Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. Can the minister confirm that the 2014 Abbott-Hockey budget forecast a deficit for 2016 of $10.6 billion, which has now blown out in the latest budget to $37.1 billion, more than tripling the deficit?

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

The Labor Party is really getting desperate when they get Senator Conroy to ask questions about the budget and the economy. What I would say to Senator Conroy is that the policy decisions taken by the government improve the bottom budget bottom line by $1.7 billion over the forward estimates. The policy decisions taken by the government on the spending side of the budget improve the budget bottom line by $3 billion.

The truth of the matter is that everybody across Australia knows that we have faced additional global economic headwinds. The truth of the matter is that we have had to deal with significant falls in our terms of trade. The truth of the matter is that the price we can achieve in global markets for our key commodity exports like iron ore and coal has significantly dropped. That has had flow-on consequences on the revenue side of the budget because of circumstances outside of our control.

What is the government doing? We are implementing our plan for jobs and growth. We are implementing our plan to secure a successful transition from resource investment driven growth to broader drivers of growth, and we are implementing our plan to put our budget on a sustainable foundation for the future. We are doing that by controlling expenditure. We are doing that by putting—

Stephen Parry (President) Share this | Link to this | Hansard source

Pause the clock!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, on a point of order: direct relevance. I asked a question specifically on the deficit and whether it had tripled since the government came to power. That was the question—nothing more. He has not mentioned the word 'deficit' in his 70 seconds. Could you draw him to the question, please.

Stephen Parry (President) Share this | Link to this | Hansard source

Thank you, Senator Conroy. You did ask the minister if he could confirm that certain figures were correct in the budget, and then you did go on to talk about tripling the deficit. The minister has been answering the question.

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

The projected return to surplus in this budget is consistent with what was previously estimated, in particular in the Mid-Year Economic and Fiscal Outlook before Christmas. The deficit is projected to reduce every year over the forward estimates both in dollar terms and as a share of GDP. We are on a responsible path back to surplus, we are on a believable path back to surplus, and we are doing it in the context of implementing our plan for jobs and growth.

We understand that the Labor Party wants to tax more, spend more and borrow more. We know that the Labor Party has a $50 billion black hole because of unfunded spending promises. We know that the Labor Party also has a $20 billion hole in their tobacco excise costings. Right now, our budgetary position is $70 billion better off than it would be under Labor. (Time expired)

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister confirm that, since his appointment, debt has blown out and will increase to 19.2 per cent of GDP in 2017-18 compared to 11.7 per cent of GDP when Labor left office, an increase of $163 billion on the minister's watch?

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

As I have indicated in answers to similar questions in the past, the government's net debt position is better and lower than it would have been if Labor had stayed in government. Labor cannot have it both ways. Labor cannot complain about cuts that are too deep and spending that is supposedly too high.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Oh yes we can!

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

Senator Conroy says yes, they can be inconsistent; yes, Labor can walk both sides of the road. Well, do you know what? You get hurt when you try and walk both sides of the road. What of course is happening here is that we made adjustments to the unsustainable, unfunded, unaffordable pie-in-the-sky spending promises of Labor. We have brought down spending growth. Instead of having the pie-in-the-sky spending growth that you locked into your medium-term trajectory, we have brought that spending growth trajectory down. It stands to reason that, as a result, government net debt is lower than it would have been if Labor had still been in government. Because of what has happened on the revenue side of the budget, of course there have been certain consequences. Nobody denies that. (Time expired)

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister confirm that, under his watch, the tax to GDP ratio goes up and up and up every year and is higher than it ever was under the former Labor government? Given that spending, taxes, the deficit and debt are all up, don't your own numbers show that you are the worst finance minister in this country's history?

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

I have had to look at the worst finance minister in the history of the Commonwealth for six years—first from that side of the chamber and now from this side of the chamber—and I hope that I can keep looking at her for another three years from this side of the chamber. What I would say to Senator Conroy is that the premise of his question is entirely false. We got rid of Labor's carbon tax. We got rid of Labor's mining tax. We reduced taxes for small business in last year's budget. Again in this year's budget we have actually brought the overall tax burden in the economy down as a result of decisions taken by the government. So taxes as a share of GDP now are lower than they would have been under Labor. Under Labor, we were on a trajectory of higher taxes than we have embraced now. You do not understand the medium-term effect of your disastrous policy decisions. You do not understand that your carbon tax and your mining tax had a bad impact on our economy, investment and growth for much longer than your disastrous period in government.

Stephen Parry (President) Share this | Link to this | Hansard source

Pause the clock. Senator Cormann, could you resume your seat. Senator Heffernan, do you have a point of order?

Senator Wong interjecting—

Order, Senator Wong. Do you have a point of order, Senator Heffernan?

Stephen Parry (President) Share this | Link to this | Hansard source

You have no point of order, Senator Heffernan. Minister, you have 11 seconds remaining in which to conclude your answer.

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

The people of Australia know that Labor does not know how to manage money, they know that Labor has made a mess of the budget and the economy, and they know that the coalition government always has to fix the mess that Labor leaves behind—and that is what we are doing.