Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance and Deregulation (Senator Wong) and the Minister for Tertiary Education, Skills, Science and Research (Senator Evans) to questions without notice asked by the Leader of the Opposition in the Senate (Senator Abetz) and Senators Cormann and Payne today.

There you go, the trifecta! I wish to draw particular attention to the responses of the government to questions around their $120 billion black hole which the Financial Review, I think it was, featured on its front page recently. That figure is a calculation based on major new spending announcements made by the government over the last few weeks. These spending announcements have come on top of previous announcements of spending relating to the National Disability Insurance Scheme, the Gonski review process and a dental care scheme, quite fortuitously in the same week that the government dropped the floor price for carbon—it seems that the Greens may have been seduced by the billions being promised for a new dental care scheme. This very week we have the government talking about topping up the wages of child-care workers. Child-care workers are among the lowest paid and most valued members of the community, but we are talking about a situation where topping up their wages would come on top of a spending spree over the last few weeks. That has had people in this chamber and elsewhere speculating that the government is clearing the decks for an early election.

We in the opposition take a very dim view of where this will lead. We believe that the government is contemplating in its Mid-Year Economic and Fiscal Outlook a whole series of swingeing cost reductions and tax increases to pay for spending announcements of the last few weeks and months. We are already on the record as opposing increases in tax. We opposed the carbon tax. We opposed the mineral resource rent tax. We are in favour of lower taxes rather than higher taxes. Indeed, my recollection is that at the end of the Howard government, taking into account the tax cuts that we committed to in 2007 election campaign, the tax share of GDP was 23.1 per cent in 2007-08, something the government has not yet attained.

There are those on the other side who are brimming with ideas about how the government can bridge this gap between its spending and its revenue base. Along with other people, I acknowledge that the revenue base is shrinking. We are in a post-global financial crisis will. Capital gains tax revenue will not be as strong as it previously was. Wealth is not growing as strongly as it was previously. No doubt that is something, Mr Deputy President, that you are aware of as well.

In this context, therefore, there is discussion about potential revenue measures to fill the hole. My fear is that the Mid-Year Economic and Fiscal Outlook could see more of those measures being put forward, including potentially, a further cut to the diesel fuel rebate. There has been talk in some circles that the Treasurer, Wayne Swan, will revisit issues around death duties for estates above a certain value.

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

Superannuation!

Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

My colleague Senator Cormann reminds me that it is possible that again concessions for superannuation will be further reduced. Superannuation, it seems, is an area that governments cannot keep away from, and it seems to be one of almost constant policy change. There is speculation that the government may look more seriously at some of the proposals of Senator Cameron, who has proposed in this place that the minerals resource rent tax be extended to other mineral commodities. He has proposed a financial services tax, a Tobin tax—a tax on financial transactions. This is something which has been tried in some jurisdictions overseas. It was tried in Sweden in the 1980s and very quickly abandoned because it led to a flight of financial services activity to other, lower tax jurisdictions. Indeed, it was probably one of the reasons why the City of London got the fillip it got in the eighties. So the Tobin tax could potentially come back on the radar of the government. Senator Cameron had proposed that these taxes be used to pay for the National Disability Insurance Scheme, for Gonski and for other expenditure commitments of this government. That is my fear, therefore, for the Mid-Year Economic and Fiscal Outlook: that there will be a raft of revenue increases and low-quality spending cuts as the government scrambles to meet its commitment for a wafer-thin budget surplus of $1.5 billion in 2012-13. The information we have about the falling commodity prices suggests that there could be at least a $10 billion hole in revenue in this financial year, and possibly that will become bigger. So there is much pressure on the government to take these swingeing revenue increases. (Time expired)

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution on this motion to take note of answers. It is exceedingly clear that Senator Sinodinos has continued on that well-worn path that the opposition has beaten, so to speak, in trying to create more fear, more uncertainty and more lack of confidence among Australians and Australian business leaders, in small business or otherwise. Basically, every day that we hear a contribution from the other side, it is aimed at negativity. Despite the fact that we have piloted our nation through the GFC in the best state of almost any developed economy, with 800,000 new jobs and continued record investment—I think Senator Evans said almost $260 billion in the pipeline—there is an absolutely relentless campaign of negativity, whether it be on the carbon emissions or on the budget black hole. We have a Charter of Budget Honesty; that is repeated every question time. We have a lower tax-to-GDP ratio than the Howard government; that is also repeated. All of that is ignored in this incessant campaign to destroy confidence in the Australian economy for their political ends. The short-term short-sightedness of their continual negative attacks is absolutely amazing. For their political ends, they are prepared to jeopardise future investment in mining and consideration of future jobs that are to be created. They are prepared to put all that out the window by driving down confidence in our economy.

We all know that Australians have changed. They have become more conservative as a result of the GFC. We know that people are putting more money into their bank each week and paying down their credit card debt, and the conservatives are capitalising on that lack of adventure in the Australian economy, which is so evident in the retail sector, where people are not spending as they did in the past. So they know that, if they are able to chance their arm, there is a climate of uncertainty there which they can exploit, and they are doing it absolutely relentlessly.

Despite the fact that there is tremendous confidence in the mining sector and a record investment pipeline—albeit prices have come off in iron ore from the high of $180 down to $86, with tremendous fluctuation in the price of raw materials putting pressure on companies who have higher leverage and higher capital costs of production—they continue to relentlessly drive home what they see as a climate of fear and uncertainty where the voters will turn around and blame the Labor government, the government which steered them through the financial crisis, supported employment and has facilitated with all of its efforts an expansion and an era where this great nation could have the mining boom it deserves and equally distribute some of those profits back to its population. No criticism at all did we hear of Campbell Newman taking the axe there and increasing royalties—which, as was quite rightly pointed out today, apply on both the upside and the downside. The minerals resource rent tax applies on superprofits. It is after companies have been able to take their tax gain for the capital expenditure that they have appropriately invested. But royalties are there whether it is up or down. When prices go down they still pay royalties, and when prices go up they pay royalties.

So I think they should be a little bit more even-handed. They should at least be owning up and being honest about the effect of some of the state royalty increases, not simply swinging away at the federal government with all of their might, trying to bring the tree down, taking the axe to confidence and continued job creation, and trying to create the climate of fear and uncertainty which they think will bring them electoral success. What a way to achieve government: by running down this great country, its great workforces and its great small businesses, and opposing almost every positive initiative that the Labor government seeks to bring to further this great national economy.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I will just make some comments in relation to Senator Gallacher's remarks. Senator Gallacher talked about lack of confidence. He is right: if there is one thing this government has done, it is destroy confidence out there in the business world through its lack of responsible spending. The way it collects the taxpayers' money and then distributes it has been an absolute disgrace. You know all the facts of it, Mr Deputy President. We will go back to the start: GroceryWatch, Fuelwatch, the pink batts, the waste of the government spending on the school programs and the $900 handed out. It just went on and on.

Now they are in serious trouble: $246 billion of gross debt as of last Friday and we cannot even get an educated guess of how much their budget is blowing out. Of the financial year just gone Senator Cormann asked a question: where are you going to fill this $120 billion black hole? You are going out promising the world with Gonski funding for education. We all support decent funding for education. You are squibbing out the chronic dental disease program that was brought in by the Howard government and that has had one million Australians receive dental treatment. It is a program this government tried to knock out a couple years ago but, thankfully, we blocked it in the Senate. There is now nothing for it up to 2014 other than some money for the state public dental system. We know how that is, especially in regional areas.

Let's go back to responsibility and the lack of confidence. When is the government ever going to learn that it is the private sector that derives our nation's wealth, and all you can do is tax the private sector in every way you can? It could be new taxes from day 1, from the alcopops tax to the luxury car tax to the cigarette tax to the LPG tax to the flood tax to the carbon tax to the minerals resource rent tax. You can go on and on. My time would be filled up if I just listed the new taxes. And yet the debt is blowing out and out. Because you have destroyed the confidence, we see business not investing, too scared to have the traditional Aussie go at anything and stick its neck out.

It is because this government cannot be trusted to keep their word. They make the promises—no carbon tax, no increase in taxes—and continually break their word all the time. Senator Gallacher mentioned the charter of budget honesty. I remember two years before the financial year just gone past there was a budget with a $12 billion deficit. Then it became $22 billion. Then the MYEFO discovered it was $32 billion and it came out at $44 billion. If you are running a budget, you budget at $12 billion and it comes out at $44 billion, that is not even a good guess; that is showing ignorance right through the whole financial management of our country. Senator Gallacher wonders why confidence is going. Of course it is going, and it can be turned around overnight at a federal election when the Australian people, especially the business sector, see that once again this country with so much future, with so much potential can be managed correctly under a coalition government. We know the track record. The Australian people know the track record.

I am amazed every time Senator Cameron goes out to bag the former federal Treasurer Mr Costello. Look at Mr Costello's record of paying off the debt and budget surpluses. When he set a budget he was conservative. He allowed for a downturn in business or world commodity prices. He always delivered the budget and more than he budgeted. This government does not know what budget surplus means. Go back over the history of Australia and the financial management of the Labor Party. Look what they did in Queensland, a great state that was managed for decades without a budget deficit. Now they have had their credit rating downgraded, are facing around $72 billion of debt as we speak today with just 4½ million people and are heading down a tube worse. No wonder Premier Campbell Newman has to make tough decisions. On this side of the chamber we refuse to let our states or out nation go down the same road as Greece, Portugal, Spain, Ireland, Japan, the United States—you name it. We refuse to mortgage our children's future away. We are responsible with managing money, and that is something this government cannot do. That is why the Australian people do not trust this government to manage our great country.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I say from the outset that I do not usually like to comment on what those opposite say, but Senator Williams has given me the opportunity. I think it is amazing that he would talk about what has happened in the past in Queensland when his own colleagues in the coalition, with Campbell Newman, are setting a world record in total destruction of the public service in Queensland, cutting the services of those most vulnerable in the Queensland community. He comes in here to talk about what has happened with the economy in the past in Queensland when those opposite do nothing but talk down the Australian economy. We on this side and, more importantly, the Australian community know that the Australian economy is very strong. We were the government that guided the Australian community through the worst global financial crisis in my lifetime—and even before that, believe it or not. The people of Queensland put their faith in Campbell Newman, as misguided as that has turned out to be, and what has he done? He has used every trick in the book to distract from the ruthless budget cuts that he is making to the most vulnerable in Queensland.

But let's talk about the positive things that are happening. We want to talk about what is happening with the economy and the investment in the resource areas of gas, oil and minerals. We know that there has been an increase of some 34 per cent into the mining industry alone. We know that since 2007, when the Labor government came into power, there has been a massive $919 billion of private business investment despite the global financial crisis. But, when we talk about the economy and those opposite try to paint the Labor Party as a government that has been unable to manage the economy, I think we need to look again. When Mr Abbott, the leader of those opposite, does nothing but have a negative policy and lead a party that is talking down the Australian economy, if there is concern in the economy, it is brought about because of the negativity of those opposite. We do not hear about the black hole in excess of $70 billion of those opposite. One hopes that the media will at some stage scrutinise their policies. One hopes they will answer and allow the community to know how they are going to fund any policies of any substance they come up with going forward.

I think we also need to talk about housing. I thought it was quite interesting that those opposite would want to talk about housing. Mr Deputy Speaker, I can give you some facts in relation to what is happening there. But before I move onto that, I want to say that those opposite spent 11½ very long years in government and at no time did they have a housing minister. The only reason that they have a spokesperson for housing now is that the Rudd Labor government and the Gillard Labor government put homelessness on the political agenda in this country. Time and time again, those opposite come into this chamber and want to rewrite history, whether you talk about homelessness, whether you talk about aged care or whether you talk about health. We know on this side and, more importantly, as I said earlier, the Australian community understand that we actually do have policies to provide housing for the most vulnerable in our community. We have taken on the plight of homeless people, whether they are individuals or families. We recognise, too, that unfortunately in this country there is a growing incidence of homeless women—women whose relationships have broken down or who have not had access to superannuation. I might add that at every turn those opposite oppose anything when it comes to superannuation and looking after those most vulnerable.

I put on the record that, on 30 June 2012, the Minister for Housing and Homelessness announced that 16 projects worth $112 million had been approved for funding under the Building Better Regional Cities program. Some of the projects being funded are in New South Wales, in places like Lake Macquarie, Lismore, Maitland, Port Macquarie, Tamworth, Tweed Heads and Wagga Wagga. If we go to Victoria, there are projects in Bendigo, Shepparton and Warrnambool. There are also projects in Western Australia. We will put our record up against yours— (Time expired)

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of answers given by Senators Wong and Evans in response to questions by my colleagues Senator Abetz and Senator Cormann. We heard it here first this afternoon when the Leader of the Government in the Senate said, 'There is no black hole.' I am very confident that those words will come back to haunt not just Senator Evans but also the government as we count down to the next federal election. 'No budget black hole' were the words.

Today we have been talking about $120 billion in additional spending commitments since the last May budget, but we have not heard from anyone from anywhere in the government about how they intend to pay for those new funding initiatives, in addition to the surplus they have promised the Australian community in the next budget. When asked in question time today, no-one in the government could rule out tax increases that would hurt Australian families and Australian small businesses.

So what tax increases is Labor hiding? As we prepare for the next election, I think the Australian community is quite right and legitimate in asking Labor: what tax increases is it hiding? Is it hiding an increase in company tax? Is it hiding an increase in personal taxes? Is it hiding an increase in the carbon tax? Or is it hiding further pain for self-funded retirees with increased taxes and charges? Where is the money coming from? Who is going to be hit by Labor's secret tax plan?

We have heard this afternoon from Senator Gallacher and Senator Polley, who have high confidence in the Australian economy. Sometimes I wonder whether some senators might travel to other planets other than our own. Mr Deputy President, I would like to share with you some comments made by the shadow Treasurer when he shared with the House of Representatives data from early September. He said that the economy had grown less than half the rate of the previous three months and that retail sales had fallen by nearly one per cent in July. On top of that, he drew the attention of the House of Representatives to falls in company profits, falls in commodity prices and a deteriorating terms of trade. What did the Treasurer say? The Treasurer said, reflecting on the national accounts data, that the economy was 'simply outstanding'. So I think Australians are right to ask this government: where are its priorities and where are its commitments to improving the state of our national accounts?

Everyone knows in this place that Labor cannot manage money. Labor has true form. We have witnessed scheme after scheme and project after project that runs behind time and suffers from cost blow-outs. Remember the school hall bungles? Witness the massive cost blow-outs as a result of Labor's stubborn position on border protection, refusing for years to concede its policy had failed. Or, more recently, we have now had confirmed cost blow-outs in the National Broadband Network—not only cost blow-outs in terms of construction of the network, which is worrying enough, but significant cost blow-outs in terms of salaries and other overheads for the National Broadband Network. Never mind that the NBN is running behind schedule and failing by a very, very wide margin, increasing every day, to meet its benchmark targets for customer sign-ups. The government seems to think: if we keep paying more and more for staff at the NBN, we will end up with the problems fixing themselves. That is simply not the case.

Even today we had it confirmed that the Gillard government has wasted $10 million of taxpayers' money. Recall earlier this year when the government announced it was spending $10 million to raise awareness of the importance of recognising Indigenous people in our national Constitution. What did we hear today? The government announced that there was insufficient public awareness and support for this issue. So Labor will not proceed to a referendum, and this is despite the fact that Labor promised such a referendum to the member for Lyne, Mr Oakeshott, as a condition for his support for forming government. It is yet another broken promise—not that Mr Oakeshott seems to mind. Being the resolute man of principle that he is, he has today confirmed to the media that his lavish devotion to the Gillard government will continue. What a sell-out. Australians are entitled to ask: where is Labor's secret tax plan? (Time expired)

Question agreed to.