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

I move:

That the Senate take note of the answer given by the Minister for Finance and Deregulation (Senator Wong) to a question without notice asked by Senator Brandis today relating to the Budget.

Since the 2010 election the centrepiece of this government's economic policy and fiscal policy has been to return the budget to surplus in 2012-13. That is the foundation of their economic credibility. There is no promise, there is no commitment, there is no assurance more fundamental than that reiterated again and again and again. One could be forgiven for being sceptical of that promise, given that not only has this government never produced a surplus budget but its four budgets for which we have the final budget outcome so far have consecutively produced the four greatest budget deficits in Australian history. So one might be sceptical of a government promising to produce a budget surplus when it has won the gold, silver, bronze and runner-up medals for the four worst budget deficits in Australian history. One might be sceptical of that but there can be no doubt about this: it has promised time and time again that bringing the budget back to surplus in 2012-13 was the foundation of its fiscal strategy.

I do not warrant the comprehensiveness of this research but I can tell you, Mr Deputy President, that since the beginning of 2011 we have found at least 30 separate occasions when the Prime Minister has promised that the 2012-13 budget would be brought back to surplus—at least 30 occasions. And in the same period the Treasurer, Mr Swan, so far as our research takes us, has promised on at least 15 occasions that the budget would be brought back to surplus. So, Mr Deputy President, even for a famously dishonest government you would think that no fewer than 45 separate promises in the space of 20 months would be enough to give you an indication of the government's intention.

Yesterday in the House of Representatives the shadow Treasurer, Mr Hockey, asked the Prime Minister a direct question: does the Prime Minister stand by her promise to deliver a budget surplus this year? To nobody's surprise, there was a very rapid shifting ground on the part of the Prime Minister. In the space of a column and a half recorded in Hansard, the Prime Minister waffled, the Prime Minister procrastinated, the Prime Minister stonewalled, but never was she prepared to reiterate what she has said more than 30 times since the beginning of last year, that the government promised to bring the budget back to surplus.

It might be that the Prime Minister was distracted by the manifold scandals surrounding her government. Maybe she was not concentrating. So we thought that today we would give her Finance Minister, Senator Penny Wong, the opportunity to set the record straight. I asked Senator Penny Wong the very same question that Mr Hockey in another place asked the Prime Minister yesterday: does the government still promise to bring the budget back to surplus by 2012-13? But not a promise, not a forecast. So I asked her again in the first supplementary and I asked her again in the second supplementary, and on each of those three occasions it reminded me of chapter 36 of the Gospel according to St Matthew when St Peter denied Christ thrice.

On three occasions—three out of three—given the opportunity to reaffirm the promise that lies at the heart of this government's fiscal strategy, Senator Penny Wong resiled from repeating that promise. Thrice she denied it. (Time expired)

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I am so pleased that Senator Brandis referred to the Bible in that statement because as I was listening to him pontificating about the process and reiterate the verb 'promise'—and I am sorry, I forgot to count how many times Senator Brandis said that; I will have to refer to Hansard, but I will say it was several times that Senator Brandis made that statement—I was actually thinking of Matthew. I do not often go off into the realms of biblical response, but I was thinking when he kept saying, 'How many times?' that Bible classes from school were going through my mind. How many times did they deny? It was just appropriate that in the end Senator Brandis went from his statements of promise into Matthew and talking directly from the Bible.

Senator Brandis also said that you could be cynical about statements in this place. Well, Mr Deputy President, you can be truly cynical in this place when anyone from either the opposition or the government looks across this chamber and demands a guarantee, because we well know that there is no way that anyone in this place can ever say, 'I guarantee this will happen'. What we can say, and what we have said, is that this government is committed to bring in the surplus.

If we go back and look at the process we see the fact that the government has committed to bring in a surplus in this financial year. When the Treasurer, with Senator Wong, brought down the MYEFO statements late last week that statement was made again: that this government has a commitment to bringing in a surplus in this year's budget and that we are moving in every way to respond to that commitment.

Today in her answers, Senator Wong responded to a number of questions about what was happening with MYEFO, the budget and also the mining resources tax. She talked about the efforts that the government has made. We pointed to the savings that came down in the statement last week; difficult savings identified across a range of departments. These were responding to what has happened not only to our economy but to the world economy in recent years. We pointed out the fact that from the time we drew up our original budget for 2012-13 there has been a significant reduction in income to the government.

We have actually stated what that reduction has been, through taxes raised and through the reduction in our minerals and resources areas. These were the figures on which our original budget statement was made and we then said at that stage that in maintaining our commitment to having a budget surplus this year we would have to make changes. That is why the midyear budget changes are announced. This is not something that this government has created; this is a system that has been in place in our financial system through many, many years. In terms of process: the government brings down a budget; we put forecasts in that budget about what we intend to do; in the midyear cycle we review what has happened—we go through what has happened to income and also to expenditure; and we make changes. That is why MYEFO exists.

We did say that we needed to make changes because the of the processes that had happened. There continues to be a commitment to working with our economy to have a budget surplus in this financial year. Those statements will continue to be made, and I am looking forward to hearing Senator Brandis coming back in times to come and saying how many times different statements will be made. We will have the answers; we will come back and say what we are doing as a responsible government in looking at what is happening in the economy to ensure that we are able to make a commitment to the Australian people that we are seeking to have a budget surplus.

So in terms of what the government has done: the minister responded in detail to questions. We have put out the information about where the cuts are going to be made. The challenge now of course is that the government has put out this process and we will have to come back to this place and have the debate to see whether the opposition will support the savings measures. That will be what will happen. We will see the debate then, and again we will see how any government is able to actually work with the economy when there is resistance from the opposition at every turn.

So, returning to Matthew: we will have to study our Bible to see what happens next, and the government will continue to do the job for which it was elected. We will continue looking at the budget. (Time expired)

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

I am following on from my colleague Senator Brandis, who put his argument so well about this proposed budget surplus in the future.

It was an honour just a couple of hours ago to have a chat to former Victorian Premier, Jeff Kennett, at the front of Parliament House, in relation to the men's sheds and the great work that he does with mental health. I said to Mr Kennett, 'I remember the days when you won government in Victoria, when the Labor Party under the Kirner-Cain government left the state broke'. There was a $60 billion debt, and Mr Kennett had to sell off electricity; $19 billion worth, and every cent used to retire debt.

At the same time, of course, the South Australian government went broke under Labor. So did the Western Australian government and the Tasmanian government. In the meantime, Canberra in those days—the late eighties and early nineties—was under the so-called careful financial watch of one Mr Paul Keating, who was borrowing around $10 billion a year. The legacy of Labor is to empty the bank account, and the amazing thing about it all was that a couple of years ago here was a government borrowing and spending and stimulating the economy while the Reserve Bank was doing what, Senator Bushby? Raising interest rates to slow the economy! That is like driving your car with your foot on the accelerator and pulling the handbrake on at the same time! We have a government borrowing money to a massive $256 billion of gross debt last Friday while the Reserve Bank is putting the brakes on the economy. How foolish is that? There would not be one economist in the world who would agree that that is good economic policy.

Following on from Senator Brandis, let me quote from Prime Minister Gillard in Hansard 11 May 2011:

As promised, we will return the budget to surplus in 2012-13.

On 11 May, again in Hansard, she said:

This budget is bringing the budget back into surplus in 2012-13—

There are some 30 quotes here from Prime Minister Gillard saying that there will be a budget surplus this year.

There is one thing you can rest assured of and that is that the election will be before mid-September next year, because in mid-September the true figures of this financial year's budget will be released. There will be no surplus. Even fudging the books, bringing $5 billion PAYG payments into this financial year will not save them. They will put on new taxes. We can go back through the luxury car tax, the alcopops tax, the cigarette tax, the flood tax, the carbon tax, the mineral resource rent tax—and it has been an absolute farce the way they have managed their budget with regards to that—there will be no budget surplus, and fudging the books will not fool the Australian people.

This is the point—the Australian people do not trust this government. They do not trust this government to manage money. They do not trust this government to spend taxpayers' money and, sadly, borrowed money, wisely. So much has been wasted in stupid stimulus programs on school buildings and pink batts and in the meantime, when we really need some money for essential programs, the debt is so great now that money has been spent. There will be no budget surplus—

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

Under a government I lead!

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

and I will take the interjection from my colleague Senator Fifield. There will be no carbon tax under a government I lead!

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

She got her lines mixed up!

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

There will be no budget surplus under a government I lead! I can go back through my life from leaving school at the end of 1972 in Adelaide. Every state government led by Labor and every federal government led by Labor could not manage money. Every time the coalition was elected after a state or federal government changeover, what do they have: debt, debt, and more debt!

Look at Queensland. The $70-odd billion of debt is going be $85 billion by 2015 and $100 billion before 2020. There are 4½ million people in Queensland and they wonder why Premier Campbell Newman is making cuts. He has to make cuts or let his state go down the road of Greece, Portugal or Spain. You cannot do that. Likewise in New South Wales, Barry O'Farrell inherited a mess, a $5 billion black hole and a huge debt. This government will keep wasting, they will keep borrowing, and we will never see black print at the end of a budget. That is why we will have an election before mid-September next year, to save the embarrassment of more debt.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to take note of the answer from Minister Wong on the Labor government's budget management record. Before Senator Williams leaves the chamber, I remind him that before he starts talking about the Tasmanian government being in debt, he should get his facts correct. In 1989-92 the Labor government was actually paying off the debt that was left by the Liberal government in Tasmania at that time.

Economic management has been one of the highlights of this Labor government. This Labor government is getting on with the job of managing the Australian economy. Everyone in this place knows the tremendous job we did throughout the global financial crisis where Labor's fast, targeted action to stimulate the economy has seen our economy now 10 per cent larger than before the GFC. While many advanced economies are still smaller than they were before global crisis, Australia has come out of the worst financial hit since the Great Depression with an economy that is growing at a good level. As Minister Wong said during question time today, Labor is committed to doing what is required to grow our economy and we have delivered a midyear budget update that brings the budget back to a surplus. Australia has an unemployment rate that is lower and an inflation rate that is low, and this responsible fiscal management gives the Reserve Bank room to lower interest rates, if it decides to.

And let us not forget that we have continued to move Australia forward while ridding our workplaces of that torrid industrial relations relic, Work Choices, that torrid system where more than four million workers lost basic protections. They were just gone.

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

Mr Deputy President, I rise on a point of order of relevance. This is about Senator Wong's answer to my question which was specifically about the budget surplus, and more specifically about whether that statement is any longer a promise. That is the only thing the question was directed to. I know that there is a reasonable latitude given in these debates but to talk about industrial relations policy of a previous government has absolutely nothing whatsoever to do with the question.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Brandis.

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

On the point of order, I would remind the good senator of the content, for example, of Senator Williams's contribution, which did traverse in lengthy detail his memory of Labor governments past and former Premier Jeff Kennett. I know that Senator Brandis has a bit of a knee-jerk reaction to points of order on relevance but I humbly suggest that it is really not apposite on this occasion.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Wong. I was going to rule that Senator Urquhart is relevant in the context of the debate. Senator Urquhart you have the call.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Obviously Work Choices is a very sore point with the opposition. A generation of workers who entered that system were vulnerable, and those young workers who were not aware of their rights, Australians who did not have experience to fall back on, were the worst affected. Labor has repealed Work Choices and brought Australia through the worst financial shock since the Great Depression with an economy that is growing. Labor is managing that economy in a much more responsible manner than those opposite did.

How do we know this? We know this because the Labor government has received a triple-A credit rating from all three rating agencies, a rating that those opposite could not achieve while in government. Under Labor, Australia sits with just six other countries in the world with top credit ratings, and doesn't that touched a nerve with those opposite! The facts show that Labor is actually the more fiscally responsible party, the better managers of the economy, insofar as job creation through the global financial crisis, the worst financial shock to the world economy since the Great Depression, and because we are actually a lower taxing government than those opposite were.

A great fact that those opposite wish they could escape is that tax as a proportion of GDP under Labor is lower than it was under the previous coalition government. Former Prime Minister Howard and his Treasurer Costello presided over what was in fact the highest taxing government in memory. We are doing more with what we have been given than those opposite could have dreamt of doing, and we are doing it while keeping our focus on the changes needed to keep Australia competitive going forward. We put a price on carbon, the price that those opposite have almost forgotten about because it did not come with the big shock that they were so hoping it would. We are building the NBN that those opposite have opposed all the way—a network that will connect all Australians with superfast broadband, enabling more efficient provision of health and education services, as well as opening up endless opportunities for businesses. We are increasing retirement savings through superannuation reforms and boosts to the pension, whilst—

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Urquhart, whilst I ruled earlier that you were within the context of the debate, you are now straying a fair way off the mark. I will just bring you back to the substance of the debate.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I will bring it back; I intended to do that. We have not run out of steam yet. We have comprehensive policy agendas across whole of government, with plans to make Australia a fairer and better place to grow up, work, raise a family and age well in.

Just this week, this Labor government has released its comprehensive Asian century white paper, and that is a framework for Australia to emerge stronger over the decades ahead by taking advantage of the opportunities offered by the Asian century. Australians look at this government's forward agenda and see a group wanting to take on the tough challenges. They see a government that has repealed that industrial relations relic, Work Choices, and a government that is committed to responsible budget management and has clear plans for Australia's future. They also see an opposition with no vision for our country's future, and that is evident today in this debate.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

A number of years ago, the member for North Sydney, the honourable Joe Hockey, predicted that this current Labor government, the combined Rudd-Gillard government, would never deliver a surplus. Indeed, the record shows at this point that they have failed dismally in that regard. I think in the first budget they handed down they actually predicted a surplus, but when the actual figures came in that went on to be one of the four largest deficits that this country has ever seen. Indeed, the four largest deficits that this country has ever seen were in fact the first four budgets that this Labor government actually delivered. I am not talking about what they handed down on budget night. I am talking about what the actual figures showed when the final accounts for each of those financial years came in. That is despite predicting a surplus when they handed down their first budget. The current budget they handed down this year, also predicting a surplus, will also end up in deficit. Just as an interesting historical note, the four largest surpluses that were ever delivered in this country were actually delivered in the last four years of the Howard government. It makes for an interesting contrast.

Senator Moore stood up here earlier and said there is no way the government could stand up and make a promise that there would be a surplus delivered and that the best they could do was provide a commitment that they are working towards a surplus. That is actually true because it is not possible to take account of the vagaries of what might happen in international developments and even domestic developments and how that might play out on taxes and expenditure. But this is exactly the point we are making. The Prime Minister and the Treasurer on numerous occasions—and Senator Brandis outlined some of those when he was speaking—have promised that they will deliver a surplus. That first occurred with the Treasurer, I suspect, in response to those comments that the member for North Sydney was making when he raised the likelihood that this government would never deliver a surplus. I suspect the Treasurer and the government of the day felt a political need to go out and say they would deliver one. So they nominated a date when they thought they could do it, and that was the 2012-13 year.

But the reality is that, since then, things have changed. As Senator Moore noted, circumstances do change, and it has put them in a little bit of a political tight spot because the reality of being able to deliver that surplus has got harder and harder as they have gone on. It is instructive to look at what happened in the last financial year before we transfer that on to what might happen this financial year. Two years ago, Wayne Swan predicted that the budget would run at a deficit of $12.3 billion for the 2011-12 year, which is the year that has just ended. Two years ago he said, 'We will be looking at a deficit of $12.3 billion for the 2011-12 year.' But when the budget for the 2011-12 year was released six months later, that $12.3 billion that they were predicting then had blown out to almost double that at $22.6 billion. In December of 2011, that figure had climbed from $22.6 billion to $37.1 billion in deficit. So it was $12.3 billion when he first mentioned it, it went to $22.6 billion in the budget and then it went to a $37.1 billion deficit by the time of MYEFO in December last year. The final figure in August this year was $43.7 billion. So we have gone from $12.3 billion to $22.6 billion to $37 billion to $43.7 billion over the course of about 18 months in predictions. I think that is instructive of the challenges the government is facing by having put itself in the position two years ago where it promised that it would deliver a surplus in the current financial year. The reality is that the underlying economic conditions that have led to the massive deterioration in the budget of the 2011-12 year have been at play in the figures and their forecast for the 2012-13 year. So the government has had to, as a result, perform more accounting tricks and more twists and turns than you would see at the Moscow Circus.

Just looking most recently at MYEFO, even the timing of the release of MYEFO is enough to raise eyebrows as it is the first MYEFO that has been released in the month of October where we did not have a federal election the following month. You could suspect that maybe we are going to have an election in the following month, but I think that is probably unlikely, although not completely out of the question. The only other alternative for bringing it forward and releasing MYEFO so early is that the Treasury was trying to deceive the public by reporting the figures before they became even worse. (Time expired)