Katy Gallagher (ACT, Australian Labor Party) Share this | Hansard source

I am sure everyone would be very interested in this. They are a mechanism by which the parliament approves government spending. They are a reminder of the government's accountability to the parliament. They display government's priorities, and they provide insights into a government's fiscal performance.

So, given all of the government's talk about the importance of budget repair, it is worth looking at the facts about how they have gone. So far, since the 2013 election, net debt has ballooned. The 2013 Pre-election Economic and Fiscal Outlook confirmed that net debt was $184 billion. The 2016 budget papers show that it has now blown out to $326 billion this year. The Abbott-Turnbull government's first budget projected a deficit for 2016-17 over $10.6 billion. Now the government says that it will rise to $37.1 billion this year. It shows that all of their rhetoric is just that—rhetoric. Then, at the end of September, they released the 2016-17 final budget outcome. This is a government that usually loves delivering long lectures about debt and deficit, but there was none of that when the final budget outcome was released. They waited for a quiet Friday afternoon in the hope that no-one would notice this moment—a moment when their rhetoric was once again deflated by the cold reality of the numbers.

What were those numbers? In the 2013 Pre-election Economic and Fiscal Outlook, the 2015-16 budget deficit was estimated to be $4.7 billion. The Abbott-Turnbull government's first budget predicted a deficit of $17.1 billion for 2015-16. The final budget outcome for 2015-16 showed that the deficit was in fact $39.6 billion. That is over eight times the deficit predicted in the 2013 PEFO. The difference between these numbers is staggering for a government that claim to be getting spending growth under control. The government may have hoped that no-one would notice the release of the final budget outcome for this year, but we did notice and we know that the Australian people noticed and see them for what they are—a government unwilling to own their own failings and a government whose own rhetoric is at odds with reality.

In contrast to the government's empty rhetoric, Labor have led the conversation on fiscal responsibility and budget repair. We have put forward sensible policies to repair the budget and to repair it in a way that is fair to all Australians. We have led the debate on superannuation tax reform, on cracking down on multinational tax avoidance and on tobacco tax reform. We have done this with sensible proposals that improve the bottom line.

In September we worked with the government to reach agreement on the Budget Savings (Omnibus) Bill. The government's bill as introduced was estimated to deliver savings of just under $6 billion over the forward estimates. We negotiated with the government so that the new policy package delivered more savings—$6.3 billion over the forward estimates. But, just as importantly, the revised package was fairer. The revised package protected ARENA, the child dental benefits schedule, Australians with serious mental illness and vulnerable Australians on Newstart. That is the approach to budget repair that Labor bring and that a Labor government would bring—sensible decisions, sometimes difficult decisions, but always fair decisions.

There is no greater contrast to our approach than the government's company tax cut for the big end of town. This is a $50 billion promise to deliver tax cuts to big business, including billions to the big banks, for very little in return. At a time when Australia's AAA credit rating is under threat, it is an astonishing thing around which to frame a budget. That this was billed as the centrepiece of this year's budget shows exactly where their priorities are. And, yet, the list of those who have questioned the value of a company tax cut just keeps growing. They include the Grattan Institute, the Australia Institute, Peter Martin, Ross Gittins, Michael Pascoe and John Hewson. Even Peter Costello has been less than effusive.

During the last election campaign, the Economic Society of Australia surveyed a panel of distinguished economists. They were asked whether it was better to invest this money in schools or in cutting company tax. Almost two-thirds said it was better for growth for the money to go to schools. That is, around two-thirds of some of this nation's top economists said that there were better things to do with this money than to throw it away on company tax cuts. Even Goldman Sachs analysis queried the merits of a company tax cut. A Goldman Sachs research note is reported to have found that it is likely that 60 per cent of the benefits of a company tax cut would go to offshore investors. When even Goldman Sachs is questioning your tax cut, you should know that it is time for a rethink.

The company tax cut will be a further windfall to those multinationals that are already evading tax. It will not be a windfall for Australian investors, who, because of our dividend imputation system, can already access franking credits for taxes paid by companies. This ever-growing line-up of people and bodies questioning the company tax cut shows starkly how this government takes senseless ideology to a new level. This is from a government that loves to divide Australia, with its talk about 'lifters' against 'leaners' and the 'taxed' against the 'taxed nots'. It is a government that has just redoubled its efforts to cut paid parental leave. It is a government that wants to make it harder for the new parents of this country to take time off to look after their kids and yet can find money to hand out tax cuts to big companies.

By contrast, Labor are a party of serious tax reform. We support tax cuts for small business because we support tax relief that is targeted, effective and responsible in the current budgetary environment. So we call on the government to ditch their wasteful tax cuts and to support our more sensible approach. We are also a party that are prepared to support tax reform that helps the budget and is in the interests of the community. Our policy on tobacco tax was quickly adopted by the government. We have also led the debate on superannuation tax reform. We have led the debate on closing multinational tax loopholes. And we have led the debate on tax reform to help even the playing field for Australians wanting to own their own home.

We have recently had the Treasurer finally acknowledge that housing affordability might actually be an issue for Australians. But he had no real solutions. He came out and said that housing affordability might be an issue and that the states and territories might have to do something about it. I can report that, in the ACT, Labor is already doing the hard work on this issue and that there was no support from the Treasurer or the Prime Minister. Labor made the decision to implement difficult tax reform, shifting from stamp duty to land tax. This was to, amongst many things, ease the burden on home buyers. Earlier this year, the Prime Minister suggested that states should consider reforms just like this. You would have expected him to have given some credit to the ACT government, to have praised the work that they are doing. But, of course, he fell silent as the Canberra Liberals rolled out yet another scare campaign against these reforms.

The ACT Labor Party has made the tough calls. The Australian Labor Party have also made those tough calls. We put forward a policy to limit negative gearing to new properties going forward and to reform the capital gains tax discount. These were tough decisions, but decision that will stimulate new construction and remove unfair disadvantages faced by homebuyers—another example of budget repair done in a way that prioritises fairness. We are streets ahead of a Treasurer who has belatedly entered the debate only to lecture the states and territories and a Prime Minister whose solution on housing affordability is to tell rich parents to shell out for the kids.

Let me conclude by saying, you can judge governments not by what they say, but by what they do. Amongst all the noise, budgets reveal priorities; tax measures reveal priorities; and appropriation bills reveal priorities. What they reveal today is a government that is not able to deliver budget repairs and whose expansive rhetoric is belied by their record, and a government whose only priority is a company tax break for the big end of town that will not help ordinary Australians. Labor will continue to put forward constructive solutions, we will continue to work in good faith for the Australian people and we will continue to prioritise fair budget repair that is in the interests of the community as a whole.