Senator ALLISON (Leader of the Australian Democrats) (8:02 PM) —Treasurer Costello told the parliament on Tuesday night that his 10th budget was framed for the future. Tonight I advise that this is not a future that the Australian Democrats can endorse. Our vision is very different from Treasurer Costello’s. The Democrats believe in fairness, equality and compassion, and we do not subscribe to the politics of shame and blame.

The 2005-06 federal budget was, as expected, one of carrots and sticks: lots of blame and not a lot of fairness. The biggest carrots have gone to the high-income earners; the sticks are being used to beat up sole parent families and people with disabilities. It is the best of times if you are well paid and the worst of times if you are struggling. It is shameful, too, that the first two measures the government will pass, using its new Senate majority, attack the disabled, the widowed, the separated and single parents of young children. The Democrats say the government has no mandate for this.

This version of welfare reform cashes in on the populist myth that welfare recipients are bludgers and shirkers. It seriously devalues the work of certain parents: the ones who do not fit this government’s conservative, white-picket-fence ideal of family. At the same time that the Treasurer was announcing his hard line for parents on welfare he was announcing that there would be a $300 tax-free bonus paid to wealthy two-parent families where one parent stays at home to care for the children up to 18 years of age. The double standard is breathtaking. This measure pushes people onto dole queues for jobs that do not exist. The economics of the government’s welfare reform simply do not add up. Why would you expand Work for the Dole when only 15 per cent of participants end up with full-time work? The only area of jobs growth in this budget is in the Job Network and Centrelink, with hundreds of millions of dollars in additional funding being provided for job police and job agency programs.

Australia has 540,000 officially unemployed people and 1.2 million who want to work but fall outside the definition of unemployed. Last month there were just 22,600 job vacancies—that is, 77 jobless people for every vacancy—and the budget forecast predicts that jobs growth will slow from 2.75 per cent this year to just 1.5 per cent by June 2006. Yet the government says that 180,000 parents of school-age children—parenting payment recipients—and another 60,000 people with a disability should be off welfare and into the work force. There are of course people with disabilities in the work force just as there are 120,000 sole parents in work. I suggest that no-one would willingly remain on the paltry parenting payment if having a better paid job were a real prospect.

The fact is that there are still many barriers to people moving from welfare to work and if more training and Job Network assistance gets them ahead in the queue of the long-term unemployed they will not necessarily benefit and their children are unlikely to be better cared for. How easy will it be for a widowed, separated or divorced parent to find a job close to home during school hours that provides time off for children as young as six? How easy will it be for sole parents who have children with chronic illness, difficult behaviour or a disability, or sole parents with more than one child with such problems? Their search for a job that will not result in them leaving their children home alone or wandering the streets at night and during school holidays will mean they are likely to be breached and have their income support stopped without any questions being asked. The Breaching Review Taskforce, still kept under wraps by the government after six months, is apparently damning about the government’s harsh penalties. It calls on the government to cut the duration of current penalties for those who breach job search rules from 26 to eight weeks, but there is no mention of this in the budget.

Workers in this country do not have the right to flexible work hours or to paid family leave to care for sick children. The government says that over four years it will fund out-of-school care for 84,300 children, most of which, however, will not be available until 2008. But right now, in 2005, there is a shortfall of 50,000 such places. Add to that the demand driven by 120,000 parents forced into work, and it is obvious that more than twice that number will be needed.

Last budget the Treasurer told Australians to get procreating. A year later, the poorest parents were punished—child care is still unaffordable and unavailable to many families. How good it would have been for Mr Costello to have announced last Tuesday that child care of up to 30 hours a week, for instance, would be publicly funded for the families that required it, and that the higher costs of child care for children up to two years of age would be addressed. The Democrats estimate that it would cost $2.5 billion to do so, including the much needed increase in child-care worker wages. How good it would have been to hear that preschool would be provided free of charge to families, at a further cost to government of $430 million. It would mean that around 40,000 children would not continue to miss out and that every child-care centre could provide formal preschool for four-year-olds. Instead, this government misled people at the last election when they promised an uncapped 30 per cent rebate on out-of-pocket child-care expenses from January 2005. Another broken non-core promise means that those expenses cannot be claimed now until mid-2006 and that there will now be a cap of $4,000 on expenses for every child.

The Democrats believe that high-quality child care and early childhood education lay the foundation for effective learning and improved educational achievement and for social, cognitive and emotional development. These are the keys to eliminating child poverty. The way we see it, children are a shared responsibility. They are our future, and the government dollars invested in care for young children are a more valuable investment than any other spending—certainly more important than tax cuts for the well-off.

The new welfare system will be more complicated, with two kinds of disability pensions and two kinds of parenting payments. We ask: where is the simplification of the welfare system that was recommended by the McClure report four years ago? Where is the disability support pension supplement that acknowledges the additional cost of many disabilities? The budget’s so-called ‘new places’ in disability employment programs largely replace those abolished since 1996. Most of these are going to the Job Network, which is far less successful at getting the disabled into work than other programs. Where are the supports for disabled people in the work force? Where are the incentives for businesses or even government departments to employ people with impairments?

The Democrats think people with disabilities should be given every possible opportunity to participate in the work force. But the budget goes nowhere near to providing the level of employment support that they need, particularly given the harsh treatment that will be dished out for noncompliance. New applicants will face a cut to their income of around $60 a fortnight, as well as the loss of concessions and other benefits. The increased mobility allowance for those who qualify is twice consumed by the drop in income. In 2002, the Democrats, holding the balance of power in the Senate, stopped these attacks on people with disabilities; these measures will not pass this time without the Democrats trying to amend them and to ensure the views of those most affected are heard.

The centrepiece of this budget—and the one government no doubt hopes will be popular with most coalition voters—is the tax cuts. But forget it if you are one of the Howard battlers. High-income earners have done very well, but those on the lowest incomes must be satisfied with the crumbs. A person on only $10,000 a year will receive a tax cut of $80 a year, while a person on $125,000 a year gets a tax cut of $4,500 a year plus a superannuation tax cut of around $1,500 a year. Of course, the vast majority of those on high incomes are men. According to the ABS, only 1.8 per cent of female employees earn more than $80,000 a year. And let us not forget too that high-income earners have had the benefit of a range of other measures, such as negative gearing, capital gains tax cuts, salary packaging, company cars, personal trusts not being taxed as companies and the private health insurance rebate, all of which are overwhelmingly beneficial to the wealthy. The Democrats will not support tax cuts for high-income earners while Australians in poverty pay income tax. Our priority is tax cuts for low-income earners. The Democrats have often spoken here in the Senate about the importance of reforming the tax system to prevent poverty traps and to encourage people off welfare and into work. The Democrats are not opposed to tax cuts per se, but we have a better alternative—a much fairer proposal.

Instead of $4,500 for just the privileged few, for the same budget outlay we would give every taxpayer, including those on the lowest incomes, $680 a year. The Democrats have been campaigning for some time to lift the tax free threshold to $10,000. We do not believe that people in poverty should be paying income tax, and we certainly do not think that those currently earning as little as $6,000 a year should be doing so. On our web site—www.democrats.org.au—taxpay-ers can calculate the different effects on their incomes of the Costello and the Democrats’ tax proposals, and it does not cost anything. A taxpayer earning $28,000 a year will see that they would be $7 a week better off under our plan than they would be under this budget. This is in stark contrast to the Costello tax plan, where someone earning $125,000 a year is $52 a week better off.

The Democrats support indexation to address bracket creep. People should not end up paying more income tax just because their wages are keeping pace with inflation. Bracket creep and, indeed, creep in a whole lot of other thresholds, give governments the ability to splurge on the eve of an election, giving back money which they gained only because of that bracket creep. This was the case in the 2004 budget, when tax cuts were provided exclusively for those on more than $52,000 a year. The government had choices in this budget. It could have given fair tax cuts and invested in services rather than deciding to accumulate surpluses of $34 billion over the next four years. In the 2005 budget there were many areas where the government failed: health, environment protection, education and infrastructure—all critical to Australia’s future.

Federal budgets for some years now have failed massively on the environment. Tax cuts will provide little consolation for the real costs of not protecting our air, oceans, forests and native wildlife. This budget, like many since 1996, has tried to pass off under the environment portfolio a host of programs that should have been funded from other portfolio budgets. The Antarctic air link is not likely to benefit the environment. Undoubtedly, the greatest omission was climate change. There is no sign of a national cap on greenhouse gas emissions or a greenhouse gas trigger in the environment laws. Greenhouse gas abatement programs have been stretched out over more than a decade and the government doggedly refuses to mandate renewable fuels or increase the renewable energy target from what will be less than one per cent of total electricity generated by 2010. The energy white paper takes us backwards on transport, still favouring road over rail and ignoring public transport.

With so much of the current focus on on-the-ground community based initiatives, the federal government has put the burden of environmental management squarely onto the community. At the same time, the Minister for the Environment and Heritage has virtually gutted funding to support voluntary environment and heritage organisations. The government is finally making some progress on water management, and at the time of the pre-election announcement we welcomed the National Water Initiative. We are pleased with continued work on Democrat initiatives, including water efficiency, recycling and reuse of grey water, better management of sewage and improved irrigation and storage systems—all recommendations that came out of the Senate committee inquiry initiated by the Democrats. Similarly, we welcome funding to fight weeds and invasive species. However, to ensure it is money well spent the government must address significant problems in policing the spread of recognised weeds—something also unearthed by the Democrat initiated and chaired Senate inquiry into invasive species.

The coalition government have never cared too much about the environment but we were shocked to see that they have also cut health funding. Despite an $8.9 billion surplus, total health funding has been cut by $275 million over four years. That happened with the lifting of the safety net thresholds and the arbitrary cut to new generic pharmaceuticals. We welcome a few small initiatives, such as the cancer program. The government has, however, failed to deliver in a number of key areas such as mental health and dental health and has failed to offer long-range solutions to the looming crises facing Medicare and to health work force shortages. Instead, it continues to pass the costs on to the sick and the poor.

The ongoing $2.5 billion a year drain on the public purse for the private health insurance rebate is maintained, money which could be better spent on addressing some of the glaring omissions from the health budget. There is nothing in this budget to contain the spiralling costs of specialists. Anyone who needs to see a doctor or a specialist faces longer waiting times and higher out-of-pocket costs. The Democrats believe this effectively wipes out any tax gains for average working Australians. It is those on low and middle incomes who rely on public dental services, and again there is nothing to reduce long waiting lists and no sign of a reintroduction of the Commonwealth dental program cut in 1996.

The Minister for Health and Ageing has acknowledged that mental health services in this country are ‘an absolute disaster’. Australia spends half as much on mental health as comparable countries do, and a fraction of those needing help actually receive it. Yet this budget has delivered nothing to help those one in five individuals who experience mental health problems in their lifetime, or their families. A decade after the Burdekin inquiry found appalling shortcomings in mental health services in Australia, not much has changed. The Democrats have initiated an inquiry into this issue and submission after submission tells us that much more needs to be done.

Mr Costello pays lip-service to the problems of an ageing population but, yet again, in this year’s budget there is no additional funding for home and community care services and no reform of the residential aged care funding system. Preventative health programs would be a better way of containing costs than raising the safety net threshold. Extending Medicare to cover allied health services, including midwifery, psychology, podiatry and physiotherapy, would have improved our primary health services enormously and avoided much more expensive acute care.

The Democrats were disappointed by this year’s Indigenous budget. The trumpeted savings from the abolition of ATSIC are not obvious anywhere in the Indigenous budget. There is just $170 million in additional funding over four years for Indigenous health, which falls far short of what the AMA said was needed. In fact, Indigenous health requires an additional $452 million annually just to bring the health of Indigenous Australians up to par with that of the rest of the population. The Democrats believe it is a matter of shame that in a time of record economic prosperity the health and wellbeing of Indigenous Australians is in crisis and Indigenous life expectancy is still 20 years below the national average and below that of Third World countries such as Nigeria, Nepal and Bangladesh.

The future of the Australian economy is dependent on the skills of its people. Despite the national skills crisis, the government funding for TAFE, our nation’s major training provider, is now significantly less in real terms than it was in 1997, despite large increases in demand and in the numbers of students in the TAFE system. There is nothing in this budget for the TAFE sector. The government’s refusal to invest in the nation’s future skills development is clearly absurd. We need to put resources into areas where demand for skills is growing: biotechnology, health sciences, food processing, business services and community and health care industries, for starters. TAFE funding is also the best way to improve the skills of those wanting to return to the work force or to keep up with technological change.

Universities and university students were also ignored in this budget. There was no relief for students in relation to income support, with HECS increases of up to 25 per cent in most universities. University grants will continue to be eroded by poor indexation. And there are no initiatives for schools. Funding for public school students is still well below the OECD average, and the government’s ideologically driven private tutoring voucher system is being ignored as unworkable and not useful. The government’s new funding arrangements for Indigenous students have caused havoc and heartache in the most disadvantaged remote and not-so-remote schools.

We had hoped that the Democrat-initiated National Safe Schools Framework, which is now a condition of federal grants, would be properly funded, but there are no allocations for financial assistance to schools beyond 2005. Around $15 million per year should have been provided by the federal government to make our schools safer. Bullying is a very serious problem in schools, with long-term ramifications. Expecting that a handful of pilot programs, a web site and some text books will eliminate bullying is fanciful.

We have a tax-and-spend government. What we need is a tax-and-invest government—one that invests in a big way in all Australians, in education and training, infrastructure and the environment. And where is the solid investment in overseas aid? Why are we not doing more to reduce poverty in our region that would lead to greater security? Instead, there is another bill for the war in Iraq—$240 million for the additional deployment of troops to Iraq that the Prime Minister promised would never happen.

Faced with a looming intergenerational crisis, a skills shortage and an $8.9 billion surplus next year, Treasurer Peter Costello could have invested in job creation, industry and infrastructure. Where in this budget are the major projects: the ports, railway networks, intermodal connections, water saving schemes—the sorts of projects that were once funded under the Better Cities Program—and 21st century telecommunications services to rural Australians?

Mr Costello’s 10 budgets have never been known for their investment in the future. Initiatives like the Intergenerational report were just given as reasons to reduce social services like the Pharmaceutical Benefits Scheme and the disability support pension because, Mr Costello says, they are not sustainable. What is also notable about Mr Costello’s budgets is that they almost always underestimate the budget surplus. The Democrats suspect that Mr Costello is keeping billions of dollars of Australians’ money for his own election war chest—money that should have been put into services and investment that would keep our economy strong and lift the incomes of the poorest Australians.

The solid financial position of the Australian economy is in part due to the sound management and responsible decisions of the Senate. Over many years, the Democrats have played an effective, responsible and constructive role in reforms to industrial relations, tax, the welfare systems and superannuation as well as the environment. We have made things fairer by preventing some of the bad initiatives of this conservative government from hurting Australians. We have stopped previous budget proposals from attacking the sick and disabled and we have significantly improved other measures. Unfortunately, come July, the coalition is going to be able to pass whatever proposals it wishes because the Democrats will no longer hold the balance of power. The government will be able to pass its grossly unfair tax cuts. But the Democrats will not pass them in the meantime—we will propose alternatives. The history of the Senate and certainly of the Democrats is full of examples of where we have been significant in improving budget proposals to ensure that they are economically responsible, socially fair and environmentally sustainable.

There are measures in the budget that the Democrats welcome, including many initiatives that we proposed or lobbied for. They include extending the maternity payment for adopted children for up to two years; extending the solar energy Photovoltaic Rebate Program for at least another two years; antismoking campaigns aimed at young people; improved taper rates for newstart allowance; a human genetics commission as proposed by my colleague Senator Stott Despoja; and continued, if minimal, funding for the National Pro Bono Resource Centre. There has also been the belated announcement that funding for key domestic violence and sexual assault centres will be maintained. The Democrats have been successful before in changing the government’s plans and convincing them to take up good ideas. We can continue to do that.

The budget welfare reform proposals must be assessed by the experts. We must hear directly from those who will be hurt. We believe the evidence is there that the budget’s proposed welfare reforms will not work. They will make life harder for many people for no good reason. We hope the government is still open to listening to the arguments and is not so arrogant that it will just force them through the Senate. I remind the government that having 51 per cent of the seats does not mean automatically that it has 100 per cent of the answers to the big issues facing Australia. The Democrats hope the coalition will listen to reason on the tax cuts. We know that the highest income earners can afford small tax cuts and the lowest paid workers deserve a bit more money in their pockets than Mr Costello is offering. If Mr Costello wants to be a leader and not just a politician, he has to look beyond the bottom line and budgets and show some compassion for those Australians who most need help.