Josh Frydenberg (Kooyong, Liberal Party) Share this | Hansard source

I rise to speak tonight on the three appropriation bills we are debating concurrently. Appropriation Bill (No. 1) 2011-12 is the primary bill to appropriate funds from the Consolidated Revenue Fund for the ordinary annual services of government and related purposes. The total appropriation under this bill is $72.8 billion. Appropriation Bill (No. 2) 2011-12 allows annual appropriations from the Consolidated Revenue Fund for services that are not the ordinary annual services of government, which includes payments through individual portfolios to states and territories. The amount sought is $7.39 billion. Significantly, this bill seeks to raise the government's gross debt ceiling from $200 billion to $250 billion—a reflection of their propensity to spend. Finally, via Appropriation (Parliamentary Departments) Bill (No. 1) 2011-12, $180 million is sought for the Department of the Senate, the Department of the House of Representatives and the Department of Parliamentary Services.

I stand here at a time when the international community is experiencing significant economic uncertainty. The world's largest economy, the United States, has over $14 trillion of debt and was recently forced to raise its debt ceiling. Significantly, the global credit rating agency Moody's fired a warning shot at Washington, saying that the AAA sovereign credit rating was at risk unless dramatic action was taken to curb ballooning budget deficits and rein in government debt. So too in Europe, unsustainable debt levels in Greece, Ireland, Spain, Portugal and the United Kingdom have rattled international markets, forced urgent refinancing and necessitated painful and far-reaching government cuts.

The messages for Australia are clear: 'Big government is bad government' and 'Live within your means before it is too late.' Unfortunately, those messages are not getting through. Both the Rudd and Gillard governments have displayed their addiction to debt. While historically this is not uncommon for Labor governments at federal and state levels, this federal government takes the cake. Net government debt has blown out from $94 billion to a record $107 billion in 2011-12. Government borrowings are $135 million a day, or $1 billion a month. Interest payments have grown to an astronomical $7.5 billion a year, which is already $12.5 million a day and they reach $20 million a day in 2014-15.

That is a lot of hospitals, schools and roads that could easily have been fully financed on the interest payments alone. This year's budget deficit blew out by more than $8 billion to $49.4 billion—the second largest since World War Two—and the 2011-12 budget deficit is forecast to rise by $10 billion to $22.6 billion. For this government, another billion dollars in debt is just a rounding error. It would be laughable if it was not so serious. Australia's future prosperity is today on the line. It is no wonder that we cannot take seriously the government's commitment to surplus in 2012-13. Labor has not delivered one in 21 years or, as the coalition's rising star, the member for Longman, Wyatt Roy, so tellingly pointed out in the House, 'Not in his lifetime.' What is more, Labor's failure to rein in spending is occurring at a time of low unemployment and a China-led boom. If the government cannot take the hard decisions when the terms of trade are their strongest in more than a century, then they will never do it. They promised a tough budget, but it was anything but. As editorialised in the Australian:

…the only time he—

the Treasurer—

has wielded a knife is when he helped to bring down Kevin Rudd.

The Treasurer's announcement of $22 billion of savings out of a total spend of $1,500 billion over the next four years was just about matched by its new spending spree. Next year, for example, the government is spending $2 billion more than it will save. In the words of Australia's distinguished former Treasurer Peter Costello, 'This year's budget was a major lost opportunity.' Peter Costello should know. Today, revenue is rising to unprecedented levels and expenditure by 2014-15 will be up by more than 23 per cent in real terms from when he was at the helm.

This dangerous addiction of Labor to spending will only send interest rates one way—up. Already, seven rate rises since October 2009 have punished homeowners and those dreaming of entering the market. Expectations in the market are of worse still to come. Moreover, this government provides no relief. This is the first budget in eight years without tax cuts, meaning the thresholds in 2015 will be the same as those announced by the Howard government in 2007. Tax cuts, no; but tax increases, yes.

The government's carbon tax is the latest impost from a government that in just a few years has given us a mining tax, an alcopops tax and higher taxes on cigarettes and luxury cars et cetera. While the mining tax was announced by the Labor government without consultation with those in the industry most affected, the government's carbon tax has been a metaphor for consultation. The only problem is that those consulted are not the families who will face higher costs of living but Labor's political partner, the Greens, who see a historic opportunity to close down important energy intensive industries and distribute wealth according to their own social agenda. The Greens are today's modern-day Luddites.

With electricity prices up by more than 50 per cent, water up by more than 45 per cent and gas up 30 per cent—all since Labor came to office—the public have made it clear they can ill afford a carbon tax, which will only exacerbate their existing hardship. As the Leader of the Opposition has said, the carbon tax should have been detailed in this budget, for it is a massive economy-wide reform with ramifications for the government's expenditure and revenue forecasts. The government's failure to do so means its forecast budget surplus for 2012-13 is not even worth the paper it is written on.

One does not have to look deeply into this budget to see dangerous signs of waste and mismanagement. More than $300 million has been set aside for high definition television set-top boxes at a cost of nearly $400 each. Given Harvey Norman can provide the equivalent technology, delivery and instalment for half the price, it should remind every taxpayer that this program is another pink batts and school hall fiasco just waiting to happen.

The $1.75 billion blowout on asylum seeker management is also a reminder that this government has failed to protect our borders. Christmas Island, Villawood and other detention centres are at breaking point and the government has stubbornly refused to adopt John Howard's successful Pacific solution. On this issue and on many others, Labor has no answers.

The freeze on indexation of family tax benefits part A and part B supplements will hurt Australian families to the tune of $2 billion and has been criticised widely. The axing of the entrepreneurs tax offset, which delivered support to small businesses around the country, will damage a sector already struggling from the loss of more than 300,000 jobs since Labor came to power. The tighter eligibility requirements proposed for the private health insurance rebate are also a retrograde step. People who take up health insurance are in effect saving the taxpayer money and reducing the burden on the already squeezed public health system. The cuts to rebates for general practitioners delivering mental health services, and cuts to the number of Medicare-funded visits patients can make to their psychologist, have been widely criticised by professionals working in the sector. The government was shamed into allocating new money for mental health, but at just over $500 million it was less than a third of what was promised by the coalition. What is more, the government has back-ended the money at a time when more mental health services are urgently required.

Aged care was also inexplicably ignored by the Gillard government at a time when our population demographic is undergoing rapid change. Around 13 per cent of Australians are today over the age of 65, a figure that will double by 2050. This government provided no new money for the aged-care sector. Despite the Productivity Commission's Caring for older Australians report, scheduled to be out in June, the government missed a vital opportunity to demonstrate with new funding its commitment to the sector and the millions of older Australians dependent on aged care.

Somehow this government can find the money for its political priorities, like the 24,000 new public servants employed by this government since 2007 or the nearly $50 billion it plans to spend on the National Broadband Network without even a cost-benefit study, but when it comes to helping aspirational Australian families it simply remains silent. It was former British Prime Minister Margaret Thatcher who said, 'The problem with socialism is that you eventually run out of other people's money.' The Australian Labor Party may not be the socialists Thatcher originally had in mind, but its willingness to nationalise industries, intervene in the market and live beyond its means indicates that this Gillard government is not far off.

Just four years ago, Australia's balance sheet was the envy of the world: no government debt, low unemployment and inflation, and a vibrant private sector sitting alongside a relatively effective public sector. But things can so quickly change. Under this Labor government, our competitive advantage has been squandered, our savings have been spent and we are now left to ponder how much more damage this Labor government will do before the Australian people have their opportunity to vote them out. It cannot come soon enough.

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