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APPROPRIATION BILL (NO. 1) 2002-2003: Second Reading

Mr CADMAN (Mitchell) (1.25 p.m.) —I cannot believe that a spokesman for education is so poor on numeracy. I would have thought that one of the prerequisites for the Leader of the Opposition in choosing someone to advance education policy is that they can do their sums.

This government has increased higher education funding by 5.8 per cent in this budget. That is not the picture painted by the spokesman for the opposition, the honourable member for Jagajaga. There is a record $6.6 billion going into education, the highest amount the nation has ever invested in education. If we could get down to some real education policy, the House would be better informed. [start page 2540]

I want to look at the reforms that the government is introducing because, indeed, this is a government of progress and reform. The government of Australia had a terrible mess to clean up when it was first elected, with huge deficits, high interest rates, high unemployment and high inflation. Those were the things in the economy to which the government first had to apply its mind during its first term of office—fix the economy, get rid of as many problems as possible which had been created by the Labor government, get inflation down, get interest rates down and take charge of the huge deficits which had been run up by the Australian Labor Party. I remind the House that not only had the previous Labor government been able to borrow money all over the world and from Australians but also the previous Labor government put up income tax, and still that was not enough. It sold things like Qantas and just tipped the funds into the bin of money and spent that as well. That caused a colossal problem for Australia and that is what the coalition government was about in the first three years in government.

Then we had to do something about the key reforms that needed to be made which were, first of all, to get more money back to people and get the government out of their pocket. So tax reform was next on the agenda, getting the taxation system right so that Australia had a broad based consumer tax—something which the rest of the world had—and making sure that it was administered simply by business, that revenue would flow to the states, cutting out all rows with state governments, premiers and prime ministers, which historically had been a problem in Australia, and putting in place a clean and efficient tax system. The trouble with that was that the Labor Party wanted to interfere at every step of the way, complaining about it and trying to hold it up to make it impossible to get the changes that were needed. They did not want to do it themselves, but would not let anyone else do it either—a strange way of looking at government. Tax reforms were made and there was more money in people's pockets, with a great release of funds back to people who needed to have more of their own resources.

In the third term of office, the government is continuing to reform, to get industrial relations changes that will benefit small business, to fix up superannuation and to make changes to business taxation so that we have one of the most effective and efficient business taxation systems in the world, and to do something about border protection, to make sure that our boundaries are held secure and safe. The government promised these things to the electorate during the election campaign.

To back up those reforms and the direction that the budget has taken, the Treasurer produced a report which includes projected changes in the Australian population over the next 40 years and the projected costs. This report gives today's government and governments of the future a better understanding of the policies that ought to be in place in order to meet some of those goals. How large should our debt be? What should the average growth of the Australia population be? How many recipients of Commonwealth payments are we likely to have in the years ahead? What will be the shift from benefits to the aged compared to benefits to families, for instance? How will the finances of the government change? What will happen to Australia's population, because we are not replacing ourselves? We need to make sure that the population projections are sound. What should our migration levels be? How many locally produced Aussies will we have compared to how many migrants we will allow to come to our country? What will happen in the workplace? What will happen to the employment rates? What is the projection for revenue and expenditure of governments into the future? All of these questions have been looked at as part of this budget. This budget is the first of a 40-year program which seeks to meet the needs of the Australian people and produce results that will cope with the challenges of the future.

This budget continues the government's management of its own affairs but, unfortunately, during this year we have had some additional expenses that have impacted on the bottom line. Firstly, the government needed to take steps to prevent people coming into Australia willy-nilly, as they wished, without going through the normal immigration or refugee programs. So the government has had to spend an additional $1.3 billion to rectify those problems and invest in protecting our borders. In addition to that, Australian defence personnel have played a very strong and significant role in Timor and Afghanistan in securing the freedoms that others cherish and that Australians regard as part of their rights.

By the end of this financial year, the government will have a surplus of $2.1 billion and will also have reduced Labor's debt of over $90 billion by $61 billion. This does not sound so significant to the average person, except that a debt of $90-odd billion was imposing on us repayments of around $10 billion a year, which included interest rate charges. So the reduction of that debt releases more funds for Australians to use. Government borrowing is just the same as everyone else borrowing: you have to put a sum aside all the time to repay it, and that is what has been happening. We are relieving ourselves of that debt, and that means that we are managing our affairs more successfully. The economy will continue to grow; inflation will remain at around 2 per cent; unemployment will continue to fall and should be under six per cent by the middle of next year; and business investment will be strong.

This budget includes funding for the defence white paper, which will be $1.3 billion higher than it was last year, bringing total spending on defence to $14.1 billion. The increased funding will support the war against terrorism, it will maintain the integrity of our borders and further improve longer term defence capabilities. That will allow us to continue our international role, to protect our borders, to make sure that we buy the right equipment and to invest in the training of personnel for future needs. [start page 2541]

The budget strengthens border protection by funding activities to deter unauthorised boat arrivals. Part of that is making sure that the processing centre at Christmas Island is developed so that people know that they cannot automatically come to Australia but will be processed offshore. I am thankful that there have been no more arrivals over the last seven months, and that is due to the government's firm stand on these issues. We have also set aside funds in this budget for securing our own security. Those funds are $1.3 billion over five years to make sure that we ourselves are safe from terrorist attacks. Just as the United States found that it was not safe from unexpected attack, Australia needs to take the right steps to protect the integrity of our internal security systems. There is a capacity there for us to be secure, externally and internally, and to make sure that all arrivals to Australia go through the proper processes.

The budget also follows through and fulfils every election commitment that was made during the campaign. That has been the history of this government, and I guess that is why people trust John Howard: he delivers on what he says he will do. I cannot remember a single Labor budget where that was done—not one. I can remember sitting on the other side of this parliament and making speech after speech on budgets where I could demonstrate, time and again, the failure after failure to deliver on your budgets. Even the estimates were dramatically wrong; you never hit the targets. Mr Deputy Speaker Lindsay, I am not referring to you. You always hit the target. You are particularly popular with your voters, and I know those military men and women who are part of your electorate understand that you are a great target hitter. But, when the Australian Labor Party were in government, their budget estimates were proved to be wrong time and again.

I do not want to be frivolous about this but the fact is that if you say that the glass is running over, it never gets better than this, you have never had it so good, and make statements of that type when things are hard and rough, trying to demonstrate by tough talk that things are okay, that is unpersuasive—people do not like that. I compare that with the role of the current government, who are more likely to say, `We know we are doing well, but we are also sure that we can do better, both as a government and as a nation.' The false expectation is not created, as it was year after year particularly by Paul Keating when he was Prime Minister.

We have delivered on the baby bonus. The new baby bonus of up to $2,500 per year for up to five years will be available to parents with children born on or after 1 July 2001—a great initiative, supplying money to young Aussies, young families, just at the time they need it. That was something that some of us were used to. It was a traditional part of Australian life: an unexpected gift—a baby bonus—when children are born. Governments in the past have cut it out. This government has restored it. I think this is a wonderful initiative.

We have delivered on our commitment to modify and improve superannuation as part of the reform process. In this budget, qualifying low income earners will receive up to $1,000 per annum in superannuation contributions. This is a great approach. We are putting money in, helping people prepare for the future. It is like a start-up scheme you give to your kids, saying, `Here is your super; here is your insurance; here is your policy; here are the first 10 years payments—from then on it is yours.' That is what the government is doing for low income earners to get them into superannuation.

The self-employed will be able to claim tax deductions of up to 100 per cent for superannuation contributions of up to $5,000. If you are self-employed, you might have a block of land, some plant and equipment, a corner shop or maybe a ute and some tools if you are in the building industry. The opportunities to prepare for the future are not quite as broad as for a person who is in employment. This idea is very useful because it will encourage people who are self-employed to continue to invest in superannuation and encourage them to prepare for their retirement in a way that they have not been able to do until now. The maximum superannuation surcharge will fall from 15 to 10.5 per cent by 2004-05. The Labor Party objects to that, but that seems to me the thing that is raised most frequently as one of the most unfair taxes and one of the most difficult to manage. I think we ought to get rid of it. If they are so intent on taking money from high earners, they ought to do it through the tax system, not through superannuation. It is up to the Labor Party to decide on that. No doubt we will hear from them. There are no ideas coming from them at this point except the wish to object to everything that is done.

We are getting more doctors into outer suburban areas. This follows the government's program of training more doctors to go to rural and regional Australia. The government will also provide $73 million over four years to build new radiation oncology facilities outside capital cities and fund their operation. These will go into regional and rural Australia. This is a very important initiative. Having travelled widely through rural and regional Australia I have found that the lack of services is something that city people do not understand. Only people in the bush know the disadvantage with which they have to survive. This is a very good initiative.

In aged care there will be an extra $654 million over the next four years to provide better care for older Australians. That is a program of partly helping people in their own home and partly upgrading regional and rural nursing homes and training nurses for aged care services. There is a very thoughtful, compassionate attitude to older Australians in this budget. There are more benefits for veterans too: an extra $93 million over four years to extend veterans' access to the gold card for health care; $85 million over four years for better compensation for war widows; $318 million provided for funds for better roads. It is a very balanced and thoughtful budget. [start page 2542]

There are some harsher things in the budget but I think that, on balance, they are warranted. The change to the national health program seems on examination to mean a slight rise in the cost of pharmaceuticals, but the government will continue to subsidise every pharmaceutical that anybody wants on the national health scheme that costs over $28.60. Anything over $28.60 that is prescribed and on the national health scheme will not cost more than $28.60. Anything costing less than $28.60 will not change in price. For example, a Ventolin pack at $17.90 will stay at $17.90. They are $17.90 today, they will be $17.90 after this legislation goes through—it will not change. Despite the scaremongering of the Australian Labor Party, this is not a harsh measure. For pensioners, their minimum will rise from $3.20 to $4.20. Anything costing under $4.20 will stay the same price; anything costing over $4.20 will be subsidised and will not cost the pensioner more than $4.20. The additional charge, whether it is $50 or $100 per prescription—and many of them can be higher than that—will be subsidised by the government. All in all, this is a very interesting and supportive budget. I like to see governments delivering on their promises. This is what the government has done while at the same time protecting our borders and maintaining a sound and secure economy with growth and opportunities for employment.

Author: Alan Cadman MP
Source: House Hansard - 30th May 2002
Release Date: 10 Jun 2002


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