BILLS;Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014;Second Reading – 17 Nov 2014

 I rise to speak on the Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Bill 2014. This is the bill the Senate should have considered five months ago. It is a bill which contains sensible savings measures—measures which the government could have had passed through the Senate with the opposition’s support if they weren’t so stubborn. The government knew that their social services budget measures Nos 1 and 2 bills would not get through the Senate in that form, and yet they persisted with their all-or-nothing approach.

The result is that the savings measures which can be supported are now going to be passed a few months late. They are going to be passed late because, unlike the previous Labor government, which negotiated a record amount of legislation in minority government, this government does not have the skills or the temperament to negotiate effectively with the opposition or crossbenchers in the Senate.

The savings the government put forward in the original social services bills—the bills which implemented some of the worst elements of their cruel and heartless budget—were supposed to be in response to a so-called budget emergency. But we know that the budget emergency is simply a political tool to try to make their claims of an economic disaster a self-fulfilling prophecy. Perhaps they hoped that the harshest, cruellest measures of the budget would pass the Senate and that Australians suffering their cruel cuts would blame Labor for their pain. But the Australian people are much smarter than that. They can see through these amateur parlour tricks. The budget emergency is not looking like an emergency at all. It is not looking like a real emergency, because the government are not treating it as such.

I will use a simple analogy to explain what I am talking about. Imagine the budget emergency is a house fire. What would our emergency services do in response to a house fire? More importantly, what would they not do? First of all, they certainly would not add more fuel to the fire. Yet that is exactly what Australia’s Treasurer, Mr Hockey, did immediately after getting into government when he doubled the deficit; when he gave an $8.8 billion gift to the Reserve Bank of Australia, against the advice of his own Treasury department; and when the first legislative priority of this government was to deliver tax breaks for big polluters and billionaire miners.

If there were a real emergency, the government would not destroy the house in order to stop the fire. After all, the government have had the gall to claim that our standing of living is under threat unless we accept their savings proposals. But many of their savings proposals fundamentally undermine the very standard of living that the government purport to defend. It is precisely because of standard-of-living issues that Labor rejected the cruel proposals in the original version of this bill, which would have cut pensions by $80 a week over the next 10 years, which would have cut family tax benefit part B for families—including single parent families—when their youngest child turned six and which would have seen young unemployed people going without any income whatsoever for six months of every year.

If the government believe that the way to maintain Australians’ standard of living is to plunge seniors, young job seekers and families into poverty, then they really are trying to have their cake and eat it too. Our fundamental sense of equity and fairness, the idea that everyone has the right to a safety net that guarantees them a fair standard of living regardless of their circumstances, is a foundation stone of Australian society. And you do not save a house by pulling down its foundations. Finally, if there were a real emergency—to use our house fire analogy once again—they would try and douse the flames of the fire as quickly as possible. In other words, they would take whatever agreement on savings they could, when they could.

You will hear those on the government benches claim that Labor are not playing a constructive role or that we are standing in the way of so-called budget repair. This is rank hypocrisy from a government which already doubled the deficit shortly after coming to power. Not only is this claim hypocritical; it is fundamentally false. For example, we have put forward the sensible and constructive suggestion that the government dump its costly, ineffective and wasteful Paid Parental Leave scheme, the scheme that is rejected by business, rejected by the unions, rejected by sensible economic commentators and even rejected by some of the government’s own experts in the Productivity Commission, who said that a wage replacement scheme would have ‘few incremental benefits’ over the highly successful scheme that Labor put in place. The bill we are considering right now is also strong evidence that this claim is false, because Labor have shown that we will accept sensible savings measures when the government puts them forward.

I will go back to what I said at the start of this speech. This is the bill that the government could have—and would have—had passed by the Senate had they introduced it five months ago. It implements those savings measures that the opposition agreed to support from the Social Services and Other Legislation (2014 Budget Measures No. 1) Bill and the Social Services and Other Legislation (2014 Budget Measures No. 2) Bill. There are a couple of relatively minor expense measures, and the financial impact statement shows the net effect of the measures in the bill to be a saving of about $2.7 billion over the forward estimates. But the Abbott government have been so determined to push ahead with their harsh, cruel and unfair proposals—cuts to pensions, cuts to the family tax benefit and cuts to income support for young job seekers—that they rejected the cooperation that Labor was offering on passing the savings measures contained in the bill we are now debating.

As a result of this government’s stubbornness and this government’s pig-headed arrogance, it has had these savings measures delayed by five months. These are not the actions of a government that is dealing with a so-called budget emergency, and that is because there is no budget emergency at all. There is no burning building. There is just a group of people on that side of the chamber running around yelling, ‘Fire, fire!’ and hoping that, if they yell it loud enough and for long enough, the Australian people will believe them. It is pretty juvenile behaviour from a government that is claiming that the adults are back in charge.

We know there is no budget emergency because 63 eminent Australian economists signed an open letter clearly stating that there is no budget emergency. In fact, the economists claimed in their letter:

… Australia’s ability to manage public debt is very strong.

They said that Australia is not facing ‘any present or imminent debt crisis’. In a major inconvenience to this government and its narrative, the economists warned that severe spending cuts would hamper job creation and economic growth. In fact, the open letter states:

Major spending reductions by the Commonwealth government are economically unnecessary and socially damaging.

I will come to the ‘socially damaging’ part a bit later on. I repeat: ‘economically unnecessary and socially damaging’.

The actions of the government to date—their new spending commitments, their axing of revenue streams, their wasteful projects like the gold-plated Paid Parental Leave scheme and the widely ridiculed Direct Action—combined with their lack of urgency to secure Senate support for reasonable savings measures, indicate that the government do not really believe in their manufactured emergency anyway. If it were a real emergency, we would have seen this bill in this place five months ago when the original bills were introduced.

The truth is that the budget emergency is a fiction. It is a political tool designed to fool Australians into thinking that Labor left this government with some kind of fiscal disaster. How inconvenient for the government that Australia’s leading economists have so comprehensively rebuked this narrative. I think it is about time that the government dropped this ridiculous pretence that somehow it had no choice but to adopt the cruel cuts that it put forward in the original bills. Labor does not accept the premise that there is some budget emergency in urgent need of repair. Australia’s leading economists do not support the premise. It is clear from the government’s actions that it does not accept the premise either, at least not for anything but some cynical political stunt which is turning into quite a comical charade.

Even if we did, for argument’s sake, accept the premise, how could that possibly excuse the abject cruelty that this government seeks to unleash with its welfare changes? Let us not forget that, despite the humiliating backdown which led to the government introducing this bill in this place today, it is still committed to its original social services bill. It is still committed to the most cruel and painful measures at the centre of its heartless budget, the measures which attack the most disadvantaged people in our society and which easily have the potential—and I am not exaggerating here—to push people who are already vulnerable into starvation, poverty and homelessness.

It is interesting to reflect on the fact that only a few weeks ago it was Anti-Poverty Week, and this government marked the week by pushing ahead with measures that will further entrench poverty and disadvantage. After all, what options does a young unemployed person have if they have no family support, cannot get a training place and face the prospect of going six months without any income? What options do a family have, particularly a single parent family, when their budget is stretched to the limit and they face the prospect of losing $100 a fortnight of family tax benefit?

The Australian people have already been loud and clear in their rejection of this unfair budget, so why is the government persisting? It is as if it is determined to unleash as much cruelty as possible on the Australian public and keep trying to blame Labor for the consequences. That cheap political trick will not work, because the Australian people are a lot smarter than that. They know that budgets are about choices and that there are plenty of alternatives available to the government other than attacking pensioners, young job seekers and low-income families. For example, the government did not have to hand over $8.8 billion to the Reserve Bank against the advice of Treasury. It did not have to give a tax break to some of Australia’s wealthiest mining companies or to Australia’s 16,000 richest superannuants. It did not have to write out $50,000 cheques to millionaire mums.

Australians understand the sensible, fair alternative savings that are available to this government. They are fully aware of the choices that are facing this government. But this government takes the Australian people for fools, because it is trying to convince the Australian people that it is being forced to unleash abject cruelty on the most vulnerable people in our society. It wants Australians to think there is no choice other than to attack the pensions, the incomes and the standard of living of the poorest and the most disadvantaged. It wants Australians to think that there is no choice other than to force millions of sick Australians, particularly pensioners, into choosing between food or heating or their health. Well I want the Australian people to understand this: this government was not forced to be cruel; it has made that choice. This government has made a conscious decision to be cruel. It has made a conscious decision to launch an unprecedented attack against the social fabric of our society, against the standard of living of some of the most vulnerable and disadvantaged people in Australia.

The government has, of course, accused Labor of being alarmist when it comes to our claims about the impact of its budget. But when we on this side of the chamber talk about the true impact of this cruel budget, these are not just our claims. They are the claims of the many community organisations who have given evidence to Senate inquiries about the frightening extent of the harm these budget proposals could do to vulnerable Australians. Inquiries such as the Senate’s community affairs references committee inquiry into out-of-pocket expenses in Australian health care, the committee’s inquiry into the extent of income inequality in Australia—both of which I have participated in—and the community affairs legislation committee, which conducted an inquiry into the two original social services bills that preceded the government’s humiliating backdown.

This latter inquiry heard evidence from ACOSS, from welfare agencies such as the St Vincent de Paul Society and the Brotherhood of St Laurence, that the changes to Newstart would increase levels of poverty and homelessness. It heard from organisations like the National Welfare Rights Network and the Council on the Ageing that the changes to pension indexation meant that pensions would not keep pace with the true cost of living for pensioners. And in relation to family payments, the inquiry heard evidence that the government’s budget would leave a single-income couple or family on $65,000 with two school aged children around $6,000 worse off each year by 2016, in large part due to the measures in those bills.

The changes to income support for unemployed people under the age of 30 could easily be described as the harshest welfare measure ever proposed in Australian history. If a young person goes six months without income, how will they pay to live, for accommodation? Where will they sleep? What will they eat? How will they clothe themselves? How will they even be able to afford to apply for jobs? I can just imagine this measure, if it were passed by the Senate, leading to a wave of homelessness and potential depression and suicides the like of which Australia has never seen before. And it will be down to those opposite if that happens. I can just imagine social welfare organisations struggling to meet the demands of tens of thousands of additional people needing their support when their resources are already strained. These organisations are already under increased pressure, and to shift the responsibility of helping so many young Australians is completely heartless and very thoughtless.

Welfare spending in Australia is not out of control. The truth is that Australia has one of the most sustainable and best targeted welfare systems in the world. In 2001, 23 per cent of working aged people received a welfare payment each week. By 2011, this had dropped to 18½ per cent. Australia’s welfare spending is 8.6 per cent of national income, and this is compared to an OECD average of 13 per cent. In fact, the only OECD country with a lower welfare bill in percentage terms is Iceland. So is Australia’s welfare system sustainable and well-targeted? Of course it is. Can our welfare system be better targeted? Of course it can, and that is why Labor is accepting the savings measures put forward in this bill. But what we will not accept is cuts to income support payments, which would completely undermine the social safety net that is the foundation of our income support system. We will not accept cuts that push Australians further into poverty and tear apart our social fabric.

There is no budget emergency and there is no welfare spending crisis. And even if there were, it is still no excuse for the horrific suffering that this government proposes to unleash on Australia’s most vulnerable and disadvantaged people. Labor support the measures in this bill, but continue to oppose the remaining cruel, heartless measures in the original bills—measures which the government stubbornly insists it is determined to press ahead with. We will continue to fight these changes. We will fight cuts to pensions, cuts which Mr Abbott said before the election would not happen. We will fight the government’s harsh attacks on families and we will continue to fight proposals which would leave young people struggling in poverty and destitution for months on end. We will fight these cruel cuts in the community, we will fight them through the media and, yes, we will also fight them in the parliament.