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

Mr Speaker has received a letter from the honourable member for North Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to properly manage the budget.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

Last night the Treasurer introduced his fifth budget, which he was proud to say stayed true to his Labor ideals. I have to say it was a true Labor budget. It was confused and full of deceit, made promises and broke promises, and failed to mention that it was increasing tax and increasing debt. This will be remembered as the carbon tax budget—except there was no mention of the carbon tax in the budget speech. It will raise $24 billion in this budget.

Importantly, it is also the case that the handouts that the government announced last night, which were dressed up as student tax rebates or increases in family tax payments, are all about the carbon tax and have nothing to do with the proclaimed intention. Equally importantly, it was a budget that had no coherent economic strategy to drive growth in the economy, to lift productivity or to create jobs.

Australia is crying out for leadership to restore confidence to get its economy performing at its very best. Economic growth under Labor has been very poor, averaging 2½ per cent or less in its first three years. This is an underwhelming record at a time when Australia is benefiting from the highest terms of trade in several generations and record demand for its exports from overseas. Productivity has stalled. GDP per hour worked in the final quarter of last year was lower than two years earlier. And what about jobs? In 2011, there was no growth at all. It was the first time in 20 years that no new jobs had been created.

So what has the Treasurer done to restore stronger growth, kick-start productivity growth and lift job creation? The answer is that he has set the bar pretty low. He has promised that the economy will grow by 3¼ per cent next year. That is on the upside of trend, and we would be able to generate growth of at least trend or even higher after years of below-trend growth if we created the conditions for businesses to invest, grow and take on more workers. Clearly the Treasurer has no confidence that he has the skills or the policy to do that. His track record suggests that he will undershoot even his relatively low bar. In last year's budget he forecast growth this year of four per cent. He has now revised that down to three per cent. But even this looks too strong given the weak growth in the first half of the year and market estimates for another tepid quarter of growth in March.

Certainly the Treasurer's ambitions for job creation suggest he really expects only modest economic growth. The unemployment rate is now expected to increase from the current 5.2 per cent to 5.5 per cent and remain there for two years. On the morning of budget day—just yesterday—the Treasurer said, 'It makes sure we support jobs.' I remember last year, when he said the budget was all about 'jobs, jobs, jobs' and he forecast growth in jobs of 500,000 over two years. Not only has he failed to reach that target; he is nowhere near it, with an expected and revised estimate of just 200,000 jobs being created. His track record suggests that we should be sceptical even of that more modest ambition.

And yet the Treasurer wants us to believe it is a 'jobs budget'. Of course, he has had many descriptions. It started off as a 'tough budget', but he does that every year. Then he said it would be a 'responsible budget'. Then he said it would be 'a budget that will whirl the economy back to a fiscal surplus'. Then he alluded to the fact that it was a 'Robin Hood budget'. And then it was 'battlers' budget'. This, of course, is the way the Labor Party does it. They use that invective to try to describe something that they cannot describe themselves.

The biggest flaw with this budget is its reliance on the continuation of the mining boom. It assumes that the terms of trade will stay close to highs so that company tax receipts and mining tax receipts continue to be high. The terms of trade assume a decline in 2012-13 of 5.75 per cent, and 3.25 per cent the following year. However, the government's own sensitivity analysis confirms that a fall in the terms of trade of around four per cent would reduce the underlying cash surplus by $3.4 billion in the first year and $7.1 billion after that. A relatively small decline in the terms of trade from record highs is going to wipe out the government's claimed surpluses. This just shows how critical the mining boom is to the government's fiscal strategy and how precariously balanced the budget is.

I could compare this government's lack of vision with the coalition's strong agenda to drive economic growth, productivity and employment. Our first step in government will be the restoration of sound public finances by cutting the waste, reducing the spending and paying down public sector debt. Secondly, we will lower taxation to enhance the rewards for effort and to reduce the fiscal drag on the economy. Thirdly, we will have a strong productivity agenda with higher labour force participation, reduced red tape and the facilitation of further restructuring of industry. Fourthly, we will facilitate even stronger engagement with our trading partners, with a particular focus on Asia. The coalition has clear plans to grow the economy and create jobs. We have done it before and we will do it again.

As I said, the Treasurer claimed at first that this would be a tough budget, as he does every year. First, of $33.6 billion of so-called savings over the forward estimates, more than half are increased or new tax measures. There are six new or increased taxes in the budget, taking the grand total since the government came to office to 26 new or increased taxes. The government always reaches for the tax lever in order to fill a budget hole. Second, spending this year will be $100 billion higher than when the coalition left office, and yet Labor said that the Howard coalition was a big-spending government. At no stage in the last few years, or over the next four years, does the government get anywhere near the levels of the last year of the Howard government in terms of percentage of GDP in expenditure. This is not a tight budget. How can it be when there has been an alarming deterioration in the numbers over the past year? Last year's budget forecast was an underlying deficit of $22 billion for this year. That has now doubled to $44 billion, the third highest deficit on record. The cumulative deficit under Labor since they have been in office is $174 billion.

What is worse is that the tiny surplus of just $1.5 billion that they are claiming they will deliver next year has clearly been manufactured. First, it relies on a $39 billion surge in revenue, of which $34 billion is tax. Second, they have shuffled money out of 2012-13 into the current financial year. We first identified this in the Mid-Year Economic and Fiscal Outlook, but the government have dreamed up new measures. These include the schoolkids bonus, shifting around $662 million from next year into this year, and $1.2 billion of financial assistance grants to local government that has been brought forward from July to June in order to avoid next financial year. Of course, the government have raided the hollow logs, taking $750 million extra out of government business enterprises next year as a special dividend, including from the Australian Reinsurance Pool Corporation and the Export Finance and Insurance Corporation.

The heart of the deceit in this budget is that the debt continues to rise even though the government claim it is going to be in surplus. How can that be? The Treasurer had a rather awkward moment in question time today when asked about how much gross debt is going to be. When it was related to the debt limit that is imposed by this parliament, predictably he got the figure wrong by responding with market value instead of face value. That is what you would expect from this Treasurer. He does not understand the markets. He accuses us of not understanding them, but he does not understand them. What we do know is that, if projects like the National Broadband Network and the Clean Energy Finance Corporation were included in the budget bottom line, on his own numbers the budget would remain in deficit to 2014-15. That is one of the reasons that net debt continues to rise next year and the year after to a peak of $145 billion, the highest on record. That is why the government have flagged that they will need to increase the debt limit from $250 billion to $300 billion. What is it with the Labor Party and credit cards? Whether it be a credit card from a union or a credit card from the Australian people, they cannot help but smoke the credit cards. In this case, they are doing it with taxpayer money.

They are indifferent to the impact of that sort of challenge. Last year the Treasurer called the increase in debt 'tiny'. He went on to say, 'It's very low,' minutes later on 2GB. Later on Sky News he was asked the peak debt level and he did not know the answer. I can assure the Treasurer that the taxpayers of Australia think debt is a very big deal. Repaying the debt is a big task, and the Treasurer claims he will pay it off by the end of the decade. I said earlier today on radio, 'Pigs might fly'—although I concede that pigs are more likely to fly these days, because last night they increased the pig slaughter levy, which is another hidden tax increase. To pay off the debts the government will have to deliver surpluses bigger than one per cent of GDP for the next six years. The cost of interest is $8.2 billion a year to 2015-16—that is, $22 million a day that Australian taxpayers have to find just to pay the interest on Labor debt.

But what about the broken promises? The government not only made new promises last night but broke the promises they had already made. The one that is ringing in our ears is the commitment to company tax cuts. The Prime Minister herself said only two months ago in this House:

If you are against cutting company tax, you are against economic growth. If you are against economic growth, then you are against jobs.

On over 70 occasions the Treasurer has said that he would be introducing legislation to cut company tax. We are waiting for it. The Greens have already indicated that they would support company tax cuts for small business. But no: the Treasurer is trying to lay it on us by blaming us for not passing it. The legislation never came to the parliament. It is like the Malaysia solution. We are still waiting for the legislation the Prime Minister was daring us to vote against. We are also still waiting for this company tax cut legislation which the Prime Minister says we voted against. We have not even seen the legislation. I thought the government had abandoned its plan to cut company tax, paid for with another tax, but the budget is still warm—delivered only last night—and the Prime Minister was on Sky News's Agenda saying: 'We're open to company tax cuts. We'll engage in further discussion.' So she is changing the budget. Normally under Labor the budget lasts from Lateline to lunchtime, but it did not quite make it past the clock on this day.

What we find is that Labor are playing and fiddling with the numbers. They are shuffling money about. The education tax rebate now has nothing to do with education and the family tax benefit part A and the allowance increases have nothing to do with giving people a fairer share of the mining tax. They are all about compensation for the carbon tax, the tax that dare not speak its name in the budget or in the budget speech. There is no clear, articulate strategy to grow the economy. There is nothing that reduces the cost of living for everyday families and there is nothing in the budget that creates jobs. There needed to be an economic strategy that Australians could believe in, that helped to give Australians confidence that the volatility offshore is not going to affect their everyday lives. Instead it was a budget that had handouts but claimed to be tough. It was a budget that has left Australians confused. It was a budget to save Julia Gillard's job instead of the jobs of everyday Australians. (Time expired)

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

It gives me great pleasure to rise to contribute to this matter of public importance. The matter before the House goes to the question of the government's economic management. I am very proud to stand here just the day after the Treasurer handed down a budget that will return to surplus. We all know that there is no greater symbol of the strength of an economy than being able to demonstrate that a budget is returning to surplus. That is something that we are very proud of.

It is interesting that the member for North Sydney's contribution today had a lot of huff and puff and the usual bluster that you get from him. It is his modus operandi. But when it came to actually putting some facts on the table, there was not a lot happening. He squibbed the central challenge that the coalition have to face on the question of a surplus because the central question that has to be answered by those opposite is whether or not they are committed to a surplus. That is the point that he did not address. It is an important point, a point whose answer I believe the Australian people have a great and strong interest in knowing. Are the coalition committed to a return to surplus?

An opposition member: Well why?

I hear the member opposite say, 'Well why?' Perhaps his colleagues can take him aside and give him a lecture in economics 101. I am sure the member for Dunkley would be able to simplify economic principles in such a way as to explain to the member opposite the importance of returning the budget to surplus.

But on this question of a return to surplus, those opposite have been a bit shifty and very inconsistent. Let us have a look at some of the commentary that we have seen from them. When asked this question of whether or not the coalition would return the budget to surplus, the member for Goldstein—who is with us in the chamber—said, 'Well, it just depends.' So there we have it from the member for Goldstein. It just depends. When the member for North Sydney—who has just left the chamber—was asked the question, he said, 'Maybe.' Then when the Leader of the Opposition was asked the question, he said, 'Well ,we will do it as quickly as possible.' But then when Senator Abetz was asked the question, he said, 'Look, we're not in the business of making extravagant promises.'

The promise that Senator Abetz says is extravagant is exactly what this government has delivered—a surplus budget. We will return the budget to surplus. We have done that in the budget was handed down. But we have heard the various mixed messages from those opposite on this question of whether or not they are committed to returning the budget to surplus.

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

Defending your budget.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

The member for Goldstein says he is defending our budget. That is nice of him to do that. But contrary to the already conflicting messages from those opposite that I have just stated, I note that on 18 April 2012 on ABC 24 the member for Hasluck said, 'I'm not totally supportive of finding a surplus at this point in time,' just to add even more confusion to the picture. The member for Goldstein raises his eyebrows as if to say the member for Hasluck is not a contributor to the economic team, but they could not do any worse, so maybe they should give him a seat at the table when it comes to being a contributor to the economic team.

On the question of economic management this government has a very proud track record. The member for North Sydney alluded to the question of jobs. Let us talk about jobs. Let us talk about the very significant role that government played in intervening and investing in supporting jobs through the global financial crisis. Since we have come to power, 750,000 jobs have been created in this country. At the same time, through the global financial crisis, 27 million jobs have been shed across the global economy. Those opposite do not want to hear this. They do not want to hear about the jobs that we have saved, working with the Australian people, working with the business community, investing in the skills and the labour of those who are actively participating in our workforce. They do not want to talk about that because they are not interested in the jobs of hardworking Australians.

In fact, when we handed down the stimulus package, when we came into this place and we voted for the package, the Leader of the Opposition did not even bother to turn up. He missed the vote. When he was quizzed about why he missed the vote, it became evident that he was up in the parliamentary dining room having a few drinks with, amongst others, the former Treasurer and he fell asleep. He fell asleep and missed the vote on the stimulus package. This is the package that we have heard those opposite seek to discredit so much, what has been one of the most effective responses to the global financial crisis. People all around the world are looking at what has been achieved in this country and the fact that today we are looking at an economy that has grown significantly from the economy that existed pre-GFC. Many economies around the world are struggling to return to pre-GFC levels, yet Australia has gone well and truly above that. At the same time we have low unemployment, we have contained inflation and the benefits of contained inflation were recently passed on in the form of a cut to the cash rate. The member for Goldstein is in the business of giving the green light to the banks to jack up interest rates. He is the No. 1 cheerleader when it comes to making the case for rate hikes. He might have been pulled into line. He went suspiciously quiet for a couple of weeks. I did not hear any response from him when the Reserve Bank did cut the cash rate. He was missing. We could not find him anywhere.

I want to talk about our record. That 50 basis point cut and the interest rate cuts that have been passed on to working Australians mean that a family in Australia today with a mortgage of $300,000 is paying $3,000 a year less in repayments. So, if you are the average family out there in Australia, you are paying less on your mortgage today than when those geniuses opposite were in office. Let's look at taxation. Those opposite make the allegation that we are the highest-taxing government. Taxation, as a proportion of GDP, is lower today than it was when they left office. In fact, if you look right across the forward estimates, taxation as a share of GDP—that is, overall levels of taxation—are lower under us than they were when those opposite were in power. So, when they talk about the new taxes, that is all good and well, but look at the tax base. Look at how much tax is being collected as a proportion of the economy. When you look at that you will see that this government is a lower-taxing government than that which preceded it. From 1 July, someone on $50,000 a year will be paying $40 a week less in tax. We have established that we are paying less on mortgages because interest rates are lower. We have established that people are paying less tax because tax is lower today than it was when we came to office.

Let's have a look at pensioners. What is the position of a single age pensioner? Let's have a look at that. As a result of the changes that we made—a historic increase in the pension—a single age pensioner today is receiving $4,000 a year more than they were in 2009. You can go back even further to when those opposite were last in office and it is an even bigger increase. But from 2009 to today, a single age pensioner has $4,000 a year more than they had in 2009.

Those opposite talk about management of the economy. Let's talk about the things that we have done that impact on the lives of working men and women around this country. Let's look at the education tax refund, which we have sought to refine and put into a form that delivers an even greater benefit to a greater number of people. Those on the other side did not support the education tax refund in the first place. It was not their idea, and if it is not their idea they will not support it. But now we have decided that there is a better way to deliver it, and they want to stand between the Australian government and the Australian people to block people getting that relief. They talk about cost-of-living pressures, and there are many cost-of-living pressures that families are facing out there, but when it comes to providing genuine, timely and targeted relief in the form that we are proposing, they want to vote against it. How can you justify coming into this place and voting against delivering cost-of-living relief to families? How can you do that? They should go back to their electorates and look the families in their electorates in the eye. They should be ashamed of what they are doing. They know no bounds with their inconsistency.

Those opposite came into this place day after day opposing a tax cut for business. I see the shadow minister for small business is sitting opposite. He is hanging his head in shame. I can appreciate the shame that he feels. When it came to supporting a tax cut for business, the Liberal Party—historically, at least allegedly, the party of business and small business—said no. They said, 'We can't support a tax cut when the revenue has come from the mining tax.' That is their principle. They are very principled people on the other side. They say, 'If the revenue comes from the mining tax, we don't care what you spend it on—even if it's a company tax cut—we can't support it.' That is what they say. We say, 'If you're going to block the company tax cut, we'll redirect the revenue that we collect with the mining tax and we'll deliver cost-of-living relief to families.' And what do those opposite say? They say, 'We think that's a good idea.' As much as I applaud them supporting the government's measure, there is a significant inconsistency there. The inconsistency is that they said that they would vote against the MRRT and would vote against all the expenditure measures, but now they are saying that they will support the expenditure measure.

When you have a $70 billion black hole—

Mr Robb interjecting—

The member for Goldstein intervenes. He does not want to talk about the black hole, although it was $70 billion. The member for North Sydney passed around a few different details. He told someone it was $50 billion, he told someone else it was $60 billion and he told someone else it was $70 billion. When the $70 billion figure was released and leaked, he knew that it was the member for Goldstein. That is the inconsistency and the division that exists in relation to economic management on the other side. They will not commit to a surplus.

The member for Goldstein is going to go to the dispatch box shortly and he will tell us whether those opposite are committed to a surplus. In fact, last night he was saying, '$1.5 billion—that's not a surplus. $15 billion is a surplus.' So, when are they going to deliver a $15 billion surplus? They have a $70 billion black hole, which, as a result of the member for Goldstein's interview last night, has just become an $85 billion black hole. Our $1.5 billion surplus will increase over the forward estimates. The member for Goldstein says, 'Well, that ain't a surplus.' The challenge for the opposition is that tomorrow evening the Leader of the Opposition will have an opportunity to come into this place and set out an alternative plan. It is important that he does that because he has some work to do. There is a $70 billion crater—they know it, and they are hoping that they skate into office without telling people about it. That alone would be a terrible thing to do if that were where their plans ended, but, unfortunately, that is not where their plans end. They have already announced a so-called commission of audit. We know there is a $70 billion black hole—or $85 billion according to the interview of the member for Goldstein. They set up this special commission of audit so that, if they get elected, they will come forward and rip the guts out of services, rip the guts out of payments and rip the guts out of benefits that hardworking Australians around this country rely upon. (Time expired)

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

Wasn't that pathetic! This is the Assistant Treasurer of Australia. This is the deputy to the Treasurer in the construction and the implementation of this budget. On the afternoon after they presented a budget he had 15 minutes to speak and he spent no time defending the budget. The matter before the House is 'the failure of the government to properly manage the budget' and we have seen absolutely no time spent defending it. So you should walk out; that was a most pathetic performance. Go and read the budget papers and come back and tell us something about it.

The member for Lindsay also said that this government has presided over Australia being the leading country after the global financial crisis. We did get through the global financial crisis in much better shape than other countries because of the state of the economy when that crisis hit. There was no debt; in fact, there was $70 billion of net assets and the unemployment figure had a 4 in front of it. That is why we got through that crisis the way we did. By the time this government started to spend, spend, spend, the economy was already raging out of that crisis because of the exchange rate, which fell to 60c in the dollar and saw us with the biggest trade surplus in our history in that first quarter of 2009, and because the Reserve Bank of Australia lowered interest rates by over three per cent. Those factors are why we got out of that crisis. It had absolutely nothing to do with the stimulus spending which subsequently occurred and pushed up interest rates, costing Australian workers billions and billions of dollars since because of the way this government has run the economy.

The Assistant Treasurer, again, should be across these things, but the International Monetary Fund just a few days ago released the state of the books of countries around the world on a comparative basis. Of course, six developed countries are reported to have structural surpluses today. A structural surplus is something that the Treasurer would salivate over, but, of course, Australia still has a significant structural deficit. If the prices come off commodities anytime in the next year because of all sorts of things that might happen outside of our control, this government has left us deeply vulnerable. This budget has done nothing—it has provided no strategy to pay down the debt; it has provided no strategy to grow the economy, create and protect jobs, and restore confidence. Nothing in this budget will address those issues. That is why we still have a structural deficit, unlike six other developed countries that have structural surpluses today. We are not coming out of this global financial crisis better than the rest of the world; we are being led by others now that went into it with much bigger debt levels than we had.

Last night, the Treasurer said that this is a Labor budget 'to its bootstraps'. I do not know about old Labor, but this certainly is a new-Labor budget to its bootstraps. It is a budget you cannot trust. It is a budget riddled with deceit. It is a budget of deception by omission. It is a budget which cooks the books. It is a budget that increases debt. It is a budget where many of the so-called savings are in fact tax increases. Can you believe it? They are parading them as disciplined savings, but they are tax increases. It is a budget which resorted to bribes—grubby bribes to try and cover up the biggest carbon tax in the world. It is a budget with broken promises. It is a budget that makes many promises but at the same time breaks many promises. It is a budget which has the world's biggest carbon tax at its heart. It is a budget devoid of any strategy to pay down debt, to grow the economy, to create jobs and to restore confidence. It is a budget motivated by politics, not genuine economic principles. It is a budget motivated by political survival. That is all it is. It is a budget for this week and next week and the week after; it is not even a budget for the next six months. It is a budget to keep the Prime Minister in the job of Prime Minister while those behind her try and sort out who might replace her. It is nothing more and nothing less than a political document. This truly is a new-Labor budget: no trust, deceit, more spending, more taxing and more borrowing.

Let me explore a couple of those points a little more. It is a budget you cannot trust. Of course, my colleague pointed out the fact that there have been five different levels of deficit anticipated and forecast over the last 18 months, up from $12 billion to $44 billion—and, of course, the year has not even finished. I bet we will find by September that it is even bigger than $44 billion. How can people trust this government to get a $1.5 billion surplus after all of the fiddles that it has done and after all the moving of cash here, there and everywhere off budget? How can the community trust this government when the deficit this year has gone from $12 billion to $44 billion with five different estimates through the last 18 months and the government has gotten everyone of them wrong?

Also, how can Australians have any confidence in the revenue?

I say today, the total revenue could not possibly go up by 11.8 per cent. That is impossible yet they expect people to believe it. This whole budget depends on that 11.8 per cent growth estimate. Welfare will grow by more than 3.8 per cent because of this budget. The Australian dollar, coal prices and resource share prices are all forward indicators and they are all going down. Add to that two new socialist governments in Europe. Unemployment is tracking up again in the US and we have a totally dysfunctional government.

This is a government which is divided in so many respects. Everyone is reporting that the Prime Minister's office cannot talk to the Treasurer's office. You have this deep division. You have people grouping as possible pairs to run for the leadership in the next few months. This is a deeply divided government and it is why they are making so many errors of judgment. It is why they are so dysfunctional. There can be no trust. Just today we saw the consumer confidence figures released. Consumer confidence, despite the Reserve Bank reducing interest rates by half of one per cent—a very significant amount and more than what was anticipated by most commentators—today has dropped a further 2.1 points. What all this says is that people do not believe this government. They do not trust this government. It is why we have a crisis of confidence amongst households and why we have a crisis of confidence amongst businesses.

Now we turn to the debt situation, one of the most outrageous things. Australia has a high debt in terms of what is good for Australia. I am sick of people saying, 'Why don't you compare yourselves to basket cases in Europe?' What we need to do is apply a measure against Australian standards. We have a high debt in terms of what is good for Australia because we need in Australia—and always have needed—a debt relatively small compared with the rest of the world. We are a small, open economy which is influenced heavily by commodity price movements; not the US, not big companies in Europe—they have large domestic economies. We need a low relative debt.

We have seen in this budget an increase in the debt ceiling to $300 billion. This is a government which knows nothing but spending and borrowing and taxing. We have seen it again in this budget. The Office of Financial Management confirmed that it has lost confidence in the government because they have asked the Treasurer to increase the debt ceiling to $300 billion as a buffer.

This is truly a new-Labor budget to its bootstraps: no trust, deceit, more spending, more taxing and much more borrowing. (Time expired)

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

It is always a pleasure to follow the member for Goldstein because he always delivers such nuggets. Just a few moments ago we heard 'this government spends, borrows and taxes' like no other government does that. What is it supposed to do? They tax, they spend and they occasionally borrow. That is the way governments all over the world operate. And now we are being lectured about budget management from those opposite.

I do not quote Paul Keating much. I should quote him more but I do not. He had a great mind. When you look at the figures in this budget, they are truly a beautiful set of numbers. Look at the economic stats in this budget and what we have been able to deliver. Growth is at 3½ per cent—most other countries in the world would love to have the growth that we have. Our economy is 16 per cent bigger than what it was at the start of the GFC. Not many countries can boast that. Inflation is contained, interest rates are lower than what we inherited and we had the member for Lindsay and the Assistant Treasurer indicate what impact that has had on households. We have a AAA rating only a short space of time after one of the world's largest economies, the US, was unable to maintain its rating. We have three agencies giving us a AAA rating, and investment is at $450 billion.

I am particularly proud of jobs growth. Seeing more jobs created, especially in western Sydney—my part of Sydney—is absolutely critical for the people that I and others represent. There were 750,000 jobs created as a result of the economic policies and the economic climate that we put in place. There is five per cent unemployment here and 10 per cent in the Euro zone.

The most critical point is the budget surplus of $1.5 billion. We said we would do it and we did it. We said we would deliver it and we have managed it. People will talk from time to time, regardless of which side of politics is in government, about a budget bounce. Budget bounces, frankly, are illusory. The big thing about this is that we delivered a critical economic objective in reaching a surplus. We can now give the Reserve Bank the room to provide the type of stimulus that is now required because we have gone through an economic period that needed fiscal stimulus. We have gone through that phase and it is now about being able to loosen up monetary policy and see business make investment decisions which cost less to finance; that is why that is so important.

We have seen taxation as a proportion of GDP at some of its lowest levels. It is now 22.1 per cent, down from the 23.7 per cent that we inherited. And we have done that effectively while swimming with one hand tied behind our backs. There is $150 billion in revenues. Tell me a government that would be able to survive having $150 billion of revenue sucked out and still be able to deliver a budget that is in surplus? We delivered a surplus, we targeted spending and we still have tax lower than when those opposite were in government.

Look at those opposite. Every time there is a bad economic statistic, they relish it. They lick their lips at any bad economic statistic. And they shrink away from good economic statistics like Dracula from sunlight—Count Hockular. They are up there all the time avoiding any good economic statistic such as higher growth, lower inflation or lower interest rates. Their first response on any occasion is to try and undermine confidence, bag out what has gone on, distort facts and ignore reality, but they are also continuing a tradition: in government, when were those opposite ever able to cut expenditure? In fact, in their last five years of government spending continued to increase at four per cent on average. They were unable to cut expenditure. They are coming here today and talking to us about the need to be able to manage the budget, but they were unable to even cut spending and kept increasing spending in those last four years. We have cut it: $33.6 billion—$100 billion of savings delivered by us. They could not then; they could not now.

They, for example, reckon they can find $70 billion in savings themselves. In a simple test last year, we were trying to help Queenslanders recover after the worst floods that they have ever experienced. We proposed a one-year levy that those opposite opposed bitterly. They said that we should not be spending on helping out Queenslanders via a levy. They resisted it every step of the way and said they could find the savings themselves; they could find savings to the tune of $6 billion. A number of deadlines were set, but they were never able to identify the savings and achieve them. That is on $6 billion, and they reckon they will find $70 billion of savings.

The member for North Sydney talks about this being a confused budget. I think it is wrong that he is trying to shift his confusion of numbers and numerical literacy over to us. When you look at it, take their form: they call for help for manufacturing workers and cut $500 million from industry assistance; they call for costs of living relief and are now opposing the schoolkids bonus; and they call for tax relief and have opposed the corporate tax rate cuts that we put forward. There is no confusion on our side. We know what needs to be done, but every step of the way we are opposed by them. They claim they have the ear of corporate Australia. They claim they represent them, but they have thrown corporate Australia under the bus the minute they could because they put their own political interest first instead of supporting a cut to corporate tax.

Confusion—today, in this debate, the member for North Sydney talked about how the Greens supported a tax cut for small business and was suggesting that those opposite would have supported that, a differential in corporate tax rates. Having tiered corporate tax rates is what they were talking about.

Confusion—look at our ERC and what it has been able to deliver. Our ERC is delivered as surplus ahead of most other economies. We have performance and growth way better than other economies. Our ERC has been able to operate like that. Their ERC operates like an entrapment exercise: handing out dodgy figures to see who will leak it to the media first to get that 'gotcha' moment. That is their ERC—their ERC operates like an entrapment exercise where the member for Goldstein is not trusted by the member for North Sydney, and they are overseen by a man, the Leader of the Opposition, who even his own colleagues describe as 'not having a real good feel for economics' or 'economically illiterate'. This is their ERC.

Confusion—the Leader of the Opposition bags out the economy here but trips over to London and says, 'Our economy has genuine bragging rights.' What is it with long-haul flights and the opposition? Their feet do not even touch foreign soil before they are in their own mouths. Then you have the member for North Sydney going on and suddenly having this thought bubble: 'We should have a welfare system like Asia. We should look at Korea. We should have a welfare system that is just like the Korean welfare system.' I am sure that that would be a cracker of an argument for all those people who get carers support, the people who need that type of assistance—unemployment support and Austudy—and all those people who, when you look at the complexity of our system, would just love to know that we should model it on Korea and effectively cut out $90 billion in one swoop.

Confusion—today Joe Hockey was asked, 'What is the difference between you introducing a baby bonus and the schoolkids bonus?' You could not make this stuff up. I think it is important we read back in the Hansard what was said today. On 3AW the host asked, 'Are you being critical of the schools bonus?' This is directed to Joe Hockey: 'What is the difference between the baby bonus that you introduced and the schools bonus?' The member for North Sydney says, 'There's a vast difference,' And the host says, 'What?' The member for North Sydney says, 'You have to have a baby.' This is the piercing logic that we have from those opposite, who tell us we should manage the budget better, and the Leader of the Opposition was also challenged on this point today: how is the schools bonus any different to the baby bonus, for example? The Leader of the Opposition says, 'Look, they just are; just accept it.' These are the geniuses among those opposite, who are lecturing us about budget management and cannot get it right themselves. I am grateful that they brought this MPI up, because we need more laughs in this place. I am very thankful that you have been able to bring that to the House. (Time expired)

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Madam Deputy Speaker Vamvakinou, I am wondering if you can help me find this budget. We have had two speakers from Labor supposed to be talking about the government's ability or otherwise to properly manage the budget, and it turns out it is like flared pants: it was out of fashion before it even started. We have had two speakers unable to turn their minds to a budget that is not even 24 hours old. This is quite a remarkable spectacle where the government has rolled out the member for Lindsay, one of the leading lights—Admiral Bradbury, as he is known by his friends—to talk about it. He is part of the Expenditure Review Committee. He could not even talk about the budget. Then the member for Chifley comes out—I always enjoy following the member for Chifley—talking about tiered tax rates. He has forgotten already that the government actually promised a tiered tax rate in relation to company tax reductions—a tiered tax rate for an earlier introduction for small business—but that promise disappeared before it was even enacted.

What has happened to the budget? Has someone pinched this Labor budget? Has someone stolen it, so that the Labor members dare not speak the name of the budget that is not even 24 hours old? We hear this fiscal fiction being talked about, but not in terms of what is in it, not in defending the parameters and not in explaining those herculean assumptions about revenue projections that invariably never get met, resulting in revenue write-downs. They live in this la-la land where they think they are going to have these enormous growths in revenue—the fiction that underpins these so-called budget projections—and then they are not met, and the government and Treasurer go around wringing their hands saying, 'We have had these revenue write-downs.' He has been hit by reality. You can only maintain this fiction for so long. You can only keep talking about a surplus that keeps going further and further away.

It was 1989 when Labor last delivered a surplus. The No. 1 hit of the year was Mick Hucknall's—Simply Red's—If You Don't Know Me By Now. The Australian public know Wayne Swan by now. They know this Treasurer and they know this government. They know that they can talk a great game about a surplus but you never get to see one. They can forecast the most extraordinary revenue projections that never materialise, and then they wring their hands saying, 'We've had revenue write-downs,' and, 'We've been hit by reality.' That is the problem with this government and their budgeting: they get hit by reality. You can only hide from it for so long.

But the fiscal fiction gets worse. You would be as astounded as I was if you saw Monday night's Lateline Business. It was less than 24 hours before the government delivered its budget speech and the Minister for Social Housing and Homelessness and Minister for Small Business was asked a fairly straightforward question. The presenter said, 'Let's look at the Sensis small business survey.' It found that 92 per cent of small businesses do not think that government policies are helping them. Do you know what his answer was—less than 24 hours before the Treasurer's budget speech? He said:

… we've done some recent things already by announcing the cut in the small business company tax rate from 30 to 29 cents …

This was less than 24 hours before the Treasurer came in here and spoke about the company tax cut disappearing. And this was someone who is on the government's Expenditure Review Committee. Isn't that extraordinary? Was he intentionally trying to create a distortion of reality or does he have NFI—'no fiscal idea' whatsoever? Is that what the problem was? He was on the Expenditure Review Committee and he could not even work out what was in the government's own budget.

What is not in the budget and what we should be discussing is how it is going to contribute to growth, how it is going to nurture business confidence, how it is going to support job creation and how it is going to enhance economic security for Australian people. What does the government talk about? None of those things. In this budget the small business community was looking for something that would give it half a sense that the record 48 per cent increase in small business insolvencies in the last 12 months might be turned around; that the 300,000 jobs that have been lost in small business might begin to be recovered; and that the 14,500 small businesses that were employing people at the time Labor was elected, but now are not, might be able to have the confidence and courage to re-engage and employ Australian men and women. That is what the small business community was looking for and it got none of it. It got absolutely none of those things.

Labor says it is 'truly a Labor budget'. I agree with them, because everybody knows that Labor loves to throw money into the wind. It has failed to do that effectively and I fear they will again fail to do that effectively with this budget. But that does make it a very Labor budget. What would have made it a good budget would have been some practical measures that would have supported growth, confidence raising, job creation and economic security and would have restored small business hope, reward and opportunity. But there was nothing in there about that.

Not only did the small business minister who has been spruiking the great influence he has within government not even know what was in the budget less than 24 hours before it was delivered, but all we could see was that there was a reheating of old commitments—nothing new. But what do small business know they are going to get? They are going to face the world's largest carbon tax. They are shaking in their boots about the world's largest carbon tax at a time when the economy that small business men and women and family enterprises are facing is already very challenging, when they are getting cost increases forced upon them and when nervous consumers are demanding discounts. Consumers want savings. They are demanding the sort of frugalness from small business that they would love to see from their government. Margins are thin. Foreclosures are happening. Insolvencies have increased 48 per cent on last year. There are empty shops in the main streets of Australia. Small businesses are looking for something to break the trajectory the government has put them on—government policy has driven small businesses into a ditch. They got none of that in this budget.

Labor once again proved it is no friend to small business. The budget has got broken promises which will hurt small business and will hurt local employment. There was no relief from the world's largest carbon tax. It is going to whack their viability, their profitability and their capacity to employ like no other measure. There is no feel within this budget that the government has any sense of the struggling, the challenges and the difficult economic climate that small business is facing. There is no sense that cash handouts will change the economic paradigm, where people will think: 'Gee, there is an ongoing change in my circumstance. I feel more confident about making longer term decisions and about re-engaging in things that put me in a financially exposed situation but where I am more confident of my capacity to deal with them.' There is none of that whatsoever. There are none of those things that would bring about a change. Instead we have a few reheated announcements of sweeteners that are supposed to soften the burden and the pain, the harm and the hardship of the carbon tax—sweeteners that those in small business know in many cases offer them no assistance whatsoever.

In this budget the government confirmed that 370,000 of our smallest businesses face higher tax on their income—not just companies, which seem to be the only kind of business Labor wants to talk to, but those self-employed people, those partners, those operating through trust and those men and women who are trying to create wealth and opportunity for their communities, their country and themselves. They used to get encouragement through an entrepreneurs tax offset. There used to be a 25 per cent reduction in income tax paid on those smallest businesses up to $50,000 and then a tapering of that benefit. That is completely gone.

We then see the issue around accelerated depreciation. The government comes in here and says, 'Isn't this great!' Small business know they have to have cash ready to spend that money on eligible assets so they can get some cash-flow benefits at some stage down the track. Then the government comes in here and says to those 400,000 smallest businesses that used to get the ETO, 'You can go and buy a ute.' They need thirty grand of ready dollars to go out and buy a ute so 18 months later they might get a couple of thousand dollars of cash-flow benefit. Spend thirty grand for a couple down 18 months later. That is the kind of cash-flow logic that small business look at. They hear the government mouthing these words and they think, 'They really have no idea whatsoever.' Then there is the issue of the loss carry-back. Do you remember that the coalition proposed that? The coalition proposed that as a response to the global financial crisis and was ridiculed and condemned by Labor. But now they want to bring it back in.

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

So will you be supporting that?

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

I am grateful to the member for Isaacs, who is conceding what we all understand—that is, the carbon tax represents a greater threat to small business than the global financial crisis. The global financial crisis was not providing a sufficient challenge for small business to have a loss carry-back scheme introduced, but the carbon tax represents a far greater challenge and that is why the government is now looking at it. We know this government has no interest in, and no commitment to, small business. If you want to see any evidence of that, just have a look at this budget and go back to the Minister for Small Business, who either has no idea what is going on or has intentionally been out there misleading the small business community. The small business men and women of Australia deserve much better than that.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to contribute to the debate this afternoon. We on this side, when we consider the management of the budget and the management of the economy, have a very clear understanding for whom we are managing the budget and the economy. We have a very clear understanding that we come to this place representing families—families with children at school—who today we are prepared to support financially, and those opposite very clearly have said they will not. They have said it in a way that is demeaning to ordinary Australians, such as the 10,300 ordinary Australian families in my electorate who stand to directly benefit from this initiative proposed and supported uniquely by this side of the House.

We have a very keen understanding of the people who we manage the economy and the budget for when we come to this place and make a financial commitment to the National Disability Insurance Scheme. I really do hope for the future of people who suffer with a disability and for people who care for them that the rhetoric of those opposite stands up when they need to make financial commitments at a state level and, potentially at some stage in the future, at a federal level. I really do hope that those people stand up for the NDIS in the way that we have quite clearly stood up for the launch of the NDIS in this place and in this budget—that is, ahead of time and fulfilling the initial expectations of those people who have campaigned so strongly for it.

We know that we come to this place managing the economy and managing the budget for working Australians. We manage the economy and the budget for people who may find it difficult to get access to dental care, which is why we have made a significant commitment of $500 million in this budget to ensure that we provide adequate responses to people who are on waiting lists around the country. We provide them with dental care, which will enable them to have a better quality of life and which will perhaps enable them to participate more fully in employment—we all know that dental difficulties present people with confidence issues and difficulties in securing and maintaining employment.

We know that we come to this place and make a commitment to working Australians when we manage the economy and when we manage the budget. We also know that those opposite, while they profess to support families and they have professed so many times to support business, come to this place and oppose measures that practically assist families and assist business. In this budget we have indicated our support for business, notwithstanding the opposition coming to this place and opposing the company tax cut that we have endeavoured to put in place to try to support people who they regard as members of their constituency. Although we have been unable to secure that given the opposition from both the Greens and the Liberal Party—an unusual alliance—we have endeavoured to provide small business with some relief in this budget through the loss carry-back arrangements.

We have been very clear in this budget about the way that we want to manage the economy and about the way that we want to manage the budget for ordinary people, people who are not in the fast lane of the mining boom. Unfortunately the opposition come here with not even a piecemeal plan for the economy and for the budget of this nation. In fact, when you look back at the budget reply from last year it was extraordinary and really quite commendable because it did two things that I thought were impossible: it neither looked at the budget, nor was it a reply to the budget. So once again the Leader of the Opposition did the unthinkable, the unimaginable, and came into this place and spouted off. In fact, a member of my family remarked that it was not so much a budget reply as an interpretive dance, something titled 'How the budget made Tony feel'. I suspect that we are going to see the same again this year with lack of substance and, frankly, a lack of interest in families, in business, in ordinary Australians and in anything and anyone other than mining magnates in this country. We have a very clear picture of the opposition on this and it will be revealed, I am sure, on Thursday night as we all expect that the priorities of the opposition will be revealed again in their budget reply and they will indicate exactly who they stand for in this country.

It is very important to reflect on the circumstances that we came to office to find because it really was a scorched earth situation on so many fronts. We came to office at a time when the Howard government had presided over 10 interest rate rises in a row. For people who have a $300,000 mortgage today, that means that practically you would be paying around $3,000 less per annum than you were under the years of the Howard. When John Howard left office and we came to office, tax as a proportion of GDP was running at 23.7 per cent. As a result of this government's efforts, in the next year it will be at 22.1 per cent. That amounts to $24 billion less tax that Australians are paying. We see an opposition come to this place and talk about themselves as being pro-business, pro-family and pro-company. They have opposed the company tax cut and they are opposing measures that we are putting in place to practically respond to the needs of families and the cost-of-living pressures for people who are sending their children to primary and secondary school. They come into this place and we find that, in fact, they have been a higher taxing government on the last occasion that they were on these benches than we have been. It is quite revealing to have a look at not only the priorities of this government in its budget, but also the legacy of those who left us with very little when we came to office. They left us with very little that means anything to Australian working people: very little in education, very little in housing very little in health. I will have a look at each of these in turn. We inherited an education system that was chronically underfunded when we came to office, particularly in trades training. It was an education system which had not benefited from meaningful, capital investment for decades. We responded. We have now completed the biggest program of capital investment in schools in Australia's history. It stands to the benefit of those who are in those schools and learning. It will stand to the benefit of future generations.

Opposition Members:

Opposition members interjecting—

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

It has stood to the benefit of those workers who are engaged in construction of those projects and I do note members of the opposition laughing and interjecting throughout this. It reveals to me their sense of priority, both for workers and for participants in our education system—people who we hope, on this side, will go on to secure jobs and have a valuable future in the Australian economy and the Australian community. Unfortunately it is not a priority that is emphasised by those opposite.

We are building trade training centres; we have made a significant commitment to that and will continue to do so. We know that those opposite chronically underfunded the education system and that their proposals now are to strip money out of the education system, specifically in trade training.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

You closed the TAFE colleges!

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

Those commitments have been publicly indicated. For the edification of those opposite who are interjecting, you may choose to have a look at that, maybe on Google. It seems you continue to object to our trade training centres and our other proposals just as you continue to object about our computers in schools arrangements. We inherited a health system which the Leader of the Opposition had de-funded and run into the ground.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

The member for Hughes will listen in silence.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

We faced a GP and nurses shortage and Australians know that we have responded by investing heavily in things like hospitals, GP superclinics and regional cancer centres. We have invested in the training of GPs, we have invested in the training of nurses and we have done so because we came to office at a time when all of these things had been undermined or left wanting by the Howard government and, in many instances, by the same people who are sitting on opposition benches today.

We inherited a housing and homelessness crisis when we came to office. We responded swiftly. We responded in one way with the National Rental Affordability Scheme, which is intended to increase the supply of affordable rental housing by 50,000 dwellings across the country by June 2014. That is us taking the lead, to give people affordable housing, making sure they do not have to worry about that, making sure that they can carry on productive lives, making sure that they are supported and their families are supported. Those are the kinds of financial priorities that we have and have had since coming to office. Those opposite may like to note that we have made a continued commitment. We have made a commitment of $3.6 billion in the 2013 budget alone, delivering record investments in affordable housing and in investments to address homelessness.

Once again, we carry on our commitment in managing the budget and managing the economy for ordinary Australians who have the kinds of needs in education, health and housing that Labor people know need to be responded to. It is the reason we have put together a budget against the backdrop of very difficult financial circumstances. They are circumstances where we have faced continuing global financial instability, which the opposition continues to wipe out of its memory, and where we have faced natural disasters around the country, which the opposition continues to wipe out of its memory. We have managed to maintain these objectives and make financial commitments that make a difference to the lives of ordinary Australians for whom we are managing the budget. I hope to see exactly for whom the opposition is managing the budget tomorrow night.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I rise to add my contribution to the discussion on this matter of public importance—in particular, the failure of the government to properly manage the budget. This budget comes down to who you trust. As a nation, who do we best trust to run the economy? What we have been hearing is rhetoric from the government with reference to a delivered surplus or delivering a surplus. Guess what? The reality is, with reference to this delivered surplus, it is a budget with a forecast next year for a budget of $1.5 billion. They have not actually delivered a budget, but that is the rhetoric and the spin. The spin doctors of Labor are better than ours. They will have you believe, through some of the speakers, that they have actually delivered a budget. In the next couple of weeks we will get to see the effect of Labor's forecasting, with the real deficit they will produce.

I will take you back a little bit, to the 2010-11 MYEFO. In the next couple of weeks, the Labor government forecasted that they will be looking at a $12 billion deficit. In 2011-12, in the budget, they revised those figures to $22.6 billion. That was just 12 months ago. Then we had the MYEFO budget, six months ago, for the 2011-12 MYEFO. They revised their deficit figures again to $37 billion. Who knows what the deficit is going to look like? I would say it will be well in excess of $40 billion.

When you look at the government's capacity to accurately forecast a figure into the future, be it a surplus or whatever, you need to look at their credibility and track record of effectively being able to forecast. On those figures, when it comes to dealing with the deficit or potential surplus, they do not—they could not hit the side of a barn with a forecast. You will also hear the Labor government make the comment about having the fastest fiscal consolidation in history. With the four largest record deficits that this government has produced, I use the analogy that with the fiscal consolidation—for those of you who do not understand what it is, it is the capacity for a government to pay down debt—what you are going to see is similar to a contestant going on the Biggest Loser and whacking on 50 kilos before they go on the show, in order to rip it down a lot quicker.

The amount of spending that this government has undertaken, and which has left us with a massive debt, is going to assist the government when talking about its fiscal consolidation. But it comes back to trust. This budget is about trust. It is about whether or not the nation can trust this government. It is whether or not the people of my electorate can trust this government. It is the hardworking mums and dads who are suffering under the cost-of-living pressures. It is the business houses that are struggling under 26 new taxes. And the government says it is representing families and has given a budget for families. If you want to help families, get your hands out of their pockets—stop taxing them. There are 26 new taxes. This is unprecedented. Farmers are copping it as well, and I have a number of them in my electorate. Then the government goes on and asks us to trust them with their assumptions as to their forecast $1.5 billion surplus. When you make your assumptions on the top of a resources sector peak and commodity prices are starting to come off, you leave yourself vulnerable as a nation on trying to find the coin. If you go back and have a look at this government's track record, the way they will try to create the illusion of a surplus—which I really do not believe will happen—will be through a process of cooking the books.

But when it comes to trust, who can forget the Prime Minister of our nation, before the last election, staring down the barrel of a camera and saying, 'There will be no carbon tax under a government I lead'? Who can forget that? And when you are working out who you can trust, ask: can you trust this Prime Minister?

But do not let the Treasurer, who has put this budget up, get off scot-free, because within days of the Prime Minister making that comment, he was also asked about the carbon tax and his comment was:

We have made our position very clear. We have ruled it out.

So here you have a Treasurer, with a track record of not being able to be trusted, walking into this parliament, delivering a budget which talks about some hypothetical surplus in the future and trying to convince the nation that they are worth trusting. Well, I implore this nation to think very hard about who they trust when it comes to the management of the economy.

I want now to speak briefly about the off-book expenditure and the tricks that this government will use to try and create the illusion of a surplus. I will try to bring it back into a business context. One example of off-budget expenditure that the government are using is the NBN—around $36 billion—and another is the clean energy fund, which is about $10 billion—$2 billion a year over five years. So when you look at the way they are doing it, it would be the equivalent of someone in a family budget not eating—showing on their balance sheet that they did not eat for the whole year but that they bought a big wodge of groceries and stuck them in the pantry for the first half of the year and then saying that in the second half of the year they will go and do another grocery run. It is accounting trickery and it is deceit shown by this government.

The government talks about the cash rate and says that it was lower under Howard. I want to make the point as a business owner: I encourage Labor to go and talk to their businesses and go and talk to those people with mortgages. I would be surprised if you did not find out that no-one can borrow money at the cash rate. So while you make the point that the cash rate may have been lower under Howard, what we need to really focus on is the spread and what the variable rate is; and I can assure you that the variable rate under this government does not come anywhere near what we had it at under Howard.

As to spending ratio, as a percentage, to GDP instead of the tax to GDP: again, these are just tricks—

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

What—tax to GDP is a trick?

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

No—spending as a ratio of percentage to the GDP instead of tax. The point I want to draw your attention to is your spending—spending to GDP.

The Assistant Treasurer recently made a comment on Sky that running the budget was not that dissimilar to running a household budget. With the full record deficits, could you imagine buying an $800,000 home, not making a payment on it for the first four years and then going in in the fifth year and saying, 'Listen, I would really like to service some of my debt, and I've got $2.60 to give you,' because basically that is what it comes back to as a percentage when you start looking at the $1.5 billion potential surplus that may eventuate in the future—to start drawing down some of these record deficits that this government is continuing to bash us around the head with.

I cannot lose the opportunity of speaking about the increase in the debt ceiling from $250 billion to $300 billion. Today we were advised in the House that, 'We just need to have a buffer.' Well, did we need to have a buffer when we took it from $150 billion to $200 billion? Did we need to have a buffer when we took it from $200 billion to $250 billion? But guess what? They are saying they are not going to draw down on that. They just need it there as a buffer. When you go and have a look at the budget forecast, they have actually taken a provision for the interest to service that debt into the future. In 2015 they are making provisions for the interest on that debt, which they try and tell you that they are not going to draw down on. Who can you trust? When it comes to this government, when will they learn that you cannot tax and legislate a nation into prosperity?

In closing, I just want to make a quick comment on the AAA credit rating. When Standard and Poor's and Moody's give credit rating assumptions for nations around the world, they give us a thing called a comparative rating. Why is it that, when we were in government and had money in the bank, and no debt, and now here we have a nation with unprecedented debt and very little capacity to service, with structural deficit—

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

This'll be good! You never got a AAA rating while you were in government!

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member will be heard in silence.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

With comparative credit rating, as other nations around the world soften, by default, Australia ends up with a AAA credit rating. It is unprecedented, unthinkable, that this government would blow their own horn to say that they are managing the economy when they are producing record deficits. I will make the point that they are structural deficits.

In closing, I would also make this point: electricity prices under this government are up 66 per cent since Labor was elected, gas prices are up 39 per cent, food prices are up 11 per cent, petrol prices are up 11 per cent, education and health costs are up 25 per cent. My message to the government is: get your hands out of the pockets of mums and dads; get your hands out of the pockets of businesses and let them flourish. (Time expired)

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Order! The discussion is now concluded.