety problems and reduced health problems from overcrowding—and they stopped funding it. There are the jobs that go with it. To pull the funding away from jobs in remote Aboriginal communities—real ongoing, skill-developing jobs; what on earth is going on?
I was on Palm Island a couple of weeks ago just after their wonderful 100-year commemorations—a community that is trying to build their own viable future from a very, very dark history. Not surprisingly, there is significant unemployment on that island and in that community. Forty jobs—40 skilled jobs, 40 jobs in building and housing construction—will go in July, in a month or so, because of the refusal to keep funding this. It's the same in Western Australia and in the Torres Strait and elsewhere.
We've seen money taken away from genuine action on climate change, something which is also an economic issue, a social justice issue and an issue for the future of young people today. We're seeing the cuts to universities, we're seeing the cuts to TAFE, we're seeing the ideological cuts to the ABC and we're seeing the cuts to schools. And we have a government that somehow thinks that giving tax cuts and giving a flat tax rate to people who are earning six figures is a great achievement. That's the great achievement, while everything else is being laid waste to? It's quite extraordinary. Just today, we have seen cuts to ASIC—right in the middle of a banking royal commission that has shown just how rampantly this government's mates have been able to flout the law at horrible human and economic cost—and we're seeing the continuing weakening there.
The core message that I'd like to put forward on behalf of the Greens with regard to this motion is that this is a budget which is economically irresponsible. It does not address the significant issue of inequality. It does not address the issues of wage stagnation, job insecurity and housing affordability. It does not address the massive problem faced by the significant, and growing, number of people who have to rent their homes, often in insecure circumstances. It does not address the issue of total inaction on homelessness and housing security. Instead, we've got massive handouts that predominantly go to the wealthiest. That seems to be the ground that this government wants to pick a fight on leading into the general election next year, or in these by-elections coming up in the near future. Certainly from the Green's point of view, we think this is important ground to battle over because the future of young people in particular in Australia is at stake. Alongside that, of course, the future of the environment is also at stake.
I cannot repeat often enough what a disgrace the complete inaction with regard to climate change in this budget is. It particularly threatens the future of young people, their future job opportunities and their basic right to a healthy environment and planet to live in. We need to fight back against that as strongly as possible, because otherwise that is what this institution will continue to try and inflict on the Australian community.
I thought over the last five years that I'd seen some bad budgets—inequitable, horrible budgets that punished the Australian people—and I didn't really think it could get much more unfair or much worse. But the priorities and choices that this government displays in this budget are appalling. It entrenches the inequality of this government's previous decisions and it goes much, much further. It's the fifth budget we've seen from this government, and it's very clear that Australians are not better off. You on the other side seek to entrench greater inequality in our nation. This is at the same time as we're having to battle cuts to health, education and training and Australians have to battle cuts to penalty rates. You don't have within this budget a plan for wage growth or job creation. What you do have is a plan to put more money into the pockets of big business. That's your grand plan for wage growth and that's your grand plan for job creation, but the economics of your corporate tax cut simply do not stack up. Last month there was a survey released which showed what we've been saying for a long time, which is that the majority of firms given a tax cut would not give employees a wage rise, but rather that the majority of these tax cuts would reward overseas shareholders and pump up executive bonuses. This is not about boosting wages or creating jobs for Australians; this is about serving your vested political interests on your side of the chamber.
This budget fails the fairness test. It fails the test on education, it fails the test on hospitals, it fails the test on job creation and it certainly fails the tests on families, pensioners and workers. It is an unfair budget, and let me tell you why. It isn't a budget that looks after everyday Australian families. This is a budget for big business and, somewhere down the track, very high income earners.
It's not a budget for women. After five years and five budgets you've never put forward a plan that brings Australian women with you. On the one hand, you've tried to cut parental leave, calling working mums rorters and double dippers; on the other hand, you've introduced a childcare policy that leaves a massive 279,000 families worse off as childcare costs continue to rise. A great many of those families are low-income households. You've also frozen the funding for the six National Women's Alliances, you've cut millions of dollars from community legal centres and you've cut capital funding used for safe housing options for women. That was all done before you were forced to restore some of that funding. You've cut almost $2 billion worth of pay rises and support for workers in feminised industries in this nation such as early childhood education and disability care.
What else have you done in the last few years? Well, you've cheered on cuts to penalty rates that disproportionately impact women. I can certainly see why you abolished the annual women's budget statement, because surely you must know just how bad your budgets are for Australian women. Today I was proud to be at Labor's own women's budget statement release, which we have done from opposition, which shows all of these things. It has a critical analysis of exactly what this government's budget does to Australian women. It highlights all of those issues and many more, and it demonstrates very clearly that gender equity is at the bottom of the pile for this government. You've not taken any serious action on gender equality on superannuation for women, for example.
We can also see very clearly today and this week that this is not a budget for pensioners or, for that matter, a budget for future Australian pensioners. Instead, pensioners are one of the biggest losers in this big-business budget. What we've seen—and I was frankly surprised to see this—is that you've locked in those unfair zombie cuts to pensioners that you previously couldn't get through. You're still relying on them. You still make it part of your agenda to balance your bottom line, so you can hand out those big tax cuts to big business at the expense of pensioners. We will fight you every inch of the way on those measures, but they're still there in the budget so you can serve your big business interests. You're there axing the energy supplement, costing single aged pensioners a massive $14 a fortnight. Now that might not sound like a lot of money to you but if you're an age pensioner, like my parents are, then it means a lot. It means the difference between getting a prescription that you need or not being able to afford it. It might mean the difference between going to the doctor or not being able to afford to do so. It might mean the difference between keeping your electricity on or putting food on the table. We know we have a nation that has growing energy costs, so why would you strip away this most vital support? The energy supplement provides assistance to households that are on low incomes and are very obviously going to be struggling to meet growing energy costs. These households are not likely to have solar panels on their roof to offset their energy costs. If you're in social housing or the rental market because you are on a low income you very rarely have the luxury of solar panels on your roof to cut back on energy costs. Instead, you can often be relying on really inefficient heating. Two million people on low incomes will be worse off under this measure.
I'm also incredibly appalled to see in this budget, in your attacks on pensioners and future pensioners, Australians being forced to work until they're 70 before they're eligible for a pension. My father is in hospital this week. He's in his late 60s. He's having treatment for bowel cancer. Fortunately, he has the security of a pension—currently—so he's not worried about his income while he undergoes his cancer treatment. But I am absolutely gobsmacked to think that people in his situation would need to be juggling access to a disability pension. Despite the fact that many older Australians have better health than they've ever had before, it is a continuing worry for them. You are more likely to have a crook back as a result of being a labourer. You are more likely to have prostate cancer or breast cancer in your older age. So it is completely unreasonable to have this kind of approach coming from the government—that people should be required to work until they're 70 before they can access an age pension. By all means, let's encourage people to work if they can, but it becomes more and more difficult for many people to continue to work. When you talk to tradies, nurses, farmers, manufacturing workers and teachers, who have very demanding physical roles, you find being required to work until you're 70 is simply too much to ask for many of those people. This is a pathetic insult to older Australians.
Also a pathetic insult is your failure, despite all the big talk, to address the aged-care crisis you've created under your watch. You created the aged-care crisis, you've ignored the aged-care crisis, and this budget fails to fix Australia's aged-care crisis. There are more than 100,000 vulnerable Australians waiting for home-care packages but there is funding for just 14,000 new home-care packages in this budget. Appallingly, this will be paid for from the existing aged-care budget.
I heard the weasel words from Minister McKenzie today about how there were no real cuts to places in aged care. That's rubbish. Residential aged care is equally in crisis, equally overburdened. But do you know why aged-care places are underutilised? Because there simply are not the institutions to take up these places that our nation needs. Why? Because they're struggling with making their internal costs add up to invest in new infrastructure. There's growing demand on all the urban fringes of Perth and in rural Western Australia for more residential aged-care beds. But it is no surprise to me that those aged-care beds may be under utilised, because there has been a failure of investment to get those beds happening—because of the squeeze of this government on those costs.
So 3½ thousand places a year is not enough to keep up with demand. We know that the waiting list for home and community care places grew by some 20,000 places in the last six months of 2017 alone. There are 105,000 older Australians currently on the waiting list for a home-care package, including almost 80,000 older Australians needing the most support to stay in their homes and out of aged care. And I hope that when my dad comes out of hospital after this week he is not one of them, because I don't want him waiting on one of those lists. It's the kind of worry that every aged person, as they start to fall into greater frailty and ill health, worries about—how they will stay at home and how they could possibly afford a place in residential care should they ever need it.
There are 105,000 older Australians on the waiting list for a home-care package—
A government senator interjecting—
and you on that side of the chamber are not doing enough to fix it. I hope you go back to your constituencies, back to your states, and listen to the stories of older Australians who are struggling to stay in their own homes. They should be supported to stay in their own homes. Otherwise, they increase the demand on residential aged care. As I said before, this is an unfair budget on women. We know that it is women, in the main, who care for elderly parents in our community. This government's not doing enough to fix those issues. You're underfunding aged care, selling out older Australians, and you're not even honest about it.
Sadly, older Australians are not the only people losing out under this budget. I'm worried about the future of our education system. At a time when we should be growing the investment in our schools at a much higher rate than we are, what you've done is put in place $17 billion worth of cuts to our schools. Our children are losing out under this budget. I know those on the other side will argue that the education budget is growing and that you can prove it's growing. But the simple fact is that we laid out very clear plans and very clear priorities that our schools deserve more growth in funding than what you've given them. That difference adds up to some $17 billion being ripped out of our schools and that you want to hand over in tax cuts to big banks, to big business. The big banks are getting that $17 billion. I find it extraordinary that, at a time when we are seeing the real and devastating and worrying impacts of the conduct of Australia's banks coming out of the banking royal commission, you on that side want to hand them a big tax cut. It's incredibly galling to me that I can see that that money should be going straight to Australia's schools.
It should also be going into our higher education system. I'm appalled to see that this budget locks in previous $2.2 billion in cuts to our universities. Part of this plan is a proposal to lower the repayment threshold for the HELP scheme, with repayments to start when individuals earn just $45,000. I was talking to my own staff and to other young people today about the fact that they're completely galled by the idea that they should be on the same tax rate as someone earning $180,000 or $200,000 a year at the same time as they're having to pay back HELP, HECS and all those kinds of student payments.
It is incredibly difficult to get by as a young person today. These cuts to universities will have a big impact on students, and, indeed, on prospective students, across the country. I also worry about what they will do to the quality of our participation in international education markets. I want to give a shout-out to the National Union of Students Build a Better Budget campaign, because, importantly, they've put many of these issues on the agenda consistently and, rightly, are communicating with students right around the country about what a bad budget this is.
Today we see a budget that persists with $715 million worth of cuts to hospitals over the next two years alone, and we can see more cuts to follow in the next five years. We see that the Medicare rebate is frozen and we see increasing out-of-pocket costs to see specialists. Those opposite failed to fix the health insurance affordability crisis, and I'm very disappointed to see that they failed to adopt Labor's great plan to scrap the discriminatory tampon tax. Rightly, we don't see items like condoms taxed in Australia, and nor should we see items like tampons taxed.
We see that we have a government here that can't be trusted on health or apprenticeships. We've seen a loss of more than 139,000 apprenticeship places under this government. We've seen more than $3 billion worth of cuts in previous budgets to education and training. We absolutely cannot afford to see any more of these cuts. We've seen cuts in remote housing, we've seen cuts in dental care and we've seen women's homeless shelters and domestic violence shelters put at risk.
So today we stand with a clear choice in the lead-up to the by-elections that are before us. A future Labor government is a government that will invest in education, job creation and health care. Or there are the Liberals, who rip money from families, schools and hospitals. (Time expired)
I begin my contribution tonight by wishing Senator Pratt's father a very speedy recovery and a safe return home from hospital. I have to say, though, that I found Senator Pratt's new-found concern for older Australians a little surprising, given that Senator Pratt is a member of a political party, the Labor Party, which only a few weeks ago unveiled a new policy to smash the household budgets of many older Australians, many self-funded retirees and, indeed, many pensioners. That was until they were forced into an embarrassing backflip a few weeks later, announcing that their changes to dividend imputation would in fact exempt pensioners—rather than their original plan, which was to smash the budgets of pensioners by preventing them from receiving the dividend imputation credits that they had been expecting in their retirement.
It's particularly galling for older Australians to hear this new-found concern for their welfare from the Labor Party when Labor were prepared to push through a change that would have decimated their household budgets and given them no way to respond. Older Australians—people who have retired—are not like the rest of us. They don't have as much time on their side, and if they have been out of the workforce for a long time they don't have many options to restructure their financial affairs to respond to changing government policy. So if someone is in their 70s, 80s or 90s and they planned for their retirement under the policy settings that were in place at the time that they retired—for example, knowing that they would be able to receive a credit in exchange for the tax that was pre-paid on shares that they own in Australian companies—and then someone pulls the rug out from underneath them, as the Labor Party proposes to do, there's very little that 70-year-old, 80-year-old or 90-year-old can do about that. They're not going to find it very easy to go back to work to earn replacement income for the income that they've lost. They're not going to be able to do anything all that creative with their finances, which they're reliant on for their income. They're just going to have to cop it. We heard horrific stories of reductions in household income of as much as 20 per cent to 30 per cent. Senator Pratt was talking about a possible $14 per week reduction in income for some pensioners. People affected by Labor's dividend policy would be affected by losses far, far greater than that.
The truth is that this budget, like all budgets delivered by coalition governments, is extremely generous to older Australians. It's extremely mindful of the contribution that they've made to their nation over their lifetime and extremely mindful of the fact that they, as older Australians, are less able to respond to changing policy settings that could affect them. That's why one of the features in this budget that I think is really worthy of support and I hope will receive support from this chamber is the change that allows pensioners to earn an extra $1,300 a year in private income before their ability to receive a pension or a part-pension is affected. That's a really good change, because a lot of older Australians might have quite good health but don't necessarily want to work full time and, of course, wouldn't want to jeopardise the pension they plan to rely on for their retirement. They might like to do a bit of part-time work here and there in their local community. They might like to do a part-time job to keep them engaged in the community, as much as anything, as well as providing themselves with a bit of extra income. Thanks to changes in this budget, they're now able to do so for more hours if they wish. It's a choice that we're giving them.
Another change in the budget which is going to make it easier for pensioners to live a more financially secure retirement is the pension loan scheme changes. They will allow pensioners, if they choose, to borrow against the value of their home and enjoy the proceeds of living against the value of their home, of living from an income from the value of their home—again, without affecting their eligibility for the pension. That would in many cases allow them to enhance their retirement income and standard of living, just by being able to access the value of the equity in their home. That's another change we've made to help older Australians better plan for their retirement and better structure their financial affairs in retirement.
Senator Pratt mentioned the aged-care system. As it happens, my wife, as some senators know, is a cofounder and director of a business in the aged-care industry that helps people who need places in residential aged-care homes to find places in such homes, so it's something I hear about often over the dinner table at home most nights. I'm acutely aware of the particularly strong demand there is in the community for home care. Like many Australians, older Australians become very attached to their home and to the community in which they live. They've chosen to live there, often because it's in close proximity to their family, children, grandchildren, friends and neighbours that they've grown to become very fond of. Many older Australians would like to remain in their home for as long as possible. They would prefer not to go into a residential aged-care facility if possible. There is great demand for the government's home-care services, and that's why in this budget they're being significantly expanded to cater for that unmet demand in the community. So for Senator Pratt or the Labor Party to characterise this budget as anything other than a very favourable budget for older Australians is very unfair and not consistent with the facts of the budget.
I'm very proud to be part of a government that's handing down a budget like this and I want to talk tonight about some of the really key features of this budget that I think are worthy of support. In particular I want to talk about two, and, depending how much time I have, I may get to some others. The two that I want to focus on tonight are the tax relief for working Australians, which is provided for in this budget, and the way in which the government has managed to get our finances better under control to live within our means by returning the budget to surplus earlier and delivering a larger surplus within the forward estimates.
I'll begin on tax relief because there's a very important principle at stake here. Every single dollar that the government raises, every single dollar that the government spends, has first been earned by someone else. It has been earned by someone because of their hard work, their entrepreneurship, their ingenuity and their effort, and government should only take as many dollars as it needs from the Australian people who have earned it in the first place, as many as it absolutely requires to run the services that only governments can run and provide the services that no other organisation in society can. We should, as a principle, allow people to keep as much of the money they earn for themselves, because it's right that they keep what they earn as the fruits of their own labour and because, frankly, they know how to spend it better than could any politician or bureaucrat, however well motivated, plan to spend someone else's money on their behalf. So, in the first stage of the tax relief plan over seven years that the Turnbull government has revealed in the budget this week, we'll focus particularly on lower- and middle-income earners.
One of the key features of this package is a new, non-refundable low- and middle-income tax offset. This will provide up to $530 a year to low- and middle-income earners every single year, starting in 2018-19. This reform will assist 10 million Australians, with around 4.4 million Australians receiving the full $530 benefit as soon as the 2018-19 financial year.
The second phase of the budget is to raise the threshold for the 32½ per cent tax bracket from $87,000 to $90,000 from 1 July 2018. This will deliver a tax cut of $135 a year to around three million Australians. Really importantly, it will prevent more middle-income earners being pushed from the 32½ per cent tax bracket into the second-highest bracket of 37 per cent, countering potential disincentives to earning higher incomes, which they face through jumping into a higher tax bracket, and, of course, countering the dreaded effects of bracket creep.
In 2022-23, the government will increase the top threshold of the 19 per cent tax bracket from $37,000 to $41,000 and increase the low-income tax offset, which I mentioned earlier, from $445 to $645. From 1 July 2022, tax relief of up to $1,350 per year will be provided by further increasing the top threshold of the 32½ per cent bracket, which I mentioned earlier, from $90,000 to $120,000. This is the bracket that was increased in the last budget from $80,000 to $87,000, so in just a few short years under the Turnbull government this middle-income tax bracket will increase from $80,000 to $120,000, helping millions of Australians avoid going into a higher tax bracket. In fact, 1.8 million will be prevented from facing the 37 per cent tax rate in 2022-23, keeping them in that lower 32½ per cent tax bracket.
The third and final phase of the government's income tax plan is to ensure that our tax system becomes much simpler and flatter, because we all know that a simpler and flatter tax system is a more efficient tax system and is a tax system which better rewards people's efforts. From 1 July 2024, the government will increase the top threshold of the 32½ per cent tax bracket from $120,000 to $200,000. Effectively, that abolishes the 37 per cent tax bracket completely. That means the second-highest tax bracket, which a number of Australians pay now and will pay in the future, will be abolished entirely. A result of this plan is that 94 per cent of taxpayers are projected to face a tax rate of just 32½ per cent, or even less, by 2024-25.
I think one of the great features of this plan is the flat nature of the tax system that will be introduced. People earning from $41,000 upwards, up to $200,000, will face no disincentives to working longer hours or going for a higher-paying job because they will remain in the same tax bracket. No matter how much extra they earn, up to $200,000, they'll still pay 32½ per cent tax. If we don't make these changes, only 63 per cent of taxpayers will have that protection. The coalition want to allow people to keep more of their own money because, unlike the Labor Party and the Greens, we believe in reward for effort.
I think this is a good tax plan. I think it's an ambitious tax plan. I think it delivers welcome tax relief for millions of working Australians. But, to be truthful, it is not the most ambitious tax plan I've read about recently. In fact, I have here in front of me a much more ambitious tax plan that proposes much more significant cuts to not just the thresholds of tax but the rate of tax. I admit it is from August 2005. I'm reading from an article by Jason Koutsoukis and Josh Gordon, since retired from the Fairfax bureau, in The Sunday Age entitled 'Union chief joins call for big tax cuts':
One of Australia's most influential union leaders has called for the top income tax rate to be slashed to 30 cents in the dollar as the push for widespread tax reform gathers pace.
Australian Workers' Union national secretary Bill Shorten, who is widely tipped to enter Parliament at the next election, said all rates needed to be simplified as part of a radical overhaul of the tax system.
Mr Koutsoukis and Mr Gordon were spot on. They could see the future. Mr Shorten did indeed enter the parliament. The article continued:
He urged Labor to embrace genuine reform to try to wrong-foot the Howard Government.
Mr Shorten's call came as Labor's finance spokesman Lindsay Tanner also backed calls to slash the top marginal tax rate, now 47 cents in the dollar.
Mr Shorten said tax reform was the best way to boost sagging productivity levels …
"There is no question that we have to offer fair dinkum tax reform," Mr Shorten told The Age. "All this tinkering about, offering people $6-a-week tax cuts, is just putting lipstick on the tax system."
Mr Shorten has proposed a radical simplification of the tax scales with a top rate of 30 cents in the dollar, a medium rate of 20 cents and a lower rate of 10 cents.
He said the top rate would cut in above $100,000, with income between $50,000 and $100,000 taxed at 20 cents in the dollar, and income below $50,000 taxed at 10 cents—all to be funded by "cutting out all the business tax rorts and business welfare".
I have to confess, it doesn't sound like too bad a plan to me. In fact, it's in many ways much more ambitious than the plan that the government's proposed. It would involve massive tax cuts for many Australians, including those on higher incomes. It compares to the government's tax plan in the same way, I guess, as the Liberal Democrats' tax plan compares to our current tax plan. It's a very radical tax plan proposing very significant tax cuts.
I aspire to one day ensure that Bill Shorten's vision for Australia's personal income tax system is achieved. Sadly, we now know that it won't be achieved under Bill Shorten, because Bill Shorten has said that the government's much more modest proposals to reduce taxes go far too far and are unfair. If the government's proposals are unfair, I wonder what 2018 Bill Shorten thinks of 2005 Bill Shorten. I wonder what 2018 Bill Shorten thinks of the ambitious, young Australian Workers' Union leader aspiring to enter the parliament and his ambitious plan for cutting taxes.
This is a little bit of a pattern, colleagues. This is not the first time that Bill Shorten has proposed quite pro-market, pro-reform, low-tax policies. In fact, as we all know, and have heard umpteen times in this chamber, he's proposed quite significant cuts to the company tax system as well. But we know that Bill Shorten's position has changed. I wonder why that is. I wonder why, as opposition leader, he's now walking away from principles that he's held throughout his career. He's walking away from his commitment to lower personal income taxes and to lower company taxes. It might just be that Mr Shorten is an ambitious person who wants to be Prime Minister and is willing to say or do anything in order to achieve that and is willing to walk away from principles he has espoused well within living memory.
Some of the criticism of the government's tax plan has been that the benefits in the tax reduction will in some way be distributed unfairly. Even the Grattan Institute today has acknowledged that the progressivity of the income tax system in Australia will be altered in no significant way by our tax plan, and the Grattan Institute is not a exactly a renowned friend of coalition governments. It was famously founded by the Rudd and Brumby governments with an injection of $15 million each of taxpayers' money. It sits upon a $30-plus million taxpayer funded endowment, courtesy of the Rudd government and the Brumby government. It is not renowned for being a close ally or friend of coalition governments or free markets, but nonetheless it has acknowledged that there would be no significant change to the progressive nature of the Australian tax system as a result of the changes in this budget.
I think it's worth putting some real facts, figures and numbers on the table here in this debate, because the truth is that, as a result of this tax plan, Australians on an income of $30,000 a year will receive an 8.3 per cent reduction in their tax bill over the course of the seven-year plan. That is a good and significant reduction. Australians on $50,000 a year will receive a little bit less. They will receive a 6.3 per cent reduction. Australians on $120,000 a year will receive a little bit less still. They will receive a 2.9 per cent reduction. Those on $160,000 a year will receive a 2.4 per cent reduction. Those on $200,000 a year will receive a reduction of 2.5 per cent. So the greatest proportional reduction in tax bills will go to those on the lowest incomes—8.3 per cent for those on $30,000 compared to 2.5 per cent for those on $200,000.
There are of course tax cuts in this budget for Australians with higher incomes, and I think that is a very necessary and worthwhile change in this budget. The truth is that, when you cut taxes, in dollar terms many of those benefits accrue to people on higher incomes because they pay more taxes. The top one per cent of income earners in Australia pay 17 per cent of all income tax. The top 10 per cent of income earners in Australia pay 45 per cent of all income tax. To put that in stark dollar terms, someone on $200,000 who, as we heard earlier, is getting a 2.5 per cent reduction in their tax bill pays $67,000 in tax. Someone on $100,000 pays $26,000 in tax. Someone earning $50,000 pays $8,000 in tax. Someone earning $30,000 pays only $2,700 in tax. Our tax system is highly progressive. People on higher incomes pay a much greater amount of tax both in real dollar terms and as a proportion of their income and, under this tax cut plan, although they will get tax reductions proportional to the tax they pay, it will be very modest compared to the very significant reductions at the lower end of the scale.
I realise that, in my enthusiasm for talking about Bill Shorten's exciting, ambitious 2005 personal income tax reform plan, I've run out of time to talk about some of the other great features of the budget. I was going to talk about how excited I am about bringing forward the return to surplus by a year. I was going to talk about how excited I am about the increase in the size of the surplus and the wonderful infrastructure package of which my home state of Victoria is the recipient. But, sadly, there is so much good news that I've run out of time, even in 20 minutes, to address it all. I'm sure there will be an opportunity to return to the Senate to share more good news with my colleagues.