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Tuesday, 29 May 2012
Page: 6116

Ms O'DWYER (Higgins) (12:46): I was very pleased to be in the chamber to listen to the contribution from the member for Hindmarsh about the cash splash of taxpayer dollars. But he failed to talk about those other aspects of the budget which should be of concern to every Australian—the question, firstly, as to how this cash splash should be paid for and, secondly, why it is that the government feel the need for modest payments to people in electorates like his. It is because people know that the cost of living is going up and up and will go up even further as a result of the government's carbon tax, to be brought in on 1 July.

Never more true than they are today are the words first espoused by President Clinton two decades ago: 'It's the economy, stupid!' That is very true. It is right to consider these words when we consider the Appropriations Bill (No. 1) 2012-13 and related bills this afternoon.

Let us look at the current domestic situation. The retail sector is hurting. We have a two-speed economy, which is very different in the east and in the west. Housing approvals for new constructions are down, growth is going backwards, multifactor productivity has flatlined and is now heading in the wrong direction, and business confidence is at an all-time low. Against this backdrop we consider the international situation, which should concern us greatly. Financial turmoil in Europe shows no signs of abating. The situation in Greece and in France is not just a financial crisis but has snowballed into something even more significant—a social crisis with far-reaching consequences. We see high levels of US debt and a significant crisis of confidence in the US, and we see signs that China's growth is slowing. This is all relevant for us here in Australia.

The budget that was announced by Treasurer Wayne Swan the foundation stone on which its economic narrative is based, so it deserves very close and very careful consideration. We cannot simply rely on the glib mantra of the Treasurer that the fundamentals of the economy are strong. He seems to think that with this mantra he can somehow avert any further scrutiny. But today we scrutinise in the time available the budget bills that have been brought before us, and there are a number of elements that we should consider very carefully. The first of them is this size of government debt, the second is the size of government expenditure, the third is how this expenditure is to be funded and the fourth is the believability of the government's claims of a budget surplus.

The budget announced by Treasurer Wayne Swan is the fifth budget he has delivered. Let us go back to the budgets since the last coalition budget. The coalition had a surplus of $20 billion, we had no net debt and we had $70 billion in net government assets. Where are we today? It was announced that we have a deficit of $44 billion. This deficit was predicted by this Treasurer just over 12 months ago to be closer $12 billion. It has gone up from $12 billion to $23 billion to $37 billion and was finally announced by the Treasurer in his budget at $44 billion. If you go back and look at the four budgets that he delivered before this one, you will see that the accumulation of deficit hit in this budget a record of $174 billion. These were the four largest budget deficits in our history. I want that to sink in for the people who are listening to this speech. There has been a combined deficit of 174 thousand million dollars in just four years. We have gone from a position of no net debt to a position where our net debt will peak at $145 billion. Judging by previous forecasts, I think we can anticipate that that figure will blow out even further.

We should also consider the government's gross debt ceiling. The gross debt ceiling started at around $75 billion. The government had to increase it to $200 billion, then to $250 billion, and in this latest budget the government has sought to increase the gross debt ceiling to a record $300 billion. All Australians are rightly concerned by this. Why has the government needed to increase the net debt and the gross debt ceiling? It has needed to do so because it has increased the amount it is spending. The government has claimed that it is reducing expenditure, yet we see from this budget an increase in aggregate expenditure of more than $100 billion since the last coalition budget. That is a 40 per cent increase. How does the government propose to pay for all this? Through their 26 new or increased taxes. It will be paid for not only by this generation but also by future generations of Australian taxpayers.

On what will all this money be spent? There was, of course, $2.4 billion spent on a pink batts scheme. That $2.4 billion, if you consider the opportunity costs of the same amount of money, could have been spent on 12 much-needed grade separations on train lines throughout Victoria. The interest payments that will be made in 2015-16 of $8 billion would equate to about 32 railway crossings. Why are railway crossings significant? In my state of Victoria there are still over 172 level crossings; Sydney has just eight. Quite a number of these crossings are located on the Dandenong railway line, which currently serves over a million people and is considered a key area for future population growth. The railway line is a major east-west artery for both people and freight stretching through my electorate and Melbourne's south-eastern suburbs and its industrial parks to the significant commercial hub of Dandenong and the growing residential developments and proposed deepwater port of Hastings. The Victorian government made a submission to Infrastructure Australia. It asked for increased funding to get rid of these railway crossings, noting that the railway corridor contributed $92 billion to GDP in 2007-08, which accounted for roughly half of Melbourne's GDP or nine per cent nationally. The railway line is already operating at or above capacity, resulting in very significant closures of the level crossings.

Within my electorate of Higgins there are three crossings in close proximity to each other: Koornang Road, Carnegie; Murrumbeena Road, Murrumbeena; and Poath Road, Murrumbeena. Their frequent and lengthy closures are severely impacting on pedestrians, car traffic and road freight and having negative consequences for local business, schools, shops and community life. But these are not the only railway crossings in my electorate. Another significant railway crossing that causes concerns for so many of my constituents is the Burke Road crossing, another very significant problem.

The economic benefits of removing these traffic impediments are self-evident. That is why I am helping to promote the RACV's Redspot campaign. Critical infrastructure spending is essential to the nation's productivity growth. This is where the government should be focusing its attention, yet in this budget we see no money for Victoria for these railway crossings. Not one cent was provided of the $16 million which the Victorian government requested in its submission for railway crossing removals in Victoria. Yet in the budget we see that the government found $36 million in extra funding for carbon tax ads. This brings to a total $69.5 million that the government is spending on spinning to the Australian people the benefits of the increased cost of living that will be applied to each and every Australian as a result of their carbon tax from 1 July this year. The government has its priorities all wrong.

We also see from this budget that there has been no security of funding for the school sector. The Gonski review recommended that the government spend an extra $5.5 billion on school funding initiatives in order to revamp the way that school funding is delivered. This was being considered by the government. We see the results of that consideration in this budget. The more than $5 billion in additional funding for schools recommended in the review is not in the budget; there is not even $1 billion for it in the budget. In fact, over two years this government has apportioned an extra $5.8 million to schools funding. There is no security of funding, particularly for those schools in my electorate of Higgins which are concerned about the impact if the government does not continue with the indexation of funding for independent schools. In Higgins, $29 million will be lost to schools, and I have 39 schools in my electorate, all of which will be impacted by the loss of security of school funding if the government does not heed their call—and, of course, it has not. In this budget these schools have been completely ignored.

We can only assume from that that the government has a different plan for school funding; a different plan for the quadrennium of school funding that it will apply beyond the next election. It will involve a hit list on independent schools which, as we know, they have proposed in the past. As an opposition we will strongly oppose this.

In this budget the government has made good on its threats to cut the private health insurance rebate. Again this will increase the cost of living to so many Australian families and so many people in my electorate of Higgins. Seventy-seven per cent of people in my electorate of Higgins have private health insurance funding. This is one of the significant costs in their budget, and the government will be increasing the cost just as it has increased the cost of so many other things—including things as essential as child care. Thanks to the government's changes in regulation, childcare costs—instead of going up by 57c a week as the minister has claimed—have gone up by between $50 and $70 a week. Again, I can only reiterate the point that, on 1 July, with the carbon tax being brought into effect, this will hit not only every Australian but also every Australian business. According to the government's own modelling alone, there will be a 10 per cent increase in electricity costs, which will flow throughout the economy.

Of course, the people of Higgins expect more, and the people of Higgins deserve more. Australians deserve hope, reward and opportunity—which is the coalition's plan. We will not simply talk about delivering a surplus; we have in the past delivered surpluses. This is something that we will do; it is not something we will just talk of doing. The government's claim to deliver a $1.5 billion surplus simply does not add up, particularly when you consider that they have been pulling funding into this year and spending into this year and pushing it out into other years to try to create fictional surplus for 2012-13.

The Australian people will not be spun on this. The Australian people have clearly made a decision on this Prime Minister, on her broken promises and on her budget that was delivered only a number of weeks ago—a budget that has sunk without a trace, and for good reason. It is a budget that the Labor Party do not wish to talk about because it is a budget that highlights their failure in government. We can do better. We will do better. That is why we look forward to the opportunity of governing. We hope that the leadership issues of the government will be resolved and we look forward to the government calling an election at the earliest opportunity.