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

I rise to speak on Appropriation Bill (No.1) 2012-2013 and related bills following the passing down of Labor's fifth budget, a budget defined by its rubbery figures, higher taxes and broken promises; a budget which is the culmination of five years of misguided policy priorities and bungled policy implementation; and a budget which does not place Australia well for the economic challenges ahead as the international environment deteriorates.

First to the bottom line: the government's prediction of a $1.5 billion surplus in 2012-13 is hard to believe. This time last year, the government predicted a deficit of $22 billion. MYEFO saw it revised to $37 billion. Now we know it has come in at $44 billion, an unforgivable blow-out which brings the accumulated deficits for the last four years to $174 billion. Not only are these the four largest deficits in Australia's history but they see our net debt peaking at over $136 billion, requiring new borrowings of $100 million a day.

The government seeks to explain itself by saying it had lower taxation receipts and was subject to external shocks such as the flooding in Queensland. But what this Gillard government fails to appreciate is that its policy prescription of increased taxes, more red tape for small business and a heightened role for unions in the workplace is a disincentive to investment and a brake on job creation. What is more, the predicted surplus was only achieved by bringing forward as much spending as possible into the 2011-12 year and pushing out as much spending as possible into the 2013-14 year and beyond—just as long as it does not fall within the magical 2012-13 year.

For example, payments of $1.1 billion to local government, $1.8 billion in infrastructure transfers to the states, $1.5 billion in carbon tax compensation for pensioners and welfare recipients, and $1.4 billion in disaster relief funding for Queensland were all brought forward to the 2011-12 year. Labor's energy security scheme, which is normally a $1 billion annual program, has only $800,000 allocated in 2012-13. The government's coal sector jobs package, which is an annual $250 million program, will only receive $10 million in 2012-13. This over-manipulation of programs also extends to the special dividends from the Australian Reinsurance Pool Corporation and the Export Finance and Insurance Corporation, which the shadow Treasurer has pointed out are only being taken in 2012-13 to 'fluff up the promise of a surplus'.

The government's accounting treatment of these programs, together with their decision to place major spending initiatives like the $50 billion NBN and the $10 billion Clean Energy Finance Corporation 'off balance sheet' in the forlorn hope that they make a return to the taxpayer, means we cannot take the government's budget numbers at face value. Nor can we allow the government to gloss over their broken promises and punishing tax hikes, the most serious of which is the carbon tax, explicitly ruled out before the election but soon to hit Australian households—in just over 30 days time. In my electorate of Kooyong I have had small business owners, self-funded retirees and captains of industry explain to me the pernicious impact the carbon tax will have on their bottom line. They are pleading for us to repeal the tax in the event we get to government. As I have said elsewhere, in my state of Victoria we will be particularly hard hit by the carbon tax. Premier Ted Baillieu released a report by Deloitte Access Economics showing that the government's carbon tax will by 2015 lead to 35,000 fewer jobs, a $6.3 billion fall in investment, a reduction in per capita income of $1,050 and a worsening in the state budget by almost $660 million—a grim picture indeed.

The next broken promise by this government was its company tax cuts, promised to small business up to the day of the budget but then brutally abandoned in this budget, saving the government $4.7 billion. In fact, Mike Symon, Labor's member for Deakin, wrote to business owners in his electorate in a letter dated 7 May, the night before the budget—

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