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

My question is to the Minister for Finance and Deregulation, Senator Wong. I refer the minister to the government's budget papers which said (1) there is no provision in the budget for the carbon tax, (2) that the carbon tax will be budget neutral and (3) that the budget contingency reserve is not a general policy reserve. Given that the government is now raiding the contingency reserve because of its carbon tax, for which the funds will need to be appropriated in order to support power plant compensation, is this not a Whitlamesque move which breaks each one of these three commitments made just two months ago?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I note that question comes from a senator in a party which is pledging smaller surpluses and which will raid the surpluses to fund tax cuts. Let us just be clear about the alleged fiscal responsibility on that side, which is built on a shadow Treasurer who proposes tax cuts funded by running down and risking the surpluses. That is not fiscal responsibility. I am also asked about the contingency reserve. This is something—

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

They are deficit deniers; that is what they are.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

There is a bit of interjection from the surplus-free zone.

John Hogg (President) Share this | Link to this | Hansard source

Senator Wong, ignore interjections. They are disorderly; you know that and I know that.

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

How about answering the question?

John Hogg (President) Share this | Link to this | Hansard source

Senator Cormann, it is your question that you are seeking an answer to and interjecting does not help the process.

Honourable senators interjecting—

Senators Conroy and Fifield, you make it very difficult for me to hear Senator Wong.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I was asked a question about the contingency reserve and there appears to be an ongoing problem in the opposition in that they do not understand how the contingency reserve operates. I would not suggest for understanding that they go and read every aspect of various newspaper articles. Senator Cormann will recall during the estimates hearing we did explain at length to him the way in which the CR operates. We also explained at length why the costings in what is known as the conservative bias allowance that the opposition made were incorrect and how they contributed to the $11 billion black hole. The contingency reserve is not a general policy reserve. It is not a rainy day fund. It is true that no provision was made in the CR as at the 2011-12 budget for the carbon price because details of the proposal and financial implications of such were yet to be determined by government. As we said in the budget papers, as we have said since, we will update the figures associated with the carbon price package in the usual way after the policy has been finalised.

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

Mr President, I have a supplement­ary question. Has the minister effectively just confirmed that the government intends to raid the contingency reserve in clear breach of previous statements, including the one she has referred to just now in Senate estimates? Can she also confirm, given she has addressed that particular part of the question, that the carbon tax will not be budget neutral as promised at budget time?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

This is the difficulty in asking a supplementary question when you do not listen to the first answer. I spent some time answering the first question.

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

It is not a debating time on either side. If you wish to debate the issue or talk about the issue, the time to do that is post question time.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I suspect Senator Cormann did not listen to my answer. I said very clearly that the contingency reserve is not a general policy reserve. It is not a rainy day fund. It is there to ensure—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

We want to know whether or not the carbon tax will be budget neutral.

John Hogg (President) Share this | Link to this | Hansard source

Senator Brandis, Senator Cormann has asked the question. Senator Wong, continue and ignore the interjections on both sides.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I also said there was no provision made at the time of the 2011-12 budget for the carbon price mechanism. The question that asserts that we are going to raid it is simply misunderstanding how the CR operates, and clearly the senator has not listened to the answer that I gave to the first question.

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

I have a further supplementary question. The minister is clearly refusing to rule out raiding the contingency reserve and she clearly is refusing to recommit that the government—

John Hogg (President) Share this | Link to this | Hansard source

Senator Cormann, it is not a time to argue; it is a time to ask a question.

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

Given that it is now very clear that the carbon tax is not going to be budget neutral as was promised at budget time, will the government now bring down a budget before pressing ahead with the carbon tax?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

No, we do not propose to bring down a budget. We have just brought down a budget and I thank Senator Cormann for voting for some savings measures in that budget, which Mr Abbott previously opposed without much demur, very quietly on Thursday of the previous sitting week. What we have said very clearly—and this is consistent with the budget papers—is that we will ensure that the budget figures are updated in the usual way subsequent to the announcement of the carbon price. That is the position we said previously. That is the position we will adhere to.

I think to criticise the government for doing what it said it would do—that is, to update the figures in the usual way and to put the detail out there—is pretty rich coming from a party that is unable to cost its policies, comes in here and votes against saving measures, announces policies that are not funded and is led by a man who thinks economics is boring. (Time expired)