Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Hansard source

I rise to speak to Appropriation Bill (No. 1) 2008-2009, Appropriation Bill (No. 2) 2008-2009 and Appropriation (Parliamentary Departments) Bill (No. 1) 2008-2009. I also speak on the Appropriation Bill (No. 5) 2007-2008 and Appropriation Bill (No. 6) 2007-2008. These important cognate bills will appropriate funds for approximately one-quarter of the Commonwealth government’s spending. The coalition supports the appropriation of moneys from consolidated revenues to Commonwealth government departments and agencies outlined in the details of these bills. However, these bills are also a key part of the ongoing political stunt by the Prime Minister, the Minister for Finance and Deregulation, and the Treasurer in particular to dupe Australians into a false sense of security that the country’s finances are being managed responsibly by this government.

In the lead-up to the budget I spoke on Appropriation Bill (No. 3) 2007-08 and Appropriation Bill (No. 4) 2007-08. The government used those bills as an opportunity to include $643 million of so-called cuts. As I said then, the $643 million included underspends in some programs, the transferring of some of the spending across to other programs and also some cuts in programs which the coalition announced before the election or that we undertook to deliver to the Australian people prior to the campaign period but which were not implemented for administrative reasons. The government tried to sell these as legitimate cuts to fight inflation. Appropriation bills Nos 3 and 4 for 2007-08 set the precedent, and I note that the government has continued with this theme into the 2008-09 budget. The Australian people should quite rightly ask themselves, ‘Are we getting what we voted for?’ The modus operandi of this government is simple. It is weak on policy and strong on spin. They make promises that they cannot keep, such as lowering the price of groceries, and then they sit on their hands and watch what happens under FuelWatch—that is, fuel prices go up.

The budget, of which these bills before the House are a key component, shows us that the government is high taxing and high spending. The government has cut $15.2 billion in coalition programs but has added $30.1 billion in new Labor spending. In fact, spending will increase by $14.9 billion over the estimates, and it is that point which I would like to examine in some detail for a moment.

The Treasurer has made repeated claims that this budget is not political but that it is a nation-building budget for the future; it is a budget for the next decade. And we have heard this quoted ad nauseam. Mr Swan has said that he wants to remove politics from the job and that he wants to take the politics out of budgets. Can you believe this bloke? He wants to take the politics out of budgets by ‘framing economic policy with an eye to the next decade, not the next poll or the next election’. Keep that quote in mind when you consider this carefully. Remember that this is a budget for the next decade when you consider that expenditure from 2009-10 onwards over the forward estimates will rise—and rise significantly. It will take a significant jump from 2008-09 to 2009-10 in particular. According to the budget papers the real growth in budget spending from 2008-09 to 2009-10 will be 5.5 per cent. With the exception of the year the GST was introduced you have to go back to the former Labor government in 1991-92 to find a similarly sized increase.

But what does that mean? Perhaps I can allow the Assistant Treasurer to explain this for us. When he was asked, on Sky’s Agenda program, about the significant spending rises to occur in 2009-10 and later, he replied that the ‘forward estimates indicate forecasts and of course in next year’s budget we’ll reassess the situation and will make changes accordingly’.

So this is the government’s long-term, 10-year, non-political strategy. Think about this in the context of the ALP’s MO: talk up the problem, frighten people, make hollow promises and then stand around and watch, generally for some period to come, until governments of the future fix the problem. That is what happened with Labor in the past; it is what will happen with Labor into the future. Labor spend. They tax and spend, put us into debt and then wait for the return of a coalition government to shore the finances of the country back to a reasonable state. It is the case, at the moment, of history repeating itself, and people should take note of the first budget delivered by this Labor government.

The government have talked up inflation and talked up saving for the future. They have talked about the long-term commitment to nation building and, when it comes down to it, all that was delivered by the Treasurer on the evening of 13 May 2008 was a one-year budget. The government was quick to criticise the coalition for its spending habits when it was in opposition but the reality is that as a percentage of GDP the coalition was one of the lowest-spending governments of the last 30 years.

The appropriation bills we are debating today are full of spin. The government claims to have found $7 billion in savings in 2008-09. There are many examples in the budget papers of so-called savings that are simply a redirection of funding—in other words, the government has cut a coalition program and replaced it with their own Labor Party program. Yet they claim this as a saving under the auspices of their ‘responsible economic management’ measures. Take for example the measure with the title ‘Responsible Economic Management—Green Vouchers for Schools’, which is on page 350 of Budget Paper No. 2. It says:

The Government will redirect funding from the Green Vouchers for Schools program to the new National Solar Schools Plan. This measure will provide savings of $334.3 million over four years to partially offset the Government’s election commitment National Solar Schools Plan.

Here the government claims $334.3 million in savings—savings which simply do not exist, as money is being channelled directly into a Labor program. And the Labor economic genius, Lindsay Tanner, claims the money is not inflationary anymore! This economic theory seems to be based on a principle of money laundering. The money is dirty and inflationary in a coalition program, but when washed through the budget, resurfacing as a Labor program, it is no longer inflationary! In total there is almost $4 billion over the estimates for similar measures which simply redirect funding, with the claim that the associated measure is some form of saving. That is all spin, no substance.

The coalition has been accused of not planning for the future, of not saving the proceeds of the mining boom. But let us take a minute to look at the facts. The coalition inherited from the previous incompetent Labor government a $96 billion debt. Through the responsible and effective fiscal management by Australia’s most successful federal Treasurer, Peter Costello, that debt was paid off. Then the coalition developed a plan to use the budget surplus to prepare the next generation for the fiscal challenges that it will face. The coalition government’s Intergenerational report shows that over the next 40 years pressure on the budget will increase as a result of the ageing of the population—with the number of Australians aged over 65 expected to double. The coalition inherited a ballooning, unfunded superannuation liability, which we addressed by closing the PSS and creating the Future Fund.

To ensure Australia’s long-term financial security, and to remove a substantial financial burden from the next generation and improve their ability to cope with the effect of an ageing population, we created the Future Fund. In doing so we also passed the Future Fund Act 2006, which put in place the governance arrangements for the fund. That is a very important point to underscore as part of this debate. That fund was a concept quite foreign to the Labor Party. This is not a normal investment fund. Something that I think is sometimes lost is that this is not just like a term deposit down at the local bank or a managed share fund. Peter Costello’s legacy—the coalition legacy—in that budget was to provide that Future Fund. Surpluses have now become the norm, and governments have a variety of options to think about when considering what to do with the budget surplus, and whether that money should be spent or saved. Of course the coalition, as much as possible, returned the surpluses to the Australian people in the form of tax cuts, and created this futuristic fund which kept an eye on the future to try to offset some future liabilities that would otherwise have hung around the necks of many young Australians for generations to come.

The Future Fund is Australia’s nest egg. It will provide a significant contribution to Australia’s financial security onward into the future, thanks to the coalition. The next generation will not have to pay for the liabilities of this generation. The coalition left in place a distinct accountability regime for the Future Fund.  The Future Fund Act 2006 states that the mandate must have regard to maximising returns on the fund over the long term, consistent with international best practice for institutional investment and other matters considered relevant by ministers. The current mandate sets a target return of between 4.5 per cent and 5.5 per cent above the CPI measure of inflation over the long term. The board has interpreted this as an objective to provide a return of at least 5 per cent above CPI over rolling 10-year periods. It is recognised that as the fund transitions to a long-term strategic asset allocation, a return lower than this benchmark is expected.

The Board of Guardians is responsible for deciding how to invest assets. The board is governed by both Future Fund and Higher Education Endowment Fund legislation and the investment mandates are established by the responsible ministers: the Treasurer and the now Minister for Finance and Deregulation. The board, with the support of the Future Fund Management Agency, builds the investment strategy and is accountable for the performance of the fund.

Compare the responsibility, accountability and transparency of the arrangements of the Future Fund that I have just outlined to that of the proposed Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund, hereafter referred to as the Labor Party slush funds. Labor has announced that it will place $41 billion into these slush funds and then spend $41 billion of the slush funds, as well as the interest, on infrastructure projects. This was announced in the budget and there is precious little detail available on how these slush funds will be set up and how the slush will be administered. This of course causes us considerable concern because we are talking about a large amount of taxpayers’ money—$41 billion, plus interest—in the slush fund that will require significant management, accountability and transparency. This is Australia’s dividend from the mining boom and the Labor Party are already in discussions about how to divvy it up between the state governments.

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