Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Hansard source

I rise to speak on the budget Appropriation Bill (No. 1) 2014-15 and related bills. The previous government left behind a fiscal train wreck. It lost control of the budget and lacked the strength of leadership to fix the yawning structural deficit it created. It lacked the strength to rein in the reckless spending of the last six years of government. There is no doubt that the coalition was in no small part elected to clean up this mess—to repair the budget and get government back to living within its means.

The budget brought down by Joe Hockey is totally consistent with that task. This budget puts Australia back on a sustainable path. It dramatically reduces Labor's record debt and deficit while at the same time reducing the overall tax burden by something in the order of $5.7 billion. It is also a budget that invests heavily in infrastructure and, most importantly, it is a budget which backs our strengths—those things which, as a country, we do as well as anyone and better than most. We are very deliberately looking to back our strengths as a country rather than do the sorts of things we have seen in the last few years where, in the middle of the biggest mining boom in our history, we saw a carbon tax introduced; and not happy with that, a mining tax was introduced as well. It is not just the taxes: it is the mountain of regulation which surrounds those taxes which has added a multibillion-dollar burden to the operation of those businesses. In many cases it has now made us a lot less competitive—in fact, uncompetitive—in some world markets in things we have historically been world leaders in.

It now takes two years longer than it did in 2007 to get an approval for a large LNG project. That means something in the order of $30-$40 million a month has been added to the cost of projects of that order with nothing to be gained. It is dead money. It is hundreds of millions of dollars of disadvantage compared with projects in other parts of the world.

In fact, the leaders of some of those companies have said to me that it is now cheaper to build a new train of gas, a greenfields train of gas, in Canada than it is to build a brownfields train of gas in Australia. That is a most disgraceful legacy, a job destroying legacy, a legacy for the Labor government which goes to our inability now even to compete in some areas that we have historically been world leaders. That is what we are doing in backing our strengths. That is what we are doing in getting the government back living within its means.

In this instance, we have seen the former government borrowing $100 million a day in the financial market. That is what it took to build up hundreds of billions of dollars of debt. When a government does that it is a lot of money each day that is coming out of the financial markets. As a consequence, there are so many small businesses in Australia which have not been able to acquire simple finance to rollover their mortgages—especially small and medium businesses. They are the ones that have been affected. That is why there are 500,000 fewer jobs in small business than there were six years ago. Over half a million, 512,000, people have lost their jobs in small business—and those opposite just wipe their hands of it. They criticise a budget which is seeking to put some resilience back into small business, to put some profitability back into small business and to get the government away from competing with small business in the financial market.

I have so many small businesses in my electorate who could not refinance a simple mortgage of $180,000 or $250,000 simply to roll it over. Their financial institution would say, 'We haven't got money for you; go and find it somewhere else.' The doors have closed on so many businesses—not because they were unprofitable, not because they were not going to see through the difficult times, but because they just could not get the finance to rollover their financial instrument. That is a direct consequence and it leads to jobs. Those opposite endlessly talk about jobs, but they have destroyed over half a million jobs in small business. Small business is the engine room of our economy. It is the innovation centre of our economy. All along, big business has outsourced innovation to small and medium business. That is how our system works. It has been undermined, constrained and, in many ways, destroyed in so many areas over the last few years.

To be sure, it is a tough budget and there are unpopular measures. But, like the Costello budget of 1996, it represents a major turning point. The fact of the matter is that, if we did not act now, it would be much worse later. The spending profile that existed when we took over will change if we get the support of those opposite or those Independents in the Senate. If we are able to change the current policy framework, what is coming down the line—which will be much more damaging than what we confront today—will not eventuate. What I mean by that is that, if you extrapolate the spending programs they accelerate. Let's assume 3½ per cent growth, which is half a per cent higher than trend growth. If you go off into the future for 10 years at 3½ per cent and you maintain the existing spending programs that have been put in place, the gap widens. It widens from something like $250 billion to $667 billion.

That is what we are dealing with. That is why there is an urgency about doing something now and why we have gone to structural changes in the budget—structural changes in health, structural changes in education, structural changes in welfare—all things which will progressively put some common sense back into those spending programs. And it is not just common sense. It is a sustainable capacity to continue to deliver things like Medicare, high-quality education and the sorts of assistance and the safety net that Australians deserve, those who are unable to look after themselves or achieve an acceptable standard of living. We want to be able to sustain those sorts of policy measures.

But what we took over, what we inherited from the last six years of Labor government, has been a budgetary situation which would have blown out with a debt reaching $667 billion within 10 years. It would have meant not $1 billion a month in repayments but $3 billion a month in repayments, and this would be untenable. We could not afford the spending programs. If you had been this House for the last three years in particular, what we saw in the last year also, I think, was a government convinced that it would not win the last election. As a consequence, there was an obsession with planting policy time bombs across so many areas.

Look at it. The $80 billion they talked about for health and education was never sustainable. For the forward estimates for Labor last year, they had modest increases in all of those areas, and then there was an explosion of cost from 2016 onwards after the next election. This was deliberate political strategy from a group that thought they would not win, that they would not have to find the money, that this would put us in the position we are in today having to defend tough measures. It was a callous strategy, an objectionable approach by those opposite—pure politics—and not looking after the interests of the nation. They were not doing things in the nation's best interest, but playing politics with the budget. What has happened was deliberate. The blow-out that is going to come to the nation if we do not do something about it now, was conceived and executed by those opposite for crass political purposes. They tried to set us up with these fiscal time bombs down the track we have seen.

We are going to address the situation. They created this problem but we take responsibility for fixing it up. We were elected. People knew there was a mess. Of course people find it difficult after several years of debt-fuelled reckless spending—everyone puts their hand out, everyone gets whatever they want. You have an opportunity in business? We will give you some but government money. You have a problem in business? We will give you some government money. Got a problem in the community—not a problem; sign another cheque and pay for it by borrowing money. All of us could borrow money tomorrow and create jobs for a little while. We could put a new deck on the house. We could paint the house. We could do things. We could go to the top restaurants. We could spend money and create jobs, but after a while the $200,000 we borrowed has to be paid back. It is no different for this community. The reckless spending and the borrowing of the last few years and the built-in spending increases which far exceed even above-trend growth for the economy, are of such an order that we need the measures that have been taken in this budget.

But the thing with the structural changes is that they will affect spending levels gradually over time. They will bring them back into order. It is not a king hit on the community. The other point is that when you rein in government spending so that small business can get some finance to grow their business and stay in business, you create a situation where you have got to replace the government spending with other activity, with robust growth in the private sector.

So this government has sought to do two things: on the one hand, to live within our means as a government but on the other hand, to open up opportunities for the private sector in a way that was diminishing at such a rapid rate. We want to open up opportunities for small business in particular—to get small business back in business. We want to reduce the taxes—to get rid of the carbon tax, reduce corporate tax by 1½ per cent and remove all of these problems with big projects. We want to get rid of the mining tax, streamline the approval processes, get some efficiency back into those processes and ensure that we can, in the future, compete effectively in these areas. There is such a magnificent opportunity emerging in the countries around us, countries that will have an explosion of the middle class from 600 million to something in the order of 3 billion not in 100 years, not in 50 years, but in the next 25 to 30 years. If we get ourselves lean, hungry, competitive and knowledge based then we will capture so much of that opportunity. The next 30 years can be spectacular for Australia but we have to—as a community, as businesses and as governments—look to that future. We have to get ourselves into condition so that we are like an elite athlete, ready to take advantage of the opportunities being presented to us.

In that regard we have sought to open Australia for business. It is why we have very aggressively sought to conclude the free trade agreements with Korea and Japan—agreements that the last government failed to bring to conclusion in six years. We have done so many things for business to restore some predictability, certainty and stability so that, as a country, we can take advantage of the spectacular opportunity that is emerging on our doorstep. It will not necessarily fall into our lap. We have to earn it, but we are so well placed. If we treat our neighbours with respect and get ourselves into great shape we can have a wonderful future for ourselves, our kids and our grandchildren.

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