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Monday, 10 September 1984
Page: 703

Senator MAGUIRE(3.36) —I rise today on behalf of the Government to oppose the matter of public importance submitted by Senator Jack Evans which refers to:

The economic betrayal of Australian families and young people by the Australian Government.

The first and obvious question is: Betrayal by whom? The honourable senator certainly cannot claim that the present Government has betrayed Australian families and young people. It is an absolute nonsense to make the suggestion that the present Government, which has increased social security spending and given tax cuts in the current Budget, has betrayed Australian families and young people.

I simply refer to the poll which appears on page 3 of today's Melbourne Age. It is headed: 'More expect to be better off with Labor's Budget'. It is a very striking article. It talks about people's attitudes to the current Budget and compares them with attitudes to the last two Budgets of the discredited former Treasurer, Mr Howard. The poll has some very interesting findings. For example, it says in respect of the 1984 Budget that 22 per cent of respondents felt they would be better off. It points out that in respect of the 1982 Budget only 13 per cent believed they would be better off. Indeed, in respect of the 1981 Budget, only 2 per cent of respondents believed they would be better off.

The poll makes it clear that while 73 per cent thought they would be worse off under the 1981 Liberal Budget, and that 60 per cent believed they would be worse off under the 1982 Liberal Budget, only 19 per cent of respondents this year believed they would be worse off as a result of the Budget. As Senator Jack Evans's matter of public importance refers to young people in the community, I simply refer to a specific point made in the article. It states:

The Budget was received particularly well with young people . . .

I simply provide these figures: Thirty-six per cent of young Australians believed they would be better off as a result of the current Budget; a mere 7 per cent thought that they would be worse off. Clearly, the perception by that group in the community is that their economic circumstances are infinitely better. In fact, it was not the present Government that betrayed Australia's young people; it was the previous Government which did so. I refer to the single rise in 7 years in the single unemployment benefit for young people. I could also refer to attempts by the previous Government to abolish the community youth support scheme which was kept on only after a loud outcry by the community.

I want to refer to some of the achievements of the present Government in alleviating the difficult circumstances faced by Australian families and young people. Our policies have alleviated those difficult circumstances. For example, in the year to June last 230,000 extra Australians were working. Those jobs were in both the public and private sectors. Jobs in all sectors of the economy increased under this Government. Clearly, the dependants of those extra 230,000 Australians would also have benefited. I refer also to the fact that in the short time the present Government has been in office some 8,000 more teenagers have jobs than had them when we started. The previous Government certainly cannot claim a record like that, as there was a net loss of jobs held by teenagers of staggering proportions under it.

I refer to the increase in the welfare of Australian families and young people as a result of falling unemployment under this Government. From June 1983 to June this year the reduction in unemployment in this country was 60,000. Again, the many dependants of those people who have also benefited would find their economic welfare improved as a result of that reduction. Many Australian families have benefited from the one per cent reduction in home interest rates under this Government. That has had a significant effect on the disposable income of families and I, like other members of the Government, look forward to the next reduction in housing interest rates which, I believe, will be in the pipeline shortly.

The most important overall impact on the economic welfare of Australian families has come as a result of the staggering economic growth in this country under the present Government. For example, in the 12 months to the June quarter just ended, Australia had a 10 per cent real economic growth-a phenomenal figure , the highest in the developed countries of the world and the best in this country for 25 years. That improvement has been of significant benefit to the well-being of Australians. This Budget makes a very big impact on the economic circumstances of lower income earners by introducing a 25c in the dollar tax rate. The lowest the previous Government could manage was a 30c in the dollar tax rate. This Budget provides that that 25c rate should apply to incomes up to $12,500 and thus it will have a very big impact on low income taxpayers.

I point out that the cost to revenue of the restructuring of all the rates of the tax system will be $2,100m in a full financial year. This is a very big increase and it must have a beneficial effect on Australian families when it comes into force on 1 November. Indeed, the tax cuts have been structured so they provide the greatest proportion of benefits to those on the lowest incomes. It is easy to read from the tax tables that there will be a 17 per cent reduction in tax paid by the lowest income families in the work force and most taxpayers will get something of the order of $7.60 a week extra in disposable income. This is, in fact, equivalent to a 4 per cent money wage rise and that is quite an achievement in one move.

Many more Australian workers on low incomes with a dependent spouse will be free from income tax in this Budget as a result of the introduction of the 25c in the dollar tax rate. My calculations are that people earning up to $8,700 will no longer pay income tax as a result of that rebate. Formerly the figure was $8,000. That is a tremendous change in the exemption level. The pensioner taxation rebate of $250 and the new rebates introduced by Senator Grimes for social security beneficiaries will, when combined with the 25c in the dollar tax rate, have a significant effect in freeing beneficiaries-those on sickness and unemployment benefits-from a taxation liability. Also, of great significance is the fact that the income threshold level for the Medicare levy has been lifted. As a result of measures in this Budget, there will be quite a large reduction in the number of Australians paying the Medicare levy. Families with two children will no longer pay the levy if their income is less than $14,460. That will free quite a number of families from an income tax liability.

In respect of social security, I am very pleased to support policies of the Government which have focused the social security increases on the neediest members of the community. It is very striking that over and above the normal indexation arrangements and the normal increases in pensions and benefits for inflation, this Budget is providing something of the order of $680m extra in discretionary increases. That is a full year figure and, combined with the reduction in income tax as a result of the Budget, the total transfer back to Australian families and taxpayers will be $2,800m in a full financial year. That is a very large figure indeed.

There will be significant increases, not only in age pensions, but also in sickness benefit and unemployment benefit. Senator Jack Evans referred to the serious and enormous problems faced by youth of this country, but I remind him that the previous Government only once in seven years did anything to lift the unemployment benefit for single, junior unemployed people. In this Budget we have provided an 11 per cent increase from $45 a week to $50 a week in one go. While I do not for one moment claim that that will solve the problems of the unemployed, it is certainly a significant lift in their disposable income. There are quite large increases provided in the Budget-not only this year, but there is a further forecast next year-for other unemployed members of the community. So there have been quite significant improvements in their economic welfare as a result of this Budget. The social security increases focus particularly on the neediest families in the community. The neediest people in the community tend to be those with children or who are renting private accommodation. This Budget provides that pensioners and beneficiaries shall receive $2 a week more in respect of dependent children. They will now get $14 a week per child. The mothers and guardians allowance for sole parents will be increased by $2 a week to $10, a significant increase. The maximum supplementary rental assistance to those pensioners and beneficiaries who rent accommodation has been increased from $10 to $15 a week-a 50 per cent rise in one Budget, which is an important step forward.

After putting those facts on the record, it would be very hard for anyone to claim that this Government has betrayed Australian families, as Senator Jack Evans would have us believe. It is very hard to support the notion that it has betrayed Australian young people. We can dispel these claims even more by looking 12 months ahead. I believe that the policies underpinning this Budget will create further jobs and therefore improve the economic welfare of many thousands more Australians. The Budget makes the forecast that there will be another 150,000 jobs between last June and June next year, and in the social security area the Budget forecast is that instead of having an average number of 620,000 unemployed Australians, as we did in the last financial year, that figure will be reduced by 50,000 to 570,000. Nobody would say that that is the end of unemployment. Of course it is still far too high and we must be vigilant and keep pursuing policies which will have the effect of reducing unemployment. Certainly, in the last 12 months, for the 230,000 additional Australians who have entered the work force under this Government in both the private and public sectors, their economic welfare has certainly not been betrayed, and neither has the economic welfare of their dependants. Those working families on low incomes have not been betrayed.

I referred earlier to the introduction of the 25c in the dollar income tax rate . That has meant there has been a significant reduction in tax and an increase in disposable income for the lowest earning members of the work force. Certainly there has been a significant rise in unemployment benefit payments to those who are presently unemployed. For example, under the present Government from November there will be an extra $30 a week for unemployed people with two children and renting private accommodation. That is quite a significant rise. When we look at an average wage earner perhaps earning $350 to $370 a week, we see that it is possible to calculate that under the present Government that person has had a $21 weekly wage rise in real after tax disposable income. That is quite a significant increase in 18 months and it comprises full wage indexation, which has been supported by this Government, unlike the previous Government which always discounted wage increases for tax factors and other factors. It also includes the $7.60 a week tax cut and the beneficial effects for lower and middle income Australians as a result of the introduction of the Medicare scheme and the effect of lower housing interest rates. So under this Government average real disposable family incomes are up in the order of $21 a week.

I think they are the major points I wanted to make this afternoon. I suggest to Senator Evans that he talk to other members of his Party about their attitude to the flow of revenue into the Government coffers because on four occasions in the 18 months I have been here the Australian Democrats, in concert with the Liberal -National Party Opposition, have blocked Government revenue Bills.

Senator Jack Evans —Not all the Democrats.

Senator MAGUIRE —Not all of them. Senator Evans's record on this matter is pure and consistent and I applaud him for that. I hope that he will have talks with the three members of the Australian Democrats, including Senator Haines from my own State, who have consistently blocked the Government's efforts to extract revenue from tax cheats. I ask him to see whether Senator Chipp, Senator Macklin and Senator Haines can be pursuaded to reconsider their position on this legislation which has denied the Government up to $570m in revenue. If he can persuade them to change their views on that sort of legislation, I am sure that the Government will have more revenue at its disposal from tax cheats and sharks who prey upon honest taxpayers in the community to improve further the social security system of this country and the welfare of Australian families and young Australians. I hope that Senator Evans can back up the concern for young people that he expressed this afternoon by taking the case firmly and strongly to his colleagues who on four occasions now have voted to ensure that this important Government legislation is defeated and thereby denied the Government up to $570m in revenue. If he can persuade them to do that, we will be able to crack down on tax cheats and as a result more funds will certainly be available to enable the Government to increase spending on social security and to enable further income tax cuts.

I believe that I have put on record this afternoon the important social security achievements that this Government made in such a short time. I have referred to the significant benefits that have been directed towards pensioners and people receiving sickness and unemployment benefits. I have referred to the $7.60 a week tax cut. I have also referred to important initiatives in respect of young unemployed people. Having put those facts on the record, I can say that I believe the Budget is supported by most Australians, certainly by those Australians on lower than average incomes. As a survey in today's Melbourne Age indicates, the young people in the community know they are better off. I believe that Australian families know they are better off. Overall, the Australian people know they are better off under the policies of this Government.

Motion (by Senator Grimes) agreed to:

That Senator Walters be allowed to speak for not more than 20 minutes.