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Wednesday, 26 May 2010
Page: 4325


Mr PRICE (5:02 PM) —I speak in support of the Appropriation Bill (No. 1) 2010-2011, the Appropriation Bill (No. 2) 2010-2011 and the Appropriation (Parliamentary Departments) Bill (No. 1) 2010-2011.


Dr Southcott —What a surprise.


Mr PRICE —Indeed! I want to say to the honourable member for Kooyong that there are a lot of things in this budget that I am intensely proud of. But I first want to congratulate the Treasurer, the Prime Minister and our economics team for the wonderful job that they have done. We have forgotten too quickly, I think, just what a threat the global financial crisis posed to this country. We have, through the government’s measures, come out of it exceedingly well. What is happening in Greece and what it is speculated may happen in Spain and Portugal suggests that we should be cautious—that we may even have a second wave of problems in the future. But how well placed were we as a country, through the efforts of the government and the hard work of business and workers, to see ourselves thus far through the global financial crisis? Indeed, this budget brings the budget back into surplus three years early.

I want to show you exactly what Australia’s fiscal position is compared with that of other countries. This chart shows Australia, in terms of percentage of GDP, at more than two and a half. Compare that with Germany, around six per cent; Canada, a similar amount; Italy, a similar amount; France, even worse—pretty close to eight per cent; Japan, 10 per cent; the UK, about 11 per cent; and the US, just short of that. From this graph, as I said to the honourable member for Petrie, you can see quite clearly that, as a percentage of GDP—that is, a bit over two per cent in this budget—we compare very favourably with the rest of the world. I seek leave to incorporate that particular table and at the same time seek to incorporate the table showing that the net debt peaks are dramatically lower—it is out of the budget papers.

Leave granted.

The tables read as follows—

 

 


Mr PRICE —Again I say to the member for Kooyong and the member for Petrie, have a look at Australia’s position compared to other economies like Canada, Germany, the US, the UK, France, Italy and Japan. As a percentage of GDP, our debt is miniscule compared with the debt in those countries. That is a credit to the Prime Minister and a credit to this budget. I shall not seek to incorporate Australia’s unemployment peaks, because unfortunately to read the graph you need to track the different colours. Australia has managed to contain unemployment to its current rate of about 5.3 per cent, compared to the UK with a rate of about eight per cent, the G7 with about the same, and the US with a rate of about 10 per cent. That is a terrible thing—it is a terrible thing when people become unemployed, because it is very hard to get them back. But we have cushioned Australia through our successive budgets, including this one, and we are laying the foundation for the future.

I do want to put on record that it is my belief that the opposition is actually disappointed that unemployment did not rise higher. They would have liked to have seen unemployment rise higher. They derided the very measures that we were putting into place as unnecessary. They were so disappointed we did not go into recession and, as I said in the House, in the Senate they opposed every measure that we brought in.

I am pleased to say that this budget delivers the third round of promised tax cuts. For example, a worker in Chifley earning $50,000 will pay about $1,750 less in income tax in 2010-11 than they did three years ago. In my electorate, $1,750 is not to be sneezed at. We are introducing standard tax deductions in 2012, so that many workers and many families will not have to go through the agony of keeping shoeboxes full of receipts, making claims and being disappointed at how little they receive. They will be getting a minimum standard tax deduction of $500, and the deduction will increase to $1,000 in 2013. In an electorate like Chifley, this will have a huge impact. These families who will benefit from the standard deduction will not have to go and spend $100 or $200 or $300 on a tax agent. They will be able to complete a tax return in a simple way, competently, put their return in and get those deductions. It is good news for the residents of Chifley.

Whenever I am asked about what I thought what was the best thing that the Hawke-Keating governments did, I say that it was extending superannuation beyond the Public Service and beyond executives in private enterprise so that all workers benefited from superannuation. We are doing the same again. This budget will build on peoples’ futures, through a $2.385 billion investment over the next four years in superannuation. Low-income earners with a taxable income of $37,000 will receive a contribution of up to $500 in their superannuation accounts, effectively refunding the 15 per cent tax they pay on their contributions.

The other significant budget measure that has been welcomed in my electorate is the rise in the superannuation guarantee from nine per cent to 12 per cent by 2020—in very small, modest increments. This is going to have a very profound effect on our national savings and on personal savings. Of course, the opposition have indicated that they are opposing this measure. They do not want to see workers seeing their retirement incomes increase from nine per cent to 12 per cent. But what will that mean? It will mean that 8.4 million Australians will not receive an increase in their retirement incomes; 3.5 million Australians on lower incomes will continue to receive little or no concession on their compulsory superannuation contributions; 275,000 individuals who would benefit from a higher concessional contribution cap will not be able to make additional savings for their retirement when they are most able; 33,000 employees who are aged 70 to 74 will continue to miss out on superannuation guarantee contributions while they are working; an employee aged 30 today, on average full-time weekly earnings, will retire with $108,000 less in superannuation; and a female aged 30 today, on average weekly earnings, with an interrupted work pattern, will retire with $78,000 less in superannuation.

Not proceeding with these changes would mean that by 2035 annual private savings would be $35 billion lower. National savings would be $19.5 billion lower. Annual age pension outlays would be $3.5 billion higher. The pool of superannuation savings available for investment would be $500 billion lower. That is a very disgraceful position of the coalition. I have to say, it is consistent—it is in their DNA. They opposed the original superannuation measures introduced by Keating in the Hawke-Keating government. They do not like compulsory superannuation being provided to workers. They believe philosophically that it should be up to individuals to make provision for their own superannuation—until it comes to their wealthy mates. How can you ever forget Treasurer Costello saying you could put an extra $1 million into your superannuation savings? I think that was in the last year that the coalition held office. How many people in the electorate of Chifley, or Petrie for that matter, may I ask, had the ability to put $1 million into their superannuation savings in one year? Zero. Absolute zero.

I regret this because, as a country, we lack national savings. As a country, we need to come to grips with an ageing population and a need to provide for people in their retirement. I am so proud, in this budget, as the member for Chifley, to see a Labor government yet again taking up the cudgels on behalf of ordinary Australians to see that they will have enhanced superannuation. To help businesses pay for the increased superannuation, to make businesses more competitive, we are reducing the company tax rate to 29 per cent in 2013-14 and 28 per cent in 2014-15. The coalition are opposing that. The government will also bring forward small business tax cuts to 2012-13. The coalition are opposing that. We will introduce new instant write-off for assets worth up to $5,000 for small businesses, and simplify depreciation arrangements for other assets. The coalition are opposed to these measures that would help small businesses. They claim to be the champion of small business, but their actions speak louder than their words.

We are also introducing the Resources Super Profits Tax from 1 July 2012. Why are we doing it? It is a very inefficient tax structure but, more importantly, look at what the government has been reaping from mining companies. Before the last boom the Australian people received for this non-renewable resource—once you mine it you don’t get a second crack—the government used to receive one dollar in every three. And what is happening today? We are collecting one dollar in every seven. What is absolutely amazing is that the Leader of the Opposition says the mining companies are paying too much tax. He is not only opposed to the resources tax that we are proposing, which will deny Australians the benefits of the mineral boom and deny small-business tax rate cuts, but says that the mining companies are paying too much tax. This is just unbelievable. Indeed, in the Henry review, even the mining companies accepted that they need to pay more tax.

Mining profits in 2008—now remember, one dollar in every three in royalties and charges before the boom is now one dollar in every 70—were more than $80 billion higher than 10 years earlier, but the Australian government collected an additional $9 billion in revenue. We want to ensure that the country as a whole is benefiting from the extraction of this non-renewable resource. The other thing is that you pay royalties to state governments whether or not the mine is profitable. Whether or not it is making super profits, you still pay royalties. Under this scheme the royalties are reimbursed. If you are making a loss on your mine, the losses are transferable and refundable. This is a far more efficient tax than the current regime. Just like the petroleum rent resource tax almost 20 years ago, under the Hawk government, this tax—just like then—is being opposed by the coalition. But it does provide certainty, it is nation building and it is a measure that mining companies can afford to bear.

Where royalty payments are higher than the Resources Super Profits Tax, firms will get a cash refund for the difference. The tax is deductible against company tax. There has been so much misinformation about the impact of this tax. We have a classic example from the member for Dickson. Just when the Leader of the Opposition is saying that this is ruinous for mining companies—that they are going to be absolutely ruined—out he goes and buys a swag of BHP shares. Well I say good luck to him. He will have found that they have already risen. It is a sensible investment.

I am delighted by the impact of this budget on my electorate. I strongly support it. I know that the Henry review was a difficult review and the Rent Resource Super Profits Tax came out of that. Perhaps in my remaining time I could mention how the opposition condemned us for not implementing more of the Henry review recommendations—there are about 135 of them. The Treasurer has indicated that we will, on a staged basis, work through those recommendations, but I want to place on record my support for the government rejecting some of those recommendations. These include the recommendation that the family home be included in the means test, that a land tax be introduced on the family home and that parents be required to work when their youngest child turns four. I support the fact that this government has rejected that recommendation.

The Henry review suggested reducing overall remuneration to members of our defence forces. I support the government rejecting that particular recommendation. It suggested reducing indexation on the age pension. I want to stand up here and say that I support the rejection of that recommendation in the Henry review. I believe that age pensioners should be entitled to see their pension increase and be indexed, and I might say that this government has made a record increase in the rate of both the married rate and single rate of the age pension. The Henry review suggested that we should index fuel tax to the CPI. This has also been rejected, and I support that rejection.

In conclusion, I did want to say that I am very proud—though not unexpectedly—in supporting these appropriations bills. I am actually delighted to in my time see a Labor government—first the Hawke-Keating government and now the Rudd government—extend superannuation for ordinary families, for workers, so that they will have a style of living in the future that they need and so that we meet the challenge of an ageing population. The country as a whole will benefit from the extra $500 billion in national savings. It will allow a range of investments to be made in this country without drawing on overseas borrowings to fund them. I support the bills.