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Senator Bob Brown delivers the Greens budget reply speech

Australian Greens Leader Senator Bob Brown delivers the Greens' budget reply speech to the senate, on May 12 2011.

The transcript of the speech is below:

Senator BOB BROWN (Tasmania—Leader of the Australian Greens):

We have just heard a speech from the Leader of the Opposition which in summary is the soulless talking about sold souls. It is a budget full of promises not only unfunded, and irresponsibly unfunded, but cutting current revenue by, for starters, $11 billion over the forward estimates involved in his repeal of the mining tax. Never in my experience in this parliament have so many promises been made by somebody who is going to cut $11 billion out of the budget without explaining how he is going to fund those promises and who is going to hurt in the process. The one commitment that summed up the philosophy of this Leader of the Opposition is that, in set-top boxes, he would give the job to Gerry Harvey at the expense of thousands of small businesses around this country. Where government is allocating money so that pensioners can watch TV without the threat of cutting from their meagre resources, this Leader of the Opposition is a remnant from the government which repeatedly gave $500 cheques to hundreds of thousands of Australians as a voting incentive in the run to elections.

Australia is an enormously wealthy country and its economy is booming. It has emerged strongly from the global recession with an economic stimulus package which was backed and improved by the Greens, creating hundreds of thousands of jobs. Now there is tremendous economic growth on the back of a resources boom, and mining investment will rise to about eight times the level preceding the boom—that is, $76 billion by 2011-12. We have the highest terms of trade in 140 years. So the Greens pose this question to both the government and the opposition: how is it that so few are benefiting from the country's great natural wealth and why is it that there is growing power at the corporate sector, which is the big-winner-takes-all section of the economy? We have a two-speed economy and a two-tiered democracy, and upstairs are the mining barons.

On 2 May last year Prime Minister Rudd and Treasurer Swan announced that they would introduce a mining super profits tax based on the Henry tax review. The mining industry campaigned against the tax, spending $22 million on an advertising campaign, and as a result they got $100 billion stripped out of the people's revenue over the next decade to line their pockets and very often the pockets of already wealthy people outside this country.

Treasury figures show that that will indeed be $10 billion lost to budgets, including the budgets a year or two from now, and then consequent years right through to the early 2020s. What could be worse? Well, the revenue that would be lost if there were no mining tax at all—that is, an Abbott government which would strip $140 billion compared with the Henry recommendations, which only the Greens endorse, over the coming decade. So the mining corporations, who employ just two per cent of Australians, would, under the Abbott prescription, deprive the other 98 per cent of Australians of $140 billion in the coming decade.

The companies that are posting record annual profits for 2010 begin in the mining sector: BHP Billiton with $14.9 billion; Rio Tinto, $14 billion; Xstrata, whose Anglo-Swiss parent company is based in Switzerland—it is not listed on the Australian Stock Exchange—net total profit in 2010 was $4.9 billion and operating profit $7.65 billion. Then there are the four big banks, which would take 12 per cent of a future tax cut to the corporate sector, which is in this budget: ANZ, $4.5 billion; NAB, $5.7 billion; Westpac, $6.4 billion; and CBA, $5.7 billion. The average worker's salary in Australia is $65,161 a year while the average base pay of CEOs—it is higher in the companies I have just mentioned—across the sector is $2,040,892. That is 31 times higher than the wage going to the average workers in the same corporation. The average worker's pay has gone up 52 per cent in the past decade whilst CEOs' pay has increased 130 per cent. Compare the $65,000 of average Australian workers with the CEO of BHP Billiton—$11 million in one year; of Rio Tinto, $9 million; of Woodside, $8 million; of ANZ Bank, $10 million; of Commonwealth Bank, $16 million; NAB, $7.7 million; and Westpac, $9.5 million.

From the economy of boom let me get back to those who are going to be squeezed. There is a problem in the revenue of this budget, not a problem with spending. It is only the Greens who are looking at the revenue base of this wealthy economy in a mining boom. It has been a missed opportunity by Labor, and would have been set aside altogether had Tony Abbott been in government. As George Megalogenis noted in the Australian yesterday:

The Treasurer should be kicking himself that the mining tax wasn't handled better last year.

Hindsight says the tax should have been framed to collect little in the early years, but crank up in the second half of the decade.

It is too late now because the half-baked Minerals Resources Rent Tax —
that is Labor's prescription — looks as if it will behave like the fuel excise—falling as a share of GDP, when the budget needs it to grow.

The Greens would reinstate the original 40 per cent mining resource tax, as recommended by Treasury, and collect that $100 billion over the next 10 years. We would drop the cut to the corporate tax rate for big business inherent in this budget, and that would save approximately $18 billion over 10 years—$3.1 billion over the forward estimates. As it is, one-third of this anomalous tax break is going to BHP, Rio Tinto and, as I indicated earlier, the four big banks alone. That is $3.1 billion in a tax break over the coming four years while the rest of Australians get no tax break at all but a squeeze is put on millions of poorer Australians in what is not only a two-speed economy but a rapidly growing gap between the rich and the poor under Labor, something that we thought would end with the Howard government.

The corporate tax cut should be applying only to small business, and we commend the government for the cut to tax on small business. After all, small business provides 47 per cent of the total employment, or around five million jobs, in this country. Compare that with the mining industry's 206,000 jobs. That tax cut for small business, while not handing over the much more expensive tax break for the big corporations who are already booming, as I have outlined, would bring Australia in line with the US, the UK, Japan and Canada, which have different and often much lower company tax rates for small business.

We would remove the fossil fuel subsidies, which total $11 billion a year, including fuel tax credits, which add up to $5 billion a year—the exclusion there being fuel tax credits for farmers, costing just $680 million of that $5 billion. These tax credits mean that, while ordinary Australians pay 38c tax per litre for their fuel, the big mining corporations pay nothing. So, every time an ordinary Australian goes to the petrol bowser, they know they are paying 38c more than these massively wealthy mining corporations going to get their fuel in the same country. Greens polling shows that 84 per cent of Australians do not consider it appropriate for the big fossil fuel companies to receive such subsidies but consider that the money could and should be better spent on development of clean, renewable energy technologies.

The government has adopted the Greens initiative to reform the fringe benefits tax concessions on company cars, so we will have a flat tax rate of 20 per cent regardless of the kilometres travelled. That will raise $1 billion in the forward estimates. It is something, of course, that the opposition will not go along with in this incredibly irresponsible presentation tonight, which is gifting everybody and costing no-one and which is short most of all on responsibility.

The Greens would establish a sovereign wealth fund. This has the support of economic experts including, if I read him correctly, the Governor of the Reserve Bank, Glenn Stephens and, just in the last week, the International Monetary Fund. There are about 37 countries which have such funds. There is currently $5 trillion in sovereign wealth funds around the world, and this will double to $10 trillion by 2015, but not here in Australia under Labor and not here in Australia under the coalition. But it would be were the Greens to be able to follow through policy responsibly on behalf of the Australian people and their future. It would be able to fund such important future infrastructure as high-speed rail in this country, rapidly carrying Australians in clean, fast, efficient and cheap transport between Brisbane and Sydney or from Sydney via Canberra to Melbourne in three to four hours. The Greens would fund that through a proper resource take from our booming mining industry through a sovereign wealth fund. Neither of the other parties will have the wherewithal to be able to get Australia into the high-speed lane for rail.

Solar power, geothermal and other renewables deserve much greater investment in this sunny country, as does grid infrastructure, which is a critical component of a future clean energy base. The Obama administration has recognised grid infrastructure as a critical enabler for renewables, similar to the way Labor here, backed by the Greens, recognises broadband as critical infrastructure. We would strengthen and promote our cultural institutions, not cut them as in this budget.

The government has increased the efficiency dividends on the public sector—that is, the cuts—from 1¼ per cent to 1½ per cent for two years, and that will raise $1 billion in the forward estimates. We cannot put a dollar figure on the savings from these cuts—that is, the impact of these cuts—but the damaging cost of this for some of our national cultural institutions is emerging. Jobs and programs will be cut at the National Gallery. Exhibitions will be cut from 12 to five in the coming years. There will be cuts to travelling exhibitions which will impact on regional Australia. Thirty per cent of jobs are at risk in the Australian Institute of Aboriginal and Torres Strait Islander Studies. Seventeen jobs will go from the National Library and a similar number from the National Museum. Seven jobs and fleet vessels are threatened at the National Maritime Museum and the National Archives. Screen Australia will be hit. So will the Australian Film, Television and Radio School and the Australia Council for the Arts. All these are, totally unnecessarily, facing the razor. Australia's pride in these institutions is unlimited, but they are going to feel the razor from Labor, and of course they would be cut even more deeply under the Abbott prescription put to this parliament tonight. He overlooked them totally. Well, the Greens will be in there advocating for the restoration of funding to these great institutions in the coming weeks and months. On a brighter note, I congratulate the government on its continuing increase in the overseas aid budget. That has reached 3.5 per cent of gross national income, $4,836 million up from the $4,361 million of the last budget. Particularly welcome is the increased focus on basic education in the countries where we spend that aid money for primary schools and in-country teacher training, as is the $96 million of new funding allocated to ending violence against women initiatives and the doubling of funding that will be delivered, and therefore better targeted, not through government but through non-government organisations.

I thank the government for some important Greens initiatives taken up in this budget. There will be a Parliamentary Budget Office. It is going to be given $24.9 million over the coming four years so that this parliament will be able to readily cost proposals like the Leader of the Opposition's uncosted budget presented tonight through an independent, established Parliamentary Budget Office. With that, we are catching up with other countries, and this will be a real achievement for the Greens which will serve this parliament and give greater prudence to political promises made and schemes offered to the people of Australia for the decades to come.

I acknowledge, along with the Leader of the Opposition, the role played by all parties, but in particular the community sector in the much better spending on mental health: $2.2 billion over the forward estimates, with over the coming five years $1.5 billion in new money for mental health investment. I give credit to, amongst the many people involved here, my colleague Senator Rachel Siewert.

Also from the Greens has come—and it was written into our agreement with the government—a move to better fund dental health care in this country. In this budget there is $53 million for 150 dental internships over the coming four years, but that is just a marker of things to come. The National Advisory Council on Dental Health will be established to provide advice on dental health in this country. I quote from the budget:

Significant reform … in line with the Government‘s agreement with the Australian Greens, will be a priority in the 2012-13 Budget.

I know from having a medical background that if you give good dental health to Australians, you give them good general health. And if you give good general health to Australians, you save not only a great deal of illness but billions of dollars to the national economy.

Next are some of the worst of the welfare measures in this Labor budget. Payments will be slashed to some single mothers with teenage children by $56 a week. I quote from an article relating to this matter by Adele Horin in the Sydney Morning Herald:

At least 50,000 sole parents with teenage children will be financially worse off, even if they are working, as a result of new welfare-to-work measures announced in the budget.

The chief executive of the National Council on Single Mothers and their Children, Terese Edwards, described the measure, as ''harsh, mean-spirited and unnecessary''.

From January 1, 2013, the mothers of children aged 12-15 will be moved from the parenting payment single to the Newstart allowance, resulting in a loss of $56 a week. The measure will apply even when sole parents are already fulfilling participation requirements by working at least 15 hours a week. Instead of being able to combine part-time earnings with a part parenting payment, they will be entitled to a portion of the much lower Newstart allowance.

The president of the Sole Parents' Union, Kathleen Swinbourne, said the shift was simply a budget-saving measure.

''It's rather feeble when the people who can afford it the least have to help fix the budget deficit,'' she said.

It is cruel, it is unnecessary, and we will be trying to engage the government in ameliorating that item.

The budget also includes a teenage mothers so-called education trial program, where mothers will be required to participate when their baby is six months old and compulsory activity such as education or training will be brought in when the child turns one year old—for goodness sake.

Harsher requirements for the disability support pension will threaten thousands of Australians with a disability. If there is one item we are very attracted to, and congratulate the opposition on, it is $20,000 to the parents of the most disabled children. We expect this will inherently be part of any future program that the opposition brings forward. The Greens are committed to improving this budget, not as Mr Abbott would have it: wrecking the budget. The Greens will scrutinise all of these welfare measures to see if they are necessary and with a view to removing some of the harshest thorns.

The economies of climate change are on the agenda, as Mr Abbott said in his budget reply speech. This budget has to be seen in the context of that huge issue which the Greens — including my colleagues Senator Milne and Adam Bandt, the honourable member for Melbourne — are focused on. This includes establishing a carbon price and ending the destruction of the nation's forests. How Labor must regret having not taken up their former leader Mark Latham's offer of $800 million to end the destruction of forests in Tasmania. We now have an historic opportunity to end that destruction, because the industry is in an economic spiral down with no end in sight. I hope that this government, along with the Tasmanian government—and following on, the governments in New South Wales and Victoria—will take this historic opportunity, which is very similar to the opportunity that the Fraser government took in 1978 to end whaling, to end the destruction of the great wild forests of Tasmania and the south-east of the mainland.

The Greens are intent on bringing humanity back into the treatment of asylum seekers. My colleague Senator Hanson-Young just yesterday successfully moved in this Senate a motion deploring the government's move to send asylum seekers from this country to Malaysia. We will be doing all we can again to have a more humane regime brought in by this government, and of course that means to offset the even crueller attitude to asylum seekers in this country inherent in what the Abbott speech tonight implied.

I want to come back to the establishment of a carbon price, because that is going to be the most substantial restructuring of the Australian economy in decades. In 2007, the Stern review, described as 'the most comprehensive review ever carried out on the economics of climate change', found that the cost of not taking action on climate change will now be equivalent to five to 20 per cent of the GDP each year later this century. We face, besides the economic and lifestyle destruction inherent in climate change, leaving through our inaction our grandchildren with an up to 20 per cent hit on every budget in their lifetimes trying to ameliorate the impact of climate change.

The cost of action to reduce greenhouse gas emissions now to avoid the worst impacts of climate change could be limited to two per cent of GDP if it were coordinated globally. Sir Nicholas also said:

… the benefits over time of actions to shift the world onto a low-carbon path could be in the order of $2.5 trillion each year.

That is, it would be better for the economy, better for jobs, better for the environment and better for the security of this nation and the world.

Treasury estimates that Tony Abbott's direct action scheme will cost Australian taxpayers around $30 billion by 2020. It relies on paying polluters $10.5 billion to reduce their emissions, with a further $20 billion for the purchase of international permits to be bought by 2020 to reach the five per cent emissions reduction target he claims. So by 2020 the total cost of Mr Abbott's plan will be $720 per household minus no compensation, leaving householders exposed while the big polluters are understrapped by payments from the taxpayers.

We reject this hit on householders, again to the advantage of the big polluters, and would turn that around. The Greens' carbon price plan would put a tax on big polluters, not average Australians. It would use the money raised to compensate householders, build renewable energy and public transport and support industry transition, and, as such, will create hundreds of thousands of jobs. According to a recent report by the Climate Institute on action on climate change, a modest carbon price would create 6,600 directly in New South Wales alone.

This is not a Greens budget; it is a Labor budget. The Greens will deal responsibly with all budget legislation on its merits. We will not block the budget or supply, but we will look to improve it where we can in a fiscally responsible manner. However, in order to ensure stability in government, the Greens will not be supporting any opposition move which aims to wreck the budget. We will not support the destabilising and wrecking tactics of the opposition as we move to improve the legislation.

I want to say this. There is more to the budget reply tonight than a thin veneer of promises to the Australian people. It is a self-invested budget reply from a Leader of the Opposition who is hell-bent on destabilisation of the elected government and the right of Australians to be able to go to an election each three years. We see the strategy in this uncosted cornucopia which does not stand any test of commonsense scrutiny as a move by Mr Abbott to look more like Mr Nice Guy when in fact he is Mr Wrecker. The Greens have his measure.

We have a job and a responsibility in this parliament to ensure that we do get stability, and we will undertake that responsibility with a very careful scrutiny of the budget measures from the government and a dialogue with the government to improve those measures which are unnecessarily harsh or punitive on individuals or institutions. My team of Greens in this parliament—now in both houses of this parliament—are committed above all not to the short-term political gain for self that we see in Mr Abbott's approach but to the betterment of all Australians, not just the big end of town. We will be judicious in our strong response to the government and some of the measures which should not be in the budget.

I have outlined tonight a revenue base which would have made this budget sing for Australians without the harsh, unnecessary lines in the budget which have been required simply because the government wants to give a massive tax break to corporations while not giving it to average Australians. The coming weeks and months will test us all out, but I can assure the people of Australia, who have generally received this budget with agreement—there has been no outcry; there is some lamenting; there has been no dancing in the street. I think, generally, Australians would see this as an average budget.

I gave it six out of 10. That is because I am more Pomeranz than Stratton! But I think that the government could do a lot better, and I will be with my team of Greens working to make it more socially just, more environmentally positive, more economically responsible and fairer in the country of a fair go, ending the two-speed economy by making sure the mass of Australians in the slow lane do better—and they will not under this budget, and they would do worse under Mr Abbott—and turning around the growing gap between wealth and poverty, luxury and harshness which we see in this country under our very eyes. We are a humane party, we are environmentally responsible and we are politically savvy. In this milieu of head-butting between the government and a very aggressive, self-invested opposition, we are up to the task of getting Australians all not only a better outcome from this budget but a better outcome from all the work that we are undertaking in this great parliament of Australia.

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