Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

At 7.30 last night the Treasurer rose to his feet to deliver his budget speech. His opening words were, 'This is a Labor budget.' Well, most Australians turned off at 7.31, as soon as he said that. Why? Because being a true Labor budget it delivered bigger debt, bigger deficits and bigger spin. The deficits in this budget, the stuff that really matters to Australians today, are growing. The budget deficit this year has grown in the last six months from $42 billion to nearly $50 billion. That means the government is borrowing $135 million every day just to fund the deficit. The budget deficit for next year, which is the appropriation bill that this House is going to vote on, is actually growing from $12 billion to $22.6 billion.

The Treasurer expects us to believe the fairytale story and for the Australian people to accept—with this year's budget deficit situation deteriorating because of external circumstances and the government's increase in its own expenditure, and next year's budget deficit increasing, including increased government expenditure—the only budget narrative the government had today, and that is that in two years time they will bring the budget back into surplus. That is the only narrative they had in this place today—to promise something that they promised last year, to promise something that they promised the year before. But the difference is that with the Labor Party it is 50 per cent promise, 50 per cent excuse. The debt of Australia, the net debt of the government, is now $106.6 billion—in dollar terms, the highest of all time. It is a deterioration in the net debt figure from $94 billion. Buried deep in the budget papers we have now discovered that the government is going to ask the parliament to increase the amount of debt issuance to $250 billion in gross terms. Of course, they are going to use the excuse of Basel III to maintain what will be since World War II the largest debt issuance in our modern history.

What does this all mean? For everyday Australians it means that the interest on the Labor Party debt will increase to $18 million a day every day for the next four years. It means that by the fourth year of this budget, interest will rise to $7½ billion. And the government expect us to believe the fairytale story that somehow they are going to bring the budget back to surplus with fiscal discipline. They sold and spun in the budget speech last night $22 billion of so-called savings. Ignore the fact that a third of that was tax increases. Even so, $22 billion, and now people are becoming more aware that the government is spending $19 billion of that $22 billion. But most intriguingly, and this is where the rubber hits the road, next year—in the year when we have stronger economic growth, where we have unemployment dropping to 4.5 per cent, where the government is running a bigger budget deficit—in that year the government is going to spend $2.2 billion more than it is saving. These much lauded savings that are going to bring the budget whirring back to surplus, in the budget where the rubber hits the road they are spending $2.2 billion more, and it is not even an election year. Growth is going up to four per cent but employment growth is actually slowing.

If we cut through the spin of this incompetent Treasurer, what we can recognise is that he is desperate to get adulation. He talks about the emotion of putting together a budget, how he is sleepless at night about the difficulty and challenges associated with the Australian economy, an Australian economy that he lauds as the best in the world. Yet he is so sleepless, he is so lost, he is suffering such insomnia.

Employment growth is slowing even though this government is desperate to spin half a million jobs being created over the next two years. That is an employment growth rate of just 2.2 per cent. It is less than the last three years of the Howard government at three per cent and, what is more, it is less than the last 12 months of this government itself, which had employment growth of three per cent, with 320,000 jobs created in the last calendar year. And somehow they think that it is a momentous achievement for them to be in the business of overseeing an economy creating half a million jobs in two years when the same economy created 320,000 jobs in the last 12 months.

On inflation, what I think was quite alarming was that last night, when you dig deep into the budget, the core inflation figures indicate that inflation is going up to three per cent, the top of the Reserve Bank band, by June 2013. Currently it is 2.25 per cent. We are in an environment where the Reserve Bank has clearly indicated it is going to take action. I want to make it perfectly clear to the Australian people and this parliament that Wayne Swan and Julia Gillard are going to own every interest rate increase from here on. They are going to be responsible for making life harder for everyday Australians and not easier. They had the chance in this budget. They had the opportunity to make the hard yards, and they failed that test because they lack courage. They talk courage but they display no courage. They talk surplus but they deliver deficit. They talk net debt as a negative and now they are going to deliver a significant increase in net debt.

This is a government that has never met its budget targets. I say to you why, Mr Deputy Speaker. It is because this government does not have internal discipline. They lack the processes for actually making hard decisions, as illustrated by the fact that they leaked $400 million in cuts in medical research and did not proceed with it. They leaked that they were going to cut childcare benefits and then did not proceed with it. What did they do? They cut families by $2 billion. It is something I said to the Leader of the Opposition in the lock-up: I cannot believe this government is reducing the real increases in the family tax benefit for families on $45,000 a year. Why would they do it?

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