Christian Porter (Pearce, Liberal Party) Share this | Hansard source

The MPI today talks about wrong priorities and I suggest that with the use of that word it conceals at least one accurate observation—that is, that budgets are all about priorities. It recalls to mind some advice that was given to me in preparation for a Treasury role. The advice was tongue-in-cheek, admittedly, but I found it very depressing. The advice was from someone who had experience in this matter. They said it was very easy to be a Treasurer because people knew with particular individual precision exactly what they wanted from government. Firstly, they wanted increased spending on services and infrastructure of every type and secondly, they wanted lower taxes, fees and charges.

I think that is depressing and, in my observation, not entirely true. The reason it is not entirely true, although it may be pithy and perhaps to some amusing, is that, if you accept that no Australian likes paying more in revenue for anything or paying more for a service or receiving less of something than they expected to receive—if you accept that, and it is not difficult to accept—there is a truth that it does not necessarily follow from that that this natural part of human nature somehow seamlessly translates into a situation where people's No. 1 priority in Australia for a federal budget is for it to run at a deficit. Poll after poll reveals this fact: what people want consistently from the federal government, and what they wish for and what they want prioritised in federal finances, is exactly the same thing that they wish to have prioritised in their own household budgets, and that is that they be able to maintain a situation where they earn more than they spend on a consistent basis. That is the single, primary, overarching priority of this Treasurer, and it accords perfectly with the single overarching priority of the Australian people with respect to this budget.

Interestingly, it used to accord with Labor's priority. They promised a surplus 500 times, but why was it that the No. 1 priority for Labor, stated over 500 times, turned into the priority that dare not speak its name? I suspect it was because Labor made a mistake in judgement. They first of all made a mistake in terms of the nature and quantum of the expenditure that they embedded in the budget after the GFC, but then they made the fundamental mistake, which occurred to them as reality only very late in their term of office. That was that it would be somehow straightforward or easy to return that embedded level of overexpenditure to a position of surplus without serious criticisms of unfairness or in a way that was somehow magically popular. That was never going to be the case.

If you look at the Labor position, as far as I can determine what it is, there are two primary problems in the position that they have consistently put in response to the coalition's, in my view, very responsible budget. The first is this: if you label anything by way of a slowing of any growth in any transfer payment or departmental budget as a cut and thereby unfair, you resign yourself to the governmental position that it is impossible to return to surplus by expenditure restraint. You simply say it is impossible to do so. If a little boy stands to be measured next to the kitchen door and expects to grow 3½ centimetres in a year but only grows three centimetres, and you say to him, 'You've shrunk'—if that is your logic—then you say to yourself as a government, 'You cannot restrain expenditure in a manner which is fair at all.' The second major problem is this: if you label any expansion in revenue as unfair on the basis that it is unfair if it represents a high percentage share of a total lower compared to a total higher income—if that is the measure for fairness in any revenue measure—you rule out any broad based revenue measure at all. If you say that 40c a week from a low-income household on the re-indexation of the fuel excise is unfair, then you effectively say no to every single conceivable broad based revenue measure, whether it be re-indexation or an increased fee for service that attaches to all Australians. You rule that out.

So, if you still believe, as seems the case after 500 promises, that you wish to return to surplus, and all expenditure restraint is unfair and any broad based revenue measure is unfair, what does it leave you with? It leaves you with targeted revenue measures against Australia's 'top' income earners—that is, those earning over $70,000. That must be the only thing that Labor can leave in its kitty if it were ever in the position of trying to return Australia to surplus. Before anyone ever contemplates that, they need to realise that we rely now more on income tax than we did in 1950. The top two per cent of taxpayers pay one-quarter of all income tax. The top 10 per cent pay two-thirds. Our effective income tax rate is three per cent higher than Canada, five per cent higher than Sweden and 10 per cent higher than the USA. That is not fair.

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