John Faulkner (NSW, Australian Labor Party) Share this | Hansard source

I would like to begin my contribution by acknowledging the courage of Senator Cormann in proposing a matter of public importance on budget surpluses. There he is, from the insecurity of a huge jerry-built glasshouse, daring to hurl some very small pebbles at the government. But, fortunately for Senator Cormann, he has a hide that really makes that of the average rhinoceros look wafer thin. Fortunately for him, he does not mind being accused of exaggeration, distortion and humbug. He likes being the fall guy for the opposition. He does not mind being a patsy for boldly going where no Liberal senator has been before and, I suspect, none are likely to go in the future.

Why did he do it? Why did he propose this matter of public importance? I do not know, but I would sincerely like to thank him for giving me the opportunity this afternoon to compare the economic credibil­ity of the government with that of the oppo­sition. After they have been exposed for their 2010 election costings black hole, which of course is a well-known debacle, this week we have a $70 billion black hole which threatens to swallow up an entire govern­ment department—the department of climate change—and 20,000 Commonwealth public servants along with it. The mantra of the opposition is that it will save more, spend less and deliver bigger budget surpluses. I think we know now that the opposition suffers from congenital innumeracy, so I think it is worth while having a closer look at this $70 billion black hole. Thirty seven billion dollars of it is in spending commit­ments the opposition announced in the 2010 election campaign, including $11 billion from the unwinding of the minerals resource rent tax. Then there is another $27 billion from the unwinding of the carbon tax. Finally, there is just a mere $7 billion or $8 billion to fund the income tax cuts that they promised. These are Mr Hockey and Mr Robb's figures; they are not mine. This is what Mr Hockey and Mr Robb have been telling their own colleagues they need to find in savings.

What will this $70 billion in savings actually mean? The Prime Minister and ministers in the government have been very clear: it will mean stopping Medicare pay­ments for four years; it will mean stopping the age pension for two years; it will mean stopping assistance to people with disa­bilities for three years; and it will mean stopping the family tax benefit payments for three years.

With the recent events in the global economy, it is obvious that Australia needs a steady hand on the tiller. The last thing we need are gigantic blank cheques and gigantic black holes from the opposition. The govern­ment's economic management has positioned Australia as one of the strongest, if not the strongest, economy in the developed world. Action taken by this government during the global financial crisis meant that we emerged from the global recession with strong growth, low unemploy­ment and solid public finances. Our economic stimulus package provided much-needed confidence at the time. It supported growth and protected jobs and it protected businesses as well. Because of this govern­ment's stimulus, Australia has emerged as virtually the only advanced economy to avoid recession and with a fiscal position that is the envy of the developed world. We have lower debt than other major developed economies, with the public net debt expected to peak at around one-tenth of that of other major developed economies.

The government has a clear path to bring the budget back to surplus well ahead of many comparable countries. Australia is one of only 14 major countries to have a AAA credit rating from the international rating agency Standard and Poor's. The government has been consistent and effective in imple­menting its fiscal strategy, constraining spending growth and putting in place responsible savings. That strategy has been endorsed by international rating agencies and the international community. In their article IV concluding statement released earlier this month, the IMF said this about the govern­ment's budget:

On fiscal policy, we commend the authorities for remaining committed to returning the Common­wealth budget to surplus by 2012/13 ... This consolidation is faster than in many other advanced economies and is more ambitious than earlier envisaged ...

The international credit rating agency Moody's on 11 May this year said:

Moody's notes that Australia's government debt remains among the lowest of all AAA-rated governments.

Rating agency Standard and Poor's said that Australia has exceptionally strong public sector finances, underpinned by low public debt and strong fiscal discipline. But I always think in these matters of public importance the final word should go to the Liberal Party. A coalition MP was reported as saying after this year's budget reply:

We can’t keep agreeing with government spending measures opposing savings and revenue measures and keep our financial credibility intact.

Unfortunately, that was an anonymous Liberal Party MP, but Senator Cormann and the others who have spoken in the debate know who it is, as I know who it is—just check the Adelaide Advertiser of 28 May this year. Then Senator Minchin, whom I know you respect very much, Mr Deputy President, and who was quite a hero to so many opposition senators, in his own newsletter of July this year said, 'If you err on the side of populism that is ultimately self-defeating because you end up standing for nothing.' Both the anonymous Liberal MP and Senator Minchin of course were right. I think Senator Cormann, the other Liberal senators and Senator Joyce from the National Party should take note of what their colleagues have said. I think that, really, Senator Fifield, who submitted this matter of public interest, and Senator Cormann, who proposed it to the Senate, should stop wasting the Senate's time on these matters. I stand by the economic credibility of the government and I believe that the facts on this speak for themselves.