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Wednesday, 19 March 2008
Page: 1294

Senator MURRAY (3:31 PM) —I move:

That the Senate take note of the answer given by the Minister for Broadband, Communications and the Digital Economy (Senator Conroy) to a question without notice asked by Senator Murray today relating to taxation.

During question time I asked the Minister representing the Treasurer, Senator Conroy: given the concern on inflation and high public spending, is the government presently intending to reduce both direct budget spending and indirect tax expenditures? Frankly, his answer was less than adequate. It is clear from the statements of the Minister for Finance and Deregulation in particular and of others in the government that the government is taking a fairly broad look at direct budget spending and has indicated it is looking at indirect tax expenditures. Recently, the OECD released a study that said that in Australia tax reform has mainly benefited higher income groups. That might be a bit unfair to the previous government since they did indeed make welfare cuts to lower income groups which might or might not have been taken into that study, but the criticism is that upper- and middle-class welfare has become entrenched.

We were recently faced with a ridiculous media campaign which failed to distinguish between providing genuine income support for carers and pensioners and giving gifts to rich seniors. It does not make any sense that somebody who is a well-funded, self-funded retiree gets the same seniors payment as somebody who is a poor pensioner struggling to put two dollars together. It does not make any sense to give carers a bulk one-off payment annually which is not in the budget papers when you would be far better off actually building that payment into their fortnightly payments and making sure they get a regular stream of income. I and my party are supporters of carers getting that $1,600, but it should not be in a lump sum. If you are going to have a lump sum component it should surely just be dedicated to capital needs, because there are times when carers do need to buy capital items such as special chairs or equipment for those they are caring for. But the greatest need is to have an increase in their regular income. The government, quite rightly and sensibly, was looking at that. But there were the media, particularly the electronic media, patting themselves on the collective back for having forced the government to back down from implementing a better policy, which would have been to provide carers with a permanent increase in their income on a fortnightly basis. As I understand it, that is the direction the government was going in.

Similarly, why should rich seniors get the one-off bonus payment? The media were so obsessed with poor pensioners not getting their bonus payment that they forgot to say, ‘Let’s means test this payment and, what’s more, if we think they should get a payment, perhaps we need to look at other ways of delivering it.’ I would say, though, that a one-off payment does have the virtue in the hands of poor people of enabling them to buy capital items which they otherwise might not have accumulated the funds to do—for instance, replacing an old fridge or an old washing machine.

I asked the minister whether, to contain costs, the government would introduce means testing wherever possible and end welfare to those who can afford to pay their own way. The problem with the Australian system is that it has extended the wonderful concept of providing for the poor, the vulnerable and the needy to providing for everybody. Frankly, if you earn enough money and you have enough savings and assets you should be paying your own way and not be supported by welfare for middle-income and wealthy people. There is the criticism both from thoughtful people in the media and thoughtful people in the policy community that welfare for the well-off has embedded a sense of entitlement that does long-term structural damage to the Commonwealth budget. Brian Toohey, for instance, is amongst many who have been making that comment.

I hold to the view that the first term of a new government, the first years of a new government, is the time when it has both the courage and somewhat of the support to take tough action. The Democrats think that unwarranted welfare benefits and tax concessions have to be wound back in the national interest and in the long-term interests of this country and to restore some of the principles of good government which, unfortunately, waned in the last two terms of the Howard government.

Question agreed to.