Hansard Transcript, May 27, Cathy McGowan Calls for Greater Spread of Debt and Deficit Burden
Posted May 28, 2014
CATHY McGOWAN (Indi) (11:55): This evening I rise to speak about three things in relation to the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and related bills. To begin with, I will outline the budget impact tour I am undertaking across my electorate of Indi to ensure that I understand and represent my constituents in this budget process. I will talk about what I have heard from my constituents in regards to the temporary budget repair levy and other budget initiatives.
Secondly, I will point out the inequity in the fact that high-income earners stop contributing to the budget deficit in 2017 just as average Australians begin to experience the hardest cuts. Finally, I offer an amendment to this bill to ensure that the debt and deficit burden is shared more equally across all Australians. I would also like to acknowledge my pecuniary interest in this legislation.
Since the budget was delivered on 13 May, I, my staff and a large team of volunteers have been travelling the length and breadth of Indi, undertaking the Indi budget impact tour. At several listening posts across the electorate, we have been talking to hundreds of constituents in order to understand their opinions, concerns and ideas surrounding the 2014-15 budget. Hundreds more constituents have contacted the office via the website, phone or social media. All this information is currently being distilled into a report which I will soon present in this place and use in representing Indi.
I must say the opinions have been broad-ranging. One aspect of the budget that has drawn support is the temporary budget repair levy. This levy will increase taxes by two per cent for those earning over $180,000—including me. Only 2.3 per cent of Australians earn over $180,000. The government's debt levy will raise $3.1 billion over the forward estimates. This levy will apply for three years, starting on 1 July this year and finishing on 30 June 2017.
However, many of my constituents are concerned other aspects of the budget. I draw the attention of the House to the following points. The significant cost-cutting policies in this budget begin in 2017, such as: reducing the income threshold for the repayment of HELP loans, the reduction in the indexing of pensions to CPI rather than wages, and the reduction in funding to hospitals and schools. These policies primarily rely on average Australians contributing to reducing the budget deficit by paying more and receiving less from government.
Most importantly, from 2017, the most significant impact of the budget will be experienced by average Australians whilst those earning over $180,000—which includes me—will no longer be contributing to reducing the budget deficit. Many people in my electorate point out to me that most people do not earn that amount of money; $180,000 a year is a lot of money. To put it into the Australian context, the Bureau of Statistics does not record income brackets higher than $104,000 per year. Only five per cent of Australians earn over $104,000 per year, and in Indi it is only two per cent of people. Therefore, it is safe to say that less people in Indi earn $180,000 than the national average.
My constituents will be doing more to repair the budget deficit from 2017 onwards than high-income earners, including me, across Australia.
Independent research supports my view that the debt and deficit levy is not being fairly spread across income brackets. Someone earning $190,000 per year will pay an extra $200 per year, or a total of $600 for the deficit levy over the next three years. Research from the National Centre for Social and Economic Modelling demonstrates that low-income families with children are the main group to be impacted by this budget. High-income families and singles and couples without children are shown to be largely unaffected by this budget in either the short or the long term. The report goes on to say that couples with children will be worse off by around 6.6 per cent while single parents will be worse off by around 10.8 per cent on average. The report also says that high-income families are marginally better off thanks to the planned removal of the carbon price.
The government believe that there is a serious debt and deficit problem and they believe that this debt burden must be shared. Extending the temporary deficit levy for a further four years will raise at least another $3.1 billion to go towards tackling the debt and deficit challenges faced by the government and this country. To ensure that the debt and deficit burden is spread more fairly amongst all Australians, I move to the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014:
That all words after “That” be omitted with a view to substituting the following words:
“whilst not declining to give the bill a second reading, the House calls on the Government to extend the period of the budget repair levy until 2020-21 to ensure the debt and deficit burden is spread more fairly amongst all Australians.”
In closing, I address my colleagues on the other side of the House. If the government truly believe, as many of my constituents do, that government debt and deficit in Australia is so serious, I request they support this amendment to spread the debt and deficit burden more fairly amongst all Australians.
The DEPUTY SPEAKER (Mr Craig Kelly): Is the amendment seconded?
Mr Wilkie: I second the amendment. I applaud my colleague the member for Indi and reserve my right to speak.