Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Hansard source

Yes, crying wolf. It is a common statement. It might be a little bit below the echelons of the High Court and other forums. Crying wolf: we heard it again today from the Prime Minister in her answer to the first question, in her answer to the second question and in her answers to all subsequent questions about the surplus. All we heard was her blaming Treasury; it is all Treasury's fault now. It is all someone else's fault. We have heard endlessly year in, year out that it is someone else's fault; that they never get there because of someone else; that the dog ate her homework today. These are the sorts of things they are starting to resort to.

The Treasurer says that delivering a surplus is all too hard, and he has given up. He is blaming a shortfall in tax revenue. We heard the Treasurer before Christmas—he is on the record—saying:

But what we've had here is a huge revenue whack if you like, out of the blue, which has made it very hard to get to surplus in 2012/13.

This is nonsense. There is no 'whack out of the blue'. There is no 'whack', in fact. If you look at the Treasurer's own MYEFO documents, the truth of the matter is that, over the first four months of this financial year, revenue to the government went up 9.2 per cent. I can tell you that there are a lot of households in Australia which could do pretty well with an increase of 9.2 per cent in revenue—pretty well indeed. The thing is that revenues are steadily growing but they cannot catch up with the rate of spending. This is the problem. They cannot catch up with the rate of spending—a rate of spending of four per cent ahead of last year already. There is already a four per cent increase. These are the ones who preach about fiscal rectitude, and in the first four months there is a four per cent increase off an already bloated spending base—a result of the excessive spending year in, year out.

Labor do not have a revenue problem. They never had a revenue problem. They have a spending-and-forecasting problem. This is a government that has constantly and deliberately assumed unachievable levels of future revenue year in, year out. At every budget they make these unbelievable forecasts. They then go and spend that money, and when it does not come in it is, 'Woe is me; cry wolf; it's somebody else's fault.' The fact is that they made these unbelievably inaccurate, politically inspired forecasts on revenue, which they never reached, and then they spend it—by God, do they spend it! This government has caused this problem.

If we look at MYEFO, we see that the company Macroeconomics—which is staffed by former Treasury and Finance officials—nailed it. Macroeconomics argues that the budget should already be in surplus by at least $15 billion, or around one per cent of GDP, at this point. How true that is. This is not a question of future surpluses. This government should have been in surplus a year ago. Macroeconomics go on: 'The Treasurer is in this predicament mostly because in the five budgets ending with MYEFO 2012-13 he has a track record as a net discretionary policy spender at around $120 billion, who failed along with his financial fiscal partner, Finance Minister Penny Wong, to ensure a return to surplus regardless of a weaker economy.' That is the point. Sure there was a GFC; it was five years ago, but there was a GFC. We had just one quarter of negative growth. Why did we have that? There are three or four reasons—and long before the stimulus, I might add. We had just one quarter of negative growth because this government inherited a situation where there was no debt. In fact, there was $70 billion in net reserves—a $20 billion surplus.

Firstly, the government inherited the most healthy economy in the developed world. Secondly, this government had the benefit, as it should, from the flexible exchange rate. In the first quarter of 2009, the dollar, you might recall, dropped to 60c. The Chinese bought massive amounts of our resources to capitalise on the 60-cent dollar. We had the biggest trade surplus in the country's history. As well, interest rates dropped 3¼ per cent between October 2008 and the end of the first quarter in 2009. Many families had more money in their pockets because of the reduction in interest rates than they had had for many, many years. These things drove economic growth in this country.

Then the government made the second raft of stimulus spending. They always avoid the fact that we said, 'You should support the first one'—and we did. In October there was a crisis of confidence; it needed to be addressed. We recognised it and we supported the government, but they never admit to that—just cheap politics. They are just trying to position us in a way which is totally irresponsible and which misrepresents the facts. The fact of the matter is that we supported sensible, stable spending when it was needed. What we did not support was reckless spending, which was invariably politically inspired, with pink batts and wasteful school halls.

There were lots of other ways in which they could have reduced the cost. If they had really wanted to save jobs they would have reduced the cost of doing business with that spending, not splashed it around on politically inspired initiatives which ended up with the biggest waste in this nation's history. This is a government that had all the benefits. Since then, they have had a 150-year high in the terms of trade. They have wasted the mining boom. They have wasted the great strength of the economy that they inherited all for political gains—all to just parade their spending to incessantly buy votes all around the country.

This is a government which has not sought to govern and manage the finances in the national interest. They have wasted the boom at a time when the rest of the world has found it more difficult—especially the northern hemisphere, where the GFC really hit, not the southern hemisphere. They had this 150-year high. In fact, the terms of trade today are still 30 per cent higher than when the Howard government lost office. You would not think that from listening to the Treasurer. Where is this 'whack out of the blue' if the terms of trade is still 30 per cent higher than it was five years ago? They have benefited from endless increases in revenue and economic growth, but all the while they have wasted it. They have spent it like drunken sailors.

That is why we have a problem.

We will not be lectured by a Labor government that have $120 billion of unfunded promises sitting on the table and that have spent $172 billion more than they have received, have no surplus and have no plan to get back in control of our nation's finances. Instead of a government that must stop crying wolf, we need to have a government that start to take responsibility for the problems that they themselves have created.

See this speech in context