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Monday, 2 June 2003
Page: 15648

Mr SIDEBOTTOM (6:10 PM) —I was impressed by the member for Scullin's comments in the grievance debate today, particularly in relation to what has happened to the weapons of mass destruction and the reasoning that was offered in terms of why we participated with the forces of the coalition of the willing in the invasion of Iraq. However, we are here to discuss appropriations and Appropriation Bill (No. 1) 2003-2004. Not being an economist but someone who is very interested in matters of the Treasury and how they affect my community on the north-west coast of Tasmania and King Island, since 1998 I have had to try and assess the import, intentions and outcomes of various budgets by the current Treasurer. My assessment is that the Treasurer is a squanderer. He has squandered a massive surplus over these years. It was a surplus squeezed out of Australian families and workers by a variety of means—the GST, the insidious bracket creep, the $3 billion worth of additional levies that face Australians through increased costs, massive service shedding, asset sales and increased pay as you go user-pays services.

Four years ago this squandering Treasurer promised that this very budget would be in surplus by $14.4 billion. Where has the surplus gone? I have heard just about every second member on the other side, when they got up to discuss this squandered budget, say, `We've had a terror campaign to wage, and we've had a war to wage,' as my colleague and friend the member for Scullin just alluded to. Let me tell you that that has not squandered $14.4 billion. Despite this being the highest taxing government ever in Australian history, today's figures show a surplus of just $2.2 billion—not $14.4 billion but $2.2 billion. Not all of it has been spent on fighting terror and a war in Iraq; it has been squandered on political decisions to buy votes.

On the budget's prediction of an average four per cent wage increase, a worker earning $40,000 today will, after 12 months, pay $480 more in tax on their income, yet they will be rewarded with only a $208 tax cut. That is a fact. The government is returning much less in tax cuts than it has taken through bracket creep. That is a fact. The smallest tax cut—that is, just $4 a week—goes to families earning $30,000 to $50,000 a year.

What do families have to look forward to from this budget? Most families will pay more for a trip to the doctor. Most families will pay more to educate their children. The tax changes will still leave average families paying tax of more than 60c for each additional dollar earned, and they will reduce benefits. Contrary to the comments made by a previous speaker, the member for Canning, that this government assists families to get out of debt traps and poverty traps, the facts speak for themselves—the government does not assist families. When families move into higher income tax brackets the government will tax them—gleefully take that tax and offer them $4 a week in return. That is the fact. What does the budget offer to the majority of struggling families in my electorate on the north-west coast of Tassie and King Island to cope with these increased costs and charges? Do not hold your breath, Mr Deputy Speaker—it is a whopping $4. We on all sides of this House will receive more. How is that fair, equal and equitable? Yet they are the words that this government used to justify me getting a larger tax cut than those on incomes much lower than mine.

Australian families have worked hard to make this economy strong, and the Howard government has failed to repay them for their efforts. Each of the government's hits to Medicare, education and family tax benefits on its own will far outweigh this miserly tax cut. The $4 a week tax cut will be swallowed up over 12 months by just five visits to a doctor who does not bulk-bill. These are the same families this government wants to slug an extra $5.50 every time they buy essential medicines. These are the same families that, due to the government's insidious clawback, will get, on average, $400 less in family tax benefits than was promised this financial year by the government. These are the same families that this Treasurer and those opposite expect to pay more in HECS or to take out loans to pay for their education and their children's education. These families face up to $32 a week in increased HECS debts and up to $125 a week in education loan repayments. These are the same families that will not be eligible for a health care concession for bulk-billing and that will be required to pay more for a visit to the doctor.

This squeeze on families has two effects. Firstly, it will increase families' costs far beyond any benefit gained from tax cuts as it shifts the cost of services more and more onto families and away from an ever-rapacious taxing government: `We'll tax you, but we won't give you the services; we'll tax you and you'll pay for these services'—a lovely system—`and, I'll tell you what, we'll do it in the name of choice.' People on low income do not have choices. Secondly, it will make our society less fair as it imposes a pay-as-you-go user-pays system based on the ideological hoax of providing so-called choice and market force delivery. The long overdue but wimpish tax cut in this budget will do nothing to take away from this Treasurer's record as the highest taxing Treasurer in Australia's history.

On the government's own figures, tax revenue will surge from $159.8 billion in 2002-03 to $166.5 billion in 2003-04. More than three-quarters of this extra revenue grab will be from extra tax on individuals. This is before considering the GST. Once the GST—that is, $32.1 billion in 2003-04—is added back in, as the government's two financial watchdogs, the Auditor-General and the Bureau of Statistics, say it should be, the real tax take is $198.6 billion. The highest taxing government in Australia's history has offered the smallest tax cut in Australia's history.

So where has this historic high tax take gone? It has been little more than squandered. The hoax of all this is that the tax cut is so miserable it does not even give back the bracket creep of $3.3 billion that the government is harvesting this year. Fewer than 10 per cent of taxpayers will face a lower marginal tax rate because of these threshold changes. Clearly, this Treasurer is the highest taxing Treasurer in Australian history. He remains the only Treasurer in our history to collect on average more than 17 per cent of national income in income tax. Even with his tax cut, income tax revenue will surge from $127.9 billion in 2002 to $134.2 billion in 2003-04.

There has never been an Australian government as reliant on income tax—that is, the tax on the income of individuals—as a proportion of its total tax take as this one is. It is rapacious in its tax intake, and this is despite the fact that the Prime Minister promised that the GST would take pressure off income tax. But why should we be surprised that that has not happened? The Prime Minister promised it and it has not happened, but why aren't we surprised? The Howard government in its budget remains addicted to introducing new hidden taxes or maintaining the $3 billion of existing levies and taxes by any other name. That is a matter I spoke about at length in this House on 5 March 2003—that is, these hidden taxes of $3.3 billion, these levies which they are still taking at a rapacious rate, particularly the Ansett levy.

The budget papers clearly outline a cynical exercise that this Treasurer and the Prime Minister have carried out to pay for their very unhealthy, unfair Medicare proposal—that is, `How shall we pay for this? How shall we give with the one hand and take with the other; how shall we use our smoke-and-mirror tricks that we have developed over the years to perfection?' It is quite simple: you reduce the funding to public hospitals by $1 billion to $1.5 billion to fund your Medicare package of $917 million. That is how you do it. For those who cannot sleep at night, I suggest they read Budget Paper No. 2; it contains very good reading to show you how you give with one hand, take with the other, have a little bit left over and beat your breast and stand up here unctuously and say that you are here to support the Australian people and their families.

I do not need to remind the House what this duplicity will result in in our public health institutions. This budget confirms Australia's worst fears about Medicare. But we should not be surprised because this Prime Minister, from the 1980s onwards, has shown that he is no supporter of Medicare; he never was and never will be. There is only one supporter of Medicare in this House, and it is the Labor Party. For the last seven years the Howard government has been running down bulk-billing—that is a fact—to a point where bulk-billing has declined by 12 per cent from the high of 1996. I notice that that is not a figure that those opposite brandish around very frequently in this House. After 13 years of Labor, bulk-billing was at its highest rate in the history of Medicare; now it is at its lowest, but we do not hear about that fact.

Both the Prime Minister and the health minister have refused to guarantee that bulk-billing will not continue to fall under the government's Medicare changes. The Howard government's Medicare changes can mean only one thing: many Australian families will pay more for a visit to the doctor. Under the changes, doctors will be allowed to bulk-bill concession card holders, but they will be given the green light to charge copayments for everyone else. It is a fact that there are seven million Australians who currently have pensioner and concession cards. That means that two out of three Australians will miss out under John Howard's plan; for them, bulk-billing will progressively diminish and perhaps eventually end.

Australian families who have two children and earn more than $32,300 a year are not eligible for a healthcare card. For them bulk-billing will end bit by bit and visit by visit to the doctor, and they will be asked to pay more for the privilege of seeing that doctor. The architect of Medicare, John Deeble, has described the effect of the government's package as follows:

... there will be GP co-payments for most people ... These would be uncapped and unpredictable and only a fool would believe that they will not rise or eventually extend to other services.

So, clearly, the Howard government's commitment to creating a two-tiered health system stands in stark contrast to Labor's belief in a universal and institutionalised health insurance system. Without easy access to bulk-billing—under threat as it is with the Howard government's unhealthy Medicare plan—access to medical services increasingly will rely on an individual's capacity to pay rather than on their health needs. I think you will find that substantiated by a very interesting parliamentary services paper by Amanda Elliott on 13 May 2003 on Medicare and universalism, which has some interesting definitions and commentary relating to this whole debate and also discusses the impact of these proposed changes on the concepts of universalism and institutionalised health insurance. It clearly establishes the principle that this government is now working on: in effect, to dismantle Medicare.

Effectively, the government's proposals further implement what I call a user pays, pay-as-you-go health system. Not only will a visit to the doctor cost more for most families but also essential medicines on the Pharmaceutical Benefits Scheme will cost more. This government has persisted with its unfair plan to increase the price of essential medicines despite its admission that 5.5 million prescriptions for pensioners, concession card holders and Australian families will go unfilled because Australians under financial pressure cannot afford to pay the higher price. Price increases of up to 30 per cent for essential medicines on the PBS will hit the sickest and the poorest Australians hardest.

Just to add another real concern to this, we know that the Pharmaceutical Benefits Scheme is on the negotiating table for the so-called US-Australia free trade treaty. We all know what that could mean. US pharmaceutical companies are absolutely livid at this government's control—its monopoly, thankfully—on the prices we pay for these pharmaceuticals. If the United States pharmaceutical manufacturers can have that monopoly broken down in any way, of course it is to their advantage. Knowing that they are making money out of the system now makes you wonder what they would make out of it if we did not have this important health brake—this important safety brake—that the Australian government has on the pharmaceuticals available in this country. We know the PBS works because, as with Medicare, other countries are looking at our system and wanting to replicate it. There is no greater success or compliment than to have others try to replicate your system.

The other major plank in this government's drive to a user pays, market force system of essential service delivery is its so-called higher education reform package or, more accurately, higher education slug. The 30 per cent increase announced in this budget on the average HECS fee will cost students and their families $1,650 per year by 2005. That is $32 per week more that students may be required to pay. Under the Howard government the average HECS fee will be up by over 116 per cent. Student and family debt is set to increase dramatically under this package. We already know that Australian families now live under record debt levels. Yet all this government can offer is, `We'll increase the costs of medical health and higher education, and we'll give you four bucks and the GST. How's that?'

Students and their families will have to go into further debt to pay for their full fee university places. Student debt is projected to increase by $800 million. So far, under the Nelson proposals, students will be able to borrow $50,000—although I notice that the minister is now wavering on that and may up it. That is tremendous! Students could then have some more debt. That $50,000 will partially pay for students' university fees. They will be charged a rate of interest of 3.5 per cent plus CPI. That will add over $16,000 to a $50,000 loan, which is a new burden of $125 a week. You can just see the students and their families lining up to take up these loans so that they can go and do the most prestigious courses. They will be lining up to do them and saying, `Give me more debt.'

I have raised in this House several times the matter of the cost to families and students when students have to move away from home to study. There was not one mention of it in the budget. On top of all the other costs that they will be required to bear, you can add another $8,000 to $10,000 per year forked out of their pockets. That will make students go and do part-time work or part-time university to make up the extra costs to pay for their accommodation and living allowances. It is totally and utterly unfair. But there has not been a word about it in the budget—or from the other side either. You cannot tell me that they do not have students in these positions.

I put out a little pamphlet in my electorate called $4:it's not enough. It certainly is not. In it I noted the 20 May Nielsen poll, where they asked people, `Would you prefer to keep the tax cut or have the money go to services like health and education?' Seventy-seven per cent said, `Put it into health and education; we don't want the cut.' Another question was, `As part of the federal budget, university students will pay higher fees. Do you support it or oppose it?'

Mr SIDEBOTTOM —Listen to this, Parliamentary Secretary. Seventy-two per cent said they would oppose it. They do not want any more arguments about increased debt, Parliamentary Secretary. It is all right for you and me to get a tax cut that is higher. But what are they going to do on $4 a week? It is not enough. (Time expired)