Michael Sukkar MP

Federal Member for Deakin.
Minister for Housing & Assistant Treasurer.
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Tax Bonus for Working Australians Repeal Bill



 It gives me great pleasure to rise in support of the Tax Bonus for Working Australians Repeal Bill 2013 because it represents a step in the right direction for the people of Deakin, who have called for an end to the government waste that has plagued the last six years. Indeed, this is a day when we can draw a line in the sand. It ends a sad and sorry chapter of the failed former government. It ensures that the Commissioner of Taxation does not make any further tax bonus payments. There will be no more $900 stimulus cheques.

The Australian people know that the Rudd-Gillard government’s six years of chaos, waste and mismanagement delivered higher taxes, record boat arrivals and debt and deficit as far as the eye can see. The $900 stimulus cheques are a poignant example of how the Labor Party turned fiscal strength into weakness in just six years. The problem is these so-called stimulus cheques have continued to be sent out as long as five years after the global financial crisis.

Dr Leigh interjecting

Mr SUKKAR: Indeed, the    $900 payments rank alongside the home insulation scheme and the school halls rip-off as a benchmark for Labor waste. I would say to the member for Fraser that that is a pretty high bar to meet by Labor standards. But we are entering a new era in Australia, an era of fiscal responsibility and prudent financial management. It is a change in direction that the people in my electorate of Deakin appealed for when they went to the ballot box last September. They had with dismay watched the country’s debt spiral out of control, and they made their feelings well and truly clear to me time and time again and they continue to do so.

The release of the Mid-Year Economic and Fiscal Outlook in December revealed the dire state that Labor left the budget in. We have heard these figures before, but let me repeat them so that they can truly sink in, because they clearly have not sunk in yet. The forecast was a $47 billion deficit in 2013-14 and $123 billion worth of cumulative deficits over the forward estimates. Since the release of PEFO just a few months earlier, in August, the budget position had deteriorated by $68 billion over the forward estimates. That might just be a rounding error by Labor’s standards, but on this side of the House that is a huge problem.

Labor’s legacy to this country was a budget debt that would not return to surplus within the 10-year, medium-term projections, with gross debt projected to rise to $667 billion over the same time. I know the Labor Party rely on these figures becoming so big and so amorphous that nobody can truly grapple with them, but this is debt that will be intergenerational. Our children will be required to pay it off. As the member for Deakin, I will not look at the schoolchildren in my electorate knowing that the legacy we are giving them is debt that they will have to pay off as taxpayers.

So something had to change, and it has. The adults are back in charge of the country’s finances and we recognise that the budget we have inherited is unsustainable. Like the Deakin families and businesses who work hard to manage their household budgets and business bottom lines, the coalition is committed to prudent management of the budget. We on this side of the House appreciate that the government is a custodian of the hard-earned dollars of Australian taxpayers and we are not going to squander their money. It is not government’s money; it is their money. When I am out in the community, I feel great pride in being able to give my electors in Deakin that assurance.

Why is this so important? Why is building that faith so important? It is important because each time we ask something of Australians, each time we take money out of their pockets, we must be able to look them in the eye and tell them that their hard-earned money, which we have taken, will make our country better. I think your average Deakin resident and nearly all Australians are selfless and love their country and do not begrudge working hard and paying their fair share of tax. But for people who are used to managing their own household or business budget, examples of waste such as the so-called $100 stimulus cheques sent to dead people and people living overseas are something they just will not accept, neither should we in this place. The reason for this is that Australians innately understand that you cannot live beyond your means. Even worse, you cannot waste borrowed money. Wasting borrowed money is exponentially worse than wasting your own money.

I will give you an example of this sensibility from an interaction I had recently in the electorate. I was visiting a small business, as I regularly do, and in this case it was a florist. I was given a very excellent tour and asked the owners some obligatory questions about customers and broadly how business was going. Business was pretty good, but I was told that in order to remain strong they really had to keep a very close eye on costs. It seemed a pretty reasonable and sensible approach and something that probably is not new to people on this side of the House. But it truly hit home to me when I walked out of the florist with a pen that I had borrowed from the owner, Helen. You see, I have a pretty bad habit of forgetting to return pens that I borrow and at times I inadvertently take them—and I can assure you it is always inadvertent. In any event, as I was walking out with Helen’s pen she exuberantly gestured for me not to take another step. She asked me if I was forgetting something and pointed to the pen in my hand. As I sheepishly handed it back to Helen, she reminded me that, when she said she kept an eye on every single cost, she meant it. If I had walked out with that pen, they would just have to buy another one. We on this side of the House all know that the owner of the florist’s, Helen, was really just trying to make a point with me, but it was a point very well made. The people in her business have to keep track of all costs, even those that may seem negligible to us, because a thriving business does not happen by accident.

So, when the member for Fraser gets up and scoffs that these are small savings that do not make a difference, it highlights the utter disregard for taxpayers’ money that they had when they were in government. How dare he get up here and talk about taxpayers’ money as though it does not matter because it is a rounding error or it is small? That is why we have projected debt going to $667 billion. It was that kind of attitude which pervaded the other side of the chamber, particularly when they were in government.

And what Helen’s actions reinforced to me when I was in that florist’s that day is that every wasted dollar is another dollar of revenue that must be found in her business or another dollar borrowed. In our case it is another dollar that we must take out of taxpayers’ pockets or borrow from lenders overseas.

When people saw in my electorate that their taxpayer dollars were being wasted so flagrantly, it rightly made them angry. So, while there is a lot of work ahead to bring the budget back under control, bills such as the one before us today help to address the waste—and what outstanding waste it was.

As a new member of this place, I was not fortunate enough to be present when my colleagues voted against the former Labor government’s second stimulus package. They voted against the imprudent cash splash, including payments to be authorised by the tax bonus acts, which this bill is seeking to repeal, because it was poorly targeted, failed to support employment and was unaffordable. The member for Fraser did not understand that. Unfortunately for the Australian people, the coalition was proved right in voting against that second stimulus, Then as now, the coalition took a responsible approach to looking after the economic interests of the nation. It is estimated that to date some $7.7 billion of borrowed government money was spent on doling out stimulus cheques to people who never asked for them and in most cases thought the money could be more wisely invested. That was certainly the feedback that came to me regularly on the campaign trail. Australians were not going to say no to a cheque sent in the mail, but instinctively they understood that it was not good bang for their buck, and now our children will repay that debt.

Although most of the so-called stimulus cheques were made in 2009, a staggering number of these payments were not made at the time of the global financial crisis. The late banking of cheques and issuing of amended income tax assessments for the 2007-08 year resulted in more than 480,000 payments, totalling more than $400 million, being made in subsequent years right up until now—close to five years. Presumably, based on the preceding comments by the member for Fraser, that is small change. That is only $400 million; that is not a problem. We’ll just find that behind the cushions of the couch! I tell the member for Fraser that $400 million is an extraordinary amount of money and the opportunity cost of that money having been wasted is an outrage. When I reflect on how that money could have been better spent I think about roads, hospitals and other infrastructure that would help our nation prosper. Quite frankly, I, my colleagues and, most importantly, my constituents feel appalled.

Not enough Australians know that these stimulus cheques continue to be doled out. Last financial year alone there were 15,000 cheques issued, totalling approximately $15 million of borrowed money. I wish the member for Fraser were here so I could ask him if that is enough or if that is really not important, because his comments suggested that that really was not worth the parliament’s time. As the Parliamentary Secretary to the Treasurer, the member for Moncrieff, said in his second reading speech:

If it were not bad enough that the government was borrowing money to pay for $900 stimulus cheques four years on after the height of the global financial crisis, it is worse that these stimulus payments continue to be sent to taxpayers living overseas.

I make that point again because it is important. It shows how badly these payments were targeted. It was a cash splash in the true sense of the word. In order to stimulate the Australian economy, the Labor Party thought it prudent to send cheques to people living overseas. Even worse—and I have said it a couple of times, but I think it is important to reiterate this point—cheques were sent to people long deceased and backpackers travelling through Australia. The numbers are approximately 16,000 payments sent to people living overseas. That equated to $14 million. It beggars belief, as do the payments made to deceased people back in 2009 and since, that more than 21,000 payments, totalling more than $18 million and including 40 payments this year, were made.

But the problem with Labor is that so many of the members opposite are career politicians who worked their way up through the union movement and have no idea how to prudently manage money. These union leaders become so accustomed to spending other people’s money that they never learn the discipline required to manage a budget. If any of the members opposite want to visit Helen the florist with me, I will take them there and she can give them a good lesson.

As I said, the coalition opposed the second stimulus package, recognising it for the ineffective package that it was, and we condemn the litany of wasteful payments that have been made in the wake of its introduction. Given that so much time has marched on since the GFC and, in any case, the flawed payments, there is simply no need for the ATO to make any more payments. Further, payments are plainly unwarranted and a waste of taxpayers’ money. The great thing about today’s legislation is that it brings an end to these payments.

Labor inherited a $20 billion surplus but left behind a projected $47 billion deficit. Labor turned nearly $50 billion in the bank into a projected debt of $667 billion—the fastest deterioration in debt, in dollar terms and as a share of GDP, in modern Australian history. The coalition government is delivering what the Labor Party could never do, prudent management of the budget, and we are identifying opportunities, such as the one before us today, to end waste and find savings. I made a commitment to the people of Deakin at last year’s election that as part of a coalition government I would help address Labor’s record of waste and mismanagement. Today’s bill is just one measure that I am proud to support to deliver on that election commitment.