Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

What a sham this government is! What a sham the Treasurer is! After the litany of broken promises—backflips, backflips on backflips, outright stuff-ups, waste and now billions upon billions in new spending announcements—the Treasurer, like a drowning man clinging to a rubber duck, is still maintaining his claim that the government will next year deliver the first Labor surplus in over 23 years.

If the Treasurer truly believes this then he should be prepared to put his job on the line—just like millions of Australians do every day when they risk their life savings to create businesses and jobs. He should measure up to the meagre standard he has set himself—and resign if he does not. But he will not do that. And we all know why. It is because he is practising a grand deceit on the Australian public.

In the short time available to me tonight, I am going to talk about two issues that should concern every Australian who cares about maintaining our standard of living and the economic legacy that we bequeath to future generations. The first is the government's $120 billion black hole and the second is the consequence of that $120 billion black hole—which is, of course, new taxes. I will go first to the black hole.

When Wayne Swan was shadow Treasurer, he made big statements that the Howard-Costello government was 'a big-spending government' He claimed that the coalition were 'spending like drunken sailors'. Yet the previous government spent $100 billion a year less than the current government—the spending then was 23.1 per cent of GDP. During the life of this government we have seen it go from 25.2 per cent, to 26 per cent, to 24.7 per cent, to 25.1 per cent. At no stage has it been as low as it was in the last year of the previous coalition government.

Four months ago, when he delivered the budget, the Treasurer claimed he would tighten expenditure, yet in the last month and a half we have seen a $120 billion black hole appear in the government's budget, because of unfunded policy announcements such as the dental plan, the Gonski plan and the National Disability Insurance Scheme. Each of these plans locks-in recurrent spending. This comes after warnings from Treasury Secretary Martin Parkinson and former Treasury Secretary Ken Henry that the current tax system is not able to cope with new spending initiatives. On top of this, the Treasurer, through the mining tax, has foolishly banked on revenue that is entirely dependent on volatile commodity prices, having wishfully bet budget spending on assumptions that commodity prices would stay at historic highs. The coalition warned then that even a small decrease in commodity prices would leave the budget exposed, let alone the 30 per cent drop in commodity prices that we have witnessed in the past year. Modelling firm Macroeconomics confirms these claims by predicting that the 2012-13 budget is already in deficit by $15 billion—a far cry from the promised $1.5 billion surplus.

In order to paper over the cracks in the budget and deal with its political problems, we have seen the government lurch from one position to another on the carbon tax. It has changed it six times since it started less than two months ago. Recently, the government exposed the carbon tax for what it really is: a revenue raiser that has precious little to do with the environment. One only needs to look at the government's recent backflip—its decision to scrap the buyout and close down brown coal power stations—to see that. This not only saves $5 billion from the bottom line but forces these powers stations to start paying the carbon tax: a double benefit to the Labor government and its coffers.

Thanks to the Australian Financial Review, Frontier Economics and the government's own figures, it is clear that Labor's unfunded spend-a-thon has created a massive structural deficit. Undermining the budget's structural integrity is a serious concern; it erodes consumer and business confidence and willingness to invest. Australians know that, over time, structural challenges will need to be addressed by spending cuts or tax increases. The Treasurer said in this place only this week that he refuses to rule out tax increases. We know that there are a couple of tax increases that are favoured by the Greens, the coalition partner of the government at the moment: more tax increases with superannuation and death duties. The Treasurer refused in this place to rule them out. We know that the government likes tax increases, because it has announced 26 new or increased taxes over the life of the government.

So I say to the people of Australia: prepare for higher taxes, more backflips, more on-the-run announcements and more fiscal irresponsibility. It does not have to be like this. With a coalition government it will be different. (Time expired)