Thursday, 10 May 2012
Questions without Notice
My question is to the minister representing the Treasurer, Senator Wong. Why does a government which is promising surpluses for each single year over the forward estimates have to pay $1.2 billion more in net interest payments to service its debts in 2015-16 than it does in 2012-13? Is the government expected government borrowings to go up over that period or interest rates or both?
As I explained yesterday, both gross debt and net debt as a proportion of GDP peak in 2011-12. Obviously Treasury make certain assumptions about the size of the CGS as well as what the relevant interest rate will be in terms of estimating going forward. I would make this point when we talk about budget costings from those on the other side—
You are very precious about this whenever anybody mentions the fact that you have no credibility when it comes to the budget, that your economic team keeps delivering mistake after mistake after mistake.
Senator Cormann interjecting—
Senator Cormann clearly keeps betting. You always have to take a point of order because you do not want anybody to know. It is very, very precious, isn't it!
Mr President, on a point of order: I cannot see how the minister's abuse can in any way be directly relevant to the question. My question was why the government has to pay more interest on its debt in 2015-16 than in 2012-13 when they are telling us they will have surpluses over this period. I want to know very specifically, from the minister, whether the government expect government borrowings to go up or whether they expect interest rates to go up or whether they expect both to go up. That is the specific question, and none of the minister's answer so far were directly relevant to the question.
Thank you, Mr President. It is the case, if Senator Cormann considers the budget papers—and I assume he has—that there is an increase in 2015-16 in the net interest payment line. This is due to the maturing of a Treasury index bond line in that year. In that year all of the capitalised indexation of the principal is accounted for as interest and this adds to the net interest in that year over and above what normal interest on those bonds would be. This is explained in the budget papers at page 714.
We have laid out our path to surplus. We have demonstrated how we will grow the surplus over time every year of the forward estimates. We have ensured that we remain below the level of taxation that Treasurer Costello bequeathed to us. We have made sure we have constrained payments as a share of the economy to a level not seen over the forward estimates since the 1980s. I invite those on the other side who think that the Liberal Party should actually be a party that is fiscally responsible to demonstrate that they are, because at the moment their economic team is characterised— (Time expired)
Mr President, I have a supplementary question. How many schools, hospitals or roads could the government fund if it did not have to pay $29 billion in net interest payments to service the debt Labor has accumulated over the past 4½ years in government?
I am asked about schools funding and hospitals funding. I remind those opposite that we have almost doubled schools funding. That is what this government has done. I remind those opposite of the increase in expenditure on hospitals, when they are led by a man who took $1 billion out of the public hospital system. But, if you want to talk to us about cuts, how many schools will you close to make your $70 billion black hole?
Government senators interjecting—
Thank you, Mr President. Those opposite should tell the Australian people how many schools and hospitals they will close to fill their $70 billion black hole. They are now locked into a pledge for a surplus of one per cent of GDP this year. A $15 billion surplus is what they said. You would have to pay no Medicare next year. You would have to pay no Medicare to anyone in Australia for all of 2012-13 to make the promise you have made.
Mr President, I ask a further supplementary question. Is the minister aware that, once the coalition had paid off $96 billion of Hawke-Keating Labor debt, the government actually received net interest payments instead of having to pay $29 billion in net interest? Isn't this another stark demonstration that Labor does not know how to manage money and that it always comes down to the coalition to fix up Labor's fiscal mess?
I am asked about former Treasurer Costello. Quite clearly the regard with which former Treasurer Costello holds the current economic team on that side of the chamber is demonstrated by his desire to return, his desire to ride again, his desire to get back into this place, because he knows those on the other side are incapable of putting a budget bottom line together.
Mr President, I raise a point of order on relevance and also on obedience to the chair. You asked the minister to come to the question. She is with contempt defying your ruling, and if the authority of the chair is to be defended you must insist that she obey your ruling.
Senator Jacinta Collins interjecting—
The reality is that I was asked to reflect on the coalition's record versus Labor's record. What I say is that this coalition has never yet done a budget bottom line which adds up, not once. They have never done it once. (Time expired)
My question is to the Minister for Broadband, Communications and the Digital Economy, Senator Conroy. Can the minister advise the Senate how the budget will continue to benefit all Australians? Are there any other budget alternatives and what would their impact be on families?
I thank Senator Sherry and also congratulate him on his career.
Honourable senators: Hear, hear!
The Gillard government is returning the budget to surplus on time as promised. The Treasurer has managed to do this despite the vandals opposite and despite the global uncertainty ripping $150 billion from government revenue.
We know that Mr Abbott has scrolled you off the page of the ERC process, Mathias, so you keep scrolling merrily. Importantly, this is a budget that provides a surplus for families and not from families; it provides the Reserve Bank with the maximum flexibility to reduce interest rates further if they support it. Importantly for families and small businesses across Australia, interest rates are now lower than at any time under the previous government. Our economic fundamentals are strong. Unemployment is at 4.9 per cent today. Inflation remains within the RBA's target and the economy is forecast to grow at around three per cent per annum. In contrast, the test for Mr Abbott, and the opposition, tonight in his reply is not to squib it. Those opposite should show us their cuts. They should come clean with the Australian people.
Mr President, I am not surprised that those opposite want to try to shut down the answer. I am not surprised, because they do not want to come clean. They do not want to tell us on the back of the $70 billion self-confessed black hole where they are going to find the other $15 billion. (Time expired)
Mr President, I ask a supplementary question. Can the minister advise the Senate on the government's treatment of the National Broadband Network, a network which is so critical to the future of my home state of Tasmania?
Mr Turnbull has once again willingly misled the public with his false claims of a blow-out and a fiddle in relation to the treatment of the NBN in the budget. His claims that $450 million of additional departmental expenditure in 2011-12 has been brought forward are simply false. The payments are made to Telstra under the terms of the definitive agreement. This is neither new nor news, as those agreements came into force on 7 March 2012 and their treatment within the budget was outlined in a press release distributed on that day. Similarly, the claim of a $400 million blow-out in equity is false, as it simply reflects the equity funding of $350 million deferred from 2011-12 to 2012-13. (Time expired)
Mr President, I ask a further supplementary question. Can the minister outline this year's budget funding allocation to the Special Broadcasting Service, SBS, and how this funding boost will help SBS continue to serve audiences across Australia?
Mr President, I rise on a point of order. I hesitate to raise this in Senator Sherry's last question to the senator, but aren't these supposed to be supplementary questions? The first question was about the budget, the next one was about the NBN and this one is about SBS. What is the supplementary nature of those, apart from the minister, who pretends he knows a little bit about it all?
I will take that interjection from Senator Fierravanti-Wells and her description of SBS as left wing. The Labor government is providing $158 million over five years to ensure that SBS remains a vibrant and dynamic national broadcaster and to enable the launch of a new Indigenous free-to-air television channel. This is the most significant funding boost that SBS has ever had. It will allow SBS to continue to provide innovative television, radio and online services, including high-quality programming such as the recent Logie Award-winning series Go Back to Where You Came From.
My question is to the Minister for Foreign Affairs and the Minister representing the Minister for Defence, Senator Bob Carr. The 2009 Defence white paper declared on page 137 at point 18.4 that funding for Defence would be guaranteed by three per cent real growth out to 2017-18. Is this still Labor policy?
On 3 May the Prime Minister and the Minister for Defence, Stephen Smith, announced that Defence would commence work on a new Defence white paper, to be delivered in the first quarter of 2013. As outlined in the 2009 Defence white paper, this process involves a new white paper at intervals of no more than five years. However, there have been a number of significant developments since the 2009 white paper which are influencing Australia's Defence budget, Defence posture and future for structure. The government is of the view that we need to review our strategic settings in light of these developments through a white paper process which will include: (1) the Australian Defence Force's post-operational challenges, including transition in Afghanistan and draw-down in East Timor and the Solomon Islands; (2) the Australia Defence Force Posture Review, which addressed a range of national—
Mr President, on the point of order. The minister was being directly relevant to the question about policy, the white paper and the government's plans. He was absolutely directly on the issue raised by Senator Johnston in his question. I suggest to Liberal senators who insist on taking a point of order at least once, if not two or three times, that they are preventing the Senate from dealing with more questions both from themselves and from other members of the Senate. I suggest that it is a complete waste of the Senate's time and that it undermines question time.
Mr President, I rise on a point of order. I ask that you ask the minister to address his comments to you. This is not the New South Wales parliament, where he always addressed his benches. He must answer his question to you, as the question is put to you, and he must be asked to address his answer through you, the President.
The second factor is the Australian Defence Force Posture Review, which addressed a range of national security questions. The third factor is the ongoing effects of the global financial crisis, which since the 2009 Defence white paper has continued to unfold with unexpected severity and duration. The fourth factor is the ongoing need to drive reform in our Defence establishment. The government also needs to ensure that Defence spending is calibrated—
Mr President, on a point of order, you have given the minister latitude to address the background of the government's considerations of the various criteria that go into its decision making. The question was specific: whether the three per cent real increase was still the policy of the government. In the two seconds remaining, the minister can answer that question—yes or no. The opposition accept the latitude you have given the minister to paint the context, but we have not had an answer. There is time for there to be an answer, and I ask you to direct the minister, in the time remaining to him, to tell us whether it is the government's policy or not.
I cannot direct the minister how to answer the question. I have said this on numerous occasions in this place before. I can draw the minister's attention to the question and to answer the question, but I cannot tell a minister how to answer the question. The minister has two seconds remaining.
Mr President, I ask a supplementary question. The 2009 Defence white paper, at page 138, point 18.10, directed that any savings generated by the Strategic Reform Program would be reinvested in acquiring defence capabilities. Is this still government policy?
The commitment made in the white paper was to funding of three per cent real growth to 2017-18, and 2.2 per cent commitment was an average to take into account Defence's annual funding needs, which vary from year to year. The government will continue to ensure that Defence will receive the funding it needs, when it needs it, to deliver its projects. However, it is not always possible for Defence to spend the money it has estimated it needs for various reasons. For example, in the 2011-12 budget, Defence reduced its call on the budget by $1.6 billion in 2010-11 and $2.7 billion over the next four years. Second, the reprogramming was necessary to reflect realistic achievement of project delivery by industry for capability and infrastructure projects. It also accommodated anticipated delays— (Time expired)
Mr President, I ask a further supplementary question. Given that neither the military nor the Department of Defence made the decision to cancel Land 17, the backbone of the Army's modernisation program, why was political expediency the primary driver in this decision rather than the defence of Australia? Has there been or does the minister anticipate any diplomatic fallout from South Korea as a result of this decision?
I anticipate none, but I want to make it very clear that the government commenced a defence budget review in 2011 to improve estimation processes in defence, which goes to the heart of this question. Global and domestic economic circumstances have changed significantly since the white paper. The effects of the global financial crisis have contributed to unfold with unexpected severity and duration during the 2009 Defence white paper. Accordingly, the Defence funding model is one of the strategic issues which will be considered through a white paper process. In the meantime, Defence has made a contribution to the return of the budget to surplus, as have other departments and agencies. The 2013 timetable is achievable. The majority of the inputs to the new white paper are already complete or are underway. That includes the Defence Planning Guidance, the Australian Defence Force Posture Review— (Time expired)
My question is to Minister Wong, representing the Treasurer. My question concerns the budget announcement that people trying to survive on Newstart and other allowances will receive $210 a year supplementary allowance, which equates to less than $4 a week, raises Newstart to $248 a week and leaves recipients $126 below the poverty line. What evidence does the government have that a person can support themselves on $248 per week? What were the policy and economic factors that the government used to arrive at the sum of $210 per year, and who undertook the modelling underpinning that policy decision?
The senator is correct; as part of the government's Spreading the Benefits of the Boom package, there is an additional supplementary allowance to be payable to income support recipients. The cost of that is around $1 billion over the forward estimates. I note that the senator is one of the people who have been most strong in their advocacy for recipients of Newstart and for an increase in the Newstart rate, and I congratulate her for participating in that campaign. I thought her involvement on a personal level on that was very impressive. The government have made it clear that we are not of the view that it is appropriate nor fiscally possible to increase the Newstart rate. Nevertheless, we do believe that in times where we can provide some additional assistance to income support recipients we should do so. As part of the Spreading the Benefits of the Boom package not only have we provided a significant amount of assistance to families; we have also included the supplement to which the senator refers.
In terms of the package more broadly, the senator would be aware that it is very much targeted, both in the family payment area and in the income support supplement area, to low- and middle-income Australia. If you look at the eligibility, for example, for the families package, that is obviously for families who are receiving family tax benefit A, with differential rates for those on the maximum rate, which are obviously families who receive much less income. In terms of the supplement, whilst I appreciate that the senator will continue to advocate for a change in the Newstart rate, that is not the approach that the government is taking. We do believe, at a time when the unemployment rate has fallen to 4.9 per cent, as we have seen today, and remains extremely low, that our focus should be on encouraging participation and bringing more people into the workforce.
Mr President, I ask a supplementary question. Given that the minister did not answer my first question, I will ask it again. Could the minister please outline what advice and economic factors led them to come up with the sum of $210 per year and what makes the government think that that will make any difference to someone trying to survive on $248 a week?
I was trying to be of some help to the senator, but clearly I was not. The government—I explained to the senator—believed that it was appropriate in the Spreading the Benefits of the Boom package to provide support to low- and middle-income Australia. We included, as a result of those considerations, the supplement to which she refers. I appreciate that her position is that the Newstart rate should be changed. That is not the position of the government. As I have said, the government's first priority is to help people get paid work. We, I think, have demonstrated our commitment to that. If you look at where the unemployment rate is today, if you look at the assistance that is provided to people who are looking for work and if you look at the increased numbers of people over time participating, then I think the policy position is clear. (Time expired)
The government made a decision to put in place a supplementary allowance, and that is the figure that the government has chosen. As I said, I appreciate that the senator does not believe that is appropriate. If she believes it is so inappropriate, perhaps she should advocate for us not to pay it. But we took the view, when we diverted the company tax cut funds and directed those to middle-income and low-income Australia, that it was important for three particular groups to obtain support: families on the lowest incomes, middle-income families and income support recipients. So the government determined the various allocations and increased payments to those groups. That is in the budget. As I said, you are looking at around $1 billion over the forward estimates.