Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

by leave—on behalf of Senator Fifield I move:

That the Senate notes that after more than 3 years in office and a change in Prime Minister, the Government still has not found its way and continues to fail to deliver on its commitments to the Australian people.

Just over three years ago Australians were promised the world by Labor. What has Labor delivered? They have delivered waste, mismanagement, record deficits, more than $40 billion in new or increased taxes and $94 billion worth of net government debt. Having inherited a very strong financial position when they came into government, they have turned that around in record time. That is from a Prime Minister who promised he would be an economic conservative, a Prime Minister who promised us root-and-branch reform of our tax system and instead delivered multibillion-dollar tax grabs one after the other in an ad hoc fashion, a Prime Minister who promised us fairer and simpler taxes and came up with taxes that are now more complex and manifestly less fair.

Of course, all of this was going to change with the overnight change in Prime Minister towards the end of June. Everything was going to be better. The government under Kevin Rudd, the then Prime Minister, had lost its way and Prime Minister Julia Gillard was going to find the way back for them. So what has happened? The first act of Prime Minister Gillard was to sit down in secret, in private, and negotiate with three taxpayers the design of a multibillion dollar new tax—excluding all of their competitors from the process, which has got significant competitive implications for those competitors—and things have got worse from there.

Julia Gillard as Prime Minister, in order to retain minority government, negotiated a deal with the Independents. In a very well-publicised press conference, Mr Windsor and Mr Oakeshott signed on to support a minority Labor government. One of the big promises made at that time was that there would be a tax summit by 30 June 2011. There seems to be some confusion as to whether that commitment was indeed made. I quote from a letter from the Prime Minister to Mr Windsor in the context of the agreement that was reached:

Thank you for signing an agreement on 7 September for a Government to be formed based on support for confidence and supply.

The letter talks about a whole range of things she promises, including, in point 3:

A minority Labor Government will facilitate discussion of future tax reform as follows:

a) Convene a public forum of experts on taxation and its economic and social effects to discuss the Henry Review, with that meeting to be held before 30 June 2011.

Mr Oakeshott, in his 17-minute speech announcing to the world that he had decided to support a minority Labor government, said:

We’ve grabbed this opportunity … to achieve a couple of cracking outcomes. We have now got a tax summit that this country needs. By June 2011, we’ve got a commitment to have the Henry Tax review thrown into the public domain with full recommendations from government and a fair-dinkum open debate in this country.

That is a good and big outcome from this process, and one that hopefully demonstrates this is not going to be a weak parliament, this is going to be a strong parliament.

We were promised a more strategic approach to taxation reform. Where the Rudd government failed, the Gillard government, with the support of Mr Oakeshott and Mr Windsor, was going to be better. We now know there will not be a tax summit by 30 June 2011.

As I understand it, Dr Ken Henry, Secretary to the Treasury, will have his last day in the office tomorrow; he made his last appearance at Senate estimates last week. Dr Henry let the cat out of the bag at Senate estimates last week. He confirmed that there will not be a tax summit by 30 June 2011. In fact, the Treasurer, Wayne Swan, has told a business lunch in Melbourne: ‘It is unlikely that there will be a tax summit at all this year. If we are lucky we are going to get a tax summit in 2012.’ I well understand why this government does not want to hold a national tax summit: this government does not want to have a strategic discussion about what the appropriate taxation framework is for Australia for the future. This government wants to continue with ad hoc tax grab after ad hoc tax grab after ad hoc tax grab. This government does not want to have to justify why a particular tax is in the national interest. It just wants to go ahead with finding targets and finding political strategies on how it likes to think it can get away with yet another multibillion dollar tax.

We were promised that, under Prime Minister Gillard, things were going to change. We were told that she was going to keep her promises, for starters. One of the very high-profile broken promises in recent days was the promise not to have a carbon tax. ‘There will be no carbon tax under the government I lead,’ is what Prime Minister Gillard said on 16 August. She cannot get away from that. It was a deliberate deception of the Australian people because she knew that she had to adopt coalition policy before the election if she wanted to have a chance of getting re-elected. But she should have told the Australian people that her intention all along was to adopt Greens policy after the election. That is what she should have done.

Let me reflect on this whole carbon tax debate for a moment. This debate was settled in the last parliament. Both major parties committed to no carbon tax, no price on carbon, in this current term of parliament. Why is that? Because the conclusion after three years of debate in the last parliament was that to impose a price on carbon in Australia in the absence of an appropriately comprehensive global framework would not be in our national interest. It would push up the price of everything, it would cost jobs and it would not help reduce global greenhouse gas emissions.

Today I asked Senator Wong what the net impact on global emissions would be from the Gillard government’s proposed carbon tax. She was not able to answer. Instead what did she do? She fudged. I asked her, ‘What is the net impact of your carbon tax on global emissions?’ She did not want to answer. Instead she started to talk about how the coalition has agreed to the same emissions reduction target of five per cent. Of course we did. But there are different ways to reduce emissions. You can reduce emissions in Australia in a way that does not have flow-on consequences in other parts of the world—through energy efficiency, better land care management practices, planting trees and doing a whole series of other things. Those things will not have any flow-on consequences in terms of increasing emissions in other parts of the world. But if you impose a price on carbon in Australia in a way that makes Australian businesses less competitive than businesses overseas who are more polluting, who end up taking market share away from Australian businesses, then that is reducing emissions in Australia in a way that will potentially increase emissions in other parts of the world.

But there is more, and clearly Senator Wong does not understand this fundamental point: if this debate is all about helping to reduce global greenhouse gas emissions, if this debate is about what the best contribution Australia can make in terms of helping to reduce emissions in the world is, then that is the debate we should be having. Of course, one of the things we could be doing is maximising our export of LNG into places such as China and Japan so it can displace coal as an energy source in those countries. Another is maximising our exports of uranium, including into countries such as India, so that nuclear as a low-emissions technology can help reduce emissions in the world. But here is the crux of the matter: if we as a country want to go down this path, it will actually mean an increase in emissions in Australia.

People on the Labor side never understand when I make this point. If we are serious about maximising Australia’s contribution in terms of reducing emissions in the world, it might well be that in Australia we have to increase emissions—