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Tuesday, 25 May 2004
Page: 29018

Mr ZAHRA (6:50 PM) —It is always a pleasure to follow my colleague and good friend the member for Braddon, an excellent country representative in this place. We do share a solidarity as country members of parliament. It is a solidarity I have often talked about at the dispatch box in this place, because the work you do as a country member of parliament is very different from what our colleagues in the city areas and suburbs find in their daily work. We share in a way that we do not necessarily share with our party colleagues. I am sure people in the Liberal Party would often be able to share their experiences as country members of parliament better with other country members of parliament, be they in The Nationals or the Labor Party, than with their suburban and city colleagues. The same is true for us on the Labor side as well. So there is a general solidarity of country members of parliament.

The member for Braddon and I represent very similar districts, and a lot of the things he touched on his contribution are things which I will touch on in my comments here today. One of the important things about the legislation that we are considering today, the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2004, is that the people who get the benefit of the government's tax cuts are people on more than $52,000 a year. I do not begrudge those people a cent. They pay a lot of tax and they deserve to get some taxation relief. The concern I have is that all the benefit is geared towards a very small proportion of people in our community and there is nothing there in terms of tax cuts for those people who are on less than $52,000 a year.

There are some general points that have been made in this debate that I want to briefly touch on here. It has been agreed and is a matter of fact, according to the taxation statistics, that this bill that we are discussing today relating to the government's tax cuts will not provide any tax relief at all for four out of five taxpayers. The point that I want to make here is that, for the country members in this place, this is a bill which will provide even less tax relief to those people who live in rural and regional areas. Whilst it might be a general fact that this bill that we are discussing provides no relief in terms of tax for four out of five Australian taxpayers, I contend that it will be a significantly larger group in country districts that will receive absolutely no tax relief from this piece of legislation and the government's budget.

I do not come here and say that as a statement not backed up by any facts. It is a well-understood phenomenon that people in country districts get paid less. I have some statistics here to back this up. These are the Regional Wage and Salary Earner Statistics from the Australian Bureau of Statistics. They are based on data from 2001, which I understand is the most recent census data that is available. It is very interesting to look at the average wage and salary income of people who live in certain parts of rural and regional Australia.

In my electoral district there are a number of local government areas, and I want to mention in the House today what the average wage and salary income is in those districts. In the Bass Coast Shire, which is around Wonthaggi in the southern part of my electorate, the average wage and salary income is $27,675. The average wage and salary income in Baw Baw Shire, which is around the West Gippsland district, is $29,920. In the City of Latrobe, which is based around the Latrobe Valley in the eastern part of my electorate, the average wage and salary income is $33,603. In the South Gippsland district, around the towns of Leongatha, Korumburra and Foster, the average wage and salary income is $28,513. That is the average—and these are statistics I got from the Australian Bureau of Statistics. That really says something about the average levels of income that you find in country districts. They are substantially less than you find in city areas, particularly in the big cities like Melbourne and Sydney, where we have many more professional people and people in higher income positions.

Some statistics have been produced by the Parliamentary Library, based on the 2001 census data. It compiled some tables comparing, by electoral district, the number of people who earn more than $52,000 a year to those who earn less than $52,000 a year. The member for Braddon was here earlier. His electorate has one of the smallest proportions of wage and salary earners who earn more than $52,000 a year. In his electorate, there are 3,673 people who earn more than $1,000 a week—$52,000 a year. That is 3,673 people in the electorate of Braddon who are going to get some benefit from the government's tax cuts. By comparison, there are 62,595 people who are not going to get any relief at all in terms of tax cuts from the Howard government's budget. In my electoral district of McMillan, there are 5,634 people who earn more than $1,000 a week—$52,000 a year. By comparison, there are 70,880 people who earn less than $52,000 a year. Those people are not going to get any tax cut at all from the Howard government's budget.

These statistics are interesting in themselves, but they are really only useful when compared to those for other electoral districts in the country. The same tables reveal that in the Prime Minister's seat, the electoral district of Bennelong, there are some 18,681 people who earn more than $52,000 a year. That is more than three times the number of people you can find in my electorate earning that. In the Liberal seat of North Sydney, held by Joe Hockey, who was in here a few minutes ago, there are 35,670 people who earn more than $52,000 a year. By comparison, there are 5,634 people who earn similar amounts in my electorate.

So you can see that it affects different parts of the country in different ways, and it is very obvious from these tables that those areas where people have higher levels of income are going to get the most benefit. There are not too many of those in country districts. That is the point that I am making in my contribution here today. This budget is bad for people on low incomes generally. It is not a budget which is good for people on low incomes but, more than that, it is not a budget which is good for rural and regional Australia, because in general terms we do not have people who earn as much as those people who live in Melbourne and Sydney. There might be some exceptions, but in general terms the statistics reveal that the most benefit will go to those people on high incomes, and the tables bear out that those people live in Melbourne and Sydney, overwhelmingly and unquestionably.

Mr ZAHRA —The member for McEwen says, `What about families?' I do not want to not address that. The government has provided a number of payments to families in the budget, and I am sure that, in some circumstances, that will provide some relief. However, there is an important point to make here, and that is the amount of debt that a lot of people have incurred as a result of this government's mismanagement of the family payment system. The average debt that is held by families who have been a part of the family payment scheme is $900. In one-third of cases, when people get their $600 from the government it will not even arrive at their door or in their letterbox, because it will be used to pay back the debt that they accumulated as a result of the flawed family payment system.

The government have not been very upfront in relation to this family payment system. The system is bad for those people who are caught up in it—the one out of three people who are in the family payment system who have ended up with a debt, who will really get no benefit from these two $600 payments that the government have announced in the budget. Quite apart from that, I do not think the government have been really honest in talking about the hundreds of thousands, if not millions, of Australian families who have completely walked away from the government's family payment system because they think it is just too hard. They think it is too hard and that there is a very real chance that they will end up with a debt to the government; they do not want to go through all of that.

Those people are, in very large numbers, just walking away from the government's family payment system. It is too complicated. Many people feel it is too dangerous to go into because they do not want to be treated as though they are criminals, as though they are people who have deliberately set out to take money improperly from the government. They do not want to end up with a debt and with government agencies breathing down their necks, asking them to repay that money. They do not want that. I think there are large numbers of people who might be eligible for some payment from the family payment system but who are making a deliberate decision to stay away from it. As a result of that, they will not get any benefit at all from those changes that have been announced in the Howard government's recent budget. So, for people who have got families, the money that the government has announced in relation to the family payment system will not really provide much assistance at all. It will be largely swallowed up as a result of the debt. Also, many hundreds of thousands of people, if not more, will not get any benefit, because they will refuse to be a part of this flawed family payment system for fear of getting a debt.

The other point that I want to make in my contribution to this debate this evening is how much pressure people on low incomes are under in our community. Just because those people who are earning less than $52,000 a year do not get any tax relief from this government, it does not mean that they do not deserve tax relief. Families are under a fair bit of financial pressure, and people are really feeling the pinch. On average, people are paying $9,000 more per year in Commonwealth tax than they paid when Labor was last in office. That is $9,000 a year more, and those people on low incomes have got to pay that money too. As well as that, people are really finding it a burden to have to pay for additional services—services which they used to get for free in some cases. Take, for example, the issue of bulk-billing. Bulk-billing is a particularly important issue in my electoral district. In the West Gippsland region, bulk-billing has fallen from 63 per cent in 1996 down to 44 per cent now. There are many people in West Gippsland who earn less than $52,000 per year. Those people have to pay more when they go and see a doctor. They have to pay more on their Telstra line rentals every month, and they have to pay more when their kids make a decision to go on to university. There is a much bigger cost for families to pay when one of the children in the family goes on to university now, as a result of the government's 25 per cent increase in fees. People who are earning less than $52,000 a year are really feeling the pinch, because they have to pay more for these basic services, and, at the same time, they are paying more tax. Despite that, they get no relief from this budget—no relief at all. There is only the vague promise that if they have got kids they might get two lots of $600, which in one-third of all cases will basically mean nothing because of the debt that they have accumulated. It will, in effect, be of no real benefit to the great majority of families.

I think that the government have been very misleading in the way in which they have presented this budget as something that is going to be very good for the nation. I cannot understand how the government can make that argument about how this is good for the nation when such a very small proportion of people in our community get benefit from it. How can it be good for the nation when in my electorate something like 90 per cent of people miss out? How can it be good for the nation when people have to pay more for basic services—like going to see a bulk-billing doctor, and covering their monthly line rental fees from Telstra?

Look at any part of my electorate and just imagine yourself driving through that area into the West Gippsland region. You have got the shops on the left and the shops on the right. Think about how many people who are employed in those shops earn more than $52,000 per year. There are probably not too many; hardly anyone, really. Then think about what industries there are in the West Gippsland region where people might be earning more than $52,000 per year. You really struggle to identify even a group of people within a certain industry who would be earning more than $52,000 a year. Sure, there are some senior managers in the local council and in some of the companies and, I am sure, some of the bank managers who would earn more than $52,000 a year. But when you think about how small a group that is versus the rest of the community you really start to get a sense of just how unfair this government's budget is.

The same is true for other parts of my electorate. When you consider how hard it is for people to find a bulk-billing doctor in and around the South Gippsland district, and how many people in that district earn less than $52,000 a year, you can see why it is that people feel that this is a government that is not interested in them and has not responded to their needs. In places like that, whilst they are paying more in taxes, and whilst they are paying more for basic services that they used to get for free, they are not getting any relief at all. This is why it is my view that it is the country districts that will have the strongest response to this budget and to the Howard government's attempt to present it as being good for the nation and good for people right across the spectrum.

I think that it will be people in country districts who say, `I don't earn $52,000 a year, and I find it really hard to find a bulk-billing doctor.' I think it will be country people who say, `I don't earn $52,000 a year, and I don't get any tax cuts, but my son'—or daughter—`wants to go to university and they are going to be up for 25 per cent more in HECS fees.' I think it will be people who live in country districts, who get nothing out of this budget, whom the government is going to have a real problem with come the next federal election. The government ignores these people at its peril. People in country districts are very resilient, very tough and very able to cope with pressure; but one thing I know for sure is that they do not take rubbish like this. They do not take it, they do not cop it on the chin and then say: `That's all right. I'll just go back for some more. This government is treating me badly and I'll just go back and get another dose of that.' That is not what country people do.

Increasingly, country people are breaking the voting patterns of a generation. In Victoria we have seen a pronounced trend where people have moved away from voting for governments that do not represent them—like the Kennett government in Victoria—towards representatives who are interested in the issues that concern them. You would never get a more clear example of how a government has lost touch with country people than the budget that the government has just brought down, which leaves so many country people—particularly those people earning less than $52,000—so far behind and provides so much advantage to people in the big cities. (Time expired)