Bill Shorten has announced a new $500m “smart investment fund” to co-invest in “high potential” start-up companies and promised free degrees to 100,000 science, maths and engineering studentsas well as more money to train science and maths teachers.
In his televised budget address in reply, the opposition leader sought to paint Joe Hockey’s budget as a “reheated” version of last year’s, the government’s claims of fairness as a “smokescreen” and a “hoax” and its predictions of a major boost to the economy from its small business stimulus plan as overblown.
“In every respect this budget is a hoax, and attempt to pull the wool over the eyes of Australians. Where it counts, this is last year’s budget – rebranded, reheated and repackaged for an opinion poll,” he said.
Shorten announced that Labor would oppose the new one-month waiting period for under-25 year olds to receive unemployment benefit and the changes to paid parental leave. Labor will continue to vote against the cuts to family tax benefits and the higher education changes announced in last year’s budget.
The government has claimed the child care spending, scheduled to start in 2017 – well after the next election – could proceed only if the family tax benefit cuts are in place.
Shorten said Labor would support the budget’s centrepiece policy – the $5.5bn package of tax relief for small business – as well as extra spending on national security and drought relief.
But he tried to one-up the government, which has promised a 1.5% small business tax cut, by setting very long-term goals to cut the small business tax rate by 5% and to spend 3% of gross domestic product on research and development by the end of the decade.
He downplayed the impact of the government’s plan. “A giveaway to start a fire sale at second-hand car yards and Harvey Norman is good, as far as it goes, but it doesn’t go very far,” he said.
“The sum total of this government’s stimulus is $5.1bn, compared with a $96bn contraction in the economy. Is the treasurer seriously asking Australians to believe that minor tax refund is his best economic response to a one hundred thousand million contraction?”
The policy announcements in Shorten’s speech, which come at a cost of $352m over four years, were:
- A $500m smart investment fund to “partner with venture capitalists and fund managers to invest in early-stage and high-potential companies (because this is an income-generating fund, Labor says its cost does not hit the budget bottom line)
- Writing off the Hecs debts of 100,000 science, technology, engineering and maths students who will be selected on merit under criteria set with universities to encourage women and students from rural areas and low socio-economic backgrounds. (The free degrees are on top of the discount already offered to all maths and science students, which Labor introduced in 2008 but then reversed in the search for budget savings.)
- A promise that computer coding should be taught in all schools
- $127m to train 5,000 primary and secondary teachers to teach computer coding
- $133m to train more science and maths teachers
- $18.5m in extra funding and more independence for the infrastructure planning body Infrastructure Australia
It was a more conciliatory response than Labor’s reaction to the Coalition’s first deep-cutting budget, in 2014. In his budget speech in reply last year, Shorten announced Labor would vote against $12bn in budget measures – including GP co-payments, higher fuel taxes, stripping benefits from single-parent families, cuts to pensions and higher student loan repayments.
But it did not meet the Coalition’s demands that Labor identify $52bn worth of spending cuts, which the finance minister, Mathias Cormann, claimed was the total cost of measures Labor has blocked or pledged to reinstate.
In fact Shorten announced no new spending cuts or revenue raising measures beyond the already announced policies to tighten superannuation tax concessions and raise more money from foreign multinationals, which the government has already rejected.
During question time, Tony Abbott accused Labor of responding to last year’s budget rather than this year’s budget which dropped many of 2014’s most contentious spending cuts. “Come on ... welcome to 2015,” he said.
But the day saw the government forced onto the defensive over its plan to save $1bn by ending what it calls “double-dipping” – where a mother claims from both a government-funded and employer-funded paid parental leave scheme – when the assistant treasurer, Josh Frydenberg, confirmed he and his wife had “double-dipped” in this way and Cormann would not say either way.
