Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Cormann. The government wants to spend $95 billion over the medium term to give tax cuts in 2024, five years away. The Grattan Institute states that in order to get the spending levels required to fund the tax cuts:

Real spending growth would need to average around 1.3 per cent per annum over the decade—or 1.8 per cent if the economy performs as strongly as Treasury projects. Either way, this is substantially lower than any previous government has achieved.

Minister, what spending will the government cut in order to fund its tax cuts?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

That claim by the Grattan Institute is wrong. It featured during the campaign. It was comprehensively discredited during the campaign. In fact, it was comprehensively discredited by nothing less than the Pre-election economic and fiscal outlook 2019, which made very clear that the medium-term projections, showing a surplus all the way through, which factors in our record funding for hospitals, schools, infrastructure and all the other essential services—it said that the cost of the tax cuts is factored in to that forward trajectory based on a 'no policy change' scenario. A 'no policy change' scenario means there are no assumptions of future cuts, as you call it, and no assumptions of future savings enshrined in our budget bottom line whatsoever. This was comprehensively discredited.

The only thing missing from Senator Gallagher's question as she spoke about $95 billion from 2024-25 was the sneering, pre-election reference to 'the top end of town'. I wonder why that is. I wonder why you have dropped that. Because the core foundation of your attack on our plan to deliver income tax relief for all Australians is your attempt to perpetuate the politics of envy, class warfare, turning Australian against Australian.

Do you know what happened? Hardworking low-income Australians, working-class Australians in mortgage-belt suburbs, voted strongly in favour of our plan because they know it delivers better opportunity for them. The modern Labor Party would do well to actually reflect on why it is that their working-class base turned against them. If you want to continue to run on a high-taxing agenda and the politics of envy when Australians are fundamentally aspirational, go right ahead. Let's have this battle all the way to the next election. Go to the next election campaigning for higher taxes again. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Gallagher, a supplementary question.

Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Real growth in health expenditure over the decade to 2016-17 was 4½ per cent. Given that, in order to pay for the $95 billion in tax cuts, the government must restrain health expenditure to just over 0.7 per cent per annum, what health spending will the government cut in order to fund its tax cuts in five years time?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Repeating a lie doesn't make it come true. Our budget actually has substantial increases every year in funding for hospitals, for schools, for infrastructure, for all of the other essential services Australians rely on. And you know what? We have been able to accommodate income tax relief for hardworking Australians in a way that is fiscally responsible. You know why this question surprises me? Because in the election, Labor said, 'We want to have $387 billion in higher taxes because that is what the country and that's what the economy need.' Now they're saying, 'We should have more tax cuts sooner.' How is that going to add up? You want to bring tax cuts forward, as if anyone believes that you actually believe in tax cuts. How are you going to balance the budget with that? How are you going to pay for hospitals and schools if you do all of that? Your position has no credibility. You're all over the place. You've got more positions on tax than are in the Kama Sutra, quite frankly. If we stay here for another— (Time expired)

Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

We didn't need the visuals of that! My supplementary question is: analysis undertaken by The Australian Financial Review reveals that spending will need to be cut by $40 billion a year by 2030 to pay for the tax cuts. How will the government allocate the $40 billion a year in tax cuts required?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

What we're getting now is a reference to an article about a Grattan Institute study that has already been widely discredited. This analysis is wrong. It is false. I will send you a copy of the Pre-election Economic and Fiscal Outlook, which completely and comprehensively rejects this furphy. In any event, here you are now saying that we should have more tax cuts sooner. How is that going to work? How are you going to make these numbers add up? The Labor Party is all over the place. Quite frankly, you should have long cut your losses. You should have long accepted the verdict of the Australian people. Australians voted for income tax relief for all working Australians and they voted against Labor's high-taxing agenda and the politics of envy. And here Labor's saying, 'There are more elections coming.' Be our guest. You know what? You can go to the next election and campaign your hardest for higher taxes again. Be our guest. Go to the Australian people and tell families yet again that the Labor Party supports higher taxes. (Time expired)