The Budget & Inequality

I led off the Matter of Public Importance debate in parliament today, focusing on the issue of inequality.

This morning I received an email from one of my constituents which read in part: 'I am 48 years old and unemployed. The fact that I have not been able to find another job makes life difficult but just manageable because my husband works. He is 52 years old and works for the federal government. He is very good at what he does but unfortunately the program he works with has been cut and he finds out today if his job has been cut.'

My constituent goes on to say that she has two teenage daughters in Catholic schools and has a mortgage on a small, three-bedroom house north of Canberra that has been refinanced a couple of times in the last few years and some credit card debt.

All of this is manageable, my constituent writes, if her husband keeps his job. But then she says, 'If he loses his job, we have no option but to sell the house and count on the kindness of relatives and friends, or to live on the streets'. My constituent concludes, 'Cutting 16,000 Public Service jobs will destroy the economy in Canberra and destroy thousands of lives, including those of my family'.

My constituent is a battler, one of millions of battlers across Australia. But recent decades have been a time in which billionaires have made out far better than battlers. Earnings have grown three times as fast for those in the top 10 per cent as for those in the bottom 10 per cent. The income share of the top one per cent of Australians has doubled over the past generation. The income share of the top 0.1 per cent has tripled. It has been a generation that has been good to the cigar-chomping plutocrats and not so good, unfortunately, for low- and middle-income Australians.

And yet what have we seen since this government has come into office? We have seen a government that has ripped away supports for low- and middle-income families: targeted supports such as the schoolkids bonus, the income support bonus, the low incomes superannuation contribution—all taken away by this government. Equity funding from schools ripped away; trades training centres, which aim at keeping low-income students at school, taken away; and the very cleaners who clean the Prime Minister's office are going to likely see a pay cut as a result of decisions made by this government.

In an era in which the earnings of financial dealers and anaesthetists have risen so much more rapidly than the earnings of cleaners and checkout workers, we have a government whose number one business adviser thinks that we have a wages problem—not the wages problem that CEO earnings have risen twice as fast as average earnings while the minimum wage has risen slower, but a wages problem that the minimum wage is too high. And we have a government that is going soft on the top end of town: saying no to modest measures to crack down on profit shifting by multinationals, giving back $700 million of revenue that now has to come out of the pockets of low-and middle-income Australians; giving a mining tax cut that will cost—well, do not take my word on this; let us go to the Treasurer's own budget papers—$1.8 billion in 2016-17. The result of that mining tax cut will see the benefits go to some of the richest people on the planet.

A government member interjecting—

Dr LEIGH:  I have just told you, anonymous interjector, of the Treasurer's estimate. If you have a different idea on that, you should take it up with the Treasurer.

We have a government that wants to put in place a parental leave scheme that gives maybe $75,000, maybe $50,000 if they are going to strike a deal with the Greens, to the most affluent families when they have a child. It is a scheme that is at odds with the means-tested system of social supports that has been fundamental to Australia's social state.

Mr Hutchinson:  It's not a welfare policy!

Dr LEIGH:  I hear an interjector over there: 'It's not a welfare policy'. And that would sit with the government's policy document, which reads as follows:

‘… paid parental leave is an economic driver and should be a workforce entitlement …’

In other words: for the most affluent Australian families it is, 'Welcome to the new age of entitlement'. So much for the government's rhetoric.

We will hear suggestions tonight that the Treasurer has suddenly become Robin Hood. Let us face it, even the Sheriff of Nottingham occasionally got the odd knight or dame offside, but this is not going to be a Robin Hood budget. This will be a budget that will slug the battlers and will help the billionaires. This is a government that wants to strip away financial protections from vulnerable Australians, which will have the effect of boosting earnings in the financial sector, I am sure, but if the government puts FOFA back on the agenda, it is going to hurt low-income Australians. It is going to hurt pensioners, the very victims of the Storm Financial collapse five years ago.

This hit on low- and middle-income Australia is going to reverberate in so many other areas too. The government claims to be committed to Closing the Gap. You cannot close the Indigenous/non-Indigenous gap if your policy is to widen the economic gap in Australia. This government says that it is committed to closing the pay gap between men and women, but you cannot close the pay gap between men and women if your industrial policy is to attack unions and to make it impossible for unions to bargain to assist gender equity across the community.

I say to the Prime Minister: enough of the tribalism, enough with the class warfare; it is time to govern in the interests of all Australians. We have heard talk lately that the government wants to engage in means testing. That would be news to those of us on this side of the House, who sat through six years in which the coalition in opposition opposed means testing at every turn. We tried to put in modest changes to the baby bonus, and the Treasurer compared it to China's one-child policy. When we put in place modest means testing to the private health insurance rebate, the now Minister for Health said that it ‘represents a betrayal of the 12 million Australians who contribute to their own health care’, and many coalition speakers decried means testing the private health insurance rebate as class warfare. And on page 93 of Battlelines, the Prime Minister has criticised means testing itself.

This is a Prime Minister who has no deep philosophical commitment to means testing. Let us be honest: he has very little intellectual commitment to anything. This is a Prime Minister who, after all, when talking about carbon pricing some years ago said, 'If you want to put a price on carbon, why not do it with a simple tax?' And yet, in order to win the Liberal Party leadership, he was willing to backflip on that.

This is a Prime Minister who promised Peter Reith that he would support him for the Liberal Party leadership and then backflipped and supported Alan Stockdale, with poor Mr Reith afterwards saying, 'I honestly do not know, I really don't. But he certainly did ask me, and he did not just ask me, he asked people around him to join my campaign, as it were. … I am a bit disappointed.'

Australians will be pretty disappointed by a Prime Minister who has said literally dozens of times, for example, 'What you will get under us are tax cuts without new taxes.' He said that there would be ‘no new tax collection without an election’. He said that ‘no country has ever taxed its way to prosperity’, and he said that ‘Personal income tax will be lower under a coalition government in its first term than it is now.

This is a Prime Minister who said in his budget reply just last year—the now Prime Minister was standing at this very dispatch box here—that ‘no-one's personal tax will go up’. Let’s see whether that holds up tonight. This is a Prime Minister who was pretty willing to have a go at our side of politics any time he thought that there had not been promises kept. In fact the Prime Minister in criticising former Prime Minister said:

‘I am not a doctor but I think that we are in the presence of a condition, a chronic condition, TDD, truth deficit disorder.’

(Time expired) 


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8/1 Torrens Street, Braddon ACT 2612 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au