Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 2 May 2016
Page: 3949

Dr LEIGH (Fraser) (12:14): This package of supply bills is required to ensure the ordinary functions of government continue in the context of a double dissolution election. Funding is being provided to see through the ordinary functions of government till the end of November. These bills essentially provide about five-twelfths of the year's appropriations for government entities with two exceptions—the Australian Electoral Commission, on the basis that they have to conduct an election, and the Australian Bureau of Statistics, on the basis that they have to conduct the quinquennial census.

Labor, as is our wont, will not block supply. The appropriations in these bills do not contain any 2016-17 budget measures, and as these bills presume the rolling forward of the budget bottom line from this financial year to the next they also assume the budget bottom line as it currently stands—as at the 2015-16 Mid-Year Economic and Fiscal Outlook, which includes the impacts of measure which have not yet passed the parliament but still remain on the books. That means that the bottom line includes cutting $30 billion from schools; a plan to inflict $100,000 university degrees on Australian students; a plan to increase the cost of medicines for everyone by increasing co-payments as part of the Pharmaceutical Benefits Scheme; a plan for Australia to have the world's oldest pension age, by increasing eligibility for the pension to age 70; calling parents 'rorters' and 'double dippers' through changes to the Paid Parental Leave scheme; cutting the bulk-billing incentives for diagnostic imaging and pathology services; making young job seekers wait four weeks before receiving income support, leaving many of them to potentially end up homeless; and cutting the pension of 190,000 pensioners through the plan to limit overseas travel for Australian pensioners, hitting migrant pensioners the hardest, a particularly cruel blow in a country where a quarter of the country was born overseas.

This is not to mention the fact that under this government the deficit has doubled between the 2014 budget and the 2015 budget, and the deficit increased again in the 2015-16 MYEFO. Net debt is estimated to be $100 billion higher next financial year than it was at the election, increasing from $217 billion in the 2013 Pre-Election Economic and Fiscal Outlook to $317 billion in the 2015-16 MYEFO for the 2016-17 financial year.

Spending is at global financial crisis levels and spending as a share of GDP is on average higher under this government than it was under Labor. A useful piece by Bernard Keane in Crikey on 15 April laid out the situation. He set out two government lies which have led him to feel so frustrated with what the Treasurer was saying that he needed to take them to task—using nothing more than their own numbers. He said the first lie is 'the government isn't taxing Australians more', but points out that as a share of GDP:

… the tax burden on the economy has risen from 21.5% of GDP in the last full year of Labor to 22.3% this year and is planned to be over 23% in 2018-19—putting the Commonwealth tax take at—

more than $100 billion above the final year of Labor. Treasurer Morrison will therefore be the highest taxing Treasurer since Peter Costello.

Bernard Keane points out a second lie: 'the government is showing expenditure restraint'. This year spending will be 25.9 per cent of GDP, higher than it was in 2014-15 and significantly higher than in Labor's final year. In Labor's final year spending as a share of GDP was 24.1 per cent of GDP. This year spending will be 25.9 per cent of GDP.

The government keeps on promising that it is going to show expenditure restraint but is demonstrating the precise opposite, demonstrating that it is unable to follow through on its fiscal promises. It used to be that, in opposition, the coalition would drive around flat-bed trucks with 'Too much debt' ads on the back of them. Frankly, they need to trade in their flat-bed debt truck and get a B-double or a road train for the increase in debt that we have seen under this government. It is no wonder that the government had to do a dodgy deal with the Greens upon coming to office to remove the debt cap, to allow Australia to have unlimited debt, because under this government we are seeing record levels of debt and deficits doubling and doubling again.

Most concerning is what is happening to the real economy. We keep on hearing about the 25 years of uninterrupted economic growth in Australia will clock up this year. What is often ignored is that this is based on GDP—the total output of the economy, not divided, for example, by the number of people in Australia. When you are a nation with some of the fastest population growth rates in the world it makes little sense to look at aggregate output. Instead, many economists argue that we should look at real net national disposable income per capita, a measure which is down four per cent since the election. That measure, a far better measure of living standards, demonstrates that the typical Australian's living standards are worse today than when the coalition won office, that living standards have gone backwards under this government, and the average Australian living standards, accounting for inflation, are four per cent lower than they were in 2013. Over that period we have also seen a fall in consumer sentiment. The Westpac-Melbourne Institute consumer sentiment measure is down 14 per cent since election.

We have challenges in innovation. Just six per cent of ASX 300 firms describe Australia as being a highly innovative nation. According to former Chief Scientist Ian Chubb the typical OECD country has 10 to 40 per cent of firms producing new-to-the-world innovations; in Australia that figure is just two per cent. Larry Summers has warned that we might be entering an era of what he calls 'secular stagnation'. Paraphrasing Keynes, he compares the economy to a car and says:

A car with a broken alternator won’t move at all—yet it takes only a simple repair to get it going.

The problem in Australia is that we do not have a government willing to make those simple repairs. We do not have a government willing to get living standards rising again. We have a government who are too keen to pat themselves on the back for being innovative, without realising that there is nothing innovative about ripping needs based funding out of schools and putting young Australians in a situation where their schools cannot give them the education that they need to participate in an increasingly technologically driven economy.

Another significant headwind, which Labor is speaking a great deal about, is inequality. Since 1975 we have seen earnings rising three times as fast for the top tenth as for the bottom tenth. We have seen a doubling of the top one per cent share. We have one in five families saying that they cannot even afford a week's holiday away from home. Jenny Macklin's critical social policy report, Growing Together, charts an important path towards a more egalitarian nation. My colleague Brendan O'Connor has shown the importance of talking about penalty rates and minimum wages—a crucial bulwark in the fight against widening wage inequality. In the area of education, Kate Ellis has been speaking about the important role that teachers play, saying, 'Teachers don't just help students build skills, they change lives'. Labor recognises the need to tackle inequality and build an economy which is ready for the innovation challenges. We recognise too the global headwinds that are facing Australia—the challenges of a Republican frontrunner in the US presidential campaign who favours greater 'unpredictability' in world affairs, and the risk of Britain exiting the European Union and the impact that would have on the trading relationships of Britain with other countries.

We have just heard Chris Bowen, the member for McMahon, speaking about the humanitarian catastrophe in Syria, a catastrophe that has flow-on economic consequences. We have the challenges of the Chinese leadership, which is managing the economic transition from export-led growth to consumption-led growth while at the same time accumulating more power at the centre than under any leader since Mao. Labor is aware of these challenges: falling living standards and rising inequality; challenges to innovation and challenges of international events. That is why we have released more than 70 practical policies on education, health, tax, housing affordability, climate change, infrastructure, start-ups, innovation, marriage equality, domestic violence, the sharing economy, competition policy and more. We recognise, as this government does not, the challenges for the Australian economy go beyond the debt and deficit crisis that we have seen getting worse under this government. We have the policies to deal with the big economic challenges, and if this government is not willing to step up, Labor, led by Bill Shorten, will do so.