Kerry Rea (Bonner, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. What are the obstacles to returning the budget to surplus?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Bonner for her question. The government is committed to returning the budget to surplus as quickly as possible in the wake of the damage done by the global financial crisis. As part of that strategy, the government has put in place $22 billion worth of savings in this year’s budget. A number of these savings are substantial structural savings that are designed to increase the returns to the budget over time. Unfortunately, last week one of the key structural savings in this year’s budget was defeated in the Senate. I refer, of course, to the reforms to the private health insurance rebate, which would have delivered a reduction of $1.9 billion in government spending over the course of the next four years. We may well ask who it was that defeated this initiative in the Senate and what their position is on the state of the nation’s budget. It was, of course, the opposition—the Liberal and National parties—that defeated the initiative in the Senate, the same opposition that say that the projected deficits are too high and that, were they in government, they would be cutting back dramatically on government spending.

At no point over the past couple of years have we heard a single substantial spending cut proposed by the opposition—the same opposition that says it stands for lower tax and lower spending. The opposition’s one significant intervention in the debate about the structure of the budget has been to knock off this very substantial reduction in government spending and, in order to cover the loss of money involved, it proposes a tax increase. That was the proposition put forward by the Leader of the Opposition. The party that accuses the government of being the tax-and-spend party is in fact the only party that has put forward a proposal to both increase the total spending in the budget and increase taxation.

I notice that another minor obstacle to the budget returning to surplus emerged last week. According to the ASIC website, Henry Ergas’s Concept Economics, which is the preferred economic adviser of the opposition and designer of its secret tax plan, has gone into administration. The opposition’s brains trust has gone broke. Maybe Malcolm has not paid the bill or something. I am not quite sure what the opposition are now going to do given that their only source of serious analysis of economic and fiscal and taxation issues is no longer in the field. They may have to do some thinking for themselves. Perish the thought! There is a crunch coming for the opposition here, because the moment arrives in this game when you are in opposition when you have to set down in detail precisely what changes you would make to the budget settings, what promises you would make to increase spending and for which programs, what spending cuts you would make and what tax changes you would make. And guess what: they all get aggregated, they get added up, and people are able to see whether or not you live up to your commitments to drastically slash government spending, to drastically reduce the deficit and to drastically reduce government debt. I will wait with great interest for that moment, because I suspect that what we will find out then is that all of this carry-on about debt and deficit is just empty rhetoric.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Mr Speaker, I ask that further questions be placed on the Notice Paper. I would also like to thank the Deputy Prime Minister for kindly lending me a Western Bulldogs tie for the purposes of question time today.