Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

The Treasurer has delivered a budget which he characterised, perhaps ironically, as meeting the highest standards of responsible economic management. But I am afraid that this government does not understand accountability. It has not earned the people’s trust. The Prime Minister uses other ministers to announce bad news or cancellation of projects despite saying repeatedly that the buck stops with him. This is a Prime Minister who is the master of broken election promises, policy backflips and mismanagement.

The CPRS, the greatest moral, economic and social challenge of our time, has been ditched. The school drop-off childcare centres program in schools has been dropped. The pink batts program has been abandoned save for nearly $1 billion to try to repair the botched job already. The so-called Building the Education Revolution program is behind schedule and has blowouts. The computers in schools program is over budget and has under-delivered. In fact, only 220,000 of the promised one million school computers have been delivered. And to pay for all this the much-vaunted Henry tax review took two years, cost $20 million and, of 138 recommendations, 2½ were adopted.

This year’s budget continues this trail of deception. The budget is based on claimed efficiency dividends and stronger growth from tax reform, yet the government refuses to release the detailed modelling on all 138 recommendations in the Henry review. The projected surpluses in the final two years of the forward estimates are wafer thin with a budget of close to $400 billion in 2013-14, relying on surpluses of $1 billion and, the year after, $5 billion. That claim is risky and unreal. These anticipated surpluses are also based on projections rather than forecasts and, I might say, budget forecasts and projections are only as good as the underlying economic assumptions. These assumptions include forecasts and projections of population growth in Australia, economic growth offshore, economic growth in Australia, terms of trade, exchange rates, interest rates, and so on. So these assumptions on the economic parameters, naturally enough, can vary widely from year to year, let alone the government’s claim that you can rely on them in three years time.

For example, last year’s budget forecast the Australian economy would contract by 0.5 per cent in 2009-10. This year’s budget tells us the economy will grow by two per cent. This is a massive turnaround in the space of just 12 months. Last year’s budget said the unemployment rate would peak at 8½ per cent in 2010-11. This year’s budget tells us the unemployment rate has already peaked at less than six per cent and is now heading to a low of 4.75 per cent in 2011-12.

I want to stress that I am not criticising the public servants in Treasury who prepare these forecasts. Forecasting is as much an art as it is a science. It is a difficult task and the degree of uncertainty has been much increased over recent years. But these very significant changes to the underlying forecasts do illustrate that there is a large degree of imprecision in the budget numbers. This makes it even more ridiculous that the government should claim kudos from its projected tiny surpluses in the last two years of the forward estimates.

These tiny suggested surpluses are based on five key assumptions. First, economic growth in Australia will need to remain at around trend levels—three to 3½ per cent. Second, the global economy will also need to grow at or above trend. Third, prices for key Australian commodities will need to remain high. Fourth—and this is the most heroic assumption of all, Mr Speaker; you would appreciate this—Labor will need to not have any further cost blow-outs in its programs. And, fifth, Labor will need to commit to making no new unfunded spending promises for the next four years through two elections. Mr Speaker, I cannot make assumptions about what the chair might think about those things, but I am sure that any person with an ounce of savvy would know that it is heroic to assume that a government will make no new spending announcements for one year, let alone four years, which is the key assumption in the government having a surplus in three years time.

The deficit this year of $57.1 billion will still be the biggest deficit in Australia’s peacetime history. Next year, 2010-11, it will be the second biggest at a massive $40 billion. And there will still be a peak net debt of around the same size as that which was left to Australians by Paul Keating. There is something about the $90 billion mark that Labor is attracted to. Keating left a $90 billion debt for us to pay off; Mr Rudd, the Prime Minister, is leaving a $90 billion debt for the coalition to pay off; even Anna Bligh in Queensland has a $90 billion debt that someone is going to have to pay off.

The improvement to the budget bottom line which the budget reflects is entirely due to parameter changes: stronger economic growth in Australia, above-trend growth offshore and the terms of trade being at 60-year highs. It does not rely on responsible economic management; it is not the result of hard decisions to cut reckless and wasteful government spending. Last year, the Treasurer justified his big spending budget on the grounds that it was necessary to prevent a recession in the Australian economy—so he delivered the biggest spending budget in Australia’s peacetime history. This year he notes that the budget has moved from supporting the economy to a position now where Australia is recovering strongly. In that light, we might have expected a budget with much lower spending to suit the times. But what we find is an increase in spending from 2010-2011 to 2012-13, compared with last year’s budget, totalling $26 billion. So last year was the biggest spending budget in modern history, but, as if Labor had not done what it could do at that time, this year it has an extra $26 billion of spending in a similar framework.

Even then, the Treasurer has pulled some accounting tricks to improve his financial ratios. Cancellation of the CPRS is worth, roughly, a one per cent reduction in the ratio of spending to GDP in 2013-14 and somewhat lesser amounts in earlier years. This is a significant issue. There is this mantra that the Labor Party run out before each budget where they refer to ‘the big-spending Howard years’. The big-spending Howard years to 2007 amounted to 23 per cent of GDP. At no time do Labor get as low as 23 per cent of GDP. Most certainly, in their most ambitious year, which is four years hence, they do not get to 23 per cent of GDP. If the CPRS were in, it would be nearly one per cent more than what they are already projecting.

It is also the case—and this is a telling point that was picked up by Ross Gittins—that $1.8 billion of spending in infrastructure, water and local government has been brought forward to 2009-10 from 2010-11 and later years to ensure that the forward estimates look better. Even more curious, and we are yet to get to the bottom of this, is that there is a revenue item called ‘growth dividend’ totalling $600 million over the final two years of the forward estimates. This is the additional tax expected to flow from the stronger economic growth arising from the implementation of tax reforms associated with the resources tax. It is fortunate that this notional revenue occurs in the two years when the government is expecting to record very small surpluses. This is part of the government’s claim, I assume, that the more you tax an industry the greater it will grow—and, of course, they are banking the proceeds of that, which we will see over the next few weeks.

The Treasurer claims that every dollar in new policy has been offset across the forward estimates. Let’s have a look at that. Policy decisions since the 2009-10 budget have increased net spending by $5.9 billion. That figure includes new spending measures, new taxes and savings initiatives. So all the new taxes have been spent, all the savings initiatives have been spent and, on top of that, an additional $5.9 billion has been spent for good measure. I emphasise that not a cent of the new taxes has been saved to reduce the deficit—not a cent.

This government have a history of wasteful spending and have, true to form, continued it in this budget. The government have allocated another $536 million for new health bureaucracies as part of their health reform program. That happened after the Prime Minister promised the Australian people that, as a result of his new hospital and health reform program, there would not be any new bureaucrats. For example—bureaucrats are part of the theme—an additional $12 million has been provided to the Prime Minister’s own department, adding an extra 86 full-time staff to the 618 already there. That represents a 14 per cent increase in the staffing levels in his own department.

After all that, it is good to see that the Labor Party continue to look after their mates. A one-off grant of $10 million has been provided to the Trade Union Education Foundation for ‘the development and delivery of national workplace education programs’. I can only speculate on what those programs are. It is just a lazy $10 million! It is interesting that they have brought it forward to this financial year. So the cheque is in the mail; it has to be in the mail before 30 June.

The government has sold this budget as being friendly to small business, but nothing could be further from the truth. The single biggest difficulty for small business at present is the availability and cost of finance. This is hampering the ability of small businesses to invest and grow their businesses and provide jobs. One of the key steps government can take to help small business is to prevent its competing for the scarce capital that is out there, but this government will continue to soak up scarce capital for the next two years with cumulative borrowings of $54 billion. This will deprive small businesses of scarce funds. It will force up the cost of finance.

The government are now borrowing $100 million a day just to fund their expenditure, not to repay debt. That does not pay off debt; they are borrowing $100 million a day just to fund the spending of this year, next year and the year after. What an extraordinary amount of money. As part of this process, the government want to impose a huge new tax on business by increasing the superannuation guarantee from nine per cent to 12 per cent. The question is: will this be paid by business?

It is interesting that the Minister for Finance and Deregulation should bell the cat earlier this year—despite what Tony Jones suggested on Q&Aby alluding to the fact that an increase in the superannuation guarantee would in fact come out of the take-home salaries of workers. This nine to 12 per cent is either coming out of the bottom lines of businesses, which inevitably means that they going to employ fewer people, or quite simply coming out of the take-home pay of workers. It is one or the other, but what you do know is that it is not coming out of the budget bottom line.

The government say: ‘In order to compensate business for this, we’re going to cut company tax, particularly for small business; we will bring it forward and cut it from 30 per cent to 28 per cent.’ They say, ‘This is a great windfall for small business.’ The problem is that only one-third of small businesses in Australia are incorporated. Therefore the company tax cut means very little to a lot of small businesses, and I am prepared to bet that for most small businesses an increase in the cost of the superannuation guarantee from nine per cent to 12 per cent is going to far outweigh any benefit that might come in the form of a reduction in company taxes.

This budget will continue to provide fiscal stimulus to the domestic economy at a time when the government says it is no longer needed. The government’s own forecasts have the Australian economy at or above trend growth for the next four years. The Treasurer has suggested that the government no longer need to provide fiscal stimulus, yet it is the case that in 2012 the government are going to be spending half a billion dollars on school halls to address one quarter of negative growth in 2008. So they are saying, ‘The economy is growing at trend or above, but we’ll still be spending money on school halls in two years time to keep the economy going.’ It is stimulatory, and with that sort of stimulation still out there in the economy the government will continue to run deficits and the deficits will impact on interest rates. The deficits will push interest rates higher than they should be.

The Reserve Bank has now a lifted the cash rate six times in eight months, with a cumulative increase of 1.5 per cent. But the gap between what homeowners and small business pay and the cash rate of the Reserve Bank has grown, and the net impact is that the increases by the Reserve Bank have had a more profound impact than just the increases in themselves. The interest bill on an average mortgage of $300,000 has risen by least 4½ thousand dollars a year. So let’s be very clear: the more the government borrows, the more upward pressure is on interest rates; the more the government goes down the path of spending money that it has not received and needs to borrow, the greater the upward pressure on interest rates.

Around the world we are seeing what happens when government finances are unsustainable. Greece is struggling to finance its ongoing deficits in the market. This has prompted a trillion-dollar rescue package by the European Union and the IMF. Sovereign risk is now a very real fear in the financial markets. Debt levels in Japan, Europe, the UK and the USA are at the point where the governments will be struggling to stabilise and service their debts, let alone make any progress at all in repaying them. IMF data shows that six of the G7 nations will have gross debt-to-GDP ratios of 90 per cent or more by 2014.

I wish to stress that Australia is not in this position. It is not an accident, but it has occurred despite the best endeavours of the Labor Party. They actually did inherit a $20 billion surplus, $60 billion in the Future Fund and an economy with just four per cent unemployment. But what they have to understand is that you can ruin the opportunity, and preserving the faith and trust of the markets and communities requires ongoing strong and prudent management of the budget and the economy. The economic and fiscal forecasts of government have to be credible. The actions of government have to provide a stable and predictable investment environment.

This illustrates why the coalition has decided to take a stand. We believe in responsible fiscal management. Dare I say it, we are fiscal conservatives and not pretend fiscal conservatives. Last week I released the principles which will guide the coalition in setting and implementing its policies for underwriting the future prosperity of this great nation. At the core of that is a belief in free, fair and competitive markets. It is also the case that the rights and choices of individuals are paramount. Well-functioning markets and individuals rather than governments are usually best placed to make decisions that maximise community wellbeing. We believe in small government. That is why we made the hard decisions about the $47 billion of gross savings. We believe in efficient government; that is why we went program by program through the savings measures that we are going to implement. And we are most acutely aware that the money being spent by government is in fact other people’s money. That is why whatever we can do to improve the strength of the Australian economy is going to be enhanced by collecting less tax, not more.

Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

We have just heard from the shadow Treasurer of Australia complete confirmation of the risk that would be posed to Australia if the shadow Treasurer or his leader were to get anywhere near the government of this country. They are a risk to jobs; they are a risk to working families; they are a risk to the infrastructure of this country; they are a risk to skills. Everything we have seen from the opposition since the budget was delivered in this House some two weeks ago has confirmed just what a risk to the people of Australia is posed by those presently occupying the opposition benches.

By contrast, through this budget the government has delivered and will continue to deliver responsible economic management. We have presented a credible pathway back to surplus in three years, and that time frame is half the time that it was expected to take when Australia first responded to the global economic crisis. This budget delivers tax cuts for working families and for small businesses. In addition, we are investing $23 billion over the next decade in a national health and hospitals network; we are investing in major national infrastructure to boost productivity and create jobs; we are investing in skills and training.

The first aim of this government was to keep our economy strong and to protect Australian jobs and Australian businesses through the worst crisis that the global economy has faced in almost 80 years. When faced with this crisis the government understood that to contain the damage and to protect Australian jobs and businesses from the meltdown in global financial markets we had to maintain confidence in our financial system, encourage households to maintain consumption and provide businesses with the certainty and confidence to continue investing. Because of the early and decisive action taken by the government, Australia has managed to avoid a recession through what was feared to be and what now clearly has been the worst global downturn in more than 75 years. Australia’s economy is the only advanced economy that expanded in the year to June 2009, the worst period of this crisis, and, according to the International Monetary Fund’s World economic outlook update, Australia’s economic growth was positive and Australia was the only advanced economy to achieve this.

In the 2009-10 budget economic growth was forecast to be negative 0.5 per cent; the estimate in this year’s budget is that it will have been two per cent. The budget forecast for 2010-11 has improved from 2.25 per cent to 3.25 per cent. No major Australian financial institution has collapsed, none required the government to take significant shareholdings in return for dealing with toxic debt and no financial institutions were nationalised. This can be contrasted with the situation in the United Kingdom, where the government has nationalised Northern Rock and taken significant shareholdings in Lloyds and the Royal Bank of Scotland. Most importantly, the government’s response to the global economic crisis has helped protect hundreds of thousands of Australian jobs. Unemployment peaked at 5.8 per cent last year, 2.5 per cent lower than it was estimated to peak at and certainly considerably lower than would have occurred without the stimulus.

It is quite clear that the government’s response has been the correct response. That has been the opinion expressed around the world. It has been the opinion expressed by the International Monetary Fund, by the OECD, by the World Bank, by governments of other countries and by finance ministers and prime ministers in the G20, all of whom have complimented the Rudd Labor government for the decisive and prompt action that was taken at the peak of the global crisis and that has ensured the financial and fiscal security that Australia is now enjoying. It needs to be borne in mind, when we listen to the muddled response—yet another muddled response—from the shadow Treasurer that the coalition, the Liberal Party and the National Party opposed economic stimulus. They would have adopted policies, had they still been in government in September, October and November 2008, which would have ensured that hundreds of thousands of Australians would now be out of work.

I would invite any member of the Liberal Party or the National Party, and in particular the Leader of the Opposition, to visit and talk to those workers who are working on Building the Education Revolution school projects throughout my electorate about how they feel the government’s programs have assisted the Australian economy and, in particular, assisted them to stay in work during this global economic downturn. Were they to do so, they would learn that it is the opinion of people, certainly throughout the construction industry, that the response of the national government, the Rudd Labor government, has been extraordinarily prompt and entirely appropriate because it has kept them in work—and that is before one even goes to the immense value that has been given to our local communities by the building of the new facilities in each and every primary school through the Building the Education Revolution program. I would also invite those opposite to visit my electorate to speak to retailers or people in the manufacturing industry, all of whom very directly attribute the continued health of their businesses and the continuation in many cases of their employment to the programs that have been adopted by our government.

With this budget, we have presented a credible pathway back to surplus. It is a pathway that will return the budget to surplus in three years. That is half the amount of time that was forecast in last year’s budget. Net debt is predicted to peak at just 6.1 per cent of GDP, which is half the level projected a year ago and less than one-tenth of the average across the major advanced economies. One thing that I noticed in the shadow Treasurer’s speech that we just heard is that at least he had the good grace to acknowledge that the average debt-to-GDP ratio in the Western economies is in the order of 90 to 100 per cent, and he acknowledged that the net debt we are going to peak at is nothing like that, but he did not go far enough. Of course he does not want to state the number, which is 6.1 per cent of GDP, because to state the number in the same context as saying that the average net debt in Western economies is 90 to 100 per cent of GDP is to show just how absurd it is for those opposite to be, even by implication, comparing the position of the Australian economy or comparing the policies adopted by the Rudd Labor government to any of the positions that those Western economies, particularly the European economies such as Spain and Portugal or the United Kingdom.

There is still a level of uncertainty faced in global financial markets. It is being highlighted right at this time by the difficulties that are being faced in Greece. Indeed, one could also point to Spain and Portugal, or indeed, by way of comparison, point not just to the net debt levels but also to the unemployment levels that have been reached in those Western economies and which are still regrettably being suffered in the United Kingdom or the United States. That puts in proper global context the success of the policies adopted by the Rudd Labor government.

This budget delivers tax cuts to working families. It delivers tax cuts to small business. And, even during this period of fiscal consolidation, there will be modest income tax cuts that will see taxpayers on average earnings keep $450 a year more. From 2011, we will provide a 50 per cent tax break for the first $1,000 of interest on savings. As I went around my electorate last week explaining the budget to different people, I went to Richfield retirement village in Aspendale Gardens. The news that there is to be a 50 per cent tax break on the first $1,000 interest on savings is particularly gratifying to people who use savings accounts as one very secure form of investment.

We will introduce simplified tax returns from 1 July 2012. The government will provide an optional standard deduction of $500 instead of having taxpayers list work related expenses individually, and it is a deduction that is going to increase to $1,000 from 1 July 2013. Every one of Australia’s small businesses will get a tax break under the Rudd government through this budget. Sole traders, partnerships and incorporated small businesses will be able to immediately deduct the cost of assets valued at up to $5,000, and those 2.4 million small businesses will also be able to pool assets costing more than $5,000, except buildings, and write them off at a single rate of 30 per cent a year. And for the 720,000 small-business companies there will be a head-start reduction in the company tax rate from 30 per cent to 28 per cent from 1 July 2012.

This budget also delivers a long hoped for increase in the superannuation guarantee, which will rise gradually over the next decade from nine per cent to 12 per cent, and this is another measure that is opposed by those opposite. This is an enormously important policy in guaranteeing the future incomes of working Australians and helps to prepare our nation and our national finances for the demographic shift that is already taking place.

The budget is filled with new investments, most notably the investment in the Health and Hospitals Network which is announced in this budget. The budget includes significant reforms to the health and hospitals system, which will be funded nationally and run locally. There is a total of $7.3 billion over five years for better hospitals, improved primary care and preventive health. It is a budget that allows access to more doctors, to an unprecedented level of support and training for our nurses, which is why nurses across Australia have welcomed the measures in this budget, and the introduction of personally controlled electronic health records for every Australian. And there is another measure, because one only has to go through the budget to find such measures, which the opposition opposes and would cut. The only intelligible response that one can glean from the muddled response of the opposition has been a list of worthwhile, valuable programs that the opposition says it would scrap—not, mind you, that the opposition is prepared to tie itself to any binding list of cuts, because while they say they wish to cut, for example, the introduction of personally controlled electronic health records of every Australian, they reserve to themselves the right to introduce new programs which might cost more, possibly even in the same area if one is to correctly understand the shadow finance minister, the member for Goldstein. So it is very difficult to work out just what it is the opposition has said in relation to this budget.

The budget contains very extensive measures in relation to infrastructure and in relation to skills and trade. Perhaps it is worth mentioning the record $37 billion investment in improving road, rail and port projects across Australia, all of which will boost national productivity and create jobs. The ongoing infrastructure fund of $5.6 billion will extend over a decade and is in response to the independent tax review—the Henry review. There will be annual contributions starting at $700 million from 2012-2013 to ensure that our nation-building project flourishes. There is funding for the Australian Rail Track Corporation and appropriate provision in the budget for the rollout of the National Broadband Network, another measure that this opposition of wreckers would scrap without indicating to the people of Australia in any way how it plans to take Australia further into the 21st century and further into the Information Age. There is something a bit striking about an opposition that wants to scrap not only a measure for personalised electronic health records but also the measures that the government is planning for a National Broadband Network.

The contrast with the opposition could not be greater. We have a budget that is responsible and that will return to surplus some three years earlier than planned. We have a budget that has appropriate measures for the economic circumstances in which Australia finds itself following on prompt and decisive action that has taken Australia to an economic position that is the envy of the developed world. We can be clear that the greatest risks to Australia’s economic security and the job security of thousands of Australian workers are the present opposition leader, the member for North Sydney—the shadow Treasurer—and the member for Goldstein. Everything about their response to this budget on behalf of the opposition has demonstrated that they cannot be trusted with the task of managing the Australian economy.

I do not think that the expectations of the community were very high to start off with, given the way in which the shadow Treasurer last year responded to the budget, which was to suggest that the forecasts and projections on which it was based were ‘grossly overoptimistic’—that is what he said. That, of course, proved to be wrong. He now wants to say about this budget that the estimates are wrong again, but I think the Australian people can judge who should best be trusted on matters like this. I would be far readier to trust forecasts that have been adopted by this government based on the steady work of the Treasury than to listen to a shadow Treasurer who said last year that the predictions of the Treasury were grossly optimistic.

There is no credibility left in this opposition on economic matters. The response last year, which criticised the forecasts, was that the opposition would stop the stimulus. That has been bettered—they have reached a new low for an opposition—with the shambolic response to the budget, with half-baked ideas and the handballed response that we saw last week. We saw in the budget reply by the Leader of the Opposition not, as one might have expected, a plan for the economy of Australia or a plan for the future of our nation with some clear responses to the measures in the budget and not, given that the opposition is very directly saying that it wishes to cut, any indication of what is to be cut or which programs are to be scrapped but, rather, the handball approach: saying that the shadow Treasurer would respond at the Press Club the following week—last Wednesday.

Then we had the response from the shadow Treasurer at the Press Club, which—as has been much commented on in the days since—did not include the list of cuts which were relied on by the opposition in its response. Instead, there was a further handball to the shadow finance minister at a press conference which was to follow. When finally it was possible to see the supposed savings which the shadow Treasurer has again referred to—at least he is now not referring to them simply as savings but trying to pretend to some accuracy in saying that it is $47 billion of gross savings—it was apparent that the ‘budget’—if one could call it that; perhaps it is better to leave it at ‘budget response’—just does not add up. The coalition’s proposed budget cuts do not add up. The $47 billion in cuts, which is what the opposition wanted to get its headline for—and did get it for—turns out to be a mishmash of cuts to capital expenditure combined with cuts to the current account or cuts to particular expenditures. It was really an attempt to mislead the Australian public with a larger headline figure. Most of the measures that have been identified by the opposition will not have any impact on the underlying balance. They are a threat to future economic growth, they are a threat to Australian families and they are a threat to the economy, and the Australian people will be able to see, from the shambolic response of the opposition to our budget measures, just what a risk would be posed if those opposite were to reach the government benches. (Time expired)

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Today, in this debate on Appropriation Bill (No. 1) 2010-2011 and cognate budget appropriation bills, Appropriation Bill (No. 2) 2010-2011 and Appropriation (Parliamentary Departments) Bill (No. 1) 2010-2011, I want to talk about the third Swan budget—the budget for the 2010-11 financial year. I make that seemingly obvious point because, to date, the vast amount of commentary out of the Labor Party about this budget has been about what it thinks the budget will be in 2012-13. The government’s spin has all been about the possibility of a surplus two years hence rather than the outcome of this budget, which will of course be the second highest peacetime deficit this nation has ever seen, at $40.8 billion. That deficit will come straight after the highest peacetime deficit we have ever seen, $57.1 billion, which is expected this financial year. That will follow a deficit in the first Swan budget double any number our country has previously seen.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The Leader of the Nationals is aware he should use people’s appropriate titles.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Given that none of the major forecasts from any of the first two of this Treasurer’s budgets has turned out to be correct, it is a very brave Australian who would bet on Labor expectations about his third budget. Who would believe that they are likely to be accurate? Heaven forbid he gets a fifth attempt at putting down a budget! For example, in his first budget, we were told Labor would run a $21.7 billion surplus, not due to any hard work by the Rudd government; that surplus was built on the back of the coalition’s strong economic management. Just 12 months later, in May last year, the Treasurer had cocked up things so badly that the surplus had turned into a severe deficit. Not that you would know—in his budget speech the cowardly Treasurer refused to even use the words ‘debt’ or ‘deficit’. Indeed, it took a week to get the Prime Minister or the Treasurer to use the words ‘debt’, ‘315’ and ‘dollars’ in the same sentence.

The same trick was used for budget speech No. 3. Rather than hearing about the $40.8 billion deficit, we heard promises of the budget returning to surplus three years early. Earlier than what, and on whose calculations? On, of course, the Labor Party’s calculations—on last year’s forecasts, which all turned out to be embarrassingly wrong. Why should you believe them this time—particularly when you look at the parameters of these forecasts? They rely on the best terms of trade that Australia has experienced for 60 years. The next three years are going to be better than our country has experienced for 60 years—once more, there is going to be above-trend growth offshore and low inflation in Australia! The reality is that this budget is a giant pea and thimble trick and the people being gulled are the Australian taxpayers.

The entire credibility of the Treasurer’s third budget hangs on numbers which, conveniently for the government, will not become clear or tested until after the next election. Those numbers rely on the national economy, and indeed the international economy, following a linear path. In just a fortnight since the Treasurer handed down his budget, share markets have fallen heavily and the Australian dollar has plummeted by more than 10 per cent against the US dollar. That is because of the government’s proposed great big new tax on the mining sector. Mining shares in particular have been pummelled by fear over Labor’s proposed profits tax on resources. The Australian share market fell $95 billion last week. In the first week, something like $15 billion was wiped off the savings of Australian superannuation funds and mum-and-dad Australians. And yet these are the parameters upon which the government are now asking us to believe that they could return the budget to surplus in three years time.

As a regional Australian, I guess I am used to being at the mercy of changing economic fortunes. For the seven million Australians who create much of our exports and our resulting prosperity, the ups and downs of the economy are very much a part of life. When the city feels higher interest rates, the country feels them much more. When jobs go, they often come from the regions first. Drought and natural disasters hit us harder too. The approach of the Nationals in coalition has always been to try and make life easier for those living in regional Australia—to reward them for their hard work and to give them a helping hand when times are tough—and to make sure that all Australians are able to share in our nation’s growth and prosperity. The federal budget has historically been a large part of that approach, but regional Australia have just seen the sort of budget that fails that very important test. The Treasurer used the word ‘regional’ only once in his budget-night address, and the word ‘agriculture’ did not appear at all. That says something about Labor’s priorities.

The massive debt, nearing $100 billion—and above $220 billion on gross levels—will overhang us all for years to come. The interest bill alone will rise from $4.6 billion this year, through $6.5 billion the following year, to $8 billion. That is enough to complete the Pacific Highway in one year. It is enough to build the hospitals we need. It is enough to build the inland rail twice every year. We will not have the money we want to spend on hospitals, roads and infrastructure because future generations will be paying off this Labor government’s debt—just as 12 years ago, when the coalition came to office, it had to spend the first half of its time, or probably more, paying off the debt of the previous Labor government.

This debt will have a significant impact on all Australians. The government will be out there borrowing $100 million every day to pay for the reckless spending that is being authorised in this budget—$100 million a day. The government will be out there competing with homeowners wanting to borrow for their first home and small business people who need some assistance to carry on their businesses. They will have to compete with a government that is out in the market for $100 million every day to pay for the expenditure in a budget which is clearly out of control.

The Treasurer’s third budget increased taxes and charges by $26 billion. But what is at the centrepiece of this budget? Why do we need to spend another $26 billion? The first part of the centrepiece of this budget is to spend $1 billion to undo Labor’s roof insulation debacle. There is another billion to manage the asylum seekers, who are coming into Australia as a result of Labor’s weakened border protection. There is another billion dollars on the school computer cost overruns. There is another $530 million in extra spending to build a new health bureaucracy, after the federal government backed down to the states on hospital reform and in reality decided to build a bureaucracy rather than to provide better services to the people of Australia. And, of course, there is additional expenditure in a whole range of other areas to patch up the broken promises, to patch up the failed programs of the government.

The budget provides no new money for road funding or regional development. Local government will actually get $1.21 billion less in 2010-11 because of the clawback of an advance payment and the termination of the Community Infrastructure Program. The clawback of the advance payment is because the government is trying to doctor the books to make it look as though they are actually moving towards a surplus when in fact all they have done is transferred expenditure from one year to another.

The budget cuts another $81 million from Caring for Our Country, including $10.9 million from Landcare, as Labor continues its assault on this iconic community based program. In every budget Labor has cut expenditure on Landcare. A party that claims it is interested in the environment, on coming to office abolished the National Heritage Trust and the National Action Plan for Salinity and Water Quality and replaced them with Caring for our Country, but provided $1 billion less in funding. And it continues to take funding away from vital environmental programs.

The regional food producers program is being cut by $5.5 million. Once again, there is no new funding for quarantine—and 250 Customs staff are to be sacked. This is another example of Labor’s soft borders approach, which places the clean and green, disease-free status of our country at risk. Not only is Labor soft on our borders when it comes to defence and immigration; it is also soft on quarantine and soft on Customs.

The budget provides no new funding for the Export Market Development Grants scheme, leaving the fund at least $30 million short in 2009-10 and $80 million short in 2010-11. Once more, the government has halved the funding for TradeStart, the network of offices which are there to assist particularly new exporters to get established in difficult export markets. The government has decided that, in spite of its mounting trade deficit, we no longer need to support our exports, so the assistance they have been relying upon to open up new markets and to get some advice locally has been viciously slashed in this budget.

But, of course, that is not the end of it. The government has decided to spend another $10 billion on the bureaucracy. The Prime Minister’s own department is going to be increased by 32 per cent. But there is a 20 per cent increase in staff for the Australian Public Service Commission to assist agencies with downsizing. So the Public Service Commission needs more staff to tell other offices how to get smaller! In reality, the size of the bureaucracy is growing anyway. The facts are that this is a government that has no control over its expenditure and has been unable to deliver programs on time and within budget.

One of the other astonishing moments in the delivery of the budget was the realisation that the Treasurer had slapped a $1 billion new tax on LPG, hitting something like half a million motorists who have converted their vehicles to LPG. We discovered this fact on the night the budget was delivered, but it seems as though it was not until a day later that the Treasurer knew that he had actually imposed this new tax and was able to confirm to the LPG industry that they would now be a part of the excise regime. So the Treasurer comes into this place, delivers a budget but does not even know what is in the documents himself!

The big, other issue that overhangs this budget is the great big new tax on mining profits. Only a little while ago the government put on the couch in the back room its great big new tax—the Carbon Pollution Reduction Scheme. That was a tax that would have destroyed Australian jobs, encouraged industry to locate offshore and increased the cost of living for all Australians. Now that scheme is dozing, Labor has invented another great big new tax on Australians. This is a tax that will also destroy Australian jobs, encourage industry to invest offshore and increase the cost of living for every Australian. This 40 per cent tax on mining profits will force the tax rate for the sector up to 57 per cent—yet the government claims that this big new super tax will actually increase investment in the mining sector! I have never heard of a tax yet that actually increased investment. The government is in fact putting a significant tax on cigarettes in this budget. They claim the reason for that is to reduce smoking. But when they put an increased tax on the mining sector, that is supposed to make them bigger and stronger. That is clearly a nonsense. It is all about Labor’s approach: spend big and tax even bigger. That is not a satisfactory way to run a country.

The government’s proposed mining tax is not fair. It not only penalises great big mining companies, as the government would lead you to believe, but small, battling mining operations as well. It is not a tax on super profits; it cuts in at the bond rate, five or six per cent—just over breakeven—and the government thinks that is a ‘super’ profit. It is a super tax, but not just on super profits. The reality is that it affects not just big mine operators but small operators as well. And, of course it affects the quarrying industry—the industry that delivers the gravel for your roads, the stones for the landscaping in your front yard, the clay for the bricks in your house. All of these operations are to be caught up in Labor’s great big new tax on the mining sector. They are also proposing, we are told, to justify this tax on the grounds that it will fund a $700 million Infrastructure Fund. That says a lot about the Labor government, which has actually drained dry the Infrastructure Fund that was left to them by the previous government. There is only $700 million left out of the $11 billion that was in place and heading to $40 billion. Labor did not just spend the interest, as was intended for those funds; it actually spent all the capital. So it spent all that money, with little to show for it, and now it wants a $700 million new Infrastructure Fund.

This is a tax on the mining sector. We are told the mining sector needs to deliver more to regional communities, but there is no commitment by the government that this $700 million will be spent in regional communities. There is no guarantee that any of it will go back to the communities that are directly affected by mining. It looks to me like yet another great big Labor slush fund that is likely to appear in marginal electorate promise sheets and that the funding will in fact be directed away from mining communities—the country towns and regional communities that are contributing to our nation’s growth and prosperity through the mining and the resource boom—and spent in capital city electorates where Labor is hanging on to a narrow margin. This is not an infrastructure fund at all. It is a Labor Party election slush fund, and you can count on it appearing regularly during the run-up to the election as Labor tries to hand out goodies to save its bacon in areas where it has clearly neglected the people. The Labor approach is to milk the cash cow until it is dry or burden the cow’s owner so much that he ships his cow overseas to a greener pasture, and it is only the Australian Labor Party that cannot see the folly of this policy.

Relative mining minor minnows like Papua New Guinea, Zambia and Mongolia have seen the error of their ways and dumped similar mining taxes. The Zambian tax lasted all of a year before President Rupiah Banda consigned it to history. He was blunt last year about the effect that the tax had upon his country: ‘We must ensure that we do not kill the goose that lays the golden egg. There is little point in taking a few million in tax if thousands of jobs are lost.’ What is obvious to the Zambian President is apparently not obvious to our Treasurer and the Labor government—or does the government think that the tax is going to work differently in Australia from how it worked in New Guinea, Zambia or Mongolia? Does the government still hold onto this quite ridiculous notion that somehow or other higher taxes mean more investment and a more prosperous country? The reality is that countries like the United States, Canada, Brazil and China are all looking forward to this tax because they know that it will result in industries being transferred to their country, to jobs being created there. Countries that have much lower tax regimes than Australia are certain to be the big winners from this foolishness on the Labor Party’s side.

In government, let me make it clear, we will be adopting a different approach. We will rein in Labor’s reckless spending, getting Australia back into surplus far quicker than Labor ever could. There is a question of trust and form. We have the form. We paid back Labor’s debt of $96 billion left to us in 1996. Labor has form too. It has never got out of debt once it started down that track—never in history. It took the Hawke-Keating governments just 13 years to rack up a $96 billion debt. It has taken the Rudd-Swan government just three years—three years for the same amount of debt. Under the coalition’s approach, we will take pressure off increased interest rates and the cost of living with savings of $46.7 billion that have already been identified. That is made up of $24.7 billion from recurrent spending and $22 billion in one-off capital savings. Our plan is there. It is in print and it is costed. In contrast, Labor in opposition could announce only $3 billion worth of savings ahead of the 2007 election, and then another $7 billion on the eve of election day.

A predecessor of the Treasurer once boasted the title ‘The world’s best Treasurer’—the unlamented Paul Keating. This current Treasurer, Wayne Swan, is the world’s worst Treasurer. He has been able to turn a record surplus into a record deficit in just a few months. He has been able to chalk up unprecedented debt at unprecedented speed, and he has been able to turn a prosperous country that pays its own way into a debtor nation that will be mortgaging the future of generations. That is his legacy. That is the legacy of this budget. He cannot be trusted with another one.

Ms Catherine King (Ballarat, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support Appropriation Bill (No. 1) 2010-2011 and cognate budget appropriation bills, Appropriation Bill (No. 2) 2010-2011 and Appropriation (Parliamentary Departments) Bill (No. 1) 2010-2011. I cannot help but comment on the contribution of the previous speaker, the member for Wide Bay, in this place. I find it passing strange that the member for Wide Bay, in his speech, decided to criticise the government for not continuing with the Regional and Local Community Infrastructure Program, which was a one-off fund as part of the economic stimulus package which has put $1 billion into the hands of local government but which has now got even more money out of it as a result of the spend they have done on local communities. You cannot, on the one hand, claim that somehow that is a cut in the budget because a project fund that was about to finish has finished and, on the other, I remind the member for Wide Bay, vote against it. There would not have been any fund in existence at all had you been in government. It is a ridiculous proposition. It is also great to see the member for Wide Bay, once again, standing up for the powerful vested interests in the mining industry over those of ordinary working Australians.

I support these bills because they represent a responsible budget that strengthens our economy. It is important for us to consider this budget in the context of previous budgets. Back in May 2007, I stood up in this House and debated the Howard government’s 2007-08 budget bills. The greatest failing of that final budget of the Howard government was that it did not address capacity constraints in the Australian economy. It failed to invest in infrastructure, skills, education and health. It failed, across the board, to lay down the foundation of a nation’s future economic growth. The Howard government was happy to ride on the tails of the mining boom, but it was not happy to do the hard yards that were needed to invest in our economy’s future. For too long, the Howard government instead used budgets to buy individual votes to win elections for short-term gain and, although this proved successful for a long period of time for Howard and to some extent for the now Leader of the Opposition, Tony Abbott, it did not prove successful for the future growth of the Australian economy and ultimately for the future prospects of the Australian people.

On coming to office, the Prime Minister and members of the Rudd government made a conscious decision to set up our nation for the future. We said to the Australian people that we wanted to work to invest in the longer term—not just the current election cycle but five, 10 or 20 years ahead. We spoke of the need for investment in infrastructure, skills, training and education. We committed to stop the buck-passing in health by reforming our nation’s health system.

In February 2009 I spoke in parliament in the face of a global financial crisis that was set to wreak havoc on local communities, local economies and economies across the globe. I find it extraordinary when, in talking and debating about the budget, members of the opposition seem to think that the global financial crisis just did not happen or that somehow, as a result of some strange fluke of fate, Australia has managed to survive the worst excesses of the global crisis and that that somehow has happened completely by accident.

The Rudd government and the Australian people were faced with tackling this global financial crisis head-on, and members of this side of the House acted decisively. At that point in time we had a choice: to deliver strong, unprecedented action to combat the nation’s worst global financial crisis in 70 years or not to act and to let the market pave the way. Let me make this point very clear: those members opposite did not want to act. They opposed our economic stimulus.

Members on our side decided to act by implementing a measured and well-targeted stimulus package. Instead of looking at the global financial crisis as an absolute negative, the Rudd government used it as a tool to invest in the long-term sustainability of our nation. We used it, on the one hand, to stimulate the economy by supporting jobs and, on the other hand, to invest in areas that the former Howard government had forgotten—areas like infrastructure, housing, education, road and rail and local community infrastructure. The result is that Australia has outperformed other advanced economies. While advanced economies collectively contracted by 3.2 per cent, the Australian economy grew by 1.4 per cent. While advanced economies were faced with rapid job losses, 225,000 Australian people found work. Without our stimulus, the Australian economy would have fallen into recession, with tens of thousands of jobs lost. Our national unemployment rate is the second lowest in comparison to other advanced economies. The results speak for themselves. These results reflect the hard work of the Australian people, the resilience of the Australian economy and the decisive action the government took in implementing its economic stimulus package. These results did not occur by accident.

The Liberals’ do-nothing approach would have been a disaster for this country. The Leader of the Opposition is quick to attempt to make light of our economic situation. At the time of the implementation of our stimulus measures, the coalition unleashed another of their scare campaigns. They failed to recognise that a global financial crisis was apparent, they failed to recognise the fall in tax receipts and its impact on the budget bottom line and they failed to support our direct action through stimulus measures. Without the stimulus, we would have lost thousands of jobs in this country. Without stimulus, we would have seen a contraction in our economy last year of 0.7 per cent, compared to the actual growth of 1.4 per cent. They are the facts. This message seems to fall on deaf ears with those opposite, who claim to be the extraordinary economic managers of our time. It falls on deaf ears because those opposite do not want to hear our nation’s good news story when it comes to how we have survived the global financial crisis.

The Rudd government has a proud story to tell when it comes to economic management. The 2010-11 budget continues this proud story. The budget reflects the success of our policy decisions over the last 18 months. The budget reflects the strong economic position we now find ourselves in, and it builds on these successes. The successes of the Australian economy through the global financial crisis mean that we now have a strong opportunity to tackle the nation’s long-term needs in skills, training, health, education and infrastructure. This budget delivers on those long-term objectives. The budget is building on hard work throughout the global financial crisis to deliver for the future. Through this budget, we will be back in the black in three years, three years ahead of schedule and ahead of every major advanced economy. Through this budget, we build on our hard work by delivering a stable budget that brings us back to surplus three years early.

This government is well aware of the impact of our ageing population combined with the current cost pressures for families in our health system. The government has put health and hospitals at the forefront of our agenda, and this budget delivers on that commitment to our national health reform. Through the budget, we have invested a further $2.2 billion into the health system, and this brings the total new investment in health from this government to $7.3 billion over five years. Our $2.2 billion package further delivers for our National Health and Hospitals Network. This government has worked hard to deliver that network.

Health reform is also a priority area for me personally, and I am very proud of what we are achieving in this field in the budget. Of this $2.2 billion in the health reform package, we have set aside some $417 million to improve after-hours access to GP and primary care services. Access to GPs is vital to Australian families and is something that has not been adequately addressed in the past. We have also invested a further $355 million to deliver 23 new GP superclinics and 425 GP and primary healthcare clinics across Australia.

Already, in my own electorate, the Ballan GP Super Clinic is up and running. It was opened back in September last year and it was the first in Australia. The clinic has proven vital to the flourishing community of Ballan; in fact, I think it will perhaps drive some of the population growth of Ballan as well. Over recent times, the local health system was struggling to meet demand, and this investment by the Rudd government has gone a long way to improve local health services. The clinic accommodates GPs—some of them new GPs who come into the area—practice nurses, visiting specialists and a range of allied health services. They include physiotherapy, dietetics, nutrition, podiatry, mental health services, pathology and chronic disease management services. There is also a psychologist who operates out of the facility. For the first time this local community has a dental service. The superclinic in Ballan is a great example of what we can do when we work with local communities in enhancing our health system and of what we seek to achieve with our $355 million investment to have a further 23 GP superclinics across the country. I know that members on this side of the House, who know the enormous benefits of these clinics in our communities, as I do, are all working pretty hard to try to get one of those clinics in their own electorates. It is a shame that members of the opposition wish to cut the program.

A further $523 million has been allocated to invest in training and support for nurses. These investments will see nurses better supported in GP clinics and there will be training and education incentive payments for nurses and personal care workers in aged care, and the first ever rural-local scheme for nurses.

The Rudd government plans to deliver on individual electronic health records. This $467 million reform to our health system will benefit patients and benefit our health system as a whole. I find it amazing that the Leader of the Opposition and former minister for health, who promoted electronic health records and who had it as part of his policy platform, said in his budget-in-reply speech that he will axe this important initiative. Coalition members have struggled to find support for cutting e-health initiatives among all of the major stakeholders across the country.

The government also announced an increase to the tobacco excise of 25 per cent. This came into effect on 30 April 2010. This excise increase provides not only an incentive for current smokers to quit but an effective measure to prevent young people from taking up smoking in the first place. This increase in the tobacco excise will be reinvested back into our health and hospital system—a total of $5 billion over five years.

While I am still on the topic of health and hospital reform, I would also like to put on the parliamentary record the Rudd government’s recent announcement to fund the new $55 million cancer centre for Ballarat in conjunction with the state Victorian Labor government. I spoke in parliament back in February this year about the importance of the cancer centre for Ballarat and the surrounding region. In April, it was my pleasure to announce—along with Minister Roxon and the state minister for health, Minister Andrews—that the Rudd government would fund the Ballarat regional integrated cancer centre. This announcement reflects the hard work of my local community and will allow for two linear accelerators, the relocation of one linear accelerator from St John of God Hospital, four radiotherapies bunkers, 16 chemotherapy chairs, a CT scanner and a wellness centre as well. This is yet another example of the government’s efforts to reform our health and hospital system.

Through this budget, we have also worked hard to alleviate the cost-of-living pressures that are facing many Australians. The announcement of tax cuts in this year’s budget was our third round of cuts in as many years. I am pleased to have seen the hard work of the Australian people, particularly in this last year, being reflected in the 2010-11 budget by these tax cuts. These tax cuts, which were an election promise, have been delivered despite the economic circumstances in which we have found ourselves. The Australian people and those across the electorate of Ballarat have worked hard to get through the global financial crisis. These tax cuts are welcome news to those families.

To give you a slight snapshot, the cuts mean that a person earning $20,000 will pay $750 less in income tax in 2010-11, a worker earning $50,000 will pay $1,750 less in income tax in 2010-11 and a worker earning $80,000 will pay $1,500 less over the next financial year. They are significant savings for families. Our tax cuts are also welcome news to low-income and part-time workers. We have lifted the low-income tax offset to $1,500 to provide an effective tax-free threshold of $16,000.

On top of the tax cuts, we are also working to make tax time simpler for families with our reforms to the tax system. From 1 July 2012, taxpayers will have the option to choose a standard deduction of $500 instead of claiming work related expenses. This will increase to $1,000 by 1 July 2013. This takes the hassle out of tax time for many families. Families will not have to go rummaging for receipts come tax time, hopefully saving some precious family time as well.

One of the things that I have often spoken about since being elected is the importance of investment in skills and infrastructure. This budget invests significantly in both of these. We have invested some $661 million to assist people enhance their qualifications by taking up one of the 40,000 additional training place and 22,500 new apprentices as part of our Apprentice Kickstart program. I have spoken to many of the young people across the electorate that have been involved in the Apprentice Kickstart program and it is great to see the investment by this government in young people’s skills through this program continuing.

The other day I was in Bacchus Marsh with Parliamentary Secretary Clare. We spoke with a number of apprentices at the Amber Hair Studio. The take-up of apprentices across the Moorabool Shire has increased by 45 per cent compared to the previous year, with 42 local apprentices getting started between December 2009 and February 2010. The apprentices and their employers who spoke to Parliamentary Secretary Clare and me are delighted by the program. There has been a boost in apprenticeship numbers across other areas of my electorate, with a 77 per cent increase across the City of Ballarat, and an in increase in Hepburn Shire from five apprentices a year to 20 apprentices in 2009-2010. This is an additional 15 young people, who would not have got the opportunity otherwise, who now have their pathway set for a future career.

Our announcement means that until 12 November businesses that employ fewer than 200 people can benefit from a $3,350 bonus payment in addition to the $1,500 commencement initiative if they take on a school leaver in a traditional trade apprenticeship. The Rudd government is absolutely determined to skill up people in my region, and that is great news for local communities.

In addition to our skills program, we have also worked hard to invest in our long-term economic growth through infrastructure investment. Project after project across my electorate is well underway to set up our local economy for the future. Through the Regional and Local Community Infrastructure Program local governments have rolled out many projects that are benefiting local communities. Projects under round 1 have all been delivered and round 2 projects are well underway. Our funding through the Blackspots Program and Roads to Recovery has also ensured that the local governments have had the funded needed to deliver on local road projects. Not only have we seen a vast improvement in local roads—especially in terms of safety—but this has also contributed to local jobs growth.

This budget further invests in nation-building projects in the Ballarat electorate. They include the Western Highway realignment of Anthonys Cutting, which the Prime Minister and I had the pleasure of visiting the other month for the sod turning; and the Western Highway duplication from Ballarat to Stawell, which the Victorian Premier, John Brumby, and I visited the other month also. Both nation-building projects are incredibly important to my district. They are both projects that are investing in the long-term growth of communities like Ballarat across Western Victoria.

Residents of the Ballarat electorate are already experiencing the benefits of the Deer Park bypass, which I lobbied tirelessly for. Once these two new projects have been completed, the western region of Victoria will have a first-rate highway that extends all the way from Melbourne through to the South Australian border. These projects are setting up Ballarat and the surrounding region for the future. They create jobs in the short term and provide safe and reliable road infrastructure in the longer term. The budget builds further on our infrastructure investment through the new $5.6 billion infrastructure fund. The fund will commence in 2012-13 and will place infrastructure funding at the forefront of Commonwealth spending. We are doing this because we know that investment in infrastructure is one of the most important elements of a productive economy.

I would also like to discuss one of the core challenges faced by not only Australia but other nations, and that is climate change. We are boosting, through this budget, our investment in a new Renewable Energy Future Fund. This reflects our strong commitment to increase the renewable energy target by 20 per cent by 2020. A $652 million investment over four years forms part of our $6.1 billion clean energy initiative. We are using this funding to increase the take-up by business and households of energy efficiency measures. Aside from our new investment through the Renewable Energy Future Fund, the Rudd government is committed to continue our efforts internationally to form agreement with other countries about future action on climate change and on what we do domestically.

There are a number of differences between the Rudd government and the coalition. First, the Rudd government decided to take decisive action to tackle the global financial crisis. Those opposite did not. Second, our appropriations since we were elected have recognised the strong need to invest in our long-term future—in the National Broadband Network; skills and training; local community infrastructure; roads and ports; education; and national health reform. Those opposite have opposed all of these measures. Third, in the wake of a prospective global recession, we made the most of an opportunity to invest in reducing our economy’s capacity constraints. Those opposite missed opportunities during the initial mining boom. Fourth, our 2010-11 budget continues our sound economic management and targeted investment. The alternative government reflects the worst economic management team in the history of the Liberal Party of Australia. Finally, our actions have been supported by key stakeholders—from Treasury to the Reserve Bank, business and community groups and international bodies—and admired by other countries. The alternative from those opposite has been supported by nobody.

I am proud of this government’s strong economic management. The budget reflects our direct action to support jobs and to bring us back to surplus early. The budget delivers a new Renewable Energy Future Fund; tax cuts and a reduction in red tape for small business; investment in health and hospitals; investment in skills, training and infrastructure; better superannuation, tax breaks on interest and a boost to national savings; a standard deduction to make tax time easier; more money to protect our troops and our borders; and a return to surplus in three years—three years ahead of schedule. The budget takes advantage of our strong economic position and sets up our nation for the future. I commend the bills to the House.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise to comment on the budget brought down nearly two weeks ago in the Appropriation Bill (No. 1) 2010-2011 and related bills. The fact of the matter is that this government inherited perhaps the strongest economy in the Western World. It inherited an economy that had had 16 years of economic growth. It inherited an economy with zero government debt and close to $50 billion in reserve. It inherited an economy with unemployment at four per cent—almost a historic low. This provided the basis to deal with the unexpected global financial crisis. Every other country of any consequence—the developed countries, at least—went into the global financial crisis with significant government debt, no reserves and much higher unemployment. And we have seen the outcome. It is no different from the situation at a family level in the suburbs: if one individual and his family have no mortgage, $80,000 or $90,000 in the bank and a job, while their neighbour has a $450,000 mortgage and no money in the bank, who is going to get through a recession more satisfactorily, more effectively? It is common sense. The family that has no debt and has sufficient reserves will be able to position itself, with a prudent approach to budgeting and all the rest, to get comfortably through a downturn, while the neighbour may well end up selling their house at a fire-sale price and moving into rented accommodation and experiencing all the stress that goes with it.

It is exactly the same for the economy on a nationwide level. Our country was in exceptional shape to deal with what was a major recession, especially in the Northern Hemisphere. Yet this government, in the space of 2½ years, has fundamentally undermined the great resilience that characterised this economy. If there is a double-dip recession around the world, our economy will be far more vulnerable to what might happen in the weeks or months ahead. This budget has done absolutely nothing to correct this situation. There are no tough decisions in this budget. This is a coward’s budget. It is the budget of people who live by the politics of the day and have no long-term vision. Where will the Prime Minister take this economy over the next three to six years if given the opportunity? You cannot answer that question. You cannot answer it from what he has done. The only conclusion you can reach is that we will continue to go backwards as a country—in terms of the resilience of our economy, the great drivers of growth in our economy—because this Prime Minister, his Treasurer and other senior colleagues have taken no tough decisions. They have been all talk and no action. There have been hundreds of inquiries and there have been major expectations built up. This Prime Minister is no different from the handyman we all know who starts hundreds of jobs and finishes none of them. He has got no capacity to implement projects.

This government is characterised by some of the most wasteful and mismanaged projects in the country’s history. The pink batts program has wasted billions of dollars. The Building the Education Revolution, the school halls program, has wasted billions and billions of dollars. This government stands condemned for the way in which it has mishandled public moneys but more particularly for the way in which it has panicked and responded over the last 2½ years to the challenges that have been thrown up for this economy. It has overspent in a massive way and this budget does absolutely nothing to address that issue.

This third budget brought down by the Treasurer is a political document, make no mistake about that. It is a political document and is not a document designed to address the challenges and opportunities faced by this country. It is a budget which is not believable. It is a house of cards. It is based on a ‘trust me’ approach, heroic assumptions and great big new taxes. It makes no allowance for any eventuality that might occur overseas. It makes no allowance for the impact of some of these great big new taxes on the ability of some of our stronger sectors to respond, to keep growing and to contribute to the resilience that they have displayed over such a long period of time. Of course the thing that we do know about this budget, one of the few things of any certainty, is that the spending keeps going. It is reckless spending and an insatiable desire to keep spending money to solve problems. The only way in which this Prime Minister and his Treasurer feel that issues can be addressed is to throw more money at them. It is a tax-and-spend budget—tax, borrow and spend. That marks the sort of sorry history of this short-term government.

The government will give us four more years of deficit, all to combat one quarter of negative growth in 2008. The response to that one quarter of negative growth has been to borrow, borrow and borrow again and to spend, spend and spend; so much so that the economy now is not in balance. The reckless spending, which this budget continues, has been the reason we have now got the highest interest rates in the Western world. It is the reason so many families across this country are now finding it extraordinarily difficult to meet their cost of living expenses and are finding it difficult to pay their power bills. Power has gone up 18 to 22 per cent across the nation over the last 12 months, petrol prices have gone up over six per cent over the last 12 months, rates are going through the roof in many areas and fruit and vegetable costs have been above the CPI. Many, many areas of our everyday expenses have well exceeded the CPI, sometimes two, three and four times as high. Yet this government, which came to office making very strong and heartfelt promises about what they would do to the cost of living and how they would deal with the challenges people face every day to meet their budget so as to enable people to live within their means and have some peace of mind, have certainly not shown any of that sort of approach. By example, the government have not lived within their means and this budget does nothing to curtail the reckless spending to bring this government and their bureaucracy back onto course which would see our record debt paid off in due course.

The government will give us four years of deficit. The deficit this year of $57 billion will be the biggest deficit in Australia’s peacetime history. You heard very little mention of what had happened with the current year we are in. They did not want to refer to this $57 billion because it is the highest deficit in our history by a country mile. Also what they did not want to say was that much of that $57 billion, something well in excess of $7 billion, was spent and not programmed in last year’s budget. They have been spending like drunken sailors with the intent of burying that spending in the $57 billion deficit this year and taking some load off next year’s deficit. It is a political budget. They plan to spend and spend in some attempt to misrepresent the figures and their record of spending.

Next year, of course, we are told we will have the second biggest deficit in our history of $40.8 billion. We will believe that when we see it. It is in all likelihood, by the way in which this government are responding, to go higher and higher. We also have not only deficit record levels but a level of net debt of $93 billion, equal to that left by the Keating government. On top of that, of course, they have foreshadowed that they will be borrowing an extra $18 billion in the next four years to fund their national broadband project; the white elephant which will materialise in seven or eight years’ time and, at best, give a return of the bond rate. It is a white elephant that they then expect to sell to somebody with a return at the bond rate. This will be a case of nationalising telecommunications. No other country in the world is heading in the direction to renationalise telecommunications but, of course, this government will. It is something in the order of $110 billion in the next three or four years, then they will add another $8 billion to $15 billion of borrowing to complete that national broadband project.

This is a reckless government. This is a government that thinks you can borrow and spend and that someone else can fix up the problem. The government continues to borrow $100 million a day. It has done so for a year and it will do so for the next two years to meet the forecasts embodied within this budget. It will borrow $100 million a day for this reckless spending. That is every week. Every week, this government is borrowing the equivalent of a world-class new hospital. A world-class new hospital could be built each week with that borrowed money. This is what we are accumulating.

The improvement to the budget bottom line is entirely due to what the government term ‘parameter changes’: stronger economic growth in Australia, with predictions of very high sustained growth, and above-trend growth offshore. They are basing this budget over the next four years on the highest terms of trade in 60 years and they are basing it on $17 billion in new taxes. Of course, another of the accounting tricks is that they classify the revenue from new taxes as savings. It is all spin—it is a disingenuous way of presenting the nation’s books and accounts. It is based on unrealistic assumptions. People can have absolutely no confidence in the quality of the forecasts, in the nature of the outcome or in the suggestion that the government will at the end of three or four years produce a wafer-thin surplus.

This budget does not rely on responsible economic management. There is not a hard decision in this budget to cut the reckless and wasteful government spending. All the cuts in expenditure were targeted in specific areas such as pharmaceuticals, as opposed to broad based programs, with close to 80 per cent of the so-called savings being achieved between 2012-13 and 2013-14. All of this is back-ended and off to the never-never, with no prospect of this government demonstrating any discipline.

We might have expected a lower spending budget, as there is no longer a need for stimulus to counter the global financial crisis and because of the pick-up in commodity prices in China and other economies and the fact that countries are now in many cases streaming out of recession. But what do we find? Over and above what the government forecast last year in the budget for spending this coming year, the year after that and the year after that, we see $26 billion of excess spending. Indeed, there was no winding back of previously allocated stimulus spending despite the very different economic circumstances. Further delays will occur in the school halls program, which will mean that $500 million of stimulus will not be spent until 2011-12, at least three years after the global financial crisis.

This is where the increased spending is now starting to compete heavily with small business trying to access finance. It is starting to compete for all other forms of borrowing by big business, small business and mortgage holders. As a consequence, it is pushing up interest rates. We have now had six interest rate increases in a row. Some of the thousands of young couples who were encouraged last year to take out a mortgage, buy a home and get on with it are this year facing between $4,000 and $5,000 more in mortgage repayments than they expected last year. That is $5,000 they will have to find after tax—they will have to earn an extra $7,000 or $8,000 between them. Many of these young couples will be facing very severe financial problems at present.

This budget is full of accounting tricks. It is full of new taxes and more wasteful spending, including $1 billion to correct the policy failures with boat people, $1 billion to fix up the pink batts program and a $4 billion a year blow-out in government debt interest rates. The government has allocated $536 million, over half a billion dollars, for new health bureaucracies as part of its health reform. This government promised in its health reform not to have any increase in the bureaucracy, yet it has budgeted for an extra half a billion dollars for new health bureaucracies as part of its so-called reform.

At the last election the government promised 36 GP superclinics; of course, only two are fully operational. This is typical—all talk, no action. But, on top of that, this budget says the government will deliver another 23 superclinics, additional to the 36 of which only two have been delivered. How can anyone possibly have any confidence in the promises made by the government? The core beliefs and values of the government have evaporated over the last few months. Their support for things like the emissions trading scheme went out the window. This was a clever accounting trick to ensure that the $10 billion that would have gone to the expenditure line did not occur and therefore the ratio of expenditure to GDP was able to stay within the parameters that they had set. It is all artificially created. The government dumped the ETS so that they could create an artificial ratio of expenditure to GDP.

This is a political document; this is not a policy document. They are giving $10 million grants to the Trade Union Education Foundation. They are giving an additional $12 million to the Department of the Prime Minister and Cabinet—that is another 14 per cent increase. The government said they would take a meataxe to the Public Service and yet 20,000 new public servant positions have been created in the space of 2¾ years.

The budget surplus relies solely on a very big new tax on the growth engine of this economy. The sector that helped pull this country through the global financial crisis, the resources sector, will now face a massive retrospective tax which will see our resource sector with 58 per cent effective tax on its operations. By comparison, the nearest to Australia will be the United States at 40 per cent—an 18 per cent greater tax load. It will put in jeopardy, and it has already put in jeopardy and prevented, work to develop $310 billion of new projects. This budget is a political document. It is a confirmation of the tax-and-spend approach of this government. This government is not fit to govern. The only way to turn around our great debt and deficit is to change the government. (Time expired)

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to speak on the Appropriation Bill (No. 1) 2010-2011 and cognate bills. The budget that the Treasurer presented to this House was a budget for its time. The budget before us is a responsible budget, a budget that is in the national interest. The government acknowledges that families still need help, but the budget puts a priority on strengthening the economy and securing sustainable growth into the future. This budget is indicative of the government’s response to the global financial crisis, a crisis that Australia avoided due to both the responsible, decisive fiscal policy of the Rudd Labor government and the determination of the Australian people who pulled together to keep people in jobs.

This budget builds on the strong foundation developed by the government in previous budgets. It converts Australia’s success during the global recession into a stronger, more secure economy for working families. It will halve peak debt, bringing the budget back into the black in three years. This is three years earlier than expected and ahead of every major advanced economy. One cannot and should not underestimate this achievement. Decisive action now, as also occurred during the global financial crisis, will ensure the future prosperity of Australia and secure the economy and the financial security of the Australian people, including many families in my electorate of Kingston. The strong position of the nation’s economy ensures that the people of the southern suburbs of Adelaide will be better positioned than people in many other places around the developed world to take advantage of the opportunities ahead. The Rudd Labor government believes in the fortitude and ability of the Australian people, and this budget represents its commitment to these people by ensuring responsible economic management, halving peak debt and securing future growth.

Those opposite have opposed the government’s action to support jobs during the global financial crisis, and there is no doubt that they will now oppose its actions to keep the government finances strong. But this budget does have significant things for the people in my electorate, and the historic health and hospital reform is especially significant to people in the southern suburbs of Adelaide. The residents of southern Adelaide deserve to live in a community where they are confident about the provision of health services to their loved ones. The Rudd government’s ongoing commitment to health will go a long way towards achieving this goal.

The government’s planned reform represents the most significant reform to Australia’s health and hospital system since the introduction of Medicare. The government is investing $7.3 billion over five years, and this is an enormous commitment to our health and hospital system. The 2010-11 budget delivers a $2.2 billion package investing in the National Health and Hospitals Network over four years. This funding will have a genuinely positive impact on health providers within my electorate. Hospitals such as Flinders Medical Centre and Noarlunga Hospital will be able to provide a better level of care for the people in our local area. This spending is vital to improving the healthcare system for all Australians and also vital to my local constituents.

This budget reflects the Rudd government’s commitment to health reform and its ongoing commitment to health within Australia. The $417 million Medicare Locals program is a commitment to ensure that it will be easier for people in Kingston and around the country to see a doctor at any time, day or night. This investment will improve after-hours access to GP and primary care services. This is a significant investment in the ongoing health and wellbeing of the elderly, parents and young people in my electorate, ensuring that all Australians have access to high-quality and affordable after-hours services. This builds on the Rudd government’s commitment to making sure that after-hours GP services are provided. In my electorate alone, a number of different grants have already been announced to ensure that GP services are available after hours. Services are already being made available in Morphettville, Huntfield Heights, Sheidow Park, Aldinga and Seaford. The further improvements to after-hours services will be widely welcomed in my local area, because people know that getting to see a GP can be difficult at the best of times.

The opposition—and, indeed, the opposition leader—have indicated that they do not believe that there is a problem out there in the provision of GP services. My message to the opposition leader is that in outer metropolitan Adelaide there is a problem with getting to see a GP. I hear regularly from my constituents that there is a shortage. They often wait up to three or four weeks just to get an appointment with a GP. It is disappointing that the opposition leader, who is a former Minister for Health and Ageing, refuses to acknowledge that there is a real crisis in accessing medical services and that the private sector has not filled all the gaps in outer metropolitan Adelaide.

The budget also outlines the government’s commitment to provide up to $950 million to increase the capacity of emergency departments and improve the time line for treatment. This has also been widely welcomed by my constituents in Kingston. The Rudd government is committed to a four-hour emergency department target. This will require patients to be admitted and then either referred or treated and discharged within four hours. This is an achievable goal, and we believe that Australians ought to be able to see a doctor wherever and whenever they need one. This will ensure that every Australian has access to the advice they deserve.

As the Minister for Health and Ageing has regularly noted, nurses are the cornerstone of any effective health system. The Rudd government acknowledges the vital role that these individuals play in the provision of health care to real working Australians and is therefore committed to investing $535 million for additional training and support to Australian nurses. Nurses play a critical role in our health system, and the Rudd government is dedicated to ongoing support of these individuals.

I draw the attention of the House to the controversial issue the opposition is opposing—that is, the issue of GP superclinics. GP superclinics are an effective and necessary addition to the health field within Australia. The government has dedicated $355 million over three years to building more of these clinics across the country. We are now seeing clinics being developed in my electorate of Kingston in the form of the Noarlunga GP Super Clinic, due to be completed this year. This will provide an important service by incorporating doctors and other allied health professionals in one location. Such clinics take the pressure off the hospital system, and we have seen this in evidence with the state government provided GP Plus services. Since becoming operational, the one in Aldinga in my electorate has seen a decrease of 13 per cent in presentations to the accident and emergency clinic, with residents in Aldinga instead presenting at the GP Plus centre.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.