Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Hansard source

I rise to lend some comment on the government's budget and associated appropriation bills. I think it is generous to conclude that the bills show that Labor's financial and budget management at best are in complete and utter chaos. The budget does nothing for Australian families to deal with the rising cost of living. It does nothing to improve services. It delivers more debt, it delivers more deficit, it has more broken promises, it has greater taxes and there is more uncertainty.

This is now six years—this is the sixth budget I have spoken on—of chaos, debt and the associated spin that the Labor Party puts on it. Australians have had a gutful and they deserve a stable and a competent government, and this budget has failed. It delivers a gross debt that will breach the $300 billion ceiling within the forward estimates. This is its fifth record deficit in five years and there are two more deficits to come. Indeed, the nation's largest deficits in history have all been on this Treasurer's watch.

There is no credible path to surplus. Even Labor's much promised surplus in three years time is based on carbon price assumptions that are patently ridiculous—that the carbon price will be $25 a tonne in 2017-18, though it is linked to the European scheme, which is currently five bucks. So a 500 per cent increase is how this government is hoping to get back into surplus. The member for North Sydney was right: the member for Lilley, the Treasurer, Wayne Swan, will never deliver a surplus. Labor will never deliver a surplus. It has not delivered one since 1989, since the member for Longman, Wyatt Roy, was born. It will not deliver a surplus, and we are kidding ourselves to think it may. Tax cuts have been scrapped, family payments have been scrapped, there is $25 billion in higher taxes and there is $100 million of spending on government advertising. The hubris, considering the 2007 election commitment on government advertising, is something to truly behold.

Last year the Treasurer forecast an underlying surplus of $1.5 billion, and what did he deliver? A deficit of $19.4 billion. Next financial year, 2013-14, a deficit of $18 billion is projected. Every single Labor budget is a massive deficit. It simply cannot be believed. Their surplus coming out to 2015-16 of $800 million is simply and utterly farcical. With gross debt heading towards a third of a trillion dollars and borrowings at almost $50 million a day, it is little wonder that Australians are sick and tired of the mismanagement of this government.

The government would have us believe that the situation is parlous because revenues have collapsed by $17 billion. If that were the case—and it is not, but if it were—with a $19.4 billion deficit, you would still be in deficit. The issue is not that revenues have collapsed. The issue is that this government cannot stop spending. Revenue in 2013-14 is $80 billion more than it was in the last year of the coalition government—a fact beyond dispute. The problem is that the spending is $120 billion more. The last budget of the coalition government actually had a $20 billion surplus. This government is delivering almost a $20 billion deficit. The issue is not revenue—$80 billion more revenue. The issue is the government's poor spending—poorly targeted spending, poorly outlined spending. The government cannot stop spending money that frankly it does not have. Spending as a percentage of GDP remains higher than in the last two years of the coalition government, as it has every year under Labor. It is not a revenue problem; it is a spending problem.

The government is not proceeding with family tax benefit A, which it announced in the budget, worth $2.5 billion. Its promised tax cuts have been abolished, reminiscent of the tax cuts under Keating that were l-a-w law—I think we all remember that. The mining tax was supposed to share the benefits of the boom, yet the most poorly designed tax in the history of Christendom has raised literally nothing. Company tax cuts that were to commence in 2012-13 have been cancelled. The blow-out in our borders is legion—blow-out costs of at least $4.7 billion since the last budget, with costs now approaching $10 billion—because this government found a solution and created a problem. Over 40,000 illegal entrants—that is, people who have come without a visa—have arrived because this government has put the sugar on the table. And of course the cost of living, which is killing families, is carbon tax driven in many cases. It is a legacy that the nation is not proud of. It is a legacy that the nation is ashamed of.

If we look in my area, defence, the story is no better. The budget committed $25.434 billion to defence next financial year, which is an increase in CPI of 2.25 per cent, up from $24.482 billion. You will forgive me if I do not share the enthusiasm of commentators who go, 'This is great for defence.' No, you have just kept it at CPI. What happened to the much-vaunted phrase that Labor would guarantee a three per cent real increase? Gone, all gone. That they would guarantee two per cent of GDP? All gone.

There are modest, at best, increases to DMO's acquisition and sustainment budgets: $400 million to the acquisition budget, and the sustainment budget has gone from $5.095 billion in 2012-13 to $5.63 billion in 2013-14, an increase of $600 million. But, in terms of both acquisition and sustainment, the government has stated in the budget papers that funding will rise by $1 billion for acquisition and $1.7 billion for sustainment by 2016-17.

Yet prior to this budget, prior to this small increase in line with CPI, this Labor government, as a statement of fact, has cut upwards of $25 billion from defence in the last five years. I expect that number may increase when Mark Thomson from ASPI brings down his much-anticipated, indeed relied upon, defence budget analysis document. By my calculations, the cuts that this Labor government has made defence endure will be at least $28 billion. It is staggering to think that our national security would be cut by that extreme level. This financial year we are in now has the lowest expenditure in defence in GDP terms since 1938, since prewar, at 1.56 per cent of GDP. It is a national and utter disgrace. DSTO's funding remains relatively flat, with funding next year reducing before going back up again—a major theme in Labor's budget, can I just say.

Defence is now in a position where much of its force is hollowed out; where individual units and formations are receiving cuts of up to 30 per cent; where reserve forces do not have enough days to make the minimum mandatory amount of 20 days; and where, for cadets, the single most important youth development activity in the country, cadet instructor days are being cut by 30 per cent. It is a disgrace.

The centrepiece of the government's budget, announced in the white paper which preceded the budget by a few weeks, was the acquisition of 12 Growler aircraft. It was hilarious to watch the Prime Minister and the Minister for Defence release the defence white paper out at Fairbairn in the hangar. They spent over $150,000 flying in some C17 with some gear on board and some fighters so the setting looked grand—there is nothing like a PM behind a lectern with war-fighting equipment behind it. They cannot find the money to fund it, but they can find the money for a PR stunt—pathetic! The centrepiece was 12 electronic attack Growler aircraft, Super Hornets configured for electronic attack. The budget papers reveal that those aircraft will cost $2.9 billion over nine years. So you would expect the budget to show how that will be paid for—wrong.

Do not listen to what this miserable government say; look at what they fund. If you are not talking dollars you are not talking strategy. There is $2.9 billion over nine years and there is an equity injection of $200 million in 2014-15. Where is the other $2.7 billion coming from? Absorbed costs—another way of saying cuts. Defence will have to cut by $2.7 billion to absorb this new capability. To put this point beyond any reasonable doubt, the budget papers themselves state:

That is a direct quote from budget paper No. 2, page 288. Defence is being cut by $2.7 billion. That is what this Labor government does. Don't look at what they say; look at what they do—$2.7 billion in cuts, again.

What is particularly vexing, what annoys me about this miserable bunch, is that before the 2007 and the 2010 elections they promised there would be free health care for ADF dependants: their spouses and kids, ostensibly wives and husbands, and children that get moved around the country in defence of our nation. Yet it was delayed and deferred last financial year. Nowhere is ADF health care discussed in the budget. Nowhere can I find it in the budget papers. But this morning we find an announcement on the ADF healthcare website saying that that trial has been delayed until December 2013. It is just appalling. You are never going to do it—never. You made a promise to ADF spouses and their kids that you would look after them in terms of free access to health care and you are never going to do it, and you did not even have the courage to come out and say it. You hid it on the Defence health care website. You did not have the courage in the budget. You did not have the courage in media releases. You hid it on the website. It is completely and utterly appalling.

There is a better way. In four months time, the Australian people will have the opportunity to exercise their democratic vote for a better way, on a way that does not cut health care for ADF dependants and their spouses, a way that provides certainty in terms of our defence budget and our national security. In a little over 100 days time Australians will have their say on abolishing the carbon tax, on getting rid of a mining tax that does nothing except introduce sovereign risk into our country and on getting substantial relief from costs of living by getting rid of that miserable carbon tax.

Australians will have their say in just over 100 days on having income tax cuts without a carbon tax. They will have the choice between a government that cuts, wastes, spends, cannot be trusted and is reckless and a coalition that is promising stability, no surprises, no nastiness and income tax cuts without a carbon tax. Those are fully funded commitments. The offset reductions were announced in the Leader of the Opposition's budget in reply speech. Australians will have the opportunity to have their say. The question will be: do you want a government that is taking you towards a third of a trillion dollars in gross debt or do you want an incoming coalition government that will increase productivity, that will get rid of a billion dollars of red tape and green tape every year, that will get the nation working again, that will increase productivity, and that will begin to get the budget back into surplus and to pay off the crippling debt that Labor has left it. That is the opportunity Australians will have in a little over 100 days. They will have the choice between a strong, prosperous economy and the present economy, where companies and small business are just hanging on.

They will have a choice between a government that continues to recklessly spend versus one that will have a commission of audit to look at all the unnecessary expenditure; a government that is addicted to public servants compared to a coalition that will reduce the Public Service by 12,000 personnel through natural attrition. They will have the choice, in 100 days, between a government that is recklessly spending and indebting versus a coalition that is prudent, sensible and growing. Bring on the next 100 days.

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