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Monday, 29 May 2000
Page: 16457

Mrs CROSIO (8:00 PM) —In speaking tonight to Appropriation Bill (No. 1) 2000-2001, or the budget 2000-01, as it is called, I would like to make comment on the fact that this budget is handed down at a time when Australia is entering a critical stage of development. New economies are emerging at a rapid rate in fields where multiskilling and investment in research, education and knowledge are essential. Australia in the year 2000 requires a budget which has vision and paves the way for this country to take a leading role in these new economies. Unfortunately, this budget does not even come close to delivering this vision. It is a budget which fails to take advantage of new opportunities and a budget which paves the way for Australia to pay more than $30 billion in new taxes.

While most of the emphasis of this budget is on services to regional and rural Australia, a fact which has received very little attention is that our densely populated cities and metropolitan suburbs are also carrying the burden of the Howard government. This budget offers little or no compensation for the impact the GST will have on the lower and middle income earners in our own suburbs—the constituencies that we represent here as members of parliament. The budget figures reveal that the promised income tax cuts due to come into effect on 1 July will be eroded within one year. In fact, the budget figures show that within two years Australians will be paying $5.1 billion, or $600 a year each, more in income tax than they are paying now. The Treasurer, the Prime Minister and in fact the entire coalition government have been running all over the countryside ranting and raving about how they have delivered the biggest income tax cuts in history. Their own budget papers reveal that this is not the case, for within that one year the income tax cuts will virtually disappear.

This is a budget which destroys this government as responsible economic managers. This government claimed that this year it would deliver a $10.7 billion surplus. Now the surplus has completely disappeared. The government would like us to believe that there is a $2.6 billion surplus. However, without the expected sale of the mobile phone spectrum, in this budget we could in fact be and are $2 billion in deficit. The expected $10.7 billion has now been whittled away. There are so many places where this money could have gone: into education, into labour market programs, into the public health system or into research and development. However, the only major spending initiative by the Howard government has been its obsession with selling the GST to the Australian people. The new economy requires skill, innovation and investment in research. These are areas where the new jobs are created. We must produce an economy where our traditional industries are modernising while at the same time the economic growth is reinvested into new industries. Australia must create a climate where skills, knowledge, education and innovation can easily be translated into economic growth. However, this budget does not create this climate.

Australia once had a positive outlook in the areas of education, research and development and science. This has now turned around to a downward direction in regard to the percentage of GDP. Other nations have seized the moment to invest wisely in these areas. It is a fact that the OECD average business investment in research and development is more than 1.2 per cent, but in Australia it is currently 0.7 per cent and falling rapidly. This government since 1996 has made cuts of over $2 billion to labour market programs and has cut more than $2 billion from innovation incentives to modernise our industries. In this budget it has become apparent that Australia has well and truly been left behind. Budget 2000 leaves us providing no solutions to the long-term problems that we face. I believe, and I am sure that many others on both sides of the House agree with me, that knowledge is one of the most valuable resources that a country can have. Education is an invaluable investment. Now is the time when it is most important for our nation to invest wisely and provide a quality education system which is accessible to all parts of our population.

Let us take a look at what this budget in this crucial year 2000 offers us in the way of education. Of the five budgets of the Howard government, this budget contains the least amount of new spending on education. What a claim to fame that is. Here we have a government with a reputation of being one of the most ruthless with spending cuts in our history, and now delivering a budget with the least amount of new spending on education since it came into office. We all remember the antics of the coalition frontbench, the razor gang, in 1996, their slash-and-burn budget cutting funding to almost every aspect of education, child care, welfare and almost every other essential service. Now it seems that they realise the damage that these cuts have caused to families, to education and to rural and regional Australia, and they are now trying to repair the damage. It is like the government driving the knives into the heart of the Australian community in 1996 and telling us they are now doing us a favour by taking them out four years later. But even the 1996 budget had more funding for education than this budget. Total new education spending in the year 2000-01 budget is $62.1 million over four years. Put simply, this is 86c per person per year. By international standards, our investment in education is well and truly inadequate. Countries which have taken a lead role in the development of the new economies, such as the UK, the United States and Singapore, are all looking to increase their spending on education. But Australia remains the odd one out among developing nations in this area.

We all know where the priorities of this government lie in terms of education: on so-called education about the GST, which has so far cost taxpayers more than $360 million in one year. Almost by the week now this figure seems to be increasing. This fifth Howard government budget allocates $62.1 million extra over four years in new education money, or 86c per student per year, while on the other hand the government has spent more than $360 million in its so-called education program for the GST. That is $360 million in just one year, and yet there is only $15 million of new money for education in one year.

It is obvious that this government's obsession with the GST comes at the expense of our future. This government knows that universities are facing a funding crisis, particularly in regional Australia. Dr Kemp's cabinet submission paper admitted to it. But there is nothing in this budget to ameliorate this funding crisis. In 1994-95, Commonwealth funding for education was 2.2 per cent of GDP. In this year's budget, as we move into an era where knowledge, multiskilling and education are crucial, education funding in Australia stands at 1.8 per cent of GDP and is predicted to fall to 1.7 per cent by 2003. This is obviously not the budget which will take Australia into the new economy with a highly skilled and educated work force. This budget is high on promises but, based on the track record of this government, it will undoubtedly be low on delivery of services. In its commitment to public health, this government has failed to deliver on many of the promises it made in the previous budgets. In this budget, $562 million is promised to rural health over four years. How can we be expected to believe this promise when this is the government that said in 1999 that it promised 200 rural medical scholarships. Now we discover that the first scholarship will not even be awarded until after July 2000. This package to the bush is just an attempt to buy back the votes of rural Australia. This government's cost-cutting agenda over the past four years has all but crippled many regional areas.

This is not just confined to rural Australia but also includes our metropolitan regions. I know from the experience in my own electorate—where many people are now feeling the effects of four years of this government's cost cutting on essential welfare, public health and education services—that many people are doing it very tough indeed. There is nothing in this budget for these people who are now struggling and particularly the people we represent in our struggling suburbs. There is no extra money for public hospitals in this budget. Public hospitals are the most important area of concern for many of my constituents who simply cannot afford private health care and rely on an efficient, accessible and high quality public health system. These values in the public health system are seriously under threat as the government, through this budget, is obviously more concerned about making private health insurance a necessity rather than an optional extra. This emphasis on private health insurance comes at the expense of maintaining a high quality public health system.

A recent independent inquiry recommended that public hospital funds should be indexed. If this were the case, an extra $630 million would have been required in this budget to improve essential services in our public hospitals. However, there is no extra money in this budget for public hospitals in our metropolitan areas. But, of course, the former Liberal Premier of Victoria Mr Kennett will be paid $57,000 for 30 days work to study depression. We have come to expect these sorts of favours from this government, especially in the Health portfolio. The minister himself, through maladministration and forgetfulness, has produced one of the biggest medical scandals we have seen. The Minister for Health and Aged Care claims categorically that at the meeting with radiologists on 6 May 1998—only days before that 1998 budget—he did not pass on any crucial information dealing with the now infamous MRI machines. The Auditor-General's report into the scandal said that on the balance of probabilities—that is, taking into account all the people the minister spoke to—the meeting of 6 May 1998 was where many radiologists found out about the MRI machines. This raises the question: if it wasn't the minister, then who did leak the information? While the Auditor-General's report, due to conflicting evidence, could not directly conclude that the minister leaked the information, the Auditor-General did say, however, that the negotiation process was flawed. The minister needs to be held responsible for his department's action and the flawed negotiation process. The fact remains that, after the meeting the minister had with those radiologists on 6 May 1998, some 33 orders for MRI machines were received between then and the cut-off date.

Then we go other ways, when we look at what can cast serious doubts over this government's credibility and continue the damage to the government's appalling record of ministerial conduct. In this budget $135 million over three years is allocated to the government's half-baked Employee Entitlements Scheme. This is an issue which over the past year has received so much attention in the media as businesses continue to become insolvent, resulting in thousands of employees losing their entitlements. So, characteristic of this reactionary government, they have finally decided to do something, and in this budget funds are allocated to their Employee Entitlements Safety Net. The Employee Entitlements Support Scheme will cost the Australian taxpayer $135 million over three years. This scheme is only a safety net scheme; it goes nowhere in the direction of protecting 100 per cent of employees' entitlements, and it does not guarantee any type of payment to any employee. For a start, employees that are entitled to this scheme are possibly eligible to a maximum of 29 weeks pay at ordinary rates up to a maximum rate corresponding to $40,000 per year. Payments will be capped at just $20,000. This would leave those who earn more than $40,000 per year out of pocket and those who have accrued more than $20,000 in entitlements short of what they are entitled to receive. Furthermore, this government continue to remain uncommitted to securing l00 per cent employees' entitlements; so they will now only take responsibility for 50 per cent of the funds towards this scheme.

I have raised these points time and time again in this House, and I will continue to criticise this government until in this country we have 100 per cent of employees' entitlements secured and guaranteed—not some half-baked, 50 per cent, phoney commitment to a $135 million taxpayer funded safety net scheme, to which employees will, possibly, get only some of their legally accrued entitlements.

This budget supposedly also paves the way for the A New Tax System, a tax which robs the future to pay for the past. As this budget is the last before the introduction of the goods and services tax, it seems the more we learn about this dreaded tax the more the government wants to wash its hands of it. For a start, promised income tax cuts commencing on 1 July were, as the Treasurer himself said, not meant as compensation for the GST. If that is the case, then, Treasurer, where is the compensation for the GST? The GST is a tax which will lump an extra 10 per cent on top of almost all goods and services. It is a tax which will take $30 billion out of the pockets of Australians each year. If promised tax cuts are not compensation for the GST, as the Treasurer has already stated, that points to the obvious conclusion that there is no adequate compensation for this $30 billion of tax Australians will be paying each year.

However, this tax only gets worse. The budget figures reveal that the promised tax cuts—`the biggest tax cuts in history', as the government like to quote and as the Treasurer continues to claim—will disappear within a year. Also, within two years Australians will be paying $600 per year more in tax than they are now paying, as well as being lumped with a $30 billion GST on top of that. Not only will people be paying the GST when it commences on 1 July but we now know that the GST will have an immediate inflationary effect on prices. This is in direct contradiction to the government's pre-election promise that prices would rise by only 1.9 per cent. The closer we get to the commencement of the GST, the more we discover how deeply it will affect Australians. We now know that Australians will be paying their $30 billion in GST per year, income taxes will eventually rise and prices will rise across the board by anything up to 6¾ per cent. It only gets worse. Next we have a rise in interest rates. Let us remember that over the last 12 months interest rates have now increased four times, with economists predicting more interest rate rises on the way. Rising interest rates are a direct result then of a rise in inflation. With the government now admitting that the initial impact of the GST will increase prices, home owners can only expect more rises in interest rates as a direct result of the GST.

We then have to ask ourselves: what good has this budget brought to Australian families, to parents, to students, to self-funded retirees, to pensioners and to other sectors of the community? After slashing more than $3 billion in funding to education and more than $2 billion from labour market programs since the 1996 budget and cutting $4.5 billion from social welfare programs over the preceding four years, the Australian community is now saying enough is enough. This GST is a massive tax on Australian families, and the Treasurer has admitted that he still cannot provide adequate compensation for the impact of the GST. This is a grim reality. I would like to quote the case of a 79-year-old pensioner in my electorate of Prospect. She informed me that she will have to start at her age looking for work again, after already working 52 years of her life, just to afford the price increases—the price increases which the government now admits are a direct result of the GST. She has told me that there is absolutely no way she will be able to cope after the GST because it will cause those prices to rise.

In conclusion, this budget delivers three things: higher prices, higher taxes and higher interest rates. It could have been the 2000-01 budget which would have invested in the future of this country to build the knowledge nation. Instead, it invests only in lumping a $30 billion tax on the Australian people. It is a budget which sends Australia backwards, led by a government trapped in the past and obsessed with selling the goods and services tax. It provides $135 million to a half-baked employee protection scheme which does nothing to guarantee the protection of 100 per cent of employee entitlements in the case of employee insolvency. It exposes the myth of the 1 July tax cuts, which, as the Treasurer has said, were never meant as compensation for the GST. We discover through this budget that these tax cuts will disappear again after one year and income tax will continue to increase over the next two years. We have a $10.7 billion estimated surplus which has been squandered on the GST promotion, advertising, education and implementation. Now in real terms we have an actual $2 billion deficit. This is a budget where an opportunity to invest in areas such as education and research and development and to really take a leading role in the new economy has now been lost and has been lost for these whole 12 months.

Finally, I believe this budget is really a nothing budget because this is exactly what it offers the future of Australia. Australia demands and expects more than that. The voters of Australia, whether they be regional or rural Australians or metropolitan Australians like the ones I represent in my constituency, now know where they stand with the government, and they know which promises have never been kept. They do not forget that, and they come repeatedly, both through my office and in written representation I have made on their behalf, to the ministers of the government saying, `When are you going to meet your commitments? When are you going to observe some of the election promises that were stated during the last campaign? When are we, as people of Australia, going to get a better lifestyle with more recourse to where we are going to be in the future?' I really condemn the Howard government for this particular budget. I thought they would have been more generous in spirit, bearing in mind that they and their members of parliament, as you would know, Madam Deputy Speaker, are well aware of what the people are saying out in the electorate at large. I would have expected in this, the new millennium budget, far more than we have before us today. I repeat: people are not fools. Be they in rural Australia, in regional Australia or in metropolitan Australia, they are saying, `Mr Prime Minister, Mr Treasurer and members of government, enough is enough.'