Claire Chandler (Tasmania, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

I move:

That the Senate—

(a) notes:

(i) the Budget is one of broken promises, higher taxes, more debt, lower living standards, fewer homes and more division,

(ii) the Prime Minister and the Treasurer now own the highest taxing

government in Australia's history,

(iii) Labor has locked Australia into a decade of deficits worth $150 billion, gross debt of $1.25 trillion and interest payments of more than

$42 billion a year, or about $80,000 a minute,

(iv) Australians face almost $50 billion in higher taxes, including

$15 billion in higher personal income taxes,

(v) spending remains at its highest level in 40 years outside the pandemic,

(vi) inflation is forecast to hit 5%, keeping interest rates higher for longer and leaving Australians with lower real wages and living standards,

(vii) Labor's housing taxes will mean 35,000 fewer homes, higher rents and less investment, and

(viii) Labor has again blown its immigration targets, bringing in nearly 2 million migrants over two terms and overshooting by another 90,000 over the next two years; and

(b) condemns the Government for making Australians pay more, borrow more and accept less.

This week the Labor government have handed down their fifth budget. After five budgets, Australians are entitled to ask one simple question: are they better off, more secure and more confident about the future than they were when this government took office? For too many households, I suspect that answer is plainly no. This budget follows Labor's familiar pattern—more spending, more promises and more pressure on Australians who are already doing it tough. It does not lift living standards, it does not build confidence and it does not leave Australians feeling more secure about what comes next.

I think a good budget should do three things. It should level with the Australian people and be clear and honest about the circumstances that the government find itself in and that our economy finds itself in, it should reward effort and it should make it easier for the next generation to buy a home, raise a family and get ahead. On every one of those tests, this budget falls short.

One of the clearest tests of any government is whether it keeps its faith with the people who elected it. Before the election, Australians heard a great deal about trust, integrity and keeping commitments. Indeed, in the last two elections, Australians have heard a great deal about those three things from this Labor government. Australians were told that promises made would be promises kept. They were told, 'My word is my bond.' I believe that, when you go to an election and you make commitments, you should stick to them. They were told that Labor was the party of homeownership. They are not my words. Those are the Prime Minister's words. Everyone has heard them all many, many times.

But the budget handed down this week shows a government willing to change its position when it suits, hoping that Australians won't notice or will plainly accept it. Given the reaction that we've seen to the budget this week, I think it is pretty clear that this government has not got its wish. Australians realise that they have been misled. That is why this budget reads as a budget of broken promises. It speaks the language of aspiration and homeownership—and we saw this time and again, particularly from the Treasurer in the lead-up to this budget—but it has delivered the exact opposite.

Housing is where that betrayal is felt most sharply. I know that, for some time, young Australians have been concerned about their ability to access housing. They were told by this government that buying their first home shouldn't feel impossible. But, because of the changes in the budget this week, for many young Australians, buying their own home now does feel impossible. Young Australians have done what we ask of them. They work hard. They save where they can. But rents are higher, mortgage pressure is higher and homeownership feels further away every year under this government.

This government talks constantly about affordability, yet it is making investment less certain and it's making new housing supply harder to deliver and it's taking longer to deliver. I've lost count of how many times I have said this in the lead-up to this Labor budget being handed down: you do not solve a housing shortage by making it harder to build; you do not solve a housing shortage by taxing new houses. The budget papers clearly show what we already knew—that Labor's housing taxes will mean that 35,000 fewer homes will be built, rents will be higher and there will be less investment in the housing market. Indeed, the only reason that any new houses will be built—again, it's in black and white in the budget—is the government's infrastructure fund, which they borrowed from the coalition's 2025 election policy.

Australians can see the pressures very plainly. Demand keeps rising, housing supply is constrained, rents keep climbing—again, more so because of what is in this budget—and more young people are going to conclude that the system no longer works for them. This will mean more competition for too few homes, more pressure on rents and more young Australians concluding that the system isn't working for them. This matters because Australians save and invest for one reason above all: to build security and get ahead. That is an instinct that should be encouraged, not treated with suspicion or blocked by taxes. Older generations could reasonably expect that effort would lead to security, but younger Australians are being asked to accept less opportunity, less certainty and a steeper climb, whether it's in regard to housing or other investments.

That is why consistency matters. If a government campaigns on certainty and governs by reversal, it will erode people's trust, and people's confidence will go with it. I suspect this government will find out very soon just how much people's trust in them has been eroded by the broken promises that we saw in the budget this week. That is why Australians are questioning not only this government's priorities—and it's fair enough that they should question those—but also its word.

The major problem with this budget is pretty straightforward. The Labor government cannot control its spending—another thing I've lost count of how many times I've said since I have been shadow finance minister. Governments need to choose between what is necessary and what is desirable and what is merely politically convenient. They're hard decisions. I'm not going to stand here and pretend that they aren't. But government is elected to make those hard decisions. Too often this government is choosing the third of those options; it chooses what is politically convenient as opposed to what is necessary. Every time the government reach for more spending first, they say they will achieve discipline later if they achieve it at all. This results in Australians carrying more debt without any confidence that the country is becoming stronger or more productive in return.

We read in the budget papers this week that the government's trillion-dollar debt bomb will grow to $1.25 trillion. It was written in the budget in black and white. That means Australians are paying $80,000 a minute in interest on that debt bomb. That is real. Every dollar spent servicing debt is a dollar that cannot be used to ease pressure on families, strengthen government services or create room for real tax relief. And as I've said many times, the heaviest burden for all this will fall on Australians of my generation and younger. They are the ones who will inherit the bill for decisions they did not make and will be left paying higher taxes to pay off that debt, unless government can get its spending under control.

At a time when households have already endured years of cost-of-living pressures, the case for budget restraint should be obvious. Indeed, I and my colleagues have been making that case for months. Yet this Labor government continues to expand spending as though there are no long-term consequences to these decisions. But Australians understand that, and they see through it. When government spending runs too high for too long, families feel it in their bills, in their mortgages and in the sense that no matter how hard they work they are not getting ahead. We know this government was fuelling inflation with government spending that was at historic highs well before the crisis in the Middle East that has resulted in higher fuel prices on our own shores. As I said, good budget management is about discipline and growth and about ensuring that the next generation is not left with a weaker economy and a tax burden. Yet that is what the budget this week is framing up for the future for all Australians.

We hear a lot from this government about intergenerational fairness. I think intergenerational fairness means recognising that today's fiscal choices shape tomorrow's opportunities. On that test, this is a budget that pushes costs forward and tells younger Australians they will have to pay for them later. That is not a prudent government. This government's ambition will come with a long-term price, and they have shown no desire to try and bring that price down.

Another issue is this government's migration policy, which, frankly, has not been matched with capacity in local infrastructure. Australia as a country has been strengthened by migration. People who come here work hard, contribute and become part of our national story. These people have helped build the country we are all so proud of. But a serious migration program must be matched by serious planning. That means housing. It means transport, schools, hospitals and local infrastructure. I recognise that not all of that is the responsibility of federal government, but a big part of it is the responsibility of the federal government. When that planning from federal government is missing, pressure builds everywhere at once. Australians can see those pressures right now in increased rents, congestion through our cities, stretched services, and the growing difficulty of living close to where they work and raise their children. All Australians are asking for is a competent government that aligns population growth with housing supply and infrastructure delivery. When that alignment is missing, confidence falls and people start to think the system is drifting rather than being governed and working in their favour.

We know this Labor government cannot match migration with homes and infrastructure, so it cannot credibly claim that it has this challenge under control. This government is not building enough homes, by their own budget's admission, and they have increased migration to a point where it is clearly not keeping up with the demands in infrastructure that we see across the country. Their own budget shows, despite the fact that they claim to have migration under control, that there will be more than two million migrants in two terms of this government. Where are they going to live? Where are Australians going to live? These are fair questions that I know many Australians are asking this week.

As I've said, this budget leaves Australians with less confidence, less capacity and less reason to believe that this government has a serious plan, because this budget didn't present a serious plan. This budget has asked households which are already under strain to accept higher costs, weaker incentives and a more uncertain future. Living standards matter. Economic security matters. It matters to me, and it matters to so many of my colleagues, that younger Australians know that effort in this country can still lead to a good life, but that is not a sense that young Australians are getting from this government right now, particularly not given the budget that they've handed down this week. This budget does not meet any of those tests. Australia deserves better than a government that spends too much, breaks its word and cannot match growth with capacity, and young Australians in particular expect and deserve so much more from a government that has promised them so much and seemingly delivered so little.

Lisa Darmanin (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It's probably fair to say I disagree with most of what has just been spoken about on the other side. A good budget is about reform, resilience and fairness but also heart, and that is exactly what you would expect from a Labor government.

What I would like to talk about first off, in response, is something contained in this budget that hasn't been spoken about in this chamber yet but is really important and life changing. I want to tell you about someone called Atlas and why, for Atlas and thousands of young people just like Atlas who are experiencing homelessness, this federal budget is bring hope and action. I was lucky enough to meet Atlas through the Home Time campaign. Atlas is a brilliant young advocate who was in and out of homelessness for 10 years. I will give Atlas's own words:

I left home with no money. Just a duffle bag full of clothes and no idea what I was doing.

I was too young to access payments like JobSeeker and I didn't understand the system. I didn't understand what was needed of me to access housing because I'd never had to before.

I spent years couch surfing and moving from crisis accommodation to park benches to strangers' couches with nowhere to go and no foreseeable way out.

Children and young people just like Atlas lose their homes for many reasons, like extreme life events, family and domestic violence, abuse, neglect and estrangement, all beyond their own control. Of course, all young people need safety, security and access to housing to have stability and a fair chance to build their future. But, until this week's federal budget, a flaw in our social housing system has disadvantaged providers and discouraged them from offering young people like Atlas tenancies. It has meant too many young people haven't been able to access social housing to escape homelessness. This flaw, known as the youth housing penalty, has made young people financially unviable tenants for community housing providers, paying just $86.52 a week in rent compared with $186.33 for someone on the age pension. It has meant that generations of young Australians haven't been able to access social housing to escape homelessness. Today, only around two per cent of social tenants are under 25, despite young people making up almost 15 per cent of Australians experiencing homelessness.

In this budget, our government has now invested $60 million to create a new youth housing supplement, which will unlock social housing for more than 4,000 young people just like Atlas to solve this problem. This would not have been possible without the fierce advocacy from the Home Time campaign, a coalition of community organisations, housing providers, unions and young people who have led this campaign for reform over three years and have now delivered through this budget. Atlas said this week:

I can't fully articulate what this supplement means for the young people who are currently experiencing homelessness, the people who have become so accustomed to falling through the cracks in the system.

This subsidy is just the first step of many in the changes we need to create a truly equitable system—but for the first time in a long time there is hope.

This budget demonstrates Labor's focus should be first and foremost about housing for people across Australia, including people like Atlas, as security and as a home. I want to thank Atlas for their advocacy. I also want to thank Daniel Scoullar and all those from the Home Time campaign for making this happen and all the workers who support people like Atlas in the community sector—who lead, advocate and support young people—and the many thousands of those who also happen to be ASU members.

I'd like to turn now to a specific section in Senator Chandler's motion that states:

Labor's housing taxes will mean 35,000 fewer homes, higher rents and less investment …

This is incorrect, and I want to put on record the misinformation and address the misinformation that those opposite are seeking to spread to the Australian people rather than supporting and being a part of the solution to address the issues that we are trying to over a long period of time. It's clear that the status quo is currently not working. The current tax settings in the housing market and in the tax system are way out of balance. In this budget, we're reforming the tax system to support 75,000 more Australians into homeownership, because this government wants to rebalance the scales. Right now, the system favours those who already have assets over those trying to get ahead. Young people want the same thing generations before had—a chance to own a home, to put down roots and to be a part of their community. That first rung on the ladder matters, and these changes will give 75,000 Australians the opportunity to step onto it. Australians can still invest with the same benefits, but now it's about investing in new supply so that we're building more homes and making housing more affordable. Our reforms strike a balance, supporting first home buyers while still enabling investment that adds to housing supply.

Let's look at what the budget shows. Yes, the budget papers do estimate a number of 35,000 fewer homes linked to these tax changes. But it's important to read all of the papers in totality, and this is based on a scenario where the government doesn't do anything else to boost construction. We know that the tax changes are not the only thing contained in the budget that are addressing housing supply. We are doing much, much more.

One of those actions is the $2 billion Local Infrastructure Fund. Treasury estimates that the $2 billion Local Infrastructure Fund will support the construction of 65,000 additional homes over the next decade. That means that the net result is 30,000 more homes being built, and that is before you account for the broader impact. That's a $2 billion fund bringing total investment in housing-enabling infrastructure to $6.3 billion, a steep change in supporting new supply. It's also tied to planning and building reforms from the states and territories, with Treasury estimating this will unlock tens of thousands of additional homes beyond that 65,000. Importantly, new housing is exempt from the tax changes, encouraging investment where it will make the biggest difference.

This budget builds on an already ambitious housing agenda, lifting total Commonwealth housing investment to $47 billion. The goal here is straightforward: more homes, better access and a system that works for people trying to get in, not just those already ahead.

Corinne Mulholland (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to talk about Labor's federal budget, which has delivered more tax cuts and a fair go to buy a home of your own and has strengthened Medicare. Let's start with the tax cuts. This budget is about delivering a tax system that is fairer for working Australians. It's about ensuring that everyday Australians can get ahead so they are rewarded for their work and their effort. It's about helping more Australians to get ahead and get a foot into the housing market.

This budget isn't about making the easy decision, to do nothing, which is the economic policy offered by Angus Taylor. Labor is making decisions to build an economy that delivers greater productivity, and Australians understand that. Australians made the right choice at the last federal election, rejecting the Liberal Party. And last weekend, in the once blue-ribbon seat of Farrer, they again rejected the Liberal Party, because this is same party that went to the last election promising higher taxes for ordinary Australians. It is the same Liberal Party under which wages stagnated for a decade. It is the same party under which productivity stalled. It is the same party under which bulk-billing rates were in freefall, making it more expensive and more difficult to find a doctor in Australia.

Instead, thanks to Labor, over 13 million working Australians will receive a tax cut in this budget. This is real money for working people, not shareholders, not trust beneficiaries, not investors with six properties—real Australian workers. We will not be lectured about taxation by those opposite, because the highest taxing government in Australia's history was John Howard's government. That is not an opinion; it's a fact. The ATO has confirmed it. Treasury's own numbers have confirmed it. Under Howard, the tax-to-GDP ratio hit a record 24.2 per cent in both 2004-05 and 2005-06. The top seven years of tax to GDP since the 1950s all belong to the Howard government. They don't like to hear it. They don't like to be reminded of history. If you want to put something in a motion about the highest taxing record, you'd better have the receipts to prove it—every single one of them.

Under Labor in 2011, the ratio dropped to 19.9 per cent, the lowest in 33 years. Howard had the mining boom behind him, and we're not begrudging him that, but what did he do with all that money? He introduced the 50 per cent capital gains tax discount in 1999, and that single decision—

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Smith?

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) Share this | Link to this | Hansard source

A point of order on a fact checking. I'm wondering if Senator Mulholland has any other facts that she would like the coalition to check while she's giving her contribution? Of course, Mr Howard, a very successful prime minister, used revenue to pay down debt.

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I'm not sure that that's a point of order.

Corinne Mulholland (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

They don't like to hear it. That single decision to introduce the 50 per cent capital gains tax in 1999 was the one policy choice that has done more than almost anything else in our economic history to lock young Australians out of homeownership. Since the discount was introduced, house prices have risen by more than 400 per cent in this country—wages, less than half that. Homeownership among 25- to 34-year-olds has fallen by 17 percentage points.

In the parts of Queensland I represent, homeownership is as low as 30 per cent, and in other parts it is as low as 20 per cent. For the first time since the Second World War, a majority of Australians in their 30s do not own a home. This is not because they don't want to but because the Liberal Party's tax system has spent 25 years favouring those who already own multiple properties at the expense of those trying to buy their first. Logically, that had to change, and under the Albanese government, Australians finally have a government with the resolve and the ambition to do something about it.

The Howard government's capital gains tax discount was the can of petrol poured over the housing affordability bonfire, and negative gearing was the flame. Now Labor is putting out the fire that the Liberal Party started. This budget begins to fix it. It gives people over a year's notice that the tax system is changing. From 1 July 2027, negative gearing for residential properties will be limited to new builds, incentivising investment in housing supply. Existing investors are protected. The grandfathering is generous, and it is deliberate, because if you've made financial decisions based on options available to you, we don't want to change that. But it's time we acknowledged that the tax scales in this country have been tipped against younger generations, so, going forward, Australian taxpayers will stop subsidising investors to bid against first homeowners for existing homes.

The 50 per cent capital gains tax discount will be replaced with cost based indexation at a 30 per cent minimum rate. That means only real gains get taxed. If inflation ate your return, you will not be taxed on it. If you made genuine, significant capital gains, you will pay something closer to what a nurse or a tradie pays on their wage. Treasurer Jim Chalmers rightly called it the most ambitious tax reform in 26 years. (Quorum formed) The government estimates these changes will help 75,000 more Australians buy their first home over the next decade. Alongside the $47 billion total investment in housing, including $2 billion for enabling infrastructure to unlock 65,000 new homes, this is a serious, structural, long-term response to a crisis that has been building since 1999.

But this is not about being anti wealth; this is about being pro fairness. There is a difference. It means that, as a government, we can focus on the things that matter, like the largest investment in Medicare in its 40-year history. We know that our investment in urgent care clinics, increasing bulk-billing and cheaper medicines is already delivering right across the country, particularly in my home state of Queensland. In the seat of Longman, since Labor tripled our bulk-billing incentives, 15 more GP practices are now bulk-billing. There have been more than 3.3 million cheaper scripts issued to the people that live in the seat of Longman, and there have been more than 57,000 bulk-billed visits to our Morayfield Medicare Urgent Care Clinic since it opened. In the seat of Groom, up on the Toowoomba Range, we've seen seven practices convert to fully bulk-billing practices. There have been over 3.2 million cheaper scripts issued to the people right across the Darling Downs. I'm looking forward to joining Assistant Minister Emma McBride next month to officially open Labor's new endometriosis clinic in the suburb of Drayton in Toowoomba.

On the Sunshine Coast, in the seats of Fairfax and Fisher there are 12 additional GP clinics that have started offering bulk-billing appointments since our bulk-billing incentives were introduced. More than five million cheaper scripts have been issued on the Sunshine Coast, and there have been 5,800 visits to the Buderim urgent care clinic, a clinic that we promised at the last election, we opened in December and is already helping thousands of residents on the Sunshine Coast. But we won't stop there. We promised an urgent care clinic at Caloundra and we'll be opening that urgent care clinic next month. We promised it at the election and we're delivering it already.

Finally, in the seat of Wright five more GP clinics are now offering bulk-billing services thanks to Labor, with more than three million cheaper scripts issued to local residents.

This budget locks in a record investment in Medicare and makes Labor's urgent care clinics permanent. The Liberal Party can run their scare campaigns, but, while they do that, Labor will be out there delivering for the Australians who have been forgotten. That is the difference between this side of politics and the other.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) Share this | Link to this | Hansard source

We do not have to wait for too much longer. Soon Australians will be put out of their budget pain, because tonight they will be hearing from Angus Taylor on what is the alternative plan to Labor's budget of broken promises, Labor budget of higher taxes, Labor's budget of lower living standards and Labor's budget of less housing. What can Australians expect when they hear from the Leader of the Opposition, Angus Taylor, this evening? They will hear how the coalition has a believable plan to restore Australia standard of living and to protect our way of life. The Leader of the Opposition's speech will be a serious speech because these are serious times. The budget reply will outline the coalition's plan to end mass migration and bring in only as many people as Australia can house; a coalition plan to build more homes and help young Australians into homeownership; a coalition plan to create the conditions for more investment, more jobs and stronger growth; a coalition plan that will make Australia more energy secure; and a plan that will reward aspiration instead of punishing people for trying to get ahead. This will be a clear contrast—a contrast between what we heard on Tuesday night about a budget built on broken promises, built on higher taxes, built on higher government spending, leading to rising inflation, leading to more interest rate pain for Australian households. The coalition's budget reply will be about lower costs, more homes, stronger borders, secure energy and a fair go for Australians who work hard, save hard and want to get ahead.

Much has been said by Labor about its claim to intergenerational fairness in its budget of broken promises. The fact is that Labor in its budget is committing a fraud on young Australians. Earlier today we heard about Labor's youth tax. The $1 trillion debt that this country is forecast to have in coming months, rising to $1.2 trillion, is a tax on the future livelihoods of young Australians. It is a tax on their future and a tax that will inhibit them finding homes, affording rents and building families. That $1.2 trillion of debt, Labor's youth tax, means $42 billion a year in interest payments alone. That $42 billion in interest payments alone is calculated at $80,000 a minute. This is money down the drain. This is interest repayments. This is money that does not go to a productive outcome. It's a burden on young Australians. It is Labor's youth tax, and over coming weeks we will hear more about Labor's tax on young Australians.

Tonight Australians will be able to watch and listen intently. There will be an alternative plan to Anthony Albanese and Jim Chalmers's budget built on broken promises, built on less housing, built on falling living standards, built on higher taxes.

Debate interrupted.

Sitting suspended from 17:30 to 20:14