24 May 2011 

Andrew’s response to the 2011 Federal Budget.

Mr WILKIE (Denison) (17:57): While every federal budget is obviously important, this year’s seems even more so coming as it does in the aftermath of the global financial crisis and a shocking series of natural disasters. Having been prepared by the first minority federal government in nearly 70 years makes it all the more remarkable.

On balance I think the budget is a satisfactory but somewhat pedestrian effort; probably sensibly so as far as the government’s perceived political self-interest is concerned. It is pedestrian in that generally it gets the job done without dramatic initiatives and fanfare. It is sensible in that this point in time would be judged by the government to be the moment for the steadiest fiscal hand.

Where the budget greatly lets us down is the way in which it reflects the government’s determination to announce a surplus in 2013 in order to serve its political self-interest at the expense of the public interest. Of course, governments must run a balanced budget over the long term. But that does not mean short-term deficits are bad, or even undesirable, especially at times like these when Australia is dealing with genuinely extraordinary economic circumstances. So I feel very strongly that the government should have refused to let its economic agenda be dictated by the opposition and instead run the deficit out another 12 months to beyond the 2013 federal election.

The government also seems to have judged it would not be well served by additional and potentially controversial initiatives at this point in time. While the National Broadband Network, a price on carbon, the minerals resource rent tax and poker machine reform promise to make this government a genuinely reformist administration, the agenda is presumably judged by the Prime Minister and her cabinet as being full for now. Madam Deputy Speaker, just think of the opportunities a commitment to running the deficit out another 12 months or so would have created. The flood levy could have been avoided and any number of new initiatives embraced. The government could have allowed itself to think and speak even bigger and to do even more to answer the calls of those on the front line in our community who know more needs to be done and done urgently. Indeed, as part of my maiden speech, I offered the observation that every parliament is an opportunity to discard political self-interest in favour of the public interest and that doing so is only limited by lack of vision.

A more courageous government budgetary agenda could have included funding, or at least tangible forewarning, of the sorts of nation-changing initiatives I trust this government or its successors will eventually bring to fruition—for instance, a national disability insurance scheme to finally bring certainty and equity to the enormous number of Australians living with disabilities, as well as their carers; a big federal cash injection to finally bring fair wages to community sector workers; genuinely deep reform of public dental care; and substantial increases to pensions and payments so that students and the elderly, for instance, could at least afford warm homes and balanced diets. Defence Force retirees in particular, would be better cared for if the unsatisfactory indexing of defence pensions were overturned in favour of a system that at least keeps up with the cost of living. Yes, I do have a financial stake in such a reform on account of being a recipient of a DFRDB pension, but that should not stop me speaking up for retired defence personnel who served their country in good faith but who now find themselves increasingly left behind financially. Of course, such initiatives would cost a lot of money. But this is one of the richest countries in the world, with the means to care properly for our young, our old and our sick, among others. It is simply a matter of priorities overlaid by an approach to fiscal planning based on the public interest, not party political self-interest.

In fairness to the government, though, the budget did go some way to realising my vision for Australia, perhaps most notably in the commendable revitalised mental health package which heralds a not insignificant injection of new funding across a broad range of mental health areas. One does not have to look very far to discover just how many people’s lives are being destroyed by mental illness. Indeed, in the short time since being elected to parliament, I have become acutely aware of the fact that we have reached a mental health crisis point. Just last week, one of Hobart’s most important community based service providers—Colony 47’s Community Central, which is a mental health drop-in centre that has been running for some 30 years—announced that it will be forced to close its doors at the end of the month, unless my plea for additional federal assistance can be accommodated.

Moreover, I recently met with a company in Hobart who are enlisted by local job service providers to help determine the mental health needs of unemployed job seekers, many of whom are long-term unemployed. Over the past two years, they have conducted over 600 clinically based mental health assessments using mental health nurses or clinical psychologists. Those assessments identified a level of mental illness among assessed job seekers close to 10 times the assumed national average. Furthermore, they found that a staggering 80 per cent of the cases of mental illness were previously unrecognised by the job seeker themselves, the employment service provider or the broader social security system. There is clearly a serious mental health problem in this country and there is a compelling case for mental health services being accorded the same priority for funding as GP and hospital services. I would just like to say thank you to the former Australian of the Year, Professor Pat McGorry, for his tireless advocacy, which no doubt was in the mix when the government was putting this budget together.

Not unrelated is the government’s welfare-to-work push, which was another significant element in this year’s budget. In essence, I fully support measures aimed at removing barriers to work and increasing workforce participation. And I agree with the government that there is a need to encourage those that are fit and able to find work. But such measures must be based on a person’s genuine capacity to work. Whether it is a long-term unemployed job seeker suffering from an undiagnosed mental health condition, or somebody who has suffered a physical impairment, the government has a clear responsibility to ensure it does everything in its power to determine their capacity genuinely. In other words, I am concerned that some of the measures contained in the welfare-to-work package could be unfair, particularly but not exclusively for recipients of the disability support pension. The government runs the risk here of frightening and demonising genuine recipients and potentially pulling the rug out from under some of the most vulnerable people in our community. To do this on account of a short-term political fix would be cruel.

On a brighter note, the budget did contain some very positive outcomes for the Denison electorate, for which I am grateful—for instance, the maintenance of funding and, in fact, a modest increase for the National Health and Medical Research Council, which is a vital source of funding for the Menzies Institute in Hobart. I was particularly delighted with this outcome, given that I had lobbied the Prime Minister, the Treasurer, the Minister for Finance and Deregulation, the Minister for Health and Ageing as well as the Minister for Innovation, Industry, Science and Research for NHMRC funding to be maintained. Another significant win I had championed was the need for federal government funding for the Prostate Cancer Foundation, and I was very happy to see $3.9 million allocated to prostate cancer support services over the next three years This is an unprecedented development as the foundation does not receive federal funding currently. Also on the health front, the budget confirmed full funding of the $340m for the Royal Hobart Hospital redevelopment, as well as the inclusion in Medicare of a privately operated MRI scanner in Hobart. More broadly, the $20 million funding I negotiated for the continued operation of the CSIRO Information and Communications Technology Centre was also reflected in the budget.

The government has defied the sceptics and proven remarkably stable. This is as it should be, because an election outcome represents the democratic choice of the Australian people and it is up to the 150 men and women elected to get on and do all they can to stand up a workable and effective parliament. For my part, I remain comfortable with my decision to give certainty of supply and confidence to Julia Gillard, and I am happy to say that my pledge of limited support is unaltered. So I will be voting for the appropriation bills that reflect this budget and trying not to sabotage the budget when associated enabling legislation comes before the parliament. I will not like some of that legislation, because I do not like all aspects of this budget. But my promise to ensure supply, by implication, also means I will support the enabling legislation that underpins the government’s broad economic agenda.

That is not to say that I will not seek to have amended any legislation warranting change. For example, the proposed changes to the taxation arrangements for minors seem to have shortfalls. While I am fine with the notion of stopping high-wage earners disbursing income to children in order to minimise personal income tax—something I have done myself through my own family trust—I do have a concern, for example, about the way the return on a young person’s invested inheritance would be hammered with a 66 per cent tax rate. Nor am I obliged to support carte blanche items that are carried forward in the estimates as part of previous budgets, two of which I would like to briefly flag as I will have difficulty supporting them.

The first is the proposed excise on LPG as part of the government’s alternative fuels legislation. This tax will have a patently disproportional effect on Tasmania, to the extent that I am very concerned that the market in Tasmania for auto LPG could collapse altogether. LPG is already as much as 20c a litre dearer in Hobart than it is in Melbourne or Sydney, and this excise will push the price of LPG so close to the price of petrol that it would scarcely be a viable alternative fuel.

The effect on the Tasmanian taxi industry in particular would be catastrophic. The Tasmanian state government incompetently flogs off taxi licences every time it needs some cash, to the extent that the taxi fleet in greater Hobart is now seriously bloated and the drivers must work ridiculous hours. So I cannot, in all conscience, come into this place and support a tax that will reduce their meagre earnings even more.

Another measure from past budgets I would like to briefly mention here is the proposal to apply a means test to the private health insurance rebate. My instinct is to support measures that promise better public health care, even if doing so is at the expense of high-wage earners such as me. So, at first blush, I may be expected to support the introduction of a means test for the rebate. But I am also concerned that this means test will result in people forsaking private health insurance for the already stretched public system. And I am worried that health insurance premiums will rise significantly, forcing even more people into public hospitals and onto waiting lists. Not insignificant too is that governments of all persuasions have effectively forced us into greater reliance on private health insurance on terms including the rebate.

In short, we have to be careful we get the balance right and, while I remain open-minded, I am yet to be convinced by the government that means testing the health insurance rebate is the most sensible thing to do right now.

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