MPI - Education funding

Wednesday, 03 February 2016

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (15:26): I want to thank the shadow Treasurer for today's MPI on education. I am looking forward to the opposition reshuffle when it comes; he is getting his credentials on education early! But I do think it is an indication that the shadow Treasurer has completely abandoned the economic argument that needs to underpin the national conversation we are having at the moment. Last year we had several MPIs on tax and on the economy. But the first MPI the shadow Treasurer has chosen to lead this year is completely outside of his portfolio.

There is a reason for that. If you think about the presentation of the shadow Treasurer calmly, there are a number of points you might want to note. The shadow Treasurer sets up a construct in terms of education funding in Australia that is completely a false dichotomy. He tries to make a case that this government will not fund education at all, and that his government—if they are ever elected to office—will somehow endlessly fund education in a way that they do not have to explain or make credible or sustainable. It is completely not the case. As the Prime Minister outlined in question time today, this government is investing record levels of funding in Australia. Anybody who has looked at the budget papers and this situation objectively would acknowledge that Commonwealth spending on education is at record levels. It is higher than ever before and is set to increase, year on year, over the forward estimates. It was spelt out many times in question time. So why would an opposition party suggest that somehow a government is cutting funding when funding is increasing? Why would they suggest there are chronic education shortfalls when there is actually a record level of spending?

It is because it is a hard business to tell the Australian people that the Commonwealth borrows money every single day to fund the ordinary expenditure of government. We do not have any money. We borrow money every single day to fund the ordinary expenditure of government. The Labor Party does not want to be honest with the Australian people and say that there are serious matters in education that need to be tackled. We did not hear one word cross the shadow Treasurer's lips about the serious issues that need tackling in education. We did not hear about teacher quality—not once. We did not hear about giving school principals autonomy to make decisions to improve educational outcomes. We did not hear about engaging parents in education, and we certainly did not hear anything about strengthening the curriculum.

What is the opposition's approach in relation to education? It is the same as their approach in every other area—spend, spend, spend. If I can paraphrase the shadow Treasurer, today he said, 'Let the spending flow. Let the money flow'. It is an ALP policy. It is a new idea in the year of ideas—let the money flow! What an election slogan—you could put that on a corflute! Here is Chris Bowen—and I can see it down in Blaxland now: 'Let the money flow. Double or nothing!' But where is it going to come from?

Mr Bowen interjecting—

Mr HAWKE: Well, not Blaxland. I apologise. In McMahon, or wherever you are going to land after the New South Wales redistribution.

Mr Bowen: Our preselections are sorted.

Mr HAWKE: Put that on a brochure as well. Tell the member for Shortland, shadow Treasurer!

In the serious stakes, of course, the shadow Treasurer says, 'We're fully funded'—just like we had former Treasurer the member for Lilley hit the airwaves last week telling us that the NDIS is fully funded. It completely misleads the Australian people. The NDIS is not fully funded.

It is important when we discuss vital areas of service provision for people with disabilities that we have a real and frank conversation with the Australian people, that we engage them and say that we are borrowing money every single day to fund the ordinary services of government, that we do have to address expenditure. This is not a radical Liberal view. This is not a radical view of right-wing economists.

I think it is that time of day when we could play a little quiz game. Who said this, today—

Mr Danby: Alex Hawke!

Mr HAWKE: No, it was not me, sadly enough. Who said: 'We cannot pretend we can go on spending as though nothing has happened. The world has trimmed us down. We now have to trim ourselves down'? Was that Adam Smith? It sounds like something he might have said. No, it would not have been him.

An honourable member interjecting—

Mr HAWKE: He is dead. Good point. He is no longer around. He would not have said it.

Mr Ewen Jones: Was it Kevin Rudd?

Mr HAWKE: It was not Kevin Rudd.

An honourable member: Was it Swannie?

Mr HAWKE: Was it the Treasurer who delivered just three surpluses in the last term of government, Wayne Swan? No, it was not four years of surpluses he delivered. It was someone who is very close to your heart, shadow Treasurer. If I can give you another clue, it is someone you might regard as a mentor in your political career. Are we getting warmer, here, in the chamber?

Mr Dutton: It is someone you are stalking! Who is it?

Mr HAWKE: It was former Prime Minister Paul Keating. It was his view that we cannot pretend we can go on spending as though nothing has happened. Even Paul Keating suggests that the world has trimmed us down and we have to make cuts. We have to be honest with the Australian people about our budgetary challenge. Let us be honest, shadow Treasurer, about the budgetary challenge facing us today. Let us talk about the taxation of tobacco, the principal savings measure you are using to fund your education programs.

Let us go to some of the best economists, the brightest minds, and ask them about their views on using increased tobacco taxes to fund $37 billion of recurrent funding in education. Let's ask economists. Let's ask people out there. Here are some quotes for you of the Labor Party, including the shadow Treasurer's use of increasing the tobacco excise to fund ongoing expenditure on education. The Grattan Institute's John Daley said:

Tobacco excise is a structurally declining tax base.

I do not think that should be a news flash to anyone over there.

It is not going to keep pace with inflation because tobacco use is falling.

The Grattan Institute would have it right, that it is structural and falling. But it gets a little better than this.

Stephen Koukoulas, someone you might know of, over there—another true believer, in the model of Keating—is a former adviser to Prime Minister Julia Gillard. He is not a right-wing economist. He said:

If the number of packets sold falls at a faster rate than the price increases, you won't quite get the revenue effect you were hoping for.

He is a mate of yours. You cannot have it both ways, shadow Treasurer. This cannot be a health measure that is designed to bring down the rates of smoking and a recurrent funding measure for your education policies. You know that.

Everyone on your crossbench knows that. Everyone I am looking at, right now, knows that using tobacco excise is lazy, is not going to work and will not fund the massive increase in expenditure that you are putting forward to the Australian people. It goes further. RMIT University economics professor Sinclair Davidson, who has researched the impacts of this, said:

At some point it's going to reduce and not fund a growing area like education.

It does not really matter who you go to. Budget expert Stephen Anthony, an economist at Industry Super Australia, questioned the mix of policy objectives behind the move:

We want to tax tobacco so heavily that its consumption in this country will fall," he said. "Therefore this revenue should not then be relied upon to fund longer-term spending commitments."

It does not matter who you go to, on what side of the economic fence they fall. They are all united in saying that this is not a way to fund recurrent education funding of the future. It will not work. It will not meet the amounts that the shadow Treasurer is talking about.

The shadow Treasurer has the hide to come in here and say, simply, 'Spend more money. Let the money flow,' to paraphrase him. Let whose money flow, shadow Treasurer? You are talking about the Australian people's money. You are talking about money the Commonwealth does not have. If you do not have a plan to fund your education for the future, you have nothing. You have come to the Australian people and said, 'We want to reduce smoking in Australia. We want to eliminate smoking in Australia. We want it to fall. We want the revenue to fall. But we are going to use it to fund our children's future.' That is the whole basis of your education policy.

If you believe that is sustainable, let's go doorknocking and explain it to the Australian people in your electorate, McMahon, or anywhere else you decide to run after this redistribution. Let's go down and tell them that you are funding our kids' futures on an increase in the tobacco excise, which you hope will fall. It is completely unsustainable—like every Labor policy proposal put forward. It certainly is not the year of big ideas. It is not a big idea to increase the tobacco excise. It is not a sustainable way to fund our children's futures. It is, simply, another thought bubble from the shadow Treasurer.