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

On behalf of Senator Fifield, I move:

That the Senate notes the Labor Government's ceaseless and ongoing commitment to debt and to deficit budgeting, which is putting upward pressure on interest rates and further pressure on household budgets.

Earlier this week Senator Wong, our Minister for Finance and Deregulation, made a very insightful remark to the Sydney Morning Herald. She said that this budget would be 'a Labor budget'. Of course, that was quite at odds with all of the things that we had been led to believe before. We were led to believe that this would be a tough budget, but here she is, the day before the budget, letting the cat out of the bag by saying it would be a Labor budget. And a Labor budget it was: a budget with more waste, more taxes, more deficits, more debt, more class warfare; targeting those Australians who are aspirational, who want to get ahead; trying to penalise success. And, of course, we have had more spin, trying to mislead the Australian people over what was truly happening.

This government wants to make us believe that this is a tough budget. This government wants to make us believe that it has have saved money in this budget. This govern­ment wants to make us believe that it has made tough decisions to cut spending. The Treasurer in his budget speech on Tuesday night said that he had made tough decisions to cut spending to the tune of $22 billion. You know what? The biggest single indi­vidual so-called spending cut in the list of $22 billion worth of spending cuts is the $1.725 billion flood tax. I am sure that people across Australia would agree with us that a tax is not a spending cut.

Let us look at the detail in this budget. Spending over the forward estimates is up by $19 billion. That is on the basis of decisions made over the last six months, since we had MYEFO back in November. So in the last six months this government has made decisions that have increased spending by $19 billion. The government tell us that that has been offset by $22 billion worth of spending cuts. The government tries to make us believe we are still ahead. Well, if it was not for new taxes like the flood tax, if it was not for other tax increases, if it was not for other revenue measures to the tune of $6.2 billion, this government is actually increas­ing net spending over the forward estimates, not reducing it. So that is the first big lie by the Treasurer, Wayne Swan, on Tuesday in relation to the budget.

This government wants to make us believe that somehow the budget is going to be back in the black in 2012-13. That is just completely unbelievable. This year the budget position has deteriorated by about $8 billion, to take us to the second largest deficit in the history of the Commonwealth—a deficit of $50 billion this year. The budget position for next year has deteriorated to the tune of $10.3 billion, to take us to another deficit, of $22.6 billion. Yet, miraculously, in the year 2012-13 where the Treasurer has put his political capital on the line, not only is there not going to be any deterioration at all, there is going to be a significant turnaround.

We actually have the strongest terms of trade in 140 years of Australian history now. The budget should be in a much stronger position now. The budget should be in surplus now. If it had not been for Labor's waste and mismanagement, for their incom­petence across many areas in government, there would be no need for us to be in this deficit position. And in no area is this more obvious than in Labor's failed approach to border protection.

I remember well when, back in August 2008, they came into this chamber, as sanctimonious as anything, telling us how offshore processing did not work, how temporary protection visas did not work: 'We can do away with all this. We're going to have a compassionate response. We think that what you guys did was totally inapp­ropriate.' What did they do? They dismantled a system that worked. They dismantled a strong border protection system, a system that had stopped the boats, and the results are there for all to see. In the last year of the Howard government we spent $100 million a year on managing illegal arrivals. You know what the government is spending next year? More than $1 billion. That is more than a tenfold increase in less than four years. Over the forward estimates, the budget to manage illegal boat arrivals at our borders is increasing by $1.75 billion. If you put that against the $2 billion assault on working families across Australia then you really get a sense of the wrong priorities of this government. This government does not care about the cost-of-living pressures faced by families across Australia. This government needs to make those families pay for the incompetence across so many areas in government, in particular its failure and its bad decision to dismantle our strong border protection policies back in August 2008.

This government is borrowing right now $135 million a day. This government is spending about $20 million a day every day of every week of every month of every year over the next four years. That is $26 billion in interest payments over the forward estimates because of the incredible blow-out in the level of debt.

Wayne Swan and Penny Wong, on Tuesday night, could not bring themselves to mention the debt figure. They were too embarrassed. They were too ashamed. They could not spell out the words '$107 billion worth of net debt'—up from $94 billion net debt only last year.

After the Treasurer had finished his speech, everybody was out there patting him on the back—not everyone but some Labor members, while others got out of the chamber very quickly—and what happened that night? Bill Shorten snuck in quietly, introduced the appropriations bill and, on the sly, came in and asked the parliament to increase the debt ceiling—the approved level of debt the government is allowed to take out—by another $50 billion.

Madam Acting Deputy President, you may well remember, as all of this on this side of the chamber do, that two years ago the government asked the parliament to more than double the debt ceiling. It went up from $75 billion to $200 billion. Actually, there was a little proviso attached to it that this would be for special circumstances, that the Treasurer would have to make a declaration, which had to be gazetted and tabled in both houses of parliament, and that there would have to be a statement explaining the reasons as to why the additional debt was justified.

You know what the government now wants to do? They want this parliament to give the government a blank cheque to put another $50 billion worth of debt on the Labor government's credit card. They want to repeal the requirement to table the statement of reasons in both houses of parlia­ment. They want to repeal the requirement to have the special circumstances declared in the government's Gazette. Madam Acting Deputy President, you tell me why that would be justified.

The Minister for Finance and Deregulation, Senator Wong, today was certainly not able to explain it. She sneers at us, she abuses us, but she does not provide any explanation. When she refuses to provide explanations to us, she refuses to provide explanations to the Australian people. Minister Wong was not prepared to tell us today when the government expects to reach its current debt ceiling of $200 billion. This is important because we have two figures in the budget papers. We have got the figure of the face value of the government securities that are out there, which is expected to be about $192 billion by 30 June. In the balance sheet, the same government securities are presented on the basis of market value. The market value of government securities right now is expected to be $200.6 billion by the end of June. That is less than six weeks away.

There is no information at all as to when the government expects to reach the $200 billion limit. The government must have known for a long time that it was borrowing so much money and spending so much that it would need to come back to this parliament to ask for approval to borrow more money. Why has it left it so late? It is just another example of this government's absolute incompetence in managing the budget. This government is so out of control when it comes to spending that it cannot keep up with the need to organise the process to get hold of some more money so that it can spend and waste some more of it.

This government has to provide a proper explanation as to why it needs another $50 billion dollars worth of debt and why the parliament should approve another $50 billion worth of debt. The reason the parliament needs that explanation is that the Australian people deserve that explanation. It is quite extraordinary that Minister Wong today was either unable or unwilling to come clean with when the government, based on its projections, expects to run out of money unless the parliament agrees to this additional $50 billion for the Labor govern­ment's credit card.

This is a budget which will hurt Austral­ian families much more than this government is prepared to let people know, because there is a big hole at the heart of this budget. This government has told us that there will be a carbon tax come 1 July 2012. The Prime Minister told us before the last election, looking down the barrel of the camera, 'There will be no carbon tax under the gov­ernment I lead.' Given that she had to come to some understanding with Senator Bob Brown and the Greens so she could scrape back into government, of course we now know there will be a carbon tax from 1 July 2012 if this parliament happens to agree to it.

If there is going to be a carbon tax from 1 July 2012, we know that the revenue figures, the expenditure figures, the inflation figures, the growth figures and the employment figures are all wrong from 2012-13. That just happens to be the year that the government tells us it is going to be back in surplus. But it has left a $12 billion-a-year tax out of the budget. It has left the economic impact of a $12 billion-a-year tax out of the budget. It has left the cost-of-living impacts on Austra­lian families from the carbon tax out of the budget. It has left the impact of a carbon tax on jobs and our international competitiveness out of the budget. This is very different from the way the government has been going about the mining tax. The mining tax has been in the budget for 12 months. It is supposed to come into effect on the same day, 1 July 2012.Madam Acting Deputy President Boyce, do you know why the Labor Party treats the mining tax differently from the carbon tax? Because the govern­ment needs the cash from the mining tax in its budget now so it can create the illusion of an early surplus.

One of the many fundamental flaws of the mining tax is that it will worsen the structural deficit of Australia because the revenue is high now when we have record terms of trade. It is expected to go down over time as a supply response in commodities will necessarily see a reduction in current record commodity prices, but the related budget expenditures that the government has put out will go up significantly over the next decade. There is hardly any expense at all in the budget related to the mining tax right now, but there is a lot of revenue in the early years. The revenue is going to go down over the years and the expenses that are related to it are going to go up and the expenses are going to be more than the revenue that will be collected from the mining tax. This mining tax is worsening the long-term structural deficit of this government.

But that was not the Treasurer's worry. The Treasurer was only worried about one thing. He was worried about 2012-13. As long as he could get enough cash out of the mining tax to create the illusion of an early surplus based on record terms of trade then he was not worried about the long-term impact on our public finances. This is how this government does business.

The Treasurer's hollow men, the Treasurer's spin doctors and the Prime Minister's spin doctors have been working the press gallery overtime over the last week, saying this is what the Howard government used to do, that when the Howard govern­ment announced the GST they did not put it in the budget. That is completely false, that is completely incorrect. The GST was announced by the then Howard government, by John Howard and Peter Costello, in August 1998. We went to an election in October 1998, and that is my first very im­portant point. Not only did we not introduce the GST without taking it to the Australian people, but we put it into the next budget. The announcement was made, we went to an election, we put it in the budget.