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

I seek leave to move the following motion:

That the House:

(1) notes:

(a) before coming to office, the Coalition railed about a debt and deficit disaster;

(b) global economic conditions are the best they've been in years, with the International Monetary Fund stating "120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010";

(c) since this conservative Government came to office gross debt has increased to a record half a trillion dollars and is expected to be even higher in tonight's Budget with no peak in sight;

(d) net debt has doubled and is growing as a proportion of the economy more rapidly than almost every other advanced economy; and

(e) last night on 7.30, former Howard Government Treasurer, Peter Costello, said that he would be dead before the Government paid back its debt; and

(2) therefore, condemns this conservative Government for giving up on Budget repair and for its failure to address the long-term structural problems in the Budget.

Leave not granted.

I move:

That so much of the standing orders be suspended as would prevent the Member for McMahon from moving the following motion forthwith—That the House:

(1) notes:

(a) before coming to office, the Coalition railed about a debt and deficit disaster;

(b) global economic conditions are the best they've been in years, with the International Monetary Fund stating "120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010";

(c) since this conservative Government came to office gross debt has increased to a record half a trillion dollars and is expected to be even higher in tonight's Budget with no peak in sight;

(d) net debt has doubled and is growing as a proportion of the economy more rapidly than almost every other advanced economy; and

(e) last night on 7.30, former Howard Government Treasurer, Peter Costello, said that he would be dead before the Government paid back its debt; and

(2) therefore, condemns this conservative Government for giving up on Budget repair and for its failure to address the long-term structural problems in the Budget.

Mr Speaker, you will recall that in 2013 we were told the debt and deficit disaster and the budget emergency existed. Not only were we told that they existed, we were told they would be fixed. Some members opposite even told us that they were the fire truck arriving at the scene of the emergency—the budget emergency—and that the then Prime Minister, the member for Warringah, was driving the fire truck. And this mob got out and poured petrol on the fire, and now they're driving away and saying it was not their fault. That's what they've done to the debt and deficit disaster and the budget emergency, and now the poor old former Treasurer has lamented on the 7.30 program that he's going to be dead before the debt is paid off under this government's trajectory.

I wish the former member for Higgins the very best of health. I hope that he has a long and successful retirement, but I fear that he may be right. This government has given up on the task of debt and deficit reduction. This government has other priorities. Everything has changed. Do you know why it's all changed? Because it's all too hard. It's all too hard. We're washing our hands of it. It's all too hard. The government talks about headwinds. The Treasurer likes to talk about international headwinds. I'll tell you where the headwinds are going at the moment. The headwinds are going all the government's way when it comes to international circumstances. We have the most synchronised global improvement in economic circumstances in a decade. What does that mean? There are no alibis for this government and no excuses. There is nowhere to hide for this government. It mightn't be so bad if things were tough in Australia, but things were getting worse elsewhere in the world as well, so we're all in this together. But here we have the situation where Australia's general government net debt as a percentage of our economy has increased, since the election of this government, by 46 per cent. That's a lot. What's happened over the same time frame in other countries? Germany's has fallen by 20 per cent, New Zealand's has declined by 41 per cent and Canada's has fallen by five per cent. The UK and US have at least managed to stay stable; they've managed not to go backwards. But, on this government's watch, after the fire truck arrived, the fire has gotten worse, all because of this government's wrong priorities and its complete lack of agenda when it comes to getting the debt and deficit under control.

We on this side of the House believe in budget repair because we believe in having the room to move if things get worse internationally. We believe that there are better things to spend money on each month, like hospitals, schools and investment in our young people, than paying the debt interest to overseas bondholders. We actually believe that we must maintain and protect our AAA credit rating to maintain confidence in the Australian budget. We believe in those things, but, more than that, we're prepared to achieve them. And we're prepared to achieve them by making tough choices. Nobody suggests this is easy, but the Labor Party hasn't engaged in leading the economic debate for fun. We didn't say we should reform negative gearing because we felt like it. We didn't say we should reform capital gains tax because it just felt like something good to do on the day. We didn't say we should reform the way that people can claim tax deductions for minimising their tax just because it seemed like a good idea at the time. We didn't say that we should reform dividend imputation refundability which sends tax refund cheques to people who have not paid income tax because it was just a really popular thing to do. We decided to do these things because we believe in making the budget fairer and better. We believe in actually improving the integrity of the tax system and we believe in it for a higher purpose. We believe in it for the purpose of improving our budget over the long term so that future governments have the room to invest and make the necessary decisions.

What does this government believe? They believe in giving away $80 billion over the next decade to Australian big businesses on the condition of absolutely nothing—no conditions, no requirements. No promises are required to be given. There was a little note sent by the BCA to the Senate which said, 'We promise to try to do better.' But they wouldn't promise to pay their tax; they wouldn't promise to employ more Australians. No. So we've actually designed a better policy which provides tax relief up-front for businesses on the condition of investment in Australia—not on the hope and the prayer, not on the plea, not on the vain wish but on the condition. We have a better designed policy which actually produces growth, which actually guarantees growth, whereas they have a wing and a prayer—a wing and a prayer which makes the budget worse, which deteriorates the budget bottom line by $80 billion over the next decade.

Know this: regardless of what the budget numbers are tonight—and we'll know soon enough—they would be $80 billion better if this government had dropped their corporate tax cuts. They would be $80 billion better over the next decade. There would be $80 billion worth of budget repair, some of which could be used to invest in schools, hospitals and TAFE. There would be $80 billion which the Australian people would know was locking in the NDIS and locking in and protecting the pension. Instead, we're giving it away. Why? Because the fire truck has given up. It's because these guys have given up on debt and deficit and budget repair. They just don't care.

We know their track record. In 2015-16, we were forecast to have a $17 billion deficit. It ended up being more than double that, at almost $40 billion. The 2016-17 deficit was forecast to be $10.6 billion. It ended up at $33.2 billion. The 2017-18 deficit was forecast to be $2.8 billion and, at the last budget update, was eight times bigger than they forecast. It was not the Labor Party's forecast but their own forecast they couldn't meet when it comes to the budget deficit.

So the Treasurer will be out there tonight. You might be shocked to learn he'll be puffing himself up a little bit. He'll be huffing and puffing. He'll be saying, 'Be grateful, Australian people: I'm not going to increase your income tax as I told you I would last year,' as if it's great news that he was deciding to increase income tax and now he's not.

He'll also be riding that economic wave, but what he won't be doing is locking in surpluses, which are necessary to ensure the health of the Australian budget going forward. He won't be doing that because, regardless of what else he does, he'll be giving away $80 billion. That's the centrepiece of this budget. The finance minister himself has told us. The most important thing in the budget, he told us, was the $80 billion worth of giveaways for corporate Australia, not the tax cuts for low-income earners, which they've been dragged to do after years of campaigning by this side of the House, when they were going to increase the tax on every Australian earning more than $21,000 just last year. We're not talking about 2013 or 2014. We're not talking about lamented treasurers long departed like Joe Hockey. This Treasurer, last year standing at the dispatch box, said he would increase the tax on working Australians and now has changed his mind.

Let's be very clear: we very much welcome an election based on a contest of budget plans and budget repair, because we'll be going to the Australian people saying, 'We will fix your budget and we will take you to the safety of a better budget surplus, because they will give away $80 billion for no good reason.' We will go to the election saying: 'We will invest in young people, we will invest in schools, we will put TAFE back at the centre of our vocational education and training program and we will invest in skills, but we will do so in a way which is responsible, because we've done the hard work. We've done the work of policy development. We've taken the hard decisions. We'll make the tax system fairer. We'll fix negative gearing. We'll fix capital gains tax. We'll fix dividend imputation while they sit and do nothing and watch that fire get worse on their watch.' This Treasurer will not be able to say that he has taken the Australian budget to a position where it is safe from international downturns. A budget surplus of half a per cent of GDP will be blown over in a short, small breeze. We want to see budget repair which is real and also fair. (Time expired)

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