The Together Party - Budget Speech - April 2 2019
Winners and Losers
Our federal budget sets the priorities of our country. The budget is massive. $500 billion. A third of our economy. In making our spending and revenue choices, Australia picks its winners and losers. Year in, year out. In 2019 we need to pick new winners. Together believes it’s time for a fairer, better budget. Over the last generation privatisation and trickle-down economics have created a more unequal society, one that benefits the better off over the less well off, one that suits our markets more than us. We have backed property investors over the homeless and renters. We have backed coal over the environment. We have reduced the ABC to a rump and funded sport on cable TV. Our corporate and tax regulators have been asleep at the wheel. Together says we need more bang for our budget buck. We need a budget that prepares us for a future rather than an election. We have 6 new initiatives that offer a bolder vision of Australia. That is what I want to talk to you about tonight.
Background – our economy
Australia is the world’s 10th biggest economy. Our nominal GDP is just over $1.5 trillion a year. We are ranked 3rd on the Human Development Index because of our quality of life and institutions: our courts, markets, free elections, health care, education, and social security system. These institutions give life to our prosperity and social harmony. They are our common wealth. And we should celebrate it. From the Snowy Mountains scheme to Medicare. Built by government, working with the people of Australia, through taxation, government bonds, even lotteries. As we all know, but easily forget.
Privatisation became bi-partisan policy in the 1980s. Together believes privatisation has gone too far. Look at the banking sector, the energy industry or how we’ve turned water – the stuff of life – into a commodity. We need profits but not at the expense of working people. We need private enterprise but not at the expense of cohesive communities. We need tax incentives for the businesses of tomorrow not the vested interests of today. We need better regulation. Government policy leaves far too much to markets, and markets are designed to look after themselves, not us.
When we talk about budgets, we focus on the deficit. The budget is likely to return to surplus this year – mainly due to revenue flowing from good commodities prices. But how often do we consider what the budget really does in the first place? You might not know how our we spend our budget of $500m. Here’s a birds-eye view based on our 2018 numbers:
$79b on health - 16 per cent
$31b on defence - 6 per cent
$35b on education - 6.5 per cent
$176b on social security - more than a third of total spending
$68b on states and territories
$3.64b on recreation and culture – including the ABC and the arts
3.1b on housing - historically a huge part of government spending but not so now.
These numbers are not set in stone. We have much more room to manoeuvre that we realise.
The Need to be Bold
The government’s budget tonight may well include measures to help its efforts to be re-elected. I do not want to focus on that. The opposition in reply might propose changes to negative gearing or franking credits. We encourage the opposition to do that.
We want to focus on our agenda. We want to be bold. Because Australians are bold and adventurous. We win academy awards, we’ve led the World Bank and win World Cups.
Australian needs to rebalance. At different times in our history we have made big decisions in our budget. When we introduced superannuation or the GST, when we privatised the Commonwealth Bank and Telstra. It’s time for new big decisions.
Together’s Funding Priorities
Together wants Australia to take 10% of its budget – that’s $50 billion - and spend it differently, to invest in 6 new initiatives:
A Climate Economy Fund - $10b – to invest in renewables generation, an emissions trading scheme, repairing our rivers and reefs, supporting new businesses and jobs. We are not responding to climate change but building a Climate Economy that is the future of Australian business and workers.
Homes for all Australians - $10b – to build homes for the homeless, for renters and first home buyers, government needs to get back in the game of making homes for our people. House prices may fall for some but the overall social benefit will be greater. All Australians deserve a home.
Our Learning Nation - $10b - for funding places at university and TAFE for lower income students, investing in research - real R&D - and innovation, and developing a national curriculum. We can lead education in our region but should not be dominated by commercial goals. We should also be reinvesting in public education.
More Medicare - $10b – for better public hospitals, for access to specialists for all Australians, and including dental services and ambulances in Medicare – with increased spending for older Australians and indigenous Australia.
Better Society - $5b - to double the ABC budget, arts funding and legal aid, creating a federal ICAC including community representatives, a national domestic violence action plan; and working with indigenous Australia to accelerating progress to a treaty and a republic.
Trickle Up Economics - $5b injecting into new business start-ups, grass-roots social enterprise, regional businesses including agriculture, with enhancements for NDIS and Newstart, and trials for universal basic income. We need a new culture of innovation, risk-taking and investment.
Other specific measures we support are:
spending $12 bil on state schools and $8 bil on non-government schools
double spending on indigenous health to $2 bil s
funding free ambulances rather than school chaplains – to the tune of over $200m
using the Banking Levy to start a publicly owned bank - $2 billion.
$1b to toughen up corporate and tax regulation especially at ASIC, APRA and the ATO.
How can we do it?
We can fund our vision by shuffling the deck of existing budget spending and tax concessions:
moving subsidies for fossil fuels into Climate Economy projects – over $10 billion
winding back negative gearing and super concessions to fund Homes for All Australians – at least $13 billion
reversing defence spending rises to fund Our Learning Nation – generating around $8 billion
moving billions from off-shore detention into Better Society projects – $4 billion plus
taxing foreign companies with high turnovers who shift profits overseas – around $10 bil
royalties for natural resource exploration – around $5 bil.
We know Australia can do this. We can - by moving money from the current winners to new winners.
Action on Tax
Together wants serious action on corporate tax. The research on tax is widespread. Companies like Exxon, Energy Australia and Ikea need to pay their fair share.
Tax doging is a huge and complex area. One report shows that the 40 top tax dodgers generated $360 bil in revenue and paid $30 million in tax over the last 3 years. It’s a scandal. We are allowing our economy to be used by large corporates, many based overseas, to plunder us for profit. And the complexity and tedium of the issue allows companies and their advisers to get away with it. The amounts Together are claiming are small compared to what corporates should be paying.
The question this budget poses is: what kind of society do we want? What investments are we as Australians prepared to make? The time for tinkering is over. The time for bribing the nation with tax cuts is done. You see, the devil is not so much in the detail, but the lack of ambition.
These are big bold brush-strokes and that is half the point. Our budget needs to break free from pigmy thinking. Our estimates are based on government papers and media reports. It is difficult for a small party to take on the budget but we can challenge the tired and timid thinking that haunts parliament today. We will update our numbers and writing more as budget week and the campaign evolves.
The main message is this: our tax system is allowing some people to win in a way that is just not fair, that is not right in any language. And serious action is required to stop so many companies taking Australia for granted.
But let us return to our headline commitments.
Climate Economy Fund
Our approach to climate change is too mild. We talk about emissions targets and an ETS. But what we are really doing is building a new economy. So, what do we need to do?
move fossil fuel subsidies into renewables
invest in electrification and batteries – in public charge stations and home systems
see the emergency of our rivers for what it is and take urgent action
provide start-ups in renewables and batteries with seed capital
organise community tree-planting teams, working like our rural fire services
support carbon sequestration in everything from seaweed to mushrooms
decentralise our food supply and enhance food security.
A Climate Economy Fund of $10bil should be allocated to these tasks. 2 per cent of our budget. Our public servants and experts in the field should work out how to allocate the fund. We need to get on with the job of climate change. And create the Climate Economy. We are talking real jobs. From designing new batteries to selling them. From installing solar panels to cleaning wind farms. The Climate Economy is the future for Australian businesses and workers.
Homes for Australians
We are a wealthy country. Yet many of us live without the basic foundation of life: a secure home. Women, often with children, often escaping domestic violence. Some living in cars or couch surfing. People with mental health issues. Thousands of veterans who served and returned home to no home. This has to be an absolute priority of government to fix. So we must make choices to fix it.
Who should the budget benefit? Those doing ok or those who are in trouble? We all live in this society together and we need to share better than we have been. Taxation is not a burden but a way to give back by contributing to our common wealth. It is also way of making things fairer. Don’t you want to invest in Australia? Making a difference. Tax should be a source of pride. We can fund Homes for Australians by rolling back negative gearing and super tax concessions. It is time for other Australians to take their turn.
Our Learning Nation
Education is our smarts, our cutting edge. A way of creating good human beings. Not a commodity. Learning has a vocational dimension but if we educate the whole person we create better workers and business people. We must invest – as many other countries do – in providing places at university and other tertiary institutions at little or no cost. Many students from low income backgrounds leave study because the cost is too great. Targeted subsidies for lower income students would make a huge difference in our communities.
We can fund A Learning Nation by trimming defence spending. Defence is important but 2 per cent of GDP, 6 per cent of our budget is too much. Germany, Japan and New Zealand spend around 1 per cent. Others spend more. We have no national conversation on how our expenditures make a difference. We have tremendous service people who distinguish themselves in war, in peace-keeping and disaster relief. But this cannot be the end of the debate. We need to invest in cyber-security, for example - not overpriced French submarines. We should also link defence capability and climate change. If our spending was benchmarked at 1.5 per cent of GDP as it was 20 years ago, that would generate nearly $8 billion we could invest in tertiary education and research. A better investment for Australia.
We need to build on the strength of our public hospital system. $10b could help deliver access to specialists for all Australians within the public system. We could include dental services and ambulances within Medicare. We can also add to spending on older citizens and indigenous Australia.
Funding cuts to the ABC and the arts damage our national identity and culture – our heart. We spend just over a $1 billion on each. We can repair the damage by doubling the budgets to over $2.5 billion. The ABC and the arts are
Our justice system needs a reboot. We have neglected legal aid – at barely $250m a year - and is available to a fraction of the people who need it. We must address government corruption with a new federal ICAC that includes community representatives. Investing in better regulation is also fundamental if we are to improve sectors like banking, energy, telecoms, and water. A national domestic violence and child abuse action plan is critical because women need to know that the country is listening and supporting them. Access to childcare and women’s control over reproduction also need urgent attention.
If our society is to have a future, it must reconcile with its past. The Uluru Statement must be at the heart of our national conversation. Indigenous Australia has to lead a process that leads to treaties, along with other measures that see first nations people leading solutions for their communities. Together Australia has to learn its history properly and sit with and learn from our indigenous people.
Trickle Up Economics
Our economy does not properly encourage innovation. Too much money is locked up in property. Too much of our super is misused by the finance sector. We need to create incentives to encourage start-ups, community enterprises and regional businesses including agriculture. We need to get serious about risk-taking. Winners come from the fringes and the grass-roots. From garages and tiny offices. We need new policy and funding to support innovation and the winners of tomorrow. We need a new innovation investment culture.
At the same time we must support the vulnerable. We need to move away from ‘conditionality’ of welfare payments. Subsistence is a human right and that should be the basis of our government payments. Newstart needs to be substantially enhanced. We should trial universal basic income.
Picking New Winners
Together we can change Australia. By re-allocating 10 per cent of our budget. And we can keep going. Do we want a society that is fairer, that has robust institutions that bring us together? Or not. Do we want a budget that defends the vested interests of the powerful in our economy and suits our major political parties or one that is about sustainable prosperity, social justice and meaningful lives for all Australians? People work hard for their wealth and Together celebrates that. Our vision is not a socialist utopia but an egalitarian society that walks the talk of a fair go, that builds our common wealth, what we own and share together.
Australia needs boldness. A budget that reflects our imagination and creativity. We want our country to be run like our communities: good people doing good things, making a future … and looking after each other.