Senator SHERRY (3:25 PM) —Senator Mason wanted to traverse history. I think it is important to remind the Senate that, in fact, the Treasurer who left this country with the highest budget deficit in today's dollar terms was none other than John Howard. He was Treasurer at the time of the defeat of the Liberal government in 1983. It was the largest budget deficit in Australian history.

Senator Tierney —You're trawling back in time now. How about the last seven years?

Senator SHERRY —I do not intend to go into history anymore because I think that speaks for itself. I want to deal with this so-called tax cut in the here and now as a result of the budget announced last night. Four dollars a week for an average income earner—that is the value of the tax cut in current dollar value delivered last night. Of course, the Treasurer does not want to explain, and certainly Senator Minchin today did not want to explain, that the $4 will disappear by this time next year. Why will the $4 disappear? It will disappear because the $2.4 billion cost of the tax cut will be clawed back through bracket creep. By this time next year that $4 will be worth precisely zero. What will Australians be left with at this time next year? Not only will they have no tax cut in dollar value terms but they will be left with much higher medical costs as a result of this government's so-called reforms and so-called improvement in fairness to the medical system. They will be left with higher medical costs. For an average person, just five visits to the doctor will wipe out this tax cut. Goodness knows what the cost to a family will be in terms of the additional expense of sending their child or children to university with an increase in fees of up to 30 per cent. That will certainly wipe out this tax cut for the next 10 years for the average Australian family. We need to look at this so-called tax cut in that context.

I think it would have surprised the Treasurer and the government—it certainly was a surprise to me, albeit a pleasant surprise—that it was none other than Senator Vanstone, the Minister for Family and Community Services, who really torpedoed the value of the government's own tax cut by her comments this morning on the Life Matters program when she was interviewed by Ms Doogue. In the context of what $5 can buy—bear in mind the average tax cut is $4—Senator Vanstone said:

That is Senator Vanstone's very correct analysis of the value of this $4 tax cut. It will buy you a sandwich and a milkshake. Of course, it will not even buy that if you have to go to the doctor and pay the extra fees that will flow as a consequence of this budget, and it certainly will not buy a sandwich or even half a milkshake if you have to send your child or children to university. Four dollars will not even buy two loaves of bread. As I said earlier, Senator Vanstone has very perceptively pointed out that it will not even buy you a sandwich and a milkshake.

If $5 is not enough for Australia's poorest citizens, how can $4 be sufficient for average families? I think it is an insult to suggest that $4, which will disappear by this time next year because of bracket creep, will make a significant difference and an improvement in the lives of struggling lower- and middle-income families in this country, particularly when they are going to have to put the tax cut in one pocket and fork out considerably more as a consequence of higher medical costs and, when they intend or wish to send their child to university, higher university fees.