Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

In the appropriations bills that are before us, we are effectively dealing with what at times in our history have been quite heated debates—they used to be called supply bills—and some of the most extraordinary moments in Australian politics have found their way into these debates. These days, given that we are not currently in a situation where oppositions are behaving quite the way they did in 1975, we find ourselves in a more measured debate but also with an opportunity of taking advantage of the standing order that applies only to these bills and to the Governor-General's address-in-reply where we are able to speak in a very broad-ranging way. It is necessary when you deal with this budget to speak in a broad-ranging way simply because the entire fiction of the fiscal approach of this government is made clear with the bills that are before us.

Prior to the last election in a budget reply when the now Prime Minister was Leader of the Opposition—at this very dispatch box here—he said:

People can be confident that spending, debt and taxes will always be lower under a coalition government.

We have a budget now where spending is higher, debt is higher and taxes are higher; notwithstanding that the guarantee from the then Leader of the Opposition was:

People can be confident that spending, debt and taxes will always be lower under a coalition government.

Then, after the previous budget on 19 May last year, he said:

but every day in the lead up to the last election, I said to people, 'We are going to get the Budget back under control.'

The form of control has been to double the deficit in 12 months.

Let us look at what the then Leader of the Opposition now Prime Minister said in that first quote. He said that spending would be lower under the coalition, debt would be lower under the Coalition and taxes would be lower under the coalition. In terms of spending, in the four years that followed the global financial crisis while Labor was still in government, we established a rule on spending growth that spending growth would not exceed two per cent and applied that year-on-year. Over those four years, we did not simply have the rule in place that spending growth would not go to more than two per cent, we more than met it. Over those four years, spending growth in fact remained on average at 1.3 per cent year-on-year. Under the coalition, spending growth over the next lot of forward estimates, averages 1.8 per cent. They said spending would be lower under a coalition government. Labor had a rule it had to stay below two per cent and actually delivered 1.3 per cent. The coalition, looking forward, is at 1.8 per cent over the forward estimates. Spending is running at 25.9 per cent of GDP—almost as high, within about 0.1 of one per cent, as it was during the global financial crisis. We had a need which was initially supported by both sides of politics but they then walked away from it. Had we in government walked away from the stimulus measures, if the then opposition had had their way, Australia would have gone into recession. The spending levels as a percentage of GDP are now nearly at that level again, without a global financial crisis.

When the Prime Minister was the Leader of the Opposition he said the debt would always be lower under a coalition government. Well, under the coalition Australia's net debt is now $285.8 billion—the highest it has been in the history of the nation. When people promise that something will be lower, it usually means delivering a smaller number than the previous one. For all this government have said about debt and deficit, year-on-year they have doubled the deficit and Australia's net debt is now the highest it has been in the history of the nation. Net debt under the coalition continues to grow in nominal terms each and every year over the forward estimates.

The Prime Minister when Leader of the Opposition also promised taxes would always be lower under a coalition government. Over the period Labor was in government tax receipts averaged 20.8 per cent of GDP. Under the coalition today, tax receipts will average 22.6 per cent of GDP over the budget forward estimates. So under Labor, 20.8; under the coalition, 22.6. Tax receipts as a percentage of GDP are forecast to be at levels which have not been seen since the years of the Howard government. Through the entirety of the period, from the peak in the Howard government through to now, with all those years that Labor was in office in between, tax receipts were lower. This is not some small, tiny, marginal gap—it is from 20.8 per cent to 22.6 per cent of GDP. This is a marked shift by this government—spending growth is higher, taxes are higher, debt is higher.

As I said, the deficit has doubled year-on-year. There has been an argument about how you view the figures for Labor's final budget and final period in office. But you do not need to get into that argument to see whether or not the deficit has doubled—you only have to look at what this government presented last year in its budget, where the deficit for this year was estimated to be $17 billion, and the budget they presented this year, where the deficit has turned out to be $35 billion. They were meant to have $17 billion last year and now we get to this year and we discover no, it is not $17 billion, it is $35 billion. For all their talk, they have come through and doubled the deficit. Ever since the pre-election forecasts made under the Charter of Budget Honesty in 2013, the deficit has blown out by $95 billion. That is the extent of it.

The Treasurer will say, regardless of everything he said when he was in opposition, 'Oh no, you can't blame me for revenue write-downs, you can't blame me for the iron ore price'—he will come forward with all the excuses that he would never allow his predecessors to use. We need to understand two things about this. First of all, the shift in the iron ore price does not completely explain the blow-out in the deficit—not for a minute. Secondly, it also needs to be remembered that if Peter Costello could handle an Asian financial crisis and Wayne Swan could cope with a global financial crisis, why can't this Treasurer deal with a change in the iron ore price? All Treasurers have to deal with changing global circumstances. You think of the enormity of the Asian financial crisis and you think of the enormity of the GFC, yet we now have a Treasurer who will allow the deficit to be doubled under his watch because he cannot handle a shift in the iron ore price.

One of the things that characterise public discussion of the budget, and understandably, is that people go to the budget documents and look at what is in there but they often miss one key point—anything that has not changed from the previous year's budget is not reported. The reporting of a budget is a reporting of the changes. Therefore, while it is not referred to in the budget documents, this budget still demands there be a shift to $100,000 degrees. This budget still demands cuts to family payments—we have seen even today analysis from NATSEM showing that families are set to be up to $6,000 worse off through a combination of measures from last year and this year. This budget still demands that people work until they are 70 years of age before they are able to retire, and this budget still infers a GP tax because it is brought in by a freeze that means over the course of four years we get to a similar cut in income for GPs as the government was previously trying to do in one hit. Be in no doubt, the GP tax is alive and well in this budget.

It is also the case that there are a number of new measures in this budget. We have already indicated through the shadow Treasurer's comments at the National Press Club last week that we will be supportive of some of them, and when the Leader of the Opposition spoke at the dispatch box last Thursday he made clear there would be a number of measures we would support.

It comes as no surprise that we are willing to support the small business measures, given that they were pretty close to measures that we had in place that this government abolished. They abolished some of them only in the last budget. So we apologise for not getting too excited in the fanfare about these being reintroduced. They were in fact our measures. In the case of the business tax cut, that was one that we put to the parliament and the coalition combined with the Greens to prevent it from going ahead. The instant asset write-off we did get through, and that was abolished in last year's budget. But there is a song and dance now, as though these are brand-new ideas from the coalition. Yes, they are good measures. Yes, we had them in place. I hope the government has the competence to make sure that they are implemented carefully and prudently, and obviously we will be watching that very closely.

There are also a number of measures which contribute $2.4 billion to the bottom line over the forward estimates which the shadow Treasurer has indicated that we will support. These were made up of the zone tax offset, tax changes for temporary working holiday makers, work related car expense deductions, the cessation of the large family supplement of family tax benefit part A and the 'no jab, no pay' immunisation changes. We trust that the costings of those put forward by the government are all accurate, but those are all changes that contribute to the budget bottom line that we have already indicated we will support. There are a number of other changes that we are still working our way through.

It is often forgotten by those opposite that in the last budget more than $20 billion worth of improvements to the budget bottom line were facilitated by the opposition. More than $20 billion worth of improvements to the budget bottom line went through without opposition from Labor. Similarly, though, Labor has gone further in putting forward more than $20 billion worth of additional improvements to the budget bottom line over the next decade through our new policy on multinational tax avoidance and our proposals to deal with high-income superannuation. The government has knocked them out straight away, notwithstanding that they would improve the budget bottom line over the decade of another $20 billion.

Why have they knocked them out? They have knocked out the changes on multinational tax because they have their own idea, with no numbers attached to it—just an asterisk in the budget papers. On high-income superannuation, they are willing to go after pensioners but they are not willing to get an additional contribution from people earning more than $250,000 a year—an extraordinary approach when cooperation is offered across the table but pretty symptomatic of how this government operates.

I want to conclude by referring to one specific change in this year's budget, because it goes to something that was part of a particular budget debate I was involved in at the time of the last election. At the last election, as some members may be aware, among my portfolio as I was Australia's Minister for the Arts. I had a debate against Senator Brandis. It was sort of a debate: we arrived separately, left separately and were never at the podium or near each other at any point in time. It probably worked fine for both of us. But in that debate I made the comment that I had a view that Senator Brandis did not believe in arms-length funding for the arts. He responded, and it was published, by describing what I had said as a 'spectacularly brazen lie'. Yet all I was predicting was exactly what has happened in this year's budget.

Be in no doubt about the level of arrogance of an arts minister who thinks that he will be able to pick and choose more effectively than the arms-length funding arrangements for the Australia Council put in place under the Fraser government, expanded under the Whitlam government. We have an arts minister so arrogant that he thinks he can get away with calling an accurate description of his policy a 'spectacularly brazen lie' before the election, and now he goes through and delivers just that. Senator Brandis needs to know, and the public will know, arrogance does not get missed.

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