Mr ALBANESE(11.27 a.m.) —I wish to speak in opposition to this budget. In particular, I wish to raise the issue of Grayndler and the impact that this budget will have on my electorate. The people in my electorate have been hurt by this budget. They have been hurt because of the savage budget cuts inflicted on them by the new Howard-Costello razor gang.

I was at university the last time the coalition handed down a federal budget. At the time, I believed that the then Prime Minister, Malcolm Fraser, was a Thatcherite. In hindsight, he was positively dripping wet compared with his sidekick, the architect of the first razor gang, the now Prime Minister (Mr Howard).

Mr Howard promised during the election campaign that services to people in need would be maintained. He promised stability and he promised fairness. Obviously, these were not core promises, because what this budget delivers is cuts to services and instability for families across the country.

Dr Nelson —Rubbish!

Mr ALBANESE —I say to the member for Bradfield (Dr Nelson), in particular, that this budget probably does represent and deliver for people in St Ives, but their interests are not the same as those of the people in Marrickville.

Apart from making savage and unnecessary cuts to the public sector, higher education, ATSIC and the ABC, what this budget does is to shave off funds from virtually all government sponsored service delivery programs, which will adversely affect people most in need.

Let us look at my electorate. I stated earlier that the people I represent have been hurt by this budget. They are people who can least afford to be hurt. According to the 1991 census, 41.6 per cent of people in Grayndler were born overseas—the Australian average is only 22.3 per cent—and 47.8 per cent of people speak a language other than English at home. The Australian average is 15 per cent. By and large, the working people of Grayndler are wage and salary earners—88.8 per cent.

What effect has this coalition budget had on these people? First of all, the Medicare office in Marrickville Road has been earmarked for closure but, never fear, they are going to put a fax machine in the local pharmacy! It is a pity that this cannot be programmed to assist those residents whose first language is not English, and it is a pity that those who cannot afford to wait for cheque refunds are going to be disadvantaged by this. I note also that there are no Medicare offices on the hit list to close in the seat of Bennelong or in the seat of Higgins.

Secondly, the CES offices are closing. They have been marked off to close at Marrickville, Ashfield and Leichhardt. I guess if you cannot register for work you do not appear in the unemployment statistics.

Just a few doors down from my electorate office is Marrickville Skillshare. This is an organisation which has excelled in getting long-term unemployed people into real jobs. On average, 60 per cent of their clients go on to find long-term employment. Furthermore, Marrickville Skillshare has developed a specialist expertise for people from non-English speaking backgrounds.

What is their reward for such conspicuous success? The minister responsible, Senator Vanstone, has decimated the Skillshare budget. Its staff numbers have been halved. This time last year Marrickville Skillshare was able to provide six months training and work experience for 45 adults and 42 youths in its brokered programs. Today, the brokered programs no longer operate. It is likely that for this financial year Marrickville Skillshare will be funded to assist 340 clients as opposed to the 800 that it assisted in the last financial year.

Labour market programs are the key to addressing the problem of unemployment in this country but all this government can see is the amount of money that can be saved by cutting them down to the bone. Even if you look beyond the rationalist response; even if you look beyond the human cost of unemployment then you will see that the economic cost is also massive because people, if they are not in jobs, are not paying taxation. Therefore, on the revenue side you lose money and on the expenditure side you are forced to continue to pay out social security rather than people gaining their income from employment. This is policy madness. It will lead to an increase in unemployment and it will also have a long-term negative economic effect.

Moving a little further afield we come to the Marrickville region Adult Migrant English Service situated at Enmore. This time last year AMES was running 15 DEET funded English for Work courses. These courses are by and large taken by highly motivated, newly arrived migrants. The courses themselves are not for the faint-hearted. There are three levels, each of which involves 20 hours of intensive English tuition over 20 weeks. Upon completion of English for Work III, students would be considered eligible for entry into TAFE vocational courses.

How many courses are currently running today at Enmore AMES? There are two! Last year there were 15, now there are two. Forget the shaving analogy of the budget I used earlier, this is slash and burn. Incidentally, AMES also runs adult migrant English program courses for the Department of Immigration and Multicultural Affairs but from 1 October this year the concessional rate of $2,205 for the English education charge will be scrapped, which means that NESB migrants will have to pay the full charge of $4,405. On 1 January 1997 the charge will rise to $5,500. Currently, some 90 per cent of people who pay the charge are eligible for the concessional rate.

This cost recovery measure inflicts a further financial burden on the very people who can least afford it: new and potential migrants. This is another example of the government implementing an agenda which has played up to the racists in our community, which suggests that those in ethnic communities can go to the bottom of the pile. Perhaps when we see the Prime Minister show some leadership in speaking out against people such as Pauline Hanson he will have some credibility and the people on the other side of the table will have some credibility as well. Realistically, the only migrant groups unaffected by this charge, the only ones that have been left alone, are those from English speaking countries.

There is a lot of rhetoric also from those on the other side about the family. Increases in child-care fees are inevitable given the loss of operational subsidies for community based long day care centres. Families using these centres will be paying around $20 a week more for each child in care. My electorate has 16 community based long day care centres providing places for 756 children. This provides the opportunity for the parents of those 756 children to actively participate in the labour market and provides 252 workers at these centres with employment. All this productivity comes at a cost of only $820,275 in operational funding to the government.

This is peanuts, given the productive value that these parents have for our economy. Community based child care aims to provide affordable, quality care. The prime motive for private child-care centres is making a profit. Therefore, it is community based child care that sets the standard in the marketplace.

This represents yet another broken promise by the new government. In a letter to the Australian Early Childhood Association, dated 28 February 1996, just days before the election, the then shadow spokesman for family services, Dr David Kemp, made a commitment to preserving the operational subsidies, and I quote:

The policy also states our continuing support for the community-based long day care sector, and we regard the operational subsidy as one of the key supports of that sector. The coalition has no plans whatever to change the operational subsidy.

It is a very clear commitment that has been broken by those opposite.

I guess this is just another one of those non-core promises. We had two sorts of promises. There were the ones that the new government kept. They were the core ones. All the rest were the non-core promises. They do not really count. We will remember that and we will be reminding those opposite of it in the lead-up to the next election.

The so-called family-friendly tax initiative is also fundamentally flawed. A low income family who, by necessity, must have both parents working gets a tax break of only $1,000 per dependent child. Such a family may earn only $70,000 a year, or $35,000 each. However, a single income family can earn up to $65,000—which increases by $3,000 for each additional child—and get the $1,000 per child and an additional tax break of $2,500 if they have a child under five years. Therefore, a family with three young children, struggling on a combined income of $60,000 a year, gets a $3,000 increase in the tax-free threshold. However, a single income family with three young children can earn $71,000 a year and get the $3,000 plus an additional $2,500 increase in the tax-free threshold.

The message is very clear. To women in middle-class families, who can afford that, it is: stay at home. But to those on the lower end of the rung it is: bad luck. There is no equity in this decision. Let us face it: the only people this family tax initiative will assist is upper middle income earners who can afford to live on one income. Low income families, who by necessity must have both parents working, are, in effect, punished.

These tax concessions, along with the cuts to the child-care sector, are a transparent attempt to get women out of the work force. Women being forced to leave the work force provides a double bonus for the government. Firstly, their departure creates a job vacancy and, secondly, because they cannot afford to be in the work force, they do not register for work and therefore do not appear in the unemployment statistics. Is this the coalition's secret strategy for bringing unemployment numbers down?

Certainly, this budget is not making Australia the clever country. Another area where the people of Grayndler will be hurting is in changes to the higher education contribution scheme and Austudy. Understandably, most families are very keen to see their children succeed. This sentiment is especially strong in first-generation Australian families, who by and large had very humble beginnings. I remind members that almost half the population of Grayndler was born overseas. One form of relief for these parents was that independent Austudy became available to many students at the age of 21. To raise this to 25 years places an untenable burden on many families. Furthermore, lowering the income threshold for HECS repayments from $28,495 to $20,701 means that many graduates will find it very difficult to get ahead. As a result, they may need to rely upon the support of their parents even longer.

The likely outcome of these changes is that children from lower income families will be forced to give up the dream of a tertiary education because their parents simply cannot afford it. But then, perhaps this is actually one of the aims of these changes. I can assure the Main Committee that, contrary to comments made by Senator Vanstone, not too many students from the inner west of Sydney will be paying their way into university in the `dumb but rich' category that is being implemented by this government.

The privatisation and Americanisation of the Australian higher education system, whereby people from richer areas, from rich families, can buy their way into university, having not got the marks, is a disgrace—given, in particular, that they will have had advantages of going to the sorts of upper-class private schools that some of the people opposite obviously went to.

The elderly and the frail are not immune from the new, improved razor gang either. There is nothing like hitting people when they are down. The coalition government has withdrawn $88 million from its contribution to home and community care funding. And the government's proposed solution of the shortfall in funds? User pays, of course—user fees for meals on wheels, user fees for home visits, user fees for community transport, user fees for respite care, user fees for shopping support, user fees for home maintenance.

These services allow the elderly and the disabled to remain in their homes with dignity. Without them they will be forced into nursing home care. But of course they cannot really do that, because once they apply to get into a nursing home, having had the choice of staying at home taken away from them, the government begins to impose an up-front fee of an average of $26,000. This may not be a lot of money for people in Bradfield, but I can assure you that it is a lot for people in Grayndler and it is a prohibitive amount for vast numbers of elderly Australians and their families.

Furthermore, thanks to the budget, people already living in nursing homes face increased fees. This will negatively affect almost 2,000 elderly people currently living in the 34 nursing homes in Grayndler. There are 1,954 people in my electorate who will be impacted by this.

Perhaps one of the most unjust aspects of this government's cost-cutting plans is the threat to the Commonwealth-state housing agreement. Funding for the next financial year may remain stable, but it is only while reforms are being worked out. It is clear, however, that these so-called reforms will lead to funding cuts of up to $500 million. The importance of public housing may be lost on the coalition government, but for hundreds of thousands of people across the country it is no exaggeration to say that it is a lifeline. Having grown up in public housing for the first 20 years of my life, I certainly can attest to that.

The government's idea, in effect, is to abolish public and community housing, and to extend rent assistance to public and community housing tenants. In an area like the inner west of Sydney, the rental market is very tight and market rents are very high. You would be lucky to rent a bed-sitter for less than $100 a week and an average three-bedroom home would rarely be leased for less than $300 a week. Such a change would alter the whole character of inner city areas, where public housing has ensured that there is a mix of people of different backgrounds. Even with increased rental assistance, low income families will be severely disadvantaged by the loss of public and community housing. The effect of these changes is potentially devastating to low income families. But then it seems clear to me that when the Prime Minister and the Treasurer talk about family friendly initiatives they do not include lower income families.

In conclusion, this budget will increase inequality. It is a road which has been gone down before; it is a road which Margaret Thatcher went down in Britain, and Reagan and Bush went down in the United States. But it is a road which is being rejected all over the world. The UNDP's Human Development Report, which came out this week, when comparing economies throughout the world said:

. . . the key to East Asia's success was a relatively equal distribution of private and public assets. Countries there concentrate on redistributing not income but wealth. What generates income is productive wealth. A progressive redistribution of assets tends to boost growth because it has a broad positive effect on people's incentives.

There is also a report by the OECD that came out in July 1996. This report concluded that growing inequality is far from conducive to growth. It admits the future prosperity of OECD countries depends on reducing social and economic exclusion in the forms of high unemployment, non-participation in the labour market and, in some instances, growing inequalities in earnings and incomes. The World Bank has also put out a report suggesting that growing inequality is bad for economic growth.

I would suggest that the results of this budget are very much going to be a reduction in economic growth, an increase in unemployment and an increase in inequality in our society. When you look at the labour market programs, where you have a strategy implemented to have labour market programs withdrawn, you also have changes to the social security system with massive proposed increases in penalties for people. If you do not turn up to a job interview, you can cop up to at least 13 weeks withdrawn social security payments. Some of the honourable members around this House should think about what they would do without 13 weeks of any payment. Those people have to get their money from somewhere.

This is not a `fair go' budget as the government would like us to believe. It is a `have a go' budget. Have a go at the elderly. Have a go at the unemployed. Have a go at low income families. Have a go at women. Have a go at students. And have a go at people least able to fight back. I urge the House to reject the measures in this budget.