Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

Here we are at last. Nine months after the last budget was delivered, the centrepiece of that budget, the centrepiece of the government's so-called economic plan, is finally before the parliament for a vote. No rush to get this before the parliament. Nine months later and the Treasurer gets around to bringing it on for debate in this parliament. I do not think they are particularly proud of this centrepiece of their so-called economic plan. Remember the Treasurer telling us that this was not just any old budget, not just another budget? It was different to all the budgets in the past. It was different to Paul Keating's budgets and Peter Costello's budgets and Wayne Swan's budgets. It was different because it was special, the special Treasurer told us. He had something different to all the other treasurers. He had an economic plan—an economic plan he did not even bother to legislate. He did not even bother to bring it before the House until today.

This is the economic plan in which the Treasurer, Scott Morrison's answer to the deficit is to increase the deficit by $50 billion over the next 10 years. That is his big answer to reduce the budget deficit: make it bigger in the meantime. Of course, we know that because the secretary of the Treasury told us. The Treasurer did not. The Treasurer stood at the dispatch box and said, 'I have a 10-year plan for our economy,' but what he did not tell us is how much it is going to cost. I asked him the next day after the budget. It was not the most complex question I could have thought of: 'What does the 10-year plan cost over 10 years? Of course, he would not say. He knew the answer, but he would not say. We knew that it would be in the vicinity of $50 billion. He did not want to fess up about that fact. I was reminded by the Prime Minister yesterday when he did not want to fess up to the fact that a million people would be affected by his cuts. He did not want to fess up to that. The Minister for Social Services has been out today saying, 'Actually, 1½ million people will be affected.' But they do not like fessing up to the facts about their particular policies.

The fact of the matter is that increasing the deficit by $50 billion over the next decade is not a plan to reduce the deficit. The government like to lecture everybody by saying, 'We must have belt-tightening. We must do more with less. We must ensure long-term budget integrity,' but then they turn around in the next breath and say that they want to increase the deficit by $50 billion with the corporate tax cut. They say that this is necessary for growth, but the fact of the matter is that the budget is in such a difficult position and is facing such serious challenges that the government and this parliament have to make choices about priorities. We have to make difficult decisions. We cannot do it all. In a perfect world, as I have said repeatedly, of course corporate tax would be lower rather than higher—of course it would be—but so could many other things be improved in the budget: personal income tax; more spending on health and education and important social safety nets. All these things are important, and it is the role of this parliament to make choices.

On this side of the House we make a different choice. We choose budget repair which is fair through reforms to negative gearing and capital gains tax and other important initiatives which we have already announced, such as better funding for our schools and fairer funding for our schools, and we choose not to give away $50 billion in a corporate tax cut. We choose not to say, 'It's important for Australia, with the triple-A rating under such threat, to see this brought about.' We know that the budget is in a parlous state. We just yesterday had a reminder from the Parliamentary Budget Office—a very fine institution—confirming a projected $42.8 billion black hole in the budget due to unlegislated measures, which are not so fondly called 'zombie measures' in the public discourse. There are the measures from the 2014 budget—the budget which cost the member for Warringah and then member for North Sydney their jobs, quite rightly—but this Prime Minister and this Treasurer continue with them. In fact, the return to surplus is dependent on those zombie measures. We would not have a return to surplus at the projected date without those zombie measures, and they are fallacious.

The government has introduced another omnibus bill. They will have to negotiate what they can through the crossbench because they will not get support from this side of the House for cutting payments and making a million Australians worse off, for making people wait longer for Newstart, for making it harder for pensioners who have worked hard all their lives and saved to have some time overseas. We will not be supporting those measures. But guess what: we are also not supporting giving $50 billion away in large corporate tax cuts. It is not a priority for this nation. It is not the sort of reform that this nation, facing the difficult circumstances and budgetary challenges over the medium term that we have, can afford at this time. It just beggars belief, but the Treasurer goes on about the deficit and debt. In fairness to him, he does not say 'budget emergency' or 'debt and deficit disaster' anymore. Those days are gone. That was what they used to say when they were sitting on this side of the House. On that side of the House there is no budget emergency or debt and deficit disaster; there is the capacity to give away $50 billion in tax cuts.

They say it is about—wait for it—jobs and growth. This is their big plan for jobs and growth, and they have some figures to back that up. Treasury analysis that was released on budget day does back up that there will be a gross dividend. What is that gross dividend? It is one per cent. The economy will be one per cent bigger. One per cent is worthwhile if it is going to make the economy one per cent bigger this year. I would say that is a worthwhile contribution. One per cent bigger a year—that is great. But, of course, no, it is one per cent bigger 10 years after the tax cut is implemented in 10 years time—that is, in 20 years time. In 20 years time, they will have a one per cent dividend for the economy. We had a negative quarter last year—indeed, the first negative quarter in a long time which could not be clearly sheeted to clear external factors. It was a substantial negative quarter, without being alarmist. I am sure that this quarter will be positive. What did the government say in response to that negative quarter? 'Yes, but we've got a plan to make the economy one per cent bigger in 20 years time, so don't worry about the negative quarter this time.' Of course, that is not a plan for jobs and growth.

We saw the Prime Minister last week at the National Press Club again. I will give him this: it was a calmer and more prime ministerial performance than we saw yesterday, but that would not be hard. Barnaby Joyce could be more prime ministerial than what we saw yesterday at the National Press Club!

Interestingly, the Prime Minister briefed that he was going to make an announcement that the corporate tax cuts would lead to a $750 increase in wages, but when the speech was released it was not in there. Then it was in the speech he actually delivered, so there was obviously a lot of toing and froing in the Prime Minister's office about the drafting of that speech. Again, $750—a 1.1 per cent increase in wages—was not today, not next year, not the year after, but a $2 a day increase in 20 years time. Well done, Prime Minister! That is the big dividend that the Prime Minister gives us from his big centrepiece economic plan.

We have a situation where, despite his tantrums about text messages and his tantrums about how he was robbed, this Prime Minister presides over a government that is attacking Medicare through freezes on the Medicare Benefits Scheme and wanted to put a $7 tax on going to the doctor. They said that these are the sorts of things that are necessary for budget repair and then they say, 'But, on the other hand, we can afford a $50 billion tax cut for big business.' Well, they cannot—and they will not get support for us for this $50 billion corporate tax cut. We will stand for better priorities than that.

The Prime Minister and the Treasurer like to say, 'But Labor used to support corporate tax cuts.' As I said, we have always said that, in a perfect world, corporate tax would be lower rather than higher, but they have one little problem—well, they have several little problems—with their equation. One that I think is particularly amusing is that they quote the Leader of the Opposition, me and others on parliamentary debates and the debate which was occurring when they were walking in here and voting against the corporate tax cuts. That is what they were doing at that time—the now Prime Minister and the now Treasurer were voting against the corporate tax cut which was smaller than the one that is being proposed by this government. They said it could not be afforded then and, of course, what they have now is a much bigger corporate tax cut, which is completely unfunded.

We will not prescribe to this Laffer curve, Reaganomics-style approach of: 'It's all right; it'll trickle down. We will cut tax and then everything will magically come back and we will whir back into surplus.' That has been discredited continually. I saw our old friend Bronwyn Bishop—which is always a delight—on the television the other night making that case—

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