Ms Anna Burke (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 adverse impact of the Government’s broken promise to deliver a surplus

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 am a little disappointed that the Treasurer is not here to answer the charge. He made his announcement just before Christmas, and we have not seen him since. That just says everything about the Labor Party in government. We are the parties which offer stability and certainty; the Labor Party only offers chaos. Firstly, they cannot keep their word and, secondly, they cannot manage a budget.

On over 500 occasions—and we have not even started on the other ministers—the Prime Minister and the Treasurer promised to deliver a surplus in 2012-13. The Treasurer alone did so on 366 occasions since 2 May 2010. It is one thing to come out with a promise and forecasts and projections; it is yet another thing to do so with language that is extremely emphatic. Their language was totally unqualified. They benchmarked their capacity to manage the economy against that unqualified promise. They benchmarked their capacity to lift the burden of a rising cost of living off everyday Australians against that unqualified promise to deliver a surplus. They used words such as 'ironclad commitment' and 'failure is not an option.' They said the surplus would be delivered 'come hell or high water'.

These are the words of the Treasurer in this place at the time of the last budget. We all remember it because, when he said it, we all scoffed—because none of us believed it was going to be delivered. But the Treasurer stood in here just seven or eight months back, delivering the May budget, and solemnly said:

The four years of surpluses I announce tonight—

that was about where we scoffed—

are a powerful endorsement of the strength of our economy, resilience of our people, and success of our policies.

He went on to say:

This Budget delivers a surplus this coming year, on time, as promised, and surpluses each year after that, strengthening over time.

No qualification, no talk about revenue like the weasel words we heard from the Prime Minister today. Does anyone really understand what the Prime Minister said today? What she is saying is that she does not know how to explain it. But the Treasurer did not let us down. After setting that benchmark, he went further. In May the Treasurer went on:

The deficit years of the global recession are behind us. The surplus years are here.

Then he gave us a lecture about what a surplus means:

Surpluses that provide a buffer against global uncertainty, and continue to give the Reserve Bank room to cut interest rates for families like it did just last week.

So how appropriate it is that he comes into this place and boasts about the fact that the Reserve Bank did not change interest rates? He is right. These are powerful words; this is not empty rhetoric. Let us go back to the original promise that was made when the Prime Minister solemnly said in a speech to the Australian people after she had knifed Kevin Rudd, for the first time, that the surplus was essential as a benchmark for the economic credibility of the government. Thank God for television! I apologise to my friends from the print media, but they are all going into TV these days at any rate—maybe not you, Sid. There are some people who still believe in print, and long may the printed word continue. In the election campaign we thanked God for television because we have it all on tape—all the solemn promises at the community meetings, all the benchmarks about how you cannot run the economy if you cannot manage the budget. It is a bounty of riches. What does it all mean? It all means that the Prime Minister told another fib. It was unqualified. It was emphatic. It was a benchmark for the government's economic performance claim.

Of course the government did not just promise a surplus; they claimed to have delivered it already. On 24 June 2010 the Prime Minister said:

… we saved jobs, stayed out of recession and got back to surplus.

The last time Labor delivered a surplus was in 1989-90—before the member for Longman was born. What a glorious year 1989-90 was. On the eve of Christmas, the Treasurer admitted delivering the surplus was unlikely:

… dramatically lower tax revenue now makes it unlikely that there will be a surplus in 2012-13.

I wonder how the Assistant Treasurer feels about that. I do not quite have it at hand, but I seem to recall the Assistant Treasurer boasting to his constituents in Lindsay that the government had delivered a surplus. Do we all remember that? The member for Lindsay, who has now dropped the tone of his voice a few decibels in an attempt to be earnest, has to explain what happened to the surplus that he said to the people of Lindsay he had delivered. Here it is: it is headed, 'Our strong economy—how is it working for you?' Commodore, listen to this; do not be distracted by the new Attorney-General. Are you familiar with this? You sent it to your constituents. Under 'Australia's economic report card', it says:

… back in surplus, on time, as promised—in these uncertain global times there's no clearer sign of a strong economy than a surplus.

Come home spinner; come home Commodore—your mission is complete. But we have not finished with you, old china. Now we are getting all the weasel words from the government; more excuses. The Treasurer said:

We ought to be very clear about why this is the case—

That is, why they cannot get back to surplus—

it's not because the government is spending too much, it's because we didn't collect the amount of taxes we expected to collect.

So all of you Australians, you are at fault—you are not paying enough tax. It is your fault. The Prime Minister repeated that today. I could not believe my ears when I was watching intently the Prime Minister's speech at the National Press Club. The Prime Minister was determined to lock in her leadership by committing herself to an election on 14 September. Then she was prepared to commit Australians to more pain. She said Australians are not paying enough tax and that the Australian people are to blame for the government breaking over 500 promises to deliver a surplus this year. So the Australian people are to blame. The Prime Minister has a history of blaming people—she blames Kevin Rudd, she blames John Howard, she blames the G20, she blames Rob McClelland, she blames Joel Fitzgibbon and she blames her caucus. How do you feel, old china, being blamed for leaking against the government?

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member for North Sydney will refer to members by their seat or their title.

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

I am sorry, Mr Deputy Speaker; I am trying to be familiar. I apologise. I am just hoping to encourage them to be more honest with those journalists who seem to sit in caucus. It is hugely important to recognise that this Prime Minister does not accept personal responsibility for her actions. We need to have a leader that is prepared to accept personal responsibility for their actions. Revenue this year has been expected to increase by $37 billion above last year.

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

Increase?

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

Increase—that is, the increase on last year. So this government gets $37 billion of extra revenue and then it blames the Australian people for not paying more tax. That is an 11 per cent increase on last year's tax take, and still they blame the Australian people and say, 'Australians, you aren't paying enough tax.' Of a total budget of around $370 billion—$360 billion, say, of revenue—they say that a $3 billion, $4 billion, $5 billion or $6 billion fall in revenue is 'devastating'. That is why they cannot live within their means. Devastating—a fall of barely one per cent of revenue, and all of a sudden the house of cards comes down.

Look at Labor. Look at what they say and then look at what they actually do. Remember: last year they said they would have a deficit of $22 billion. What happened? It ended up being $44 billion, as the Prime Minister tried to shore up her leadership against the member for Griffith. It is all about that paradigm. The Labor Party is talking all about itself—about its leadership, about who gets what job, about how it can manage to trick the Australian people. In the meantime, the Australian people have a government that does not care about what they think, does not care about the cost-of-living burden and does not care about the challenges for families in everyday life. This government just cares about winning the election.

It is the Labor Party that has delivered the four largest deficits in Australian history. It is the Labor Party that in five years has borrowed over $200 billion—$200 billion! The interest alone on that is $7 billion a year, and that $7 billion a year would immediately fund the National Disability Insurance Scheme. It would immediately fund the Gonski reforms. But, instead of that, now we know that Labor is going to increase taxes. Look out, superannuants; look out, every worker of Australia: the Labor Party is coming after you. They have said it; they have background-briefed the media on it: they want to start taxing Australians over the age of 60 when they take their super. That is coming, as sure as night follows day. I say to you, Mr Deputy Speaker Scott, the Labor Party does not have the guts to be honest with the Australian people.

They have more problems. They say to us: 'You've got a problem about the mining tax.'

Mr Bradbury interjecting—

Well, let me let you into something, old china—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order!

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

Mr Deputy Speaker—

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

I'm sorry—old mate.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The Attorney-General will resume his seat. The member for North Sydney—

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

I am sorry, Mr Deputy Speaker—china plate, mate.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

I have called member for North Sydney to order once—

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

I understand. I am letting you into something, Mr Deputy Speaker.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

No, no. I asked him before to refer to members by their titles—

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

Sure. It was a general statement.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

and I ask the member to withdraw that—

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

China—mate. Let me—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

You have been asked to withdraw.

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

Okay, Mr Deputy Speaker Scott; whatever you want. I withdraw. I would say to the new Attorney—

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

Mr Deputy Speaker Scott, I wish to raise a different point of order from the standing orders that you have been drawing attention to, which is that the member for North Sydney needs to direct his remarks to the chair.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

I thank the Attorney-General for his assistance. The member for North Sydney has the call.

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

Mr Deputy Speaker Scott, I say to you that this is a government that cannot live within its means; and, when the government cannot live within its means, it defaults to higher taxes and new borrowings. The Labor Party, over five years, has introduced 27 new or increased taxes. Remember the alcopops tax, the flood levy, the carbon tax and now a mining tax that hardly raises a dollar? Only Wayne Swan could introduce a new tax that hardly raises a dollar and brings down two prime ministers. That man is a genius as Treasurer! And it leaves the budget worse off. Their mining tax package leaves the budget worse off. Their carbon tax package leaves the budget worse off. What does that mean when you add the borrowings, the $200 billion of new borrowings, that Labor is out there collecting? And let's be frank: whenever the government borrows money, it is borrowing future taxes from our children, because someone has to pay the money back.

So the Labor Party's call on the Australian people is higher, much higher, than anything in the coalition years, because when we were in government for 11 years we did not borrow a dollar—not a dollar—but the Labor Party has borrowed over $200 billion. This is what the Labor Party does. It completely trashes the joint, tries to claim the high moral ground and leaves Australians to pick up the pieces and pay the bills. Labor writ large are a disaster for Australia, and the sooner they are gone the better.

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

We have seen, over the last couple of months, the full impact of revenue write-downs. In particular, most recently we have seen revenue write-downs of amounts in the order of $20 billion. These, in their broader context, represent the fact that somewhere in the order of $160 billion worth of revenue write-downs have been experienced over the last couple of years. That, in part, has been as a result of the global financial crisis and its ongoing effects. It has been about the impacts of the international economy and the challenges that have been faced right around the globe.

The fact remains that the Australian economy is one of the most resilient in the world. It is indeed the envy of most developed nations across the global economy at the moment. That is a fact that is beyond dispute. For all of the talking-down of the economy that we hear from those opposite, we know that when they travel internationally, as they do, they stand up in international fora and spruik very loudly just how successful the Australian economy has been in getting through difficult global challenges. Of course, we recognise that despite the underlying economic indicators—as strong as they continue to be, as resilient as they continue to be—the multispeed nature of our economy presents challenges across the economy and that there are some people who are not sharing in the wealth that those figures would otherwise indicate might flow through to them.

We make no apologies for having a fiscal policy that will support jobs. That is absolutely central to our DNA. If you look at the record of this government you will see that it was this government which protected the jobs of hundreds of thousands of Australians during the global financial crisis. While we were focused on protecting the jobs of hardworking Australians, those opposite were distracted by a whole range of things. We all recall that the Leader of the Opposition—he was not the Leader of the Opposition back then—did not even show up to vote when the stimulus package was before the parliament. The decision we have taken is that, given the write-downs in revenues, we no longer think it is appropriate to continue to make further cuts in order to return the budget to surplus because we believe further cuts at this stage will jeopardise job opportunities and the prospects of our economy more broadly. That is the decision we have taken in the national interest. If those opposite were honest about the challenges we face as a nation, if those opposite were honest about what has occurred since the global financial crisis, their contributions would be somewhat less hysterical than what we have seen here today.

When it comes to the question of the surplus, those opposite speak as though it is beyond doubt that, if they are returned to government, they will simply return the budget to surplus. It is worth having a look at what they have had to say, because they have been all over the shop on this issue. I saw the member for North Sydney in here with bundles of photocopies. It is not hard policy work over the summer to be sitting at the Xerox machine photocopying pieces of paper to bring in here and to put them on the table and suggest that somehow the size of the bundle of papers you flop down on the dispatch box gives greater weight to your arguments. The only policy document, or anything that resembles a policy document, they have is the little leaflet we have seen them brandishing around. A little leaflet is not a substitute for real and costed policies. That is what the Australian people are expecting of the people who parade around as an alternate government. With the date of the election now having been determined, there will be increasingly greater pressure on the opposition to come clean not just on their future plans but also on the things they have already announced and on the true impact and cost of those plans.

On the question of the surplus, the little pamphlet—the poor excuse for a fig leaf protecting their lack of policy detail—says 'we will live within our means, get the budget back under control and pay back debt'. It is funny that they do not make a commitment to a surplus. A couple of pages later it goes on:

… we’ll immediately establish a Commission of Audit—to identify savings and efficiencies in all areas of government so we can start delivering real and sustainable budget surpluses into the future.

Once again, there is no commitment to a surplus. When Mr Abbott was pressed on the question of the surplus he said, 'We have to see their figures before we can tell you exactly what we'll do.' We know how consistent the economic message has been from those opposite. In fact, on the very same day, when the shadow Treasurer was asked a question on the coalition's commitment to a surplus, he said:

Our commitment is emphatic. Based on the numbers published today we will deliver a surplus in our first year and every year after that.

The Leader of the Opposition says, 'We need more information'; the shadow Treasurer says, 'Don't worry—in our first year and every year in office we will deliver a surplus.' For a mob that want to run an election on the issue of trust, I think they are going to have to do a little bit more than expect the Australian people to make that gigantic leap of faith. It seems that the pressure of the statements made by the member for North Sydney then applied to the Leader of the Opposition, who decided he needed to firm up his position. On 28 January—this was three separate positions on the one-day—when asked: 'Joe Hockey has been saying that the coalition would be able to deliver a surplus based on the numbers available today. Is he right? Can the coalition deliver a surplus?' the Leader of the Opposition said, 'Yes, he is. We believe we can deliver surpluses in each year of the first term of a coalition government.' That was three positions in one day from two people. That is the sort of policy consistency we are getting. Then, the following day, Mr Hockey said:

Our commitment is emphatic … we will deliver a surplus in the first year and every year after that.

It raises the question: if they are so determined, so committed and so certain that they are going to deliver a surplus, why will they not bring forward the policies they are going to take to the Australian people to show how they are going to pay for them? They cannot get the budget back to surplus while cutting taxes, which they tell us they are going to do, and increasing expenditure, as there is so much evidence they intend to do. It just does not add up.

The member for North Sydney announced on breakfast television to the world at large that the coalition does have a $70 billion black hole in their costings brought about by their commitment to repealing the carbon price and repealing the mining tax. But they have failed to be clear and honest with the Australian people about what they intend to do with the associated expenditure, with the compensation and with the other assistance to pensioners and to families and to tax cuts.

Last night on television we saw Mr Pyne say that all of that is up in the air. So, when they run around the country saying they are going to repeal the carbon price, they also need to come clean on what they are going to do with the assistance. Are they going to rip away the family assistance? Are they going to rip away the increases in pensions? Are going to rip away tax cuts for small business? Are they going to unwind the tripling of the tax-free threshold which will mean that one million Australians will not have to submit a tax return because their first $18,200 will be tax-free?

Are they going to unwind that? Are they going to return it to $6,000? Are they going to do that and slug low-income people, middle-income earners and, in particular, those such as women and part-time workers? Is that what they intend to do? It is about time they became honest with the Australian people. There are only two policies that they have been honest about. They said they would scrap the schoolkids bonus. I noticed over the last week or two Mr Abbott running around saying that he is the best friend that Western Sydney has ever had. He might want to explain to the families of Western Sydney—the families of the 160,000-plus schoolkids whose parents receive the schoolkids bonus in order to support them in their return to school—how he is going to ease their cost-of-living pressures by ripping that money away. What is the impact of this? We know those opposite think that it does not get spent on school expenses.

In the Penrith Press last week, Mrs Boorer, a mother with five children, had this to say about the schoolkids bonus: 'While it was always a stressful time—the return to school—it was made easier by the federal government's schoolkids bonus scheme. I've used the money to buy everything for school including uniforms, school shoes, joggers and stationery. I think it's great and I don't know how I would have got the money without it. As it is, the $1,230 we received in January did not cover everything, so without the payment I would have had to put everything on credit.'

The way these characters opposite operate is that they talk about public finances but rip away assistance and rip away support. The net result is that families end up carrying the debt. If you want to talk about debt, have a look at the increase in indebtedness of families in this country over the entire time that those opposite were in office. That might give you a better picture of the impact of their policies.

On the question of when their policies will be ready—the $70-billion question that the Australian people want answered—back in June 2011, Mr Hockey said, 'We intend to release our policies and costings by the end of next week.' We know that did not happen. We also know that Mr Robb, who is in the chamber—he has been pretty quiet of late—also backed the fact that that work had been undertaken and that the policies and costings would be released at that time. But they were not released. We have now heard from Mr Abbott, who says, 'The coalition will release our costings after the government releases theirs, after the budget and before polling day.' Thanks very much for that! Why don't you roll out your policies now and start giving the Australian people the opportunity to measure the impact of those policies?

There has been a lot of inconsistency about when they will actually front up. But I think the person who gets the prize for the best contribution is the shadow minister for foreign affairs, the Deputy Leader of the Liberal Party, who on radio this morning came up with a slightly different take on the timing of the opposition releasing their costings. She was being interviewed by Fran Kelly, who said: 'You'll have all the numbers you need when the budget is released on 14 May, as of budget night. So there'll be no excuse, will there, for the coalition not to move on releasing costings for their policies?' Bishop said, 'Well, that's not correct, Fran.' Kelly said, 'Why not?' Bishop said, 'Well, the full impact of the budget is not known until 30 September.' That is after the election. Are you telling us that your position now is that you are only going to front up and provide the Australian people with your costings after the election? If that does not scare the living daylights out of Australians all around this country, then I will tell you what should. It is the fact that those opposite have said that they will do exactly what Campbell Newman did: they will set up a commission of audit and they will call in someone like Costello or some other individual to go through the budget line by line and work out which forms of assistance that are currently being delivered into the bank accounts of Australians all around this country—which payments, which services—need to be ripped away in order to fund the $70 billion-plus black hole that we already know they have. They have a $70 billion black hole because they have made these promises about cutting taxes.

The member for North Sydney was jumping up and down saying, 'We will cut taxes.' What about his monster parental leave tax? It is a $12 billion tax to fund a parental leave scheme that shovels all of these benefits into the wealthiest parts of the country. Who is going to pay for it? Mums and dads and pensioners all around the country will pay for it, and they will pay for it when they pay for their groceries and at the bowser. In addition to that, they want to jack up taxes on superannuation for the lowest paid workers, because that is what you get under a Liberal government. (Time expired)

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

Sadly, we start this year as we finished the last—with the member for Lindsay not even spending 30 seconds addressing the subject of the matter of public importance and not spending one second trying to establish how this government may in fact return to surplus. The bottom line is that they have no surplus—we have all heard that from the Treasurer's mouth, after hundreds of comments to the contrary—but they also have no plan. They have absolutely no idea: no fiscal strategy. We saw today the ducking and weaving and the avoidance of the issue. They have no idea how to get this country back on track financially. That is what is eating at the heart of certainty. That is what is eating at the heart of any sense of stability. It is why people are not spending. It is why they are paying off the mortgage. It is why companies are not investing around this country. And now we have the government trashing the messenger. Don't trash the messenger. We are just reporting the facts. As the Prime Minister likes to say, we are reporting the facts. Do not start that time-worn technique of attacking the messenger.

The time has come for the Prime Minister and the Treasurer to stop crying wolf about the economy and to start taking responsibility for the problems that they themselves have created—

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

Crying wolf ?

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

Yes, crying wolf. It is a common statement. It might be a little bit below the echelons of the High Court and other forums. Crying wolf: we heard it again today from the Prime Minister in her answer to the first question, in her answer to the second question and in her answers to all subsequent questions about the surplus. All we heard was her blaming Treasury; it is all Treasury's fault now. It is all someone else's fault. We have heard endlessly year in, year out that it is someone else's fault; that they never get there because of someone else; that the dog ate her homework today. These are the sorts of things they are starting to resort to.

The Treasurer says that delivering a surplus is all too hard, and he has given up. He is blaming a shortfall in tax revenue. We heard the Treasurer before Christmas—he is on the record—saying:

But what we've had here is a huge revenue whack if you like, out of the blue, which has made it very hard to get to surplus in 2012/13.

This is nonsense. There is no 'whack out of the blue'. There is no 'whack', in fact. If you look at the Treasurer's own MYEFO documents, the truth of the matter is that, over the first four months of this financial year, revenue to the government went up 9.2 per cent. I can tell you that there are a lot of households in Australia which could do pretty well with an increase of 9.2 per cent in revenue—pretty well indeed. The thing is that revenues are steadily growing but they cannot catch up with the rate of spending. This is the problem. They cannot catch up with the rate of spending—a rate of spending of four per cent ahead of last year already. There is already a four per cent increase. These are the ones who preach about fiscal rectitude, and in the first four months there is a four per cent increase off an already bloated spending base—a result of the excessive spending year in, year out.

Labor do not have a revenue problem. They never had a revenue problem. They have a spending-and-forecasting problem. This is a government that has constantly and deliberately assumed unachievable levels of future revenue year in, year out. At every budget they make these unbelievable forecasts. They then go and spend that money, and when it does not come in it is, 'Woe is me; cry wolf; it's somebody else's fault.' The fact is that they made these unbelievably inaccurate, politically inspired forecasts on revenue, which they never reached, and then they spend it—by God, do they spend it! This government has caused this problem.

If we look at MYEFO, we see that the company Macroeconomics—which is staffed by former Treasury and Finance officials—nailed it. Macroeconomics argues that the budget should already be in surplus by at least $15 billion, or around one per cent of GDP, at this point. How true that is. This is not a question of future surpluses. This government should have been in surplus a year ago. Macroeconomics go on: 'The Treasurer is in this predicament mostly because in the five budgets ending with MYEFO 2012-13 he has a track record as a net discretionary policy spender at around $120 billion, who failed along with his financial fiscal partner, Finance Minister Penny Wong, to ensure a return to surplus regardless of a weaker economy.' That is the point. Sure there was a GFC; it was five years ago, but there was a GFC. We had just one quarter of negative growth. Why did we have that? There are three or four reasons—and long before the stimulus, I might add. We had just one quarter of negative growth because this government inherited a situation where there was no debt. In fact, there was $70 billion in net reserves—a $20 billion surplus.

Firstly, the government inherited the most healthy economy in the developed world. Secondly, this government had the benefit, as it should, from the flexible exchange rate. In the first quarter of 2009, the dollar, you might recall, dropped to 60c. The Chinese bought massive amounts of our resources to capitalise on the 60-cent dollar. We had the biggest trade surplus in the country's history. As well, interest rates dropped 3¼ per cent between October 2008 and the end of the first quarter in 2009. Many families had more money in their pockets because of the reduction in interest rates than they had had for many, many years. These things drove economic growth in this country.

Then the government made the second raft of stimulus spending. They always avoid the fact that we said, 'You should support the first one'—and we did. In October there was a crisis of confidence; it needed to be addressed. We recognised it and we supported the government, but they never admit to that—just cheap politics. They are just trying to position us in a way which is totally irresponsible and which misrepresents the facts. The fact of the matter is that we supported sensible, stable spending when it was needed. What we did not support was reckless spending, which was invariably politically inspired, with pink batts and wasteful school halls.

There were lots of other ways in which they could have reduced the cost. If they had really wanted to save jobs they would have reduced the cost of doing business with that spending, not splashed it around on politically inspired initiatives which ended up with the biggest waste in this nation's history. This is a government that had all the benefits. Since then, they have had a 150-year high in the terms of trade. They have wasted the mining boom. They have wasted the great strength of the economy that they inherited all for political gains—all to just parade their spending to incessantly buy votes all around the country.

This is a government which has not sought to govern and manage the finances in the national interest. They have wasted the boom at a time when the rest of the world has found it more difficult—especially the northern hemisphere, where the GFC really hit, not the southern hemisphere. They had this 150-year high. In fact, the terms of trade today are still 30 per cent higher than when the Howard government lost office. You would not think that from listening to the Treasurer. Where is this 'whack out of the blue' if the terms of trade is still 30 per cent higher than it was five years ago? They have benefited from endless increases in revenue and economic growth, but all the while they have wasted it. They have spent it like drunken sailors.

That is why we have a problem.

We will not be lectured by a Labor government that have $120 billion of unfunded promises sitting on the table and that have spent $172 billion more than they have received, have no surplus and have no plan to get back in control of our nation's finances. Instead of a government that must stop crying wolf, we need to have a government that start to take responsibility for the problems that they themselves have created.

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

It is a pleasure to rise today to speak on an important issue of economic management. When we talk about the importance of good budget management it is important to remember one simple fact: if the tax-to-GDP ratio today were the same as it was under the Howard government then the budget would be strongly in surplus.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

By more than $20 billion.

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

By more than $20 billion, I am informed by the minister. But if the tax-to-GDP ratio under the Howard government had been what it is today then many of their budgets would have been in deficit. That is a simple fact which those opposite cannot deny. Driving things at the moment are two big factors, a double-whammy on revenues. First of all, mineral prices have softened, and that has brought down corporate revenue. Second, the Australian dollar remains high. Why does the Australian dollar remain high? Because Europe is underperforming. With Europe underperforming, investors are looking around the world to where they can find AAA-rated government debt. And they are finding it in Australia, one of the few countries that maintain that AAA rating. Despite the fact that minerals prices are coming off, the Australian dollar remains high. So this double-whammy hits revenues, and this is the reason that revenues for 2012-13 are $20 billion down from what Treasury projected in 2010.

What should a government do under those circumstances? Prior to Christmas there was a suite of policy advice coming at the government from across the political spectrum. John Quiggin and Warwick McKibbin do not agree on every issue in public finance, but they were among the many economists who were saying that as revenue fell it was not the best approach to fill the government's revenue shortfall by making further budget cuts. The OECD and the IMF were among those saying the same thing. So that was what drove the Treasurer's announcement before Christmas.

But it is important to put this in a broader context. We have had a few bits of history being disinterred over recent times—we have just discovered where Richard III is buried. And, thanks to an IMF report, we have discovered a little bit about past budget practices in Australia. An IMF report released in January examined 200 years of government financial records across 55 leading economies. It identified two periods of fiscal profligacy in recent years. When were those periods? Well, if you listened to those opposite, you would be led to think that it was under the current government. But in fact that is not what the IMF found. The IMF found that those two periods of fiscal profligacy were under John Howard's term in office in 2003 and during his final years in office from 2005 to 2007.

Why did that fiscal profligacy occur? A report by David Hetherington and Dominic Prior from Per Capita called After the party: how Australia spent its mining boom windfall found:

The Howard Government gave at least $25 billion away in tax cuts and concessions … It used another $50 billion on inflated spending programs …

As a result, the report concluded, 'we missed the opportunity to invest $75 billion in long-term productive assets'. And the Howard government, of course, was unable to make the tough decisions that have been made under this government.

Stephen Koukoulas has observed that during their combined total of more than 20 years in office the Fraser and Howard governments never once cut real spending. Labor governments have cut real spending on five occasions since the mid-1980s. In the last five years we have found savings of $138 billion, and they have not been easy savings to find. When we means tested the family tax benefits and the private health insurance rebate, those opposite said we were playing 'the politics of envy'. When we phased out the outdated dependent spouse tax rebate, a measure that discourages work by secondary earners, we were told we were attacking the family. When we reduced the baby bonus for second and subsequent children, the member for North Sydney drew comparisons with China's one child policy. That is how serious those opposite are about finding savings.

But you do not have to take my word for it. The IMF's article IV report from 16 November said:

The authorities' adept handling of the fallout from the GFC, their prudent economic management, and strong supervision of the financial sector, has kept Australia on the dwindling list of AAA rated countries.

The OECD economic surveys Australia 14 December said:

Adjustment to the mining boom so far has produced favourable results, thanks to the robust macroeconomic policy framework and the largely decentralised wage setting system …

Authorities at the OECD think we have got the balance right on industrial relations, unlike those opposite.

At the same time we have been making the right investments. In my own electorate of Fraser the ANU has seen an increase in enrolments, up from 6,350 to 7,086. That is part of a nationwide increase of 150,000 in student numbers. ANU funding is up $130 million, and 15,000 more students nationally are getting youth allowance. And, as the Prime Minister and the Leader of the Opposition did, I acknowledge the very generous donation today from Graham Tuckwell of $50 million to improve scholarship opportunities at the Australian National University.

This morning I joined the minister for transport, the member for Eden-Monaro, Senator Lundy and the member for Canberra at the sod-turning for the Majura Parkway, the biggest ever road investment in the ACT—$288 million, half federal, half ACT, which could teach the New South Wales government a lesson about co-contribution—an important road which will take the pressure off traffic in my electorate.

By contrast, those opposite have been coy about what will happen if they come to office. Senator Sinodinos said that the opposition was doing something like the dance of the seven veils, which does make one wonder whose head is going to be on the platter. Senator Abetz said that the opposition was offering a policy skeleton and that only further down the track would there be flesh on the bones.

But yesterday the cat was belled in the form of Senator Humphries. Senator Gary Humphries is now facing a preselection challenge from Zed Seselja, who assured the people of Brindabella of his undying loyalty just a few short months ago but has now decided that he would prefer to abandon them for a shot at the red carpet. When querying this on PM Agenda yesterday, the interviewer said that under an Abbot-led government the interests of the people of Canberra would not rate. Senator Humphries said, 'Well, it is a question then of making sure they are constrained in the knowledge that this impacts very badly on one of their colleagues.' Senator Humphries is now admitting that an Abbot government would impact 'very badly' on the ACT.

He said in another interview:

Canberra is going to be facing very heavy pressures. We know that this city will be the subject of some very tough decisions by an incoming government.

We know why that is: the member for Canning, in a previous debate, described public servants as those who feed on others. The member for North Sydney gets the Public Service numbers wrong every time he stands up to speak on them and thinks that there has been an extra 20,000 public servants, a number in which he appears to be including Defence Force reservists as public servants. That now seems to be their new target for public sector job cuts—20,000 public servants. Those opposite say that they have an aspirational target for job creation, but the only policy they have released on jobs is a target for job destruction. It is a target for getting rid of 20,000 Canberra public servants.

Let me just finish with an article that I would commend to members of the House on 'The limits of hairshirt economics' by Tony Abbott, from the Adelaide Review, November 1994. This is an article in which the Leader of the Opposition questioned the floating of the dollar. He said as follows:

The floating dollar remains an article of faith with the leadership of both main parties, notwithstanding its exceedingly dubious outcome for Australia—

(Time expired)

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

We have this first debate of this first day of the parliament this year appropriately on another major broken promise from this government. When we last sat, the Treasurer—who is not present for this debate, as usual—was still insisting that his budget would be in surplus. As the shadow Treasurer pointed out during question time and at the beginning of this debate, the Treasurer, together with the Prime Minister, promised on 500 occasions that the budget would be in surplus this year. Before he departs, I would remind the previous speaker that he gleefully jumped to his feet the day after the budget on a tax law amendment bill, from memory, and talked about how important it was to get the budget back to surplus.

We have had a lot of obfuscation from those opposite, but let me suggest that the previous speaker, who was an economist before entering this place, knows in his heart of hearts that this government's approach to the budget is dysfunctional. He, along with the Treasurer, promised that the budget would return to surplus. I think he believed the Treasurer. But what the Australian people now know is that the only thing you can believe about any government promise is that it will not be delivered.

We started this parliament with the Prime Minister announcing that she would deliver a carbon tax that before the election she pledged would never occur. All of last year, we heard the Treasurer and the Prime Minister proclaiming that they would deliver a budget surplus. 'No ifs, no buts'—that is a quote. All of those quotes, without any wriggle room, were repeatedly defiant. All we know is that, while they were still insisting in the dying days of last year's parliament there would be a surplus, they were preparing to ditch the pledge. That is why they brought forward the mid-year economic forecasts to October. That is why the announcement by the Treasurer was made once he could avoid the scrutiny of this parliament; it was made in the days leading up to Christmas.

If you look at this government's approach, it is not only its fiscal and economic mismanagement that concerns the Australian people, who pay the price for it every day; it is this government's deliberate approach of breaking promises and its looseness with the truth at every opportunity. There have been so many broken promises and so many solemn pledges, but this budget surplus pledge that was broken before Christmas will sum up and define this government right through until election day, an election that was called just a few days ago.

When you look at the words of the Prime Minister and the Treasurer—their defiant words—it is quite clear that the public should judge them on two criteria. The public should judge them harshly on their broken promise and they should judge them according to their own words: 'You can't run this country if you can't manage its budget.' That was a proclamation from the Prime Minister on 14 April 2011. You have heard the other proclamations, day in, day out. Every member of the Liberal and National parties has sat here and heard the Treasurer and the Prime Minister every day promise a budget surplus and outline the necessity for it in terms of budget management, in terms of reducing cost-of-living pressures, in terms of budget responsibility.

All the time, those opposite had their fingers crossed behind their backs, because, when they make a promise and they cannot meet it, they push it out a year. We have seen it before on their budget management. Straight after the last election, they said that, for the financial year just gone, the budget would be $12 billion in deficit. By May 2011, it was $22 billion. By budget night, it was $44 billion. So it was a blow-out from—let's be generous and forget the $12 billion—a $22 billion forecast to $44 billion, in one year. And now the government expect the Australian people to believe anything they say on the budget. As I said last year in one of the final MPI debates of the year: with that sort of record for accuracy, if Wayne Swan were competing in the archery, the only safe place to watch would be on television. After that speech, the member for Bennelong pointed out that it would be equally safe to stand in front of the target, which he was quite right about!

But the serious point of all this is that the Australian people pay for Labor's failure. Labor's budget failure and budget deceit here in Canberra are paid for by families and small businesses right across Australia. As the shadow Treasurer pointed out, they are paid for in the net interest cost of that debt—$7 billion a year, just to keep it. That is to keep it; that is not to pay a dollar off. The latest projection is $147 billion—when they started with $45 billion in cash in the bank. As the shadow Treasurer pointed out, it is the families of Australia, the children of today, who will have to pay it back tomorrow. Those opposite expect the public to believe that, with their track record of mismanagement and deceit, they can be relied upon by the Australian public. I will tell you what the Australian people and the small businesses of Australia can rely on from the government. If the government have their way, they will do more of what they have done in the last four years. That is the only rock-solid certainty.

Five years ago—a Prime Minister ago—those opposite, including the minister at the table, the Minister for Trade and Competitiveness, were settling into a new government and a new parliament. Just months earlier, the then Prime Minister, the member for Griffith, had said, 'This reckless spending must stop.' Nearly $200 billion ago, he said, 'This reckless spending must stop'! I think those on this side of the House would agree with me when I say that, if you look back at every statement made by those opposite in the lead-up to the 2007 election, from the member for Griffith being a 'fiscal conservative' right through, it is very hard to find a single statement that turned out to be true. But there is one, and it was made by the member for Kingsford Smith, who said to a journalist, in an unguarded moment, 'Once we get in, we'll just change it all.' Hasn't he proved to be right!

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

On this matter of public importance, when we start talking about budgets, fiscal positions, surpluses, deficits and where the country and the economy are at, we should at least start with facts; we should at least start by making some things clear. The reason we are in the position we find ourselves in today is not a matter of spending but a matter of revenue. One thing is clear and is borne out in the detail, the facts, all the work and all the data, and all the economists agree: what we are talking about today is not a matter of spending; this is a matter of revenues.

Any government and any Treasury, or Treasurer, will understand that your fortunes are based on two things in terms of what you can deliver in an economy, and they are how much you spend and how much you get in. We have been very good in terms of our position and what we have been able to deliver. There has never been a government that has needed to work harder to maintain a strong economy and grow jobs, but that is exactly what we have done. This has been a great challenge and one that the Gillard-Swan government has met. We have delivered. Not since the Great Depression have we seen a devastating global position where the global economy has collapsed and impacted greatly on the Australian economy. Never has there been a higher demand on the government to get it right, to make sure that, when you swing the pendulum to ensure continued growth and jobs, to ensure the future of the Australian economy, you swing the pendulum far enough that you get it right. If you do not swing that pendulum far enough, you miss the opportunity to save jobs, to continue growth, to look after the people you are meant to be looking after—the Australian public, the Australian community. Never before has an Australian government risen to that challenge in more difficult circumstances, but risen to the challenge we have.

After the global financial crisis and a continued downturn in global economies and markets—something that the opposition seem to flick away and say, 'It's been five years, so why haven't the government fixed it all yet?'—it seems that it is a little bit larger than just the Australian economy. When we talk about the global financial crisis, one that impacts directly on all of the OECD countries, we should at least be honest about the facts, honest about what happened, honest about what we needed to do. We were honest about the tough decisions we needed to make to ensure that we continued the growth and to make sure we continued to have people employed. They were the challenges that we met. At the same time the United States—the largest economy in the world which underpins the global economy—basically went into a deep recession. Europe, the OECD countries and every other economy in the world went into recession, but the Australian economy has remained resilient.

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

China. What about China?

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

I will take the interjection, because China is, of course, an important part of our economy. Where have you been for the last 20 years? It is as if the member has just thought of it. The genius on the other side has just thought of saying 'China' because he thinks it has never been mentioned in this place before. Just like every other economy, China has its ups and it has its downs. If you have a look at the data you will notice that China has gone from plus 11 per cent growth to 10, to nine, to 8½, to eight, to 7½ per cent. While China remains a key part of our economy, it is not the only thing that we have and need to maintain.

Opposition members interjecting—

This is the sort of interjection we get from the geniuses across the other side. Come up with something new! A year 12 student doing a report can come up with just saying 'China'. So, even though all of these things have taken place—

Opposition members interjecting—

Don't you love it when you get their backs up? Don't you just love it? Don't you love it when you have hit that raw nerve? In 10 minutes they will be up; of course they will.

While all this has been going on globally we have met those challenges, but we have done a little bit more than that. If that was all that we had done then I would probably agree that we just had not done enough. It is not good enough just to say that we have tried to maintain growth—and we have done that—or, since we came to government, create a further 800,000 jobs. If that was it, if that was all that you did, maybe you would be open to some criticism that said, 'Well, you just haven't done enough.'

We did a lot more. When we came to government in 2007 we acknowledged something that had been hanging in the community for more than 20 years—through previous governments—that pensioners were doing it really tough and needed a massive increase. It was a Labor government that delivered that, and continues to deliver that. You cannot just wash that away and put it to one side and say that we did not manage economic growth. In our time in government we saw the creation of 800,000 jobs while the rest of the world lost 28 million jobs. Other economies were going backwards by miles and we had a resilient economy. It is still tough here; we all understand that. This is the point of this. It is still tough here and we still have a lot of work to do. But you need a government that can acknowledge this stuff, work with not only the good news in the good years but also the bad news in the tougher years, and that is what we have done. In fact, we have been recognised for that.

While the opposition were in government for almost 12 very long years—and they crow about their successes—not once could they achieve a triple-A rating across all three ratings agencies. Why is that? Because they did not do a good enough job. It is not good enough to just have money flowing in. What are you doing with it? What are you creating out of that money that is flowing in? Your task is not just to be a simple tax collector; it is about being a wealth creator. It is about creating jobs, creating an economy, productivity, innovation, supporting science, supporting education and supporting families. These are the tough things that we have to do. It is easy to do them when there is plenty of revenue coming in. It is just a little bit harder when those revenues start to diminish.

Opposition members interjecting—

There is volatility and no-one can argue the volatility case. I will accept that if interjectors from the other side want to come in about volatility, iron ore prices, coal prices, resources and the high Australian dollar. We talk about this every day. You are not telling me anything new. But let's at least be honest about the facts, about the challenges that we all face and about what your response is. What is your response? What are you actually doing?

I am pretty proud to talk about our government's response and the things that we have done. Things that we have done include making sure we have a strong enough economy that has seen successive interest rates fall—decrease—which gives scope to the Reserve Bank of Australia. That means that, since Labor have come to government, families on a home loan mortgage of $300,000 are saving about $5,000 a year. They are saving $5,000 a year more than when the Liberals were in power. That is the difference. At the same time we have tripled the tax-free threshold. For ordinary people it is no longer $6,000; it is $18,200. That is the tax-free threshold. We have gone out there and we have recognised the need that, if you are going to keep an economy strong, you have to empower the people, empower the families by giving some of their hard-earned money back to them, and that is what we have done through the tax-free threshold.

It does not end there. We have recognised cost-of-living issues and pressures. So, what do you do? What is one of the direct ways you can help families, even in tough times? Sometimes you have got to help them a little bit more. You have got to make sure the economy keeps going and you do it through education. What better place could you do it than through education. The School Kids Bonus directly helps families, directly helps young mums and young dads and kids. One of the things that this mob is going to do if they get in is take that away.

The opposition have a big, giant crater of promises they have made, $70 billion worth, that they cannot fund. It is in black and white. That is what the shadow Treasurer said. How are they going to fund this? Easy. They will strip things away. They will strip away the bonuses for families. They talk about the different elements of how they are going to return to a surplus, but you have to go to the detail of what they are saying. They do not give you a date of when. They made a promise of guaranteeing there would be a surplus in every year of a coalition government, except now they have back-pedalled a little bit. Now they say, 'Well, it's when we can afford it.' There is no date, and they say, 'Well, we'll see.' So it has gone from the rock-solid guaranteed promise of 'every single year' to 'suddenly it doesn't happen' and then 'we will just see what happens in the future.'

I want to remind you about something else, which is really important. How do you build the nation? What do you do for the country? Things like NBN, great infrastructure projects. This government has spent more in two terms—in three terms—on infrastructure than any other government in the past has spent in any of its terms.

Opposition members interjecting—

That is true. I am thinking ahead already. We have done more in those terms in delivering on infrastructure, but there is something that is really important in those two terms since we came to government, and that is that the economy today is 13 per cent larger than when we came to office. We have actually grown the economy. It is not something you can argue; it is just a fact—it is 13 per cent larger. You also have to flick the coin the other way and look at what these guys are going to do. They have already told us what they are going to do and it is going to hurt families.

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

Given that this is my first opportunity to speak since the summer break, I would like to wish all members and the parliamentary staff a very healthy and prosperous 2013. Like other members, I appreciated the opportunity to catch up with my constituents over the summer break. One of my favourite places to spend some time is my local surf club. There is a bloke at the surf club that everyone knows as Dingo. I turned up there the other day and Dingo said: 'Jeez, there's been some bad news for Julia Gillard: Minister Roxon and Minister Evans are both leaving. But there's worse news: Wayne Swan is staying.' I said, 'Dingo, you're a bit harsh on the Treasurer.' Dingo has got it in for the Treasurer for some reason. I basically tried to defend the Treasurer in the interests of bipartisanship. I do try to defend the Treasurer a bit. I say, 'He's not that bad.' I said, 'It's a hard job to defend him.' But Dingo has been adamant. He has kept saying, 'This Treasurer can't even add up.'

Next Sunday when I see Dingo, I am going to have to apologise to him, because I think he is right. I think this Treasurer really has been treating the Australian people like mugs. This Treasurer has been misleading the Australian people with his repeated promises and repeated assurances that he could deliver a surplus in 2012-13. Honestly, if the treasurer of my local surf club ran the books the same way as this federal Treasurer runs the nation's budget, he would be run out of town. I want to refer to the Treasurer's budget speech on 8 May 2012. There really is no bigger stage for an Australian Treasurer than delivering his plan for the future on that night—to stand before the mums and dads of Australia and explain how the nation's books are looking. This is what the Treasurer had to say. This was the Treasurer's opening line on the biggest stage of the year, on live television:

The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people, and success of our policies.

He is no shrinking violet, our Treasurer, is he? He continued:

In an uncertain and fast changing world, we walk tall—as a nation confidently living within its means.

This budget delivers a surplus this coming year, on time, as promised, and surpluses each year after that, strengthening over time.

That is our Treasurer on his biggest night of the year. He went on to say:

A surplus provides our best defence against dramatic changes in the global economy.

This is probably the best line of all. The speech writer deserves a medal for this one:

The deficit years of the global recession are behind us. The surplus years are here.

There he goes, but, as it has turned out, it was all a con. It is a myth, a mirage—just another Labor broken promise.

Instead of a surplus, we have another deficit heading our way, and it is proudly brought to you by the same Treasurer who has delivered record deficits, one after another, throughout his time in the portfolio. Those opposite would have seen all those polling results, and they are probably wringing their hands trying to figure out what the problem may be and why there is an issue between them and the Australian public. I am afraid that this issue of breaking promises goes to the very core of the public's mistrust of the Gillard government. If the Australian people cannot believe their Prime Minister when she promises that there will be no carbon tax under a government she leads and if the Australian people cannot believe the very first sentence of the Treasurer's address to the nation when he delivers his annual budget, why should Australians believe anything anyone in this government tells them in the lead-up to the 14 September election?

The promised surplus was not just a passing mention; it was not something he dreamt up; it was on the biggest stage of the year for this Treasurer. He staked his entire political credibility on it. We have had the shadow Treasurer highlight for us today that the Treasurer has promised this surplus more than 300 times. Actually, the shadow Treasurer said it was 366 times,. He used terms like 'come hell or high water'. As any reasonable Australian knows, we have seen a bit of hell and a bit of high water this summer, but we still have not seen a surplus. We have seen the hell, we have seen the bushfires, we have seen the high water in Queensland, but we are still looking around for that surplus. This Treasurer was so confident about it, I thought I would take him on. I offered to bet the Treasurer a thousand bucks. He was boasting about his forecast surplus and I bet him in this place. I stood up here and I bet the Treasurer. I checked the Hansard just before. On 21 September, I came in here I challenged the Treasurer in his presence—he was in this place with me. I bet him a thousand bucks on his surplus promise. I said that, if he won the bet, I would pay a thousand bucks to his favourite charity, and if he lost the bet he would pay a thousand dollars to my favourite charity. But the fact that he would not take me on says a bit about this Treasurer, because I think he knew even then that he was conning the Australian people. He was misleading the Australian people with his repeated surplus promise even then. He was never prepared even then, in September 2011, to put his money where his mouth is, because that, I think, is increasingly becoming the Australian Labor Party's way: they will always spend someone else's money but never their own.

So the surplus promise has gone. It has disappeared. It is going to be replaced by another whopping big deficit, but, interestingly, we probably will not know what that deficit is when we all go to the polls on 14 September. The final figures may not even be in by then. So Australian people will not even know whether the Treasurer has outdone himself and delivered his worst ever result—whether it is going to be a personal-best deficit or just a run-of-the-mill $20 billion, $30 billion or $40 billion deficit. We do not know if it is going to be a personal best or not. We have a Treasurer who has presided over the four biggest deficits in Australian history, so he has got the record, but he is going for the five peaks. Can he top his own performance? It has all added up to the Rudd and Gillard governments combined borrowing $200 billion.

Keep in mind: this is from a government that inherited a budgetary situation of no debt whatsoever and money in the bank. That was the situation it inherited. I have only been around politics 20 or so years; I cannot recall an incoming government being so quiet about the state of the books. Normally the incoming government says: 'Oh no! There's a big black hole and things are worse than we thought!' I think this government came in and said, 'Let's be quiet about this—things are looking pretty good!' But it has managed to destroy it all in five years.

While you are borrowing $200 billion, the Australian people need to understand what that means in terms of the interest bill alone. We are talking $7 billion per year which needs to be repaid by the Australian people.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

How much?

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

That is $7 billion! The member for Cowper is right to ask, because I ask the Australian people listening today: can you just imagine what we could do if we did not have to pay back Labor's debt? Could you imagine if we did not have to pay back the principle but just the interest alone—if we only had to pay back the $7 billion a year? This is Kevin Rudd's and Julia Gillard's gift to our children: this massive debt that they are going to have to repay. Think about what we could do, as members in this place in each of our own electorates, if we did not have to pay back that debt. If we are in the fortunate position sometime later this year to form government, imagine what you could do, the good you could do in your community, with $7 billion per year. Think of the hospitals we could be building. Think of the roads that we will not be able to build because of the debt, and the improved aged-care and childcare facilities—think of all the things we could be doing for regional Australia and the cities. Think of all the things we could be doing if we were not paying back that interest rate bill. It is interesting, because the interest rate bill alone would pay for the National Disability Insurance Scheme.

So, when it comes to economic management, we have this Treasurer and this government failing to deliver any certainty or stability for the Australian people and Australian households. At the same time, they are out there making new promises—casting grand ideas out there and throwing them up in the media as if they had been paid for. But the simple fact is: they have not been budgeted for, and projects like the National Disability Insurance Scheme will never be delivered by a Labor government because even if it wins in September this year it will not have the money to pay for them.

As we have just emerged from a summer of natural disasters, which will obviously have an impact on the budget bottom line, hopefully this government is not going to go back to the Australian people and demand another levy, because prudent governments should be preparing for such events and responsible governments would be making contingencies, in a nation such as ours, for the impact of such natural disasters.

On that note, and in conclusion, I will perhaps finish with a word of caution to members opposite, and perhaps even members on this side: the public will judge us very harshly in this place this year if we are seen to be wasting time talking about ourselves. I can assure you now that people in Bundaberg shovelling mud out of their living rooms do not care about the latest Newspoll, and the Gippsland farmers who are out there today rebuilding fences in my community could not care less if the caucus is leaking to the Australian media. They want us to be focused on their interests—which goes to the very heart of the debate we are having here today.

Those opposite have tried to claim that economic conditions have changed and that is the reason for their major write-down in revenue which has caused this broken promise on the surplus, but the bottom line remains unquestioned: this government is actually receiving more revenue than previous governments but has failed to manage the budget in an economically sustainable manner. Australians deserve better from their government than having this divided and distracted mess. Australians deserve better economic management and the coalition government which can deliver it after September this year. (Time expired)

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

There being no further speakers, the discussion is concluded.