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Thursday, 26 June 2014
Page: 4123


Senator O'SULLIVAN (Queensland) (16:43): As should always be the case when there are two parties—I do not mean political parties but two parties generally—who are not agreed on a topic, a subject matter, a fact or an opinion, every effort should be made by those parties in the beginning of a debate to find and agree upon those issues. I open by saying that I doubt that there is anybody on this side of the Senate chamber or amongst the majority of Australians who would agree with the statement that the government's budget this year was an affront to an Australian's sense of fairness.

In endeavouring to touch upon those things that I believe we can agree on with our colleagues in the opposition, I suggest that we all here in this place and, indeed, in the government and, I expect, in all walks of life in Australia want equality for all. There is no contest between us in relation to that ideal. We want to see the application of fairness and equity in our decision making, particularly when it applies to public policy and the introduction of initiatives that will affect all Australians. We all want to see the following generations have access, as did I, to affordable education and affordable health services. In fact, we want that education and those health services to be cutting edge, best-practice education and health services that compete significantly with those provided generally in the developed world.

I am sure colleagues from the other side would agree that we want to do whatever we can to help Australians, no matter what their circumstances, to realise their full potential. For some, that may be that they want to invest in small business. For others, it might be a technical or low-skilled career. Indeed, it could be any of the professions that are available in Australia—professions that are highly regarded when having cognisance of our skills base here compared to other parts of the world. We agree on the ideals of home ownership or, at least, housing markets that allow people access to affordable accommodation if their circumstances do not allow them to afford their own property. I suspect all of us in this place are agreed on the ideal of sustainability in agriculture and primary production to the best extent that we can, given our circumstances, in nurturing one of our greatest resources, the nation of Australia, as it feeds us and contributes to our economy and provides food and fibre for other parts of our region and, indeed, the world, particularly those in developing areas who are themselves striving to an ideal of a middle class.

So the ideal of having an egalitarian society is one that I think is fairly shared by us all, but I can say that all of the things that I have spoken about—all of those ideals and objectives that I am sure colleagues across this chamber agree upon—cannot be achieved without an economic capacity. I have now been in business for a very long period of time. My family have been blessed in business. This nation and, indeed, my state of Queensland have nourished us wonderfully. For that, I am particular grateful. But I learnt very, very early in my business career that you simply have to have more income than expenditure if it is your intention to have a successful business over a long period of time. In fact, before I went into business, along with my dear late wife I learnt very early in my married career that, unless your income exceeded your expenditure patterns, there were difficulties. Oftentimes the gap could only be filled with debt.

We look at patterns that occurred between the fifties and the sixties in household budgets, prior to the onset of the ready availability of credit and then the very ready availability of credit cards and the ability to access money through so many mediums to make purchases, where our society became somewhat insulated from the cost of what it was doing, and we see household debts and, in many instances, business debts levels—as per the asset capacity of businesses and private homes—increasing by hundreds and hundreds of per cent over those couple of decades.

There really are only a few ways that a long-term budget can function and, when a budget comes out of balance, you have to make productivity gains, cut back on your expenditure, cut spending full stop or increase income. In the case of governments, the increasing of income can generally only happen through taxes and charges.

Governments are not immune from our basic principle that either budgets have to balance or borrowings have to be invested only in projects, particularly infrastructure, that will promote increased productivity that will of course, in turn, affect increases in the broad tax base that a nation, and particularly Australia, relies upon.

On the question of an Australian's sense of fairness, I think that statement would be challenged when one has regard to the fact that the previous government incurred five budget deficits in a row, leaving the coalition with a legacy of over $100 billion that was projected, if there were no fundamental structural changes to the economy, to rise to some $667 billion within a decade. These are the figures of the Treasury; they are not the workings of the coalition.

As a result of the coalition's Economic Action Strategy, which I suggest would appeal to an Australian's sense of fairness, the debt in 2023-24, as a result of the measures taken in the recent budget, will be $300 billion lower, at $389 billion, as opposed to the aforementioned projected $667 billion.

The International Monetary Fund warned that, without policy change, Australia would record the fastest spending growth of the top 17 surveyed advanced economies in the world. I promise you that, over time, one of those things that is present in almost every failed business enterprise that has been within my scope of knowledge is where you borrow money to fund increased spending growth within your business, where there is no plan to address the debt and no plan to address the deficits in your business. Ultimately, the music stops. And, when the music stops, there is often no chair to sit on.

The Monetary Fund also indicated that, between 2012 and 2018, we as a nation had the third largest increase in net debt as a share of the economy. I listen to commentary in this space, I listen to the criticisms and I listen to the ideas that are shared across this chamber as to what we ought now do post budget and one of the features I note with every suggestion put to the coalition is: we need to continue to spend money that we do not have.

I can tell you, with some certainty, that that will be seen as an affront to an Australian's sense of fairness. Australians have become aware of the potential of a perilous economic situation if debt is not reined in and if we do not do something to deal with the progressive structural deficits that are now presenting.

Again, not the politician but the businessman in me tells you that this will not be solved by spending more money, in particular, spending more money that the country does not have. That indeed would offend an Australian's sense of fairness.

If these deficits had been allowed to continue, they would have been the longest stretch of deficits since the Second World War. This year's interest bill alone could build a world-class teaching hospital in every capital city in Australia or, indeed, applying it to the circumstances in my home state of Queensland, it could duplicate the Pacific Highway, from Coolangatta through to Cairns and beyond—a project that would, if we could afford to do it and if we did not have to devote that money to debt servicing, generate one of the largest stimulations to this nation's economy that has ever been seen.

Figures of the type that we speak about, if broken down and returned to each federal electorate, would result in each member of the House of Representatives being able to take back to their constituents $80 million during their term of this parliament alone. The impact of these things permeates across all aspects of government spending. Indeed, during the term of the previous government we saw investment in defence fall to 1.56 per cent of GDP in the fiscal year 2012-13, the lowest level of defence spending since 1938.

We saw a 10.5 per cent cut in the 2012 Defence budget, which was the biggest cut since the Korean conflict. That, I think, would offend the sense of fairness of many Australians. I want to be very cautious here. I am not laying this statement at the feet of anybody; I am just stating a fact. But many Australian families have made a very large investment in the defence of our nation and I think they are entitled to see, as a minimum, able defence and properly funded defence as one of the focuses of any government of any persuasion. And so it is in the context of referring to Australia's sense of fairness that I make that observation.

During the previous government—whilst we are on the subject of fairness—household health costs increased by 35 per cent. I think that would fail the test of fairness. Education costs increased by 39 per cent. I think that would fail the test of sense of fairness. Indeed, whilst talking about education and health, one of the things that everybody in this place needs to do is to be honest and open with the Australian people when they refer to free health and education systems. The two things in our society today which governments are largely responsible for delivering, health and education, are a long way from being free.

They may be free for some who have made their way through life either not making a contribution because of their circumstances or because they are simply indolent, but, I promise you, someone pays for health and education. I am proud to say that I have made my contribution along with many in my family and I promise you it is not free. Therefore I think that if Australians take the time, when the dust settles and some of the white noise around this budget disappears—and I see evidence that that is happening—they will understand that it is with a sense of fairness that all Australians, no matter what their circumstances are or what for many will be a minor way, will contribute to ensuring that we continue to provide affordable health services, some of the most affordable in the world.

I want to close by simply saying to those who would criticise the budget and those who would make the case that it is an affront to Australia's sense of fairness that they should probably travel a little bit more to some other points of the earth. Again, through my business interests I am well travelled and I promise you that even if a fraction of what we are able to deliver to our people in Australia, which I think meets our Australian sense of fairness and equity, were delivered to some of the developing nations in our region and across the world, they would be delighted. Of the 25 million Australians, if there are some who are affronted by the sense of fairness of budgets that will maintain our standard of living, I recommend they buy themselves a ticket. (Time expired)