Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to Senator Cormann, the Minister for Finance and Minister representing the Treasurer. Will the minister update the Senate of the most recent expert opinion on the need to repair the budget?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Edwards for that question. Indeed I can. Deloitte Access Economics has released the Budget monitor today, and it makes very sobering reading. It makes the obvious point that there are two key drivers to any budget—the economy and the decisions of politicians—and, when you read through the report, you see that by politicians they do not just mean those of us in government; they actually mean all of us here in the Senate, for example. We are all in this together. Back in September last year we inherited a situation with a weakening economy, rising unemployment, low consumer confidence, business investment which had plateaued and, of course, a budget position that was rapidly deteriorating. Back in December last year we adjusted our revenue forecast. The Labor Party was arguing that we adjusted them by too much, that we were intentionally taking a too-pessimistic outlook in order to make the numbers look worse. What we of course now know is that, despite our attempt to come up with a more realistic assessment of where revenue was likely to track, commodity prices have fallen much more sharply than was predicted at the time.

The sobering assessment in this report is that, sadly, good politics has good policy well and truly over a barrel. When they talk about good politics, what they are talking about here in this report is good politics from the irresponsible and reckless attitude of the Labor Party and the Greens. Today we had Mr Shorten out there again saying that all we need to do to fix our budget challenges is to increase taxes on multinationals, while here in the Senate the Labor Party and the Greens are voting to keep in place for research and development a tax subsidy for multinational companies which the Labor Party themselves said they wanted to scrap when they were in government. We have a situation where the Labor Party and the Greens are working together— (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister advise the Senate of the benefit of repairing the budget?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Edwards for that supplementary. The main benefit is that it actually helps us build a stronger, more prosperous economy where everyone can get ahead. In order to ensure that happens, we have had to make difficult but necessary decisions. The truth is that since September last year we have been able to make significant progress. We certainly have much further to go, but confidence is actually returning. If you look at what is happening in the marketplace, confidence is returning and we are looking forward to a good Christmas. I know it does not suit the Labor Party, but the truth is that across the community people are understanding that we found a set of difficult challenges, we had to make some difficult decisions in the national interest, we are progressing implementation of those difficult decisions and it will help us build a stronger, more prosperous economy over the years ahead.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister inform the Senate whether there are any alternative routes to fiscal repair?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I am quoting directly from the Deloitte Access report, which says May's budget is 'the only road map to structural fiscal repair Australia has. The opposition and minor parties have washed their hands of setting­ out detailed alternatives, preferring populist posturing.' 'Populist posturing' is actually not in our national interest. What is in our national interest is to have a serious look at the structural challenges we are facing with the declining terms of trade, with the ageing of the population, with falling workforce participation rates and, of course, with all of the spending decisions locked in by the previous government for the period beyond the forward estimates, increasing way beyond what our nation can afford. The Labor Party can keep the pretence alive, but we cannot afford to stick to the spending growth trajectory that you locked Australia into. It was a reckless and irresponsible thing to do, and it is time that you started focussing on the national interest.