14 May 2014



SUBJECT/S: The Abbott Government’s Budget of Twisted Priorities and Broken Promises.

CHRIS HAMMER: Well good morning and welcome to breaking politics, it’s the morning after the night before the Federal Budget. Economists like it and businesses like it, but welfare groups are most concerned about it. Now the big sell starts for the Government, Tony Abbott has been out early this morning selling the Budget. Now joining me in the studio we have Labor MP Michelle Rowland, Member for Greenway in Western Sydney, a very sensitive seat politically, and also Senator John Madigan from the Democratic Labour Party. Can I quickly get a reaction to the budget? Michelle first, what are the items in this Budget that Labor is going to oppose?

MICHELLE ROWLAND, SHADOW MINISTER FOR CITIZENSHIP AND MULTICULTURALISM: We are especially concerned about the broken promises in the areas of health, on taxes – on fuel in this case – and also the impact on families and pensioners. So we are especially concerned about the implications that will arise from the co-payment that will be applied to visits to your doctor. We are also concerned about the cost of living implications that arise out of the increase in the fuel excise, not only for families, and you mentioned very sensitive in Western Sydney, we are the people who do the most commuting as well, on the outer metropolitan fringes of Western Sydney. But add to that the cost that won’t be absorbed by the tradies, the plumbers, the builders and so forth who will simply absorb that into their own costs and pass it onto consumers, a huge concern there. The promise the night before the election, one of the promises of no changes to pensions. That is a clear breach of trust, it is a broken promise, Tony Abbott lied. He said one thing before the election and is doing another thing afterwards. Pensioners are already doing it so tough and to have these changes put upon them will be absolutely detrimental to their standard of living.

HAMMER: Okay Senator Madigan, Michelle Rowland has nominated several areas there where Labor disagrees with the Budget strategy: Medicare co-payments, changes to pensions, fuel excise. Where do you stand on those issues?

SENATOR JOHN MADIGAN: Ah look, Michelle and I see pretty much eye to eye on many things there and I think the point that should be made is that it’s the people who’ve got the least in our country, who are being expected to pay the most. I mean put yourself, as Michelle said, in the position of a person who lives in Western Sydney or in the outskirts of Melbourne who has to travel a long way to work. People in these areas have a lack of public transport so most of these people to get to their work have to travel by car, and if they’re working a night shift, or after day shift, they are living in areas that are poorly serviced by public transport and are highly dependent on their cars. The next thing is that families are getting very hard hit in this Budget, and they are future Australians, they are future tax payers. We know as a nation that we have an aging population, yet the people who need money, to give our young people hope, to equip them for the future are having the daylights kicked out of them. Then of course we move to the car industry with the pull out of Holden, Ford and Toyota, the effects on our components manufacturers and how they were trying to transition good faith to build the jobs of the future. The people in these industries are real people with real skills, real jobs and they have had a big slug hit on to them, because there are indeed commitments that have to be made to purchase equipment because there are times with things developing new markets and they’ve been promised one thing not long ago and have just been kicked in the guts.

HAMMER: Now the former Prime Minister John Howard this morning, as might be expected, has largely supported the direction of the Budget. But he has been critical of changes to Family Tax Benefit B, a benefit introduced by the Howard/Costello Government and particularly supported single income families. Is that something you would oppose in the Senate?

MADIGAN: Yeah well look at the effect on families, and as I was saying, these were John Howards battlers and they are still the battlers in our community. And if we don’t have families, we don’t have anything. These people need support and the abolition of these families supplement tax benefit, if we don’t support families we will have more drug and alcohol abuse, domestic violence, vandalism and mental health issues. These things are a huge burden on the community; they cost a lot of money. We’re talking about people, we’re talking about realities, we’re talking about people without disability pensions. There seems to be in this Budget, a disconnect.

HAMMER: Okay Michelle Rowland the Budget has been presented as one of sharing the pain around, of being equitable. So is something like the deficit levy, the temporary tax surcharge for high income earners, that would be something Labor would find difficult to oppose wouldn’t it?

ROWLAND: I’ll make a couple of points there Chris. Firstly, the measure you mentioned is one element of the Budget in which I would say is actually regressive in terms of the impact it has on some of the most vulnerable in our society. We will be having a look at all of the measures in the Budget over the next couple of days. But before the election, I think we need to remind ourselves, that we had so many people who went to their ballot boxes, with Tony Abbott promising, it was the night before the election in Penrith, the good people of the surrounding electorates came and there he was in the electorate of Lindsay. They went to their polling booths the next day and voted for Fiona Scott, or in Barton where they voted for Nick Varvaris. Margins, in the case of Barton for example, with a couple of hundred votes, less than 500 votes. Now these people were elected on the back of promises, including that the incoming government would not be a government of increased taxes. Now clearly that has been a broken promise, clearly that was a lie. But I think that the most important thing to realise, and I think the point was well made by Senator Madigan, that the regressive components of this Budget really outweigh any progressive measures we may identify. I think the impact on families in particular; they have already been hit by cuts, cuts to the school kids bonus, cuts to many other services. Their cost of living is going to increase when they have to fill up their petrol tanks, their cost of living is going to increase every time they or their children have to go and see the doctor. These are families who are doing it tough and who are making ends meet and contributing to society in many important ways and here they are getting slugged.

HAMMER: Okay Senator Madigan, you two are from different political parties but are pretty much on the same side of the sheet this morning. With the new Senate, some of these new appropriation bills will pass the Senate, but some of these co-payments, fuel tax, indexation changes to the pension will need to go through the parliament. Can you see in the new Senate, there being an alliance between Senators of different backgrounds joining together to block these changes, is that a real possibility?

MADIGAN: I think that the Senate has the duty to fulfil its role, and its role is a house of review. The role of the Senate is not to bludgeon the government, nor is it the role of the small minor parties to bludgeon. Now we are entrusted with great privilege, it’s not a right, it’s a privilege and our job is to give a voice to those who do not have a voice. Now it’s plainly obvious if you’re here today, from this Budget, that there are a lot of disconnected people out there. Those people deserve to have a voice along with all Australians, and all Australians need to make a contribution. But the fact of the matter is that some of us have greater means to make a contribution than others. Now I had a chap ring me last night and he said to me, ‘the impression I had is that as a higher income earner’, probably on about $175 000 a year he said to me, ‘John what I was expecting was that I would be paying more tax’. So last night I’m looking at the papers and then you see when they earn over $190 000 those people were going to be paying 2 per cent tax, but it’s not, when you look at the Governments papers, it’s $200 over the next three years. The point I’m making here is that it’s doing a very good job of making people think that we’re all going to be contributing according to our means. But the fact of the matter is that we’re not, because if you’re earning, as in my case I’m earning a lot more money that the other people in the community, the vast majority in the community does not earn anything like $190 000, that’s the reality. My ability to pay more tax is greater than somebody living in West Melton in Victoria. Where I know a bloke earing $42 000 a year who’s got three children, one of his children needs grommets in his ear. He’s told to go on the waiting list, he’s never been on the dole, he pays his tax every week, his little boy can’t talk all that well because he can’t hear. Now do you think if my child needed grommets that I couldn’t afford to get them for him? Well that’s rubbish I can, but he can’t, and he’s not bludging on the system and he deserves a fair go.

HAMMER: Okay so in the Senate, what are you going to do? What are the areas where you are interested in talking to other Senators with the Labor opposition to say ‘no, this is a bridge too far, we need to block or we need to amend’? What issues would be coming up?

MADIGAN: I think that I’m keenly looking at the effect on families; I’m keenly looking at the effect on industries and jobs because if people don’t have a job, the sense of self-worth and engagement with possible employment goes down the pot. The Government talks about innovating and that other people have to innovate; well it’s about time that Government innovates. We have a Budget which has just gone for the low fruit and it’s putting the impact on those who can least afford it and are under the most pressure.

HAMMER: Okay now Michelle Rowland, there’s something like $80 billion in cuts over the next decade in education and health. Do you think that the Government is essentially cutting back funding to the States so much on those issues that the States really have no other choice but to support increasing the GST?

ROWLAND: Well one can speculate on that, but a couple of things are clear. Firstly again, there was a very clear promise that there would be no cuts to health or education: broken. Gonski, there’s no difference between Labor or Liberal when it comes to Gonski educational reforms: promise broken. I think one of the sad facts will be that we will go back to a situation of the blame game between Commonwealth and State on very serious issues. Particularly in health, where there has been so much cost shifting over the years and Labor put in significant funding reforms to end that blame game and to actually make sure hospitals were funded effectively, the health system work appropriately and that schools were given resources based on need. That’s gone out the window. I really fear for what is going to happen, particularly in areas of higher need, areas where some of the most disadvantaged children are going to schools that need extra resourcing. Many of whom I represent. Hospitals where waiting lists and emergency times have been below par, again many of whom I represent. This is supposed to be a Budget, Joe Hockey said last night, that it’s supposed to be a Budget about people. Well you know what’s going to happen to these people? They are going to have longer waiting times in hospital, they are going to have kids who are not going to get the support that they need when they go to school. The States will have to somehow find a way to make up that shortfall, and it’s not just State Governments when we talk about cost shifting: $1 billion cut from Councils last night in the grants that go to Councils. Every time that people open their rates notice and it’s had to go up because Councils can’t cover the cost shifting shortfall, people should thank Tony Abbott for that rate rise, again lowering the cost of living. The main point I will make Chris is that if it is supposed to be a so-called Budget about the future, it’s not a future of innovation, it is not a future where jobs are the underlying investment in our society. It’s one where apprentices, the whole apprenticeship model, is completely torn down. Where are we supposed to have the skills in our society to build all of these infrastructure programs that have been talked about? They simply won’t have the necessary skills to do these important jobs like engineering and building and so forth. All those trades, out the window. If this was going to be a Budget of the future, it would have at least set some sort of bench mark for making sure that people have the capacity to increase their human capital, and that the social capital of society would be enriched as a result. There’s nothing in this Budget about that. I completely reject and actually find it offensive for the Treasurer to talk about this as the Budget for the future, because it’s simply not.

HAMMER: Okay, Michelle Rowland, Senator John Madigan, thank you so much for joining us today. That’s all on Breaking Politics for this morning, be sure to be watching when we live stream Question Time later today. Until then, enjoy the rest of your day.