I acknowledge the traditional owners of the land, the Ngunnawal and Ngambri people.

I acknowledge elders past, present and emerging. We thank for them for their stewardship of this land over 40,000 years.

I acknowledge my Parliamentary colleagues here today, Joel Fitzgibbon and Kim Carr.

Not long after the 2013 Federal election, the then Treasurer Joe Hockey reached peak apocalypse warning mode.

Releasing the 2013 Mid-Year Economic Update, Mr Hockey and Senator Cormann breathlessly warned us that gross government debt would tip the disastrous level of $667 billion if it wasnt for them.

We were told it was an enormous figure, which is undeniable.

We were told the ramifications of hitting it would be terrible.

Of course, Labor was blamed. And reassurance was given: it will be OK now because the Liberals are here.

There was quite a contrast between that first Liberal MYEFO and the Liberal budget delivered last week.

On Budget night, the Treasurer quietly issued a direction to lift the debt cap to $600 billion.

There were no mentions of this in his budget speech, no press release was issued.

Just a throw-away reference in a footnote buried deep in the Budget papers.

It took several goes at Question Time to get the Treasurer to admit that gross debt would continue rising to $725 billion and the lift in the cap to $600 billion was but a temporary fix.

The Finance Minister declined six times to name the peak gross debt figure, arguing that the net debt figure is more important.

Well, net debt is the much more reliable indicator of the health of the national balance sheet.

But the budget papers confirm that net debt will rise to 20% of GDP.

Whilst low by international standards, it is very high by Australian historical standards.

Not since World War II has net debt been that high.

Apart from the financing of World War II, no Labor Government has ever had net debt reach 20% of our economy.

The Budget now shows:

• New record net debt for the next three years;
• A deficit for the coming 2017-18 year which is 10 times bigger than was predicted in the Liberals first Budget, and;
• Gross debt equivalent to $20,000 for every man, woman and child in Australia.

This alongside the fact the Government has completely junked entire elements of its Budget Repair Strategy in this budget.

I raise the issue of debt because its important.

High debt increases the risk of economic instability, leads to higher government interest bills and reduces the capacity for the government to respond in the event of an international downturn.

I also emphasise the Liberals failings on debt because it is symptomatic of their wider economic failings.

This is a Budget which sees virtually every key economic parameter collapse since their Budget a year ago, with growth down, wages down, employment down and the unemployment rate up.

These figures dont give us reason for optimism.

And yet the Budget also continues to include unrealistic forecasts which help underpin the return to surplus.

Wages growth is forecast to double over the next few years to hit 3 per cent by the end of the forward estimates period.

A pretty big bounce given the spare capacity and record underemployment we are currently seeing in the labour market, together with the cut in penalty rates and the fact the budget papers show the unemployment rate isnt expected to fall that much.

Senior market economists from St George pointed out on Budget night The budget projections for wages growth stand out as overly optimistic.

And despite the record level of household indebtedness in Australia, the GDP figures in the budget are underpinned by households further running down their savings over the forecast horizon.

Ive said for a long time now that the economic forecasts are too beholden to political circumstances.

Its why Labor has committed to expand the mandate of the PBO to make sure these types of forecasts are taken out of the political domain, into an independent one.

I use the deterioration of our debt position and economic circumstances to highlight a broader point: the cost of a lack of policy consistency and lack of narrative by the two successive Liberal Governments.

The cost of four wasted years.

Every so often we are given a new Orwellian phrase to guide us through the latest round of Liberal policy making.

Now its better days ahead.

Weve been through Lifters and Leaners, the Age of Entitlement, Have a Go, Jobs and Growth, to name a few.

Its also about consistency of values.

Now a government which has spent four years proposing GP taxes and freezing the MBS wants to be believed on Medicare.

A Government which promised a unity ticket on education funding and then immediately walked away, wants to be believed on education.

And a Government which has wilfully failed to act on housing affordability wants to be believed on that too.

This lack of consistency extends to the current Treasurer.

On becoming Treasurer, he told us that his over-riding objective was lower personal income tax.

On multiple occasions he told us he wanted large, swingeing tax cuts.

He told us he was passionate about it. The notion of a revenue problem was airily eschewed.

Eventually, he delivered modest tax cuts last year.

And he took them back this year.

Far from big personal tax cuts, personal tax was increased this budget by $8 billion.

The lions share of the $20 billion in tax rises that the budget contained.

Id hate to see what the Treasurer would do if he actually thought Australia had a revenue problem.

Last years personal income tax cuts cost the budget $4 billion.

A figure just half this years personal tax rises.

So much for the Treasurers passion.

But nowhere has the Governments budget rhetoric and the reality been so starkly different as in housing affordability.

The Treasurer told us housing affordability was to be at the centre of his budget.

And the responsible Minister, Michael Sukkar told Sky news on April 23:

The housing package will be extraordinarily large. It will be far reaching. It will deal with all the groups on the spectrum of housing. It will be an impressive package. It will be well received

Expectations management clearly isnt his strong point.

The package was neither impressive nor well received.

As John Daley of the Grattan Institute has said:

Youll need a scanning electron microscope to see an impact on prices.

And Adrian Pisarski from the peak group National Shelter said Its a centrepiece without a centrepiece.

I dont think I need to outline the case today for Government action.

The case is self-evident. Right across Australia, people locked out of the housing market know the Government needs to act.

• House prices have risen 30% on average across the country since the Liberals came to office, 50% in Sydney.
• Home ownership rates for 25 to 34 year olds have collapsed from around 60% to 40% over the past 30 years.
• While home ownership is at 60-year lows,
• Rates of property investment have been at record highs.
• Rates of first home ownership are at record lows.
• The number of investors with at least 5 properties is growing at three times the rate as the group with just one property.

Few if any parts of our economy are as impacted as housing by government policy levers.

And this Government refuses to use them.

And the fact is that Government policy as it stands makes housing less, not more affordable.

Around 50% of recent housing purchases in Australia have been by investors.

Which is singularly unsurprising considering we have the most generous property investment tax concessions in the world. Bar none.

The combination of negative gearing and the capital gains tax discount reflects a potent elixir which powers property investment at the expense of first home buyers and frankly, at the expense of our society.

Budget speculation tells us that they contemplated acting. I always doubted that they would.

They didnt, because they lack the courage.

Without reform to negative gearing and capital gains tax, the Governments package, and I dont use the word lightly, is a sham.

Now most of the measures are unobjectionable. Ineffective, but unobjectionable.

One, however is highly objectionable.

We know the Government dabbled with all sorts of hair brained plans to allow access to superannuation.

The eventual model they settled on, allowing voluntary contributions to be withdrawn by first home buyers will not make a jot of difference for the vast majority of first home buyers.

Without negative gearing and supply-side reform, if it has any impact at all, it will simply drive up prices.

It is badly designed and ill-thought out.

How voluntary contributions will be kept distinct from compulsory contributions in a downturn when balances can contract is beyond me. They cant be.

The Government supports a legislative objective for superannuation, as recommended by David Murray. Their preferred objective is: To provide income in retirement to substitute or supplement the age pension.

The whole idea of an objective is to have a benchmark against which proposed changes to super can be judged.

And yet the Governments first proposed legislative change since announcing their preferred objective would undermine the goal of providing income in retirement.

Labor will oppose this ill thought out and counter-productive plan.

Taken as a whole, far from helping young people with housing affordability, the budget substantially worsens the situation.

Take a young university graduate earning $50,000.

Someone who earns $50,000 a not atypical graduate year income will be worse off to the tune of $1,250 in this budget.

$250 a year worse off from new taxes.

And a $1,000 cut in their take home pay due to extra HELP repayments.

Without these extra taxes and costs, a person will now have $6,000 less to put towards a house deposit after 5 years in the job market.

I dont think these people will be too excited about the prospect of putting $30,000 into their superannuation as the solution to their housing challenge.

The Government claims they want to help people with cost of living pressures.

Young people in particular are entitled to say yeah, right.

The Government is increasing the cost of living and making affording a house harder, not easier.

I want to turn now to one of the most important areas of the budget and of Labors reply.

The National Disability Insurance Scheme and how it is funded.

Firstly, on a positive note.

The National Disability Scheme is one of the great steps forward in Australian social policy in recent years.

Its a Labor achievement. Its been confirmed under the Liberals. Thats a good thing.

Jenny Macklin and Bill Shorten designed the scheme under Julia Gillards leadership.

It has now been continued under two conservative prime ministers. Tony Abbott and Malcolm Turnbull are to be congratulated for that.

Unlike, for example, superannuation and Medicare, which have remained highly contested and were particularly in their early years, the NDIS is a social reform which has and will continue under governments of both persuasions.

We very much welcome that.

Australians with disabilities are too important to become political playthings.

This is important.

I suspect every single Member of Parliament has witnessed firsthand the positive impact of the NDIS on our country and those who have benefited from it.

The Turnbull Government signing the NDIS agreements with the states last year means the NDIS is locked in.

Not to be watered down or abolished. Regardless of who is in government.

Thats the good news.

As much as I give the Government credit for embracing the NDIS as a bipartisan reform, their politicisation and obfuscation on the issue of NDIS funding is most disappointing.

Disappointing and destructive.

When the Government claims that NDIS is at risk because of funding they cause unnecessary concern and indeed heartache amongst those who rely on the NDIS.

It is irresponsible. It is wrong. It is morally wrong and factually wrong.

Let me spend a few minutes outlining just why it is factually wrong.

If there had been a cost blow-out in the NDIS, the Government might have a point.

There hasnt been.

When Labor announced the NDIS it was fully budgeted and funded.

The National Disability Insurance Agency itself recently confirmed that the original Productivity Commission estimate as to cost at the peak of operation is accurate. In other words, the NDIS is running on budget.

The relevant minister, Christian Porter has, as recently as last month, said that claims of an NDIS blowout are, and I quote wildly premature.

So the opportunity for the Government to claim a cost over-run does not exist.

Instead, the Government claims Labor did not make appropriate provision through savings.

This too is palpably wrong.

The government concedes that Labor increased the Medicare levy and re-directed some disability funding to the states as offsets for the NDIS.

But they ignore the other decisions made.

Its as if Labor did not make changes to the Private Health Insurance rebate, change the indexation of tobacco excise, change import duties and fringe benefit concessions.

The problem for the Government is this: these things did happen. They were decided, they were implemented.

The Government can deny it all they like, it happened.

And, combined, these savings are enough to pay for the NDIS.

Four years of Liberal budgets have seen the Budget worsen, and the economy stuck in neutral.

These failures are now projected onto the NDIS they are essentially holding the NDIS to ransom for their failures.

And so, I have a very important request of the Government.

Please stop lying about NDIS funding.

We give you due credit for embracing the NDIS. We pay tribute to you for it.

But every time you claim it is unfunded you worry people that maybe the NDIS will have to be cut.

Please stop it. Its not true. And it causes concern every time you say it. So dont do it.

Which brings me to the issue of the Medicare levy and tax.

While the Governments claim that the NDIS is under-funded simply doesnt stack up, Labor does not deny the need for difficult decisions.

In fact, weve led the debate on the need for revenue measures through our carefully designed policies on negative gearing, capital gains tax, superannuation and last weeks announcement of a cap on the costs of managing tax affairs.

And accordingly, we make the difficult decision to support the increase in the Medicare levy on the top two tax brackets and, in effect, to make the deficit levy permanent.

Unlike the coalition in 2013, we make these announcements now, from Opposition, not in the first budget post-election.

But we dont support increasing the Medicare levy on lower income earners.

Some context is important here.

Every Australian earning more than $80,000 got a tax cut last year. A tax cut supported by both sides of politics.

And regardless of how you describe it, Australians who earn more than $180,000 will pay less tax on July 2 this year than they pay on June 30.

But you have to reach back to the Gillard Government to find a time lower income workers got a tax cut.

This at a time when wages growth is at record lows.

In fact todays data confirm that wages growth remains at record lows, with wages now growing more slowly than the increase in the general cost of living.

Real wages are now going backwards.

And when many workers will receive a pay cut on July 1.

A pay cut unprecedented in Post-World War II Australia.

We say this is not the time to be increasing the tax burden on people on $30, $40 and $50 thousand dollars.

And hence we have designed a policy which raises slightly less than the Government over the forward estimates, but more over the medium term and makes our tax system more progressive.

Now of course, when the Budget is in surplus, personal income tax relief can be examined.

And this brings me to company tax.

While the Government is lecturing people on $30,000 a year that they should be paying more tax, they are intent on delivering tax cuts to businesses.

Last Thursday, we had the most farcical Question Time I have witnessed in my 13 years in Parliament.

The Prime Minister and Treasurer were casting about, with multiple new figures to explain the cost of their corporate tax cuts.

But at its nub, the confirmation that the tax cuts will now cost $65 billion over the next ten years underlines what Labor has been saying for a long time.

That is, the tax cuts are long term structural drag on the budget.

The cost increases simply because at maturity, the tax cuts are so expensive.

Contrast the two approaches: The Governments corporate tax cuts cost the budget $15 billion a year in ten years time, our negative gearing and capital gains tax reforms make the budget $8 billion a year.

And the Liberals dare to claim the mantle of fiscal responsibility.

At its core, this budget was about survival, not values.

It was about the Prime Ministers internal viability, not the long term prosperity of the nation.

It was about the next Newspoll, not the next decade.

It was about politics, not policy.

The nation deserves better.

In Opposition, Labor has been developing and releasing a comprehensive, detailed and some have said bold economic plan.

Were not afraid to take risks. We dont shy away from being up front about our plans.

In some ways, this Budget is a testament to that detailed plan.

The Government has recognised that they need to catch-up with us on health, education, housing affordability and fairness.

We welcome this recognition.

But they have fallen short.

Their policy offerings dont cut muster.

Because they dont really believe it.

The buzz word of the day for the Coalition is fairness, yet they have left in place billions of tax concessions and unfair tax deductions which if reformed could help lock in our AAA credit rating.

Ive spoken about negative gearing and capital gains concessions.

While they are important from a housing affordability perspective, lets not forget they are also good for the budget and improve the fairness of the tax system.

Take the capital gains tax discount, budget papers now show that these tax concessions are now set to hit $13 billion each and every year by the end of the forward estimates.

This is a tax concession where 70% of the benefits flow to the top 10% of income earners.

Yet the Government has done nothing.

At a time when the Government is asking lower and middle income people to pay more tax, it is even more paramount that the tax system is seen as being fair.

But under this Government loopholes remain.

There were 48 people in 2014-15 who earned more than $1 million but paid zero tax.

A staggering nineteen of these people claimed an average of $1.1 million in deductions for the use of the lawyers and tax advisors that helped them pay no tax.

Compare this to the average person who claimed a deduction, claimed just was $378.

Its these sorts of loopholes that Australians are right to feel fed up about.

At a time when the Government wants to blow a $65 billion hole in the budget for its corporate tax cut, there is no excuse to not address these inequities.

Bill Shorten announced last week we would cap managing tax affair deductions at $3,000 per year, a measure that will raise $1.8 billion over the decade but will only affect less than 1% of all taxpayers.

Following on from our reforms to negative gearing, capital gains tax, and superannuation, its the next step in Labors plans to make our tax system fairer.

These reforms will like our reforms to negative gearing and capital gains help build trust that the tax system is working for everyone, not just a wealthy few.

On future

A political document like this Budget that is about getting the Prime Minister through the next four sitting weeks, and by its very nature is weak on economic reform and the future, inevitably leaves the country poorer.

The Government and Prime Minister that used to talk about how its never been a more exciting time to be alive, about innovation, about responding to climate change.

These issues now barely get a mention.

These issues were apparently important to the Prime Minister back in time but it would seem with his political survival in question, they are now not.

Our chameleon Prime Minister, while trying to improve his political fortunes, has forgotten about the nations future.

We are living in an age of transformation.

While the Government has dropped the ball on education, Labor hasnt.

While the Government has dropped the ball on innovation, Labor hasnt.

While the Prime Minister has dropped the ball on energy and climate change, Labor hasnt.

And while the Government is failing to do the long-term thinking the country needs, Labor isnt.

Its why Bill is so passionately focused on lifting the skills and human capital of Australians.

As Bill said the other night, Australias future lies in human capital: in skills, education and training.

Nearly 1 in 5 [18.3%] young people aged 15-24 are underemployed and cant get the amount of work they want.

As I revealed in a speech a couple of weeks ago, new data suggests between 30 and 40 per cent of the jobs in the financial services industry could be automated or manufacturing could witness automation affecting 50 per cent of jobs currently performed.

The fact is, the jobs of the future will need a real lift in investment in human capital.

But in this Budget, our human capital will be eroded.

• $22 billion from Australian schools
• $3.8 billion from universities
• And nothing for TAFE and apprenticeships.

And after living through five minutes of innovation sunshine on the Prime Ministers watch, theres very little mention of the importance of innovation for the future of our nations living standards.

Gone is the talk about innovation and agility.

And climate change, an issue that didnt rate a single mention from the Treasurer in his Budget speech or the Budget.

This despite the Governments fig leaf emissions reduction fund policy about to run out of money.

This budget delivers ZERO new policies or funding to drive down pollution and combat climate change.

It is vital that our economy that we get the transition right, but the Government is asleep at the wheel.

How does the government maintain its commitment to the Paris Agreement climate change targets, while ruling out anything that even remotely resembles a carbon price and not funding its costly government controlled emissions reduction fund?

There is no greater cheat on future generations of this country, than the Prime Minister putting his own political interests ahead a well thought through energy and climate change policy.

Its why Labor has been rolling out its comprehensive plan for energy and climate change, its commitment to introduce an emissions intensity scheme, a policy that will help Labor achieve 50% renewables by 2030.

These arent passing fads for Labor as they are for the Prime Minister.

Conclusion

Well for Mr Turnbull himself, what he stands for on key philosophical and policy issues, it feels like hes up to 20.0.

You can only flick so many policy switches before the Australian people themselves flick the switch and stop listening.

Lets be clear, the best way to guarantee the future of the NDIS, of Medicare, of proper-needs based schools funding, of quality action on climate change, of pushing all levers in addressing housing affordability, is not to pretend you can have a Malcolm Turnbull being poked and prodded by a conservative backbench to deliver Labor-lite policies.

Its actually by electing a Shorten Labor Government to do the job properly in the first place.

We continue to lead the debate while the Government looks for the next policy switch to try and shore up its political fortunes.

We will continue to fight for a properly funded schools and universities.

We will continue to fight for a fairer tax system.

We will continue to outline policies that will see us return to budget balance.

And we will continue to fight for an efficient market based mechanism to meet our international climate change obligations.

We seek a mandate to do all these things and more.

Because weve seen four years of policy drift, we know that we have to come to office with a clear agenda for the future of our country.

And its that agenda we look forward to implementing.