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Wednesday, 1 June 2005
Page: 180


Ms CORCORAN (12:31 PM) —The Howard government has failed our society, even by its own liberal values. One of the deepest insights of the classical liberal tradition is that each member of our society is valuable and has potential. I can only paint word pictures for you, but I challenge members of the government to go into the Centrelink offices, the welfare agencies, the homeless centres and the women’s refuges and see for themselves the despair, the frustration and the suffering that some people are going through. Stop your busyness and feel the poverty that is happening right here in this country, a country that should be so good to live in. There is an underclass of poverty-stricken people. There is an underclass suffering from despair. It is growing and has been growing like a noxious weed under this government.

The people being ignored or being battered by this government include the unemployed, the underemployed, sole parents, those suffering a disability and people caring for others unable to care for themselves. This government goes from one vulnerable group to the next, stigmatising, denouncing and threatening them. It has been put to me that the government’s actions suggest that it sees these groups of people as valueless and without potential. That person then offered me another thought—that the government deliberately sets up disadvantaged people as a class against which the government defines itself. It has become clear to me over recent years that the government has deliberately tried, and to some extent has succeeded, in setting Australians against Australians, and it is this trend that my constituent is talking about.

Today in Australia, on Howard’s watch, it is becoming okay to denigrate those on social security payments, it is becoming okay to denigrate those who come from overseas seeking our protection and help, and it is becoming okay to denigrate those who hold different religious beliefs or even none at all. It is becoming okay to stop caring about our neighbours, both local and global, and just narrow our focus to ourselves. A classic proof of this came the day after the Treasurer’s budget speech. The Daily Telegraph’s headline read ‘Workers 1, shirkers 0:  The tax system finally rewards effort and makes the bludgers pay’. The article goes on to talk about workers winning and shirkers feeling the heat. The implication is that anyone on a social security payment is a shirker. This is provocative language and a clear example of whistleblowing—that is, it appeals to those who are already predisposed to think ill of people on welfare and just want an excuse to do so. It encourages the notion that the world is a simple place and consists of people who work hard and those who prefer to lean on others.

In this black-and-white world there are no people who have accidents, or, if they do, they have the wherewithal to look after themselves, they recover completely and they return to work without any further problems. In this black-and-white world all marriages or relationships last happily forever or, if they do not, the partners have the grace to continue to live together quietly, providing good care for their kids and not abusing each other. In this black-and-white world no decent people have an alcohol problem or an addiction to illicit or legal drugs. Those that do are seen, firstly, as having wantonly brought their problems on themselves and, secondly, as not worthy of any assistance beyond the recommendation that they pull up their socks and get on with it. These attitudes do not recognise that many people, through no fault of their own, require assistance from time to time and that some people require assistance on a long-term basis. These attitudes do not recognise that, regardless of why some people are in need of help, there are often children involved and that we must, regardless of their parents’ actions, have concern for these children and provide adequately for them.

This budget is a failure. It fails our society. It is not just and it is not fair. It does not treat the vulnerable as people with potential; rather, it attempts to separate them from others and treats them as a different species. It is my experience, listening to the distressed voices in my electorate, that disabled workers and single parents by and large want to participate in the work force. The trouble is that employers often do not want to employ them. The government’s own track record here is a classic example. The number of people with disabilities who are employed by this government is falling.

The government makes a lot of noise about the recent increase in the number of people on disability pensions. The government is trying to suggest that there are a lot of people out there on a pension fraudulently. We hear disparaging comments about all those with bad backs, as though everyone with a bad back is pretending. It is reasonable—in fact, it is desirable—to ask why the numbers of disability pensioners are growing. It is then the government’s job to react properly to the cause, not simply to suggest that those on this support are shirkers or to make life more difficult for them.

Those who are on a disability pension fraudulently should be identified and moved off. Those who are genuine should be treated with respect, provided with appropriate assistance to get a job that is consistent with their disability and provided with the assistance they need to live a decent life. Appropriate assistance includes recognising that some people cannot go to work every day, that sometimes they are well and capable and other times their illness means that they cannot work. Appropriate assistance means recognising that some people need assistance in the workplace—physical assistance or assistance that allows them to work at a different pace to others without fear of discrimination.

Research suggests that there are several reasons why the numbers of those on disability pensions have increased. One reason is that the population is ageing and that older people are more likely to have disabilities. For example, men who have worked in a physical job all their lives often eventually sustain physical long-term injuries. A number of other social security pensions have been stopped. For instance, the age for which the pension is available to women is increasing to eventually reach 65 years of age. It is likely that in the past women aged between 60 and 65, unable to work because of a disability, went on to the aged pension. Many of these women are no longer able to do that because of the change in the age rules and so move on to the disability pension. Another reason cited by the research is that we are getting better at looking after people who sustain big injuries from accidents. More people are surviving and they need support through the disability support pension. These people should not be the subject of slurs by the government or by the community. They deserve appropriate support and respect.

A constituent of mine has told me of the frustrations she is going through trying to get into the work force. Maree has been out of the work force for some time. She was her husband’s carer but they have now separated. Maree needs retraining and her confidence restored. She has had her name down for a place on the personal support program for many months and is despairing of ever getting onto this program. Maree spoke to me before this budget was brought down and said she was worried about having her single parent payments cut. She has one son. Her former husband is a pensioner, so there is not a lot of capacity for financial support from that source. Maree wants to get her drivers licence and to buy a car so that she can improve the range of jobs she can apply for. She cannot do this in the face of a threat of reducing income.

If the mooted changes to the disability support pension and the parenting payments are made, those who are currently on these payments will be treated under one set of conditions while those who apply from 11 May for the DSP will be on another set of conditions and those who apply from 1 July 2006 will be on yet another set of conditions again. We are going to end up with groups of people who are operating under similar circumstances being treated very differently. This is going to be an administrative nightmare and, more to the point, it is very unfair to the recipients.

The tax cuts proposed in this budget have been described as a welcome and overdue acknowledgment of the tax break hardworking middle Australians deserve. I am not sure what middle Australia means in this context, but let us assume it means those on average incomes or in middle tax brackets. If the government was serious about rewarding hardworking middle-income Australians, it could have designed a far better tax system than the one proposed. The proposed changes are: a reduction of two points in the 17 per cent marginal tax rate, down to 15 per cent; an increase in the threshold level for the 42 per cent margin rate—from $58,000 to $63,000 this year, with another move to $70,000 next year; and an increase in the highest marginal rate—from $70,000 to $95,000 this year and then on to $125,000 next year. This is on top of the tax break introduced last year for those on $50,000 a year or more. It is also on top of the complete abolition of the superannuation surcharge tax for those on high incomes, from this year.

What all this means is that those on $50,000 per year or more had a tax cut last year, they will get one this year and they will get another one next year. Those on incomes below $50,000 will get one tax cut. The tax cuts are roughly as follows: there will be $18 per week for those on $20,000 or less; there will be $6 a week for those under $50,000; and those on $100,000 per year can look forward to $40 a week this year, moving to about $63 per week next year. That again is before we start considering the changes to the superannuation surcharge.

Some people think it is okay for those earning more to get bigger tax breaks than those earning less. The argument usually runs along the following lines: those on higher incomes pay more tax in dollar terms in the first place, therefore of course they are going to get bigger tax cuts in dollar terms than those on smaller incomes. I have done an analysis of the proposed tax cuts to test this argument and I have come up with some interesting results. Firstly, as I noted earlier, those on higher incomes are getting a bigger tax cut in dollar terms than those on smaller incomes. Secondly, those on higher incomes are in many instances getting a bigger tax cut than those on smaller incomes in percentage terms as well. The tax cuts in percentage terms over the next two years, to 2006-07, are 13.1 per cent for those on an income of $20,000, six per cent for those on an income of $30,000, 3.8 per cent for those on an income of $40,000 and 2.8 per cent for those on an income of $50,000. So far, so good—the percentage tax cuts are moving in the direction you would expect and in the direction the government has said. However, from here on in the story changes. The tax cuts in percentage terms over the next two years, 2006-07, are 3.8 per cent for those on an income of $60,000, 9.4 per cent for those on an income of $70,000, 9.7 per cent for those on $80,000, 9.8 per cent for those on $90,000, 9.9 per cent for those on $100,000 per year and 10.1 per cent for those with incomes of $120,000 per year. We have to move on to those on an income of $150,000 a year before the tax cuts in percentage terms start to fall again—down to eight per cent.

I did not take my analysis any further than these income levels. Even so, it is a bit rich to say that someone on $150,000 can have a tax cut of eight per cent or $86 per week, while those on a third of that income, $50,000, get a tax cut of $6 per week or 2.8 per cent. Again, do not forget that the person on $150,000 also gets a tax cut, as the superannuation surcharge is abolished.

The alternative plan put forward by Labor is much better. It proposes that from 1 January 2006 there should be a rise in the threshold where the 30c tax rate cuts in—from $21,600 to $26,400—and a welfare to work bonus that will provide an effective $10,000 tax-free threshold for people earning up to $20,000 per year. These would be followed by further tax cuts from 1 July 2006, which would raise the threshold where the 42c rate cuts in from $63,000 to $67,000 and would raise the threshold where the 47c rate cuts in from $80,000 to $100,000.

These changes to the tax system will give a $12 per week tax cut for those earning from $25,000 to $70,000—double what the Liberal Party is proposing. They will give the same tax cuts as the government proposes to those earning from $70,000 up to $105,000. The changes will give a tax cut of $40 per week to those who earn $105,000, which is one-third less than the government is proposing and a much fairer outcome across the range.

It is interesting to note that the Treasurer has not responded at all to this alternative proposal. He had the details of Labor’s tax policy for some hours before he was required to come back into the House and sum up the tax debate. He did not offer any comment or attempt to discuss the merits or otherwise of our policy.

The government promised, in the lead-up to the 2001 election, that it would keep private health insurance affordable. It is a pity that it did not define ‘affordable’. Clearly, this promise is in the same ironclad, never-to-be-broken category as the Medicare safety net promise. I say this because private health insurance has increased by 33 per cent since 2001. This is hardly an affordable rise.

This year, the government approved and announced an increase of 7.96 per cent in health insurance premiums. Many of my constituents, however, ended up with a rise of around 15 per cent. One gentleman who rang me was very upset. He joined private health insurance a few years ago. He was not sure he could afford it, but bowed to the pressure. The big push was on. But this latest rise is just too much for him and he is now going to get out. This means he will join many other Australians who are leaving private health insurance.

The seniors health insurance rebate was meant to make the private health insurance industry more sustainable, but it is not working. The latest figures show that, so far this year, while 54,000 people over the age of 55 joined private health insurance, 21,000 people under the age of 55 got out. This leaves a lopsided private health insurance industry paying out record amounts in benefits, which is hardly a sustainable trend. Private health insurance is not affordable for many Australians and the latest move to prop up the industry is not working. Clearly there is a lot more work that needs to be done in this area.

Child care, or at least the lack of child-care places, is a continuing theme with my constituents. This budget will do nothing to help them; in fact, it may make matters worse. This budget does not attempt to match child-care places with need in either long day care or before and after school hours care. The government is intent on forcing parents out to work but has made no provision for the extra child care that this will demand. There is a total of 87,000 new before and after school hours care places in this budget, and this is welcomed. We know from ABS data—the office of the Minister for Family and Community Services does not keep this data—that there is an existing shortfall of around 174,500 places in Australia.

We know, because the Treasurer has told us, that he wants 190,000 parents back in the work force. We do not know, however, how the extra child-care places needed to cope with 190,000 parents going back to work, plus the existing shortfall of 174,500 places, are going to be managed with the allocation of only 87,000 new places. Those figures are for before or after school hours care.  There is nothing positive in this budget for long day care.

There is a negative, however, which is very hard to understand. In the face of all the noise that the Treasurer is making about getting people back to work, he quietly cuts funding for child care to parents on low incomes whilst they undergo training or look for work.  The JET scheme is now only available to parents who can do their training within 12 months. If you are interested in doing any training that takes more than 12 months, this scheme, which is aimed at low-income parents, is suddenly not available.

Industry has, for some time now, been talking about a shortage of workers with the skills needed by industry.  The Reserve Bank, last March, talked about this shortage too, as well as problems with our infrastructure. These two factors were the reasons given by the Reserve Bank to justify its decision to raise interest rates by 25 basis points at that time. The Reserve Bank was concerned that skills shortages would put pressure on wage costs and, therefore, inflation. Despite the fact that skills shortages have been talked about for years, this government has done nothing—worse, it has actually reduced capacity to improve the situation.

Since 1998, over 270,000 Australians have been turned away from TAFE. We see that 40 per cent of our apprentices do not complete their apprenticeships. This is clearly unsustainable and needs to be addressed. Labor has announced a completion bonus to encourage apprentices to finish their training. This bonus would be in the form of $1,000 midway through the training, and another $1,000 once the training is complete. This money would be tax free. It is estimated that, should this policy be adopted, it would put another 8,000 trained apprentices into the market every year. We cannot afford to ignore the need for skilled workers. We must train up our own people, who are looking for training and ready to learn, rather than trying to rely on importing skilled migrants.

In summary, this budget introduces a new tax schedule which is clearly unfair. It threatens the wellbeing of many households by moving parents off parenting payments and onto a lower social security payment. It threatens the wellbeing of many disabled people by threatening their incomes. It does nothing to address the training needs and child-care shortages which exist now and are becoming more acute. This budget is clearly a disgrace.