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

I have 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 urgent need for the Government to provide accurate information on Australia’s current budgetary position.

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

I rise to discuss a matter of grave public importance—that is, the failure of the government to be honest with the Australian people about the state of the economy and the budget. Just yesterday the Treasurer said in relation to the release of the IMF Global Outlook Report:

The IMF's World Economic Outlook (WEO) has reaffirmed the strength of Australia's economic fundamentals …—

and—

The Australian economy remains the standout performer of the developed world, with solid growth, low unemployment, contained inflation, strong public finances and an enormous pipeline of investment in resources …

Sometimes I think that the Treasurer lives in a parallel universe, where he is in denial about the true state of the nation. I hate to rain on the Treasurer's parade, but the IMF was not signalling that all is fine with the Australian economy. The IMF revised down its outlook for Australia. The growth forecast for Australia for 2013 was downgraded substantially, from 3.5 per cent to three per cent. The three per cent growth in 2013 will be a marked slowdown from the 3.3 per cent forecast for 2012.

The IMF forecasts that the Australian unemployment rate will rise, from 5.2 per cent the year before, to 5.3 per cent in 2013. This is an increase on the current level of 5.1 per cent. Of course, the IMF has not taken any explicit account of the deterioration in the employment participation rate in Australia as Australians give up looking for work.

The IMF also exposed the Gillard government on its claim that taxes have come down under Labor. The Treasurer recently claimed that this government has already delivered three rounds of personal income tax reforms or, if you like, cuts.

Senator Wong, the Minister for Finance and Deregulation, told the Senate three weeks ago that Australia has cut income tax. Yet the IMF Fiscal Monitor, also released yesterday, showed that Australia has increased both corporate and personal income taxes since 2009.

The Australian economy is facing severe headwinds. The Treasurer's deceit on tax and spending does nothing to instil confidence that he has the capacity to meet the challenges. Even the Reserve Bank is now expressing unease about the prospects for the economy.

Last week's reduction in the cash rate, to 3.25 per cent, took it to levels only one cut away from the lows reached during the financial crisis. The Reserve Bank are cutting interest rates not because the Australian economy is doing well but because the Australian economy is deteriorating. Now we are only one interest rate cut away from the three per cent level that the Treasury described as 'interest rates at emergency levels'. So we are one cut away from emergency levels of a cash rate. So, clearly, the Reserve Bank now see the commodity investment boom coming off the boil. They said in their statement:

… the peak in resource investment is likely to occur next year, and maybe at a lower level than earlier expected.

They went on to say that 'the labour market has generally softened somewhat in recent months'. They suggest:

… the growth outlook for next year looked a little weaker …

But, if you believe the Treasurer, everything is rosy, everything is terrific and we are going up the league table of the size of the world economies. But what he fails to explain is that the people who are falling off the table are Spain, Mexico and a range of other countries. The Treasurer constantly compares us to some of the worst performers and not the best performers, because he is a man who advocates and believes in mediocrity, just like his Assistant Treasurer. Mediocrity: that is what those opposite believe in.

Although the Reserve is usually careful not to comment on government policy, it comes straight out and says:

The introduction of the carbon price is affecting consumer prices in the current quarter and this will continue over the next couple of quarters.

So the carbon tax is actually making things worse. We have the labour markets softening up. We have the cash rate coming down to near emergency levels. We have business confidence down. We have business investment coming off. And what does the government do? It introduces a mining tax and a carbon tax, which increase the cost of business and increases the cost of living.

The IMF and the Reserve Bank are as impartial and professional observers as you can get. They are not talking-down the economy, they are simply telling it as it is. They are reflecting what the data says. Clearly, we are seeing a marked slowdown in the momentum of the economy. The monthly trend increase in retail spending slowed to only 0.2 per cent in August, which is a significant deterioration from the 0.5 per cent increases recorded in April and May.

ANZ job advertisements have declined every month this financial year. I say again: ANZ job advertisements have declined every month this financial year. Job advertisements are now 10.8 per cent below levels seen a year ago. The Sensis Business Index shows that the confidence of small and medium sized businesses declined in the September quarter, which is the third consecutive fall. So it is no surprise that support amongst small and medium enterprises for the federal government dropped from the last quarter and is now at its lowest level since February 1996. That is an independent survey. It says that confidence in this government by small business is at the lowest level since February 1996—the month before Australians got rid of the Keating Labor government.

The Australian Industry Group-Commonwealth Bank Australian Performance of Services Index weakened again in September, falling further into the zone that indicates a contraction in activity. Consumer confidence in October remained in the pessimistic zone for the eighth month in a row. The trade deficit in August was $2 billion, which is the largest in four years. NAB's monthly business survey for September showed a fall in business conditions, which are now well below long-run average levels. Forward orders were noticeably weaker in September, pointing to further weakness ahead.

I am sorry, Treasurer, this is not an economy that is displaying strong economic fundamentals. The more the government spins its lines the more it loses its way and the more it deludes itself that the economy can cope with more regulation and higher taxes. If it does not tell the truth about the state of the Australian economy then it fails to appreciate what everyone is going through. And if it fails to appreciate what everyone is going through, it thinks that the pain threshold of the Australian economy is higher than what it is.

The challenge is reflected best in the budget. The recent release of the Final Budget Outcome for last year shows that the government's fiscal position continues to deteriorate. This is the budget. The underlying cash deficit was nearly $44 billion. The government promised that it would be $22 billion and six months before that it promised it would be $12 billion. It turns out, when the actual number comes in—not what Labor spins, but what actually happens—it is double what was promised at the budget and four times larger than what was promised just 18 months before. The deficit was the third biggest in Australia's history. The government has now run cumulative deficits exceeding $173 billion.

An opposition member: How much?

It is $173 billion, since coming to office. This is the 10th consecutive budget deficit delivered by Labor governments. In 2011 budget papers Labor estimated a net debt of $107 billion. The final budget outcome saw this grow to $147 billion—a blow-out of over $40 billion. The blow-out increased Australia's interest by $1 billion year to $6.6 billion. The net debt figured in the final budget outcome is $5 billion more than forecast in the recent May budget. That means that in just seven weeks alone—after the Treasurer last stood at this podium, at the dispatch box, to deliver a budget—the Labor Party added $90 million a day to the nation's credit card.

To really understand the damage this government has done we need to look at what the Commonwealth government is actually worth. The recent final budget outcome shows that the net financial worth of the Commonwealth government had, in one year, deteriorated to $158 billion, and we are now worth negative $358 billion. This is the lowest—the worst—balance-sheet position since modern accrual records have been kept. This is a government that claims it has the budget under control, that it has the budget in hand.

The Treasurer wants you to believe that the deterioration in the budget position is all about lower revenue and the global financial crisis. That is what he said in answer to the member for Casey's question today. It is not his fault, the Treasurer said. The problem is: Labor knows how to spend money. And it spends it recklessly. Last year, as a percentage of the economy, the government spent 25.3 per cent. That is the usual benchmark for comparing it between governments: apples with apples.

The percentage of the economy spent by the government is 25.3 per cent. This is higher than at any point under the previous coalition government. Labor is now spending $100 billion a year more than the last year of the coalition government. The government says it is doing the hard yards on savings. Do you know what savings are, according to Labor? It is not about reducing expenditure; it is about increasing taxes, according to Labor. Isn't that a novel idea?—to describe a saving as taking money off someone else. That is what Labor does.

They claim to have $33 billion of savings this budget. They will not admit—I challenge old buggerlugs here, the commander from the west of Sydney, the Assistant Treasurer, to respond to the Australian people—

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for North Sydney will refer to members appropriately, by their titles.

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

The member for Lindsay. I challenge him to confirm that half the so-called savings in the budget this year are actually tax increases. Labor are desperate for money; they are desperate for other people's money. This mob, like a bunch of good socialists, know how to spend other people's money; they never spend their own. They are so desperate for money they are raiding everything.

We understand that the government now is in the process of taking an accumulated $850 million over three years from Medibank Private. From Medibank Private, to whom people pay their private health insurance premiums and expect services in return, this government is gouging $850 million over three years. But what is of concern is that the dividends from Medibank Private exceeded their profits over the last two years. This year reports suggest the board has been asked to approve a special dividend payment of $300 million on top of an ordinary $91 million dividend. So the total dividend payment to the government is three times larger this year than Medibank Private's profit. In 2011 Medibank Private paid $434 million in dividends to the government, when the profit was only $300 million. This gouging of money is a worrying trend, because the Australian public and the millions of policy holders with Medibank Private deserve to know where the money is coming from.

The government is also tapping the Australian Reinsurance Pool Corporation, taking $300 million over the next four years. This reinsurance pool provides the insurance cover against the risk of terrorism, and the government is taking money out of it to prop up its budget. The government is also taking $500 million out of the Reserve Bank. Whilst it is not unusual to get a dividend out of the Reserve Bank, I would say to you that now is not the time to be taking money out of the Reserve Bank—whilst we have this sort of volatility in international capital markets. But, no, this is the Labor way.

And it goes on. The cream on the cake is that Labor, not satisfied with the biggest deficits in Australian history, are now spending $120 billion on new promises and they have not explained to the Australian people where the money is coming from. I say to the Assistant Treasurer: show the courage today, stand at this dispatch box and explain where the $120 billion is coming from.

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

Madam Speaker, can I take the opportunity to congratulate you on your elevation to high office. Congratulations.

It is a great pleasure to be able to speak to this matter of public importance. It is a shame that the member for North Sydney, after having posed so many questions, is now about to walk away without hearing the answers. But I relish the opportunity to respond to the invitation from the member for North Sydney to debate this matter of public importance. I find it extraordinary that he would bring forward a matter of public importance that dealt with the need for accurate information on budgetary positions. Of all of the audacious things the member for North Sydney could do, this is right up there. I say it is audacious because he is not a man who has a good track record when it comes to transparency and accuracy in relation to information that is brought forward on budget costings.

What am I referring to? Let me begin with the budget-in-reply speech that, we all recall, the Leader of the Opposition gave in 2010, where he gave us no detail, no indication of any of the cuts that he was going to make—the cuts that he would have to make, and ultimately cuts that he at least put on the table before the 2010 election: cuts to education and to health. But then we had the member for North Sydney front up to the National Press Club. He told us, 'Well, I'd love to be able to tell you where all these savings are going to come from, but you'll have to wait; we'll tell you next week.' Then we had the member for Goldstein, who is in the chamber at the moment, come forward. He had that wonderful press conference where he had to go through and try and do the hard work to explain where they were going to find the costings. It culminated of course with that wonderful conclusion to the press conference where the advisor up the back was signalling as though he was about to slit his neck—'Cut it off! Cut it off! Enough questions; enough scrutiny; enough accountability. That's the end of it: we don't want to have to answer those questions.'

Anyway, fast-forward through to the 2010 election. They went off to the election. This is the mob that told us for all those years about the Charter of Budget Honesty—we should all kneel down at the Charter of Budget Honesty, because that is the only way we can determine that a party heading into an election is committed to actually delivering fiscal responsibility! So you would have thought, having been lectured about the significance of the Charter of Budget Honesty for all those years, that when they had an opportunity—in fact, their first opportunity in opposition—to go to an election and to put their plans on the table, to get them properly costed, having genuflected at the alter of the Charter of Budget Honesty for all those years, they would be able to walk down the aisle and do the same thing in the lead-up to the 2010 election. But did they? No, they did not. They went off and got some dodgy costings from a set of accountants that were subsequently reprimanded because the costings were that shonky. The member for North Sydney at the time was asked: 'Was this an audit—

Opposition Members:

Opposition members interjecting—

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I remind members who are not in their seats that they should not be interjecting.

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

He was asked: 'Was this an audit of your policy costings?'—and he said it was an audit. But, subsequently—in fact, this is the very reason the firm was reprimanded; because it was not an audit—the member for North Sydney said, 'Well, you know, what's an audit? Obviously I wasn't familiar with a detailed definition of what an audit was.' That is what he said.

So what have we seen since the last election? Of course, after the election we had that period of negotiation for minority government; and the Independents finally exposed the fraud that was the fiscal plan that the opposition took to the last election. They required that that plan be properly costed. It would have been properly costed had they done what the Charter of Budget Honesty requires. But it finally got costed by the Treasury, and what did we find? We found an $11 billion black hole.

It is on the strength of that $11 billion black hole that the Independents decided to form government with this government. So, when those opposite talk about lack of electoral legitimacy and electoral mandates, what they do not tell you is that one of the principal reasons why the Independents supported Labor to be government was that we did not go to the last election with shonky figures. We did not try to pull the wool over the eyes of the Australian people by going there with a plan that had an $11 billion black hole. We did not get some shonky costings from some accounting firm and then try to serve that up as having met our obligations under the Charter of Budget Honesty. But what do we have now? We have an opposition that has not learnt their lesson. They have been coasting along. They think this is all about the carbon tax and winning the next election because the sky is going to fall in because of the carbon tax.

Well, by the next election the Australian people are actually going to ask you to be up-front with them about what it is you plan to do. They will ask you to do that, and if you try to pull the wool over their eyes the way you did last time—or sought to, and got exposed after the election—you are going to come under a little bit more scrutiny this time. Not only do you have an $11 billion black hole, but we know that you have a $70 billion black hole. How do we know that? That is not some figure we have plucked out of some inaccurate newspaper report, like the figures you people want to trawl around with. That figure came out of the mouth of the shadow Treasurer.

In fact, Minister Burke is at the table here and he was on national breakfast television at the time that the shadow Treasurer said that they had a $70 billion black hole. And the shadow Treasurer has, ever since, sought to deny they have that $70 billion black hole, until just a few weeks ago when he went back on breakfast television—this time on the national broadcaster rather than commercial televisions, but breakfast television nonetheless—and confirmed that they still have a $70 billion black hole.

So, we know that they have a $70 billion black hole, but the only thing we do not know is how they are going to fill it. I have spoken in this place before about their economic strategy. Well, it is more of a political strategy. It is about running around to every corner of this country talking the economy down. You just heard it from the shadow Treasurer. If there is any bad news to be found in the national economy, the shadow Treasurer will be there, sniffing around looking for bad news.

But when you look at all of the good news—and there is plenty of it in terms of the strength of the Australian economy against competitor economies in the global economy—they do not want to know about it because it does not suit their political aims. Their strategy is to talk the economy down, tell everyone the economy is so busted and so wrecked that they have to come in and do some nasty things. The only thing is that they will not even tell us what these nasty things are. They talk about this commission of audit, which I will come to in a minute, but once again it is just a mechanism designed to try to kick the can along a little, past the next election, so that they can come back and have a crack and do all of the things that their counterparts in states like New South Wales and Queensland have been doing.

But on the question of the $70 billion black hole—out of the mouth of the member for North Sydney—he actually went on ABC News 24 TV on 19 September and said, 'We will find savings and we have found the savings.' Full credit to him if he has done the hard yards and has gone out and worked out which government programs he intends to cut in order to fill his $70 billion black hole. I think it is only fair that he share this news with the Australian people. He should share his plans for where he intends to make these cuts across education and health. If you look at New South Wales, $1.7 billion worth of cuts have been made to education. We have seen how much damage you can do with $1.7 billion worth of cuts. Imagine what you can do with $70 billion worth of cuts. Is that what he intends to do? I think it is only fair that he share this with the Australian people.

Not only should he tell the Australian people where he intends to make these savings, but he should learn from the error of his ways and should walk down to the Parliamentary Budget Office and get these plans costed so that the Australian people know not only, firstly, what he intends to do—what damage he intends to inflict—but, secondly, whether or not the shonky figures he wheels out before the next election have any credence at all. If he does not trust the Treasury—and we know how much they have talked down the public service; they have talked them down relentlessly and we know they do not trust the public service—we have even set up the Parliamentary Budget Office to give the opposition another option. The opposition should be fair dinkum with the Australian people. They should go and get their policies costed so that we know exactly what the full cost of them is.

I mentioned earlier that they talk about this commission of audit. We all know that what we have seen in New South Wales and Queensland is just a curtain-raiser of what is to come if they ever get their hands on the Treasury benches at the Commonwealth level. We know that, because what is going on in Queensland and New South Wales is fully authorised by those here in Canberra from the Liberal Party. In relation to Mr Abbott, Premier Newman said, 'He is very understanding. He and people like Joe Hockey have been incredibly supportive.' We heard the shadow Treasurer go on and say: 'All strength to his right arm. He is showing incredible courage.' My challenge to the shadow Treasurer is: be courageous and tell the Australian people which programs you are going to cut to fill your $70 billion black hole. Which programs do you intend to cut?

We already know from the last election that they would cut trades training centres and that they were going to cut our GP after-hours clinics. All of these things they said they were going to cut. Tell us what you are going to cut, if you win at the next election, to fill your $70 billion black hole. The only thing they have told us that they will cut is jobs. The shadow Treasurer says, 'I'm deeply concerned about the future of the labour market in this country.' We have 5.1 per cent unemployment; go and compare it with what is happening elsewhere in the world. He says he is deeply concerned with the labour market in this country, just as concerned as he was back when the global financial crisis struck. When we as a government acted, they did a runner.

In fact, the Leader of the Opposition did not just do a runner, he was asleep in his office when the biggest set of economic decisions that this generation has ever had to take were being taken in this place. He was asleep in his office. He missed the vote. So, for all of the talk about the BER and all of these other stimulus programs he, unlike some of his colleagues who are here, did not even vote against them because he missed the vote when he fell asleep—he was napping.

I know he was napping on that occasion.

Some people out there might argue: 'Well, look, he had a rough day. It was late at night. He fell asleep after a few drinks up at the parliamentary dining room.' I know it was reported at the time that that was what had occurred. You might be willing to be generous and forgive him for that—I am not that generous, but some might be more generous than me and say: 'He fell asleep, he missed a vote on one night.' It just happened to be the biggest economic vote that this House has ever taken—certainly in a generation. But he missed a vote. You might say that he had a rough day. Okay.

On several occasions recently I have seen the Leader of the Opposition out there saying, 'When we come to power we will return this country to growth'—implying that somehow we are not growing—totally ignorant of the fact that our economy has had 21 years of consecutive growth, unmatched in the developed world. The only conclusion I can draw is that he was not just asleep when he missed the vote; he has been asleep on the economy for the last 21 years. When it comes to the economy—

Mr Neumann interjecting—

I thank the member for Blair for reminding me that Peter Costello said that Abbott was bored—bored to tears and bored to sleep. Obviously he fell asleep for the 21 years of economic growth. His former employer John Hewson said Abbott was innumerate. These are the credentials of his economic policy, coming from his own side. But do not listen to what Peter Costello says; do not listen to what John Hewson says; have a look at what the member for North Sydney says. He says they have a $70 billion black hole; he says they have the policies that are going to fill that black hole; but he just has not told us what they are.

He said a bit earlier that we should not compare ourselves to countries like Mexico, South Korea and Spain—we are the twelfth-largest economy even though we are the 51st-largest country by population—he says we should be comparing ourselves to others. It is interesting. He gave a speech a bit earlier this year in which he said the same thing. He was talking about the 'end of the age of entitlement'. He was talking about ripping the guts out of the social service system—ripping the guts out of education and health. He said, 'We need to compare ourselves with our Asian neighbours, where the entitlement program of the state is far less than it is in Australia.' That is because he wants a race to the bottom. He wants to cut our social security safety net. He wants to drive us down. He wants to destroy the jobs of so many Australians. (Time expired)

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

No wonder there is a crisis of confidence in the Australian community—people saving like they never have before; businesses not investing, despite cashed up balance sheets. We have just heard the member for Lindsay—the Assistant Treasurer, would you believe? He had 15 minutes and was unable to answer one question, not one question, posed to him by the shadow Treasurer. No wonder there is a crisis of confidence. No wonder he is leaving the chamber. Off he goes. He has not given one answer in 15 minutes. It is pathetic.

For over two years now, we have been warning this government about its reckless spending and the impact that that is having on creating a structural deficit, a situation where the government has now committed this country to well over $100 billion of ongoing new spending, which—when the rivers of resource gold start to dry up to some extent; not collapse, but when they start to come back—we will be unable as a country to afford the commitment, the structural deficit, the reckless spending that this government has embarked on.

Warren Buffett once said that it is only when the tide goes out that you discover who is swimming naked. The tide is going out on this government, and what it is revealing is not a pretty sight. You never hear this government refer to debt. When was the last time we heard this government talk about debt? Never. They never talk about it. You never hear this government refer to the significance of the four biggest budget deficits in this nation's history. You never hear this government talk about the impact on the broader economy of needing to fund this record debt. You saw no comment two weeks ago when that record debt went over a quarter of a trillion dollars. For the first time in our history, the Australian federal government now owes over a quarter of a trillion dollars.

I will put this into some context by asking one simple question—I put this to the chamber: what was Australia's second-largest export last year? Easy question. Iron ore? No; that was the largest. Coal? Gas? Wool? No. I will give you the answer. Australia's second-largest export last year—according to PIMCO, the world's largest bond investor—was Commonwealth government bonds. Would you believe that? Have we ever heard this? Here we have a debate about the government providing accurate information but no-one in this chamber was able to answer the question. Minister Burke here is totally ignorant of the fact that the second-biggest export last year was Commonwealth government bonds. Would you believe it!

Not only is that an interesting fact; it also has implications. Importantly, PIMCO go on to say that funding the record debt—described by them as a 'capital tidal wave'—has contributed to the high level of Australia's currency. Funding this debt has held up the Australian currency at record levels but it has also provided none of the direct economic benefits that other large exports provide when they increase terms of trade and push up the value of the dollar.

The government bonds have been in the market pushing up the Australian dollar while this government says that it is doing all it can to help those affected by the high dollar—manufacturers, the tourist industry, those selling education overseas and the millions of businesses that are trade exposed in this country and do not have the benefit of iron ore and coal sales and associated activities.

We have been blessed with high iron ore and coal prices. As terms of trade have gone up so has the dollar; that is what normally happens. In fact terms of trade are coming off in Australia at a much greater rate than was anticipated, even in the recent budget. The budget as it stands assumes a fall in the terms of trade of 5.75 per cent. So, when the Treasurer was asked, 'What have you allowed for this reduction or fall-off in price?' he said, 'Of course we have done that; we've assumed terms of trade to come back 5.75 per cent.' However, based on falls in commodity prices since June, economists are almost unanimous in projecting that the terms of trade are likely to fall this year a further 10 per cent over and above what the budget papers assumed just back in May. That gives a shortfall of about $20 billion.

Just watch this upcoming MYEFO. It will be brought forward—it will come out sooner rather than later—so that they can make assumptions which they hope to get by with. Watch the trickery. Watch this government fudge these numbers with trickery and subterfuge. You will see it writ large again, as we saw it in the budget. This is a government that is not, in any way, making a contribution to accurate information on Australia's current budgetary situation.

Let me tell you more, though, about the problem with relying on the funding of government debt on overseas markets through government bonds. When the banks borrow they hedge the dollar, and that borrowing has a minimum impact on the value of the Australian dollar. Many of the banks are pulling out or they are repaying offshore borrowing faster than they raise new debt. What we are seeing now, however, is that offshore investors in government bonds—many of them are central banks—often do not hedge their foreign exchange exposure, as they are specifically attempting to diversify their foreign exchange reserves. As a consequence, in contrast to the banks, who hedge their A-dollar proceeds, foreign investors buying Australian dollars to invest in government bonds on an unhedged basis put upward pressure on the Australian dollar. So this manic drive to spend, spend, spend is pushing up debt, debt, debt, which is resulting in a quarter of a trillion dollars of government bonds, which are going onto the world market unhedged because the buyers of those bonds do not want to hedge those things—they are trying to spread their risk. As a consequence the Australian dollar is being held up.

I suspect that all of us in this chamber wander around our electorates and other parts of the community and now people—businessmen and others—are asking us, 'Why is the Australian dollar staying up when the commodity prices have come off?' After the global financial crisis, before they started to spend, spend, spend, the automatic stabiliser of a lower dollar came in. The dollar dropped from one to the US down to 60c. It was our biggest trade performance on record—ever—in the first quarter of 2009, because of the automatic stabiliser and low interest rates.

That is what saved this economy, with a great budget position from which to go into that global financial crisis—not the wanton spending that has taken place in the year or two, or three or four since. That is not what saved jobs; it was this automatic stabiliser. Now their debt is stopping that happening again. As the commodity prices come off, the A-dollar is being held because this government is putting bonds into the market at a rate which is holding up the Australian dollar. It is materially impacting on the inability of manufacturers, our tourist operators and our education exporters to compete on world markets. This is dereliction of duty. This is misrepresentation. This is obfuscation of the facts in this situation.

Of course, Minister Burke opposite just smiles. Why wouldn't those opposite smile? That is their answer to all of these things. There is no capacity for fiscal stimulus if things really come off now, because it can only be funded by debt, which means more pressure on the A-dollar. The Treasury monetary policy is being compromised, also, because it is down now to only 0.25 per cent above the so-called crisis level—as it was called by the Treasurer back during the GFC. So fiscal policy has been thrown out of the ring. We cannot use that if things turn down even further, and monetary policy is constrained. This government is incompetent. It has got us into a very vulnerable position. This government needs to give up the reins of office if we are to restore the stability and confidence that this country needs. (Time expired)

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to rise to speak in a debate on the strength of the Australian economy and the right policy settings. Any discussion about where the Australian economy is headed needs to recognise that we are in the midst of one of the biggest terms-of-trade shocks in Australia's history. In the history of the Australian economy, when a terms-of-trade shock has come along—whether it was in the 1930s, the 1950s or the 1970s—it has blown the place up. Yet, despite a massive increase in the terms of trade—a massive increase in the ratio of export prices to import prices—the Australian economy, this time, has remained strong. Unemployment has stayed at five-point-something and inflation has stayed low.

Importantly, while the Australian economy is undergoing significant structural adjustment, not only has unemployment stayed low but the dispersion of unemployment has stayed low as well. But it is still correct that the world is a dangerous place for anyone trying to run an economy well. The IMF yesterday cut its forecast for world output this year to 3.3 per cent, down from the 3. 5 per cent announced in July.

All of us can name important risks, whether it is the Chinese housing market or the need for the Eurozone countries to better manage their fiscal burden. In this environment the Australian government continues to properly cost our policies through the usual budget processes and the midyear updates. At the last election our policy costings were found to be spot on—no surprise, given that they were prepared by Treasury. Of course, that is more than can be said for the coalition's costings, which were done by a private accounting firm and were out by a cool $11 billion.

The problem with the coalition's costings now is that, while they have said yes to every special interest, they have said no to every tough decision. They said no to the mining tax but yes to the superannuation increase that is funded by it. They said no to the carbon price but yes to the tax cuts and the benefit increases funded by it. When we make hard decisions to means test policies like family tax benefit part B, the baby bonus and the 30 per cent private health insurance rebate, they cry foul about class envy. But it is through tough decisions like this that we made $100 billion in savings over recent budgets.

My attention was drawn to a piece by Bernard Keane, who went back to look at the veracity of some of the economic predictions made by those opposite. He noted that when the condensate excise exemption was removed in 2008, Senator Johnston called it 'one of the greatest assaults on the living standards of Western Australians I have ever seen in the history of Federation'. Of course, shortly afterwards Woodside unveiled a record profit, up 70 per cent on the previous year. In 2008, when our government lifted the luxury car tax, Senator Fifield called it 'the politics of envy and class warfare'. Bernard Keane went on to point out that SUV sales have risen 40 per cent over the past four years. And you will hear those opposite rail against Australia's debt levels—a modest 10 per cent and falling—but you will never hear them admit that taking on that debt saved 200,000 jobs in the global financial crisis.

Here in the ACT it looks as though the local Liberal Party are a carbon copy of their federal colleagues. On 20 October Canberra voters will go to the polls to choose a new government. With newly elected Liberal governments around the country having run, and won, on negative anti-Labor messaging—like the Federal opposition is attempting to do—it is no surprise that the Canberra Liberals are being negative to the last. They are leaving all Canberrans asking what policies they have come up with in the last four years—and the answer seems to be not much. The Canberra Liberals' signature policies include promises to reintroduce lightweight plastic bags, despite the fact that they supported a ban on the bags in 2004; to provide a green-waste bin at no cost, although it has been costed at $19 million a year; and to scrap the nurse-led walk-in clinic that has provided free healthcare to tens of thousands of Canberrans.

But since this MPI is on costings let us discuss the apparent inability of the Canberra Liberals to provide voters with proper costings for their small set of policies. Let us take health. At first the Liberal health spokesperson said their health plan would cost $6.9 billion over four years. And then on 1 October it became a $6.9 billion plan over five years, when the opposition leader intervened. And in the third version it became $6.2 billion over five years. As the website www.realzed.com points out, at best this indicates a massive $800 million cut to public health services. They have not been able to articulate how much money, nor how it will be spent. They have not even said how many beds they will fund—or defund, as they did when they were last in government.

And then there is education. In their education policy the Canberra Liberals omitted to fund the Canberra Institute of Technology. Confronted by Treasurer Andrew Barr over their plan to rip over $100 million out of the vocational education system, the Liberal Treasury spokesman refused to say why vocational education had been omitted from their policies or how much a Liberal government would give the CIT. As Bill Clinton said recently, 'It is just math.'

What is striking about the Canberra Liberals' refusal to detail policies, and their slipshod costings, is how closely it echoes their federal counterparts. A good opposition do not just say what they stand against, they also say what they stand for. It is not good enough for the Seselja opposition to play fuzzy games over what they would do if elected. ACT voters have a right to make a real choice. Frankly, ACT voters deserve better than the Leader of the Opposition's and the member for North Sydney's 'mini-mes': Zed Seselja and Brendan Smyth.

In other states we have seen Liberal premiers promising no change before election day and then delivering radical cuts afterwards. In New South Wales Barry O'Farrell slashed 800 TAFE jobs and cut 15,000 public servants over two budgets. In Victoria Ted Baillieu has cut firefighting services, and some 5,500 public servants are facing job losses. In Queensland Campbell Newman has cut 14,000 public sector workers after telling them before the election that they had nothing to fear from him. Premier Newman has also cut Breastscreen Queensland and the Premier's Literary Awards.

If the Canberra Liberals will not tell us some policies, and cannot cost others, the only thing Canberra voters can judge them by is what their colleagues are doing in other states—and it is not pretty. Federally the opposition leader's plans to cut 20,000 Canberra public servants are met with a deafening silence from the ACT Liberals. When the member for Canning said in this place in one of these debates that public servants 'feed on others', there was not a murmur of criticism from Senator Humphries and the ACT Liberals.

It is very clear that the federal coalition cannot meet their $70 billion costings gap without some radical cuts. Seventy billion dollars is equivalent to stopping Medicare payments for two years or stopping the pension for four years. The coalition say that their policies are ready to go. In fact, in one interview the member for Goldstein said he had already designed the covers. He had the covers done but he will not release the policies. Australians are entitled to ask: if the coalition's policies are so good, why don't they release them?

I think history might provide some of the answers. I have before me the Liberal and National parties' Public Administration Policy document for 1996. It says: 'Our plans to reduce departmental running costs by two per cent will involve not replacing a proportion of those who leave—up to 2,500 positions over the first term of a coalition government, a process of natural attrition with no forced redundancies.' But of course what happened was far from that. There were 30,000 public servants who got the sack after the election of the Howard government. What is particularly telling about this document is that it says on the back that it was printed and authorised by A Robb. That is right: the member for Goldstein was behind a document that said the Howard government would axe 2,500 public servants when it went on to axe 30,000.

If they say they are getting rid of 20,000 public servants now, imagine what they will really do. The Australian economy is the 12th-largest economy in the world; we have just risen three places. Our Treasurer has been awarded the Euromoney Finance Minister of the Year award—an award those opposite would be praising if Peter Costello had won it but, because Keating and Swan won it, they trash it. We put a price on carbon pollution. We are linking our scheme with existing schemes in Europe and elsewhere. We have a AAA credit rating from all three major credit agencies—the first time that has ever happened. Yes, we have challenges but it is all the more reason for Liberals—ACT and federal—to    put properly costed policies on the table.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

I am very proud to represent the Riverina. Far from the hazy lights of Canberra lies the Riverina. I am not saying that people in Canberra do not work hard but it is the Riverina where a lot of this country's wealth and a lot of the food which Canberrans eat is produced. The Riverina needs to be preserved and protected but it is not being preserved and protected by some of the policies, many of the policies, most of the policies—indeed, all of the policies from those opposite.

We heard a lot about the Australian Capital Territory Legislative Assembly elections on October 20. The member for Fraser quite correctly pointed out that voters will have their say. Indeed, they will because hopefully they will see the good sense to reject what Labor and the Greens have to offer, which has been rejected in New South Wales, Queensland, Victoria and the Northern Territory. All over Australia we are seeing the rejection of stupid, ill-thought-out, ill-conceived Labor policies.

The member for Fraser went on about hospital beds in the ACT. No-one denies that hospital beds are important. Certainly the member for Dawson here knows how important hospital beds are in Mackay. I am sure the member for Fraser knows how important hospital beds are in Canberra. But he also might like to know that this Labor government, of which he is a member, has put in more detention centre beds than hospital beds throughout Australia and that is a disgrace.

There is an urgent need for the government to provide accurate information on Australia's current budgetary situation. In the past 15 or so sitting hours of this House, much of the time has been preoccupied with controversy about the Speaker and that position. It was a necessary issue to be discussed and decided. Now it is back to business. The most pressing business at hand is this Labor government's debt and deficit. The spending is out of control, with unfunded promises totalling $120 billion and increasing.

Labor talks up a National Disability Insurance Scheme and funding it but the government, as with so many other policy areas, has adopted an adversarial approach to the NDIS—and shame on it for doing so. If ever something required bipartisan support, the NDIS is it and it has it. This is something marked by cooperation. The Prime Minister told a Perth audience just last month that she would fight for the NDIS but no fight is necessary, none whatsoever. Our nation wants this; the people need it; and it must and will be done. The coalition stands ready to work with the government to implement the Productivity Commission's NDIS recommendations as soon as possible. This should not be about getting credit. It should be about doing something which is just, proper and right for the good of disabled persons, adults and children, who are desperately seeking help. The coalition's disability spokesperson, Senator Mitch Fifield, was correct when he said an NDIS will not happen without a deep and enduring cross-party consensus. It will also take money.

I see an NDIS as an investment in our future and certainly in the lives of those who will depend upon it. I know how desperately hard the member for Dawson has worked to ensure that this happens. But there has to be money available to finance the NDIS. A government which cannot rein in its expenses, which cannot stop borrowing and which cannot balance the books without cooking them cannot hope ever to sufficiently resource an NDIS the way it ought to be. It should stop lecturing this side and giving false hope to those counting upon it. It is a similar situation with the national curriculum and the Gonski education report: lots of words, reviews and analysis but a delay in real action. I say to the Prime Minister and to her government: stop trying to pick fights; stop spending money you do not have; stop making promises you cannot and will not keep; and start delivering.

The Treasurer needs to come clean on where the nation's finances are up to. That is what this matter of public importance is all about. Instead of using question time to score cheap political points and to twist and turn his responses into attacks on the opposition, the Treasurer would do well to simply answer the questions asked. His relentless and reckless negativity is boring and is unhelpful. What would assist the Australian public, the people who give us the privilege to serve them in this place, would be for the Treasurer to be transparent just for once. I call on him to come to this chamber and fess up to the real situation. Tell us how much Australia owes and how he and his government plan to pay it back. Do not hold your breath. We will all be blue in the face or well and truly expired before this Treasurer—supposedly the world's greatest; I would hate to see the worst—was straightforward with this parliament and through it the people of Australia.

Given the fact that the Treasurer will not be bursting through the door any time soon, I outline for the record the parlous state of things. When the Liberal-National coalition left government in 2007—what a sad day that was—there was $70 billion in the bank for Labor to inherit. Think about that. It is a lot of money. We are now $246 billion in gross debt and our gross debt went up by another $2 billion in just the past week. In the past month we have borrowed an extra $10 billion. What does $10 billion look like? Senator Barnaby Joyce gave this correlation at the recent Nationals' federal conference:

Now I just want to show you what $10 billion looks like. If we say that the average price for a house in regional areas is $300,000, the ABS tells us that there are 2.2 people in a house on average, well that would be a city of 73,000 people, in a month. That is what we are borrowing, and we just think that we can miraculously pay this back, that it will just happen. Somehow the guardian angel of the credit card will descend from the heavens and pay all the money back. Well, it won't.

The member for Fraser knows it, the Prime Minister knows it and the Treasurer knows it. How very right Senator Joyce was.

I will now go to more on where Labor has taken us. According to the Reserve Bank of Australia, the government borrowed $15 billion in the first three months of this financial year. That is despite promising a $1.5 billion surplus this financial year. It has a lot of catching up to do. Perhaps the most damning of statistics—and they are accurate because they come from advice researched by the Parliamentary Library—are the following. Everybody should really take note of this. This government has borrowed $173 billion in four budgets. All Australian governments before this government, back to Federation, borrowed a total of $123.7 billion over 108 years.

Dr Leigh interjecting—

Member for Fraser, I would really like you to listen to this. In four years, this government has borrowed more than the previous 108 years of Australian federal governments. It has borrowed more in four years than all governments have in the 108 years prior. What a disgrace. Can you believe that?

When the coalition was last in office—

Dr Leigh interjecting—

Listen to this. This is really important and you need to listen. I know you are an economist and I know you are a really smart fellow, but you really need to listen closely to this. When the coalition was last in office, it borrowed a total of $18 billion over 11 budgets, including during the East Asian financial crisis, the dotcom bust and September 11 and the war on terror. Just remember, Commonwealth governments in the 108 years prior to the Rudd-Gillard government taking over had two world wars, a number of other military conflicts and the Great Depression. Yet, still, your government has borrowed more than all those other governments put together—do you believe it? It is just really remarkable. It is correct. The Treasurer goes on about accuracy; that is an amazing statistic.

The Treasurer today in question time said the opposition leader was not entitled to make up the facts, but there are the facts. He urged Australia to walk tall in the world. He said we are walking tall in the world and that no-one should talk down the economy. I am not talking down the economy; I am simply presenting the facts. The Treasurer should know that we are not talking down the economy when we are presenting a few figures—real figures, not the rubbery ones he spouts.

Over the last four years, the Labor government has increased our debt by $173 billion. Our net debt now is $147 billion and our gross debt is going up by the minute. Goodness knows how many millions of dollars it has gone up by in the 10 minutes I have been talking.

Bernie Ripoll (Oxley, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Stop talking then.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Well, you stop governing. You stop governing and we will get this economy back on track. Rest assured, I will stop talking when you call an election. That will be great, everyone will be happy and the Australian people will be able to eject this government. They will be able to reject it and throw it where it needs to be thrown. Also, to the voters in the ACT, if you are out there listening, on 20 October I urge you to vote Liberal because, I tell you what, you will not get anything from Labor— (Time expired)

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I will try to deliver this 10-minute speech without yelling at the other side, if I can manage that. I think I probably can. I would like to take up a few points the member for Riverina made before I address the specifics of the matter of public importance. Firstly, on his remarks about the fact that over the last day or so in this parliament there has been an incredible amount of time dealing with the issue of the Speaker's role and that now things can get back on track, I just want to make the point that, as much as the opposition comes into this place and tries to tear up this parliament and spend incredible amounts of time on suspensions of standing orders and an incredible amount of time literally brawling in this place, the thing they affect in this place is the status and the operation of this parliament. What they have not managed to do, because they have not been able to make a case strong enough for the crossbenchers to support their policy position, is interfere with the governance of the country.

The government was still operating yesterday. Despite the incredible amount of time we spent doing the work of the parliament here yesterday in electing the Speaker, the government continued to do what it does. All of the brawling that we see every day here, the suspensions and the time-wasting motions that require an absolute majority when there is no way you can get one but we spend two hours wasting our time on anyway, all of that which tears up this parliament—

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

Madam Deputy Speaker, I rise on a point of order. The MPI before us is about the urgent need for the government to provide accurate information on the budgetary situation. The member's contribution is of no relevance to that. Can you bring her back to the MPI?

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I understand your point of order, but the member has a wide ambit in this question on the government's actions. I would ask her to continue but with relevance.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I am entitled to respond to the contributions of the members prior. That is called a debate. One side says something; the other side responds. That is a debate. That is what we do. If your side introduces the subject matter, we are allowed to respond. Debate—that is what it is called.

The second issue I want to take you up on is the issue of debt. I found this quite extraordinary. I do not think the member for Riverina will ever make it to the Treasury benches. When you talk about money across 100 years, you do not say that somebody who earned a shilling in 1910 earned less than a person who is paid in today's dollars. You actually compare dollars with dollars. When talking about debt levels, you compare percentage of GDP, because that reflects your capacity to pay the debt back.

Opposition members interjecting—

I resisted interjecting during the past speaker's contribution even though I would have loved to, and I would appreciate the same respect. It is not something we get a lot of in this House. During World War II and in 1920 debt levels reached 120 per cent of GDP—not 10 per cent but 120 per cent. So for anybody in this House to come in here and seriously suggest that you can compare the debt levels now with those levels is financially illiterate at best and mischievous at worst. I do not know which of those the member for Riverina is. I do not know whether he just does not understand or whether he is deliberately misrepresenting the facts, but anybody who knows anything about the way money is compared over decades knows that you do not simply add up the dollar figure from 1901 and 1902 and then assume that that means the same as the dollar figure in 2012.

You learn that somewhere in primary school, I think, but I am assuming that he has made a genuine mistake.

Debt is an interesting subject anyway. Again, if the member for Riverina had done any research he would know that Australia has had one of the lowest debts in the world since 1970. We were about No. 6. We had the sixth lowest debt in the OECD in 1971. At the end of the Whitlam era we were about No. 6. We were about No. 7 at the end of the Keating years and we had the eighth lowest debt at the end of the Howard-Costello years. Now we have the lowest. So we have actually had an extraordinary record over 30 years of incredibly good fiscal management, which has kept the debt levels in Australia as some of the lowest in the developed world.

It is worth knowing that, while members opposite might like to take all the credit for our strong fiscal position, we have had one of the strongest debt positions in the world for nearly 30 years, because we have had good policies of spending when we needed to. When the economy slowed and business pulled out of the economy governments stepped in, and when business stepped in governments pulled out. I think we paid off six per cent of GDP in two years in the late 1980s. There is an incredible pattern of spending at the right time and paying it back as quickly as possible. We were also one of the few countries that paid off our World War II debt, so we started the 1970s with a very good debt position relative to the rest of the world. I think we should all give credit for a very strong performance over many years. In fact, we have been in growth for 21 consecutive years, which is an extraordinary record for any country.

The subject of this MPI is the need for accuracy, and I am going to interpret that as the need for honesty as well because they tend to go hand in hand. I want to explain to the opposition how budgets and budget updates actually work. I just want to explain that the budget is handed down in May. All the forecasts are prepared by the Treasury—the same Treasury that prepared the forecasts for the previous government and the government before that. They were trustworthy then; presumably they still are. I cannot see why they would not be. The budgets are prepared in May and then a midyear budget update is due at the end of January. The opposition should know that, because it was Peter Costello who introduced the charter of budget honesty, which required that a midyear update come by about the end of January.

The government have said over and over again that we will provide that midyear update in the last three months of this year. We have said it over and over again. We have just begun October, so sometime in October, November or December—the last three months of this year—we will see the midyear budget update and it will include, as the Treasurer has said, the savings measures that we need to make because there has been a write-down in revenue. Again, the government have been really clear about what will happen when that midyear budget update comes in.

If the opposition require this sort of accuracy, I think perhaps they should look to themselves. We know they have a $70 billion black hole in their plans. We know also that they have their policies and they have found their savings. In fact, the shadow Treasurer said on 21 August in one of his doorstops: 'We've found all our savings and we've got our policies. We are ready to roll if an election is called tomorrow.' In other words, it is actually there. The policies are there, the savings are there and, as we heard from the member for Fraser, so are the covers of the policies. Even the covers have been designed, so they are ready to go. What they have not done is walk down the corridor to the Parliamentary Budget Office and do what they are supposed to do, which is get them costed and release them.

So they say they have them. They say they have found the savings for that $70 billion black hole. Well, that is a lot of savings; $70 billion is whole departments. This is from an opposition that reject the savings measures and accepts the spending measures on nearly every policy, that refuse and vote against almost every savings measure that this government introduces. It is a massive black hole. It is whole departments. It is massive. It is bigger than we would ever, ever see. So let's see the savings. It is only fair that the opposition come clean with the people of Australia, who the opposition profess to be able to govern, and tell them what they are going to hack away out of our community and our society in order to fill that $70 billion black hole.

If they want to come in here and talk about accuracy, costings and all the rest of it, they really should look at themselves. We have committed to a midyear budget update in the final three months of this year, earlier than is required under the charter of budget honesty. We have committed that the budget update will include the savings that we need to make for our spending commitments and for the write-down of revenue and we expect exactly the same standards from the opposition. Go to the Parliamentary Budget Office and do your job. (Time expired)

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

As this MPI quite rightly points out, it is time for this government to provide us with accurate information on the budgetary position. The member for Parramatta has just pointed out that they are going to do that in the midyear economic update, but given the fact that this government's financial track record leaves a lot to be desired I would suggest it would be well worth our while waiting till well after that and closer to an election before we release our policies, to ensure that we have an accurate funding base for them to start with. I would also suggest that the reason the government want us to release our policies now is probably because they have run out of ideas and they need some new ideas about how to get the house back in order.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

We're not going to get them from you!

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

We will give them to you in due course. We are not the only ones concerned about the deterioration in the government's fiscal position. This government, as we have all seen over the past four or five years, is addicted to deficit and debt, and it is showing no signs of checking into rehab. The member for Parramatta touched on the issue of debt and the fact that our governments have had relatively low debt by international comparison. The interesting aspect of that, particularly over the past 20 or 30 years, is the very significant increase in private sector debt, which has driven our economic growth at a time when governments have been reducing their debt. It is important to look at the total debt profile of the country, not just government debt. If you take this government's profligate spending and add it to the high levels of corporate and private debt that we have, then you have a serious issue.

Let us look at some so-called accurate information and the final budget outcome for 2011-12. We were told that initially the budget deficit was going to be somewhere around $11 billion, and then that was increased in the midyear economic update to about $22 billion. Lo and behold, we finished up with an actual deficit of nearly $44 billion. This government has been very good at creating history of all manner and shape. Again, we have seen the government create history with Australia's third-largest budget deficit of all time. In five years this government has spent like a gangsta rapper on payday. It has spent the $70 billion left to them by the Howard government and has racked up an additional $147 billion in net debt. The government now has cumulative deficits exceeding $173 billion since coming to power in 2007. To add to the history, this is the 10th anniversary of recurring budget deficits under a Labor government.

How can this government honestly say they will return to a budget surplus in 2012-13, some seven months from now? As David Uren, economics editor at the Australian, pointed out:

Swan has been here before. In 2008 he refused to countenance that the GFC would push the budget into deficit, until after the mid-year budget update.

Uren said that the core of the problem of the past five years is that business activity has not been generating the same level of tax revenue, particularly capital gains tax. He added that there was also the spending side of the ledger—so it is not just the revenue that has fallen but, more importantly, there has been a massive increase in expenditure over these past five years. To top it all off we have a government that claims that tax increases are actually savings. In all honesty, where will these savings be found? The government do not know where they are going to be found, and that is why they are looking for ideas from us and are looking for us to release our policies prematurely. When are the Australian people going to be informed about how these savings will be made by those on the treasury bench, who are the ones responsible, and what cuts will be made, and, more importantly, what additional taxes will be imposed on everyday Australians already doing it tough under this government.

In my electorate of Forde, businesses and residents have already been hit with price increases on their electricity and utility bills, in part due to the carbon tax. What other increases in the cost of living will we see? The government talk about interest rates, but what they fail to tell the Australian people is that, while interest rates have come down, the spread—the difference between the cash rate and the actual rate that the banks charge—has blown out. Instead of being 180 basis points, as it was in 2007 when we were last in government, the gap is now some 315 basis points. On an average home loan of about $300,000, that is costing the average Australian some $4,000 a year extra in interest costs.

There are other cost blowouts that I have not touched on yet. Where are the savings going to be found to fund promises like new facilities for asylum seekers in Nauru and Manus Island, the new dental plan currently before the House, the Gonski school funding, the National Disability Insurance Scheme and any of the other promises that this government has trotted out over the past few months, none of which are funded? The government has not explained where these savings to fund these additional promises are going to come from out of existing revenues.

As I touched on earlier, as we are seeing declining revenues we are seeing increased spending and therefore increased borrowing—some $40 billion since the 2011-12 budget. In addition, interest payments have increased from $1.1 billion a year in 2007-12 to $6.6 billion. By any simple calculation, you can see that if you combine declining revenue with more debt and more payments you will not end up with a surplus, let alone a few extra billion dollars to fund Labor's promises. The net debt figure in the final budget outcome is already some $5 billion more than forecast in the 2012-13 budget—in just seven weeks that equates to an extra $90 million a day being added onto the national credit card.

The government are so desperate to hide their spending from the Australian people they tried shifting expenditure between years and have kept projects like the $50 billion NBN off the books entirely. The Australian National Audit Office addressed this issue recently and forced the government to move $500 million of a special dividend received from the Reserve Bank back into the appropriate financial year. It is these pea-and-thimble tricks, these sleights of hand, that we have to be so vigilant about when the government are presenting the nation's financial position. This is why this matter of public importance is so relevant—the Australian people need to know the actual budget position of this nation.

This government loves to compare us to the poorer performing nations in the world and is revelling in the fact we have now moved up to being the 12th largest economy in the world, above Spain and others. That is hardly a ringing endorsement. It is more a case of those countries falling than us rising.

It is instructive to look at some other basic economic facts. Annual growth in building approvals in 2007 was nearly 15 per cent. In the year to April 2012, there was a decline of some 24 per cent. Growth in lending for housing declined by 7.2 per cent in 2010-11. That compares with growth of 9½ per cent in 2006-07. We need to restore hope, reward and opportunity to— (Time expired)

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! The discussion is now concluded.