I rise to speak on the Appropriation Bill (No. 1) 2011-2012, Appropriation Bill (No. 2) 2011-2012 and Appropriation (Parliamentary Departments) Bill (No. 1) 2011-12, which implement the Gillard government’s budget for this year. I note the passionate comments of the member for Berowra, who spoke just before me.
In my address this evening I want to comment on the budget’s impact on residents in my electorate and on families and small business particularly. These make up an important part of most electorates but particularly electorates like mine, which comprise a huge number of middle-income families and small businesses. Overall this budget is an attack on those two groups at a time when families are doing it particularly tough with cost-of-living pressures and at a time when small businesses are also particularly doing it tough with rising interest rates, less flexible industrial relations regimes and difficulty in accessing finance.
Let me make some macro comments about this budget. In the government’s own words, this is a ‘very Labor budget’. It sure is. It has growing debt. There is a growing deficit, slowing jobs growth and more wasteful spending. They called this a tough budget but they increased spending. They talk about surpluses but they deliver deficits. They talk about the need to repay the debt but they lift borrowings to record levels.
Let us look at some of the numbers in the budget. This year’s deficit will be $50 billion, and that is a blow-out of $10 billion even since the forecast from last November. Net debt will now peak at $107 billion and will stay above the $100 billion mark, according to the forward estimates, for at least the next four years. The government continues to borrow $135 million per day and the interest payments on Labor’s debt will be a staggering $7 billion per year.
The government is forever telling us that the debt is not that high; we should not have to worry about it; it is minor compared to those of Greece and Spain and some of these other countries. But just let us consider for a moment the interest repayments alone: $7 billion per year. That would build seven Rowville rail links. We have been campaigning in my electorate to get a rail link out to Rowville to ease congestion and to link up Australia’s largest university, Monash University, for some time now. A feasibility study was just announced last Sunday and is finally underway. The $7 billion interest alone would build seven Rowville rail links. One year’s interest payments of $7 billion would complete the last section of the Melbourne ring road, which needs to be done and which causes so much congestion in outer eastern Melbourne. About $7 billion would also complete the connection of the Eastern Freeway to the Tullamarine Freeway, again a vital piece of infrastructure which everybody accepts needs to be done and would alleviate the bottleneck at Hoddle Street, where the Eastern Freeway just comes to a full stop. Of course this one also greatly affects residents of my electorate who have to travel into the city. The amount of $7 billion would also build seven tertiary hospitals. This is a huge amount of money which is now just disappearing every year—$7 billion year on year—just to pay the interest repayments on Labor’s debt. The debt is also a concern because it puts upward pressure on interest rates, and in my electorate, which has one of the highest proportions of home ownership in the country, that is a very great concern. The debt alone, as Mr Ruddock pointed out, is left as a legacy for our children, so they will have to pay it off in due course.
Why are we left with such debt? How did we get into such a position given that when the Labor government was elected in 2007 they had $60 billion in the bank and they had $20 billion of surplus? What happened was their spending was essentially out of control and was often on wasteful activities which have left no legacy for future generations. We have seen the greatest growth in government spending since Whitlam.
What do we have to show for it? Do they have those major infrastructure projects that I was referring to previously? No, we do not. What we do have is cheques of $900 which were issued; we have school halls that were built for double the price of what they could have been built for; we have blow-outs in border protection; and of course we have hundreds of thousands of roofs which were fitted with pink batts and then had the pink batts taken out. Literally billions of dollars have been wasted over the course of the last few years of the Rudd and Gillard governments, and this budget continues to spend and spend and spend more—often on wasteful activities.
Let me move now to the impact which the budget will have on families and particularly the families in my electorate of Aston in eastern Melbourne. As I said at the outset, my electorate is a family electorate basically made up of middle-income, everyday families working hard, frequently with two parents working and kids who attend school, go to church and do all the other activities which families do. Like many families across the country they are doing it tough with cost of living pressures.
I hear this every single day that I am in the community. We know this because since December 2007 electricity prices have gone up 51 per cent; gas prices have gone up 30 per cent; water has gone up 46 per cent; and education costs have gone up 24 per cent. But instead of taking measures to try to ease the cost of living pressures in this budget, the government has actually added to them by slashing the support for families. The government’s budget will freeze the indexation of family tax benefit part A and the government is also going to fix the income threshold limit for family tax benefit part B. The first measure will affect over 10,900 families in my electorate, and families with incomes as low as $45,000 will be affected by that, while the second measure will affect a further 7,900 families in my electorate.
Families will not just be losing a few dollars from these particular measures. Quite often they will lose considerable money each year. For example, a family with one parent earning $65,000 and one earning $40,000 will lose $853.50 a year in 2012-13 if they have a couple of kids under 13, and they will lose $907 a year if they have three kids under 13. This is a standard family in my electorate. One parent, who might be a teacher or a junior police officer, is earning $65,000 and the other parent is earning $40,000, and they might be a typical part-time worker who contributes to the family in the other half of his or her time. That is a very significant hit on their family budget at a time when they are already stretched to capacity.
Families will also be hit through the changes to the private health insurance rebate scheme in this budget. That will affect directly not only those people who will be above the new income threshold; it will have flow-on effects to all other families who take out private health insurance, because premiums will inevitably have to go up if people drop out of private health insurance.
What is not included in this budget but should have been included is the carbon tax, which will have a dramatic additional impact on cost-of-living pressures. It is the great betrayal of this government that went to the last election promising that there would be no carbon tax under a government that Julia Gillard leads, and of course it has lied to the Australian public and is planning on introducing that. It will have a dramatic effect also on cost-of-living pressures on families across Australia, including in my electorate.
I want to move to small business. Again, this budget is a direct hit on what is the engine room of our economy, and certainly the backbone of the economy in Aston. The budget has three strikes on small businesses. The first, as you may well be aware, is the scrapping of the entrepreneurs tax offset. This was a relatively small tax benefit for micro-businesses with an income of less than $75,000. The 400,000 small businesses across Australia that fit that category will lose up to $2,500 due to this adjustment, and 1,500 small businesses in my electorate will be affected as a result of it. The second hit was the changes to the fringe benefits tax on motor vehicles. We know that, under the new regime, if a person has to drive more than about 25,000 kilometres they will be worse off under this measure. The third hit is the measure that imposes burdensome reporting requirements on those in the construction industry, for no apparent reason. Yes, there is a small new benefit in terms of businesses being able to write off $5,000 on a new work vehicle, but that is no recompense for those other measures I have mentioned.
Why has the government made those attacks on small business? It is basically because the unions do not like small businesses and they particularly do not like independent contractors. If you look at a quote from Ken Phillips, the executive director of the Independent Contractors of Australia, he made the comment that in all his time in professional life he has ‘never seen such a blatant and intentional attack on the self-employed as there is in this budget’. ‘It reflects the changed dynamic within the federal government,’ he said. I think he sums it up very well.
In my remaining couple of minutes let me say at least a couple of positives about the budget.
Mr Ruddock interjecting—
Mr TUDGE: There were two or three, Mr Ruddock. I was pleased that more money was put into mental health. I have been running a campaign in my electorate to get more investment in mental health in the outer east of Melbourne, including a headspace site. Unfortunately, it was not the $2.2 billion that the government said it was investing. It was only $583 million over the four-year forward estimates and, of course, it did come at the cost of scrapping the Better Access Initiative. But, overall, more money for mental health is a good thing and I am hoping that some of that money will come to the outer east of Melbourne.
I also support the government’s decision to extend the National School Chaplaincy Program, which is an excellent initiative that Julie Bishop introduced when she was the Minister for Education, Science and Training. It is a very popular program in my electorate and the government in this budget has committed to a further three years for it.
Mr Ruddock: No guarantee in the future, then?
Mr TUDGE: There is no guarantee after those three years but it has committed to it. I also support the additional funds for students with disabilities and I support the Welfare to Work measures in the budget. These are all good things. By and large they are all things which the coalition has led. It led with the School Chaplaincy Program, it led in the debate on students with disabilities, it has certainly led in the debate on mental health issues and it has led in the debate on the Welfare to Work measures. Overall, however, this is a disappointing budget for families and for small businesses in my electorate and it continues the Labor tradition—more debt, more spend, more taxes and more waste.