Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Hansard source

I move:

That so much of the standing and sessional orders be suspended as would prevent the Member for Wentworth moving immediately:That:

(1)

this House condemn the Rudd Government for the misleading claims that its first budget would fight inflation, when instead, the Treasurer has delivered a budget that increases inflationary pressures and does nothing to relieve cost of living pressures on Australian families, seniors, pensioners and small businesses; and

(2)

for delivering a budget under the cover of a mountain of spin that, in reality, increases taxes on cars, tourism, alcohol, health insurance, computer software to name a few, along with other measures that will generate a revenue windfall of $19.5 billion for this same old-style tax and spend Rudd Labor Government.”

This is an urgent matter for the House to consider now and we must suspend standing orders because this budget is built on a mountain of falsehood. For months, the Treasurer has wandered around the country saying that he was going to fight inflation with massive cuts in spending and what has he done? He has brought in a budget that increases spending. When you look at his own budget papers—at statement 3 of Budget Paper No. 1—you see there that the result of his own policy measures, his own decisions, is to increase spending in every year of the forward estimates.

We need to debate this now, urgently, because, far from delivering a budget that was in accordance with what he told the Australian people, the Treasurer has delivered the exact reverse. And now he stands up and says, ‘It’s only a mild tightening.’ Well a few weeks ago he was saying it was going to be a massive cut in spending. What sort of Treasurer do we have in this country? He is so incompetent that he will mislead the Australian public about what will be in his own budget, claiming it will put downward pressure on inflation. He is so dishonourable in this House that he will misrepresent public research from market economists.

This is a Treasurer who quoted just a moment ago the approval, so he said, of the Commonwealth Bank and yet here we have the Commonwealth Bank’s own research. What does it say about the budget?

The government has fallen short of its own rhetoric of putting downward pressure on inflation in the short term.

That is precisely what we have been saying. Market economists do not normally make scathing remarks about budgets, but there you have it from the Commonwealth Bank. The Treasurer did not want to table the research from Goldman Sachs JBWere. He did not want me to do it either because what that research says, in a passage that he chose not to quote, is this:

While the ALP has gone to great lengths to claim that this Budget will ease inflationary pressures, most of the supply enhancing initiatives involve large implementation lags.

In reality, the ALP’s biggest contribution to inflation is that it is not making the inflation process worse.

That is not a citation for an inflation-fighting medal; that is the faintest of faint praise. We need to suspend standing orders urgently because of the dishonesty and the confusion associated with this budget. We have heard from the Prime Minister and the health minister that the new tax on alcopops will decrease consumption. Yet, every single year of the forward estimates, the massive revenue from this new tax goes up from $600 million to more than $800 million in just four years. The Prime Minister wants us to believe that that is nonetheless a reduction in consumption. The Prime Minister no doubt has advice from great mathematicians and economists behind him, but how can you have a tax based on volume of alcohol which increases year after year if there has not also been an increase in the volume of alcohol sold? So, after days of obfuscation, they finally produce a Treasury paper which suggests that this tax, this $3 billion of additional revenue, may reduce consumption from what it otherwise would have been by—wait for it—four per cent. That is what they are arguing for. That is going to save the young from drinking RTDs; a tiny reduction in consumption from what it otherwise would have been, and a massive revenue windfall for the government. That is the best they can produce. This is nothing more than a tax grab, a blatant tax grab.

Then we come to the dishonesty of their ‘soak the rich’ programs. Let us talk about the means test on the baby bonus. A household with two parents, each earning 40 per cent above the average weekly earnings, would be caught by this means test. A household that earned $75,000 in the six months after the birth of their child would receive the pre-tax equivalent, in terms of income including the baby bonus, of $83,300. If they earned $76,000, they would be nearly $7,000 worse off. That is the result of the extraordinary effective marginal tax rate the Treasurer has created. What a disincentive to work. It has no taper rate. There is no consideration for what it does to incentives. What this tax will do is provide a real and massive disincentive to work for households who have just had a baby. If they are going to earn a dollar more than the $75,000 figure, they lose the lot. They do not lose a few dollars; they lose the lot. The effective marginal tax rate is disgracefully, unprecedentedly high. Remember that the Treasurer is the man who said famously, ‘nobody knew about EMTRs until I came along’. Well, nobody has seen an EMTR as big as the one he is creating here. This will save $70 million, and that is without any taper rate, with a totally unjust arrangement and a huge effective marginal tax rate. It will save $70 million out of a $1.5 billion program. This is a $70 million fee to buy a headline ‘Soak the rich’.

What about the other ‘soak the rich’ tax—the tax on so-called luxury cars? We have heard about the large families who have a lot of kids and need to buy people movers and vans. They have no choice. They are not buying a car worth $57,000 or more because they want to roll around in leather in a Ferrari or anything like that. They are doing it because they have a big family and they need to move them around. But they will pay the tax. It is not a tax on the rich; it is a tax designed to get a headline about ‘soaking the rich’. It is a tax that hits large families. A hundred thousand cars a year are sold that fall into this bracket and the vast majority would not be regarded as being cars of the rich. There are hardly any Bentleys, Rolls Royces or Ferraris. These are cars bought by large families who need to move around with their family. They are going to be paying a higher price for that.

Next we come to the greatest con of all: the funds. This is not an investment in infrastructure; it is the creation of a bank account with ‘infrastructure’ written on the title page. There is no guidance and no indication of how that money will be invested or what economic return will be sought. How do we know whether it will be given away to inefficient state utilities? This is a Treasurer who has said, year after year, that the member for Higgins ran big surpluses and hoarded them so that he could dole them out at election time. He said yesterday at the National Press Club of Australia that ‘this fund can fund election promises’. In other words, he is creating a special Labor Party slush fund which will be drawn from at election time to subsidise the inefficient and incompetent utilities of his Labor mates in the states. (Time expired)

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