Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

Thanks very much, Deputy Speaker, and thanks to the member for Kingsford Smith for making a good point on the way past as well. As I was saying before I was so kindly interrupted by the member, these bills are all about ensuring the funding of the ordinary functions of government, but they do go to some of the broader issues about the management of the budget, the management of the economy and also more specifically to the approach that both sides of the House are taking to the omnibus bills which will come to us later in the week.

The truth is that when debt has blown out and is blowing out, when the deficit has tripled since those opposite handed down the 2014 budget and with the AAA credit rating at real risk, we do need budget repair and both sides agree on that. But that budget repair needs to be fair and it needs to invest in the drivers of growth and productivity and employment, not hollow out the future or ask the most vulnerable people in our society to carry the heaviest burden. These are the challenges before us as we go about managing the budget, and to compound these fiscal challenges we unfortunately have a government which is divided, dysfunctional and deluded: divided on superannuation reform, a key part of the fiscal repair task, but not just super reform but right across the budget; dysfunctional on the omnibus bill, which shrank by more than $500 million in a space of a week, and that is before the Treasurer had to kind of skulk in here last week and admit that there was a $107 million hole in his numbers; and deluded about the nature of the mess that the budget is in, its causes and consequences, and the government's own culpability in that situation.

We need those opposite to take responsibility for the deterioration in the budget on their watch and to work with us—to work with people of goodwill in all corners of the parliament—to fix the budget. And for our part we will continue to be constructive; we will continue to seek common ground; we will continue to propose improvements to the budget and to do the right thing. That will guide our approach to these bills. It will also guide our approach to the omnibus bills and other bills as well.

That responsible approach begins with these appropriations. The three bills before the House today are required to ensure that the ordinary functions of government, as I said, continue for the remainder of the 2016-17 year. The package of bills appropriate about $58 billion this financial year, and that of course is in addition to the $41 billion which was appropriated in that quite unusual period, that uncertain period where the government was moving around the timing of the budget and where the government was seeking the double dissolution election. And so it was quite an unusual way to do it in two hits, but for our part we will respond to the appropriation bills in the usual way, and that of course is to not block supply.

But I do want to spend a few minutes putting these bills into their broader economic and fiscal context, because when it comes to the economy, despite that quite impressive 3.3 per cent GDP growth figure headline, it masks some fairly serious and fairly pressing challenges in the economy. We have a problem with investment in this country despite record low interest rates. We have mining investment collapsing and other sectors not quite ready to pick up the slack. Total private investment has plummeted 14.7 per cent over the last 12 months alone, the worst yearly drop in nearly 16 years. GDP growth for the June quarter was entirely driven by the government sectors, so, if you think about that, underneath that 3.3 per cent growth figure for the year in the last quarter, were it not for the contribution made by government spending—ironically when you consider some of the arguments made by those opposite—growth would have been negative in the most recent quarter. Real national disposable income per capita, which is a measure of living standards, grew by 0.2 per cent in the June quarter, but living standards still remain 1.9 per cent below the level at the 2013 election. This is a factual reflection of the fact that people have gone backwards under this government as measured by the most credible measure of living standards. Wages growth, related to that point, is the slowest on record. We have unemployment at or near the same level as during the global financial crisis, quite remarkably. And we have more than a million Australians who cannot get the hours that they want or need at work.

All of that combined means that despite that headline number, as I said, the experience for people right around the country—in my electorate, the member for Griffith's electorate, the member for Eden Monaro's electorate, the member for Oxley's electorate and the member for Werriwa's electorate—is that they hear the Prime Minister talking about how spectacularly well things are going but their experience when it comes to wages and living standards is entirely different to the one that they are lectured about by the Prime Minister and the Treasurer.

And so, with these challenges and despite things like the nominal growth figure recovering in those last national accounts, it still remains the case—and this is important for the budget—that government revenue will remain under pressure for the foreseeable future. We have an issue in this country when it comes to the revenue coming into the budget—the revenue we need to fund important public services, to invest in infrastructure, to invest in clean energy and all of those sorts of things. So we have these ongoing budget deficits—of course, the ones that were supposed to miraculously disappear when government changed hands in 2013—and we have this trajectory of debt, which is unsustainable.

We have had debt to GDP, which is the most reliable measure of a country's position, rising faster than most other advanced economies since 2012. The solution has to be a mix of changes to spending but also to revenue. The Treasurer has spent a long time saying that there is no revenue issue. And then finally, just before parliament came back, he gave a speech about how we do not have a revenue problem, we have got an earnings problem, which was his way of saying that he was right all along, when in reality he has been wrong all along. If we are going to repair the budget in a fair way, we need a mix of revenue measures—things like negative gearing and capital gains, multinational and tobacco tax—combined with spending cuts—things like the new baby bonus et cetera. That is what we need in this country.

However you want to look at it, whatever facts you want to dig out, it is undeniable factually that the budget, according to the government's own budget papers, is in a worse shape today than when Labor left office. In their own budget papers—let me give you a couple of examples, Deputy Speaker—net debt has blown out by well over $100 billion in just over one parliamentary term. That deficit has tripled from the disastrous 2014 budget. The expected deficit for 2016-17 was $10.6 billion; now it will be $37 billion. It has more than tripled between the 2014 budget and now. Tax has been higher as a share of the economy every year under the Liberals than it was under every Labor budget. Government spending is higher now than at any point since the peak of the global financial crisis. Spending as a percentage of GDP is higher under this government than under Labor. When you think about those facts together and about all the bluff and bluster that we get from those opposite about how responsible they are, all of those measures—and they are not cherrypicked measures; they are all credible measures for a government's position and how a government is managing the budget or, in this case, mismanaging the budget—really do put some perspective on the sort of rubbish that we hear from those opposite.

When you have a set of numbers like that, an awful set of numbers like that, it is little wonder that the ratings agencies are starting to pay the wrong kind of attention to our budget and to our country. When it comes to rating sovereigns, rating countries, they have started to indicate that our AAA credit rating—which was won by the previous Labor government during the global financial crisis because of the good work of people like former Prime Ministers Rudd and Gillard and former Treasurer Swan—is at risk. What we saw during the GFC was ratings agencies paying the right kind of attention to our country. They looked at Australia and said, 'Those guys know what they're doing. We're going to give to them for the first time in their history'—not under Costello, not even under Keating—'three AAA positive outlook credit ratings for the country.' That was a hard-won outcome for Australia. It was a good outcome for Australia. Now that is at risk.

For people who tune into politics sparingly, understandably, who do not quite understand what the AAA credit rating means for us, when you have a AAA credit rating the money that you borrow is cheaper. So when you lose that AAA credit rating, money becomes more expensive for governments but it is also passed on in terms of mortgages. It means that money at the national level that could go towards vital infrastructure, schools, services or repairing the bottom line will instead be needed for ever higher interest repayments. It means higher borrowing costs will be passed on to consumers; mortgages and other loans will cost more. I think it is shameful that at a time like this, with the AAA credit rating at risk, the only contribution that the Treasurer has made to that so far is to say that it would all be Labor's fault if we lost that AAA credit rating. We all know—and I think if people around the country were asked to judge they would also think—it is entirely reasonable that, after more than three years of government, those opposite should take some responsibility for the budget position and the fact that that AAA credit rating is at risk. No matter how hard they try and pretend that it is somebody else's fault, they cannot pretend that they have not been in government for the last three-plus years.

The reason that people have so little faith in the government's ability to fix the budget is, I believe, that since the election it has been stumbling from one stuff-up to the next. Time does not permit me to go through all of them—the royal commission, the census—

Ms Butler interjecting—

I am sure the member for Griffith has a long list that she could rattle off, but let me just focus on two. The first one is this omnibus bill, or what people have come to know as the 'omni shambles'. We had the finance minister stand up at the Sydney Institute and say that there is an omnibus bill that is going to have $6.5 billion worth of savings. Within the next week, the Treasurer said, 'Actually, it is $6.1 billion.' We had a bill that was supposed to have 21 measures in it; it has 24 measures in it. Then, as I said before, the Treasurer had to admit to that humiliating error—that $107 million black hole—where he could not even add up the sums on page 5 of his explanatory memorandum. Of course, he blamed Treasury for that, because that is how he rolls, but the responsibility for an error like that rests with the Treasurer. We were able to find that error in two days. The Treasurer could not find it in two weeks.

Ms Henderson interjecting—

The member for Corangamite can chirp all she likes about this. It is a $107 million hole. If the member for Corangamite is so confident of these matters perhaps she could help out poor old Scott Morrison when it comes to his sums.

The second one is superannuation. The reality is that there is in-fighting on that side of the House about this. While they demand consistency and urgency from us on the omnibus bill, they have a superannuation policy which is being shredded by their backbench and so it still has some time away. We had the member for Warringah shirt-front the Treasurer in a meeting about those superannuation changes. We had the Treasurer release half a bill, not the whole bill, because some members of the backbench have not finished dictating to him what the other half will contain. There is no end in sight when it comes to this embarrassing impasse. That is why we doubt the government's ability to fix the budget.

No matter what happens with the other bills, the omnibus bills and all of that, we doubt the government's capacity not just to repair the budget but to repair the budget in a fair way. They don't just have form when it comes to this; they have cuts still on the table from that 2014 budget and subsequent budgets. Whether it be the $30 billion cut from schools, the expensive university degrees, the medicine price hikes—tinkering with the PBS—raising the pension age to 70, which will be the world's oldest retirement age, or cuts to the pension and the like, those measures are still on the table. No matter what happens with the omnibus bill in the next little while, if people want to know how the government approaches budget repair they need to look at some of those cuts to health, education, pensions and changes to the retirement age.

The fact that these cuts survived a change of prime minister a year ago shows that the member for Wentworth has brought none of the new direction or leadership that he promised. Even his own side of politics has struggled to point to a single tangible achievement in the past year. I was very interested to see that, when Jeff Kennett was asked if he could name a single achievement of the Turnbull government over the last year, he said: 'No, not at the moment.' He could not identify a single thing—a former conservative premier of Victoria could not nominate a single thing. I was also very interested to see when the member for Warringah's former chief of staff was asked on TV to name a specific policy achievement, she responded: 'Oh, look, Andrew, I'm pressed.' She could not name a single achievement. That same source, Peta Credlin, in The Australian during this week also wrote:

For a guy with so much promise to start with, the reality of Malcolm Turnbull as Prime Minister has been a bitter disappointment. Once so loved in the seats that don't determine elections, he's now reviled in those that do.

That is a very interesting reflection, and not just from Peta Credlin but Jeff Kennett and others. I was very interested to see in the Financial Review on the weekend a piece about evaluating the first year in office. The headline is 'D+' and the article begins:

After one year as prime minister, the verdict on Malcolm Turnbull's performance is in: D+.

I was also very interested to see Warwick Smith, a former Liberal member of this place, was asked about Malcolm Turnbull's performance and he said:

He is in danger of being seen as a total fizzer.

When asked to nominate Turnbull's greatest success, Smith said:

The search continues!

That is really a reflection on how those opposite are going; and it does reflect on their ability to solve some of these budget challenges.

One of the reasons he is in such a weakened position—so incapable of fixing the budget in a decisive way—is that he has sold his soul to the extreme right in his party. He has thrown his principles out the window when it comes to climate change or marriage equality—the list goes on. What is very revealing is not necessarily the things he has given away in this one-man job policy of his—not just the things he has sold his soul on—but the things he really digs in on that say the most about him. There are really only three things. He says he is flexible and agile and nimble and he has to keep people happy, but the three things he has dug in on are: his refusal to back a royal commission into the financial services industry; the $50 billion gift to big business; and high-end personal income tax cuts. He is flexible on all the stuff that might be seen as a bit of a fairer version of what is being proposed. He is flexible on all that—that can all go out the window; that is easily traded away—but, when it comes to these other things, he digs in. I think that says it all about the government's approach to the budget.

Imagine how much better off this country would be if he showed that same willingness to dig in on things like schools or Medicare or fairer budget repair. When he was in China and elsewhere in the region last week and again when he was at the dispatch box today, he talked about populism and protectionism. He said that populism and protectionism is a shovel that digs us deeper into a hole. What I find really disturbing about that approach is that the Prime Minister fails to understand that, when it comes to these populist protectionist urges, he is not the solution to these issues—he is the problem. If he were serious about these challenges—the sorts of feelings and emotions which are leading people to Hanson or to Trump or to Corbyn or to Brexit—the absolutely last thing he would do would be to hollow out services in Medicare, schools and the like and to give $50 billion to the biggest multinational corporations in this country.

As the member for Lilley, the member for Scullin and others have pointed out in this place, if you are serious about warding off the kind of division that poisons democracy, the last thing you want to do is feed that division with a policy agenda that says to most people, 'We are going to take money out of your hospitals and schools and we are going to give it to the biggest companies in Australia.' The nerve of the Prime Minister to lecture us about the moral challenge of fixing the budget while at the same time not fessing up to his core agenda, which is to take money off battlers and the most vulnerable people—out of their hospitals, out of their schools, out of their pensions—and give it to the biggest companies. That is really quite an offensive thing: to be lectured about the moral challenge of fixing a budget while that kind of stuff is going on. You can see that his divisive attitude affects the whole show.

The other day the Treasurer talked about 'the taxed and the taxed nots'. It was an imitation of another expression that went so well for Joe Hockey—the lifters and leaners. You get the sense that, if you really care about division or populism and protectionism, what those on that side are doing will not fix the problem; it will be part of the problem. That is a big part of what we are talking about here—budget repair that is fair.

We will continue to play a constructive role in fixing the budget. We have led the conversation. We have already demonstrated our bona fides. We have put solutions on the table on superannuation; we have offered the Treasurer a way out of the superannuation mess. We have put all sorts of constructive proposals on the table—more than any opposition in the 20 years I have been in the Labor Party. We have put so much on the table and said, 'Look, if you want to pick that up and run with it, go for it. If you want to take the credit for this good idea of how to get out of this superannuation mess, go for it.' That is how we have approached the task of budget repair. We put on the table at the Press Club, via Bill Shorten, $8 billion in savings over the forward estimates and $80 billion over the medium term with some very sensible proposals. As I said, we offered the government a way out of the superannuation mess to make the retrospective part of it prospective, to make it fairer and to save more money. Nobody here would be able to suggest to me that the first act of an opposition in a new term should be to propose a saving of the magnitude that we have proposed on superannuation. We have made it fairer and we have made it better for the bottom line in the budget. The government should keep that up and run with it, instead of letting the backbench shred their superannuation policy. We have put on the table a way forward, and they are welcome to it.

All up, we have committed to $130 billion in budget improvements over the next 10 years and we have done that in a way that does not ask the most vulnerable people to do the heaviest lifting. We are guided by fair principles that reflect our Labor values. Fiscal policy has to suit the times, and times change. We do not cut the budget for the sake of it; we make good decisions even when they are difficult. We are open to ideas about better budgeting and forecasting and more transparency and forward-looking ways to borrow cheaply to invest in infrastructure. We understand the transformative possibilities of big data, targeted service delivery and technological progress, not just to improve the bottom line but to improve lives. Above all else, we think that budgets must underpin economic growth that is inclusive, that creates jobs and that attacks inequality and social immobility in this country.

As I have said, whether it is our approach to this bill, the omnibus bill or the other bills, budget repair must be responsible and fair. Our careful and cautious approach has been justified by the discovery of some of the errors in the omnibus bill. But we want to continue to play that constructive role. We want to continue to talk with stakeholders and other people affected by the changes in the budget and changes in the economy to make sure that we are relying on the lived experience of people, whose lives are touched when we change budget settings. We will do all of this, adhering to those Labor values that I have spoken about.

To be clear, we will support these appropriation bills. Obviously, we will not block supply. We will continue to play a constructive role, we will continue to lead the conversation, we will continue to propose responsible ways to repair the budget and we will continue to prioritise budget repair that is fair—in this bill, in the omnibus bill and in all the bills that come before this House in the 45th Parliament.

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