The Leader of the Opposition, Dr. Brendan Nelson, has proposed a 5 cents reduction in petrol excise.
Delivering his response to the Federal Budget, Nelson also committed the Opposition to oppose the increase tax on alco-pops in the Senate.
- Listen to Nelson’s Budget Reply speech (30m)
Text of Opposition Leader Brendan Nelson’s Budget Reply Speech.
Mr Speaker. Australians expected a lot with the election of a new government.
Last year they listened to what the now Prime Minister and Treasurer had to say.
They heard them say they were going to be good economic managers.
They heard them say that they would do something about grocery prices.
They heard them say they would do something about the price of petrol.
They heard them say they would do something about home interest rates.
They heard a lot.
Every Australian should now ask themselves this question:
Will this budget make it easier to keep my house, fill the car with petrol, put groceries in the trolley and keep my job?
The Prime Minister and Treasurer have styled themselves as new Labor leaders, yet this is old Labor returning to haunt the Australian economic landscape.
This is an old-fashioned high-taxing, high-spending Labor budget that seeks to punish those it does not like and discourage aspiration.
The Government promised to ease the pressure on “working families”, but failed the very people they promised to help.
How can any government boast of a budget that proposes to put 134,000 Australians out of work? Under the Coalition it was ‘welfare to work’. Under Labor, we are headed again on the road of work to welfare.
How can they boast of a budget that largely ignores the men and women whose sacrifices built this nation – pensioners and retirees?
How can they boast of a budget that not only leaves carers “in the lurch”, but sells them down the river?
Where was the incentive for small family business?
Where was the emphasis on water, farmers, rural and regional Australians?
This budget, like this Government, puts media spin ahead of substance, bureaucratic doublespeak ahead of people and more than 100 reviews, inquiries and committees ahead of decisions.
Clever media strategy is no substitute for a sound economic strategy – and Australians know it.
For months, the nervous man that is Treasurer talked up an “inflation genie” as being out of the bottle. He spoke of an inflationary crisis. He darkly warned that deep spending cuts were needed.
Yet he has delivered a budget that actually increases spending and taxes. Far from slaying inflation, this budgetary approach risks breathing new life into it.
This budget will do little to reassure Australians nervous that this Treasurer and this Government really understand what they are doing.
In contrast, the Liberal and National parties have enormous demonstrated experience to keep a strong, competitive Australian economy and make sound judgements according to economic circumstances.
Mr Speaker, since last November’s election, the Prime Minister and Treasurer have been more concerned with undermining and misrepresenting the Howard-Costello legacy rather than seriously grappling with the economic challenges ahead.
We should never forget that the leadership of the Coalition, John Howard and Peter Costello enabled Australia to become a stronger, more prosperous country, more confident in itself and its place in the world.
Australia was a dramatically different place when the Coalition came to power in 1996.
Under Labor, Australia had emerged from oppressively high interest rates, the collapse of businesses and a recession that deeply scarred the nation.
It was an Australia in which every parent feared for the future of their children. There was no talk of a skills shortage.
And in its very first budget, the Coalition faced a deficit of $10 billion and $96 billion in accumulated Labor debt.
Last November, by contrast, we bequeathed to the new Prime Minister and Treasurer an economy the envy of the world.
There was no Commonwealth debt, surplus budgeting now accepted as the norm, and more than $60 billion invested in Australia’s future.
During the 12 years the Coalition was in government, everything that should be up – wages, economic growth, consumer and business confidence – was up, while everything that should be down – unemployment, inflation, interest rates – was down.
Under the Coalition Government Australians were able to get ahead.
This sound management and economic prosperity took place in the face of the Asian financial crisis of 1997-98, the US recession of 2000-01, the September 11 and Bali terrorist attacks and Australia’s worst drought in a hundred years.
We took these challenges in our stride because we know that managing a trillion dollar economy is not supposed to be easy.
The Labor Party steadfastly opposed every single Coalition measure essential to strengthening the Australian economy.
Before the election, the Prime Minister repeatedly styled himself as an “economic conservative”.
Expensive advertisements, slick management, cardboard cut-outs and expensive suits do not make economic conservatives. It is deeply rooted in philosophical conviction and character.
Today, Australians are not confident about our economy.
Business and consumer confidence has plunged to record breaking lows despite our fundamentals still being strong.
Retail sales have fallen, building approvals have flatlined, house values have fallen in many suburbs and Australians are less confident in both the economy and their government.
All this before the global liquidity crisis is yet to fully wash through the Australian economy and Labor’s inflationary job-destroying roll back on workplace relations.
Union bosses are back in town.
We have no confidence in the Prime Minister to stand up to union intimidation. Why would he? After all, they put him into government.
Under Labor there is little opportunity for Australians to get ahead.
This underwhelming budget is one of lost opportunity.
The Prime Minister and Treasurer have presented their budget as one that fights inflation.
While no one should deny that there is an inflationary challenge to be managed, there is no crisis. The last Labor government ran inflation at more than 6 per cent a year for 6 years. Inflation is currently 4.25 per cent.
We have never subscribed to the Treasurer’s assertion that an inflation ‘crisis’ justifies savage budget cuts at a time of significant domestic and global economic uncertainty.
We do not support higher taxes and higher spending.
For all his talk of slaying some dragon, the Treasurer has breathed new life into inflation with a budget that delivers something Australians have not known in Commonwealth budgets for some time – tax increases.
The Government has perpetrated a fraud on the Australian public.
Preliminary calculations indicate that the budget will increase the CPI by up to 0.4 per cent.
The price of alcohol is up. The price of cars is up. The price of groceries will be pressured in part from higher taxes on trucks. The passenger movement charge is up. Taxes on computer software are up and workers are about to have the Treasurer bite into their hard earned money with a tax on canteen meal cards.
And health insurance premiums will increase with measures that will see a so far confirmed figure of half a million mainly young people, drop out – leaving families, pensioners and retirees to face higher premiums.
It also removes a net $300 million from Australia’s hospitals.
We stand up for Australians with private health insurance. We always will. We will oppose this measure.
These are real price increases that will cut into the household budget of real Australians, many of whom can least afford it.
These price increases could also mean higher interest rates.
And far from reducing spending to put downward pressure on inflation, this budget increases spending.
The Treasurer has not, as he says, “taken the axe to irresponsible spending”. He has merely taken a sledgehammer to people the Labor Party doesn’t like and ignored others – seniors, carers, small business, rural and regional communities.
The Government has cut $15.2 billion to Coalition programs. But then it has added $30.1 billion worth of new Labor spending over the same period.
So net spending will increase by $14.9 billion over the forward estimates.
The Government has not paid for this new spending with cuts.
The Government has instead chosen to impose taxes and revenue measures that will raise $19.7 billion over five years.
Far from reducing taxes to encourage incentive and workforce participation, this budget increases taxes.
This is a high taxing, high spending Labor government.
As for the income tax cuts announced by the Treasurer on Tuesday night, bear in mind that these are Coalition tax cuts copied by the new Treasurer. He no longer has a straight-A student in the form of Peter Costello to copy. Australians have seen the last tax cut they will see for some time.
This budget confirms that Labor stands for higher taxes whereas the Coalition stands for lower taxes. Even after the income tax cuts, the total income tax take from Australians will increase $42.8 billion or 21.1 per cent over the next four years.
Tax relief not only provides practical help for families. It also rewards hard work and self sacrifice.
It can also help tackle inflation by removing pressure for wage claims while encouraging people into work.
The Treasurer demonstrated his lack of commitment to tax relief in January when he called for an end to the Howard Government policy of returning excess budget surpluses as tax cuts.
The Reserve Bank, he warned, had been allowed to shoulder too much responsibility for controlling inflation with interest rate rises.
If the Coalition tax relief delivered in this budget reduces inflation by promoting participation, encouraging skill development and keeping wage pressures under control, as Labor accepts, doesn’t that argument also apply for future tax relief?
Clearly the Treasurer doesn’t believe his own argument.
Labor is giving with one hand and taking back with the other – and not just through kneejerk measures, such as a new Tarago tax on cars or the $1 slug on responsible Australians who happen to enjoy a pre-mixed Bundy and Coke or Scotch and Dry.
We know that as incomes rise over time and workers move into higher tax brackets, the value of today’s income tax cuts will be eroded in the future.
Economists call this “bracket creep”. We call it tax increases on the sly. There must be a commitment to future relief.
Alcohol abuse is a problem. It is a real problem, confined not only to some young people, but right across society. I spent much of my medical life seeing its human consequences. I am also a parent.
According to the Government, the principal cause and the source of binge drinking is the so-called ‘alco-pops’ and pre-mixed drinks.
A whopping 70 per cent increase in excise, we have been told, would make significant inroads into binge drinking.
The evidence does not support the Government’s deception.
The Government’s own National Drug Strategy Household Survey confirms binge drinking by young women since 2001 has actually declined and alcohol abstinence in this age group has increased.
So the Prime Minister has told Australians that they’ve got to pay $3.1 billion more in tax on one alcohol product to deal with binge drinking.
Any parent, let alone a health economist, will confirm that if you jack up the price in isolation from other measures, kids will simply move to another alcohol product or drug.
The budget confirms that after its tax increase the Government expects consumption of these products to grow at a rate of some 10 per cent per year compounding.
This is nothing more than a tax binge falsely presented to Australians as a health measure. We will oppose it.
A real strategy to deal with alcohol abuse and anti-social behaviour demands an integration of education, prevention, policing, media, appropriate pricing measures and parenting where it involves young people.
I will convene a national forum of alcohol specialists, educators, police, parents and people with expertise in this and related fields to develop a truly integrated approach to what is an undeniable problem.
This will involve more substance than style.
Petrol Tax Relief
Before the election the Prime Minister led the Australian public to believe that he would cut the price of petrol.
He has done nothing of substance.
Watching petrol prices does not bring them down.
Australians may not have expected a silver bullet in the case of petrol, but they deserve better than a government firing blanks.
In 2001, when the price of petrol spiked sharply, we took the view that a strong budget allowed for some tangible relief.
Petrol indexation was abolished. Petrol is now 17.7c per litre less than it would otherwise have been. The Coalition did that.
Petrol is now hurting Australians in every walk of life and in every part of the nation.
There is only one way that an Australian Government can actually do anything decisive about the price of petrol – and that is to cut taxes.
So tonight, I propose a cut in fuel excise of 5 cents a litre.
This is a modest but meaningful way of helping all Australians – families, small businesses, pensioners and working people so dependant on their cars.
Ninety per cent of Australian households have a car.
Right now, they all need some help. Real Help.
The Coalition believes it responsible and fair to return a further $1.8 billion back to hardworking everyday Australians in the form of a 5 cent per litre reduction in the fuel excise.
By lowering the price of petrol and the cost of transporting goods, this 13 per cent reduction in petrol excise will also have a modest, but measurable downward impact on inflation.
This is in stark contrast to the tax increases under Labor, which as I have indicated will increase prices by up to 0.4 per cent.
The Coalition is serious about reducing price and inflation pressures.
Labor talks. The Coalition acts.
This is a real tax cut in the best traditions of the Liberal and National parties.
It was the Keating Labor Government that put 5 cents onto the excise in 1993. I challenge the Rudd Labor Government to help us take it out in 2008.
This is not a review, a committee or a summit to talk about the issue.
It is decisive action.
Capital Gains Tax and small business
Small family businesses are the backbone of the nation. Indeed, support for small business is one of the pillars of Liberal belief.
Men and women taking a risk, borrowing money to create or buy a small business and employ other Australians – few things are more important to our way of life and future prosperity.
Get the conditions right for small business and employment will flourish as businesses grow.
We believe in encouraging and rewarding hard work.
The tax system must not stifle innovation and Australians prepared to have a go.
Therefore we are announcing tonight a major reduction in capital gains tax for small business.
The current 15-year rule with respect to waiving capital gains tax on the sale of a small business entity on retirement from age 55, was an incentive to small business introduced by the Coalition in government.
To further encourage small business men and women to invest in establishing or taking over a small business, the Coalition will introduce a 5-year rule for CGT on sale of the business for retirement.
After owning and operating a small business for five years, we believe you should be entitled to CGT relief should you sell that business for retirement.
You will be rewarded – as you should, if you can grow and increase the value of your business.
Education is our future.
The centralised fund proposed by Labor for school infrastructure cannot replace “parent power”.
Parent groups and school principals will always know what their school needs better than a clipboard carrying bureaucrat from a centralised education department. They know best.
The Government has scrapped our “Investing in Our Schools Programme”. These direct grants to schools have made a big difference to improved buildings, classrooms, playgrounds and upgraded technology.
The Coalition will reinstate it.
We will get them moving again.
The Government speaks of a so called “Education Revolution” in delivering more computers to schools, while ignoring the added costs to parents and schools of connection, maintenance and training.
The single most important influence in the life of a child – apart from a parent – is their teacher.
But no teacher can teach what he or she does not know.
The standard of teacher training in Australia must be improved. Higher standards in universities, means higher standards in classrooms. In this, we are failing.
The Coalition commits to education reform so essential to our economic and social development.
The Coalition will require a number of conditions for funding of Australian Universities that train teachers.
Entry scores to undertake teaching courses at university are embarrassingly low.
The minimum university entrance score must be higher for entry to an education degree.
Science, humanities and social science departments will be required to set and/or accredit relevant course content and assessment in education faculties.
All trainee teachers will be taught how to teach children to read using proven techniques, including phonics based instruction.
They must also be taught and assessed in basic sciences, mathematics, English and history.
University education faculties will be required to appoint high quality classroom teachers to their academic staff as tutors and lecturers. More teachers and less social engineers.
This will assist in lifting the status of teaching as a profession and bring a greater practical focus to the training of teachers.
To attract our best graduates into teaching, we need to provide quality teachers with access to increased pay.
Like any other profession, teachers should be rewarded and recognised on merit as assessed by their peers. Better teachers deserve better pay.
There can be no place for mediocrity when it comes to the future of the nation’s teachers, yet that is tolerated in too many of our teacher training institutions.
This is an “Education Revolution”.
The Prime Minister has repeatedly told the House that he would reduce the financial stress of carers by providing them with ongoing secure support. Yet the budget has failed carers.
The Carers Bonus, introduced by the Howard Government, is only being paid this year because the Labor government was shamed into action.
Devastatingly for carers, however, there is no commitment in the budget papers to pay it in future years.
Carers are a window to our humanity and their work is done on behalf of all Australians.
What modest support they receive from government should be recognised as a wage that saves the Australian taxpayer in the order of $30 billion each year.
Tonight I give all Australian carers my commitment that we use the Government’s inquiry to ensure equitable funding to carers in reflection of the work they do on our behalf.
With respect to seniors, we will not support Labor’s changes to income test for the Commonwealth Seniors Health Card which will leave thousands of seniors without a Health Card when they need it most.
Conclusion: five challenges
In addressing the future course of our nation, we need to identify and respond effectively to five key challenges.
The first is the prosperity of our nation. How are we going to ensure that the next generation enjoys a standard of living in which we and they can have confidence?
This will mean taxation reform. Not just simplification, but lower taxes overall.
Further, how can we prosper when this budget cuts investment in R&D and swings the axe through the CSIRO?
The second challenge that we face is that of the federation.
It is very important for us to ask ourselves how we can make the federation work in the interest of Australia and Australians for this century.
It isn’t just about hospitals and schools; it’s also about business regulation, taxation, communications and the recognition of skills.
It means examining the constitutional responsibilities of the three tiers of government, including the raising and distribution of money.
The third challenge for us as Australians, and indeed as global citizens, is to adjust to the environmental deadlines that are bearing down on us.
It is time for us to live on environmental interest rather than environmental capital.
Water security is food security. Further, Australia alone cannot solve climate change, but we can do enormous environmental and economic damage to our children’s future if we get this wrong.
The fourth challenge for us in our future is that of the security of our nation: the protection and defence of our country, our people, our interests and our values.
And the fifth challenge is to ensure we are a cohesive society – to make sure that we see addressing drug use, welfare without responsibilities, gambling addiction, homelessness and the existential despair of 90,000 remote Aboriginal Australians as being no less important to us than solid economic outcomes upon which success will depend.
How we respond to these future challenges will define our nation’s prosperity, its security and us – for generations to come.
Before the next election we will announce policy to shape the future we want.
We are an opposition, but we are also an alternative government.
Our beliefs are in the individual, in encouragement of, and rewards for, hard work in everyday life.
We believe in family small business.
We believe in families as the bedrock of the nation while respecting and reaching out to every Australian irrespective of his or her personal circumstances.
We believe in choice – in health, education or membership of a union.
We believe in lower taxes, sound economic management.
We believe strongly in defence and security.
We will be at our best as a nation if we strive to be outward looking, intensely competitive yet compassionate people, reconciled with our indigenous history and imbued with values of hard work, self sacrifice, tolerance and courage.
Australia deserves better than that delivered by this Government in this budget. We will be both a practical and inspiring alternative for Australia.