Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House why it is important for the government to deliver economic reforms that are costed, funded and consistent with a serious and credible fiscal policy? What other approaches have been put forward and what would be the impact of these?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Deakin for his question. I would also like to acknowledge Mathew's presence in the gallery today and say how proud we all are of his achievements.

Honourable members: Hear, hear!

We have spoken a lot about the patchwork economy over the past few months and indeed over the past year, and we have seen the contrast in our economy writ large in the past week. We have seen the substantial job losses at BlueScope, which have been caused by the high Australian dollar and other global factors, but on the other hand we have also seen substantial new investments in the resource sector in the past week and of course we have seen today the record BHP profit of $22 billion.

The challenges of the patchwork economy go to the very core of our economic policy-making. Our last budget was focused exclusively on spreading the opportunities of the mining boom. That is why we had a $3 billion training and skills package at the core of that, it is why we must also begin to bring down the company tax rate, it is why we must also give small businesses a very substantial tax cut through the $6,500 instant asset write-off, and it is also why we must put in place the minerals resource rent tax, so we can use those resources from the highly profitable mining industry to cut taxes for struggling businesses elsewhere in our economy.

I know the Leader of the Opposition believes that mining companies are paying too much tax and he believes they should pay less, but what is even more astounding is that he believes that other businesses that are not in the fast lane must have an increase in their company tax rate, and that was the policy that he took to the last election. This is stunningly stupid economic policy. The Australian people deserve, through the MRRT, a fair share of the resources of our country. How the Liberal Party could go around the country arguing that we should not have a resource rent tax, to give a tax cut to small business and to give a tax cut to other businesses through a reduction in the corporate tax rate, is simply astounding. But how he could then compound that by arguing for an increase in the company tax rate just demonstrates how reckless he is and how big a risk he and the shadow Treasurer are to our economy.

At the heart of our reform agenda is a strict fiscal policy. We have put in place a strict fiscal policy to bring our budget back to surplus. It is a strategy that has been endorsed by the IMF and the international rating agencies. We have made a very important advance with that fiscal policy this week by announcing the Parliamentary Budget Office. This is very important because those opposite went through the last election with an $11 billion black hole in their budget estimates and they tried to hoodwink the Australian people that their numbers added up, but at the end of the day the department of finance and Treasury found that they did not add up after the election and that there was an $11 billion black hole. They will have nowhere to hide as they go through to the next election, because they will have to submit their costings to the Parliamentary Budget Office or the Department of Treasury. This is important. The shadow Treasurer has now said that there was a $70 billion hole at the core of their budget estimates. That was repeated by the shadow finance spokesman a few days ago, but today the Leader of the Opposition has said that they did not say that and that is just fanciful. What this proves is that he will say anything and do anything. What does not drive this Leader of the Opposition is the national interest. It is just his short-term political interests. His statements today demonstrate just how unqualified he is and how unfit he is for high office.