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Simon Crean: Budget Reply Speech 2002

The Leader of the Opposition, Simon Crean, has delivered the ALP’s Budget Reply speech to the House of Representatives.

It was Crean’s first Budget Reply speech as party leader. He was responding to Treasurer Peter Costello’s seventh Budget.

  • Listen to Crean (27m)

Hansard transcript of Simon Crean’s Budget Reply speech.

Mr CREAN (Leader of the Opposition) (7:31 PM) —Before I commence tonight, I just heard the sad news coming in that Alec Campbell died tonight aged 103. He was the last of the original Anzacs and our last living link with that Anzac tradition. I just want to say that we thank him, we honour him and our condolences go to his family.

Honourable members—Hear, hear!

Mr CREAN —Tonight I want to do something different. The Australian people want to hear an alternative vision for this nation. I am offering one. As well as securing our nation’s borders, we have to secure our nation’s future. I want Australians to do what we did during the Second World War: Ben Chifley and John Curtin were able to win the war and plan for the future—let us do it again.

I want Australians to be confident. I want a budget based on hope, not a budget that is frightened of the future. I want a budget that looks at the future as an opportunity, not just as a cost. I want modern Labor to be known for what we propose, not just what we oppose. Modern Labor’s goal is simple: a strong economy for a fair society.

I want a modern Australia. That is why I am determined to modernise Labor. A modern Labor for a modern Australia: a party of ideas, a party that listens to the whole community, a party with a plan to strengthen the nation, a party that will relieve the pressures on working families and a party that is true to the Labor ideal of a fair go for everyone.

The Australian spirit of looking after the battler is disappearing under this government. Modern Labor will restore it and build opportunity for all. Tonight I want to tell you about new ideas to strengthen the nation and make life better for hardworking Australian families. Budgets are not just a balance sheet; budgets are about choices and how they impact on people.

One choice governments have to make is about taxes. During the next parliament $6 billion per year will be raised in bracket creep. Labor wants to give some of it back through tax credits—Labor’s tax cut for working families. Tax credits will take into account things like total family income and children when determining the amount of tax families pay. It is a tax cut tailored to the needs of each family. It is a tax cut that rewards work. Labor’s policy means working families with children will pay less tax, boosting their take-home pay.

I also want to protect 100 per cent of employee entitlements, because Australian families work hard and deserve every cent that they earn. Collapses like OneTel, HIH and Ansett have brought home to everyone the need to protect employee entitlements. Australians get very angry when they see company executives awarded multimillion dollar bonuses just before their company goes broke, robbing their employees of their accumulated sick leave, long service leave and holiday pay—their money. That is why Labor will guarantee every last cent of your entitlements. We will do it through an insurance scheme that will cost large companies only 0.1 per cent of payroll. Under Labor’s plan small businesses will not have to pay. The government’s plan only protects eight weeks of redundancy and lets rogue employers get away scot-free. It punishes loyal employees the most. Only Labor will protect your entitlements.

Labor also have a plan to lift the burden of the BAS red tape on small businesses. We will replace the current complex procedures with one simple calculation based on business turnover. More time running the business or the farm; more time with the family.

I am also committed to introducing paid maternity leave. For families to get ahead these days they usually need two incomes— to help them buy a house, pay off a mortgage and give their kids a decent education. Women especially must cope with the joint demands of work and family. Paid maternity leave, together with greater flexibility at work for mums and dads, will make it easier for families to keep those two incomes for as long as possible. That is why Labor will introduce paid maternity leave. We cannot understand why the government will not. Labor will make sure that small business does not bear the cost.

I also have a plan to protect our children, because Australians worry about whether their children are safe. Earlier this year, following national controversy concerning the mishandling of child abuse allegations by the Governor-General, Peter Hollingworth, I promised to do something to address in a lasting way the problems of the victims of child sexual abuse. That is why I have a plan to make sure that our children are safer when they are under the care of others. I will insist on a national voice to help protect children and young people and to advise government on their needs. And I will insist on checks on everyone who works with kids, to ensure their good character.

As part of the budget, the Treasurer has released his so-called Intergenerational Report. It painted a bleak picture of what would happen in 40 years time if the Treasurer’s policies continue: lower economic growth, lower employment growth and lower productivity. The Treasurer’s only answer, as our population ages in the future, is to cut health and aged care today. That is not a plan for the future; it is an excuse to destroy Medicare, it is a trick to end access to affordable medicines and it is a gimmick to make the Treasurer look like a visionary. Some vision!

Labor has a better vision for the future of our nation, and it starts with raising productivity. I want a more productive work force to create more wealth so we can look after our parents and grandparents. Lifting productivity is a Labor goal. It is good for growth and it secures jobs and industries into the future. We must invest in the good ideas of our people because that is the path to wealth and opportunity. We must boost the education of all our children. That means better schools, better universities, better TAFE colleges and more apprenticeships. The Treasurer’s budget rejected this productivity and education road to the future. The Treasurer wants to pay for the future by slugging Australians today, but I want to meet the challenges of the future by investing today.

A vision for the future must also include a comprehensive population policy that sets targets so that we will have a work force capable of supporting the aged; a population policy which provides a viable future for South Australia, for Tasmania and for regional Australia and which takes the population pressure off Sydney.

I believe in building a sustainable future by tackling long-term environmental problems like salinity and climate change. All Australians deserve to live in a healthy environment with clean air, clean water, safe food, healthy wildlife and plenty of green space for our kids to play in. Labor will achieve this by: halting land clearing and combating salinity; tackling climate change, ratifying the Kyoto protocol and reducing greenhouse gas emissions; protecting Australia’s unique wildlife and world heritage areas like Kakadu, the Great Barrier Reef and the Tasmanian wilderness; and leading the world in environmental goods and services. With vision and leadership, Australians do not have to choose between a clean environment and a strong economy—we can have both.

Another challenge facing Australia is how to make sure that everyone has enough money to retire on. The answer is superannuation. Prior to Labor spreading superannuation throughout the community, only the well-off enjoyed the luxury of a comfortable retirement. People should remember that the Treasurer fought to stop everyone getting access to superannuation.

The budget contained what the Treasurer claimed was a plan to boost incentives to investment in superannuation. In truth, it is a plan to benefit the very well-off whilst leaving middle Australia with nothing. His proposal is to reduce the high-income superannuation tax surcharge for the richest three per cent of Australians. Labor has a better plan. Instead of a superannuation tax cut for the richest three per cent, we want to give everyone a superannuation tax cut. At the moment, the government imposes a 15 per cent tax on contributions made to superannuation funds. This reduces retirement income. I think a superannuation tax cut should go to reducing this burden on everyone, not just the top three per cent. How can it be fair for the Treasurer to vote himself tens of thousands of dollars when he retires but an average wage earner will receive nothing from his proposal? Labor will vote against his proposal.

Our alternative propositions for the use of the money are these: we can redirect the money earmarked for the few into cutting the superannuation tax for all Australians from the present 15 per cent to 13 per cent; or we can cut the tax to 11½ per cent for people over 40 years of age—the age when most people start getting serious about planning for their retirement. The last option would mean a cut of more than 25 per cent in superannuation contributions tax. It would add many thousands of dollars to everyone’s retirement income whilst still being economically responsible. It would be a powerful incentive for Australians to invest in their own future, helping us to cope with our future needs. It is a fairer alternative.

I have concentrated tonight on the positive approach that the new-look Labor Party will bring to politics. Until we are the government, though, part of our job is to stop the things that we think are not in Australia’s interests. Tuesday’s budget is a cruel and unfair budget. It is a budget that gives us a deficit when the Treasurer guaranteed it would not. It is a budget that will push up interest rates and hurt ordinary Australian families; a budget that will hurt the poor, the sick and the elderly; a budget that will not reduce unemployment; and a budget that fails to plan for future generations. And it did not have to be this way.

Elections are about trust. The Australian people trusted the Treasurer when he guaranteed that he would deliver a surplus, they trusted him when he guaranteed no new taxes to pay for the war on terror and they trusted him when he guaranteed that no one would lose their benefits. In Tuesday night’s budget he betrayed their trust. Now we know that the budget is $3 billion in deficit—one story before the election and another story afterwards.

Labor supports the war on terrorism and protecting our borders. We honour the men and women of the Australian defence forces who are providing outstanding service but we do not believe that securing our borders should make us feel insecure at home. This budget is not in deficit because of border protection or the war on terror. This year’s deficit is $3 billion. The total new defence spending on the war on terrorism, border protection and domestic security is just $400 million this year. Tuesday’s budget is in deficit because of the Treasurer’s poor economic management.

In the lead-up to the last election the government spent $20 billion of your money, jettisoning the surpluses for the next five years, to win an election. The budget is also in deficit because the Treasurer gambled on currency swaps and lost. He lost $5 billion of your money and now he wants you to pay his gambling debt. During the election campaign the government claimed that a $200 million deficit would push up interest rates. If $200 million puts pressure on interest rates, how much pressure does $3 billion put on them? Interest rates rose last week—one week before the budget—and now we know why. Economists warn that more rises are on the way.

This is the highest taxing government in Australia’s history. Revenues have surged and last year every man, woman and child in Australia paid $800 more in tax than they did before the introduction of the GST. This week’s budget increased that burden further. But the Treasurer is still in deficit and he still fiddles the books. His economic policy is all `smirk’ and mirrors. Some in this place will remember the Treasurer once using his budget speech to say that the budget was `back in the black, back on track’. There I was on Tuesday night, listening and waiting for him to mention in the budget the biggest news story of the night, maybe with a similar flourish; but it did not happen. Let me say it tonight for him: you’re in the red and you’ve lost your cred.

It is a great Australian tradition that in times of military conflict we all pull together; everyone bears the burden. It is the principle of shared sacrifice. But that is not how things work under this Treasurer. The old, the sick and the poor are the ones who will shoulder the burden, while the well-off get the big superannuation tax cut. The government promised to keep a 10 per cent GST off medicine, and yet now it effectively puts a triple GST on it. If the Treasurer gets his way, families will pay $28.60 for each prescription, an increase of $6.20 per script—up by 30 per cent. And pensioners and cardholders will pay $4.60 per prescription—also up by 30 percent. We know that one million pensioners and concession card holders will pay the maximum of $52 extra per year and that 300,000 Australians are in families who will pay the maximum $190 extra. In some cases this will mean food off the table. These are real people. They are members of our families; they are neighbours; and they cannot afford it. We will vote against these unfair measures in the Senate.

The Treasurer is also going to shift the goalposts for what it means to have a disability. Disabled people—even those with severe disabilities—who are assessed as being able to work more than 15 hours per week are going to be kicked off the disability pension and onto unemployment benefits. Take two hardworking Australians: David and Tannia Smith. David suffers from spina bifida and Tannia is a virtual quadriplegic.

Mr Costello —Do they exist?

Mr CREAN —They do exist, Treasurer, but you wouldn’t know it because you have slugged them; and they deserve better treatment than they got from you the other night! Both are in wheelchairs. On Tuesday night they said—these people that you have questioned the existence of—`We love working. We’re proud to be making a contribution as taxpayers in society.’ But the Treasurer is going to take up to $52 per fortnight out of their pockets, and they have done nothing wrong except try to get ahead. He will tax them 80c for every dollar they earn. There is no incentive in that, nor is there any esteem in it. We should reward people for working, not punish them. The Treasurer should examine his values. They are the wrong values.

The Treasurer says he needs to cut David and Tannia’s pensions to pay for the war on terrorism and border protection. Treasurer, we should be defending these fine Australians, not attacking them. What the Treasurer is really doing is using the war on terrorism to cover up his budget deficit. They are not reforms, Treasurer; they are cuts. The government’s own adviser on welfare reform has rejected the Treasurer’s proposals. This government’s welfare reform agenda was born in fanfare, promoted at the election but killed off last Tuesday night in the Treasurer’s budget.

Labor supports real reform of the Pharmaceutical Benefits Scheme and the disability support pension and, because we are economically responsible, we know the money has to come from somewhere. We support tightening the administration of the Pharmaceutical Benefits Scheme with measures that prevent misuse and fraud and control costs. The budget papers say that such measures announced by the government will save $800 million over four years. Subject to the fine print, Labor will support these measures—in fact, we proposed many of them in the last election.

But at the same time as we were proposing those measures, the Prime Minister was adding further pressure to the scheme by widening access. He claimed then that the scheme was sustainable. Now, he says, it is not. One thing before the election, another after the election. But at the last election we promised more. We will support tighter administrative controls on the Pharmaceutical Benefits Scheme with measures such as increased focus on the cost and prescribing patterns of new drugs in their first year on the PBS, tighter controls on consumer advertising, and greater scrutiny of industry marketing. There are a number of other proposals that we believe the government should look at. They are an important list of options, and at the conclusion of this address tonight I shall seek leave to table that list.

I invite the Treasurer to take up these constructive suggestions. In the 48 hours since the budget has been handed down, it has not been possible for us to cost them. My challenge to the Treasurer is to get them costed before the parliament returns in two weeks time and release the details. I know that they will save money, but I want to know how much.

Labor will also take a constructive approach to reform the disability support pension. The measures the government has proposed do not yield any savings until the year after next. This means that we have time to get this aspect of welfare reform done properly. Labor is developing proposals that will genuinely help people move from welfare to work, not simply dump them on the unemployment scrap heap. My suggestion to the government is to freeze the measures that they have proposed and to work with us to develop new policies to reform disability support based on our suggestions and the McClure report. The government’s existing measures are unfair to Australians with disabilities—and we will also vote against them in the Senate—but we offer constructive proposals of our own.

The government has challenged Labor to come up with alternative savings. In addition to the measures that I have mentioned previously, I will also be tabling tonight further measures that we had costed by Access Economics in the lead-up to the last election, which can provide further savings. We have had only two days to examine this budget and we do not have the full resources of government behind us. But I want to start tonight setting out examples of this government’s waste and mismanagement and its wrong priorities from which the savings could come.

We will save nearly half the cost of the increased cost of medicines simply by cutting wasteful government advertising, travel and consultancies. We will double the government’s big business tax compliance measures to make sure they pay the tax they owe. We will cancel some unjustified big business tax concessions proposed in this very budget and we will abolish the outrageous tax deduction to the Liberal Party’s wealthy donors. We will stop people using the first home owners grant to buy million dollar-plus houses. These measures could enable us collectively to meet the government’s budget outcomes without slugging the vulnerable. My challenge to the Prime Minister is to take these measures seriously—the Treasurer has not. Have our measures costed by Treasury and come back when the parliament sits again in two weeks time with fairer proposals. There is a better way; it does not have to be done your way. Your way is the wrong way; it is an unfair way; it can be done much more fairly. We support the war on terrorism but Labor believe that everyone should pay their fair share, not just the poor, the sick, the elderly and Australian families.

Last night on the 7.30 Report, the Prime Minister told the Australian people six times that he had nothing further to add. Well, Prime Minister, if you have nothing further to add, it is time to go. We know the Treasurer wants you to go, but people need to judge him in the context of his budget on Tuesday night. It is a budget that is unfair and a budget that offers no future. It does not have to be that way. It can be made fairer through the proposals that I have outlined tonight, and our future can be strengthened through the initiatives that I have outlined tonight. Australia needs a new direction, a modern direction. We need a strong economy for a fair society. We need modern Labor for a modern Australia. I seek leave to table the two documents that I foreshadowed in my address.

Leave granted.

Debate (on motion by Mr Slipper) adjourned.

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Malcolm Farnsworth
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