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Thursday, 22 August 1996
Page: 2977

Senator SHERRY (Deputy Leader of the Opposition in the Senate)(7.30 p.m.) —We are a more creative nation than this budget recognises or permits. We are a more united community than this budget will encourage. We are a nation of greater integrity than the shattered election pledges this budget contains—pledges that were given so forcefully and in such an unqualified manner by the Prime Minister (Mr Howard) only a few months ago.

This is a budget of betrayal—not just a betrayal of election promises but a betrayal of the Australian promise itself, the promise of Australia working always towards a more fair, more just, more inclusive and united society. The message of this budget is: don't be sick; don't be old; don't expect to go to university; if you are unemployed, too bad; and, if you are young and unemployed, forget it.

At the last election John Howard told Australians that they could trust him. He told Australians that, whatever budget numbers he inherited, all promises would be delivered. This budget breaches that trust. There is a long list of broken promises—promises made to mainstream Australia and made to battlers, promises made to students, promises made to the elderly, promises made to state and local governments. No contrived dribbling out of bad news for mainstream Australia and the battlers prior to the budget's presentation can hide that fact.

The new morality of this government is that there are core promises and non-core promises, although no such distinction was made before the election. Core honesty; non-core honesty. Would you take that from your kids? John Howard inherited an economy that he said `. . . was better than good'. Indeed he did. It was an economy with inflation that had been averaging two and a half per cent; an economy that had been growing by four per cent a year; an economy which created 700,000 jobs over the last three years; an economy which saw our exports, particularly those of manufactured goods, grow and diversify. He inherited an economy with a very small public sector by international standards and a budget outcome better than any in the industrialised world, bar a couple.

Compare all that with the economy we inherited back when we came into government. The unemployment and inflation rates were over 10 per cent and there was a $25 billion budget deficit in today's dollars. This government placed a dead hand on the economy when they took office. A core reality of this budget is that the dead hand is still there, so much so that Treasury officials observed in the budget papers that `. . . possible confidence effects, while significant, do not fully offset the direct short-term effects of the measures resulting in a small net contractionary impact on activity in 1996-97'. That is Treasury-speak for saying that this budget not only does nothing for growth, but it will reduce it.

Instead of undermining growth, the government should be promoting it. With more growth the budget could be restored to balance without the need for savage cuts to valuable public programs. Higher growths destroys the case for savage budget cuts. By keeping growth up, by aiming for sustainable growth at the four per cent we averaged during our last four years in office, we also bring unemployment down. Unemployment, not the budget, is the No. 1 problem facing Australia.

The Treasurer says that saving is our No. 1 problem. We have no argument that Australia has long had a saving problem; we did more to solve it, with the introduction of our national superannuation scheme, than any previous government. And now Mr Costello places a huge question mark over that achievement.

We have no argument that Australia's longer term economic interests are well served by restoring the budget to balance. That is why we, alone among post-war Australian governments, delivered successive surpluses in the late 1980s. But we say that the best way to restore the budget to balance is through a moderate program of budget cuts over the whole life of this parliament which do not harm valuable public programs, which do not harm growth, and which provide hope rather than despair for the jobless.

Mr Costello makes a virtue of the fact that this budget holds growth back so that in three years time, and with massive budget cuts, the surplus will be $1 billion. It suits the government to have low growth because low growth makes it appear as though bigger cuts are needed to restore the budget to balance. But, with average growth close to four per cent, it would be possible to achieve balance without savage budget cuts.

On the government's own admission, these cuts are not necessary to reduce the debt ratio: that would have happened anyway. And so far as reduction of the current account deficit is concerned, that is hardly going to change next year. These cuts are not being made for genuine reasons of economic necessity; they are being made to satisfy the Liberals' ideological obsession with reducing the role of government in Australian society.

Significantly, the burdens in this budget are not equally shared. It is a wrong headed interpretation of this budget that it soaks the rich as well as the poor. Mr Costello has leaped to the challenge of the Commissioner of Taxation to collect $800 million of avoided tax by the wealthiest Australians with a slash of his feather duster—$100 million and a bit of a look. `Hopefully it will be collected voluntarily,' he said. `And have a bit of health insurance while you're at it,' he invites wealthy Australians, `or we'll give you a snip of a levy.' The burden is borne by the battlers, the job seekers, the students, the elderly and middle income Australia.

He offers tax cuts. For a dual income family earning up to a total of $79,000, these tax cuts amount to $3.85 a week for each dependent child. But families want to educate their children. They want to use child care. They are worried about their kids getting an opportunity to work. They want to know that, if their elderly parents need a nursing home bed, they will be able to afford it. They use public hospitals. They carry the burden of increased taxes and charges when the states are slashed.

A generation of women has grown up with successive Labor governments, with new expectations and hopes for the future: meaningful employment and ongoing careers—a totally different world from their mothers and grandmothers. The female labour force is over 50 per cent larger today than it was in 1983. The Prime Minister shows no sign of recognising this fact. But this fact is why successive Labor governments made available affordable, high quality child care. This recognised that many families do not have the means to allow one partner to leave the work force to care for their children, even if they would like to.

At the last election the Liberals were at pains to promise that this quality child care—affordable and available on an equal basis to all Australians—would remain. But what do we find in the budget? We find a range of mean-spirited measures which will make child care more expensive for all families. For those using community based care, it will be $14 per child per week more. And this won't be all: $500 million will be taken out of child care and it will be the parents who will have to make up the difference.

Families contain people of all ages. What does this budget do for families of older Australians? We see a proposal which may force older Australians who need nursing home care, or their children, to find around $26,000 in entry fees. Nursing home residents also face a new fee of up to $34 per day, or $12,000 per year, depending on their income.

Mr Howard says that children should pay for their elderly parents to have a nursing home bed. This is yet another way this government is getting families to pay more. But it gets worse. Many older families, frail but still living in their own homes, are dependent on services such as Meals on Wheels, provided by the home and community care, HACC, program. These families are to be stung by greatly increased user fees. That is code for increased charges for Meals on Wheels and the like. The Prime Minister gives with one hand and takes away even more with the other, like a man that comes up to you in the street and says, `Here's $5, now give me $7.'

In the health area, Mr Howard promised to `retain Medicare in its entirety' and to provide a net increase in health funding. Instead, we have indirect cuts through reductions in the financial assistance grants to the states and direct cuts to hospital funding grants. The combined effect is a cut of around $800 million dollars over four years.

The nastiest, if not the largest, of the government's health cuts is the abolition of the Commonwealth dental health program. This program spends around $110 million a year and is exclusively directed at the provision of basic and emergency dental services to health card holders. The abolition of this program will reproduce the two- to three-year waiting lists which prompted the Commonwealth's intervention and which the program has substantially reduced. The budget speech contains the following explanation for the cuts:

. . . as waiting times for public dental health services have now been reduced, funding for the Commonwealth dental health program will cease—

As if your teeth can be fixed once, and that's the only time you need a dentist! Another of the coalition's major betrayals in health is big increases in the costs of prescription drugs. For a family with three children—and we all know how often they get sick at once—at $20 a script, that is $60 for a family for just one visit to the chemist. And the increased pharmaceutical charge for pensioners breaks Mr Howard's explicit promise to `maintain the real value of all pension benefits and other entitlements for low income earners'.

Above all, there is the threat to bulk-billing. The government says that it will maintain it, yet eliminates the CPI adjustment to doctors fees. Bulk-billing is voluntary. Hundreds of doctors will stop bulk-billing with this change. With another budget next May, you just have to wonder how many more changes and how many fee increases there are going to be.

We do not equally share the burden of this budget. Those who live in regional Australia carry it disproportionately. Regional communities have already been hit by a big round of cuts. Many centres have lost their CES and their tax offices. Now they will lose their local Medicare offices and they will pay more for the services that continue.

During the recent election, the coalition asserted that regional communities were `Australia's forgotten people' and promised to `revitalise regional Australia'. Betrayal has been as swift as it is comprehensive. This government has abandoned regional Australia. In common with its approach to other issues of national importance, it has abandoned its responsibilities to lead, to coordinate and to cooperate with the people of Australia's heartland. When it comes to regional Australia, this coalition has quickly become a government in exile. They are absentee landlords with a big city focus—a government of capital city lawyers from leafy suburbs.

Roads are regional Australia's vital arteries, something that city dwellers often forget. Road funding through the national highway system has been slashed by $620 million. Even with the Pacific Highway and the black spots programs, total road funding to the regions has been cut by $150 million over the next three years, and it will be hit with an additional $45 million cut the year after that.

Infrastructure projects in centres such as Townsville, Moe and Newcastle, with a total value of $150 million, have been abandoned. This signals the end of the effective and community-building cooperation between business, all levels of government, local communities and unions that had become the hallmark of regional development under Labor.

Savage cuts to education spending and labour market programs will have a more than proportional impact in regional Australia. It is no wonder that the government's document Rebuilding Regional Australia makes no direct mention of education. Universities mean jobs and wages in regional areas. The impact of these education cuts on regional economies is huge. Yet this government intends to cut the funding for regional universities for every campus in every region in every state.

Slashing labour market programs will have a punitive impact on both regional unemployed and the local government authorities and organisations that have benefited from the programs under Labor.

The ABC will not be able to insulate regional Australia from their massive cuts. National sporting events, news, current affairs, vital local weather and radio services for rural and regional Australians are threatened by Mr Howard's decision to cut $65 million from the nation's public broadcaster.

Mr Fischer and his National Party have willingly collaborated with the Liberals in the betrayal of what they would have us believe is their constituency. These people are over-represented in a ministry in which they lack the clout to stand up to ignorant Liberal colleagues and defend the interests of regional Australia. They deserve to share the retribution that awaits Liberals in regional seats at the next election.


The proposals for education deserve outright condemnation, not only because they cut off resources but also because they show the barrenness and prejudice in what passes for vision by this government. The government calls them `far-sighted' and `equitable'. Those who are on the wrong end of them will call them vandalism. Labor set up and supported one of the most accessible higher education systems in the world. The government proposes to take so much funding out of universities that they will be harmed for years.

Look at what this budget has done to young people and their parents, and their expectations. Labor brought higher education within the reach of all young people in Australia, wherever they lived, whatever their circumstances. This has gone. If you or your parents are well-off, you are okay; if not, you are not.

This vandalism goes on in school and vocational education. Funding for schools will be cut, including resources for capital and literacy programs. Assistance for students with disabilities will be stopped altogether. Vocational education will be cut, and the government has abandoned its agreement to fund growth in the TAFE system.

Remember this: we have crossed a line here. Now that universities, schools and TAFE are just other sources of revenue, who can be confident that there is not more of this to come? It is on for young and old. Mr Howard has asked you to mortgage your kid's university education, and he has told you to mortgage your old age accommodation.


This government has abdicated its responsibilities to Australian industry. Think of an industry where Australians have moved to the cutting edge; think of an industry that has made the hard yards in improved productivity and export competitiveness; think of key growth areas for small business—and you will be thinking of some sector, enterprise or activity that has been damaged in this budget.

The Liberals fail to comprehend the fact that innovative export oriented industries are central to any strategy for future prosperity and jobs growth. Their treatment of the Australian Made campaign is a powerful signal of the extent to which they have lost the plot. The green and gold logo symbolised the emerging hope for the future of Australian industry, and the government has strangled it.

This budget does not slash programs to end rorts; it hacks away at success stories and punishes innovators. Support for the manufacturing sector is to be cut by $336 million, or 60 per cent over the next three years. Exporters—whose efforts are crucial to our whole economic future—will lose $500 million over the same period. Industries critical to our export competitiveness and employment growth have been singled out—for example, by the removal of the ship building bounty and the abolition of the computer bounty.

Research and development have been heavily set back by at least a decade. The broken promise that has seen the R&D tax concession cut back will cost industry some $1.25 billion. When combined with the abolition of syndicated research, a total of $2.2 billion will be removed from research and development to be replaced by a paltry $340 million in grants. The result will see Australian researchers and Australian ideas move offshore, whilst a range of activities from medical research to information technology and electronics will stall for want of support in this country.

Government support for exporters and industry has been crippled by cuts of $100 million from Austrade and of $30 million from Ausindustry. These all represent broken promises. They amount to dishonest government and, just as certainly, they amount to foolish government. Manufacturers, exporters and researchers have been ill-served by this budget and, consequently, so have we all.

Above all, this budget also betrays the jobless. This is a budget that will commit itself to no job targets between now and the end of the century. This budget ends the public labour exchange started by Ben Chifley. It shoves the unemployed into the hands of the inexperienced at the same time as it cuts nearly all of the programs that made the long-term unemployed job-ready.

Sheer ignorant prejudice has meant that the coalition has torn down the highly successful Working Nation employment and training programs—the very programs that were regularly praised by both major employer groups and individual Australians assisted back into the work force. And do not think that unemployment is not a mainstream issue. Three decades of technological change and industrial restructuring have meant that many have experienced the shock of redundancy previously only experienced by a few.

Since the election of the Howard government, redundancy has been legion in the public sector, in Telstra and in a wide range of industries. Australians expect their prime ministers to stand up for the weak and forgotten; to stand above treasurers and the desire to please the financial markets when necessity dictates; and to have a sense of community. The unemployed, the Aboriginals, the young and the aged have always needed it. For Mr Costello's budget, the Prime Minister stood aside.

This is not a government for communities. It is a government for elite opinion leaders who do not get Meals on Wheels or use community child care; who can afford to pay for tertiary education, dental care, nursing home care; and who will not notice the burden of higher state taxes and charges. Australia is a cohesive community. We are an egalitarian community. Socially just communities are safe communities. Communities which deny opportunity are, in the end, denied security.

This government attacks security in public sector employment, in the safety net when you are out of work and in effective access to public hospitals. This budget lays down the path to a two-tier society. The Prime Minister is driven to division. All that is public or shared is cut and will be cut again. The message is that, whatever you cannot pay for, you do not deserve. It is an old style tory budget, scapegoating the battlers and having a dead hand on the national tiller.

It will be up to business, Australian workers and our community to work their way back to the low inflationary growth they had and the opportunity we provided. It is a budget whose poisonous content will gradually seep out.

As a responsible opposition, we will subject its meanness to several tests. Where does a measure betray a promise? Where does it damage equity? Where does it fail to contri bute to national savings? The community demands no less. Many measures fail these tests. Many are locked away in the appropriations legislation immune in the end to defeat but not safe from rigorous criticism in our two houses of parliament.

Others, however, are about revenue raising or go to the heart of community entitlement programs. The government's measures on the higher education charges, on nursing home contributions and charges and on pharmaceutical benefits for pensions and families—these, for example, will be rigorously opposed. We will oppose them.

This Prime Minister was elected promising Australians that they could be `comfortable and relaxed' and that he would make their lives more secure. Instead, he has hit them with massive changes, making their lives less secure. He promised a zone of comfort but he has delivered a nation more fearful than ever. Australians now face changes they do not need—changes that will hit the family budget and will divide communities.

The budget is a mere irritant for the rich, but a disaster for the disadvantaged and a matter of despair for the unemployed. It is the first chapter in the story of a new, unfair Australia. For all those who had hoped for a secure future for themselves and their kids, this is a budget of betrayal.