Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

Seven weeks ago the Treasurer stood up at the dispatch box and suddenly became hysterical. He screamed, he shouted, he went red in the face, he frothed at the mouth, he cursed, he ranted like an old preacher at an AA meeting. We were almost expecting a round of ‘Away, away with rum by gum.’ You could say that he does this often, but this was a particularly spectacular performance—and, by the sound of his rather ponderous and soporific contribution today, he is probably still recovering. Why was it that he became so hysterical? What was the cause of this outburst of red-facedness, hysteria and ranting? The answer is: Labor’s broadband proposal.

This proposal includes drawing on $2.7 billion of Telstra shares, one telecommunications asset held by the government in escrow in the Future Fund, in order to invest in creating the national broadband network that this nation desperately needs and the Howard government has totally failed to deliver. The Treasurer described this as shameful economic vandalism, robbery and burglary. He said it was the most economically irresponsible thing that Labor has said in 11 years. Fortunately the commentators dismissed this hysteria as total rubbish and last night, in effect, the Treasurer and the government completely surrendered. They vacated the field on this assertion that Labor’s broadband proposal is economically irresponsible. Why? Because they have effectively done the same thing that Labor was proposing to do with respect to prospective future investments. But they have doubled it. They have taken what would otherwise have been Future Fund assets of $5 billion plus the earnings that would accrue from that between now and the end of next year, which effectively adds up to double what Labor’s commitment involved. But in true hypocritical preacher style the Treasurer is still trying to pretend he is pure. So in the budget speech, the same speech where he announced this $5 billion drawdown on the Future Fund, he also said, ‘But we won’t be like those irresponsible Labor people who propose to draw down $2.7 billion.’ Let us run through the quote to make it clear exactly what we are dealing with. He said:

If you rob capital or earnings from the Future Fund, taxpayers will have to make up the difference. You are passing our bills, our obligations, from our generation to the next. This will limit their future. We will strongly oppose any irresponsible attempt to raid this national investment for cheap political advantage.

Six weeks ago, in the Australian Financial Review, the Minister for Finance and Administration said:

Certainly this year’s surplus and next year’s surplus will be going into the Future Fund.

So where did this $5 billion for the Higher Education Endowment Fund come from? It came from this year’s surplus—the same surplus that, according to Senator Minchin, was destined for the Future Fund. Whichever way you look at it, however you play with words—as he sought to do in his press release defending himself this afternoon—that $5 billion was halfway out the door, heading towards the Future Fund. He grabbed it and said: ‘We’re going to have a Higher Education Endowment Fund. This isn’t going into the Future Fund.’ So the preacher has gone out and got legless. He is wandering around looking for some alcoholics to convert and lecture about the virtues of abstinence. Labor supports the Higher Education Endowment Fund. It is a reasonable idea. But we should not get carried away with it, as the Prime Minister and Treasurer have done, because it is only going to deliver approximately $300 million of, one would hope, new money to the higher education sector each year. A lot more needs to be done, but that is not a bad start.

But the one thing we can take out of this is that the debate about Labor’s broadband proposal is over. Not only is the proposal good in the national interest from the point of view of getting that broadband network built; it is entirely responsible financially. But yet again there is virtually nothing in this budget to tackle that chronic productivity problem of our falling behind the rest of the developed world in access to high-speed broadband. The government have now conceded not only that Labor’s proposition is good and sound from a communications point of view and a productivity point of view but also that the financing proposal is entirely reasonable—because they are doing exactly the same thing with respect to the headline announcement in this year’s budget.

In a sense that encapsulates the entire budget, a budget built on preaching abstinence and practising incontinence; that is the entire budget of 2007. Yes, there are many initiatives that we support, such as the Higher Education Endowment Fund. Some of them we designed, so why wouldn’t we support them? But the wider picture is different. The wider picture is of a government that is complacently cruising on the minerals boom, handing out money every way it can to try to ensure its re-election while not investing for the future of Australia and for the future living standards of our kids and not investing for increasing productivity to ensure that we stay at the forefront of the world’s nations. When the sun is shining you make hay. That is not what this government is doing and that is not what the budget is doing; it fails the future test.

We welcome the education initiatives that are in the budget, but they are, in overall terms, relatively modest—a good first step. They are good snapshots but they are a long way from being the whole picture. And the government could not help themselves: they had to whack in a little sting in the tail on HECS; they had to slug students on the way through. They had to revert to type and hit accounting, business and commerce students with a big HECS slug, because they could not help themselves. Even though they are trying desperately to look like they care about education—they want to improve investment in education because Kevin Rudd has put the issue squarely at the forefront of the national agenda—on the way through they could not help themselves: they had to slug students.

We need to examine what has not been tackled in this budget. We need to look at what has not actually occurred. There is very little on vocational education in the middle of a skills crisis. There are a few modest initiatives with respect to climate change, the most striking of which is about adapting to climate change, getting used to it—not doing something about it, not acting, not leading the world as Australia should be doing, not contributing to a global solution. Early childhood education is critical to the future opportunities of all children but there is effectively nothing. And, as I said, there is nothing on broadband.

Then, if you look at the wider estimates, the wider projections as to where the nation’s economy is heading, you see productivity effectively at zero and very ordinary productivity figures projected for the future. As to export growth, they have finally given up on all of the outrageous, exaggerated export projections that they have put over the past few years when they have kept saying we are going to get eight per cent or nine per cent growth but it turns out to be two per cent. They are backing that down to five. That makes you really worry about what the outcome and the reality will ultimately be in the next few years if they are pulling their projections down like that, particularly when the projections indicate that the current account deficit is expected to blow out to six per cent again.

Unemployment is expected to rise; job creation is expected to fall. It is also important to look at the wider macrofiscal position to lay to rest once and for all the suggestion that this is a fiscally conservative, ‘small government’ focused, economic-managing government. Fifty-three billion dollars in additional money has rained down on the government since December. The estimates for the four years have $53 billion more than what was available in the equivalent estimates in December. They have spent the lot. They have used the lot, some on tax cuts and an awful lot on spending, and they have managed to throw in an additional $4-odd billion of spending at the end of this financial year, the one that is about to close, not to mention the $5 billion that has been put in there for the Higher Education Endowment Fund. We are getting to the point where we are going to see more new spending initiatives at the end of a budget than we see at the start. In the financial year that is about to end, the new spending initiatives that were announced in the 2006 budget for the 2006-07 year were worth about $4 billion. The new spending initiatives for the 2006-07 financial year announced in the 2007 budget are also about $4 billion, even if you exclude the one-off capital investment in the higher education fund. This is a very peculiar approach to accounting.

There has been virtually no serious effort to gain savings, to cut expenditure and to ensure that we have rigorous controls on government spending. A lot more money has been handed out to departments such as Treasury and Finance without even any process attached to them as to what they are supposed to be for. The Melbourne Cricket Club has got another $10 million to add to the $15 million it got last year for its museum, and so the list goes on.

The drunken preacher is having a wild time. He is handing out free advice on abstinence in between swigs of his flagon. He is passing the flagon around and he is having a great time because he has a lot to drink. The worry is, though, that it will be our kids who get the hangover, because when this nation was in a position of enormous good fortune—of great fortune with huge revenues coming in to the government from the mining boom—what did the government do? They squandered it and they are continuing to squander it. Don’t be fooled by the fact that they are trying to look as if they are doing something, because this budget fails the future test. (Time expired)

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