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Monday, 19 March 2018
Page: 1384


Senator BILYK (Tasmania) (13:49): I rise to speak on Appropriation Bill (No. 3) 2017-18 and Appropriation Bill (No. 4) 2017-18. These two bills provide appropriations from the Consolidated Revenue Fund for the annual services of the government for the remainder of 2017-18 and facilitate implementation of a number of 2017-18 Mid-Year Economic and Fiscal Outlook, or MYEFO, measures. The government is seeking to appropriate a total of around $1.5 billion for the remainder of the 2017-18 financial year. These amounts have already been incorporated into the budget bottom line as presented in the 2017-18 MYEFO.

While the Labor Party will be supporting these bills, the debate today gives us an opportunity to highlight the flaws in the 2017-18 budget and the misplaced priorities of this chaotic Turnbull government. Let's be clear at the outset: it's big multinational businesses and millionaires who get all the goodies from the Turnbull government, not the low- to middle-income Australians who could do with some additional support. The recent MYEFO confirms that, instead of making the right decision to rein in generous tax breaks for the top end of town, Mr Turnbull, Mr Morrison and Senator Cormann are once again asking those who can least afford it to carry the can for the government's budget failures. The government prefer to rip away funding and support for students and universities in an attempt to fix their budget mess rather than ditch their tax breaks for the top end of town. They are effectively delivering their $65 billion handout to multinationals and the banks by increasing the tax burden on low- and middle-income earners. Not only is Mr Turnbull's budget elitist and out of touch; it doesn't make any fiscal or economic sense either. The government's budget delivers tax handouts for multinationals and millionaires while hurting Australian families. The mid-year budget update is, at its core, a triple whammy of higher taxes for workers, lower taxes for the top end of town, and record and growing debt. It also shows that Liberals still want to ditch the energy supplement for pensioners and increase the pension age to 70.

The Liberal government, like all Liberal governments, continue to perpetuate the myth that they're better economic managers than Labor, but they have overseen an exponential increase in Australia's levels of debt and deficit. This year's deficit has blown out by a factor of eight times. In the 2014-15 budget, the 2017-18 deficit was projected to be $2.8 billion; however, the deficit is now $23.6 billion in the 2017-18 MYEFO. Net debt has also more than doubled since the Liberals took office. Net debt was $175 billion in September 2013 and had risen to $353 billion in January 2018. Net debt is also expected to reach new highs over each of the next three years. Gross debt has also spiked under this government. It's now more than half a trillion dollars. It has never been higher and is growing, with no peak in sight. While those opposite inherited gross debt of $280 billion, it has blown out to $518 billion as at 9 March 2018. Gross debt is currently estimated to reach $684 billion in 2027-28. Both gross debt and net debt are also growing faster under the Liberals than under Labor—and this coming from a government who in opposition told Australians that they were facing a 'budget crisis' and a 'debt and deficit disaster'.

These figures absolutely rubbish any argument that those on the government team are better economic managers. Rather than fixing Australia's debt, the Liberal-National government's policies are making it worse. As at 9 March 2018, gross debt was growing at $1.2 billion a month quicker, and net debt $575 million a month quicker, than when Labor was in power. This is despite the positive global conditions the government is currently working within, after Labor saved the country from the global financial crisis. The government has tried to talk up some modest and expected minor improvements in the budget, but the substantial uptick in global economic conditions in recent times means they should have expected nothing less.

The fact remains that the headline numbers in this year's MYEFO are nothing to be proud of. International comparisons show other countries are capitalising on improving global conditions better than we are. According to the latest OECD data, Australia ranks 20th in terms of GDP growth among member states, behind the likes of Mexico, Estonia, Finland and Latvia. I say we can and we must do better. As a comparison, understand that in the two years to 2010, during the peak of the global financial crisis, we were ranked fourth highest in the OECD with GDP growth of 4.6 per cent over that period. At the same time the economies of similar countries like the US, the UK, Japan and Germany were contracting. Given this current underperformance, it does makes sense why the Liberals chose to release the update just before Christmas, when Australians were more focused on their festive season than they were on the nation's finances. Sadly, our nation's economy is underperforming in the best global conditions in a decade, when it wasn't long ago that we were overperforming in a very difficult global context.

At the same time, some of the underlying data gives us cause for concern, particularly in how it reflects the economic reality for large swathes of the community. Wages have stagnated under this government, yet there are greater and greater tax cuts to multinationals and to millionaires. This government shouldn't be cutting company tax for those huge companies; it should be making them pay their fair share in the first place. Australia's philosophy of the 'fair go' that guarantees fair wages for a fair day's work has been severed. The fact is that, over the past year, company profits have grown by 20 per cent but wages have grown by just two per cent. Isn't the rising tide meant to lift all boats equally? According to the flawed trickle-down theory of economics that those opposite subscribe to, that's how it's meant to be.

The latest national accounts show that in just the last two years the wages share of income has fallen 1.5 percentage points while the profits share has grown 2.3 percentage points over the same period. We want strong profits and we want sustainable wages growth as well. On top of that, more precarious and insecure work and very high underemployment, which has almost 1.1 million Australians not getting enough hours of work, are making life harder for many people on modest incomes.

The effects of all this are really obvious. Household consumption grew just 0.1 per cent in the September quarter—the worst quarterly result since the global financial crisis. The RBA points specifically to the decline in the growth of discretionary spending, on things such as eating out and recreation, as an indication of increased pressure on household finances. On top of that, the household-debt-to-income ratio is the highest it's ever been, and the household savings ratio is around the worst it's been for about a decade. All of this tells us that people don't have money to spend in the shops or to save for bigger purchases and are bogged down by debt—all of which has repercussions for businesses and the wider economy.

It's very clear that this government doesn't want to do anything to make the tax system fairer. It doesn't want to reform trusts or stop wealthy property investors from using tax concessions they don't need to lock first home buyers out of the housing market. All the while, the nation's debt keeps growing and growing. In fact, it's not well known or understood that debt is actually growing faster now under Mr Turnbull in favourable global economic conditions than it did under the former Labor government, which had the global financial crisis to deal with.

In contrast, Labor has announced responsible savings that significantly improve the budget over the medium term, including ensuring multinationals pay their fair share and reforms to negative gearing, capital gains tax and trusts. Labor has found tens of billions of dollars in fair budget repair measures that don't ask the most vulnerable in our community to do the heavy lifting.

Labor's recently announced reforms on dividend imputation credits will also redirect an unsustainable tax refund, for people who pay no tax, into more productive areas. Dividend imputation is a proud Labor achievement. Paul Keating, as Treasurer, re-engineered capital formation in Australia by eliminating double taxation on company profits. Imputation is, and will continue to be, a vital part of our financial infrastructure. But John Howard and Peter Costello decided—

The PRESIDENT: Order, Senator Bilyk. The time for the debate has expired. You'll be in continuation.