Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Hansard source

Along with other members of the coalition, I support the reconstruction but oppose the tax which is being levied through the Appropriation Bill (No. 3) 2010-2011 and cognate bill in order to address reconstruction. Reconstruction in the face of natural disaster has always been core business for Australian governments. We have a contingency reserve. We make provision. We make savings. We do the difficult things precisely so that at the moment of need we are ready. Support or opposition to these bills does not represent support or opposition for reconstruction. It is inappropriate for anybody on the other side to misuse this debate to indicate that there is not absolute unanimity for reconstruction in the face of the terrible hardship that Queensland has faced. What debate on these bills represents, at its core, is the fundamental work to provision, to prepare, to protect and to make sure that our nation’s finances are ready for the inevitable range of natural disasters that are part and parcel of Australia’s landscape, our history and our future. That has not been done.

I want to make two simple points in this statement. Firstly, there is an increasing pattern by this government of using a good purpose as a justification for a bad means. Secondly, I want to run through a little bit of the financial history and current practice which has led to about $209½ billion of accumulated debt over the last eight Labor budgets and the next proposed Labor budget. It is not due to a one-off global financial crisis; it is a pattern over eight successive budgets, with a ninth budget to come.

I think it is very important to recognise that this is not just being unlucky; this is a systemic pattern of gross misuse of Australian finances. And all the time there is a better way, which is to be more responsible through making the difficult cuts. We have made them and, most intriguingly, the government has effectively conceded that it could also make them.

Let me run through the facts about, firstly, the increasing pattern of applying a good purpose—a moral purpose—to justify a very bad policy, which can frequently have deep human consequences. I will begin with my own portfolio area and the Home Insulation Program. We were told it was a moral imperative that we support it. Only that package could, so they alleged, save Australia and be efficient, as well as make inroads into reducing Australia’s emissions. It failed on the value-for-money test. It failed on the fraud test. It failed on the test of public safety. Then, most ironically, the emission reductions were overstated by about 300 per cent. It was a catastrophic policy but we were told it was for a good purpose and therefore it was our moral duty to support it. We opposed the Home Insulation Program. We attempted to prevent it coming into being. We foresaw the impacts it would have on the industry. We foresaw the risks to public finance and we foresaw and forewarned about the absolutely flawed structure that would inevitably lead to rorting and risk on a grand scale.

But that was not the only example. The Green Loans Program was such a misconstruction, right from the outset, that we knew that there was no way that it would be successful. In the end, over $200 million was spent to generate 1,000 loans. The processing fee per loan was more than $200,000. That is incredible. If you designed a program to get that result and took it to the public you would be laughed out of every form of government in Australia.

The Green Start program, the successor, also failed. We were also told that was a moral imperative because only it could help make the efficiency savings. We were told, similarly, that the citizens’ assembly was a moral imperative, but it had a half-life of about four weeks. We were told that cash for clunkers was a moral imperative whereas, instead, it was a fiscal insult to Australians. The same people who devised the Home Insulation Program, the Green Loans program, the Green Start program, the citizens assembly and the cash for clunkers are now telling us that it is a moral imperative to use a tax to pay for the flood reconstruction, right in the face of Australia’s history of provisioning for natural disaster relief, repair and reconstruction as core business.

Against that background, that pattern, of misusing a good purpose to justify a bad mechanism, I want to deal with the broader parameters. There is a better way of doing this than raising a tax—which will be one of three major taxes moved this financial year. The second tax is the mining tax. We now know that the figures on that are so bad that there has been a $100 billion variation in what is actually going to be delivered over the coming years compared with what was promised. That will leave an enormous gap because the government have spent all of the proceeds. They will have a much lesser proportion of receipts, whilst also creating sovereign risk in the mining sector and dampening future investment.

Today the Prime Minister has confirmed that there will be a carbon tax, which she expressly ruled out on 16 August and on 20 August, on election eve. The Treasurer called the carbon tax ‘hysterical’ and expressly ruled it out twice in the week before that. That tax will have an enormous impact on electricity and, as of yesterday, petrol prices for Australians.

Against that background, let me make this point. I have recently gone back to the published budgetary figures and the most recent updates from the government. When you do the analysis—when you look at the spending habits and practices of the last eight Labor budgets, including the coming budget and the final five budgets of the Keating era, you will see the following. In the Keating years there were deficits of $12 billion, $18 billion, $18 billion, $14 billion and $11 billion, or an accumulated total deficit of $74 billion. Interestingly, things began to turn around immediately during the period of the Howard government, when there were accumulated budget surpluses of $95 billion. The last three surpluses were $13 billion, $15 billion and $19 billion. But with Labor back in government we have miraculously had budget deficits of $27 billion, $54 billion and $41 billion and a deficit of $12 billion is proposed for the next budget. In nine consecutive Labor budgets, including the proposed budget, we see a total of $209½ billion of debt.

It is extraordinary. We go from minus, minus, minus, minus in the Keating era to a reduction in the debt and then plus, plus, plus through the Howard years. As soon as the Howard years finished, we get $135.5 billion of debt in the next four budgets alone. The government’s answer? ‘Bad luck. We are just unlucky. We had to spend the $74 billion of additional expenditure in debt and deficit over the last five years of the Keating government and then we had to spend the additional $135 billion of debt and deficit over the first four years of the Rudd and Gillard governments.’

So there is a systemic pattern of failure in relation to the fiscal responsibility of the Labor Party. There is a $209 billion pattern of debt over nine consecutive budgets. This is not bad luck. This is not inadvertence. This is fundamental and systemic. That is why we say that there are huge savings to be made which would be about fiscal prudence as well as the correct way to provision for the rightful reconstruction of Queensland—Brisbane, Ipswich and Toowoomba in particular.

We know that the government knows this as well. The Prime Minister was asked, ‘What if the costs are additional?’ She answered, ‘We’ll find the savings.’ When Cyclone Yasi came along, which was not expected at the time the levy was announced, she was asked, ‘What of the costs here?’ and she replied, ‘We’ll meet those through savings.’ And then we saw a third example—in order to get the bill through they had to negotiate either deferring or axing over $400 million of their savings. So they will either have to increase the tax, increasing the deficit, or find those additional savings. We are led to believe that they will find those savings. Subsequently, on three different fronts, they indicated there were more savings to be made. It is absolutely clear that there are extraordinary savings to be made. But none of these savings, of course, are real or desirable—are all opposed until the moment the government reverses position and embraces them. That is the pattern, and we see from some a misuse of morality to justify bad policy.

When you look at the last eight Labor budgets and the proposed budget for next year, you see nine consecutive deficits. All the deficits are over $11 billion per annum, with some rising as high as $54½ billion. That is not bad luck; that is bad management. It is systemic, it is real and it has resulted in a net loss of $209.5 billion to the Australian taxpayer. It is recklessness on a grand scale and we do not want to compound this recklessness by supporting this levy.

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