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Tuesday, 19 August 1980
Page: 380


Dr KLUGMAN (Prospect) - by leaveDespite all the leaks associated with the Budget, the Opposition received the final Budget documents only two hours ago, and it is therefore impossible for us to comment in detail on all the aspects of the proposed changes to social security payments. Obviously the Opposition welcomes the increased payments, but I think it is important that the Australian people see these increases in the perspective of what is actually happening. This Government came to power in 1975 on the basis of its claim that it would be a low tax government. Let us examine what it has actually done. Between 1979-80 and 1980-81 the Government's income will increase by $4,8 10m. Income tax paid by individuals will increase by $2,030m in one year. Page 298 of Budget Paper No. 1 , presented today by the Treasurer (Mr Howard), shows that in 1975-76, in the last Labor Budget prepared by the then Treasurer, Mr Hayden, the total tax revenue was $1 6,843m, and everybody was screaming about it. What is the proposed total tax revenue in the current Budget? It is $3 1,796m, or an increase of 88.8 per cent. Excise on oil in 1975-76 was $264m. In the next year - I am sure the Government has underestimated this amount - the estimated revenue from excise on oil and liquefied petroleum gas is $3,1 57m, or an increase of 1,096 per cent.


Mr Roger Johnston - Mr Deputy Speaker, I raise a point of order. The remarks of the honourable member for Prospect hardly relate to the subject in hand. I ask that he keep to the subject.


Mr DEPUTY SPEAKER (Mr Millar - The honourable member for Prospect may proceed by leave to address himself to the matter.


Dr KLUGMAN - I know that my comments hurt the honourable member for Hotham (Mr Roger Johnston) because, at least in theory, he always talks about low taxation. I hope that he will look at the figures tomorrow.


Mr Roger Johnston - Get onto the subject.


Dr KLUGMAN - Thank you very much. If one examines page 298 of the Budget statement one finds that the income tax to be collected from individuals in the last Labor Budget in 1975-76 amounted to $9,2 19m. In the current year it will be $1 7,070m, or an increase of 85.2 per cent. That is the increase which has occurred during the last five years, under a government which claims that it is a low tax government. Total revenue has increased by 88.8 per cent.


Mr Roger Johnston - The honourable member for Prospect was given leave to talk about social security programs. He was, not given leave to talk about any other aspects of the Budget. I ask that he confine his remarks to the subject.


Mr DEPUTY SPEAKER -The honourable member for Prospect was given leave by the House to make a statement.


Mr Roger Johnston - Relating to social security.


Mr DEPUTY SPEAKER -Order! The honourable member is not confined in explicit terms. It may well be that it was understood that he would address himself to the statement made by the Minister for Transport (Mr Hunt), who represents the Minister for Social Security (Senator Guilfoyle) in this place. The Chair will judge whether the honourable member for Prospect departs from the subject on which he was given leave to speak. I call the honourable member for Prospect.


Dr KLUGMAN - Thank you, Mr Deputy Speaker. I am sorry that my comments hurt the honourable member for Hotham. He apparently believes that the money spent on social security is printed and not collected from the Australian people. As the Prime Minister (Mr Malcolm Fraser) has pointed out to us repeatedly, there is no such thing as a free lunch. Money is collected from the Australian people but a relatively small proportion is handed back to those who need it most. I seek leave to incorporate in Hansard a table setting out the figures to which I have just referred.

Leave granted.

The table read as follows -

Percentage


Dr KLUGMAN -I turn now to the expenditure proposed under social security programs and deal firstly with the two largest gioups which are in receipt of payment. I refer to the families receiving a family allowance and to age pensioners. Neither group receives an increase in this Budget. Let us look at what has happened to the family allowance in the years since it has been introduced. I seek leave to incorporate in Hansard a table which I have prepared on the matter.

Leave granted.

The table read as follows -

COMPARISON OF INCOME, TO TAX PAYING FAMILIES, FROM THE FAMILY ALLOWANCE SCHEME WITH WHAT IT WOULD HAVE BEEN WITH TAX REBATES AND CHILD ENDOWMENT

4 28.00 2.25 33.75 6.00 20.50 -13.25

5 35.00 2.50 43.25 7.00 27.50 -15.75

6 42.00 2.75 53.00 7.00 34.50 -18.50

Therefore, every taxpaying family with children is much wo


Dr KLUGMAN - The table compares, on a weekly basis, the income of tax paying families under the family allowance scheme with what it would have been with tax rebates and child endowment. In 1980-81 the tax rebate will be available only in conjunction with a zone allowance. It has been indexed to $360 per annum. Under the old system the tax rebate for all tax paying families would have amounted to $7 a week for each child. The child endowment for the first child under the system preceding the family allowance was 50c a week. The total amount received for the first child would therefore have been $7.50 per week. The family allowance, which replaced the previous arrangements, provides $3.50 a week. There is therefore a loss to every tax paying family with one child of $4 per week. For two children the tax rebate loss is $14. Child endowment would have been $1 plus 50 cents - a total of $15.50. The total family allowance paid to a two-child family is $8.50. The loss to that tax paying family with two dependent children is $7 a week. Age pensioners receive no increase whatsoever.

I refer now to some of the other benefits about which the Minister for Transport (Mr Hunt) has spoken. The weekly unemployment benefit for those under 18 years of age is $36. The date of the last increase was May 1 975. The consumer price index has increased since then by 62.6 per cent. The benefit would now need an increase of $23.60 a week to maintain its value. The increase allowed for in this Budget is nil. The present payment for those over 18 years without dependants is $51.45 per week. The date of the last increase was May 1978. The consumer price index has increased since then by 20.5 per cent. The amount required to bring the benefit up to the original amount in real terms is $10.50 a week. The increase given in the Budget is $2.

The present guardians allowance for people with children under six years is $6 a week. This was last changed in October 1969. The increase in the CPI since then has been 182 per cent. An increase of $10.92 is needed; the increase is $2. The childrens allowance for pensioners for each child 5 Off. each week is $7.50. It was last increased in November 1975 by the Labor Government. The CPI has increased since then by 55.7 per cent. There has been an erosion of the benefit. In other words, an increase of $4. 1 8 a week is required to bring it back to its original value. The amount by which it has been increased is $2.50 per week, approximately half the amount necessary.

The accommodation subsidy for homeless persons has been eroded by 58c; the actual increase is 45c. The subsidy required to keep the Meals on Wheels in line with the CPI increase is 21c; the increase is 15c. The education allowances, which have been vastly decreased and not dealt with adequately, require an increase of $182 per annum; the increase is $110. An increase of $14.19 per week is required in the Tertiary Education Assistance Scheme; the increase is $4.30 per week. The away-from-home allowance increase necessary is $10.38 per week but the increase given in the Budget is $4.52.

Under the family allowance scheme increases of $ 1 .66 for the first child, $4 for two children and $6.87 for three children are required. No increase has been given. The original double orphans pension of $47.70 a month was granted in November 1975. There has been an increase in the CPI of 55.7 per cent. An increase of $26.56 is needed a month to keep the benefit at its real value; the increase is $8. 1 am trying to put the increased payments into perspective. I seek leave to incorporate a table in Hansard.

Leave granted.

The table read as follows -

SOCIAL SECURITY PAYMENTS AND EDUCATION ALLOWANCES

* This is the amount the payment would have to be increased by in today's prices to restore its value to that level when last increased.


Dr KLUGMAN - During the last five years, since November 1975 when this Government came to power, the consumer price index has increased by 55.7 per cent. I make this statement for the benefit of the honourable member for Hotham. In the same period income tax for individuals increased by 85.2 per cent. Total tax revenue of this so-called low tax government has increased by 88.8 per cent. This can be compared with the increase in the consumer price index of 55.7 per cent.

The social security payments granted by this Government in no case have kept up with the erosion due to the consumer price index increases. While the Government may be very proud of handing out folders which look impressive from the Department of Social Security on information for the 19 August 1980 Budget so that its members can go out to the electorate and pretend to the electors that they are doing well, I remind those who are more honest in the Government that the Government has not kept its benefits in line with consumer price index increases and has certainly not paid the increased benefits which ought to be available from a government which has increased its taxation revenue in the period by nearly 90 per cent.







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