HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
PER CAPITA POST-BUDGET ADDRESS
"Growing Wealth The Labor Way"
THURSDAY, 17 MAY 2012
***CHECK AGAINST DELIVERY***
Thank you to David and everyone here for that welcome. This speech at Per Capita brings me to the end of my tour talking to Australians about the Government's recent Budget.
Now, I've largely steered clear of the politics during the week but in this last speech I want to take on some of the political arguments I've heard about this Budget. Not because I want to score a political point. But because if these political arguments were to prevail, it would have long-term economic consequences for the people we represent.
I'll also be talking today about the opposition to the Minerals Resource Rent Tax and about the Liberal Party who have vowed to repeal it. The Liberal party who is lining up with Clive Palmer, Gina Rinehart and Twiggy Forrest to remove benefits from families. Families who deserve a stake in our growing prosperity.
Fundamentally, the difference in views across our two main political parties stems from our different approaches to wealth creation and the distribution of wealth. And the key point is that only the Labor Party will make the tough decisions needed to grow our national wealth.
We see it in our history - tough decisions like bringing down the tariff walls, introducing enterprise bargaining, floating the dollar, introducing compulsory super and a raft of personal and business tax reforms to provide better rewards for work and improve competitiveness. And we see it now, with the Gillard Government's strong focus on the investments and reforms needed to drive productivity growth.
So we're all about wealth creation - otherwise we wouldn't have worked day and night to ensure that our economy has stronger growth than any major advanced economy.
It's why we are working so hard to address the infrastructure deficit we inherited from the Howard Government – with investments of $36 billion in roads, rail and ports.
Skills and education are essential for productivity – that's why we have uncapped university places, it's why we have increased schools funding by nearly 50%, and it's why we are investing in more training places and better quality training.
To improve our competitiveness we are reforming business tax through initiatives like the instant asset write off and loss carry-back, as well as tripling the tax free threshold.
It's why we are pursuing regulatory reform through the Seamless National Economy agenda. And we are putting in place the foundations for long-term growth through a carbon price to drive investment in clean energy, and a Minerals Rent Resource Tax to replace inefficient royalties. We've made room for spending in these areas in some pretty tough budgets recently, and we've done it again in this Budget.
But what is special about the Labor party, what really sets us apart from our political opponents, is this: We will always reject the idea that we should grow the pie by increasing inequality. We don't support growing the pie by stripping working conditions from vulnerable workers. We don't support growing the pie by simply jacking up the GST and making households pay for lower company taxes. And we aren't prepared to bow down to vested interests who claim they are interested in 'growing the pie' – when really they are only interested in growing their own piece of the pie.
It's a question of what sort of Australia you want, one where a handful of people call the shots to increase their own personal wealth, or one where the benefits of the mining boom are shared with all Australians.
This Budget shows which Australia I want, and the Liberal Party's response has nailed their colours to the mast as well. And I wish to explore this in a bit more detail in the last of my budget road show speeches, with one of my favourite audience, Per Capita.
In a world of neo-conservative idea machines, Per Capita has become a beacon of social-democratic economic sanity. Its small staff has set itself the biggest job of all: reconciling economics and justice.
For far too long, others have held sway with the idea that economics is a fundamentally amoral proposition. That we can focus exclusively on growing GDP, instead of worrying about improving people's quality of life. It's a view summed up by that T-Shirt slogan I mentioned in my essay in The Monthly in March, "Trample the weak, Hurdle the Dead".
With the likes of Captain Palmer at the helm, these ideas take our societies headlong into the dangerous waters of inequality and social division.
Well, if Mr Palmer's juggernaut is his favourite ship, the Titanic, then think tanks like Per Capita are the iceberg. Small on the surface, but able to hole him below the waterline with the power of good ideas. And Per Capita's simple idea, which I thoroughly endorse, is this: democracy is stronger when the benefits of economic success are shared more equitably.
As we've seen in recent days, some will try and mischaracterise this as 'communism' or a "rejection of the free market". This is completely wrong. Labor understands that the market is an engine for prosperity, an engine that drives investment, growth and jobs. And as I said in Sydney earlier this week, I've got a huge amount of time and respect for anyone who has done the hard yards in either building or running a business.
When we were pulling together to stare down the GFC, I probably spent more time on the phone to senior business people – in the financial sector in particular – than I did with my wife or kids. We acted to keep the doors of Australian business open during the worst global meltdown since the Great Depression.
I was there when Australian business men and women made the hard decisions to protect their staff during those dark days. But I do believe that the Government has a role – a responsibility – to ensure all Australians have the opportunity to enjoy a fair share of the benefits of our strong and growing economy. That's why we need a targeted and affordable social security net that lifts people up into work, supports families raising the next generation and provides older Australians with support in their later years. And that's why the Budget I released is about spreading the benefits of the mining boom. A Budget that supports the vast bulk of hard-working, good-hearted Australians, for whom fair pay for a fair day's work is the basic concept on which they build their lives.
This Budget, I am proud to say, delivers $5 billion in much needed assistance to families.
This is real financial assistance to ensure more Australians share in benefits of the mining boom, not just those fortunate enough to have a direct stake in it. And it builds on past reforms the Government has put in place:
Reforms that will help build a fairer community and support the most vulnerable. Reforms that deliver a stronger community, where all Australians can share in the tangible benefits of our success.
Of course, our political opponents don't see it that way. They argue that these reforms are giving rise to "a culture of entitlement". So let's talk about an entitlement culture – some social-democratic disease Joe Hockey thinks we caught from Europe.
Apparently, it's a culture of entitlement to expect to live in a civilised society that lifts people up through education, makes them well when they're sick, helps them through the trials of parenthood, and provides a comfortable and dignified retirement, free of want.
There were many extraordinary things about Joe Hockey's recent speech, which showed that he is a champion of the 'survival of the fittest' ideology that would undermine the fabric of our society. Not least of which was his use of Korea's spending on social services as an objective we should aspire to.
Now, according to the OECD, Korea spends 10 per cent of GDP on social services, Australia spends 16 per cent. If we are to accept the Hockey challenge, and cut social spending by 6 per cent of GDP, that would be a staggering $90 billion a year cut to social services. To put that in perspective it is around what the Commonwealth spends on health and the aged pension combined.
I put it to you that what we have in Australia today is not a culture of entitlement; it's a culture of justice. A fair-go culture. Australia at its best. A country that exists for the benefit of all its citizens, and invests the bounty of its success for the welfare of everyone.
Let me tell Joe Hockey and everyone here what an entitlement society really is. It's a society in which a handful of people feel entitled to harvest the wealth of the nation, which belongs to all its people, for their own personal and exclusive benefit. It's a society where vested interests take out full page newspaper advertisements across the country to deny that they have too much influence. It's a society where the very rich feel entitled to buy and sell political parties and media interests, to misrepresent their personal interests as the national interest. That's what an entitlement society really is: an entitlement to special treatment for the very people who don't need it.
Now I've got nothing against people taking risks, working hard and becoming wealthy. Good luck to them. It's what a market based economy is all about – entrepreneurs driving growth and jobs. My concern is with a small group who would use their considerable resources to exercise a disproportionate influence on our democracy, to achieve a policy outcome that suits them. A small group who think they are entitled to determine the future of this country. And while there is one breath in my body, I won't be silenced about this.
I completely reject the view that these people should be immune from public scrutiny. That they can run around the country calling for a greater share of the pie, without anyone daring to ask 'Is this really in the country's best interest?'
Of course, we aren't asking for anything special from this small group who find it so hard to give up their sense of entitlement. All we ask is that, having benefitted from our economy and our society, they now carry their fair share so that others can benefit as well. That's exactly what the Minerals Resource Rent Tax is all about. And Mr Abbott and his party should hang their heads in shame that they have opposed the MRRT.
Now, of course, it would have been easier to be Treasurer when the times were not as tough, watching the gold roll in like Mr Costello did, getting a good sleep-in in the mornings. Unfortunately, though, we don't get to choose the circumstances under which we govern. Compare now with then.
As a share of GDP, tax revenue is at its lowest level for nearly twenty years. Peter Costello saw tax revenues increase by almost 2 percentage points of GDP during his term while in my five Budgets revenues have fallen by more than 1½ percentage points of GDP.
If we had the same average tax-to-GDP ratio as the previous Government, revenue in 2012-13 would be $24 billion higher. This would give us a surplus of around $25 billion – the largest nominal surplus in Australia's history. That's why you should all have a good laugh when you hear my opponents talk about high taxes, when they're lower now than at any time under the previous Coalition government. And while taxes were this high, as David Hetherington's paper illustrates, the Howard Government failed to invest in the long-term with a lack of funding for assets which increase productivity.
Good governments are remembered for what they do with the cards they are dealt. This goes especially for social-democratic governments, which are called upon to do a lot of the heavy lifting when times are tough.
Think of the Roosevelt and Truman administrations of the 'thirties and 'forties. And the Curtin and Chifley Governments, which did the same here under similarly difficult circumstances. Despite the difficult times they faced, those governments not only got their economies on the road to recovery, they introduced major reforms that improved the lives of their citizens immeasurably. That's how I think of the job we have done and of the Budget now before the Parliament.
Not only have we had to negotiate the worst global economic conditions since the end of the Second World War, we have kept faith in Labor's mission and delivered landmark social reforms. But more than that, we have kept faith with Labor's supporters and the everyday Australians who elected us twice.
We have found room for major spending increases in aged care, in dental care, for families hit by the patchwork nature of our economic growth, and for people with disabilities. This last initiative is the National Disability Insurance Scheme. It's a grand social reform in the great Labor tradition, and I'm incredibly proud to be part of a government that brought it into being.
It is as important as the other great reforms that have shaped our society, the minimum wage, the age pension, compulsory superannuation and Medicare. This is why Mr Hockey's statements yesterday calling the future of the NDIS into question are so worrying. Just like his comments that he would claw back tax cuts for average workers. It's another example of how the Liberals dismiss reward for work or looking after out most vulnerable as examples of an 'entitlement culture' that should be done away with
I want to end with a comment on Tony Abbott's Budget-in-Reply address last Thursday, in which he quoted from Labor Leader Ben Chifley's famous Light on the Hill speech. The fact is, men like John Curtin and Ben Chifley would turn in their graves if they heard the great principles of social justice they passionately believed in dismissed and denounced as the products of 'an entitlement culture'.
Those men were worked ragged by the demands of a Great Depression, a world war, and the need for post-war reconstruction. They made modern Australia.
Arguably, their struggles to create a better and fairer country from the ruins of war and depression killed them well before their time. Curtin was so sick by the time the Full Employment White Paper was finished that his colleagues and his doctors wouldn't let him read it. He and Chifley never lived to enjoy the post-war retirement they dreamt of, relaxing with a quiet beer and a good book on their verandas.
As David's paper has ably demonstrated, when Mr Abbott, like Mr Costello and Mr Hockey, was a prominent member of the Howard Government during far easier times, what did he do – what did they all do – that compares with Curtin's and Chifley's achievements? The answer is nothing.
And as a member of the Labor Party and a proud Australian I for one find it personally offensive that a man who spent the easy years in policy indolence, playing politics, dividing Australians against each other to get himself re-elected, would dare compare himself to a great Labor icon and a great Australian like Ben Chifley.
And I'm reminded of that great line Lloyd Bentsen used to put down George W Bush's running mate Dan Quayle when he tried to compare himself favourably with John F Kennedy in 1988. If I can paraphrase: "Mr Abbott, I'm from the party of Ben Chifley. Ben Chifley is a hero of mine. And you're no Ben Chifley."