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Thursday, 22 August 1996
Page: 2987

Senator MARGETTS(8.21 p.m.) —These days Treasury rules, okay. Treasury rules on direction by the money market, and by that read money speculators of Europe and America. And isn't it amazing how many commentators are ticking the budget on the basis of what the speculators are saying. This is the basis of approval on how we run not just our economic policies but also our social and environment policies. In fact, in relation to every value policy, we look to see whether we get a tick by the money speculators of Europe and America.

The real game with budgets is often very diffuse. In fact, around 70 per cent of appropriations are currently automatic appropriations, so many of the decisions that are taken in relation to spending are never in any way in the budget appropriation bills. While budget decisions are important and have real impacts on real people, a lot of the activity at budget time is theatre—a chance to create images. The budget books, I have noticed, are often written with the theatre of the period in mind.

One thing to note is that there are a lot of rubbery figures, especially in terms of forward projections. There are large variations—a billion up or down as a result of a variation in a single percentage point in prices. Treasurers like to dress up their budgets using these and a few other devices. One device we have noticed in the past is that the presentation of actual figures of the previous year allowed an appearance of a substantial increase in funding where the actuality was that the prior year's budget was not entirely spent. In some environmental areas, we noted in the past that a budget decrease appeared and was announced as an increase.

Another little trick of Treasury is to project declining funding into the future. Again, environment budgets—in paragraph 7.4, `environmental protection', or in paragraph 8.4, `national estate and parks', or in paragraph 10.7, `natural resources development and management'—have for the last several years shown an increase in the current year budget with rapid decline in the future. The next year the same pattern would follow. Basically the declining forward projections allowed the forward outlays to be lower, bringing future budgets well back into the black, while the previous decline allowed a small increase to look like a substantial new initiative.

A very big example of this kind of ruse applied to the labour market programs of the previous government in 1993 which we identified in that year as a hole in the budget that would need to be filled. It simply was not realistic, at a time of high unemployment, to axe your entire labour market programs—and we said so, but we were the only ones saying so. Sure enough, 1994 included the Working Nation plan. The thing to recognise is that much of this was the simple replacement of programs that had fallen off the budget and which had been called a deficit reduction plan.

This year we again see a huge decline in labour market programs at a time when employment prospects are not looking good. It is one thing when this is just rubbery figures. It is another thing entirely when a government is actually content to allow programs and whole portfolio areas to fall into a pit—a black hole, which in physics is something that sucks everything into it and emits no light.

Our worry is that this government intends to stick to its forward estimates. In previous years when the forward estimates went down there was generally an increase in the environment and in other areas in some particular programs.

This government has presided over a real decline in environmental funding this year. Not only has environmental funding declined this year, but we are afraid that the government really intends to cut—in paragraph 10.7—natural resource management by about half; in the next few years it really intends to cut—in paragraph 8.4—national estates and parks by a third; and it really intends to cut—in paragraph 7.4—environmental protection by 55 per cent. This is what it says in the budget papers. I am afraid in this case that it is not just a ruse to make the forward estimates look better; I am afraid the government really means to devastate the environment budget.

I want to note a few things in relation to environment spending. The government say in the budget papers on page 3-125 that they will eliminate the wet tropics tree planting scheme, saving over $5 million, and cut over $24 million in each of the next three years from DEST. On page 3-131 you will notice that they will eliminate the off-reserve nature conservation and the ecologically sustainable natural resource management program, savings of between $11 million and $17 million per year in this year and each forward year.

They will eliminate initiatives to establish a world-class, adequate and representative system of parks and reserves, a saving of between $16 million and $32 million per year in this year and each forward year. They will eliminate green volunteers, an Australian nature conservation volunteer program. On page 3-142, it says that they will eliminate the national landcare program expansion, saving between $43 million and $59 million per year in this year and each forward year. They will eliminate the Murray-Darling Basin initiative, saving between $17 million and $34 million per year in this year and each forward year. They will even claw back $7 million from the drought recovery management facility.

I also point out from page 35 of the government's Investing in our Natural Heritage document that they plan to cut environment portfolio outlays by over half in the next four years. Yes, it says that there may be other spending if the Senate agrees to sell Telstra; but, bottom line, their commitment to the environment is to halve its funding unless the Senate buckles.

There is nothing here that says what the level of annual funding will be. The total funding is apparently slightly over $1 billion, but there is no indication over what period this will be distributed. On page 5 of the Investing in our Natural Heritage document, it says:

The $1 billion received from the one third sale of Telstra will be supplemented both by interest earned and from consolidated revenue, so that overall, an additional $1.149 billion will be spent . . .

The plain English reading of this is that, from Telstra and interest from the trust and consolidated revenue, this is all the money you will give to the environment. I am pleased to see that Senator Kernot has also done the figures and has established the same reality—that is, even if Telstra is sold, no more money will be available on a per annum average basis than is available this year.

The reality is that when you look at the spending program in that Telstra package you see most of it is not even environmental spending. It is not even to be managed by the environment; it is to be managed by primary industry. It is a total ruse. The whole thing from beginning to end is a ruse.

Senator Sherry —A non-core promise.

Senator MARGETTS —Yes, a non-core promise, as has been mentioned. I do not actually think this is a great deal. Maybe they meant something different. I stand to be corrected, I would love to be corrected on this, but that is not what they said in this budget paper.

In terms of general social wellbeing, this is a disaster budget as well. For the aged the government will allow those of retirement age to keep contributing to superannuation and will allow them to get a rebate for contributions to the superannuation funds of an unemployed spouse. Given that few of the working poor can afford voluntary superannuation contributions, the idea that they would voluntarily contribute to a spouse is hard to see. The rich, however, may have a non-working spouse to contribute to.

The bank retirement savings accounts are the coalition's way of giving banks more economic power. On the other hand, the government is increasing the cost of prescriptions, increasing the cost of aged care, introducing fees for community care and eliminating the Commonwealth dental program. It will also eliminate the means test exemption for superannuation for older people between the ages of 55 and 65.

For families there is a worsening situation for education, increased health costs and various changes to tertiary education designed to push adult students into dependency on their parents. Perhaps that means they should be staying home and somehow or other the coalition thinks they can point their finger at them and say, `If they were good and if they had a good family, they would all be at home until they were 26.'

Then there are the general changes to industrial relations and the fact that we are being pushed, perhaps, into the recession we did not have to have. Competition policy changes will also mean that a new range of services will become user pays or may increase in cost. What we have seen is the excuse of the budget to move from government to private providers, whether or not it leads to better outcomes.

There are a huge number of problems, for example, in relation to case management. Not a lot of private providers actually want to provide case management. There is not a lot of profit in it and, if you are going to promise more profit, that does not mean that it is going into the public sector. Quite frankly, the way to gain more profit is to cream off the employable and get the others off the books. That is going to be made a little easier by the coalition. It is going to be made easier because you tighten up the rules, make it harder for people to find enough money to pay their rent, take money from them if they happen to share a house with another person to survive; and then, if you find them breaking the rules, throw them off the system. That should save a lot of money and that should allow private providers of case management to make a bit more profit—throwing people off the books will make it more profitable for them to operate.

For young people, for whom unemployment is running at over 20 per cent, the government has made tertiary education much more expensive, has undercut Austudy and, as I mentioned, with the decrease in rent assistance, has hit those who are single and trying to reduce costs by sharing rent. The govern ment plans to make $40 million on this. In the meantime, it is guaranteeing that universities will increase their non-HECS charges for course materials and, by so doing, reducing funding to universities.

I would like to give a little summary of the winners and losers in education—a bit of an education scoresheet. Who gets the increases? There will be increased capital funding for private schools: they get $5 million extra up to $10 million per year. There is an increase to the apprentice and trainee program of $5 million to $8 million per year, an increase of $4.8 million per year in aid to isolated children and increases to English as a second language programs of $4.4 million per year.

What are the cuts? There will be overall cuts in total education in real terms of 0.1 per cent this year, 3.6 per cent next year and two per cent in the following year. And these cuts are greater on a per capita basis. Overall cuts in higher education in real terms will be two per cent this year, 10 per cent next year and seven per cent in the following year. And these cuts are greater on a per capita basis.

The overall cuts in funding for government primary and secondary schools in real terms are: 0.2 per cent this year, 2.4 per cent next year, 2.4 per cent the following year and 2.8 per cent in 1999-2000. These cuts are also greater on a per capita basis. Reducing discretionary funds for universities represents a cut of $43 million per year. Cuts to higher education operating grants are $22.4 million, rising to $266 million, and targeting of Austudy will cut $63 million per year. Raising the age of independence for Austudy is a cut of $28 million, rising to $78 million, and reducing maximum Austudy rent assistance to students in shared houses is a cut of $0.4 million. I should mention that in Austudy we heard last year about student rent related poverty. I think that fell on deaf ears, so poverty will be the in thing for people who are game enough to go into tertiary education. I think fewer of our able students will do that.

Other cuts include: HECS increases—$22.6 million, rising to $123.5 million; earlier HECS repayments—$230 million to $318 million; unspecified savings—$14 million, increasing to $56 million; reducing cash balances of statutory authorities—$15 million; eliminating case management of homeless secondary students on Austudy and Abstudy—$3.8 million; cutting homeless secondary students on Austudy and Abstudy schooling incidentals allowance—$2.8 million per year; eliminating Australian youthnet—$0.3 million per year; reducing vocational and training grants to states—between $10 million and $24 million in various years; cutting ANTA operating costs by 25 per cent—$3.6 million per year; cutting back indexing TAFE—$5.3 million, rising to $41.4 million; cutting funding for schools in external territories—$1 million per year; cutting migrant places for people under humanitarian programs on the ESL program—$1 million to $7 million; reduction in ESL for migrants—$5.5 million to $14.6 million; and the two-year waiting period for migrants before Austudy—$12.5 million per year.

Who are the winners? Well, almost no-one. There are slight benefits and no pain for those with children in private schools. The losers? The nation is the loser through reduction in education and industry will lose through reduction in the skilled work force. But industry will put the pressure on the government and the government will say, `Okay, let us get in some skilled migrants. Let us adjust the supply curve of the labour market because we do not want industry to have to pay too much for skilled workers.'

Who else loses? The economy loses through a reduction in people who might provide the basis for a clever country. Young people lose through a reduction in quality of education and vastly increased costs of tertiary education at a time when this is a requirement for a decent job. Families who assist their children at school will lose as a result of increased costs and a decreased ability of university aged children to be independent. The vulnerable lose: migrants and teenage secondary school students who are homeless.

That was just one example, one program. I would urge those people who read the headlines and said, `What a fair budget. They've cut their mates but they've been fair' to look at the details of what has actually been provided. To show exactly where the heart and mind of the government is: there is a measure to take away the book allowance from homeless teenagers trying to stay in high school. This is mean, ugly and nasty. It is a vicious attack on those least able to defend themselves.

I thought and thought about these kinds of measures, about why there has been certain targeting, and I have decided that it was a very large case of opportunism.

A large number of people in our society, many of whom were blue-collar workers, were, admittedly, feeling betrayed. They did not know what exactly was happening to them to change their lives—why they were feeling less certain; why they were on shorter contracts; why they were having to work harder for the same or lower salaries; why they suddenly found they were either out of work or working fewer paid hours; why they suddenly found themselves on split shifts in some states; or why they suddenly had to get two incomes just to survive. Those people were feeling betrayed yet they were being told by the previous government, `You've never had it so good.'

It was not explained that all of the benefits that were supposed to come from this great new internationalism in all these new markets was not actually happening. It was not explained that we had now lost a lot of our manufacturing industry and a lot of people had lost their jobs. It was not explained that we had made a big error. It was not explained that the new internationalism meant that Australian industries were no longer Australian industries and that there was almost a free rein on speculative investment whereby people could come in and do a bit of asset stripping and people would lose their jobs and production could go overseas. It was not explained that this was part of the big error we had made in accepting the new internationalism through the Uruguay Round of GATT.

But because both parties agreed to that error, and there was almost no debate, all those people in blue-collar jobs in Australia felt betrayed and did not know who to blame. Guess what? They listened to John Laws, Alan Jones and those sorts of people saying, `Ah, I've got a good idea. Let's blame the unemployed, young people, Aborigines, migrants and everybody else except those people who helped to make the decisions which changed people's lives so drastically in the last few years so it will now be a double whammy.'

The new government picked up that little window of opportunism and said, `Let's use this budget and cash in on the scapegoating that results from communities feeling disenchanted, disenfranchised and betrayed. And let's try to direct that against those people that the racists in our community direct people to hate.' That is exactly what this budget is about—directing the anger of the community away from the decision-makers who have changed people's lives to the people who can least fight for themselves.

I can understand the disillusion amongst blue-collar workers. But they were not told what was happening to them through the new internationalism, world's best practice and the fight to the bottom. They did not have explained to them the implications of the wide-ranging impacts of competition policy which will continue for years to come when values go out the window in exchange for the short-term dollar and making profits for some corporations and companies in our society at the expense of values and outcomes.

Other people targeted in this budget include indigenous people and Aboriginal and Torres Strait Islander programs are also being cut. Somebody must have seen a poll indicating that attacking indigenous people would be less electorally damaging than attacking middle-class Australians—and, of course, the poor whom the government has targeted for its wonderful unaccounted savings.

For example, there is the increased activity test on the jobsearch allowance and newstart. Somehow this will net the government up to $116 million, and it must be pretty heavily increased to cut all those people off. The government will simply save up to $127 million on some ATSIC programs and, I believe, up to $400 million on others altogether. How? What will be the human outcomes? What on earth do you expect to save from that level of human suffering?

What was the goal of this budget? To reduce the deficit? Is this what governments should take as their sole aim for budgets? I do not believe so because somehow or other if you say you are going to reduce the deficit, it is what Paul Keating used to call `getting a good set of numbers'.

Somehow there must be a goal for benefiting the community. What were the long-term goals for benefiting the community? Before the election the government said it would increase employment opportunities for young people. Frankly, this budget will do the exact opposite. So what was the goal of this budget if it was simply to reduce the deficit? Affordable tax cuts have caused much of the deficit. Basically, when you cut tax and you cannot afford to do so, you get into a deficit.

Instead of looking at the tax system and wondering how you can increase the revenue and make the tax system more fair again, the only goal of this budget is cutting programs and expenditure and cutting from the most vulnerable in our society. There was less than $1 billion worth of changes to revenue and the rest came from cutting.

Can this be justified only by cutting? A number of economists of highstanding in Australia do not believe so. But what are the choices? If we do not have enough money in the government coffers for the programs we need to provide in a decent, fair society then we look, amongst other things, at revenue measures. We look at whether our tax system is fair and, if not, how we can increase that fairness. We look at revenue measures which will redress the growing gap between rich and poor which the coalition mentioned again and again during the last parliament. That is what the Greens (WA) will be working towards—not letting this government off the hook; not letting them pretend in any way, shape or form that they have given any gift whatsoever to this nation by way of this budget. We will not let them forget that there are options they chose not to take, that they used this budget as a ruse and that we do not now or ever accept they should make the sole goal of their budget pleasing the money speculators of this world.

The real role of governments in budgets should be towards some goal about community; improving something within the community. This budget has not done a cracker for that. The Greens will be working hard to make sure that you understand at every turn what the options are. I can tell you that, where we can improve the situation, we will be working hard to achieve that.

Debate (on motion by Senator Kemp) adjourned.