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

A letter has been received from Senator Fifield:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Gillard Government's Budget of more debt, more deficits, more taxes, more broken promises and more uncertainty.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

What can we say about a government which has got things so far wrong over so many years? What is the consistent message? The only consistent message you can take away is that it is consistently wrong. We are in excess of $60 billion away from where it was predicted we would be four years ago, at the start of this budget estimates period. Remember the backslapping, the hugging in the chamber and everybody clapping last year—they were going to have a surplus of $1 billion; Mr Swan, the Treasurer of Australia, was a genius! Then, of course, it turned into possibly a smaller surplus. Then it turned into a deficit. Then it turned into a rather large deficit. Now I think it has turned into the fourth biggest deficit in our nation's history. And you have got to remember that even that is not the final figure. The final figure will come out in September.

What can you say about a government that went through the $75 billion debt ceiling? Then we had a temporary extension of the debt ceiling—because China apparently was going to go into recession—to $200 billion. Then the temporary extension became a permanent extension to a quarter of a trillion dollars. Then they went through the quarter-of-a-trillion-dollar debt ceiling. Now we have got a $300 billion debt ceiling. Now we are drawn $272.8 billion against that ceiling. Now we look into the budget estimates and, even by the government's own figures, they say that at the end of the budget estimates period the market value of our debt will be $370 billion. How on earth do we pay this money back? Where does this money come from?

I hear so many people saying about debt: 'It's just an argument in sophistry. It doesn't really matter. It's not really important.' You have to grimace when they tell you: 'It's all right. You'll get through the day.' It is not like that, because debt has to be repaid. Eighty-two per cent of this money is owed to people overseas, people who really want it back, like the Chinese and the people in the Middle East, provident people who save. They actually want the money back and we will have to pay them the money back. Where is that money going to come from? It is going to come from the people listening to this today. It is going to come from them.

What happens if we cannot pay it back? What happens if we cannot extend the debt ceiling? What happens if our credit rating goes down? What happens if we do not extend that debt ceiling and we go up to it? The cheques bounce. What does that mean? Let us look at it, because the best way to understand that is to go down to some of the intricacies of what happens when you go out the back door. We believe that health care should be public and it should be free. Well, you cannot have that when you go out the back door. We believe that education should be free. Well, you cannot have that when you run out of money. We believe that the Pharmaceutical Benefits Scheme—so you can get subsidised cancer treatment—is a great thing, but you cannot have that when you run out of money. That is what happens. That is why it is immoral to run out of money. It is immoral because of the hurt it causes. That is why this government has been so hopeless—this Greens-Labor Party-Independent amalgam, this peculiarity of the Australian political system, this thing that has driven the finances of our nation into the dirt. It is such a peculiar beast.

We must acknowledge that this government is not just a Labor government. By themselves, they could not govern. With just the Labor Party and the Greens, they could not govern. They govern because they have the support of the Independents—in particular, Mr Windsor and Mr Oakeshott. That is how they govern. That is why it is genuinely a Green-Labor Party-Independent government. If we are to change the government, we must change Green members of the lower house, Labor members of the lower house and Independent members of the lower house. It is the only way it is going to work.

How we can take any of them seriously, when we have seen the catastrophic effects on our defence budget? Our defence budget—it must be one of the primary jobs, to protect the sovereignty of the nation—is now at its lowest levels, in GDP terms, since 1938. How can we run a platform to deal with the requirements of 21st century warfare, to protect our borders and protect our nation, when we have run out of money? Where did the money go? Where has it all gone? What have we got to show for it?

They say that they saved us from the global financial crisis; what a load of rubbish. If you want to know how we got saved from the global financial crisis, it requires a discussion of geology—little black rocks and little red rocks. The little red rock is called iron ore, from Western Australia. They put them on the boat and the good people of South-East Asia buy lots of them. The black rock is coal, predominately from Queensland. It goes on the boat and the same good people buy it. There are also wheat crops. They are the sorts of things that got us out of the global financial crisis, not ceiling insulation or school halls. It is an absurdity to suggest that that was what saved us or that we somehow singlehandedly rebooted the global economy with ceiling insulation and $900 cheques. No, what we did was create a complete economic fiasco for ourselves.

Now we have some serious problems. We had Mr Chaney, the head of NAB, on Lateline about a week ago. He was very dire. Mr Chaney said something that I think I said a few years ago myself. And I congratulate him; he kept his job. Mr Chaney said that in a few years time, if we go down this path, we will be like Ireland. Surely that jerks people back into gear. Surely, somewhere along the line, people start scratching their heads. David Murray, the former head of the Future Fund, said we are going out the back door. Surely somebody understands what this means, but instead we get Mr Swan. I would have to say that the feeling around this building, and over the last couple of days, is one of complete and utter anticlimax. There is just a hole where, once upon a time, competent people resided—because nobody can believe anything that the Green-Labor Party-Independent government says anymore. None of it matters. It is all pointless. It is all ridiculous. You can only be believed when you can stand behind your products and when you can bring your actuals in to meet your budgets. As a little old bush accountant I see that sophistry lives in budgets. Sophistry is the world of budget. The beauty of a budget is in the eye of the beholder. But if you want to put yourself up as the Cassandra, the clairvoyant or the Nostradamus in the budget, you have actually got to make your predictions come somewhere within the ballpark of what your actuals are. It has never happened. We have never got within a bull's roar of what was said was going to happen.

We have had other confusions in here, because the Labor Party gets egged on by the Greens. The Greens want to pay for the everything with a mining tax, but they do not believe in mining. They cannot ever nominate one mine that they believe in, but apparently that is how they are going to pay for everything.

How do we actually get ourselves out of this situation that the Green-Labor Party-Independent alliance has put us in? For how many years are we going to inflict this upon the Australian people? What happens with their heroic projections, even in current budgetary papers, and their terms of trade? Correct me if I am wrong, but our dollar has—for the first time—just slipped below parity. It has done that because the world is reading in a downturn in commodity prices. Where is that going to leave us in trying to finance a debt that was predominately raised from overseas? How much trouble have these people put us in? Where is the confidence that we can start moving the agenda back? Last time they left us with $105 billion gross debt and $96 billion net debt, just to show you how close the two figures ended up. When they left us debt of $105 billion gross and $96 billion net, it took the nation 10 years of a coalition government to pay it off. And there was a substantial asset in there as well: the sale of Telstra, which was $45 billion.

Now, in their own words, they talk about $370 billion as the market value of their peak debt. How do we pay that back? What are we going to sell this time? What is on the market this time? What can we possibly do? Where is the solution to this? Ladies and gentlemen, there is only one solution, and that solution is an election as quickly as possible and a change of government, and then an arduous period of time where we have to walk hand in glove with the Australian people. But we must explain to the Australian people that they were put in this situation by the Greens, the Labor Party and the Independents Mr Windsor and Mr Oakeshott.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

I rise to provide a contribution to this matter of public importance. Senator Joyce, as you leave the chamber, I am not sure if that was a speech on the budget or a pre-selection speech: 'Why you should vote for me to contest the House of Representatives seats.' But, based on that performance, I think Tony Windsor will outstrip your knowledge of the economy any day.

I have great pleasure, actually, in standing up and speaking about last night's budget. That is particularly true if you come from the Northern Territory and you have had Indigenous people at the heart of your constituency—but I will get to that in a few minutes. We know, of course, the theme of budget this year—and you have heard Wayne Swan say it over and over again—is about a smarter, stronger and fairer future. This is a budget that puts jobs and growth front and centre, but it is more than that. It is much more than that. It not only sets out a pathway to the surplus. I think I saw the Prime Minister say today, in a transcript: 'Let's be honest about this; we were planning to have a surplus this year.' But some of the honesty that we have accepted, and some of the reality that the coalition will not accept, is that the income and the revenue we were expecting were not there.

What this budget does is make smart investments for our future—investments that Labor governments make. We will always act responsibly. We always prioritise jobs and the economy, but we are also known as a party that has put in place some of the great social infrastructure and stepping stones of our time. So let us have a look at what we have achieved. We have got a budget based on targeted and responsible decisions, made in line, as I said, with our Labor values. We have a clear choice in this budget between protecting jobs and making smart investments for the future or just taking an axe to the economy, making savage cuts to basic services, which is what those opposite in the coalition would want to do, and returning the budget to surplus a little faster. We have decided to do the former and not the latter. This budget is about ensuring that we do create a fairer and more prosperous Australia for our future, for our kids. In painting the picture of how we arrived at where we were last night, let us have a look at our record.

Going back to the global financial crisis, we did get the big calls right to support jobs and growth. I have travelled overseas many times since the global financial crisis, and this country is certainly doing far better than any other. Senator Joyce mentioned Mr Chaney's reference to Ireland. I was in Ireland last year, and the one thing that people kept saying to me was, 'How is it that you notch up 21 consecutive years of growth and consecutive years of growth in Australia since the global financial crisis?' Why is it that there are so many young people in Ireland who are floundering to get a job, so they are coming out to Australia to do six or 12 months work? If you want to make reference to Ireland, have a look at what is really happening. People are turning to and looking at our economy and at our unemployment rate and our jobs growth rate and the way we support jobs through our economy. They are travelling out here to provide themselves with that opportunity—an opportunity they do not get back in Ireland.

We have an economy that is 13 per cent larger and an unemployment rate of 5.6 per cent. A 5.6 per cent unemployment rate would be the envy of many countries around this world. We have got solid growth and we have contained inflation; in fact, only a few days ago we saw interest rates drop once again. Since coming to office we have created 90,000 jobs. We have got a gold-plated AAA rating. So those opposite cannot stand here and lecture us about the economy and about what we have and have not done. If you look at our track record, you will see how well we have handled the economy since 2008. We have had a Treasurer who has been recognised around the world as being one of the best and finest to handle the books during the global financial crisis, and he continues to do so.

I want to talk about the signature pieces in this budget—building on Medicare, building on superannuation and building on the fact that we floated the dollar. Now we have got two more signature pieces that we can put the Labor brand to, including disability—anyone, anytime. How are we going to pay for that? By attaching it to the Medicare levy. I personally think it is a great long-term, sustainable way to go. I could walk out of here tonight and—God forbid—be struck by a car and need to rely on this scheme myself. You never know what is going to happen to you. I hear that so often from people I meet who have a disability—people who are not necessarily born with a disability but who have attained a disability through a workplace accident or a car accident, and they have got nowhere to go. My grandfather was struck by a truck in Bega four decades ago. It turned his life around, simply because he struggled to pay for the outcomes of his disability.

I want to commend the coalition for coming on board. I want to commend the Northern Territory government for signing up to the trial site in the Barkly region and for signing up to the NDIS last Saturday so that 7,000 Territorians can now benefit from it. How can you back away from this in the budget? How can you not support such a massive social infrastructure reform in this country?

It is the same with schools, under the National Plan for School Improvement. The massive increase that will be given to schools through the Gonski reforms will have untold benefits for each and every child in every classroom around this country and for every teacher and every specialist. Every outcome that we want to see improved will be improved because we are going to invest in education. I am disappointed to see the Northern Territory government not coming on board with that. Peter Chandler, the new Northern Territory Minister for Education, can see the reality and the benefits of Gonski, but we have a chief minister who wants to put a spanner in the works and halt those negotiations. I am hoping that we will continue to press with them the urgency of signing up to Gonski.

The budget contains $70 million for the Palmerston hospital and we had offered the Northern Territory government about $38 million for the new children's wing, to refurbish the paediatric ward at RDH. Both of those moneys are conditional, of course, on the Northern Territory government putting forward some of their own contribution. Yesterday, in handing down their budget, the Northern Territory government said no to both of those things. Go figure that. Go figure why you would not want to put money towards a new Palmerston hospital that would service more than 40,000 people, why you would not come to the party with $40 million to match our $70 million to get that hospital up and running. They have decided to waste $5 million on doing another scoping study. There is already a scoping study. It is in somebody’s filing cabinet in the Northern Territory. It was done by the previous Labor government. That is how we came up with the plan to build a hospital in the first place. There was a scoping study; it has been done. We do not need to reinvent the wheel. People, particularly Territorians, are sick of governments reinventing the wheel and writing reports for the sake of reports, having consultancies for the sake of consultancies. The work has been done. I am bitterly disappointed that the Northern Territory government did not make a commitment of $40 million yesterday to get that hospital up and running. In this budget we see $1.6 billion in funding towards improved health, education and other essential services, welfare reform, recognition and advocacy for Indigenous people and a big boost to their Indigenous languages and arts. Of course, this is part of our $3.4 billion package for the Stronger Futures in the Northern Territory.

This is a 10-year funding commitment. The $1.6 billion is part of that commitment. This is finally us as a government saying, 'We are not going to dribble out money to you every year or every three years. We are actually going to give you 10 years of guaranteed certainty so you can employ Indigenous people, train Indigenous people, write your strategic plan, implement it, review it and in fact have time to write another one.' This is a great budget for people in the Northern Territory, particularly if you are Indigenous. This is the budget that finally puts in place our commitment to a ten-year plan for your stronger future to ensure that we do actually match what we want to do with the rhetoric. This is now the money for you to start closing the gap and to put in place those programs, those employment outcomes, those job opportunities so that Indigenous people can finally relax and say—(Time expired)

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

The budget delivered by the Treasurer, Mr Swan, last night is another deeply disappointing budget. It is a budget which delivers more debt, more deficits, more taxes, more broken promises, more uncertainty. It is yet another budget which does nothing to strengthen our economy, to make us more competitive internationally or to help families deal with rising cost-of-living pressures. There is no credible pathway back to surplus. Earlier today the Treasurer and Senator Wong were running the arguments that 'Yes, it is true that this time last year we really did plan, we really did have an intention, to bring the budget back to surplus this year.' What a completely dishonest attempt to rewrite history. There was not an intention, there was not a plan; there was an ironclad guarantee, a rock-solid commitment. There was a promise that, come hell or high water, the budget would be back in the black. That is what the Prime Minister said. The Assistant Treasurer, Mr Bradbury, was so convinced by the spin in Labor's budget last year that he went out to the constituents in his electorate with a flyer to say that Labor had delivered a surplus, which, of course, was not true, though Labor had promised a surplus—not that the Treasurer fessed up to it in his budget yesterday. What we now know is that the government, having promised a surplus this time last year of $1½ billion, is on track for a $19.4 billion budget deficit, the fifth budget deficit in a row under Wayne Swan's stewardship.

There are accumulated deficits of $191 billion under this government so far. In the first five years the government spent $191 billion more than it raised in revenue, even though this Treasurer had the benefit during the first four years of the best terms of trade in 140 years and even though this Treasurer introduced about 30 new or increased taxes in the first four budgets. As Senator Joyce accurately pointed out, this financial year is not over yet and we have not seen the final budget outcome yet. Conveniently, that will not happen until after the election. Do not tell me that the timing of the election has not got anything to do with that. Let me remind the chamber what the Treasurer said in last year's budget speech:

The deficit years of the global recession are behind us. The surplus years are here.

But we know that that was just a complete fabrication, a complete figment of the Treasurer's imagination. Given that people could not trust what Mr Swan predicted in his budget last year, why should anyone trust what he said in his budget this year? He is still making the same mistakes, either deliberately to mislead or incompetently.

Over the last couple of months we have had a plethora of extraordinarily dishonest spin from the Prime Minister, the Treasurer and the Minister for Finance and Deregulation about the reasons behind the failure of the government to deliver a budget surplus this year. We predicted this last year. We predicted last year, when the Treasurer wanted to make people believe that government revenue would go up by 12 per cent, that it would not happen. The government wanted us to believe this time last year that government revenue would increase by 11.8 per cent, to be exact, at a time when Treasury was also predicting that the economy would grow more slowly, that our terms of trade would fall, that the Australian dollar would be high. That was all predicted, but the Treasurer, Mr Swan, wanted people across Australia to believe that government revenue would go up by 11.8 per cent. It was never believable; it was never going to happen. The only person in Australia who truly seemed to believe that it would happen was the Treasurer and when the inevitable happened—when he failed to meet his overly or aggressively or unrealistically optimistic revenue forecasts—he threw his hands in the air and said: 'Our revenue has collapsed.' In fact, they have a technical description where they talk about 'revenue write-downs' without giving you the fine print that revenue has only been written down against the overly optimistic and always unbelievable and dishonest predictions made by the Treasurer in the budget last year. But they do not give you that fine print.

Sometimes some of their own ministers get caught up in the spin. This morning at a budget breakfast with three accounting bodies, Mr Shorten had to correct himself. He started to say, 'Well, you know revenue has been falling'. Guess what, Mr Acting Deputy President? Government revenue in Australia is increasing and it is increasing strongly. Government revenue this financial year is up by more than six per cent, and next financial year it is expected to be up by more than seven per cent. That is nearly three times the rate of inflation. Just to pick up on the Prime Minister's example in recent weeks of average wage earner John, if any average wage earner across Australia were told: 'Guess what? You are going to get a seven per cent pay rise this year, on top of a six per cent pay rise last year' and if they were able to cover their expenses last year, they would say: 'That is great. Not only will I be able to cover my expenses next year, I will actually be able to put some money away for a rainy day.' But not this government. This government does not have a revenue problem; this government has a spending problem. This government is collecting $80 billion more revenue this year than in the last year of the previous coalition government. The problem is that this government is also spending $120 billion more this year than in the last year of the previous coalition government. That is how they turned a $20 billion surplus, which is what they inherited, into a $20 billion deficit—a $40 billion turnaround.

As I have said, Labor is still at it: the revenue forecasts in this budget are still dishonest. As much as the Treasurer is out there complaining about falling terms of trade, he is actually expecting the terms of trade over the next few years to essentially remain the same. His forecast for our terms of trade is to suggest that they will remain at least 15 per cent higher than their highest level under the previous government. Despite all of his bleating about the strength of the Australian dollar, and the impact that that has on the budget, he has not changed the exchange rate forecast—it was $1.03 in last year's budget; it is $1.03 in this year's budget. And you cannot blame the impact of the Australian dollar on government revenue for the failure by the government to raise the revenue it predicted, because last year $1.03 was predicted and that was essentially what happened throughout the year.

As for the mining tax, it has been a complete failure. It is a complex, distorting, inefficient tax that is costly to administer and costly to comply with. It will raise just $200 million this year, 95 per cent below the original forecast that Wayne Swan made when he announced the tax—yet he wants us to believe that it will increase by more than 10 times over the forward estimates. It is not going to happen. He wants us to believe that the carbon price is going to be double what any other expert thinks it will be in 2015-16. Then the government is drawing a line between its inaccurate assumption in 2015-16 and an imaginary objective of $38 a tonne in 2019-20, and it is saying that everything on the line is now its new estimate in the intervening years. This government could not be trusted last year; it cannot be trusted this year. It is time for this government to go. It is time for this government to be replaced with a government that can actually manage the books.

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

I rise today to inform the opposition that the Gillard government's budget is certainly not one that can be characterised as more debt, more deficits and more taxes. It is a balanced, prudent, reasonable budget that makes wise investments in Australia's future. It is a budget which recognises that the global economy remains fragile, and that a high Australian dollar is not welcome news to many businesses. We cannot expect to reap the same tax revenues we have enjoyed in previous years. This budget prepares for that.

My own state of Tasmania will benefit enormously because we in the Gillard government have made sound choices for the future of the state. We have chosen improved infrastructure. The next phase of the $60 billion investment through the Nation Building Program commits significant funds to major new projects. This takes Labor's total investment in the state's road, rail and public transport infrastructure to an unprecedented $1.9 billion since 2008. The government has released its preliminary schedule of new projects to be funded and delivered under the Nation Building Program over the next five years. This list includes $500 million going towards the Midland Highway Safety Package to improve safety and productivity. But this budget is not just about improving Tasmania's roads; just under $120 million has been dedicated to freight rail revitalisation to continue improvements to the major lines. We have also chosen a first-class health system. I know this issue is a particularly uncomfortable one for those opposite, since their leader presided over massive cuts to federal health funding whilst he was the health minister—I recall it was some one billion dollars that was gutted out of the health budget under Mr Abbott. This budget provides Tasmania with a record $399 million investment in funding for its health system. This means that the state will enjoy improved health and hospital facilities, more frontline services and improved care for patients, no matter where they live.

We have chosen superior schools. Schools in Tasmania will benefit from an additional $400 million under the groundbreaking National Plan for School Improvement. The federal government is paying two dollars for every dollar being spent by state governments on our nation's schools: what an achievement! We have chosen more jobs, the issue of the highest possible importance to Tasmanians. Over the next four years, over $10 billion will be spent on employment services. This includes $5.3 billion for Job Services Australia, an organisation that works with job seekers to provide the training and support they need to get back to work as quickly as possible. Since this scheme replaced the Liberals' Job Network, we have achieved 90 per cent better outcomes for the most disadvantaged job seekers. We want all Tasmanians to be able to find work. This investment has seen over 43,000 people placed in work since the program began. On top of this, $238 million in new funding has been dedicated to establishing up to ten industry innovation precincts, including a defence precinct. This takes total funding for this initiative to close to half a billion dollars. We chose the National Broadband Network, something I am particularly passionate about and from which Tasmanians have already seen benefits. The Gillard government has announced plans to bring the total number of premises where NBN construction will commence or be complete by mid-2016 to more than 208,000. We are doing it all.

I note also that the state's share of GST revenue has jumped by $71 million, despite predictions it would plunge. If a coalition government were in power, we know that GST revenue to Tasmania would fall by $600 million dollars. The coalition plans to take money from Tasmania and deposit it into the hands of richer, larger Liberal held states such as Western Australia. I can see my colleague opposite, Senator Sinodinos, smiling. We Tasmanians are not smiling because we know how that will impact on health and on schools. We cannot let this happen.

When it comes to considering this budget in the broader context of Labor's strong management of the economy, it is important to remember that we are the envy of countries around the world. Had we been able to experience the full force of the global financial crisis and the impact of slipping into recession, perhaps people would now recognise just what Labor has achieved. Despite a global credit crunch, Labor has presided over an economy that is 13 per cent larger. Our unemployment rate is at 5.6 per cent, we have experienced solid growth and we have contained inflation.

Australia enjoys a gold-plated AAA rating from all three global ratings agencies—something the coalition never achieved in 11½ years. Even as various industries experience a fall in international demand and a high Australian dollar, since coming to office Labor has created around 900,000 jobs.

We should never forget that, during the Howard years, the coalition failed in its duty to invest in the nation's future. Despite enjoying unprecedented tax revenues that delivered a sugar hit to the Australian economy, there were negligible advances in education and health measures to assist vulnerable elements of the community. Instead, we saw unsustainable middle-class welfare and a series of election year bonuses and bribes.

Not so with this government: Labor governments understand that all members of the community can thrive and take advantage of our strong economy only if a level playing field is created. We want our children to enjoy a world class education system and we have not put services for those with disabilities into the too hard basket.

On numerous occasions I have had the privilege of speaking in this chamber about the National Disability Insurance Scheme. As the Prime Minister demonstrated so poignantly this morning, there is nothing more important to this government than realising the full potential of this scheme. This budget sets it in stone. DisabilityCare will ensure that the level of support a person with a disability will receive will not depend on where they live or how they acquired their disability. In Tasmania alone, the Gillard government will contribute close to a quarter of a billion dollars by 2019. This means that over 11,000 Tasmanians will be eligible for support under DisabilityCare.

Over the course of today, as journalists recovering from last night's festivities across Kingston and Manuka report from tents outside a rain-soaked Parliament House, we are going to hear a lot of strange things said about this budget. We will no doubt hear the shadow Treasurer claim that the Gillard government has broken promises. But he knows full well that budgets need to be adapted to meet changing economic conditions—or I hope he does; I am not always sure from what I read and what he says. We may well witness hysterical predictions from various talking heads on Sky News that this budget will cause the sky to fall in on itself. But, of course, that is not the real story. I remind all Australians that, despite everything they have seen on television or read in the newspapers about this budget, they really need to consider that they have a choice—a choice between a government making targeted and intelligent investments in the future and an opposition that wants to make unnecessary cuts that will sacrifice jobs and harm the economy; a choice between a government focussed on employment and growth and an opposition obsessed with fearmongering about deficits and uncertainty; a choice between a government that provides opportunities for all Australians and an opposition operating at the behest of mining executives, big tobacco and the noisy, privileged few.

We are not like those opposite in this chamber; we will never forget about you. I guarantee you this: the Gillard government will persevere and make our voices heard over the din of cynical opposition jibes and lazy reporting. We will always fight to improve this country and put jobs and economic growth first. Sometimes in Canberra it is difficult to find the signal amidst the noise, particularly during budget week. It comes down to a simple choice between a government making smart investments in Australia's future, enhancing prosperity across every corner of this increasingly divided country and protecting jobs, or an opposition working for the haves and the have mores. Labor will never forget about you. Whether you are someone struggling to run a small business on slow broadband speeds, someone confined to an unsuitable wheelchair, someone who did not enjoy a private education on the North Shore— (Time expired)

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

It is a pleasure to take part in the debate on this matter of public importance concerning more deficit, debts, broken promises and policy uncertainty. I am speaking, of course, of the government. Let me begin by updating Senator Polley, who early in her speech spoke against middle-class welfare. Stop press: at lunchtime at the National Press Club, in a luncheon address, the Treasurer, Mr Swan, gave a vigorous and spirited defence of middle-class welfare. In fact, he took great exception to the term. He said targeted family payments are important because they provide us with a way of providing support for the next generation. He took umbrage at the term 'middle-class welfare'. Indeed, many on the other side other than the now Treasurer have used this term all too loosely. I mention that because the capacity to have provided baby bonuses and targeted family payments, to have paid down the debt that the Howard-Costello government inherited in 1996 and the capacity to provide income tax cuts were all ticked off through the 1990s and into the 2000s by the Treasury. The target of one per cent to 1.5 per cent of GDP for a surplus was ticked off by the federal Treasury and, indeed, by the Reserve Bank.

A myth has grown up that the only way the Howard government ever achieved anything was because of the increase in national income through the terms of trade in the latter part of its term. Well, as Peter Costello reminded us the other day, it was a government that produced 10 or 11 surpluses out of 12 budgets—think about that. In other words, in good times and bad, it was a government that had the management capacity, the sagacity and the courage to make the decisions that were required. There are many on the other side of the house who will recall the way in which they opposed many of the measures taken at that time. So I take umbrage at the idea that, somehow, the mantle of fiscal conservatism has been appropriated by a government which is yet to produce a surplus. It is a government which has, indeed, produced the four successive biggest deficits in our history, which has three more deficits to go, and whose definition of the economic cycle now extends well beyond seven years. It now has a target of achieving a surplus over the cycle. Well, the cycle is getting longer and longer.

The sad truth for the Australian economy and for our vulnerability to future downturns is that in their almost dying days, five minutes to midnight, this government are taking measures which, if they were genuine about being fiscal conservatives, they would have taken six years ago when they came into power. They have had a deathbed conversion to making savings to make up for their increased spending. They have had a deathbed conversion to taking a conservative approach to making revenue forecasts. They should have realised, once the initial numbers came in after the global financial crisis, that revenue would not be growing as strongly as it had pre the global financial crisis. In this budget they are budgeting for revenue to grow by something like seven per cent, which has been the average over the last few years. Finally, they are conceding the obvious point that you need to budget according to the revenue that you have, unless you want to keep raising taxes—and I will come back to taxes.

The real issue that has dogged this government since the recovery from the global financial crisis has been the fact that they have not been willing to take the action required to bring spending under control. The reason the coalition focuses on spending as opposed to tax is that we believe, fundamentally, if you want an economy which rewards enterprise, rewards initiative, then to the maximum extent possible you should keep the pressure on efficient, effective public spending and try to reduce the pressure on the tax base. It is a very important principle. That principle has underpinned what we did in government with things like the switching between inefficient, indirect taxes and the goods and services tax, and then the trade-off between those indirect taxes and cutting personal income tax. All those years in the early 2000s when the coalition was cutting tax the Treasury was putting into the budget statements estimates of the impact that that was having on the incentives to work, save and invest, which are, principally, the incentives to greater labour force participation. They knew, as we knew, that they were supply side measures; they were not just giveaways. So, no more of this idea that they were just giveaways. They had a discreet and important economic as well as social purpose.

This government is in the position it is today because no-one believes what it has put into this budget, and the people have to cop it for four months until the election. In their bones the people out there know that they cannot believe what is in this budget because for too long, unconditionally, they have been promised things that have not come to pass. The Prime Minister and the Treasurer have sworn black and blue 300 or 400 times that there will be a surplus come what may. At the Press Club last year the Treasurer, in answer to a question from Mark Simkin, said that he would deliver a surplus come what may. Now, any economist could have said, 'What? You're going to cut spending in the middle of a recession just to achieve a surplus? You'll override the automatic stabilisers just to achieve a surplus?' What that betrayed to me, if not to other people, was that the Treasurer did not understand his job. He was making an unconditional political point. In this game that always catches up with you. You always get mugged by reality whether you like it or not.

This budget will only reinforce in people's minds the litany of broken promises of this government. The principle broken promise, of course, goes back to beyond the 2010 election when the now Prime Minister pledged that there would be no carbon tax under a government she led. That started the rot. Her credibility was under a cloud already, but that really started the rot. So we have a government which has produced deficits when it said it would produce surpluses, which said it would reduce debt when it has increased debt, which has broken promises that it tries to make up for by making more promises, more estimates, more assumptions. It is hoping, like Mr Micawber, that something will turn up, that the terms of trade will be a bit stronger than it thought, that external stimulus in some form will be stronger than it thought.

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Didn't you design non-core promises, though?

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

And another myth from the government about core and non-core promises. I will address that on another day; that is the subject of a chapter all of its own. I will not be distracted by the bleachers on this occasion; I will keep talking about the policy uncertainty induced by the actions of this government. What do I mean there? Here is a classic example: all of a sudden, again, the government are the champions of improving our schools. But, hang on, $2 billion is ripped out of universities to help achieve that. A couple of years ago the government were lauding the role of universities in our system and talking about how they were uncapping places and so on and so forth.

My colleagues the Greens made a very important point about the consistency of messaging: if you support education, you sacrifice one element of education in order to buttress another. This is where the mixed messages of this budget come to the fore. This is not how you sell a budget. This is not how you sell a consistent message. There is no message left. The only message is, like Mr Micawber said: 'Something will turn up. Let's just get through the next four months. Let's lay down a few fiscal booby-traps and maybe the other side will have to pay for all the promises that we've made.' That is not to say that over the years the government has not made some good decisions, but the fact of the matter is that, unlike truly successful long-term governments, it has failed to create a consistent and coherent message around what it is doing.

People opened the Daily Telegraph today and saw a list of measures. They saw all the family payments being cut and all the other payments being cancelled or postponed, which were flavour of the month, as it were, last year or the year before. They were championed—that only Labor could protect Medicare, and they started to slash Medicare to build DisabilityCare. They said there would be no more taxes, and then there were new taxes to support DisabilityCare. The mixed messages will bury this government.

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I will respond to some of what Senator Sinodinos said a little later in my contribution. I want to begin this afternoon by welcoming the opportunity to speak on this matter of public importance about the 2013-14 budget. Of course, as is my practice, I will leave the hysteria and ritual denunciation to opposition senators. After all, it is just same old, same old from them: hyperbole, negativity, doom and gloom. Perhaps it is time for a more objective assessment, the sort of assessment that former Senator Rosemary Crowley—who I note is in the gallery—was noted for in her time as a senator in this chamber. I believe that such an assessment would acknowledge that the government has found the right balance between strong investment in our nation's future and responsible savings. I believe such an objective assessment would acknowledge the government's investments in education and disability care as very significant achievements indeed. Certainly, such an objective assessment would have to acknowledge that the government has delivered this budget from a position of economic strength, as one of the strongest economies in the developed world.

What is this record? What do the facts actually tell us? Our economy has grown by 13 per cent since the beginning of the global financial crisis. More than 950,000 jobs have been created by the government. For the first time ever, we have a AAA credit rating from all three international ratings agencies. This has never been achieved by Australia before, and only seven other countries in the world share this achievement. Inflation is contained and interest rates are at record lows. All of this has been achieved in a climate of global economic uncertainty and during a period in which we have had the world's worst recession since the Great Depression.

The decisive action taken by this government during the global financial crisis meant that we have emerged from the GFC with strong growth, low unemployment and solid public finances. Regardless of what the opposition says, the truth is that our economic position is the envy of the developed world. Australia has seen 21 consecutive years of economic growth. Our economy grew by 3.1 per cent over the past year around its trend rate and faster than any major advanced economy. Since this government came to office in 2007, Australia has moved up three places to now be the 12th largest economy in the world, passing South Korea, Mexico and Spain. More than 950,000 jobs have been created since the current government came to office, despite the fact that millions of jobs have been lost worldwide.

Australia's unemployment rate of 5.5 per cent is one of the lowest in the developed world, less than half the unemployment rate in Europe, which is 12.1 per cent, and significantly less than that of the United States of America, which stands at 7.5 per cent, and the OECD, which stands at eight per cent. Our net debt will peak at only 11.4 per cent of GDP in 2014-15, less than one-eighth of the peak across major advanced economies, with many experiencing levels of net debt over 90 per cent of GDP.

I do not expect all members of the opposition to agree with these facts and figures. After all, they are just statistics, and the opposition seems to reject statistics from time to time. But I know that Senator Sinodinos, who spoke just before me in the debate, was of course the former Prime Minister's economic adviser—that is, Mr Howard's economic adviser—from 1987 to 1989. He had a bit of a break and then came back and was again economic adviser to Mr Howard from 1995 to 1997 and then became Mr Howard's chief of staff from 1997 to 2006. So I suppose that Senator Sinodinos would have seen the article in today's Sydney Morning Herald. I do not always quote the Sydney Morning Herald as a journal of record, but there it is on page 7, under the cross-head 'Unemployment: Former PM surprised by low rate'—and I interpolate here that the former PM is Mr Howard: 'Resilient economy in better shape than most, says Howard'. This is written by journalist Deborah Gough, and I thought I would share it with the Senate, particularly Senator Sinodinos, who was lyrical about the efforts of the government which he served as a staffer. It says:

Former prime minister John Howard gave the economy a big tick before Treasurer Wayne Swan delivered his sixth budget on Tuesday night.

I wish he had told Senator Sinodinos! It continues:

In an off-the-cuff speech on Friday, reported by trade website The Adviser, Mr Howard was upbeat about the economy.

I wish he had told Senator Sinodinos! It continues:

"When the Prime Minister and the Treasurer—

this is quoting Mr Howard directly. Mr Howard said:

"When the Prime Minister and the Treasurer and others tell you that the Australian economy is doing better than most—they are right," Mr Howard said.

The low unemployment rate had surprised him …

"We are still fortunate that we have an unemployment rate with a five in front of it. I wouldn't have thought that was going to be possible a few years ago, and I don't think many people would. Our unemployment has remained pleasingly quite low," …

"And our debt to GDP ratio, the amount of money we owe, to the strength of our economy, is still a lot better than most other countries," he said.

There is Mr Howard, Senator Sinodinos's former employer for all those years, endorsing the Australian economy and, I believe, endorsing the stewardship of the Australian economy of the government elected in 2007. On this occasion—and I would rarely say it—Mr Howard got it right.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The time for this discussion has now expired.