Budget cuts!

Budget cuts!

February 6, 2015

I made history in the Senate last December.

I am the first senator to introduce a Bill that received only one vote in its favour. On the other side of the Chamber, 45 senators were herded together by their whips, while the remaining Senators decided not to turn up for the vote.

So what was the content of this outrageous, history-making Bill that united the Coalition, Labor, the Greens, the PUPs and other cross benchers?
Was it a suggestion that we should use nuclear weapons to mine coral from the Great Barrier Reef? Was it perhaps a Bill allowing school children a free cigarette every morning, or to allow hunters to use National Parks for koala culls?

It turns out my history-making unpopular Bill was a modest proposal to cut middle class welfare – a Bill to limit entitlement to Family Tax Benefit A, mostly affecting families with an income over $90,000 per annum. While so many politicians talk about their dislike for middle class welfare, when it came down to it, none of them was willing to take action against it.

I have repeatedly challenged cross benchers in the Chamber to explain what they would do to fix the budget. If forced to write an essay on the subject some might be able to wangle a pass, but all (with the honourable exception of Senator Day) would fail the practical component on account of not having done a damn thing about it.

Senator Cormann was right when he said that for all of the complaints about budget fairness, it is unfair in the extreme to saddle our children with debt. So what would I do?

One quarter of the Commonwealth Government’s spending is payments to the States, Territories and local governments. These payments should be abolished. Abolition would prompt the States to means-test access to public hospitals and schools, and to put tolls on arterial roads and highways. Even if they reacted by increasing taxes, which I would not encourage, the States have access to substantial tax bases, many of them more efficient than the Commonwealth’s income tax. The abolition of Commonwealth payments to States would increase the autonomy and accountability of the States, allow greater competition and experimentation, and end a system where funds are effectively taken from rich State Governments and given to poor State Governments.

I support ending industry assistance such as spending on agriculture, tourism, mining, manufacturing, and construction industries. But not to be forgotten is funding for the arts industry, the sports industry, and the communications industry, including the ABC and SBS. Corporate welfare doesn’t stop being corporate welfare when the corporation is government-owned, or when it’s a corporation you like, such as a renewable energy business.
We need to bring back a central support role for family and community, focus tax-paid support on the least well off and revisit the Commission of Audit report, which suggested the removal of the Schoolkids Bonus and Family Tax Benefit Part B.

We need to include the family home in the assets test for the aged pension. So long as only the home’s value above a high threshold is taken into account, and so long as there is always access to a pension-equivalent payment through a reverse mortgage or something similar, there is no reason for the family home to be excluded.

Finally, the salaries of the 1.9 million Australians who work for one tier of government or another have grown more quickly than salaries in the private sector over the last decade. A 10 per cent cut to these salaries would be reasonable.

As I have explained to the Senate, I support just about all of the spending cuts brought forward by others. The only exception has been the plan to temporarily remove the dole for unemployed youth, which is bizarre when the Government prices them out of jobs through the minimum wage.While we hear complaints about “dole bludgers”, the truth is that spending on family payments is more than three times larger than unemployment benefits.

For all of the talk from the Government and others about a budget crisis, my attempt to make a modest cut to middle class welfare was a telling moment. It suggests that perhaps what we face is not so much a budgetary crisis, as a shortage of testicular (or ovarian) fortitude in our legislative
chambers when it really matters.

David Leyonhjelm is Liberal Democrats Senator for NSW