Tuesday, 4 March 2014
Questions without Notice
I thank the honourable senator for his question and for his interest in matters of economics and finance, not just those with an agricultural event. When we talk about an unsustainable budgetary position we mean that, if the budgetary position is allowed to remain as it is, it will mean that debt and deficits continue to grow. The Mid-Year Economic and Fiscal Outlook delivered in December last year showed the extent of the legacy left by the previous government, with a deficit of $47 billion in 2014, $123 billion in budget deficits over the forward estimates period, a deterioration of $68 billion since the Pre-election Economic and Fiscal Outlook. What is more, in the absence of significant policy changes, the budget will not return to surplus for more than a decade, and debt will reach $667 billion in 2023-24. The fact is that Labor presided over the fastest deterioration in debt, in dollar terms and as a share of GDP, in modern Australian history. In the recent IMF report it was projected, on present policy, that over the next five years, from 2012 or 2013, we would have the fastest growth in public spending for Western countries.
So getting the budget under control will be challenging, but the coalition is up to the task and we will bring spending under control. But in doing that we are determined to deliver on important initiatives like the National Disability Insurance Scheme, which will benefit hundreds of thousands of people with disability. And we are committed to delivering a surplus of one per cent of GDP within a decade.
Senator Conroy interjecting—
Thank you for that interjection, because it gives me an opportunity to say that we will also deliver on a fair dinkum paid parental leave plan, championed by our leader, the Prime Minister. (Time expired)
Opposition senators interjecting—
The Commission of Audit is an important step in addressing Labor's budget legacy. The commission has examined spending line by line to ensure that taxpayers will see value for money and to identify overlaps and inefficiencies. By cutting waste to streamline public services and by providing strong and competent leadership, the government can then provide much-needed resources to areas of need. The coalition took $42 billion worth of savings to the election and we added a further $1.1 billion worth of savings in MYEFO. But the Labor Party, sadly, has declined to accept the mandate of the Australian people.
And this includes fixing the budget. Labor is opposing around $20 billion of savings, including $5 billion of the savings they proposed before the election, cancellation of the 2015-16 tax cuts linked to the carbon tax, higher education savings and savings from changes to the R&D tax credit. (Time expired)
Mr President, I ask a further supplementary question. Will the Assistant Treasurer advise the Senate why it is critical that the government's election mandate be respected and that it be allowed to get on with the job of implementing policies that will increase the rate of economic growth?
We do need to increase the rate of economic growth, because growth is sub-trend at the moment and we are making the transition from growth largely based on the mining part of the economy to growth based on the non-mining sector. What will help there is if we start with the abolition of the mining and carbon taxes. Last year the carbon tax imposed a $7.6 billion burden on business but reduced carbon emissions in its own right by only 0.1 per cent. On Friday the head of Virgin Airlines made it crystal clear that the carbon tax was a direct hit on the bottom line of airlines, because the costs could not be passed on in full in the current competitive environment. We are creating a climate that will boost investment, particularly in infrastructure. We are going to change the focus of government expenditure so that there is more focus on job-creating infrastructure that also improves our international competitiveness and our productivity. This will allow private businesses to spend more time innovating, creating wealth and becoming profitable.