Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

They are engaging in a blatant falsehood with the Australian people; they are taking the Australian people for mugs. The second false premise is closely related to the first—that is, that the increase in the debt and deficits over the forward estimates is not primarily due to the revenue write-down that the government has experienced. We have just heard the shadow Treasurer say again that the main impact on the deficit situation has been government spending. It has not been revenue write-downs, they say.

This reached its most ridiculous last week on 7 May on the Sky News AM Agenda program in a debate between our colleague the Minister for Small Business, Independent Contractors and the Service Economy and the shadow minister for small business, the member for Moncrieff. I confess I did not see it myself; I heard about it. I have a bit of a soft spot for the member for Moncrieff, but I could not believe it. I thought the story must have been embellished. So I checked the transcript, ready to leap to the defence of the member for Moncrieff, but unfortunately it was indefensible. He said this:

We put forward our proposal for the stimulus package this year, which would be about 50 per cent of Labor’s. Therefore, this year the deficit will be 50 per cent or less.

Let us just think about this. He said, ‘Our stimulus would be 50 per cent less, therefore our deficit would be 50 per cent less.’ There is a small problem with this equation, as the minister for small business correctly pointed out during the program, because it completely ignores tax write-downs. It completely ignores the wrecking ball that has gone through the Australian budget as a result of the global economic downturn, the fact that tax receipts have fallen so dramatically. The revenue loss in 2008-09 is $23 billion, but that did not happen according to the opposition. The member for Moncrieff says that it did not happen because he says that the only driver of the deficit is the stimulus program. If we have 50 per cent less stimulus then we would have 50 per cent less deficit. That is just not right, putting aside the fact that arguably they would not have had a 50 per cent smaller deficit because they believed in, as the Deputy Leader of the Opposition—who is present in the chamber—said, ‘broad and sweeping tax cuts’. Her economic narrative is that they would make the government money. Remember that? Broad and sweeping tax cuts would actually make the government money—just before she lost the shadow Treasurership of Australia without seeing one budget. I wonder why that happened, when they engage in voodoo economics. We cannot be too hard on the Deputy Leader of the Opposition and on the member for Moncrieff, because it comes right from the top. It comes from the Leader of the Opposition himself. Even today, the Leader of the Opposition said to Sky News this morning:

In 2012-13 there will be a net debt of $188 billion, an almost inconceivable figure. Since he was elected, Mr Rudd has spent  $124 billion, so in fact about two-thirds of his debt is represented by his spending since he got elected. Yes, the economic downturn has hurt us—no question. It has affected tax revenues, but the biggest contribution to that debt has been discretionary spending by the Rudd government.

Let us have a look at the Leader of the Opposition’s maths. He says that net debt in 2012-13 will be $188 billion. Yes, he got that from the budget papers. He says that the new government expenditure is responsible for $124 billion. If that is correct, that means the revenue write-down would be $64 billion, but we heard the shadow Treasurer last night say he accepts that the revenue write-down is $210 billion. The Leader of the Opposition needs to explain his maths. He needs to justify his sums. He needs to say how he came to that figure. If he cannot, he is clearly engaging in sophistry of the most wilful and disgraceful type. The Leader of the Opposition said on Sky News this morning, ‘You can’t argue with the numbers.’ Well he is arguing with the numbers and he has come off second best, just as he might argue with the numbers and come off second best in the Liberal party room in a couple of months, I suspect.

We also had the official opposition response last night in the shadow Treasurer’s press release. I thought that this would be good—two pages, obviously a considered press release with a great deal of thought going into his position. We would welcome that. The first page of the shadow Treasurer’s press release condemns the government for the deficit. It says that the deficit is too high, that we should have been tougher, et cetera. If that is the line they are going to take, fair enough. The second page condemns our savings measures. It says we have saved too much. How dare we deal with the private health insurance rebate, how dare we deal with structural change to the budget deficit. But the best bit comes towards the end. This is my personal favourite. I almost fell off my chair when I read this and I feel obliged to share it with the House. We come to education and training and the shadow Treasurer, the member for North Sydney said—brace yourselves, this is good:

… the Government is offering nothing new for Australian schools at all.

I am not sure where the shadow Treasurer has been but I seem to recall the government delivering the biggest rebuilding program of Australian schools in our history—which the opposition opposes. Now he comes in—this is a press release—and says that the government is offering nothing new for Australian schools at all. So having opposed the biggest rebuilding program, now the opposition is calling for us to do more. But it gets better! The shadow Treasurer then goes on to say:

Universities have been let down.

Universities have been let down by this government! That is from a member of the only government in the entire OECD to preside over a reduction in higher education funding. This government has delivered in this budget $5.7 billion over four years for higher education, and the shadow Treasurer says that universities have been let down! So presumably he would like to see more spending. So they call for a lower deficit, they oppose the spending cuts and they call for more spending! I am not quite sure how that works.

The shadow Treasurer says that universities have been let down. The chairman of the Group of Eight, Professor Alan Robson, said:

In a difficult budgetary environment, Ministers Carr and Gillard are to be commended for their long-term vision and commitment to Australian higher education.

And close to home the Vice-Chancellor of the University of Western Sydney, Professor Reid, said:

This has been a landmark Federal Budget for university teaching and research funding—one that promises to transform Australia’s higher education landscape.

So the shadow Treasurer says that universities have been let down. The universities do not agree. He calls for more, yet the opposition also call for a lower deficit and a lower debt. Is it any wonder that all the evidence is that the Australian people have lost all confidence in the economic management abilities of those opposite?

If the opposition were in charge it is highly unlikely that we would have seen some of the endorsements of the budget that we saw last night. It is highly unlikely we would have seen Standard and Poor’s saying:

The budget articulates a plan for fiscal consolidation as economic conditions recover. The successful delivery of this strategy of returning the operating position to surpluses over the cycle and maintaining lower debt will be consistent with maintaining the AAA rating of Australia.

I wonder if that would have been the case if we had had the voodoo economics of those opposite, with their voodoo dolls, saying, ‘How do we do this? I know what we’ll do: we’ll lower the deficit, we’ll spend more and we’ll oppose savings measures.’ I wonder if we would have seen that sort of endorsement then.

Why did we see that sort of endorsement? We saw it because the government was dealing with the long-term pressures on the Australian budget, including the long-term pressures of demography—not only the global financial crisis but the ageing of the Australian population and the pressures that that will place on the Australian budget in years to come.

It has been said by many people that demography is destiny. That was said by the Leader of the Opposition. He said it in his first speech. I remember it well; it was the same day as my first speech. The Leader of the Opposition said:

The demographic storm is coming. How hard it blows and how well our children weather it will depend in large measure on the decisions we take today …

Well said. It was a good contribution. It was a good first speech. I was sitting on the opposition side, listening to it. The issue of demography is why decisions that we have taken—like dealing with the aged pension—are so important. People are living longer. The proportion of the population that is ageing is growing rapidly and unless we make decisions now about how to deal with the ‘demographic storm’—as the Leader of the Opposition calls it—we will be leaving it to our children and we will be doing them a disservice.

Policy decisions about dealing with the age pension and dealing with the private health insurance rebate are the sorts of decisions that the government has had to make. They are tough decisions—decisions which were not made lightly; decisions which were not made with alacrity. They were decisions that were made over a long period of time in a careful and considered way. They are tough decisions. The opposition says that they are not tough decisions but the opposition are not sure whether they are tough enough to support them. They say, ‘You haven’t made any tough decisions, but the decisions you have taken are too tough for us to support.’ That seems to be the other confused narrative that we get from the Leader of the Opposition.

Budget time is not a test just for governments. As much as it is a test for governments it is also a test for oppositions. And tomorrow night will be a test for this Leader of the Opposition. Last year it was a test for the member for Bradfield—a test that he failed, and he paid the price. Tomorrow night will be a test as to whether the Leader of the Opposition can live up to his title. Is he a leader or is he an opportunist? It will be a test as to whether he is willing to act or willing just to whinge. It will be a test as to whether he is interested in the nation’s interest or his own self-interest. It will be a test as to whether he is up to the job of the Leader of the Opposition. The Australian people do not look just to the government for leadership in times like this; they also look to the parliament.

The Leader of the Opposition has been strong on rhetoric about bipartisanship in the face of this crisis. He has been very good at the rhetoric. Tomorrow night he has the chance to come in here and lend some bipartisan support for this government’s efforts to keep the economy strong, to provide stimulus to the economy and to put us on a sound structural footing going forward. It is a test that we will wait and see whether he can pass.

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