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

Thank you, Member for Chifley, for caring about my good health! I am delighted the member for Chifley has chosen to debate the need for responsible fiscal management. I could not have chosen a more appropriate topic on the last sitting day before the presentation of the 2012-13 budget.

The main focus of the coalition in this budget will be on whether the government actually can deliver an underlying cash surplus in 2012-13—not whether they promise a surplus but whether they can actually deliver a surplus—and we will not know that until September 2013.

Australians would be wise to subject the budget's numbers to particularly close scrutiny, as we will do. The bottom line is that the budget numbers, no matter what they are, simply cannot be believed. The government has an appalling record in forecasting its budget and economic numbers. There has been a massive error in forecasting this year's budget deficit. The 2010-11 MYEFO forecast a deficit of $12 billion. Six months later the forecast budget deficit was $23 billion. Six months after that the forecast budget deficit was $37 billion. That is a blow-out of over 200 per cent in a budget deficit in just 12 months. And the Treasurer says, 'Well, this is all the GFC.' In fact, there is a whole lot of expenditure going towards increasing the budget deficit, such as the expenditure associated with the carbon tax and the money the government is choosing to spend this financial year rather than next financial year.

The end result may be even worse. The current estimate of a surplus next year is based on a massive increase in tax receipts for the Commonwealth. In fact, the Commonwealth currently projects a $38 billion increase in receipts between this year and next year. That is based in part on ongoing high commodity prices. This is now looking unrealistic. Economic commentator David Uren has observed that, if company tax receipts perform as poorly in the June half year as they did in December, the government could face a deficit of $50 billion in this current year—$50 billion! That would be the second-highest deficit on record, exceeded only by Labor's previous spectacular effort—a $55 billion deficit in 2009-10.

The economic growth numbers on which the budget is based have also been all over the place. The 2010 budget forecast real GDP growth at an above-trend four per cent in 2011-12. Six months later in the MYEFO it was revised down to 3¾ per cent. Six months after that, the growth figure was revised back up to four per cent, and the latest forecast is that it is back down—this time to 3¼ per cent. So up down, up down, up down—they are the economic growth forecasts from this government over the last two years. Now, even that estimate looks too high. Growth has averaged under 2½ per cent for the first two quarters of this financial year, and it will take a mighty rebound to get anywhere near the forecast growth figure.

The most damaging example of Labor's budgetary incompetence and bungles is of course the mining tax. This has now been through five versions. The original RSPT was predicted to raise $12 billion over four years. The compromise negotiated by the real Three Stooges—the Prime Minister, the Minister for Resources and Energy and the Treasurer—was forecast to be $10.5 billion. Then we had the 2010-11 MYEFO, which said it was $7.4 billion. The 2011-12 budget said it went back up, to $11.1 billion. Then, the last MYEFO said it was back down to $10.6 billion. Even these numbers seem dodgy, because the government has not taken into account the nearly $1 billion impact of the increase in mining royalties from the New South Wales government.

This government claimed that it had not been informed of the change in the royalty regime in New South Wales. The only thing is, it was in the New South Wales budget papers. It was released in the New South Wales budget. There was a press release from the New South Wales government. But this government chooses to ignore all that and says they just were not told about this increase in royalties. Therefore their numbers, according to them, stand. We had the extraordinary situation earlier this week with the Treasurer saying on Radio National that the difference between the first mining tax and the second mining tax was not $60 billion and that a 10-year estimate was never produced by Treasury, and within four hours we released to the Treasurer his own Treasury document that said there was a $60 billion hole and that there were 10-year estimates. The Treasurer had that on his own website, and he denied that it existed. Not only have the invention, creation, development and implementation of the mining tax been a shambles but I can assure the House that, when the budget comes around and we try to find the revenue figures actually delivered by the mining tax, there will be yet another Labor Party black hole.

Labor continues to boast about spending commitments worth tens of billions of dollars, but they are unfunded or not included in the budget bottom line. This includes the $50 billion National Broadband Network and the $10 billion Clean Energy Finance Corporation. These programs are funded by additional borrowed money which will take the Commonwealth gross debt position to over $250 billion. In addition, the government has refused to explain where the money is coming from for 12 new submarines, costing $36 billion; the Commonwealth's 30 per cent share of the Gonski education plan, starting at $5 billion a year; up to $6½ billion each year for the National Disability Insurance Scheme; or for its promise to the Greens to have a dental program, which could cost $4 billion a year. On top of this there are structural holes, as I have pointed out many times, in the carbon and mining taxes which amount to more than $6 billion over the next three years.

It is only the Labor Party that could introduce new taxes and leave the budget worse off. They are the only people capable of introducing new taxes, increasing taxes, and somehow making the budget worse off, with a bigger deficit. This unfunded hole is now well over $100 billion. In addition, future governments—I suspect we will be one of them—will have to find $136 billion to repay just the principal on Labor's debt. Labor's debt is going to cost Australians $8 billion a year in interest alone. On current numbers, it will take 63 years to repay this government's $136 billion of net debt. Where is the member for Longman? He will be getting a letter from King William on the occasion of his 100th birthday when Labor finally gets this debt paid off.

Labor has also been moving money around in the budget. My colleague the shadow finance minister provided last Friday a full account of the trickery engaged in by the government, and I will mention just a few examples. Labor will spend just over $1 billion this year to support energy markets through its Energy Security Fund. It will also spend just over $1 billion on guaranteeing our energy security in 2013-14 and $1 billion in 2014-15. But there is a big gap. It is a billion dollars on energy security this year; next year it is not a billion dollars—they have deleted the 'b' and put in an 'm': it is a million dollars. But, then, the year after it is a billion dollars and the year after that it is a billion dollars. So what is the deep, dark valley that represents a billion-dollar hole in the Energy Security Fund in 2012-13? It must be going towards their so-called surplus. But it is not real. It is unbelievable. There is a billion dollars this year, a million dollars the next year, and a billion dollars in each of the two years after that, and that represents accounting trickery.

Another example is that Labor's coal sector jobs package will spend $222 million this year, $10 million next year, $247 million the year after and $257 million the year after that. So this year it is a quarter of a billion dollars, next year it will cost only $10 million but the year after that it is a quarter of a billion and the year after that is a quarter of a billion.

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