Wednesday, 26 March 2014
Questions without Notice
My question is to the Minister for Finance, Senator Cormann. Can the minister inform the Senate of whether the government has received any recent unsolicited advice about fiscal controls that would assist the government in bringing the budget back to surplus?
Yes, I can confirm that the government did receive some unsolicited advice on how we could repair the budget mess that we have inherited from our predecessors. This morning, we had the shadow Treasurer, Mr Bowen, out there, followed up by the Leader of the Opposition in his Press Club speech today, suggesting that the best way to fix the budget mess that Labor left behind was to follow Labor's fiscal rules. If only we did what Labor said we should do, the budget would magically get back into surplus! We would magically reduce debt! I see that Senator Boswell looks a bit confused, and I guess it is true: it is very confusing to listen to a Labor shadow Treasurer saying, 'Do as we say and everything will be fine,' when their track record was such that, when we came into government, we held $123 billion of projected deficits. We inherited a budget with government debt heading for $667 billion.
Over their six budgets, they committed $314 billion more in spending than they collected or thought they would collect in revenue. Of course, they say: 'Stick to our fiscal rules. Make a surplus over the medium term.' Well, we know what that means under the Labor Party. The Labor Party have not delivered a surplus budget since the late eighties. Of course, they say, 'Let's keep spending growth to below two per cent in real terms per year.' Well, guess what? In the first two years of Labor, there was 17 per cent growth in spending in real terms. That was the GFC, we are told, but that was of course the new base that they worked from, from there on in.
And then what? All this additional spending. In year 5, the first year beyond the forward estimates that Labor had blocked in, there was a six per cent increase in spending in 2017-18—real growth in spending compared to 2016-17. That is what Labor left behind. If we followed Labor's trajectory, it would be a recipe for more debt and more deficit. (Time expired)
Honourable senators interjecting—
Mr President, I have a supplementary question. Could the minister inform the Senate if fiscal controls established in recent budgets have been effective and also explain the reasons for the projected budget deterioration?
The former finance minister, Senator Wong, was furiously interjecting there as I was answering the previous question, accusing us of spending cuts. Well, do you know what? Senator Wong and the Labor Party cannot have it both ways. They cannot say: 'Limit yourself to two per cent growth in real spending. Lock in spending growth of six per cent in real terms, including 3.5 per cent growth in real terms in education spending, 4.2 per cent growth in real terms in health spending, 13 per cent growth in real terms in defence spending, 66 per cent growth in real terms in overseas aid spending and 125 per cent growth in real terms in spending on disability services, hidden in the period beyond the forward estimates.' Either you say that you should stick to your fiscal rules, as the shadow Treasurer and the Leader of the Opposition said earlier today, which would mean limiting all of these spending increases to two per cent, contrary to what you put into the budget trajectory, or you do not mean it. (Time expired)
I thank Senator Boyce for that supplementary question and for her previous questions. Repairing Labor's budget mess is so important to build a stronger economy, to create more jobs, to restore confidence, to restore investment growth and to actually ensure that, over the medium to long term, we can fund the important services of government in a sustainable way. What Labor did, cruelly, was to create all sorts of expectations and make all sorts of promises to all sorts of people right across Australia, 'We're going to spend some more money here; we're going to spend some more money there,' and never provide the funding for it. They were always chasing their tail, coming up with yet another additional tax—another tax here, another tax there. If you do not live within your means, if you do not actually raise the revenue for the spending that you commit yourself to, inevitably you have to come up with more new taxes. We have to bring our spending back under control so that we can keep our taxes at a competitive level so that we can grow the economy more strongly and fund services sustainably. (Time expired)