Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

Show no mercy, Mr Deputy Speaker! The Labor Party's fiscal rules make it very clear that we will be providing bigger budget surpluses over the forward estimates, as will be crystal clear when the member for Rankin and I outline the fiscal bottom line during the next election campaign. But it will reflect bigger budget surpluses because of the decisions we have made.

We actually think there is a problem. Without being overly alarmist about the situation, Australia is exposed. We have the second-highest household debt in the developed world. These are uncertain international economic times. The international environment is very benign at the moment, but that won't continue forever. We need to be building the policy buffers so that governments can respond to these uncertain times, and that means bigger budget surpluses than the ones we are projected to have under this government's budget.

We believe you can do that. You can provide small businesses and medium-sized enterprises with tax relief. You can make important investments in health and education, which is important for this side of the House, in particular—particularly our recent investments in schools and in preschool. You can make important social investments in things like the superannuation wellbeing of Australia's women. You can afford to do those things if you're prepared to make tough decisions, as we on this side of the House have done. But you can't do that if you're not prepared to make those tough decisions, as this government has simply failed to do.

This is the latest change in position from the government on tax. We're used to it now. We've got the now Prime Minister, who was Treasurer, who's had state income taxes, an increase in the GST, big swingeing personal income tax cuts and then smaller income tax cuts. Of course, this now Prime Minister, the then Treasurer, has not accepted and kept to one persistent and consistent economic position on tax for his entire term as either Treasurer or Prime Minister—not one, for his entire term. This is just the latest thought bubble. And we've seen plenty more thought bubbles today from this Prime Minister, who's in desperation mode about a certain coming event on Saturday—but that's a different matter for another time. It just goes to show that there is nothing consistent about this Prime Minister's approach.

We are prepared to facilitate this debate. We have said that we will facilitate the debate through this House and through the other house, because small and medium enterprises deserve the certainty to know that these tax cuts are locked in. But they deserve to know more than that. They deserve to know that an alternative government will provide them, as well as big businesses, with more tax relief through the Australian Investment Guarantee, if they agree to invest in Australia. They deserve to know there is an alternative government that is prepared to pay for it and have bigger budget surpluses.

But part of the problem is: the Prime Minister simply doesn't understand the basics of the budget. He says that tax cuts don't make the budget worse. Well, they do. They actually do increase the budget deficit or reduce the budget surplus; it's a statement of fact. We recognise that. We recognise that tax relief can be appropriate, but it has got to be part of an overall budget strategy. We actually do that by delivering on the tough decisions. The Prime Minister makes a virtue of not doing that. He makes a virtue of ignoring the fiscal reality. He is throwing money at all the political problems of the government.

Today we've seen a humiliating backdown by the Treasurer on the GST distribution. The week before last, I called for a guarantee to be written into the GST distribution legislation. The Prime Minister and the Treasurer got themselves in a lather, started hyperventilating and said it was 'unnecessary' and 'unworkable'. They said it meant we were selling out the people of Western Australia. I was told I was selling out the people of Western Australia—terrible! Terrible, it was! It was a 'calamity', the Prime Minister and the Treasurer said! We stuck to our guns. And, a couple of days later, the state and territory treasurers unanimously agreed with us. Dominic Perrottet, the Treasurer of New South Wales; Tim Pallas, the Treasurer of Victoria—all of them, Labor and Liberal, from Tasmania to Western Australia, agreed with federal Labor's position. And what has happened today? The Treasurer of Australia has agreed with that position. It's another humiliating backdown by the member for Kooyong, the Treasurer—a humiliating backdown when it comes to GST distribution. And it's a humiliating backdown by the Prime Minister. It underlines my point: there is nothing these guys will consistently stand up for and believe in. They will do what it takes from day to day.

But we, as a constructive alternative government, will facilitate the passage of this legislation and ensure that every Australian business has the same rate of tax, regardless of who wins the next election. Australian businesses will have access to the Australian Investment Guarantee under a Shorten Labor government as well.

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