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Monday, 16 June 2003
Page: 16491

Mr SCHULTZ (4:00 PM) —I rise once again to speak on an appropriation bill—more specifically, the Appropriation Bill (No. 1) 2003-2004. Over the years when we have come into this place after a budget has been brought down, we have looked to the budget with a great deal of apprehension and hope to see what benefits have flowed to the communities that we represent. Invariably, every year when a budget comes down there is good news for people. If there is no increase, very rarely—that I have seen in my lifetime in politics—is there a decrease in a particular area. In most cases, there is an increase in the budget for specific projects: for example, from 1 July 2003 there will be $51 million for residential aged care providers as part of an extra $311 million in new money for aged care homes which was announced in this budget, a $17 million funding boost to community aged care packages that deliver personal care to people in their own homes, and a further $65 million for the next four years for the 65 Commonwealth Carelink Centres across Australia that provide information about aged care services.

In 2003-04 the government expects to spend over $31 billion on health. From reading the budget papers, that represents an increase in health spending of around 65 per cent since the government came to office. The budget is also taking pressure off families by cutting income taxes for every Australian taxpayer. From July 2003, the income tax threshold for each taxpayer will be lifted and the $10.7 billion in tax cuts will mean that Australian families will get to keep more of their pay packet in their pocket. With regard to rural and regional areas—which I am representative of—farmers, small businesses and regional communities will receive about $750 million in 2002-03 and the two following years to assist them through the most extensive drought ever recorded. This funding will provide direct income support, personal counselling, tax relief and interest rate relief for those in need. I have said something about that in the last two or three weeks. Specifically, I commented on the way in which the system needs to be tidied up—in fact, the criteria within that particular system probably need to be replaced in their entirety.

Nevertheless, the point that I am making is that, every year when we come into this place, under successive governments treasurers of the Crown get up and talk about the wonderful thing that the government is doing in terms of increasing expenditure. But, despite the fact that oppositions of the day are there to criticise the government and talk about what the government should have done in terms of further increasing funding for specific areas of the budget, we never seem to get to the point where we talk or think about where all this money is coming from and what influences it. That is something I want to talk about today.

Quite obviously, when you see all of the self-interest groups that pop up leading up to a budget and during the budget process, you tend to be concerned about the ever increasing demand from those self-interest groups for governments to spend more and more money on issues and/or projects that they believe governments should be spending money on in an environment where there does not seem to be much thought given to where that money is coming from and who makes a contribution in the way of the taxes which then become revenue of the government. The point that I am making here is that it is conveniently overlooked from time to time that the people who are supporting the government's revenue are those people out there earning a living. They have other pressures placed on them following on from a budget such as the one that I am talking about.

Let me go back in history and then come up to the present day so I can tell you a few things about what I am concerned about. I do this taking into consideration that things do change and there are significant pressures and contingencies that we have to adjust to and accommodate over the years which create pressure on the government and thereby the taxpayer. I am talking about natural disasters and things like that. In June 1991-92, there were 917,000 people unemployed in this country. In the latest figures which I have, which are from April 2003, that figure had been reduced to 622,700 people, a net lowering of the number of unemployed by 300,000—300,000 people going back into the work force. That is a very positive thing because it does a number of things: it takes an enormous amount of pressure off the taxpayer and, more importantly, it puts people back into the work force earning money and paying taxes. The unemployment rate had a very significant reduction, from 10.7 per cent down to 6.1 per cent. That is a very significant contribution by the government—and indeed by people who have been given the opportunity to find work and who have gone and found work—to the economy of this country and, more importantly, to the revenue for the budget.

I would also like to point out that personal income tax revenue in this country in 1999 was about $73 billion. In the current financial year it is about $88 billion. That is a pretty significant contribution to the revenue and the coffers of government for the budget by the personal income tax, pay-as-you-earn people out there in the community.

That is another indication of the sort of thing that I am talking about and that we need to think about from time to time when we are calling on and squealing to the government to find more money for all of the projects of all of the groups of people in the community who believe they have a right for government to support them in anything and everything that they do. They have forgotten the fact that they also have responsibility as individuals in the community to do something about supporting themselves.

With regard to those social security recipients, in most democracies the modern welfare state—which developed mainly after World War II—was driven by the need to stabilise societies following the ravages and dislocations of the Depression and wars, and one of its essential features was a system of social security payments for people in various situations of relative disadvantage. They were financed either by contributions to a separate social security fund or, as in Australia's case, from general taxation collections. By 1970 this system had become an integral part of society and the function absorbing the biggest proportion of the Commonwealth government's outlays. Since then the system has continued to grow. It is driven by the desire for society to remain inclusive following the many demographic changes: the ageing population; social changes, which include family type and composition; and economic changes, for example, the massive increases in unemployment which have taken place that I alluded to before.

Thus, the safety net providing assistance to those in need has spread to include new groups of people, particularly those not in receipt of payments in the 1970s—I refer to sole parents and low income families—and also to accommodate sometimes massively increased numbers in already existing groups, for example, the unemployed and aged pensioners. The age pensioner issue is going to be an ongoing problem for governments of all political persuasions because our population is ageing very rapidly and those people that came through the baby boom era are now in their late 50s or mid 60s.

Whilst all of us would agree that there are sections of the community that need assistance through remuneration and services, we should look not only at the system we operate in today and the amount of money we are spending budget to budget but also, more importantly, at whether we are managing that money as efficiently and as professionally as we should do. In my time in this place, through some of the committees I have been involved in, I have seen significant evidence that we are not addressing as efficiently as we ought to be the professional accounting requirements of the money that we allocate, on behalf of the taxpayer, to various groups in the community.

I say this—and I know many of my parliamentary colleagues, having given some thought to what I am saying, would probably agree—because if you look at one example of where our money goes, at the social security and welfare budget, you will see that, whilst the mix might have changed and created some pressure on that over the years, it has gone form $46.7 billion in 1995 to $71.3 billion in 2003. That, to me, is very disturbing, because we are talking about an area of the budget that made up 37 per cent of the total budget revenue outcomes in 1995 to a portfolio which has now resulted in 48 per cent of the total budget being allocated to it. It is a very serious issue and it is something that we really should be looking at.

Those comments are made in the context of the recipients of social security and welfare, which in 1970 were 779,000 Australians. In the year 2000, which is the latest figure that I have, it was 1.73 million. It really makes you wonder how we are going to maintain that sort of pressure on the government. It does not matter whether it is a coalition government or a Labor government. Those are my reasons for raising it.

It is also true to say that we have to not only manage the distribution of taxpayers' resources through the budget in the various portfolios but also look very seriously at some of the people who are dudding the taxpayer by using the extensive neutralising activities for paying taxes. The most recent classic example is the massive payouts of chief executive officers of corporate companies throughout the country. In my view, these payouts are not carrying the requisite tax penalties and thereby make a significant contribution to the coffers of this country and take the pressure off the hardworking pay-as-you-earn taxpayers—men and women earning an income to try and stay alive in a very demanding and pressured environment.

It is interesting to note that there have been some pretty savage reactions from the opposition and people on our side of politics to the outrageous way in which some of these executives are being paid—most of them in an environment where they have been abject failures. When are we going to address the issue and make them pay their taxes, either through their corporations and companies or by themselves to take some of the pressure off some of the more needy sections of our community, which are crying out every year for more money?

I have painted a bleak picture. My comments on those particular aspects of the budget and where it is going seem to be negative, but I really feel that we need to address this matter. I know that may not go down well with some people in this place, particularly with ministers of the Crown. I view ministers of the Crown as managing directors of large companies. Like managing directors of large companies, they have a moral responsibility and indeed a statutory responsibility in this case to ensure that, when they are allocating funds for whatever purposes, they are fairly and equitably distributed. That is the first point I make.

The second point is that all of the dollars that are allocated to the specific portfolios or projects that might come out have to be accounted for in the interests of the taxpayer. The taxpayer ought to know what happens to the dollars that they are putting into the government's coffers to be distributed to fellow Australians. The majority of Australians do not mind paying large taxes to help their fellow Australians. In most cases, those people we commonly refer to as middle-income earners pay 40-odd cents in the dollar when they are over a certain level of income. They carry the great burden of taxation in this country. I was talking to a number of them yesterday at a function and they said, `We don't mind paying this level of tax as long as it is going to assist those more needy in the community, but we would appreciate it if you fellows would think a little more about what you are doing with our money and how you are handling it.' That was a very valid point. It was something that I have been thinking about for some time.

I was the manager of a large export abattoir in the mid to late seventies and early eighties and my responsibility was to cut out all of the waste that was occurring—the job duplication et cetera—so that the company could get on with making a profit in an environment where there was enormous pressure on the industry and many of the abattoirs around it were closing down. That is what we need to think about very seriously. Whilst I am always going to graciously accept any remuneration to any group in my community—whether it be for a project or for helping aged people, war veterans or whomever—the reality is that it cannot go on indefinitely. We have to look at where else we can save money. I know some work is being done in that respect, but there is absolutely no doubt in my mind that there are hundreds or perhaps thousands of millions of dollars out there being wasted or being absorbed by industries that should not be there and that are only there because governments have been very generous. We ought to tackle them as a matter of priority so that next year's budget and the budgets after that will not only be beneficial to the community but be responsible in the extreme. (Time expired)