In rising to speak this evening on Appropriation Bill (No. 3) 2014-15 and related bills, I would like to take the opportunity to add my voice to the conversation about fairness that we, as a country, must have and that must be heard at the highest levels and seep into the consciousness of every man and woman in Australia.
Can I say how disappointing and frustrating it is that on Australia's budget situation it is the Labor clamour, the left-leaning media and the tweeting keyboard warriors that are drowning out the real and dire situation that we have here. The fact is that we must make changes if we want to have anything resembling our current standard of living in future years and for future generations.
It has been said before, and I will say it again, that in 2007 I was a proud member of the Howard government and we had a very strong and sustainable budget with a $20 billion-
Mr Husic interjecting-
Mr ENTSCH: Listen to this, the member for Chifley: a $20 billion surplus and $50 billion in the bank. That is something that you guys on the other side would have no concept of what that really means. After six years in a Labor government the deficit has blown-out to $50 billion and gross debt was heading towards $660 billion.
Yes, Labor faced the GFC in 2008, but they also had the massive benefit of a resources boom that could not last and it was squandered. They caused this debt with a mining tax that raised a minimal revenue but cost the budget $15 billion in kickbacks to voters.
They caused this debt with the pink batts scheme that killed one of the installers, young Mitchell Sweeney, in Far North Queensland, which is up in my area. They caused it through the school halls that cost taxpayers $16 billion. They failed to meet value-for-money requirements. Also, let's not forget the digital set-top boxes for old TVs, which cost hundreds of dollars more than if they had been bought independently. And, of course, the introduction of the NBN blew out from $44.5 million to well over $43 billion, and it is still going northward.
Our problem now is that our taxes are too low and government spending is too high. Taxes are spent on interest payments rather than on the range of services that our communities expect, and there is nothing left for a rainy day when the next global economic shock inevitably occurs. When this happens, the solutions that we will have to undertake will be far worse than those that we are trying to undertake now.
As the PM recently said, 'Standing still on reform means going backwards on living standards.'
The public backlash against the government's reform attempts over the last nine months has been staggering, leading to our Treasurer and Prime Minister acknowledging that they tried too much too fast, despite the fact this government has tried to bring in far fewer budget reforms than the first budget of John Howard and Peter Costello, the former government of which I was a member in 1996.
It saddens me that this national conversation that we need to have about reform is being hijacked by the wilfully deceptive alliance of Labor, PUP and the Greens, and with a good dose of biased media coverage on the side. My colleague the member for Higgins, the new Parliamentary Secretary to the Treasurer, made a very good speech last month to the Centre for Independent Studies on the concept of fairness. She acknowledges:
“Much of the public conversation since the 2014 budget has been about fairness.”
That is not surprising given that a fair go is a key part of the Australia psyche. Frustratingly, Labor and the Greens have turned this sophisticated concept into a one-word slogan. In their view, fair means that the budget measures should take more from those with higher incomes that they enjoyed prior to the budget and/or give more to those with lower incomes that they enjoyed prior to the budget. As the member for Higgins says:
“We need to engage the Australian public in a conversation about the many other dimensions to fairness than the redistributive dimension. That will be critical to prosecuting economic and social policy reform successfully.”
Thinking about fairness, let's look at some figures. ABS data show that households on the lowest income quintile rely on the government for around 55 per cent of their income. At the other end of the scale, households in the highest income quintile receive less than one per cent of their income from government. Looking at the income tax alone in 2011-12-
Debate interrupted. resumed Thursday 5th March;
As I was saying when debate was interrupted on Tuesday, ABS data shows that households in the lowest income quintile rely on the government for about 55.1 per cent of their income. At the other end of the scale, households in the highest income quintile receive less than one per cent of their income from government.
Looking at the income tax system, in 2011-12, one-sixth of all individuals filing income tax returns paid nearly two-thirds of all income tax. Narrowing that down further, around two per cent of individuals paid about 26 per cent of all income tax. Conversely, 45 per cent of those filing an income tax return paid less than four per cent of total income tax.
Is it fair that such a burden be placed on so few? Is it fair that people who have made sacrifices to be in a position to earn more, such as paying to attend university, working long hours away from family or taking financial risks, are penalised for doing so?
Labor have made a lot of noise about the 2014 budget being unfair; but take a close look at the six budgets delivered by Labor from 2008-09 through to 2013-14. From an intergenerational perspective-and we will hear more about that later today from the Treasurer-those were the most unfair budgets in our country's history.
Over that period, as I stated on Tuesday, our position went from having $44.8 billion in the bank to owing $202 billion. What is even worse is that they put in place a whole range of new initiatives that were either unfunded or not fully funded beyond the forward estimates, knowing full well that Australia would be liable for further bills once they left office.
I just about choked on my morning coffee when the Leader of the Opposition's latest missive to his Labor supporters landed on my desk. He talks about how his team 'will be focused on the people who are counting on us, like the students facing the prospect of $100,000 degrees, patients being slugged with the Liberals' unfair GP tax, or families under pressure thanks to Tony Abbott's $1 billion of cuts to child care'. This clearly illustrates Labor's deception around the concept of fairness.
The higher education debate has been focused on those students who are fortunate enough to attend university and who are being asked if they can pay a little bit more. What about the fact that our reforms will enable even more young people from regional areas to attend university? Why is it so unreasonable to ask that a student pay a little more for their degree and the taxpayer a little less, given that university graduates typically earn around $1 million more over their working lives than nongraduates?
The GP co-payment has been dropped, but it does not change the fact that we need to strengthen Medicare for the long term. At its current rate of growth, it is totally unsustainable.
On childcare, again Labor allowed the system to completely blow its budget. Childcare fees skyrocketed 50 per cent under Labor, which abandoned its promise to build 260 new centres. We are focused on a more flexible and responsive childcare system which will lift workforce participation.
Labor conveniently forgets that, of the 10.1 million Australian income tax payers, eight million go to work to pay tax so we can fund our $150 billion welfare system. The new McClure review points to the need for a simpler welfare system that focuses on supporting getting people into work and helping those who need our assistance most, while respecting the taxpayers who have to pay for it.
At a family level, most parents hope to build some wealth during their lifetime to help their children and grandchildren have an easier start in life. At the government level, Labor took the opposite approach. The result is that this government has been left holding the can, making the decisions to cut spending and rationalise services that no government really wants to make.
I do not want to dwell entirely on the negative today. Despite the challenges that I have outlined, we have had some major achievements in the past 17 months. The carbon tax is gone, so every household on average is $550 better off. New projects worth over $1 trillion have received environmental approval. The mining tax is gone, making Australia certainly a better place to invest. Free trade agreements covering more than 50 per cent of our exports-with China, Japan and South Korea-have been finalised.
The NBN is actually rolling out now, is far more reliable and has improved in relation to affordability. The boats, which peaked under Labor, have now stopped. Jobs growth in 2014 was triple the rate in 2013. The registration of new companies is the highest on record. Economic growth is now 2.7 per cent, up from 1.9 per cent a year ago.
In Leichhardt, we have welcomed a range of investment from government, including $19 million to refurbish the Star of the Sea Elders Village on Thursday Island; 42 beds for a Mossman nursing home, after-goodness me-20 years of campaigning, and now we are looking for capital investment to finalise that project; $1.4 million to establish the Mossman Botanic Garden; and funding for a wide range of initiatives focused on improving the health of the Great Barrier Reef, including $5 million for turtle and dugong protection and $40 million for the Reef Trust.
There is $42 million towards the establishment of the Australian Institute of Tropical Health and Medicine and, through that, we will have a faculty for tropical sports medicine. From there, we want to build an institute that will be the fourth of its kind, providing tropical conditioning for athletes and sportspeople, and we want it to be centred in Cairns.
There is $1.8 million for a pilot project to address health, water and sanitation issues in Papua New Guinea to deal with the tuberculosis crisis up there; $4.8 million towards the refurbishment of the Tobruk Memorial Pool in Cairns; $350,000 for the establishment of the mental health Clubhouse in Cairns, which is going absolutely brilliantly at the moment; $150 million towards Cape York infrastructure, including sealing sections of the Peninsula Developmental Road. I expect we will see in my lifetime the sealing of the entire Peninsula Developmental Road, something I never imagined, even six or seven years ago.
There is $12 million for sea walls in the Torres Strait, with construction just starting now; $400,000 for new CCTV in the Cairns CBD; $9.7m to James Cook University for the Daintree Rainforest Observatory; and more than $100,000 for projects around Leichhardt to commemorate the anniversary of Anzac, which is of course a great initiative from the Minister Assisting the Prime Minister for the Centenary of ANZAC and this government. Stage 1 of the Bruce Highway southern approach to Cairns will be completed with stages 2 and 3 fully funded for the next ten years.
The crowning jewel is the white paper on Northern Australia, which was due out at the end of February. Unfortunately, with the change of government in Queensland and the natural disaster on the Capricorn Coast we need to wait a little while for the new Premier to sign off on it before we release it. In addition, Green Army projects are getting underway; a medicinal cannabis bill is in the Senate; communications black spots are a priority; insurance measures including the aggregator website are underway; and we have an initiative that has been put up recently and is being considered by the Assistant Treasurer and the Prime Minister's office, which will see a brand new product coming into the market, which I really expect will see a significant downward trend in the current prices for insurance in Northern Australia.
This year, the government's priority is about creating more jobs, easing the pressure on families, building roads, strengthening national security and prompting more opportunity for all-with a new families policy and a new small business and jobs policy.
In conclusion, there is no doubt that we need to prepare now for the Australia we want for the future. Prosperity is not predestined; the decisions we make today will shape our future. Therefore, reform is essential. But it is becoming increasingly clear that we will only achieve reform if we convince the Australian population that the reform is fair so they come along with us on this journey.
Let us look to our neighbour, where John Key's re-elected New Zealand National government has demonstrated how to work back to surplus through tax reform, health reform and sensible workplace relations changes that were both efficient and fair.
In the UK, David Cameron has been faced with a situation where out of every 100 pounds the government spends they have had to save one. Thanks to sensible spending measures and reforms, such as a major overhaul of their welfare system, they have seen GDP growing and have slashed unemployment. As the member for Wannon wrote recently in the Drum:
“Populism and false hope through denial of our problems will only lead to a future where the government will struggle to provide services and maintain our standard of living.
“As every household and business knows, living within your means over time is not austerity, it is common sense.”
Australia's continuing prosperity depends on the success of the reforms we are pursuing now to support productivity growth and participation, boost job creation and expand the opportunities for Australian businesses and workers to thrive well into the future.