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Thursday, 30 September 2010
Page: 359


Mr SHORTEN (Assistant Treasurer and Minister for Financial Services and Superannuation) (3:53 PM) —The cost of living pressures for Australian families are real and for many families they can be tough pressures to bear. The shadow Treasurer is concerned about our plans to deal with these pressures, and I would like to address his MPI in good faith not just by outlining just the headline numbers in abstract detachment but by looking at how the government’s plan delivers and supports diverse Australian families. In doing this it is important to address some issues about what the government has done and also address some of what the shadow Treasurer said are the problems.

I will look at the education rebates that Labor are offering, the tax cuts that we have implemented, the dental investment we have provided to families and children, the family tax benefits and the jobs that we have created. Of course, it would be remiss not to look at some of the mistakes that the coalition have offered up: their Woolworths tax, their specious debt arguments, their inability to have costings without black holes and their failure to recognise the cost of inaction on climate change.

I think it is important to always relate the debates in this place to the lives of people outside this place. For instance, let us take a family in Fremantle—call them the Browns. The Browns are a single-income couple where the breadwinner is earning a bit over the average weekly ordinary full-time wage. As a result of our last budget, the Brown’s real disposable income has increased by $3,300. I remind the shadow Treasurer that someone on $50,000 is now paying $1,750 less tax than they did in 2007-08—that is 18 per cent less tax.

Let us also take the Black family who live in my own home town of Moonee Ponds. They are a dual-income household with children, where one parent is on average weekly ordinary time earnings and the other parent is perhaps working part time and getting about half of that weekly wage. As a result of the last budget delivered by this government, the Black’s real disposable income has increased by $5,624. I go to real numbers in this MPI because that is what makes a difference to families trying to balance budgets.

In addition to the tax cuts for the Black family—for the third consecutive year, I should add—their disposable income has also been boosted by the government’s assistance to families for the costs of education, child care and dental care. For example, the education tax refund helps families with children undertaking primary or secondary school studies to meet the real costs of school expenses. Because the Gillard government is extending the education tax refund to school uniforms, the Blacks will be able to claim up to 50 per cent of the cost of uniforms incurred from 1 July 2011. This relieves pressure on the family budget being dedicated to their children’s schooling.

This family might also be a family with teenagers who need to have their teeth checked. This government is supporting families to improve the dental health of teenagers by providing a voucher worth $157 in 2010 to eligible teenagers to assist with the cost of a preventative dental health check. Since this plan was implemented on 1 July 2008, I am pleased to report to the House that the Medicare Teen Dental Plan has provided 850,000 teenagers with the opportunity to receive a preventative dental health check.

Given that the Black family are entitled to family tax benefit A, they are able to ease the cost of living pressures by claiming the 50 per cent refundable tax offset every year up to $750 for each child undertaking primary schooling. That is a refund of $375 per child per year. If their children are teenagers, there is a 50 per cent refundable tax offset of up to $1,500 for each child undertaking secondary schooling. That is a refund of $750 per child per year.

The family tax benefits are part of our plan to relieve the costs of living pressures on families and I think it is important for the opposition to recall our 2 August 2010 campaign commitment to increase the family tax benefit part A by up to $4,000 per teenager aged 16 to 18 to help families meet the cost of older children and encourage more teenagers to stay at school. In total, the forward estimates confirm this is a $595 million investment in easing the cost of living pressures, which is what this MPI is concerned with.

If this family chooses to have another child in a spirit of adventure and family building, as a result of our recent commitments dad will be provided with two weeks dedicated paid paternity leave as a new father, which will be paid at the national minimum wage of about $570 a week. This is going to help with not just the Black’s family budget for the new cot, the new mattress and the invariable costs that come from shopping at Baby Bunting but the living pressures that will come in the form of irreplaceable time with the newborn child. When the Black’s new child needs to be sent to the local creche so that Mrs Black can get back to doing a few days work to help with the income, Labor’s childcare rebate kicks in to help the family budget.

The government increased the childcare rebate from July 2008 from 30 per cent to 50 per cent of out-of-pocket childcare expenses, providing families with the ability to claim up to $7,500 per child per year towards their childcare costs, and we have also made this rebate payable on a more frequent basis. Indeed, if the Black family had had the unfortunate outcome of living under the former coalition government, they would have had to wait a year to get this rebate. Of course, as we know, children grow very quickly in their early years. Just when you have bought them one set of clothes they seem to have grown to the next size. So timely payments assist young families, and there will be about 800,000 families eligible for this rebate.

Now we come to my third family, the Purple family. The Purples are a pensioner couple who, after the last budget brought down by this government, have seen their real disposable income increase by 8.1 per cent, or about $2,030 over the year. To deliver for seniors such as this family, on 7 August we announced a commitment to an improved work bonus for age pensioners choosing to do part-time work and we also are providing $4,000 worth of training to support mature age workers in the workplace. I do not know whether that would be of interest to the coalition. Despite the challenges of the global financial crisis, with families such as these pensioners in mind, I believe that we actually stay true to our core values—that is, we have delivered an historic increase in the age pension and we did so in the teeth of the most difficult global financial circumstances since the Great Depression. From 20 September 2009 single pensioners have received an increase in their payments of $32.50 per week and for couple pensioners there is an extra $10.15 combined. Including the pension rise and the improved indexation arrangements, whilst we have been in office we have actually delivered increases of around $115 per fortnight for singles and $97 per fortnight for couples combined. From 1 July the maximum pension payment payable to single pensioners, including supplements and indexation, has increased by 19.5 per cent, well above the increases of the cost of living. For couple pensioners there has been an increase of 10 per cent, well above the increases.

In stating these numbers, I do not pretend that life is easy for pensioners—not at all. But, in putting forward the numbers for all of these families, what I do recognise is that in terms of real money—and what matters to families at the end of the day is the money to pay the bills and to enjoy the pleasures of life, to have holidays and to be able to buy presents for their families—this government is a pragmatic government which has been getting on with real and tangible outcomes for millions of Australians.

Of course, whilst we can talk about the tax cuts, the rebates, the dental investment and the family tax benefits improvements, there is one thing which is most important in helping to deal with the pressures of the cost of living; it is called a job. No-one should suggest that any form of state assistance is the substitute for the merits of a job. Since coming to office, the foundation of this government’s plan to address the cost of living for Australian families has been to ensure they have a job and have some control over their own lives. Our economic stimulus package has been praised internationally as the best the world saw during the GFC. The stimulus was of course all about protecting jobs and creating new work. Those opposite, including the shadow Treasurer, oppose this vital job focused package. Instead of doing their utmost to ensure that the families I have been talking about were households of work and wages, our opponents sitting on the other side of the House were prepared to stand by with what, regrettably, I have to characterise as a ham-fisted, do-nothing, hands-off, leave-us-alone approach.

The stimulus in the economic circumstances that have been given to this country is paying dividends today. We have seen the creation of 53,100 new full-time jobs in the last month alone. In the past 12 months we have created 349,700 jobs and we have presided over 567,000 jobs since we came into office in November 2007. What is encouraging is the broadening of growth as the economy makes a smooth transition from the support of the stimulus to a recovery in private demand. This means of course that labour demands will continue. Household consumption has risen 1.6 per cent in the last quarter. Building investment and engineering construction are strengthening remarkably. So, if the Browns’ single breadwinner is working on a construction site, his or her job security and professional aspects are definitely enhanced. If the family living in Moonee Ponds have a small corner store—and many do—they will welcome the news that other households in Moonee Ponds are likely to be increasing their spending at the corner store—more turnover at the retail counter.

As I have mentioned the cash register, I might add at this point that if those opposite had been elected last month all the families that I have spoken about, and millions of other Australian families, would shortly be experiencing the sharp end of the opposition leader’s hastily thought-out thought bubble, the coalition’s Woolies and Coles tax, with his plan to increase the tax on big business masquerading as a parental leave scheme. I understand that there are many in the opposition who were uneasy about promoting this plan and quietly hoped the idea would go away. Now, in the reflective time in opposition, they perhaps have a chance to make a silly idea see the dustbin of history.

But you cannot talk about the cost of living without talking about the cost of living in retirement. That is why our government is passionately committed to promoting reform in our already enviable superannuation system. I spoke today in question time about the need and the national good of moving from nine to 12 per cent in superannuation. I do believe and I predict, perhaps somewhat foolhardily, that the opposition will eventually come on board and there will be a time in the future in this place when the opposition will say—perhaps when they win an election once the nine to 12 per cent has been implemented—that this is a good idea and there will be bipartisanship. All I say is: let us take the agony and the tears out of a position which will inevitably be adopted by the opposition and move on, and let us fight about what is genuinely disagreed upon rather than simply having a policy vacuum on superannuation versus a set of meritorious ideas.

And another meritorious idea is the idea of Labor’s MySuper election commitment.


Mr Robb —More people sacked from small business!


Mr SHORTEN —The member for Goldstein is yet again arguing in the face of progress. At least he is consistent. MySuper offers a generic and standardised super savings product that will return more to retirees—some of us will be retirees soon and some of us a bit later—and, in doing so, will improve this country’s national savings pool. Safe, low-cost and simple superannuation solutions are essential to help Australia’s retirement savings. By 2050 one in four Australians will have reached retirement age, compared to one in seven today. You do not get a bill in the post, but Australians are currently paying $85 a month on average in superannuation fees, which is more than the average person’s monthly mobile bill. We need to have the offer of low-cost superannuation products for people who cannot afford and who do not seek to have high-priced superannuation products.

It is our intention to allow super funds to offer simple, low cost superannuation products called MySuper, from 1 July 2013. This will be a new default superannuation product with no unnecessary fees or charges and with simple features to make it easy to compare fund performance. This benefit for a 30-year-old worker on average wages would lift their retirement savings by $40,000. When we talk about superannuation and if we want to relieve cost of living pressures, we need a bigger national savings pool. I think the opportunities of moving from nine to 12 per cent, the doubling of the concessional cap, the improvements for low income earners and the extension of the SG from 70- to 74-year-olds will help build a national savings pool. A national savings pool is one of the competitive advantages of Australia in the global economy. This whole House should get behind that rather than having the point-scoring debates about the cost of living that the opposition have tendered in this MPI.

I would also suggest in closing that, if we want to talk about the cost of living, there is a cost of inaction on climate change which has been recognised in the Stern report. There is a cost to inaction. Just as well there is a cost to an $11 billion hole in the funding policies of those opposite. We keep hearing about debt. Let us just put some facts on the line. We are the envy of the world in our government debt situation. Our peak debt will be six per cent of GDP in 2011 and 2012. Our budget returns to surplus in 2012-13. I do not think the opposition is happy about that. I think they resent that Labor is able to return it surplus. We are doing much better than the rest of the world in international net debt for the government sector, and I think we have the plan for the cost of living—(Time expired)