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

I thank the member for Lowe for his question. It is certainly true that accurate accounting for proposals for savings is critical to returning the budget to surplus. Members will be aware that over some months I have been asking the opposition to put forward its savings proposals that would back up its claims to returning the budget to surplus more quickly than the government proposes to do.

Last week, in a highly entertaining three-ring circus, as the Prime Minister described it, we finally got an outcome after the member for Goldstein indicated that the savings would be in the Leader of the Opposition’s budget reply. The Leader of the Opposition then indicated in his budget reply that they would be in the shadow Treasurer’s speech to the National Press Club. Then the shadow Treasurer, at his speech to the Press Club, said they would be in a subsequent press conference from the member for Goldstein. We finally got a statement on proposed budget savings from the opposition.

At first light it had a very big number on it. It had a very big headline number of $46.7 billion. Initially, I was almost impressed by this. I thought, ‘Gee, they have done all right here.’ But, unfortunately, I then started to read the savings proposals and, sadly, they did not stand up to much scrutiny. In fact, if you took that $46.7 billion and rubbed out the ‘4’ then you would still have an overstatement of the net impact on the budget bottom line. You could take out the digit ‘4’and you would still have an overstatement on the beneficial impact on the budget bottom line of the proposed savings of the opposition.

Let me run through a few examples. First—and most egregiously—they quote their proposal to not proceed with the government’s Resource Super Profits Tax as a saving. A small bit of news for the opposition and their economic gurus: when you cancel out tax revenue, that is not a saving to the budget; that is a loss to the budget. So $12 billion straight off the top has gone—dead. Next, we have capital savings. They do concede in the fine print that these do not hit the budget bottom line, so there is a total of $22 billion. These are simply figures that the opposition have made up. There is no substantiation for their proposed sale price for Medibank Private and there is no substantiation for the $18 billion they claim would be removed from the budget by not proceeding with the capital item for the National Broadband Network.

Then we have $3.5 billion worth of proposed savings that have a little asterisk beside them. It is a very small asterisk: it would be about four point. There is a very small note at the bottom that says, ‘These items may be used to finance coalition commitments in the same area.’ In other words, they will not really be savings; they are going to spend the money by rebadging these things or in a different way. Then there is $2.4 billion of claimed savings on interest from the refusal to proceed with the National Broadband Network. This is a figure that has simply been plucked out of thin air—created, fictitious and has no substantiation or reflection in any budget items.

Then we have the proposed freeze on the Australian Public Service. That has morphed around a bit. A few things have been added here and there that would not be subject to the freeze but, allegedly, that saves $3.8 billion. Unfortunately, the opposition neglected to note that when you freeze Public Service numbers in enforcement agencies—for example, people in the Australian Taxation Office chasing tax avoidance activities—you lose revenue. The estimate of the equivalent loss of revenue as a result of cutting back on staff chasing people like tax avoiders and welfare rorters is $2.1 billion in lost revenue. Finally, there are a few classic proposals, a few absolutely sensational proposals, supposedly cutting back on Public Service travel, government advertising and consultancies.

The interesting thing about all these proposals, which add up to about $800 million, is that they are all areas where spending has been cut back very substantially by this government after the massive explosion in spending by the Howard government. The same people who let spending blow out are now claiming that they will be able to reduce spending below the level to which it has already been cut by the Rudd government. The savings package is totally phoney.

I note that I am not the only person who was less than impressed by the performance of the member for Goldstein in presenting this savings package at his press conference. In fact, his own media adviser, who I think is named Nicholas Troja, did not seem to like the proposition much either because he spent most of his time doing this or doing this and turning away. It is on YouTube and it is really worth a look. I am delighted that the member for Goldstein is employing people who are obviously concerned about fiscal responsibility. It is just a pity he is not taking their advice. If the opposition want to be treated seriously on these matters, they have got a lot more work to do.

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