Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Minister, can you inform the House of the government’s view on reckless spending? What problems with respect to wasteful and inefficient spending does the government intend to address in this budget?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the honourable member for his question. The budget to be delivered tonight has been framed in extremely challenging circumstances. One of those circumstances in particular has been the fact that the government has inherited a rate of government spending growth running between 4½ and five per cent in real terms, which is putting serious upward pressure on inflation and interest rates. The budget we inherited from the former Liberal government was awash with wasteful, inefficient, short-term, vote-buying initiatives. For example, in the last 16 months of the Howard government we had $457 million spent on government advertising—they go a little bit quiet when they hear that statistic, don’t they, Mr Speaker?—$350 million spent in one year on the infamous Work Choices scheme; $417 million spent over a number of years on the now completely discredited Regional Partnerships scheme; Public Service numbers soaring, most particularly a 44 per cent increase in the SES level, the fat cat level; and virtually no serious savings initiatives in any budget since the 2003 budget, so for four budgets in a row.

It is against that backdrop that the government has adopted key targets to deliver a surplus of a least 1½ per cent of GDP, requiring $3 billion to $4 billion in savings and no revenue windfall being used to deliver that outcome. We are pursuing these targets for three key reasons, which were outlined by the Prime Minister earlier: to put downward pressure on inflation and interest rates, to move the focus of the budget from short-term wasteful, vote-buying expenditure to investment for the long-term future of this nation and to protect the living standards of working people, particularly those who are struggling to make ends meet in the face of rising prices on a variety of fronts. I have learnt to expect almost anything in Australian politics but it amazes me that these objectives appear to be highly controversial. The objectives I have just set out—downward pressure on inflation and interest rates by cutting government spending, moving from short-term vote-buying to long-term investment, and protecting the living standards of working people—are apparently controversial.

The Leader of the Opposition has followed in the footsteps of the member for Wentworth by dismissing the inflation problem that this nation faces as a charade. He said before that it was rubbish that we have the highest rate of inflation for 16 years—when that is a simple statistical fact. The Leader of the National Party and his party have refused to disown the infamous Regional Partnerships and other regional rorts programs that were used by the former government for vote buying. The Leader of the National Party seems to think that the biggest issue in Australian politics this year is the defunding of the fishing hall of fame by the Rudd government. That is the big event that has occurred during his time as Leader of the National Party.

No-one from the opposition has disowned the extraordinary expenditure on government advertising over those past 16 months of the Howard government. Some of the opposition also seem to think that working people in this country should be paying taxes to fund welfare for millionaires. Half of the opposition appear to think this and the other half are not quite sure. We are not quite sure which side of the argument the member for Wentworth is on on any particular day. He swaps from one side to the other depending on which day it is.

You can guarantee that, come tonight and come Thursday night, the Leader of the Opposition and the member for Wentworth will be nitpicking about individual savings measures, complaining about specific budget cuts and refusing to acknowledge that there is a need to cut government expenditure. The Leader of the Opposition was very aptly described by a journalist a couple of weeks ago as a ‘piece of emotional blotting paper’—he feels everybody’s pain. Whenever anyone has a complaint about a decision taken by government, you can guarantee the Leader of the Opposition will be there feeling their pain. He feels everybody’s pain. If a little kid falls off his bike and grazes his knee, Brendan will be there feeling his pain.

You have to take tough decisions in government. This budget will involve tough decisions, but it will be a Labor budget. It will be a tough budget, but it will be a fair budget that looks after the living standards of working people. We will be making the decisions that are required in order to put downward pressure on inflation and interest rates and look after the interests of the working people of this nation and invest for the longer term future of this country’s prosperity.