David Coleman (Banks, Liberal Party) Share this | Hansard source

I am very pleased to speak in support of the Tax Laws Amendment (Temporary Budget Levy Repair) Bill 2014, arising as it does in the context of economic management where there is really no greater contrast than between the government and those opposite. One side of the House take a measured, mature and responsible approach to economic management and the sorry history of those opposite is well known, and I will come to that in some more detail in a moment. The budget repair levy is a temporary levy, which will be in place for three years from 1 July 2014. The levy applies to high-income earners of over $180,000—less than four per cent of taxpayers. It is a measure that needs to be taken because of the very serious economic situation which the government faces. As all Australians are required to contribute to that very difficult budget task, it is entirely appropriate that high-income earners do so as well.

The tragedy is that we are in this situation in the first place. This would not be necessary and in fact many of the measures in the budget would not be necessary but for the extraordinary financial mismanagement by those opposite. When Labor came to government after a long era of sensible, mature economic management, there was about $50 billion in the bank. You would think that the first instinct of an incoming government would be to protect that asset. Obviously that is what you would do in real-life, that is what you would do in business and that is what you would do in a household. And the last thing you would want to do is inherit a tremendous financial situation and blow-up the joint in a few short years. That is what occurred and it occurred because of a very loose approach in relation to spending.

Spending went up 50 per cent over six budgets. That is not a very long time—six years. Inflation was dramatically lower than 50 per cent in that period. So in real terms, it was a huge increase. As well, Labor left us with the horrendous debt situation of $200 billion and they also left us with a very bad trajectory. You might argue that if there had been a temporary move into debt and then a hurried and successful move to get that under control then perhaps one might have more respect for it. But in fact the exact opposite of that occurred. So having hurried into debt, Labor continued to put the foot down on the accelerator. We saw more and more spending and a complete lack of regard for taxpayers' money. So much so that, based on the trajectory provided by the previous government, OECD's forecast for Australia was for the fastest growth in the OECD between 2012 and 2018. The notion in the previous government that somehow everything was related to the financial crisis of six or seven years ago really does not hold up, for a number of reasons. One reason which demonstrates that very clearly is the fact that the trajectory of government spending is the fastest in the OECD at present. It is very difficult to hold responsible for a period from 2012 to 2018 some events that happened on Wall Street in 2008.

One asks the question: how can this occur? I think there is a simple reason for this: those opposite do not fundamentally understand the basics of economic management. I think they see some charts and numbers on a page, and they look up at the PowerPoint presentation and see lines and things like that, but they do not understand that this is real money and that the government does not generate money. The government takes money. People generate money. Companies generate money. Government takes some of that money. Given that government takes some money, it is incumbent upon it to exercise discretion and care in the way it spends that money. Of course that is not what happened.

We can think back to the days of the NBN announcement and that famous plane trip that Senator Conroy and former Prime Minister the former member for Griffith took. There it all was: a couple of pamphlets, a few envelopes, maybe a couple of HB pencils. And a massive project was born. We had the grave announcements with the faux FDR significance of the private sector being in retreat and the government stepping forward. But of course we had one of the worst, if not the worst, example of public sector management in our nation's history—a project that was costed in our most recent independent assessment as having a peak funding requirement of $73 billion. There are about nine million households in Australia, so $73 billion is about $8,000 per household in Australia to build the NBN under Labor. Remarkably, once each household effectively contributed that $8,000, they still had to pay for it. They still had to pay $70 or $80 a month—whatever the cost was. So it was $8,000 to build it and then a requirement to pay for it on an ongoing basis. There was a lack of operational management and a lack of hand on the steering wheel which was really quite frightening to behold.

We saw the same thing in border protection. The arguments put to that matter were not good for humanitarian purposes at all, as we know, and were certainly not good for economic outcomes for the nation, with a massive budget blow-out of $11 billion. We are now in this position where we have to fix up the mess. That is what we are saying and that is exactly right. It is $1 billion of interest every month. Another way of thinking about that is $30 million or $35 million every day. It is a sobering thought. And what do you get for your $30 million? What you get from your $30 million is to keep your outstanding principal of $190 billion at the same amount. That is what you get. You basically get to pay off your interest and keep your outstanding principal at about $190 billion. In order just do that you have to borrow $30 million every day. This is extraordinary.

Then again, these are the people that have not produced a surplus budget since 1989. You do not need me to tell you that 1989 was a very long time ago. It was 25 years ago. It was a different nation then. Labor in 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 had deficits as far as the eye could see. If it just happened once or twice you might understand it, but over such a long period of time—way back to 1989—that is just a way of life. Cast your mind back to 1989. It was a very long time ago. Kylie and Jason were still doing duets in 1989. There were some fantastic movies in that year: Bill and Ted's Excellent Adventure, Weekend at Bernie's. Ivan Lendl won the Australian Open. As you know, he is much more of a coach these days than an active participant. Cher released If I Could Turn Back Time, which no doubt is something that Labor thinks of when it considers its legacy of economic management in recent decades. So the notion that Labor could provide any sort of guidance—perhaps an academic thesis from the member for Fraser or a pocketbook guide from the member for McMahon—and have its arguments treated with any respect at all is quite laughable given the extraordinarily poor result we have seen since the late eighties.

We are taking a very responsible approach in this budget. We are reining in spending where it is appropriate to do so. We are doing it in a responsible way so we can fund investment for the future and so we can get our debt burden under control. But we do need to bust some myths perpetrated by those on the other side about the measures in the budget. Over the next four years, within that envelope of responsible economic management, we are able to increase hospital spending by 40 per cent. You hear from those opposite about billions of dollars of cuts. But we are actually increasing hospital spending by 40 per cent in four years. Mr Deputy Speaker, you know the small business community better than anyone. If you were in small business—or in big business, indeed—and you were told that your revenue was going to increase in the next four years by 40 per cent, you would think that was a very substantial increase, which of course it is. Schools spending is up 34 per cent in the next four years, at $1.2 billion more than Labor was going to put in. Pensions are going up every single year, despite this scaremongering. I was very pleased to be able to ask the Minister for Social Services about that important topic this afternoon.

With respect to universities, there are important deregulation measures, which will allow universities to be their best. Importantly, though, we are actually expanding the number of students who can get access to the HELP debt system by about 80,000. Nobody is required to pay up-front now and will not be required to pay up-front in the future. Nobody has to pay back any of their HELP debt until they are earning at least $50,000 and, even then, they only have to pay back about two per cent of it in that year. So this sort of screaming and so on that we have seen about university costs is particularly inappropriate. It is entirely right that students contribute to the cost of their education and the cost of around 50 per cent is entirely reasonable.

Of course, it is great to have the assistant minister for infrastructure in the chamber with us as we talk about the importance of infrastructure. Of course, infrastructure is the economic gift that keeps on giving. Once you put that road into place, once you put that infrastructure in place, it is there for years and years, decades and decades. Those productivity savings accumulate and they are there on day 1 and they are also there 30 years down the track.

In my electorate and indeed in yours, Mr Deputy Speaker Kelly, the development of WestConnex, championed of course by the Minister for Infrastructure and Regional Development, is a great initiative. We are expecting savings in travel time to the city of about 25 minutes through the duplication of M5 East, which is a terrific result.

Another thing on economic management is the carbon tax. We have talked about this topic before. We know that the abolition of the carbon tax will mean a $550-a-year saving for the average family. Yet those opposite, who purport to be the champion of Australian families, are cruelly standing in the way of that $550 relief per year. It is a very significant saving. Those opposite persist with their environmentally ineffective and economically irresponsible carbon tax.

What does all this mean? It means that we get the budget back on track. It means that we go from $50 billion of debt in FY 2014 to about $3 billion in FY 2018. We will save $300 billion in debt and all of the interest that would have otherwise been paid on that amount. We will get the nation back on a sensible and economic foundation.

We are at our best as a nation when we confront difficult issues. We cannot just sleepwalk into the future and pretend that difficult issues do not exist. They do exist. Those opposite have created an economic crisis and the budget crisis needs to be addressed. We are addressing it. It is absolutely in the interests of the Australian people.

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