29th May 2014
I rise today to speak on the Appropriation Bills currently before the House.
This Budget confirms the worst for ordinary working Australians.
It confirms the worst for families already battling to make ends meet…
The worst for people on the Age Pension, the Disability Support Pension and the Carer Payment…
The worst for our young people trying to find work in an ever changing economy.
It confirms the worst for all Australians who believe in a fair, tolerant and compassionate Australia.
In this Budget, the Abbott Government has revealed to the Australian people their plans for our country:
- savage cuts to our existing safety net;
- the rollback of social and economic reforms like Gonski; and
- an attack on the core pillars of the Australian way of life.
This Budget is made up of cruel measures from a cruel government.
And they’re broken promises, the lot of them.
The impact of this Budget on social and economic disadvantage will be far reaching and hard hitting.
It will also have implications for the investments we make in the future opportunities for our people.
Over the last 100 years, a social contract in this country has taken shape.
It is based on the pillars of the Australian way of life:
- access to universal healthcare and education;
- a fair and secure pension system;
- support for people who cannot work due to disability or caring responsibilities; and
- support that helps get people into work.
This social contract didn’t just magically appear. It took more than a century to get to where we are today. Successive Labor Governments have led the way in strengthening it over the years, making it fairer and more inclusive for all.
We have developed a very different approach to Europe or the US. And Australians are rightly proud of our smart, fair and uniquely Australian approach.
Shamefully, not only does this Budget disregard the Government’s responsibility to maintain and further strengthen these pillars of the Australian way of life - it goes out of its way to tear those pillars down.
Australia’s economy is strong.
We have low inflation, low interest rates and net debt well below comparable countries.
We have a triple AAA credit rating from all three credit rating agencies.
Ever since the election, all we have heard from this Government is false claims that Australia’s spending on welfare is out of control. We’ve heard senior government minister’s cry that Australia is on a path to countries like Greece and Spain.
These claims are just not true.
Earlier this year, independent analysis (from NATEM) found that in the last 12 years, Australia’s welfare spending has in fact decreased as a share of total expenditure.
Treasury’s 2010 Intergenerational Report shows that welfare spending as a proportion of GDP will remain steady over the next three decades.
None of this is to say we can’t do things better. But it does confirm the current Budget’s whole platform is based entirely on a lie.
One of the glaring examples is the $7 Medicare co-payment.
In the pre-Budget sell, the Government proclaimed that the current universal health system is too expensive and requires greater patient contribution, in order to repair the Budget bottom line.
Yet the Budget reveals that not one dollar of the Medicare co-payment will go towards the Budget bottom line. Nor will it be returned to recurrent health spending.
The co-payment will undermine universal healthcare in our country. And as many health experts have said, co-payments will not increase efficiency, but will hurt the poor and sick the most.
Impact on Families
This Budget is a savage attack on ordinary Australian families.
It includes $7.5 billion in cuts to family payments.
For the first time since Peter Costello first introduced them, this Budget contains no family impact analysis in the Budget papers.
In the last fortnight, expert analysis from independent modelling agency NATSEM has put to shame the Government’s claims that the burden of this Budget is shared by everyone.
Overwhelmingly, analysis has demonstrated that those at the bottom are hit the hardest, while those at the top are spared.
NATSEM found that around 1.2 million families will be on average $3,000 a year worse off by 2017-18. In contrast, the top 20 per cent of households will have either no impact or a negligible positive impact.
Low-income couples with children and single parents will suffer the most.
This Budget is incredibly short sighted, and full of what surly must be unintended consequences.
Because of this Budget, single parent families are faced with a huge disincentive to work.
This Budget creates a new Single Parent Supplement, which single parents will get when they are kicked off FTB B when their youngest child turns six.
This measure actively discourages single parents to work. Once a single parent earns just one dollar more than $48,000 a year, they will lose this supplement.
They will pay an effective marginal tax rate of around 80 per cent for every dollar they earn above $48,000, taking home just 20 cents in each of those dollars.
According to NATSEM, if a single parent’s income increases from $45,000 to $50,000 a year, their disposable income will increase by just $1,706.
NATSEM has described this as a ‘sudden death drop.’
The impacts of the Budget get worse and worse over the next four years.
By 2016, a couple with a single income of $65,000 and two school aged children will lose over $6,000 a year.
That’s around 10 per cent of their entire family budget.
Nationals Senator Ron Boswell summed it up yesterday when he remarked to the media,
“There's an equity problem that's falling on the low-income earners, more so than higher income earners.”
National Party Members and Senators should be protesting much louder. Many of the low and single income families hit hardest in this Budget live in country and regional Australia.
Impact on Pensioners
This Budget makes savage cuts to pensions – to the Age Pension, the Disability Support Pension, the Carer Payment, Bereavement Allowance, Parenting Payment Single, Wife, Widow and Veterans pensions.
The Government’s decision to increase the pension age to 70 was made on the run. Without any evidence; without any policy case.
It will disproportionately hurt low income earners who don’t have much superannuation, who are disproportionately women, and those in manual jobs like labourers and nurses.
Yesterday in this House, senior members of the Government – the Prime Minister, the Treasurer and the Minister for Social Services – repeated the falsehood that this Budget does not make cuts to the Pension.
Australians know this is just not true.
The changes to pension indexation arrangements in this Budget are a cut. They are a very direct cut to the living standards of Australia’s 3.2 million pensioners.
The pension is benchmarked to wages for a reason – so that pensioners’ standard of living keeps pace with the standard of living of the working population more broadly.
John Howard knew that – that’s why he legislated for it.
If the Prime Minister’s indexation arrangements had been in place for the last four years, today pensioners would be around $1,500 worse off each year.
That is a cut in anyone’s language. And about as big a broken promise as you can get.
It is clear that the Prime Minister’s only plan for older Australians is for them to work longer and retire with less.
And the short-sightedness doesn’t end there.
The Abbott Government’s policies will see more people be reliant on the pension in the future.
How else would you explain their decision to abolish the Low Income Super Contribution, a measure that reduces the tax burden for 3.6 million Australians who earn $37,000 or less a year, two thirds of which are women?
How else would you explain the Government’s decision to further delay the increase in superannuation from 9 to 12 per cent and at the same time reverse the proposed changes at the top, to tax earnings over $100,000?
THE LEGISLATION – CONCESSIONS NPA
Another cruel cut to pensioners in this Budget, one relevant to the Appropriation Bills I speak to today, is the Prime Minister’s decision to cut the Commonwealth’s $1.3 billion contribution to concessions for pensioners and seniors.
Because of this Coalition Government, the National Partnership Agreement on Certain Concessions for Pensioners and Seniors Card Holders will be axed from 1 July this year. These cuts will start in just 34 days.
This is yet another attack on Australia’s 3.2 million pensioners – including 2.3 million Age Pensioners. They will likely have their concessions cut for vital services such as public transport, electricity and water bills and their council rates.
The Prime Minister didn’t even have the courtesy to tell his state and territory colleagues he was making this cut.
And now, they are left to try and cover the $1.3 billion shortfall. On top of the $80 billion cuts to health and education, of course.
It is no wonder the New South Wales Treasurer yesterday came out to fight against this cut from the Prime Minister, describing the Prime Minister as “burdening pensioners”.
Before the election, the Prime Minister said there would be no change to pensions. The Prime Minister was not being truthful with pensioners before the election, and the Prime Minister is not being truthful with pensioners now.
These cuts will hit pensioners from July, not in three years like the Prime Minister says.
This Budget is an unprecedented attack on our pensioners. And it will hit them hard.
Impact on Young People and Jobseekers
The changes in this Budget to Newstart and young people are the most brutal and cruel measures of all.
The Government has sentenced our young people to a potentially endless cycle of poverty. Six months without any support at all. With no explanation of how our young people are supposed to house and feed themselves during these extended periods of time.
On top of these cruel measures, there are cuts of $130 million per year to Youth Education programs including Youth Connections. At a time when the youth unemployment rate is significantly higher than the unemployment rate, at a time when we desperately need to improve support for our young people.
LABOR KNOWS THERE IS A BETTER WAY
Over the last two terms of government, Australia saw a renewed focus on social investment.
The National Disability Insurance Scheme, Better Schools Funding reform, investment in early education, the development of a comprehensive framework for Closing the Gap between Indigenous and non-Indigenous Australians.
These were all important investments in our people.
If we are to ensure that every Australian can participate fully in our ever changing economy, we will need to ensure we target our investment in people.
We need to step outside the neoliberal view of the welfare state and take an integrated view of social and economic policies.
This requires a new debate about the importance of social policy to our future prosperity.
Only then will we be in a position to develop a comprehensive set of policies that can support the modern economy, and the people within it.
CONCLUSING REMARKS - THIS BUDGET WILL HURT ORDINARY PEOPLE
Last week, I spent time in Victoria, Tasmania and South Australia, talking to people about the impact this Budget will have on them.
I spoke to low income families in Tasmania who rely on family payments to make ends meet.
I spoke to a young man in South Australia who is now hitting his stride thanks to the Youth Employment Program, Partnership Brokers, a program that the Government has cut.
I spoke to young people who were fearful of what was in store for them and their future.
I spoke to compassionate, hardworking and smart women in Melbourne who spend their time helping other women overcome disadvantage and get into work.
I spoke to more than one hundred age pensioners who were afraid for their future and who were upset at having been betrayed by this Prime Minister.
The message they had for the Abbott Government was loud and clear: this Budget is based on broken promises and lies, and seeks to destroy the smart, fair and compassionate Australia they know and love.