Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Hansard source

Sadly, this budget confirms that there is no change in direction in industry and innovation policy. In addition to yet delivering more of the same that so-called 'modern Labor' delivers, there is: total gross debt to breach the $300 billion debt ceiling within the forward estimates; Labor's fifth record deficit in five years, and at least two more deficits to come—whatever happened to that promise of a surplus made hundreds and hundreds of times?; a record net debt of $192 billion, no credible path back to surplus; a laughing stock of even the most basic of predictions within the budget; more broken promises as scrapped tax cuts and family payments hit those in need; and more than $25 billion in higher taxes over the next four years.

There is one thing that this government does do exceptionally well, and that is the use of spin and the unashamed use of Orwellian language. Remember that this was supposed to be a budget about jobs growth! Jobs and growth—and what do we see? That it delivers higher unemployment—up to 5.75 per cent—and lower growth—down to 2.75 per cent. In fact, this is a budget for higher unemployment and lower growth.

It is no surprise: this is what we have come to expect from this sort of government. They blame everyone else! One of the most frustrating and infuriating things about this government—and I share this with so many Australians—is the inability and the stubbornness to accept responsibility for their gross errors of policy and judgement. Why can they not just be upfront and honest and say, 'We've stuffed it up'? Why do they keep trying to blame everything and everyone else?

They say that there is a revenue problem, but revenues are up. It is not a revenue problem that this government have, it is a spending problem. Everyone knows that. Everyone knows that and so does the government, but they stubbornly refuse to accept that.

I do want to focus, as I said at the beginning, on my portfolio of industry and innovation. At a time when Australia's innovators, scientists, start-up firms and manufacturing companies, in particular, are crying out for a new policy direction and for some serious vision, all the budget provided was confirmation that Labor regards making another wholesale cut to incentives for investments by Australian companies in R&D as a headline priority. It wants to speed up shovelling money out the door on its carbon tax compensation programs before the election, not to mention indecently rushing to send out up to another $800 million through the utterly unnecessary Clean Energy Finance Corporation—yet another legacy of that failed experiment of the Labor-Green's alliance.

At the eleventh hour, as part of the carbon tax negotiations, what did we get? A green bank, a slush fund of $10 billion of taxpayers money, borrowed at a time when we have a budget crisis, to pay for what? To pay for projects that are unviable and would not be funded in the private sector. How utterly irresponsible. At a time when we are having a discussion about appropriate funding models for industry assistance and how we need to ensure that there are adequate guidelines and checks for the use of taxpayers' money, here we have this absolutely indecent haste to shovel out almost $1 billion before the next election, at a time when the coalition have made it very clear, from the very beginning, that as part of our abolition of the carbon tax we would get rid of the Clean Energy Finance Corporation. It is in writing and any attempt by this government to shovel out more money, particularly in the caretaker period, would show an absolute disregard not only for good government but also for the will of the Australian people, should there be a change of government on 14 September.

Let us look at what they have tried to deliver in the industry portfolio. They actually still have no idea how they are going to deliver on their 2011 industry precincts announcement or their 2012 spin that they would establish a manufacturing technology innovation centre. In fact, their agenda is so decrepit and so devoid of any new ideas that they think the best thing to do is to try to re-badge a number of failed announcements from the past and pass them off as new. Otherwise, all the budget really did for this portfolio was affirm that the government intends to plough ahead with their limp industry statement from February.

The government has said that it is funding its various changes in that industry statement, guess how? By making yet another deep cut to R&D tax incentives. It made it comically clear that its last round of changes was revenue neutral but now it asserts the cut this time amounts to around $1 billion. Not only is there absolutely no evidence anywhere on the public record to verify that figure but it represents quite a difference from the figures calculated by the government in its own business tax working group when it was modelling the same numbers last year. It is also at odds with the nature of those previous changes made by the government to the R&D tax break system from 2011. Those sorts of changes were specifically designed to reduce the claims on the system by the largest investors in innovative R&D activity in Australia. Pointers to that fact can be found numerous times in Labor's legislation and in its own words, not to mention the words of the Greens—albeit that the words of the Greens proved that they have plainly never had a clue about the sort of damage they were agreeing to inflict on the system when they foolishly passed Labor's 2011 changes. At least in that regard there is consistency.

Yesterday in the House, even though they were directly challenged to do so, no-one on the Labor benches could provide an explanation as to how on earth the $1 billion has been calculated. The reality is that they either do not know or they do not want to explain something they know is wrong. In so far as a serious calculation has been done, one would have to assume that figures for the old R&D tax concession have been used to underpin it, in which case the saving will almost certainly have been over estimated.

I would also add that the government first cited the $1 billion figure in February, long before most claimants had concluded all of their R&D spending for the first year of the new system and at which time the government still could not have been anywhere near sure of the full impact their changes have inflicted on large R&D spending businesses. In other words, there is absolutely no reason to be anything other than deeply suspicious and cynical about the claim that the savings they are supposedly making by decimating R&D tax incentives for the second time in this government's history have been accurately calculated. This government is consistent at least in that regard—being utterly incapable of providing any incredible assessments or calculations to do with spending or budget forecasts.

The government has also publicly tried to create the pretence that its industry statement somehow represents an injection of $1 billion in new funding in the industry portfolio, but anyone who has more than a cursory look at their summary figures knows that that cannot be true. Instead, it seems to incorporate about $600 million worth of cuts. Before the 2010 election Labor made billions of dollars of promises to the car industry only to break, after the election of course, $1.4 billion worth of promises to them and add a carbon tax on top of that. The Green Car Innovation Fund was abolished with the stroke of a pen, with around $850 million promised to the industry suddenly gone. The axing of their signature policy for the car industry at the 2010 election, the absolutely discredited and absurd cash-for-clunkers scheme, accounted for a trashing of another $429 million.

What did that do? That just added, as Mike Devereux from Holden has said, to the sovereign risk of investing in Australia. At a time when we are competing particularly for investments from multinationals, what did this government do? Before the election they said to the industry: 'Open up your books. Tell us what you are prepared to do if we commit to these promises.' So in good faith, on the past track record of the Australian government, these multinationals took the Australian government at their word. After all we are not some tin-pot country that cannot be believed, or so they thought. They were wrong. The word of this government cannot be believed whether it is by taxpayers or by business which seeks to invest in this country. No wonder it has raised the issue of sovereign risk. You cannot tell industry, 'Do this because the government is going to invest this much money. Believe us, take us on our word. Do the right thing,' and then, without even as much as a phone call, trash all of your promises you made to that industry.

The budget papers also confirm the government remains utterly bereft on car industry policy. There still no change to a funding system that has failed both the sector and the Australian taxpayer in a monumental and catastrophic fashion. Under Labor let us have a look at some of the key indicators. Vehicle production has declined in Australia by as much as one-third, exports have dropped by 27 per cent and turnover in the industry has fallen by 18 per cent. Around 20,000 car industry jobs have been lost, or around 80,000 direct and indirect jobs that are car industry related if you apply the multiplier that the government regularly uses. They are now in such a state they are even consumed by illogical internal debates about re-regulating the Australian dollar and raising tariffs, which is no surprise when you examine some of the members on the other side. They thought they had a safe Labor seat for life, a great ticket, and then all of a sudden they find a Prime Minister—arguably the worst one in history—

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