Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

No more Work Choices ads and no more ‘Unchain my heart’ ads or any of those complete outrages that we all remember so well.

I will turn now to the budget processes and the wider picture of government efficiencies that I have been directly responsible for. In our first budget we had $33 billion of savings over four years; in the second budget, $22 billion of savings over four years; in the third budget, $28 billion of savings over four years. These have included major tough decisions such as extending the age of pension eligibility from 65 to 67. This year we have made very substantial savings as a result of very tough negotiations with the pharmaceuticals manufacturing sector and the pharmacy sector in order to get better value for money from that very large spend that the government undertakes through the Pharmaceutical Benefits Scheme and the delivery of pharmaceuticals. In contrast to this very substantial track record of the Rudd government, in the last four coalition budgets there were virtually no substantial savings. In earlier budgets the Howard government did have very substantial savings, some of which we disagreed with and some of which involved broken election promises—we all remember the distinction between core and non-core election promises—but in the last four budgets, with the money rolling in, there were virtually no savings.

This government, whether it has been during a mining boom, in a global financial crisis or in a resurgent economy post the direct impact of the global financial crisis, has found substantial savings, including very substantial spending cuts in all three of its budgets. The overall position is that the budget, in spite of the impact of the global financial crisis, will return to surplus by 2012-13, debt as a proportion of GDP will peak at just over six per cent and, as a result of the budget two days ago, we have finally seen the inevitable demise of the laughable ‘debt and deficit’ campaign—the hysterical rhetoric and grossly inflated exaggerations of the opposition. We have put in place strict budget rules to impose real discipline on the government, on its ministers and on its public servants, in particular a cap on spending increases of two per cent per annum in real terms, which is lower than the projected increase in the economy over that time. In this budget we extended that cap to go to the point where the budget will be in surplus of one per cent of GDP. We remain committed to keeping the tax ratio as a proportion of our economy on average at or below the level we inherited from our predecessors and we are adhering to that commitment. In fact, it continues to be substantially lower and will be significantly lower right across the forward estimates. In the second year of the four years of the forward estimates in this budget, spending will return to roughly the level it was for much of the Howard years as a proportion of the economy, and for the third and fourth years of the budget estimates it will be lower than the typical level of spending as a proportion of the economy under John Howard.

It is crunch night tonight for the opposition. They have kept putting off the difficult stuff. They are very good at rhetoric; they are very good at slogans; they are very good at colourful one-line grabs—but they keep putting off the hard choices. They keep putting off the difficult point where they actually have to stand up and say, ‘Here is where the money is coming from.’ We first had, ‘Not until the new year.’ Then it was, ‘Wait until parliament resumes.’ Now it is, ‘Wait until the budget reply.’ I am banking on the fact that you will not get much of that in the budget reply tonight, Madam Deputy Speaker. The moment of truth is here, but I can guarantee you that you will not see the Leader of the Opposition indicate where the $15.7 billion of unfunded spending he has already committed to is going to come from. You will not hear him indicate how he is going to maintain the projected surpluses that the government has put in place in the forward estimates. All you will hear is further hairy-chested rhetoric with nothing behind it.

In the chart and table that I released today is a very conservative estimate of the commitments that have been made by the opposition. It only includes commitments that have been explicit and that are clear—an indication that a coalition government, if it were elected to office, will do the following things. For example, the coalition has committed to removing the means testing of family tax benefits and the baby bonus that the government put in place and removing some of the tightening of middle-class welfare that the government put in place. It has committed to those things at very substantial cost, well over $1 billion, and there has been no indication yet of how they are going to be paid for. That is just one component of that $15.7 billion black hole in the coalition’s costings.

We will see tonight whether the Leader of the Opposition can meet the four tests I set for him earlier today: first, whether he can explain how he is going to pay for this $15.7 billion that he has already promised; second, if he is going to continue to oppose the Resource Super Profits Tax, whether he is also going to oppose the cut in company tax, the small business tax benefits, the improvements in superannuation and the improvements in infrastructure that are all being financed by the proceeds from this tax and, if he is not going to oppose those things, how he is proposing to finance them; third, whether he is prepared to match the government’s fiscal rules and to commit to extending the two per cent real cap on spending to the point where the budget gets into surplus of one per cent of GDP; and, finally, whether or not he is committed to ensuring that those surpluses that are now projected for 2012-13 and 2013-14 are protected—whether he can set out exactly what he is going to spend, what he is going to save, how it all adds up and how those surpluses will be maintained. We might also like to hear from him whether he understands the capital side of the budget, investments in financial assets, which do not count as spending, and whether it is the proceeds of the sale of an asset or cancelling an investment that delivers a return. That does not become transferable into spending capacity. If he spends on that basis, all he will do is further push the budget into deficit.

There is a very big challenge for the Leader of the Opposition tonight. He has to switch from the rhetorical windbag, the bloviating buffoon, to somebody who can tell us where the money is coming from. (Time expired)

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