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

The bills before us—the Appropriation Bill (No. 3) 2012-2013 and the Appropriation Bill (No. 4) 2012-2013—seek a further appropriation of $1.27 billion in 2012-13 for government departments and agencies. What these bills do not tell us is how Labor proposes to fund its $120 billion worth of unfunded spending promises made so far. What these bills do not tell us is how the government plans to return the budget to surplus. What these bills do not tell us is what the budget position is going to be this financial year. What we do know is that this government in general and Treasurer Swan in particular have made a complete mess of our Australian government's public finances. This is a government which inherited a very strong budget position. This is a government which inherited a situation with no government net debt, with a $20 billion surplus and $70 billion of Commonwealth net assets. Just in its first four budgets, the most incompetent Treasurer in the history of the Commonwealth turned that around to a situation where we now have $172 billion of accumulated deficits and where we are heading to well in excess of $150 billion of Commonwealth net debt. The former Howard-Costello government was able to collect more than $1 billion in net interest payments; the current government is looking at spending nearly $30 billion over the forward estimates just to pay the interest on the debt that it has accumulated so far.

This year, 2012-13, was supposed to be the year we would see the first surplus delivered by a Labor government since 1989. None of us ever believed it would happen and of course it will not. In the shadow of Christmas, the Treasurer snuck out and gave a press conference, and 'fessed up to what all of us already knew—that is, in 2012-13, we will have yet another Labor deficit, the fifth budget deficit in a row under the current Treasurer, Mr Swan.

How Mr Swan is able to hold onto his job is beyond me. After Labor's broken promise not to introduce a carbon tax, the promise to deliver a surplus in 2012-13 was the second most emphatic promise made by this government. On more than 500 occasions, the Prime Minister and the Treasurer promised that in 2012-13, come hell or high water, the Gillard government would deliver a surplus. But of course it will not happen and we are now on track for accumulated deficits over the first five years of this Labor government approaching $200 billion.

Only last Friday, the government released its most recent monthly financial statement and there we can already see that the government's underlying cash position is $5 billion worse than what the Treasurer predicted in the budget in May last year. The Treasurer dishonestly, as he does, jumps up and down and says: 'Revenue is collapsing. There are all these things happening in the world that I cannot control. I am a victim and I cannot really influence any of these things. I am just trying to do the best I can when everybody is against me.' That is just not true. It is complete nonsense. Revenue is about six per cent higher than what it was last year.

The problem with this Treasurer is that at budget time he shamelessly, dishonestly and incompetently overestimates the revenue he thinks he will raise and when his shamelessly overoptimistic assumptions do not come true, he throws his hands up in the air and says: 'Shock, horror! Revenue has collapsed.' It has not collapsed and the predictions that Mr Swan made in the budget last year that revenue this year would increase by a staggering 11.8 per cent were never going to eventuate.

This is the Treasurer who signed up to a mining tax deal with the three biggest mining companies, telling us that in the first year that mining tax would raise $4 billion. That is what the Prime Minister and the Treasurer said when they signed on the dotted line—in the first year the mining tax was going to raise $4 billion; in the second year it was going to raise $6½ billion. At the time, nobody really believed what they were saying because they were keeping all of the detailed, underlying information secret. They told us their revenue estimates were based on information about commodity prices, production volumes and so on provided by the three biggest miners who signed on the dotted line, so that was commercial-in-confidence. None of us were allowed to know what those revenue assumptions were so that we could scrutinise them. Of course, clearly at the time the government overestimated commodity prices, overestimated a whole range of other variables, which is why in subsequent budget updates progressively the government has had to downgrade revenue estimates. The mining tax revenue estimate, which started at $4 billion, became $3 billion in the most recent budget, became $2 billion in the Mid-Year Economic and Fiscal Outlook. But guess what, after two quarterly payments out of three for this financial year have come in, the gross revenue from Labor's failed mining tax is $126 million. The reason I emphasise gross revenue is that revenue estimates published in the budget papers are net revenue estimates. So the $4 billion, when the Treasurer signed the deal, which became $3 billion in estimated mining tax revenue in the most recent budget, which became $2 million in MYEFO, is a net revenue estimate, which takes the so-called company tax effect into account.

I explain: when a company has to pay mining tax that becomes a deduction for company tax purposes. Out of the $126 million that the government have raised in mining tax revenue so far, 30 per cent would have been raised anyway—that is, about $38 million would have been raised anyway in company taxes. So the net revenue in the two quarters so far is $88 million. When you consider that the ATO so far has spent about $53 million administering the mining tax, that takes us down to revenue from the mining tax of $35 million. When you consider that the government have spent $38½ million promoting the supposed benefits of the mining tax, that puts the taxpayer $3.5 million in the red from the mining tax. This comes at a time when the government have already spent all of the money they thought it would raise, the $4 billion they thought it would raise, and more.

No wonder this government's budget is in a mess. When you have a government which comes up with a supposedly multibillion-dollar new tax which targets the most successful sector in our economy right now making it harder for miners to be successful into the future, spends all the money it thinks it will raise and more so that the budget ends up in a worse position, no wonder the budget is in a mess. When you have a government that makes it harder for an important industry to be successful, which makes it harder for us to grow the economy as strongly as we could and should, which leaves the economy worse off, which leaves jobs worse off, which leaves the federal budget worse off, no wonder this government has to come to this chamber again and again, cap in hand, asking for more money to waste. This is a government which has completely lost control of our public finances.

The mining tax is only one of the Swan initiated shambles. The carbon tax costings are not any better. We know that the carbon tax is a bad tax. It is a tax which we were promised we would never get. It is a tax which pushes up the cost of living and pushes up the cost of doing business. It makes us less competitive internationally because the costs imposed on manufacturers and businesses in Australia are not faced by manufacturers and businesses we are competing with in other parts of the world. We also know that it will not help the environment, that it will not help reduce emissions, but it will just shift emissions to other parts of the world. On top of all that, the carbon tax is another multibillion-dollar new tax which leaves the budget worse off. The government to this day has not come clean about the extent to which the carbon tax will leave the budget worse off, because this government dishonestly, incompetently and inappropriately continues to hold on to the unbelievable assumption that in 2015-16 the global carbon price will be $29 a tonne. It is not going to happen. There is absolutely no way that the carbon price in 2015-16, globally, will be $29 a tonne, yet the government's revenue estimates and the related spending estimates are based on an assumption that exactly that will happen. The Prime Minister, Ms Gillard, the Treasurer, Mr Swan, and the climate change minister, Mr Combet, are the only people in the whole wide world who still hang onto this dishonest, incompetent and inappropriate assumption that somehow in 2015-16 the carbon price will be $29 a tonne.

There is another multibillion-dollar black hole coming around the corner in our budget. If Mr Swan is still around in 2015-16, still the Treasurer and still having to be accountable for the failure of the carbon tax to raise the revenue he predicted it would raise, when he has already spent all the money he thought it would raise and more, I guess he will throw his hands up in the air again and say: 'Shock! Horror! Revenue has collapsed,' without putting down the footnote that revenue has collapsed only against his overly optimistic, shamelessly optimistic and never-realistic revenue assumptions. Revenue across Australia for the Australian government has not collapsed. The revenue for the Australian government continues to increase, but it is not increasing quite as fast as Mr Swan's most heroic assumptions have tried to make people believe in his various budget papers.

Because this government keeps coming up with new taxes which are failed taxes, which have a bad impact on the economy and which do not deliver the revenue the government said it would deliver when it has already spent all the money it thought it would raise—and more—this is why the government has to continually cast around for more cash. This is why, in the lead-up to the next budget in May, if Mr Swan is still the Treasurer then, we are now being told that there will be more new taxes. We are now being told that in order to fund the reckless and wasteful spending of the Gillard Labor government Australians saving for their retirement will be asked to pay the price. The Prime Minister and the Treasurer have made it very clear that they think people's retirement savings are an appropriate revenue target for the government. They can see it as a $1.35 trillion pot of savings—savings that people across Australia have worked very hard to accumulate; savings that are there to ensure that Australians can have a comfortable retirement. This government, in its desperate need for more cash, will make people's super savings the next revenue target.

We say, 'Don't do it.' People are doing the right thing by saving for their retirements to ensure that they can look after their own needs in retirement, to ensure that they do not have to be a burden on the public purse. They should be encouraged and incentivised, not punished. It is completely inappropriate for the Gillard government to look at people's retirement savings as if they are an ATM that the government can draw on every time the budget is under pressure, or that when every time it has spent too much it can say, 'Let's go and take some money out of people's savings accounts.' It is not on. It should not be allowed to happen and the parliament should resist every attempt that this government is putting forward to do that.

Over the last five years, as well as having delivered $172 billion of accumulated deficits, this government has already increased taxes on people's retirement savings by more than $8 billion. That tax grab includes a $3.3 billion hit on low-income earners. This government promised in the lead-up to the 2007 election that it would not make any changes to superannuation arrangements—'not one jot, not one tittle' is what the former Prime Minister and perhaps future Prime Minister Kevin Rudd said in the lead-up to the 2007 election. There was not going to be one jot or one tittle of change to superannuation arrangements, but, of course, under Prime Minister Rudd, followed by Prime Minister Gillard, there were more than $8 billion in new and increased taxes targeting Australians doing the right thing by saving for their retirement, including, as I have mentioned, more than $4.4 billion in taxes targeting lower-income Australians. The government reduced the super co-contribution benefit for lower-income Australians by $1,000. Under the Howard government there was a matching rate that for every dollar saved by people for their retirement they would get a benefit of $1½, up to $1,500. Now that has been reduced to a $500 matching rate. The current government, on the back of lower-income earners saving for their retirement, has collected $3.3 billion in additional taxes.

Then we have this attack on people trying to achieve self-funded retirement. Concessional contribution caps under the Howard government were $50,000 or $100,000 a year, depending on your age. The current government, after promising not to make any change—'not one jot, not one tittle'—took that down to $25,000. So, if you now want to save more than $25,000 a year to achieve a self-funded retirement, you have to pay more tax. In fact, not only do you have to pay more tax but also you have to pay the top marginal rate. Who is going to put more money into their savings, locking it away until they retire, if they have to pay 46.5 per cent tax on it? You might as well keep it outside.

These are the sorts of changes that this government has made, driven by the reckless and incompetent mismanagement of this Treasurer. People across Australia who are doing the right thing are paying the price of Mr Swan's incompetence. That is one of the key reasons that people in September, hopefully, will take the opportunity to achieve a change, because we need to have a government that lives within its means. We have to have a government that taxes people less and that will incentivise aspiration and success so that we can grow our economy more strongly.

If we get the tax settings right, if we get the incentives right, if we get ourselves into a more competitive and more productive position, then the economy will grow more strongly. One of the key benefits of that is that the government actually collects more tax without the need to increase existing taxes or introduce new taxes. Not only is it good for our prosperity as a nation, not only is it good for people across Australia, but also a more strongly growing economy is good for the government's revenue. That is the approach that an Abbott-led coalition government will take, should we be given the opportunity on 14 September.