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

The Australian Labor Party does not know how to manage money. Even when the budget was bleeding with red ink back in May the Prime Minister, the Treasurer and the Minister for Finance and Deregulation were walking into television studio after television studio to talk about this surplus that we are going to have in 2012-13. The budget position has deteriorated dramatically since the mid-year economic and fiscal overview in November last year. The deficit, already one of the highest deficits on record, had deteriorated by another $8.5 billion in the couple of months between the mid-year economic and fiscal overview and the budget being delivered in May. The deficit had gone further down by $8½ billion. The deficit worsened by another $10 billion for the 2011-2012 financial year, to take us all the way up to $22.6 billion. So here was this government that wanted everyone to believe that 2012-13 was going to be the year that the Labor Party would finally achieve what they had not achieved since 1989-90, a surplus budget. But we have always been sceptical because this Australian Labor Party spends too much and borrows too much, and, of course, that is why they have to tax too much. This is a government which, in four out of four budgets, has delivered deficits. The last Labor Party surplus in government, here at the federal level, was, as I have mentioned, back in 1989-90.

The reason that this government ends up in this much of a mess is that they just do not know how to live within their means. When the minister for finance was under pressure because of this disastrous fiscal record under the Labor administration, she piped up and said, and this was in the lead-up to the last election, 'Hang on, we have made $83 billion worth of savings.'

Senator Wong interjecting—

Minister, I am happy to show you the transcript. You said it after the election and the Treasurer, Wayne Swan, said it just before the election and, of course, the Prime Minister has said it at various times as well. So '$83 billion worth of savings'—they were trying to make it look as if they had made some tough decisions. Given that '$83 billion worth of savings', everybody across Australia would think that the government had made some difficult decisions to cut spending. Guess what? Half of the money that was supposed to be in spending cuts was in fact new multibillion-dollar taxes or tax increases. This is a government that thinks that when they rack up a new tax they are actually saving money.

Let us take a step back. In the lead-up to the 2007 election the then Leader of the Opposition, Mr Rudd, said that he was going to be an economic and fiscal conservative; he was going to be a mini John Howard. He was saying to the people of Australia, 'Don't you worry. I am going to look after the public finances. I am going to look after the economy in the same way that John Howard and Peter Costello did.' Then, in the first budget, taxes went up by $20 billion and spending went up by $15 billion. In that first budget, the 2008-09 budget, they still delivered a $27 billion deficit, followed by a $55 billion deficit, followed by a $50 billion deficit—and now we are on track for a $22.6 billion deficit this year. That is if we believe the budget papers, but the budget had a very significant omission.

When the government knew that they were going to introduce a carbon tax, they delivered a budget without including any information in relation to the carbon tax, a carbon tax which we were promised would not happen, a carbon tax which the govern­ment now says will start on 1 July 2012, a carbon tax which will raise about $25 billion over the forward estimates, a carbon tax which starts on the same day as the mining tax, a carbon tax which Minister Wong said, in media interviews at the time of the budget, would be broadly budget neutral. When we said, 'This budget isn't worth the paper it is written on as the revenue figures are wrong, the expenditure figures are wrong, the growth figures are wrong, the CPI figures are wrong and the jobs figures are wrong,' the minister said, 'Well, the carbon tax is going to be broadly budget neutral, so don't you worry.' Now we know what 'broadly budget neutral' means. We now know that, even after they introduce a multibillion-dollar new tax, even after they introduce a tax which will take $25 billion out of the Australian economy, the government's budget is going to be at least $4.3 billion worse off. But there is more, because Treasury officials admitted during the Senate carbon tax inquiry that the money to buy back the so-called dirty, coal-fired power stations was hidden in the contingency reserve—not over the forward estimates, but beyond the current forward estimates. So here we have a multibillion-dollar new tax which is going to leave our budget worse off over the forward estimates to the tune of $4.3 billion and beyond. And there is more.

The mining tax, according to Treasury modelling, will raise about $38½ billion over the next decade but, true to the form of this wasteful, high-spending, high-taxing, high-debt government, before they have even passed the tax laws through the parliament, before they have even started to collect the tax, they have already spent it. Not only have they already spent it; they have spent more. So here they are wanting to collect $38.5 billion in mining tax revenue and they have made commitments which are conservatively estimated to cost about $57½ billion over the next decade. On its own the proposal by the government to increase compulsory superannuation to 12 per cent will cost $3.6 billion when it reaches that 12 per cent in 2019-20. That is a figure that was included in the government's own budget papers last year: $3.6 billion it will cost in 2019-20 and, of course, it is increasing from there. According to Treasury, in that same year the mining tax is expected to raise about $3 billion. Incidentally, 65 per cent of that mining tax revenue is to be collected in one single state, Western Australia. So here you have a government that comes in with one new ad hoc multibillion-dollar tax after the other and each one of them is leaving the budget in a worse position. You would think that, when you come in with a tax measure that increases the amount of revenue you collect, the purpose would be to get yourself out of the financial mess that you got yourself into by spending too much. But, no, instead of spending less and instead of taking advantage of all these taxes that they want to bring in to get themselves back into a surplus position, they actually end up in a worse position. In a paper they published in November last year, Treasury said that the budget was going to be in structural deficit until 2019-20. Since then, we have had the carbon tax, which is going to put the budget in a worse position, and we have had the mining tax, which is going to put the budget in a worse position. We also have this dodgy mining tax deal that the government negotiated exclusively and in secret with the three big mining companies, where, under pressure in the lead-up to the election, they promised them, without even having a conversation with state and territory governments about it, that they would credit all state and territory royalties. So now, every time state governments do what they are completely entitled to do under the Constitution—that is, make decisions about their royalty revenues, removing royalty concessions or increasing royalties as they see fit—it will be a hit on the federal budget, courtesy of a dodgy deal negotiated by this government.

The point of the argument here today is that this is a government that, very clearly, is already laying the foundations for preparing the Australian people for the fact that it will not be delivering a surplus budget in 2012-13. The government know that they have a bad track record when it comes to managing money. They know that the Australian people know that they have a bad track record when it comes to managing money. Labor keep talking about surpluses, but it is coalition governments that deliver surplus budgets. Ten out of 11 budgets under the last coalition government were surplus budgets. People across Australia know that after a couple of years of Labor in government it is time to get the coalition back into government to sort out the mess that Labor have created with their complete fiscal recklessness.