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Monday, 29 November 2004
Page: 118

Senator MURRAY (9:33 PM) —I too wish to speak in reply to the Governor-General's speech. The Governor-General wraps up much of what the government has said in the past about what it intends to carry out in the future, and I am going to do something of the same thing, repeating some themes that I have developed over some time. The areas that the Governor-General picked out which interest me for the purposes of this speech include reforming industrial relations laws, tax cuts, selling the rest of Telstra, bringing in new media ownership laws and water conservation. But before I get into the meat of those I would like to briefly restate a proposition I have been putting concerning the new Senate paradigm, and that is really the issue of what I regard as a generational shift in the Senate's situation.

I saw a clever line in the Adelaide Independent Weekly on the Senate election. It said, `It is true that people spoke on 9 October but perhaps it was a slip of the tongue rather than a carefully worded statement.' In one respect that is true. I doubt that there are any voters who place a `1' in the Senate box above the line who have any idea of what really happens to their vote as it wanders through the labyrinth of lodged party preference tickets. By any measure, the Senate lodged ticket preference system is hardly transparent or predictable. But what voters were very clear about was to whom they gave their primary vote: 80 per cent of voters gave their primary vote to the majors in increasing numbers, and that was no slip of the tongue. In 2004 there was a swing of nearly four per cent to the majors, mostly to the coalition and away from the minors, micros and Independents. The Senate result reflected a deliberate decision by the electorate to give greater support to the major parties. The Democrats' centre was hollowed out, the Green Left failed to capitalise sufficiently on their strong and supportive media exposure, the Christian Right retained a seat—Harradine to Fielding—and One Nation passed on.

The media have been concentrating quite rightly on what coalition control of the Senate means in the short term, but the long-term permanence of the change is more interesting. The Senate vote represents a generational shift and change in Australian politics in the last three decades. In 1998 the coalition won 15 long-term and two short-term seats, the two short-term seats being from the territories. In 2001 the coalition won 18 long-term and one short-term seats; therefore, in the 2002 to 2005 Senate term, the coalition have 35 seats and need four votes from the crossbenches. In the 2004 election, the coalition won 19 long-term and two short-term seats, giving them a 2005 to 2008 term total of 39 seats and absolute control of the Senate. At the 2007 election, even if the coalition do one seat worse than in the 2004 election—say, 18 long-term and two short-term seats, they will still have 39 senators and absolute control of the 2008 to 2011 term. Unless there is a backlash against the coalition at the 2007 election, which looks unlikely at present, then it is not until 2011 to 2014—10 years on—that coalition control of the Senate could be threatened. So that is a decade's control or a blocking majority for the Senate by the coalition that is likely.

That being the case, you might begin to understand why the coalition are not rushing their program forward or showing any great haste: they do in fact have time before them. There will be consequences arising out of that. One of the consequences, of course, is that the dissident members of the coalition will have to be more assertive as they will no longer have the Senate non-government parties as a safety net. The only restraint on the coalition government, and it is a big restraint and not to be sneezed at, is the need for them to retain popular support for re-election. The one thing apparent to me is that, if Labor were to gain power with a coalition-controlled Senate, they might be forced to an early double dissolution to break a coalition stranglehold in the Senate. So there are some fairly serious changes to the way in which the Senate has operated over the last three decades.

I turn to industrial relations laws, which is where the government have proclaimed so loudly their likelihood of major change. It has been pretty pathetic that, so far, the only thing they can come up with is unfair dismissal laws. The idea that getting rid of 2,200 small business unfair dismissal applications under federal laws for small business is going to make any significant difference to Australia is a fanciful one. I would hope that the coalition would use their new situation not to beat up on unions and on the system but in fact to advance the cause of real and needed reform to IR in this country. They should focus on achieving a unitary system and focus on creating a new national workplace regulator. The sooner we get rid of the six systems we presently have and replace them with one the better for the country, and it does not matter which government that is true under. That is a very important issue as far as I am concerned.

I want to turn to tax cuts. The tax cuts issue was around before the election and is around now, but there has not been any real focus on significant goals. ACCI is starting to move towards a goal-oriented approach, but if we are going to look at income tax cuts it really is important that Australia does it with an objective in mind and not for short-term political advantage or opportunism. The social goal of raising Australian living standards is universally accepted, yet the annual national minimum wage case is always controversial. Self-evidently, labour costs influence employment and employer groups argue that raising minimum wages costs jobs. Nevertheless, rising wages have been accompanied by falling unemployment, now at its lowest in 25 years.

The problem is more that the living wage increases are a very inefficient way of increasing the disposable income of the lowest paid. For every living wage increase, an employer is faced with additional superannuation contributions, workers compensation payments, payroll tax and other on-costs. Therefore, a $27 a week wage increase will result in an effective $32 to $35 employer cost increase. A full-time, low-paid employee gets half of this: they will pay 30 per cent tax and lose welfare benefits, leaving them only $14 or so better off. So you have a $35 effective cost to employers and a $14 effective benefit to employees. I think that is incredibly inefficient.

I think the better social and economic way to help low-income earners raise their living standards and to move the unemployed from welfare to work is not primarily through the minimum wage case but through tax and welfare policy. The goal is simple: to meaningfully increase the real disposable income of low-income employees without raising labour costs unsustainably. Why do we tax income earned over $6,000 when the poverty line or bare minimum existence is set at around $12,500? This year's budget tax cut only went to the highest 20 per cent of taxpayers, those earning above $52,000. The Democrats argued that it would have been better at the same cost to increase the tax-free threshold to $10,000, which would have resulted in an additional $13 a week in disposable income and would not have resulted in a reduction of benefits.

In their `Info 347' June 2003 paper, ACOSS said that the average tax rate on all income for someone earning $20,000 a year was 12 per cent, or $2,400. I think that we should be aiming for a tax-free threshold of $20,000. The President of the ACTU, Sharan Burrow, said in the Bulletin on 3 August 2004:

Of the 1.6 million jobs created over the past 10 years, the bulk of them have gone to women. But 50% of those jobs are part-time or casual, which means that women are on $18,000 a year or less.

A $20,000 tax-free threshold already exists for qualifying single self-funded retirees and age pensioners. If you went down that route as a goal, two million taxpayers would no longer be required to submit a tax return, with consequent administrative savings. That is the first goal we should have: let us get that tax-free threshold up to $20,000. The second goal we should have is to index tax rates and thresholds so that you can avoid the scourge of bracket creep. The third area relates to where the top tax threshold should be. ACCI are now arguing for $100,000. If you were to advance to the $20,000 tax-free threshold, it would be perfectly legitimate at that stage to have a $120,000 top rate. You would then have $100,000 between the bottom and the top rates and they would be indexed, and you would have a secure system.

The sale of Telstra has been raised and it will, in my view, undoubtedly occur in the period following 1 July 2005. There is absolutely no chance whatsoever that The Nationals will not sell Telstra. That is a pity in many respects from my point of view. As I clearly outlined in my speech during the second reading debate on the Telstra (Transition to Full Private Ownership) Bill 2003 there are circumstances in which I would agree to the sale of Telstra, subject to some fairly tough demands. It fascinated me that occasionally a journalist would ring me about the Telstra issue before the election. I would say to them, `My position is on the record.' They would ask, `What is your position?' I would say to them, `It's in a second reading speech,' and I would give them the reference. They would ask, `What is your position?' I would say, `Have you read the speech?' They would say no and I would say, `Go away and do your homework.' All the time journalists ask for a shorthand version of what is a complex position. I think it is about time that serious people started treating other serious people seriously. You cannot, for the purposes of Mr Murdoch, Mr Packer or Mr Stokes, be expected to give just one-liners when you are dealing with these sorts of issues.

That brings me easily to the other thing that the government wishes to do—that is, to free up media ownership. I hold to the view that you could never even consider it from the economic perspective without serious strengthening of the Trade Practices Act, including the divestiture provisions and adopting in full the recommendations of the Senate committee on the Trade Practices Act. But that is just one step forward. With the big media conglomerates, you are dealing with very large and very powerful organisations, with very powerful employees, and their employees do their master's bidding to earn the profits they are required to earn. The only way in which you can protect and ensure a free and independent press is by finding ways to protect the journalists and people who work for those corporations. Good unfair dismissal laws are a start, but you also need to ensure in some way that they are independent from proprietorial direction.

The last issue I will touch on in the brief minute before the adjournment debate arrives is water. My own state of Western Australia is drying out and we need water. We are starting to look at desalination. I think it is a great mistake to continue to use underground water. I think there needs to be a real and serious examination of the possibility of bringing down water from up north in the manner originally outlined by Ernie Bridges, a former Labor state minister, or in the manner outlined by a recent consortium who said that for $2 billion they could bring water down in a sealed canal—`You would get a decent water flow without having to dam the rivers up there. You just take it from the excess water.' I do not know enough about the feasibilities, but I think if we are going to look at the water needs of Western Australia, particularly south-western Australia, we have to walk away from a closed mind to examining such prospects and issues. The very essence of the government's Murray-Darling Basin discussions is in fact about getting better flows into the rivers to water our drier states. We have the same problem in Western Australia, but we do not have rivers we can direct down there and we may indeed need a canal or pipeline. I hope both the Commonwealth and state governments will look at this matter with greater interest in the future.

Debate interrupted.