Appropriations 2020 - 21

By Matt Keogh MP

21 October 2020

Watch Matt's speech here

The Morrison government loves making announcements, but it never delivers. It is always hardworking Australians who end up paying the price. We have seen lots of numbers recently through COVID and the federal budget, but budgets should be much more than just numbers. They should be about agendas and priorities. That's where this year's federal budget falls over. It completely and utterly lacks vision.

Protecting Australians should be the Morrison government's biggest priority—protecting their health, protecting their jobs and protecting their livelihoods. They can't let people just go it alone. The key word here though is 'should'. Unfortunately, time and time again they've proven that they're all about the photo op, not the follow-up. In this budget this government has put pen to paper to rack up $1 trillion of debt. It seems that it has little inclination to seek any sort of bang for that buck. I think it's useful to go through how this will affect our communities. Let's first turn to infrastructure funding.

The Morrison government spends on average $1.2 billion less on infrastructure each year than what it has promised in its budgets. Last year it was a whopping $1.7 billion less than what it said it was going to spend. Little wonder that the Australian economy was in a dire situation before the COVID pandemic hit us. It's essential that the projects that have been announced in this year's budget—projects intended to deliver more jobs and stimulate our economy—are delivered now, not many years down the track.

My community has yet again been left off the list. WA is often forgotten when it comes to federal funding and national schemes, so much so that when I looked into the allocations for the last three rounds of infrastructure spending for WA what I found was appalling. Of the total $2.5 billion of funding allocated to Western Australia in the last three major infrastructure announcements under this government, less than 11 per cent was spent in electorates held by Labor members of parliament—the very well-deserved and sorely-needed Fremantle Traffic Bridge and part of the Tonkin Highway project in the federal electorate of Perth. That's it. Labor electorates represent nearly one-third of Western Australia's population and yet are receiving less than 11 per cent of the overall spend under this federal government. The way that the Morrison government is dealing with infrastructure spending is simply shameful.

Let's look at what they're doing to assist people on lower incomes. People on lower incomes are going to be left worse off under the Morrison government budget. The federal government tax cuts will leave more than a million Australians earning between $37,000 and $45,000 a year paying a higher rate of tax on their superannuation contributions than on their take-home pay. That's not fair. In Burt, the average household income is around $1,500 a fortnight. Often that's a combination of incomes from both partners in the family in the household. That's less than $90,000 a year. According to the government's budget tax measures, while almost no-one earning less than $90,000 will apparently be worse off, nor will they actually be any better off. Taken by itself, the stage 2 tax cuts that we've just passed would notably give tax cuts to only those who are earning more than $90,000 a year. That means that many, many people in our community are missing out on tangible benefits that should have been flowing to them through tax cuts. To make matters worse, despite the protestations of this government about always being the party for lower taxes, next financial year the Morrison government's budget is going to deliver higher taxes to those people who are relying on the low- to middle-income tax offset. People who are earning up to $126,000 a year will have their taxes increased by up to $1,080 a year under the Morrison government, who will be withdrawing that low- to middle-income tax offset at the end of this financial year.

Let's also look at the situation when it comes to the systems and programs that the government has to support the unemployed and people in work in Australia. Under this government we've seen a decrease in the rate of JobSeeker. We've got a decrease in the rate of JobKeeper and changes to the availability of JobKeeper for businesses in our community. This is going to hit a huge number of people across our communities and across our nation. In my electorate alone, in the seat of Burt, there will be up to 15,000 employees potentially affected by these changes from the Morrison government. But this is precisely the wrong time to be withdrawing economic support. The country is in the depths of a recession. They might not like it being called the Morrison recession, but under this approach, where they're withdrawing economic support early, we are certainly going to end up in what will be the Morrison recession. It will be something that has developed under their watch, and it is not appropriate. The government likes to say that, with economic conditions improving, it's appropriate to reduce the rate of JobKeeper because businesses won't need it. Yet, to qualify for JobKeeper, a business still needs to demonstrate a 30 per cent decline in turnover. So, yes, fewer businesses might be qualifying for that, but the businesses that still have a 30 per cent decline in turnover clearly need the full rate of the JobKeeper that was available before because they clearly haven't benefited from the economic growth that is allegedly occurring through our communities at this time.

The government tries to claim that it has a plan for jobs in this budget. Let's look at that. The government's plan for jobs is going to produce an additional 160,000 newly unemployed people by Christmas. How on earth is that a plan for jobs? That is a plan for fewer jobs. Whilst nearly one million unemployed people aged over 35 have been deliberately excluded by this government from being eligible for hiring subsidies to help them get back into work, the average worker in Australia will no doubt gratefully receive a $50 a fortnight tax cut. Meanwhile, millions of JobKeeper recipients have seen their pay cut, just this last fortnight, by at least $300 a fortnight. I'm already having constituents contact me about these reductions in their take-home income—and it is hurting them. It means that they are now unable to pay their rent. What does the Morrison government have to say in response to that?

There are many things that the government could have done in its budget to better support our communities. For starters, it could have address the costs of child care and the current disincentives to work. We should instead be looking at a universal provision of affordable child care in this country. That is not a welfare measure; that is a fundamental economic reform. Children in Australia are fortunate enough to be able to go to any public school in the country and get a good education and education support. It doesn't matter how much their parents earn, everyone is able to access that education. Everyone is able to access Medicare. So why is it that that education support is only available on a universal basis from the age of five and above?

We know—the research is in—that the first thousand days of a child's life are fundamentally critical to their development and prosperity later in life. Wouldn't it make sense to try and increase the universal accessibility of education—it's in the name, 'early childhood education'—to as many children in this country as possible? The beauty of this is it's not just about improving the development and education of our children. It also enables more parents to get back into the workplace, not only to be able to feed their families and to be able to pay for the things that their families would like to do, but also for the fulfilment that comes from being able to pursue the career of their choice.

The way the current system operates, it denies parents that opportunity of being able to pursue their career, to be good role models to their own children and to our communities about what is available and possible for them to pursue. Finally, as we think about the recession that we are currently facing in our nation, remarkably, if we made child care and early childhood education more accessible to more children, it would require more staff in those centres and it would be a job-creating program. This is a fundamental economic reform, and the government has blinked at the opportunity that it presented.

Another thing that the government could have done—and it speaks loudly about its priorities—is invested significant funds into repairs and upgrades to the social housing stock that we have in our country. On my side of politics, we believe that at least $500 million could have been put into this sort of scheme, working with the states on a matching funding basis. This would allow repair work to start immediately, not only making sure that our rundown housing stock would be improved to provide better dignity to those that are living in public housing but also it would provide immediate work for the local plumbers, the chippies and the sparkies, who are in need of that work in the construction industry. We would have been supporting our communities, the people who are homeless and the people that have been out of work because of the recession that we're currently confronting. The McGowan government in Western Australia put aside $142 million in its budget to refurbish 15,000 existing social housing dwellings, and a further $97 million was allocated to build or buy an additional 250 dwellings for new social housing. Why couldn't the federal government have looked at a scheme like that and expanded that on a national basis, helping so many people in our community?

Finally, I want to turn to areas that are confronted by one of my portfolios, in defence industry. It's not just local communities that have been negatively effected by this pitiful budget under the Morrison government. COVID has also delivered to us a unique insight into why sovereign, self-sufficient defence manufacturing and supply chains are so vital, not just for supporting our businesses but also for our nation and its defence as a whole. Australia should be a country that makes things. We need to leverage the money that is there in the budget to make sure, as I said at the beginning, that we get the best bang for our buck. We should be a country that is making high-value, high-end manufactured goods and the supplies that are required for defence industry and leveraging that into a broader, high-end manufacturing industry in our nation.

The Australian government has embarked on a $270 billion defence acquisition program over the next decade. Unfortunately, despite the headline-grabbing media releases, the commitment to the Australian defence industry and Australian industry capability has been completely lacking. You only need to look at last week's great media announcement, with Naval Group Australia, about its $900 million tender to manufacture equipment in Australia for the Attack class submarine program. I don't see why it needed all of this hoopla, because it should have been a given that at least $900 million of manufacturing opportunity will be provided under the new Future Submarine program. It shouldn't be a surprise that Australian companies are merely being given the opportunity to tender to do work in our defence industry space. You see, this announcement is, quite literally, a drop in the ocean. The overall spend on the Attack class submarines is $90 billion, so this $900 million across a 25- to 30-plus-year build, that will go out to the 2050s, is around only one per cent of the total project acquisition cost.

Frankly, it's offensive to Australian defence manufacturing industries and businesses that this government, and the prime contractor responsible, have such little faith in our local industry. They have worked so hard to promote that they're providing an opportunity for business to seek a mere one per cent of the work, with no commitment that that will be delivered to Australian business. It's why Labor made a commitment to ensure that we will have mandated, enforceable, audited and transparent Australian industry contract requirements in major defence projects going forward, because our defence industry not only demands it to ensure that we've got the jobs, the skills and the capability here in our nation, but it's the opportunity to make sure that we're supporting our high-end manufacturing industries across the board in our nation. But this government only pays lip-service when it comes to supporting the defence industry. It's all about the headline, it's all about the photo op, but it's never about the follow-up.