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Wednesday, 25 May 2011
Page: 4661


Mr VAN MANEN (Forde) (10:13): These appropriation bills confirm the sad and sorry story of a government with a budget position that has spiralled out of control and is going down the drain. This budget provides little support for families hard hit by ever-increasing costs of living from new taxes and rising interest rates. These budget bills reveal just how high the government's deficit has risen. In November, we were told the deficit for 2010-11 would be $41.5 billion. On budget night, it was revealed to have blown out to almost $50 billion. In November, we were told that net debt would peak at $94 billion. On budget night, it was revealed that figure is now $107 billion. This net debt is set to stay above $100 billion for at least the next four years. Labor's reckless spending and borrowing have seen interest rates higher than they would otherwise be, resulting in Australia having the highest interest rates in the OECD and among the highest mortgage rates in the world. In less than four years, Labor have beaten Paul Keating's record—he left the Howard government with a $96 billion debt in 1996. It took the coalition to repay the debt and we will repay it again. Labor's spending as a percentage of GDP is 25.2 per cent, almost three per cent higher than in the last year of the Howard government.

This budget saw family benefit changes which will impact many families who receive the family tax benefit, having their indexation of family tax benefit supplement frozen. To add to this strain on families, Labor's cuts especially hurt those families in the higher income bracket at a time when they are struggling as well.

Small business is a core employer in my electorate and is finding it costly and difficult to access new capital to grow and expand or just to get through present difficult trading conditions. These issues arise from the fact that the government continues to borrow at a rate of $135 million per day, which in essence means there is $135 million per day less in the capital markets available for business. Now the government wants to increase its debt ceiling from $200 billion to $250 billion. This capital would be far better allocated and utilised by business as it would seek to utilise that capital productively to employ staff, manufacture goods and make profits. The release of the budget saw the government pocketing $365 million as a result of axing an important microbusiness tax incentive which leaves more than 400,000 business people in Australia with further financial stress. The entrepreneur's tax offset, delivering up to $2,500 in support and encouragement to Australia's smallest businesses as they get off the ground and grow, was also cut from this year's budget, showing the government's obvious disdain for small business, one of the cornerstones of our economy.

This government has wasted billions of dollars on ill-fated, poorly managed and poorly thought out green programs to deal with the great global warming swindle. This absurdity has now been compounded by the Prime Minister's plans to introduce a carbon tax from 1 July 2012. The Prime Minister has broken her election promise to the Australian people that there would be no carbon tax. We should not be surprised, as Labor consistently mismanages and wastes taxpayers' money. With electricity prices rising, the Prime Minister's proposed carbon tax will only make Australian lives more difficult.

We can look to Europe for the painful examples of what will happen with a carbon tax. Spain, for example, has pursued the folly of this action. In Spain they discovered that, on average, for every green job they created they lost between two and three jobs in the normal economy. In addition, each green job created required approximately $174,000 in various subsidies, leading to a suffocating national debt and a double-digit unemployment rate.

As I am sure members in this House are aware, the UK has raised its carbon targets to a 50 per cent reduction over the past week or so, leaving many businesses worried about having to close their doors. A number of businesses have already come out in the past week and said they are going to shed jobs, particularly British Steel owned by Tata from India which announced it was going to retrench 1,500 people. Some of those people are employed in areas in Britain with high unemployment rates already. Is that just an example of what we are going to face here in Australia with the introduction of a carbon tax?

It is worth reviewing some points with regard to the carbon tax. Australia is responsible for only 1.2 per cent of global carbon dioxide emissions. A price on carbon intended to reduce Australia's emissions will have little effect globally, particularly when global emissions are increasing at a rate of approximately three per cent per annum, mostly driven by China and India. Australia's unilateral reduction in carbon emissions brought about by a price on carbon will be wiped out by increases in emissions in the rest of the world in only 22 days. The question I pose is: at what cost to our economy and our lifestyle?

As an example of that, one of the local businesses in my electorate, a linen and commercial cleaning business that currently employs 200 people, has advised that based on a carbon tax of around $26 a tonne its estimated costs will increase by $1 million a year. They say at that level it wipes out all of their profits and they will put 200 people out of work. As they are a local business and they are not trade exposed, they are not going to have any compensation. Whatever compensation the government offers is not going to be sufficient to cover the fact that these 200 people will be out of work.

This government's record is replete with examples of waste and mismanagement of the taxes Australians have currently been paying and the money that they have entrusted to the government. The government seems to think that imposing taxes will get them out of their financial problems, but it is not for the people of Australia to pay for the government's mismanagement. Take for example the pink batts scheme, which turned out to be a monumental waste of time and money. Not only was there enormous financial loss to all concerned, but there are still risks of fire due to faulty installation, all of which are yet to be identified by the program as the government refuses to complete inspections on all homes.

The government spent approximately $2½ billion on the pink batts scheme, which is to cost taxpayers yet more money to fix. In addition, numerous small to medium businesses, some of which have been in the industry for many years, have suffered significant losses and in some cases gone out of business altogether. The number of jobs created was fewer than promised and the ones created did not last as long as promised. A review in 2010 found a third of the 14,000 properties surveyed appeared to have faulty or dangerous installation, resulting in the loss of any potential environmental benefits.

Another example of waste and mismanagement is the Building the Education Revolution program, which has seen cost blowouts, inappropriate or poorly designed buildings and a lack of consultation. It is important to understand the coalition is not against spending on school infrastructure. As with the Howard government's Investing in Our Schools program, we would like to see the money spent through school communities rather than via state bureaucracies. The government is so unconcerned with education that it decided to cut back on funding for important research facilities in the budget. For example, a cooperative research centre suffered a $33½ million cut over the forward estimates, a breach of Labor's 2010 election policy, which was still to cut funding but by a lesser amount. A cooperative research networks program which aids smaller and often regional universities network with larger research institutions has also had a funding cut.

This government is one that lacks empathy and expects everybody else to pay for its mistakes. The health sector is yet another area that has suffered in the latest budget due to funding cuts. The mental health sector, to the government's credit, has had some additional funding, although the majority of that has been delayed to future time periods. This funding only came about as Labor was shamed into its decision by the Leader of the Opposition, who understands the importance of mental health facilities and the important work that professionals in that area do. Hidden in the details of the budget is $580 million in cuts to mental health programs coordinated by GPs, an important front-line resource for identifying people at risk of mental illnesses. This is a far cry from the empathetic coalition plan, which sees an additional $2 billion over four years. The mental health sector will go backwards from day one under these new arrangements.

The budget has shown the arrogance of the Labor government by failing to take expert advice in cutting crucial new drugs from the Pharmaceutical Benefits Scheme. Due to the government's reckless spending and empty bank accounts, patients with chronic disabling pain, schizophrenia, lung disease and blood clots will either go without necessary medication or pay hundreds of dollars for drugs instead of the PBS co-payment. This government's financial mismanagement shows its willingness to hurt its own citizens.

This government is a wasteful and reckless government that continues to treat Australians with contempt and as fools by counting new or higher taxes as savings, continuing to deliver policies that lead only to a higher cost of living for all Australians and doing nothing for the future prosperity of our nation by leaving a legacy marred by debt, the interest on which will rob future generations of their wealth.