PARLIAMENT HOUSE, CANBERRA: Mr Deputy Speaker, the Family Assistance and Other Legislation Amendment (Schoolkids Bonus Budget Measures) Bill 2012 abolishes a good program, the education tax refund, and replaces it with a fistful of dollars designed to shore up the electoral prospects of the Prime Minister. The bill itself should be called the ‘sugar hit bill’ because that is exactly what the intent of this bill is. Make no mistake: it is about two things and they are not to do with education. It is about trying to compensate for the carbon tax—the world’s biggest carbon tax coming on 1 July this year—and trying to add to the pretence that the government has some sort of economic credibility by delivering a budget surplus next financial year.
I will get to those two points in a minute, but let me get to the substance of the bill in front of us first.
The bill abandons the education tax refund. This tax refund was specifically designed to assist families with their education expenses. We support that intent, and we support the education tax refund because, as the member for Fowler pointed out, many families are doing it tough at the moment. We know that education expenses have been going up. There are uniforms, school fees, textbooks, drama, music and all sorts of things for which families need to pay.
We are a strong supporter of the education tax refund to enable families to pay for those measures which specifically are tailored towards helping their children go to school. In fact, so much so are we supportive of this measure that we took to the last election a policy to increase the amount of money which people could claim against that education tax refund. It was based on an important principle, and it is a principle that the other side of this chamber have great difficulty with. It is the principle of accountability. It is accountability to the taxpayer, who is paying for the payment, and it is accountability on behalf of the recipient to spend it according to what the desires of that payment were.
The design of the education tax refund was quite simple. You simply had to collect the receipts for items which went towards the education of your children. That was all. It was no great burden. If you bought textbooks you got a receipt, put it in your pocket, and then you could claim it back against your taxes and get a refund at the end of that financial year. That is what it required. That did two things. First of all, it created an incentive for people to spend the money on education rather than other things, because we think that is a good thing. Second of all, it created an accountability mechanism so that we ensured the money set aside for education expenses actually got spent on education expenses. We are in favour of this. We are in favour of supporting families with their costs of education, so much so that, as I mentioned before, we took to the last election a policy to increase the amount of support provided to each family—up to $1,000 for each secondary school aged child and $500 for each primary school aged child. By contrast the Labor scheme provides only $820 for each secondary school aged child and only $410 for each primary school aged child.
This bill removes the linkage between the payment and education. That is what it does. No longer do you have to collect the receipts and no longer do you have to ensure that the money has to be spent on education in order to receive that payment. Rather the payment just gets delivered directly into your bank account to spend on whatever you like. We have seen this before, because we have had a pattern from this government, and we know through the GFC that there were $900 cash splashes provided to families. Yes, many of those families used it for the right purposes to help them with their food and accommodation and other costs that they were struggling with. We also know that a lot of that money was spent on flat screen TVs from China, it was spent on holidays and it was spent on some other unsavoury things, which I do not need to mention here. It was given to dead people and it was given to people who were overseas. I am concerned that exactly the same thing will happen, again, here. Yes, a lot of people will use it for education costs but there will also be people who use it for things other than the costs incurred for the education of their children. There will be payments, I am sure, made to people who are now deceased and there will be payments made to people who are living overseas.
Our concern is that it breaks the nexus between the payment and the purpose for the payment and, consequently, this core concept of accountability gets thrown out the window. It is accountability, most importantly, for the taxpayer who is paying for this. They are the ones who are paying for it. It is not the Labor government paying for it; it is the taxpayer. They deserve accountability to ensure that their hard earned dollars are going to where they are supposed to be delivered. It is accountability on behalf of the recipients of that money to ensure that they spend the money on the purpose for which it was intended.
Let me now go back to what this bill is really about. As I said at the outset, it is really about two things: compensating for the world’s largest carbon tax coming to all families on 1 July; and trying to add to the pretence that there will be a budget surplus next year. The carbon tax, the greatest carbon tax in the world, will hit every single family on 1 July this year. This was the tax which was supposed to reform the economy according to the Treasurer—a clean energy future was going to occur, a transformation of Australia.
It is funny, Mr Acting Deputy Speaker, that it did not get mentioned once in the budget speech. This was the big transformation of our economy. You would think in the 14 pages, the half-hour speech, that the Treasurer might have mentioned it once. But, no, he did not mention the carbon tax. We know why, because it is toxic. It is politically toxic for this government. The reason it is politically toxic is it puts prices up for every family across Australia and it will cost jobs across Australia. When you look at the government’s own figures, the carbon tax will increase electricity costs by 10 per cent in the first year alone. According to the government’s own figures it will increase gas costs by nine per cent alone.
It will cost jobs across Australia. The Victorian treasury has done some analysis and says it will cost 24,000 jobs across Victoria. In my electorate alone it will cost 500 jobs. The reason is that it penalises our businesses but does not penalise the businesses that we are competing with from overseas. So a manufacturer in my electorate, which is struggling already with the high Australian dollar and fierce competition from China, will all of a sudden be imposed with additional costs but the Chinese manufacturer will not have those additional costs. It operates like a reverse tariff. It is poisonous because it is bad policy.
Of course it is based on a lie: it is based on the premise that this government went to the election promising that it would not introduce a carbon tax, and what does it do as soon as it gets in? It introduces it, and this bill is all about trying to provide a little sugar hit to divert people from the carbon tax, which is coming their way. But of course it will not compensate for fewer jobs. It will not compensate for the higher prices which will be coming from 1 July. It certainly will not compensate for the continuing increase in prices which will occur because the carbon tax is legislated to increase from $23 up to $29 in the first three years alone. It cannot compensate for those things, and the government should not pretend that it will do so.
The other thing that this bill is about—and the member for Menzies touched on this—is trying to add to the pretence that the government is reining in its expenditure, getting on top of its debt and will deliver a surplus in 2012-13. The trickery of this bill is that it brings forward some of the costs from the education tax refund, which were supposed to be incurred in 2012-13, and brings them forward into this financial year—that is what is happening. Under the previous scheme, you had to collect your receipts, you would put them in and the payment would come the next year; under this measure, a payment will be delivered in June, immediately, and that is why there is a great rush to get this bill through the parliament to deliver the payment in June. The government does not care about the expenditure; it only cares about the paper projected budget surplus of next year.
If this payment were put into next year’s budget then half of the $1.5 billion budget surplus would be gone. This is not the only piece of accounting trickery which is going on, as the member for Menzies pointed out; there is any number of other pieces of accounting trickery occurring in order to give the pretence that we will have a budget surplus next year.
The key thing about a budget surplus is that it is not just to give the pretence through a bit of paper that they have got the spending under control. We advocate for running a budget surplus because, primarily, it is intended to stop a government spending money beyond its means. We advocate for a budget surplus because it puts limits on the government spending money beyond its means. But the government actually does not care about that. That is why we have seen this financial year’s budget deficit balloon out from $12 billion to $22 billion to $37 billion to $44.5 billion for this financial year. It does not care about that as long as it has the pretence that next year it will get this $1.5 billion surplus.
The other thing that I would mention is of course we will not know whether they actually deliver on this budget surplus until the end of next year. We know for sure that they will not deliver. It is interesting that we have the member for Fraser in the chamber. The member for Fraser has been a big advocate of looking at betting markets to determine what is the most likely outcome in politics. He suggests that they are a very good predictor of what will occur. In fact the betting markets today have the odds on whether the government will deliver a budget surplus, not just project one but actually deliver one, in 2012-13. The odds of them delivering a surplus is about $4 or maybe $5; the odds of them delivering a budget deficit for 2012-13 is about $1.20—that is, the markets suggest there is about a 20 per cent chance of them delivering a surplus even taking into account all of their accounting tricks. Maybe the member for Fraser will be able to comment on that because he has written extensively about how the betting markets are very good predictors in politics, and the betting markets are saying that there is about a 20 per cent chance that they will deliver a budget surplus next year even taking into account their accounting tricks.
Let me summarise: this measure before us is poor policy because it takes away the link between the payments and the actual intent of the payments—that is the first point. It is also poor because it is based on accounting trickery, trying to bring forward payments from the next financial year into this financial year. Thirdly, it is all about trying to create a sugar hit for the carbon tax, which is going to hit all families on 1 July this year.