MONDAY 22 MAY 2017
On 9 May the Treasurer strutted out to deliver a budget that in a mere two weeks has already slumped into a slouch. A budget that was supposed to stand tall and lift the government’s standing is doing nothing of the sort. And the reason it is a slouch of a budget is that, frankly, it lacks a policy backbone and is weighed down by contradictions and a heavy load of hypocrisy.
The Coalition Government, who shrieked about the disaster of debt and deficit, will preside over gross debt rising to $725 billion and, in this budget, snuck in as a footnote that they would lift the debt cap to $600 billion.
Things are not much better when you focus on net debt, which is set to rise to a staggering 20 per cent of GDP. It has not been that high since World War II. And it has never been that high under a Labor government. This is a budget that is jam-packed with heroic claims of future performance, such as reaching surplus in a few years off the back of a leap to three per cent wages growth, when just last week we saw official figures detailing that wages growth had reached historic lows of just 1.865 per cent. How is that leap supposed to occur?
What about the observation of Fairfax’s Peter Martin, who says this about government spending:
“…in 2019-20, for one year only, the budget tells us that number will drop to 0.9 per cent, before bouncing back to 2.1 per cent. That curious dip, for one year only, is enough to push down the projected 2019-20 deficit from $10.5 billion to $2.5 billion and to turn what would have been a deficit in 2020-21 into a surplus.”
The budget is one of the principal financial documents of the Commonwealth and it is, frankly, underpinned by dodgy, politically pliable numbers. When you push through this and focus on the real numbers, you appreciate the reality of the debt and deficit disaster presided over by the Coalition. There will be new record net debt for the next three years, and we will experience a deficit for the 2017-18 year which is 10 times bigger than was predicted in the Coalition’s first budget. As this reality is dawning on people, you can appreciate why the proud claims of the coalition simply do not stack up and why this budget reflects either laziness or an incapability to get any budget management right.
While the deficit has soared, so too has the weight of the Turnbull government’s cuts, and the impact of its bad decisions have ballooned, affecting the people I represent in the electorate of Chifley. From Mount Druitt to Blacktown, families will find themselves worse off because of Malcolm Turnbull’s budget. While they will pay more tax and bear a heavier burden, the nation’s wealthiest two per cent are actually aided by the Turnbull government in this budget. Millionaires will get a tax cut of $16,400, while families in our area feel the pinch of this budget.
It was staggering to listen to the fake, opinion-poll-driven concern of the Treasurer on budget night, when he said:
“We must choose to tackle cost of living pressures for Australians and their families.”
He did not say that because he genuinely believed it. He said it because, no doubt, the $200,000 he spent on opinion polling told him to say it. It is offensive when you compare his words to the realities of his decisions. Anytime this government has a chance to make a decision to help average Australians, the Turnbull government makes decisions that actively hurt them.
Look at what this budget does. A family on $65,000 will pay $325 more in tax in two years’ time. Changes to Family Tax Benefit A Supplement will mean that a family with an income of $80,000 will lose nearly $730 per child. Axing the Energy Supplement to new pensioners, people with disability, carers and Newstart recipients will mean a cut of $14 a fortnight to single pensioners or $365 a year; couple pensioners will lose just over $21 fortnight or roughly $550 a year.
Beyond this budget, the Turnbull government hardly lifts a finger to lift the wages of low-income earners—or it champions cuts to take-home pay, by supporting penalty rate cuts which mean 10,000 workers, from Mount Druitt through to Blacktown, could lose $77 a week from their pay on 1 July, the very same day that millionaires get a $16,400 tax cut.
As to schools, the Turnbull government budget has slapped schools across Australia with a $22 billion cut. Parents across the Chifley electorate should burn with rage when they realise that $22 billion of funds that should be invested in their children’s education is being shovelled into a $65 billion cut in big business’s taxes.
The original Gonski report—the fair dinkum Gonski report—identified how education investment could bust clusters of disadvantage. Yet when I look at the very neighbourhoods where I know these clusters exist, the harsh reality is this: millions of dollars are being denied to those young Australians and their opportunities in life crippled and hampered by a government that could not care less.
Of the roughly $900 million cut from New South Wales schools, public schools in Chifley will suffer cuts of $31 million over the next two years. Over two years, Chifley College Mount Druitt Campus gets $5.9 million less; Plumpton High School, $1.38 million less; Doonside Technology High School, $1.36 million less; Hebersham Public School, $1.35 million less; Bidwill Public School, $1.14 million less; Lethbridge Park Public School, where the member for Barton once taught, will get $1.13 million less because of this funding deal. Rooty Hill High School will get $1.2 million less.
All of those areas will suffer cuts to education funding. We hear often from those on the other side the claim of intergenerational theft. This is intergenerational theft—ripping away money that would have helped so many young people in our area get a better education and, hence, a better start to life.
As to TAFE, there were budget cuts of $600 million more from TAFE and vocational education and training over four years. Locals trying to pick up valuable skills at Mount Druitt TAFE will inevitably feel the cuts.
For universities, up jumped the student costs by thousands of dollars. University funding was cut by $4 billion. At a time when we are supposed to be lifting the skills of future generations, we are underinvesting in the development of those skills.
On Medicare: the Turnbull government’s delay in reversing their freeze on Medicare by three years puts bulk-billing in our area at risk. In Western Sydney, bulk-billing is relied upon by the vast majority of doctors and patients. Nearly 99 per cent of doctors in the Mount Druitt area bulk-bill. If they have to start passing on these costs, charging more for visits, families will bear the brunt of this freeze every time they visit a doctor.
As to hospitals, the current low levels of hospital funding were not boosted in this budget. State governments have closed down wards—for example, the cardiac ward in Mt Druitt. In an area where heart disease is a massive concern, the State Government shut down the cardiac ward. No wonder when you see the cuts to hospital funding that you see hospitals in our area doing that—denying a vital service to people. This budget enables more of the same—residents having to sit through long waits in emergency rooms and long wait times for elective surgery in both Mt Druitt and Blacktown.
As I said earlier, this budget lacks a policy backbone, and the failure of the Turnbull government to deal seriously with housing affordability is a classic example. I would be stunned if there was an ability of the general public to point to just one thing ushered in by this budget that will make it easier for first home buyers to get their first home—just one thing.
A budget that said that housing affordability would be a central part of it is suddenly unable to deliver and refusing to tackle the hard task of pulling apart the distortion created by taxation concessions like negative gearing and capital gains tax discounts—again, no backbone in this budget.
On jobs, vital not only to western Sydney but obviously to communities across the country, the Turnbull government’s own budget papers show their inability to grow the economy and help create jobs. Nearly 100,000 fewer jobs are forecast for this year compared to the last budget. Their own numbers show up their claims of economic growth. This year’s budget forecasts higher unemployment, lower wages and lower GDP.
Just last week we saw the new labour stats announced. While more people are getting into work right now, there is a very slippery undercurrent. There are fewer and fewer full-time jobs available and fewer work hours to go around. People are feeling the pinch, but nothing in this budget reveals anything—not even a hint—of a jobs plan.
The government does a poor job of creating jobs and then those who cannot find jobs are placed into failing jobs programs. The Turnbull government said, for instance, in this budget that they had refocused Work for the Dole, but there is no detail around how they will improve that failing program. Remember: almost 90 per cent of Work for the Dole participants are not in full-time work three months after finishing the program — appalling!
The government announced the expansion of the National Work Experience Program but they have not even finished or published a review into the program, explaining why it is meeting expectations or not meeting expectations. There is little detail about how much this expansion would cost and no justification for its expansion or an expectation of what success would be triggered by.
Some new incentives will be provided to jobactive and transitional work providers as well as the National Work Experience Program post providers, but, again, there is very little detail around cost.
The government’s approach to jobs is all talk. They care more about tabloid headlines than actually helping find Australians work.
The latest thought bubble was the one that was ushered in by last year’s budget, the Youth Jobs PaTH intern program. Last week, the Employment Minister admitted that just over 100 interns have signed on to this program since it started in April. The harsh reality is that the government have to get 2,500 interns a month to meet their 30,000 annual target.
Australia’s labour market is in a weakened state, with wages growth at record lows and underemployment at record highs. But the Turnbull government have still not been able to explain how putting 120,000 interns into a shaky jobs market will not displace jobs that already go to paid employees.
I heard firsthand the impact of a weak labour market when I visited Western Australia, where the unemployment rate remains above the national average. There, the Turnbull government have watched the state’s employment services perform poorly compared to the rest of the country, but what have they done about it? They have not lifted a finger. In six Western Australian employment regions, the majority of jobactive provider sites scored only one or two stars out of five in the Department of Employment’s own evaluation system. Despite this poor performance, they have not made any changes. Jobseekers are still being left out to dry. They need to get serious about helping people find work.
On the digital economy — another portfolio area that I focus on — the Turnbull government have made cuts to education, skills and universities and are continuing to ignore the investment required to grow our digital economy. Start-ups feel like they have been abandoned by a Prime Minister who told us last year that it was an exciting time to be alive and agile.
As the CEO of StartupAUS, Alex McCauley, summed up this budget:
“Startups and entrepreneurs, once seen as the heart of the `Ideas Boom’ and the government’s economic agenda, were not mentioned in the Treasurer’s speech at all.”
We need a focus on their work. We need a stronger, more inclusive approach to advancing the innovation agenda in Australia to plan ahead for those who will be affected by technological change and automation.
In some cases, for example, manufacturing might see automation affect 50 per cent of the jobs that are performed there. Fast food, the generator of entry-level jobs for young and mature workers alike, could see 60 per cent automation.
We need to be doing the work now to build the skills of future generations of people, to ensure that there is an effective transition through that period and that people are looked after. We cannot afford to drop the case for innovation as has been seen by this government. And we certainly cannot afford to drop this in regional areas.
I noticed last week that the Turnbull government had sneakily pulled the handbrake on a $23 million program to help fund the set-up of regional incubators to start new businesses in our regions. During this program pause, which is simply Canberra-speak for a future cut to this program, it will be interesting to see what gets announced.
Great things are happening — for example, Runway Geelong and Silicon Paddock, initiatives that are occurring outside the cities to generate new enterprises and new jobs. And the support, right at the time it is needed, is being pulled by this government. It is unacceptable, particularly for regional Australia, to have that impact on them.
In the meantime we see stuff-up after stuff-up in digital transformation by this government, which has announced that it is spending not $5 billion that it inherited when it came into office but $10 billion right now—$10 billion on ICT, with no explanation about how the government is spending the money wisely, while at the same time cutting funds to education, cutting funds to innovation. Again, it is simply unacceptable to see that ushered in by this budget.
As I said, it is a budget that started to walk tall but is now in a slouch. It lacks backbone, it lacks discipline, it lacks focus and, importantly, the people of Australia are paying for that.