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Thursday, 29 May 2003
Page: 15426

Mr BARTLETT (11:44 AM) —I rise to speak on the Appropriation Bill (No. 1) 2002-2003. It is always enlightening to listen to those opposite comment on things to do with fiscal management and budgets. It is a pleasure to speak on a budget that is responsible, sensible and balanced. This budget does three essential things. Firstly, it addresses some very important areas of need through increased spending and reform. There are longer term reforms to tertiary education, which will strengthen our tertiary education sector. Medicare will be strengthened and more money will be spent on strengthening Australia's security. Secondly, this budget reduces income tax burdens on ordinary working Australians. Thirdly, this budget continues this government's proud record of strong economic management and continues to pay off the legacy of Labor's debt. After some extraordinary, unexpected items of expenditure—the longest drought in history and an escalation of the war against terror, with action in Iraq—we are still able to live within our means, and we can still deliver a budget surplus that pays another $2.2 billion off Labor's debt.

I would like to address each of these areas in a little more detail. On the first essential area of spending, this budget allocates over the next five years another $2.1 billion to strengthen Australia's defence. We are strongly committed on this side of the House to building Australia's defence capability. This is in clear contrast with some of those on the left of the ALP. The extra commitment in this budget brings the total of new funding commitments to defence to $38 billion since this government came into office. Domestic security is a related area of need. This budget means enhanced domestic security. In the 2001 budget, we allocated another $1.4 billion over five years for domestic security measures. This budget allocates a further $411 million over the next five years for ports, airport security, Australian intelligence organisations and other essential areas of need. It is unfortunate that the world climate is such that this money has to be spent, but it is a prime priority of any government to secure the safety of its own citizens. This government is committed to doing that. In that regard, I have to express my disappointment that the Labor Party continues to obstruct the ASIO bill, which is part of this government's determination to protect the life and the safety of Australian citizens. Again, the government's measures are being obstructed by those opposite.

The second essential area of spending highlighted in this budget is education, including schools, higher education and vocational education and training. This budget delivers much needed reforms to higher education that will deliver greater flexibility, competitiveness, sustainability and equity and will raise the teaching standards in our university sector. This package of reforms has been developed by the minister after extensive consultation throughout the tertiary sector and with widespread support from the Vice-Chancellors Committee. The package has many features: an extra $1.5 billion over the next five years; an extra 1,400 places for nursing and teaching in our universities; 2,500 scholarships, which will start next year and will rise to 5,000 in three years time to assist disadvantaged students to get into university; an easing of the repayment threshold for HECS for students, which will rise from $24,000 to $30,000; and access to full fee paying places to give Australians who have the capacity and want to access a loan the same opportunity as overseas students. So, after the expanded number of HECS places are guaranteed and delivered, there is that other option as well.

These reforms are essential, sensible and equitable despite the nonsense we have been hearing from Labor on the other side. In the Sydney Morning Herald this week, Ross Gittins, who is pretty objective in his analysis of most things to do with economic policy, said this about the changes to university funding:

You take the people who are smart enough to attend the most intellectually high-powered institutions in the country—

that is, the universities—

mention a threat to their hip-pocket and all their powers of rational analysis goes out the window.

That could be said of those opposite as well. All their powers of rational analysis go out the window. Ross Gittins continued:

When you look at it coolly, and assemble all the facts, you find that the Howard Government's proposed changes to university fees are not as onerous as the critics claim and they're not unfair to students from poor families.

In fact, they greatly assist students from poor families, as there will be 2,500 scholarships next year, rising to 5,000, for students from poorer families.

The other point that is worth making is that this package of extra funding for higher education is roughly double the package that Labor offered in their much trumpeted Knowledge Nation. They went around the country saying how wonderful their Knowledge Nation package was, and that it was going to deliver all this funding for universities. The package that this government will deliver, and that is budgeted for in this bill, is twice that which the much trumpeted Knowledge Nation was going to deliver.

Mr Hardgrave —Noodle nation!

Mr BARTLETT —They could never fund it. Now they are saying ours is not enough, yet it is double what they said they were going to deliver. I move on to other areas of education. There is continued and essential commitment by this government to vocational education and training. Remember that 70 per cent of students do not ever get inside a university. This government is committed to increasing, enhancing and expanding opportunities for those young people who were ignored by the Labor Party, which shamefully allowed apprenticeships to run down to their lowest level for 30 years. This government has proudly reversed that tragic decline. Apprenticeships in this country are now at record levels, more than double what they were when Labor were kicked out of office.

This package brings vocational training and education spending over the next four years to a record $8.5 billion. It is an area where it is much needed. I will illustrate that by reference to my own electorate. Under this government we have seen a strong increase in the number of young people in apprenticeships. Over the last two years, there has been an increase from 1,471 young people taking up new apprenticeships to 2,075—roughly a 50 per cent increase in people finding worthwhile careers in apprenticeships just in my own electorate in two years. They are beneficiaries of the strong and positive policies of this government.

In the area of education, there are measures in this budget to increase export education. It is an area of enormous potential—an area of $5 billion a year and growing. One of the outstanding institutions in my electorate, the Blue Mountains Hotel School, brings many students from overseas, puts export dollars into our local electorate and provides tremendous career opportunities for its graduates. In the area of school education, this budget delivers an extra 8.3 per cent to schools, bringing school funding to a record $6.9 billion. That includes a focus on really important areas such as literacy, which received $210 million. That has been a very important focus of the Howard government: raising standards of literacy and numeracy across this country. It has finally brought the state premiers and education ministers—sometimes kicking and screaming—to an agreement on the national benchmarking of literacy and numeracy to guarantee essential standards of literacy and numeracy in our schools. It has been very sad to hear the ideologically driven rhetoric of the other side about school funding, captivated as they are by the teachers unions and unwilling and unable to look at the realities of school funding.

I move to the third area of need addressed in this budget, the area of health spending. Addressing areas that really need to be addressed, this government is committing under this budget an extra $917 million to Medicare to ensure that Medicare is sustainable, accessible and affordable. As for the nonsense we hear from the other side about the government threatening Medicare, how could we be threatening it if we are putting an extra $917 million into it? We are committed to making it work better. Labor could never do that. In spite of all their nonsense over there, the best that bulk-billing rates ever got under the Labor Party was 80 per cent. They could never get it above 80 per cent, and now they are somehow pretending that, if they got into office, they would magically do what in 13 years they failed to do. It is a fraud and a sham.

Under the Howard government, spending on health has risen by 65 per cent in seven years. The other aspect of the budget is the Australian health care agreements with the state governments, agreements that will provide $42 billion—$42,000 million—over the next five years to assist the state governments to fund their state public hospitals. That is an increase of $10 billion, on top of an increase of 28 per cent in real terms for the five years before that. The last five-year health care agreement under the former Labor government was $24 billion; this one is $42 billion. That is an increase of 75 per cent in Commonwealth funding to assist the states with their public hospitals.

I could go on detailing other key areas of spending. There is $316 million over the next four years to continue this government's successful Tough on Drugs strategy. That strategy has led to greater seizures of illicit drugs and is tackling the importation, distribution and use of illicit drugs, which have brought so much misery to so many people. It is a program that has been successful. We have seen an encouraging decline in the number of heroin deaths and a dramatic rise in seizures of illicit drugs.

Turning to other areas, there is an extra $135 million over the next four years for the disability employment services, which do so much to focus on the abilities of people with disabilities and to use those abilities to get them into rewarding work. I have got some great disability employment providers in my electorate—Nova Employment, Active Employment, Syd-West Personnel, Eloura Industries and others—who do a great job. This extra $135 million will assist them.

The other area that is important in this budget is the income tax cuts. There is $2.4 billion in income tax cuts, but let us put that into context. These come on top of the income tax cuts that we delivered just three years ago in July 2000. Let us not forget that. The income tax cuts in July 2000 amounted to $12 billion—net tax cuts of $6 billion, after the whole new tax system package was brought in—but were opposed by the Labor Party. The Labor Party opposed income tax cuts of $12 billion to Australian workers. They opposed net tax cuts of $6 billion. Now they are over there saying that $2.4 billion in income tax cuts—extra tax cuts—is not enough; yet, when the opposition leader got up to deliver his budget response, we did not hear any other promises about extra tax cuts.

Compare this: what happened to Labor's last promised tax cuts, the l-a-w tax cuts? They disappeared magically after Labor got into office. Not only did those l-a-w tax cuts not materialise but they were replaced by an immediate slug of 2½ per cent on every sales tax rate around the country. The 10 per cent rate went to 12½ per cent; the 20 per cent rate went to 22½ per cent, and so on. The contrast is clear: the Labor Party stands for higher taxes; this government, the coalition, stands for tax cuts. There is $2.4 billion in tax cuts in this budget. The point is this: after delivering on those areas of need—increasing security for Australia, enhancing our education system and strengthening our health spending—we are committed, where we can and if we can still afford it, to giving back to taxpayers some of their hard-earned money by reducing income taxes.

This budget illustrates—and this is so important—that this government is committed to living within its means. This government is able to live within its means. This government is able to manage responsibly. Compare that with the record of the other side. This budget delivers another surplus, a surplus of $2.2 billion. This means that $2.2 billion more will be paid off the debt that we inherited from Labor. Let us go back and think about this. In the last five years of the Labor Party's time in office, they added almost $70 billion to government debt. They averaged deficits of almost $14 billion a year, year after year for five years, for a total of, I think, $68 billion. They left us with a debt of $96 billion when we came into office. Through this government's responsible management, we have been able to repay $63 billion of that $96 billion debt, reducing it to $33 billion.

The implications of this are obvious. Let me mention three of the important ones. Firstly, our children will not be saddled with the burden of having to pay for the profligacy of the drunken sailors opposite. Secondly, the annual interest bill that taxpayers have to meet has been substantially reduced. In 1995, $8 billion a year of taxpayers' money was going down the gurgler simply to pay interest on Labor's accumulated debt. To service Labor's debt, $8 billion a year of taxpayer's money was going down the drain. Because of this government's responsible management, that has been reduced to $3 billion. Now that they are not servicing the massive debt left by Labor, taxpayers are saving $5 billion a year in interest payments that can be spent on essential services such as health, education and defence and security for this country. Thirdly, the other effect of the high-deficit policies of Labor was to put upward pressure on interest rates. Who can forget the horrific interest rate burden that home buyers suffered under Labor?

When Labor left office, home loan interest rates were 10.5 per cent. They are now down to almost 6.5 per cent. Through saving almost four per cent a year on interest payments, even a home buyer who has a mortgage of $100,000 is saving almost $4,000 a year in post-tax dollars on their mortgage. That is roughly $330 a month. If you have a mortgage of $200,000, you are saving close to $660 a month on your mortgage. The high-debt, high-deficit policies of those opposite would push interest rates up again and rapidly raise that burden on Australian home buyers and owners.

The constant cries we have heard coming from the other side about us not spending enough on this, that and something else were repeated by the Leader of the Opposition in his response to the budget. The opposition want to spend but do not have a clue how to get the money to fulfil all their promises. This is a magic pudding approach from the other side that somehow pretends you can keep spending money. `It will materialise out of nowhere; someone will pay for it; we will worry about that later.' They have policies that would run up deficits and debt, policies that would push up interest rates and policies that would have to push up taxes.

The contrast could not be clearer. This government can deliver sound economic management that can reduce debt, reduce interest rates and reduce income taxes. The random policies of spending which are easy to promise but cannot be delivered on and the outrageous profligacy and extravagancy on the other side would raise interest rates, raise debt, raise deficits and raise taxation. This budget is responsible. It delivers on areas of need. It enhances Australia's security, it strengthens our education and health systems and it allows us to continue to manage this country properly in order to repay Labor's debt, keep interest rates down and improve living standards for the Australian people.