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 failure of the Government to properly manage the Budget.

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

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

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

I confess that I genuinely wanted last night's budget to be a good budget. After five budgets of overblown rhetoric and broken promises from this Labor government, I believed that Australia's finances were in a mess. I wanted the Treasurer's sixth budget to set us straight. I expected he would come clean about the state of play. I expected that he would identify the reasons why the budget was in a mess and would admit that he had basically got the numbers very wrong—very wrong last year and the year before and the year before and the year before. I expected he would lay down a believable pathway to surplus, that he, as Treasurer, would restore the sustainability of the nation's finances. But I was disappointed, and I think many Australians were disappointed. I do not have any confidence that the numbers and the promises in the Treasurer's sixth budget are any more believable than they were in his previous five budgets.

Last week, the Leader of the Opposition and I laid out benchmarks for what we believe would make a good budget. The first requirement was honesty. But straight-up in his budget speech last night, the Treasurer began the spin and excuses. Faced with his broken promise to deliver a surplus this year, he talked about the high Australian dollar 'weighing more heavily than expected on tax receipts'. As I said before, the one assumption the Treasurer got right in last year's budget papers was the Australian dollar. In last year's budget the four-year assumption that underpinned the numbers was an Australian dollar of US103c, and it has remained around there. In the previous budget it was a four-year assumption of 107c. In MYEFO, released last October, when he was still predicting a surplus, the Treasurer said:

The exchange rate is assumed to remain around its recent average level … a [US] dollar exchange rate of around 102 US cents.

The Australian dollar has subsequently been little different to the forecast—today it is actually weaker, under parity with the US dollar—so the Treasurer cannot use the Australian dollar as an excuse for his budget chaos. His own budget papers also show there is no shortfall in revenue. Next year revenue will be $80 billion higher than the last year of the coalition government—no shortage there—but spending will be $120 billion higher than the last year of the coalition. But in real terms, the fact is that in last year's budget revenue rose six per cent; this year it is projected to rise seven per cent; next year it is projected to rise 6½ per cent and so on. With any business that is having a six to seven per cent increase in revenue and is still under water, surely the directors would be sacked? But the government keeps overestimating revenue.

Last year I described revenue forecasts as a 'magic carpet ride' in my address to the Press Club: an estimated $39 billion increase in revenue that would turn a $44 billion deficit into a $1.5 billion surplus. Of course, the government were wrong. Now they are basing forward estimates for revenue from the carbon tax and the mining tax on equally ridiculous assumptions. Net receipts from the MRRT are forecast to be just $200 million this year. That is less than 10 per cent of the $3 billion forecast in last year's budget. But, despite this massive shortfall and widespread views that the commodity price boom is fading, MRRT revenue is forecast to rise strongly over the forward estimates to $2.2 billion in 2017. So the government wants us to believe that revenue will be less than 10 per cent of the forecast this year but then will rise by a factor of 10 over the next four years.

The forecasts for the carbon price also stretch credibility. The carbon price scheme links to the European system from 1 July 2015. Overnight, forward prices for European carbon permits in 2016 were at $5.57 at current exchange rates. The carbon tax revenue is based on $12.10 in 2016, a marked reduction from the originally forecast $29 a tonne. That looks pretty high. Surely, if you were preparing your budget numbers you would do it on the basis of what appears to be the most likely price today. Even stranger: the carbon price is projected to rise in a linear fashion to $18.60 in 2017 and back up to the model price of $38 per tonne by 2020.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

That's a floating price!

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

That is meant to be the floating price! But what is patently clear is that if they do not have a satisfactory floating market-based price they are going to reintroduce the tax! That is what their budget assumes. Fundamentally, they are changing policy in the budget. Spending relative to GDP will be higher in every year of the forward estimates than it was in the final two years of the coalition government. So the picture is clear: the government does not have a revenue problem; it has a spending problem.

There is more. The Treasurer has made jobs and growth the centrepiece of his budget. He said:

Two simple but powerful words are at the heart of our approach—jobs and growth.

And yet, his own budget forecasts show the opposite. Real GDP growth is forecast in his budget to slow down to 2.75 per cent in 2014 and from three per cent this year. The unemployment rate is expected to rise to 5.75 per cent in the first two years, from 5.5 per cent today. So the budget comes along, and then he says: 'What spin am I going to put on it? Oh—jobs and growth!' The problem is that when he defined the spin he did not actually look at the budget, because the budget goes in absolutely the opposite direction! So promising jobs and then not delivering goes to the heart of the uncertainty facing so many families in Australia today.

The forecasts for growth in nominal GDP also look optimistic. This goes to the heart of revenue. Nominal growth is forecast at five per cent in 2013 and 2014, and then even stronger—at 5.25 per cent—in the next two years. This is a much stronger rate of growth than has been delivered in the past year or so. But the Treasurer says, 'No, no—it's a hit on our revenues.' For example, the forecast for this financial year is growth of 3.25 per cent, and over the year to the December quarter nominal growth was only two per cent.

If you bear with me, Madam Speaker, I need to get a little bit technical. Real GDP shows the volume of goods and services produced and then consumed in the economy in any given period. Nominal GDP shows the value of goods and services produced and consumed. The difference is the rate of growth of prices, measured in the case of a GDP deflator. The GDP deflator is different from our more commonly used price indicators, such as the CPI—the consumer price index—because, amongst other things, it takes into account the prices of exports. So forecasts of the prices of exports and the terms of trade are critical input into the forecasts of nominal GDP. What is surprising is that the budget forecasts the terms of trade to remain at very high levels over the next two years, with a negligible decline. I remind everyone that even at their lowest point under this government, the terms of trade are going to be much higher than they were at any time under the coalition.

So the government's claims seem odd, because the terms of trade peaked in the September quarter of 2011 and have declined in every quarter since. They were 17 per cent below the peak in the December quarter last year. So while commodity prices picked up in the March quarter, showing that there are always swings and roundabouts, they have begun falling again. Many analysts suggest that the commodity price boom is now coming off the boil. In fact, in the budget papers they identified that iron ore prices are coming down to around $100 a tonne in the next two years in response to the increased supply of commodities in the global market. Yet, the government believes that this overall decline in prices will conveniently come to an end after two years.

Why is this important? It is important because the assumption of continued high terms of trade feeds into the higher forecasts for nominal GDP. This, in turn, allows higher forecasts of company profits and taxes and, therefore, a better estimate of revenue for the budget bottom line. So, while the budget does not provide four years of forecasts of the terms of trade but it gives 15 years of expenditure in various areas, the robust near-term forecasts are a key determinant of the projected surpluses in the final years of the forward estimates.

So the forecasts are very finely balanced. Sensitivity analysis suggests that a one per cent fall in nominal GDP owing to a fall in the terms of trade of just four per cent would wipe out any—any—budget surpluses this mob are claiming. That is the bottom line, and that is the risk in this budget. That is why we do not believe the numbers announced last night.

The second requirement the Leader of the Opposition and I had was a realistic medium-term budget strategy within achievable fiscal rules. The core of the government's medium-term fiscal strategy is to achieve budget surpluses on average over the medium term. It is a worthwhile goal. However, the Treasurer has not told anyone what the medium term is. With seven years of deficits in prospect, what is the medium term? It may be a decade, two decades, a century, a millennium! We don't know. What we do know is that the two promised surpluses in the final years of the forward estimates are tiny: $850 million and $6.6 billion. And, as I have said, they are based on heroic assumptions. So his claim of a credible pathway to surplus is not honest with the Australian people.

The third criterion laid down by the Leader of the Opposition and me was that the Treasurer must present a believable strategy for stabilising and then repaying the massive Labor debt. Unfortunately, the budget papers show that the debt continues to rise. The headline cash balance, which includes the NBN and the CEFC, remains in deficit throughout the forward estimates. We never had any project anything like what they are trying to offload off budget. This means that the government will continue to borrow more and more money over the next four years, totalling around $58.2 billion. With the expected face value of Commonwealth securities on issue of $256 billion as at June 2013, it suggests gross debt is likely to exceed the $300 billion limit not only within the forward estimates but probably in the next two years. This has been confirmed by third parties such as the National Australia Bank and UBS Australia. Yet we had the charade of the Treasurer in this place trying to compare apples with oranges and alleging that we were being misleading for the Australian people. Previously he has fronted this place and given a gross debt value, a gross debt level, according to the rules of the debt cap. Today he did not have the guts to do it. Why? He doesn't know or else he is deliberately misleading the Australian people.

If this Treasurer does not know what the debt level is of this government, he is not fit to be the Treasurer of the Commonwealth. The government has flagged that it will legislate to increase the debt limit 'as it becomes necessary'. So they do not have the courage to front up with their budget papers that increase the debt without coming to this parliament and saying they are going to increase the debt level. What we do know is that the interest bill on this debt will peak at $13 billion a year—$35 million a day. That would cover the full cost of the DisabilityCare Australia program when it is fully operational.

Fourth, the Treasurer must come clean on the taxation burden he is imposing. In the range of taxation measures announced last night, 60 per cent of the so-called policy savings over the forward estimates are in fact new or increased taxes. This government maintains the fantasy that it is a low-taxing government. But the fact is there are shortfalls in revenue thanks to the incompetence of the government and it is also added to by the massive borrowings and non-tax revenue. The average call on resources of this Labor government since its election will be 25.2 per cent of GDP. That is, it is utilising more than a quarter of the nation's output. That is big government. In contrast, our call on resources as a coalition was significantly less, at 23.4 per cent, because we did not borrow tomorrow's taxes to spend today. We didn't do that. We didn't borrow money like this mob. Therefore, we weren't leaving our children with the pain.

This budget is flawed. This budget does not tell the truth. This budget is leaving a legacy of debt and deficit the likes of which Australia has never seen. Everything the Treasurer says and everything the Treasurer does is as unbelievable as all his previous budgets. Unfortunately, all Australia will have to pay. (Time expired)

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

It is great to be able to contribute to this MPI debate, albeit to the very flawed the proposition that has been brought forward by the member for North Sydney. The member for North Sydney asserts that the failure of the government to properly manage the budget should be the topic of discussion. It is extraordinary that, in the circumstances of the strength and the resilience of the Australian economy, the member for North Sydney, who has been prone to come into this place and go anywhere in the country to talk down the economy, would choose to do that once more. He wants to talk about confidence, yet in every utterance that comes out of his mouth he talks down the economy. Let us have a look at the Australian economy and the resilience of the Australian economy.

We are 13 per cent larger today than we were before the global financial crisis. There is no major advanced economy in the world that has grown in that order of magnitude in that period of time. In fact, countries like the UK still have not got back to the starting line. They are in negative territory. Many comparable countries around the world have experienced consecutive quarters of negative growth. Here in Australia we continue to move ahead—21 years of continuous economic growth.

When it comes to employment, we have created more than 960,000 jobs since we have been in office. The Leader of the Opposition says he has a plan. He doesn't have a plan; he's got a little blue book. For some reason, someone in a focus group somewhere told him, 'Whenever you are doing an interview, stick it up under your chin.' It does not add any economic ability to someone whose former boss said was economically illiterate. It adds no credibility whatsoever. The Leader of the Opposition is out there saying, 'If we get elected, in five years we will deliver a million jobs.' I have got to point out to him that in just over five years that is what we have delivered—and we had a global financial crisis, where around the world we are looking at about 30 million jobs having been lost. Here in Australia we have created almost a million jobs in that period. We did that because we took the right decisions at the right time. We stepped up to the mark and we invested in stimulus activity to keep people in jobs. The Leader of the Opposition, we all remember, was not even in the chamber. He was, in fact, asleep on the lounge in his office. The biggest economic challenge to face this country in a generation and where was the Leader of the Opposition? He wasn't the Leader of the Opposition at the time, but he was asleep on the lounge in his office. He did not even vote on it. So unlike some of his colleagues, like the member for Goldstein, who runs around when it suits him and says, 'Well, I voted against the stimulus,' the Leader of the Opposition cannot even say that, because he did not turn up; he did not vote. And this is the bloke that wants to stand up and ask the Australian people to give him the privilege of managing the Australian economy as the Prime Minister.

We have outperformed every major advanced economy, whether in growth or in employment. Our unemployment rate is at 5.5 per cent. In fact, do not listen to me; listen to the former Prime Minister John Howard, who recently said:

We are still fortunate that we have an unemployment rate with a five in front of it. I wouldn't have thought that was going to be possible a few years ago, and I don't think many people would.

This is a ringing endorsement from the former Prime Minister John Howard, the man whose economic credibility the opposition say they want to reclaim—the mantle of economic credibility that he once had, as they suggest. He says the Australian economy is doing well. When it comes to overall performance, he says:

When the prime minister and the treasurer and others tell you that the Australian economy is doing better than most, they are right.

'They are right,' he says. Do not listen to the opposition when it comes to the strength of the Australian economy. In fact, you do not even have to listen to us. Listen to the former Prime Minister John Howard—or, more importantly, listen to some independent voices in this debate. Have a look at what the ratings agencies have to say: a AAA credit rating from all three major global ratings agencies delivered under this government and reaffirmed in response to our budget handed down last night—never achieved under the former government. For all the talk about how good they were as economic managers in government, they could not achieve the trifecta of AAAs. We have got it, we have done it and it is about time it was recognised, because we have managed the Australian economy not just to deliver the sort of strength of performance reflected in those figures but to make sure that people have jobs and that the economy grows.

Let us look at what some other commentators have had to say about the budget. ANZ have said, 'As was already well known, the deterioration in federal finances has largely been due to lower than expected revenues'—as we all know, except for the member for North Sydney. He reckons there is some mysterious explanation other than a deterioration in revenue. 'ANZ's assessment is that this is a budget broadly appropriate for the economic cycle. The substantial tightening of fiscal policy that would have been required to return the budget to surplus any earlier than outlined tonight would be too damaging to an already somewhat vulnerable Australian economy.' There you have it—ANZ. That sounded like a pretty strong endorsement of the budget to me.

Do not listen to the member for North Sydney, the man who talks big when it comes to the age of entitlement. When he had his chance to confront a measure that we had taken in relation to trimming the baby bonus for second and subsequent children, he got rolled. Maybe the member for Goldstein, when he gets up and gives us his usual contribution, would like to tell us whether he was right there behind Joe. Were you right behind Joe? Did you help him out or did you get rolled too? If they could not make a responsible decision in relation to a modest trimming of the baby bonus, you have to ask yourself what hope they have.

I could go through other commentators. Westpac said:

The improvement in the budget position is appropriately gradual over the four years.

…   …   …

The Commonwealth Government's net debt position remains extremely manageable.

It was not just Westpac that said that our debt position was manageable. I will just go back to former Prime Minister John Howard for one moment:

And our debt to GDP ratio, the amount of money we owe, to the strength of our economy, is still a lot better than most other countries.

In fact, if you look at the budget papers, our net government debt is about an eighth of the average among comparable major advanced economies in the world. So, when those on the other side come forward and want to start talking down the economy and the debt that we are lumbering future generations with, just remember that the whole world went through the global financial crisis. That is why it was called the global financial crisis. So you have to have a look at what happened across the globe. When you look at what happened across the globe, you can see that we came through stronger than anyone else. We punched through stronger than anyone else, and we are 13 per cent larger today than we were then, while others are struggling to get back to whether they were. We are creating more jobs, and now we are investing in the programs of the future.

Mr Hunt interjecting—

I hear the member for—I cannot—

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

Flinders. You are an absolute genius—one of life's greatest geniuses!

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

Flinders. I hear him make a little interjection. He is a man who has all of the credibility you would expect from someone who wrote his PhD on pricing carbon to tackle climate change and then, when he gets a chance—

Opposition members interjecting —

Look, at least the member for North Sydney went into the shadow cabinet and put the case. He got rolled, but he put the case. The member for Flinders does not even know what he stands for. The bloke went through three years putting together a thesis. I would hate to think what he got for a mark, but he put in three years of effort and his conclusion was that, if you want to do this, the most effective and efficient way is to price carbon. Most people stick their hand up and run for parliament because they want to make a difference. They want to take their values and enshrine them in the law of the land. But some people—

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: I am reluctant to do this, but the reality is that the MPI is about the budget, and this stream of personal attacks by the Assistant Treasurer has nothing to do with the MPI.

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

I thank the member for Groom for his point of order. I was myself on the point of bringing the minister back to the MPI before the House.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

This is the best you can do? Hey, mate, it was an undergraduate thesis on zinc, cadmium and lead—undergrad on zinc, cadmium and lead. So you've just misled.

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

Matters that go to carbon pricing are very adequately set out in the budget. I thank the member for Flinders for his suggestion that this has been an undergraduate contribution. I will get back to his postgraduate contribution, which was back when he believed in actually doing something to tackle the problems of the planet. But now he is more interested in self-promotion, and that means within the Liberal Party that you do not get ahead if you assert the valid view that you tackle climate change by pricing carbon. So he has put his own interests and self-advancement ahead of the duty that each and every one of us in this place has to bring the values that we believe in, enshrine them in the laws of the land and make this country a better place. That is what we have done on this side.

When it comes to economic management, I have to say that, for all the facts and figures that the member for North Sydney wants to blurt out, you did not hear him talk about the tax-to-GDP ratio. The tax-to-GDP ratio, where we look at the size of the economy and the tax that the government is collecting as a percentage of the size of the economy, is the best measure of the tax burden. It is considerably lower today than it was when we came to office. It was 23.7 per cent when we came to office; that is what the Howard government was taxing people at. It is 21.5 per cent in the current year. They talk about the tax burden. As a percentage of the economy, this government is collecting less than 22 per cent of GDP in tax collection; they were collecting almost 24 per cent. If we were taxing at the same rate as they were when they left office we would be in a comfortable surplus, but the reality is there have been revenue write-downs and cyclical and structural factors that we face.

In terms of some of the structural factors, we have put in place a proposal to tackle some of the profit-shifting activity that has been going on, where big multinationals shift profits into low-tax or no-tax jurisdictions to avoid paying their fair share. I speak to many of these companies and they point out: 'This is not a question of morality; we are doing what is legal.' I say, 'Well, I don't think it's very moral.' They say, 'If you don't think it's very moral, you're the law-maker—change the laws.' You know what? That is what we are proposing: to change the laws so that we can make sure that multinational enterprises, which are some of the most profitable enterprises in the globe and profiting from economic activity occurring here in Australia, are paying their fair share—like all the mums and dads that head off to Penrith station in my electorate at five o'clock in the morning to head into the city to work each day. They pay their fair share of tax. The small, home based business in Glenmore Park is paying its fair share of tax, but these big multinationals often locate their profits in tax havens or low-tax jurisdictions and avoid their obligations.

We want to stop it. But every time we have brought an amendment into this place—and we have brought $11 billion worth of them—what have those opposite done? They have voted against it. If there is a rort, a rip-off or a loophole they will be in there trying to protect it. This goes to a question of values. We believe we have to crack down on these loopholes and that is what we are doing.

I do not have a lot of time left and in the time left to me I must take the opportunity to talk about the high-taxing ways of those opposite, and the latest iteration of their high-taxing tendencies is this paid parental leave tax. Tony Abbott is a man who can absolutely be believed on parental leave questions because, when he was last in office as a minister of the Crown and had a chance to do something, he said, 'When it comes to parental leave it will happen over my dead body.' Over my dead body! What a commitment he had to parental leave when he last had a chance. But now he has this you-beaut, mickey mouse, Rolls Royce version where a woman on $1 million a year can take $75,000 for that period while she is on leave. There are people all around the country who will never earn $75,000 a year.

And who is going to pay for it? Companies. Remember: this is the mob that told you, 'It is a great, big, new tax and when you tax a big company it's going to flow through and be passed on in higher prices and we'll all pay, so you don't tax big companies—you actually tax all of us.' That is what they told us, but all of a sudden they are proposing a great, big, new tax. They say it is fully funded. A 1½ per cent levy on 3,000 companies will not fully fund their program. They are going to have to jack up that tax or spread it on to more and more people. See the member for Goldstein—body language is a great thing!—as he starts to have that nervous itch and twitch. He knows that this is a shambolic policy. He knows it is a sham and that, if they are going to deliver it, they are going to have to jack up taxes by more than 1½ per cent on those businesses and that will mean higher costs for consumers. (Time expired)

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

That was another very cerebral contribution by the Assistant Treasurer, I do not think. There is an old rule: when you are incapable of defending your position, go the man. We just had 15 minutes of that. You would think, after the presentation of the budget, you would get something more substantive than what we have just heard from the Assistant Treasurer, but you cannot blame him. The Treasurer never fronts to these debates. He is incapable of defending himself so we have just had that contribution.

This budget is a sea of red ink. For this reason it carries no hope—a failing compounded by the thread of fundamental dishonesty running through this budget document. This budget is built on shifting sands because it continues the practice of recent years of being blatantly overoptimistic about revenue forecasts. For several years now we have seen the government basically assuming that the terms of trade would stay at these 150-year historic levels. They have consistently created estimates which are unrealistic and overstated. Then they spend that money and, when that revenue is not realised, they say they have to fix the books—that they have been whacked in their revenue forecasts; they have had a hit to revenue.

The surpluses are a mirage—simply not believable—because once again they have blatantly overestimated the revenue forecast. The budget assumes that the terms of trade are basically going to flatline. The terms of trade are still at very historically-high levels. They are still 15 percentage points above their highest point under the Howard government—the golden years, as we are often told by those opposite. But the terms of trade are still 15 per cent higher. I have spent half my life in the commodity markets and I know what goes up, comes down. What this government has assumed for years now is what goes up does not come down—and yet commodity prices will not collapse but will start to head back to more normal levels. This budget ignores that fundamental reality of the market, that commodity prices will start to head back to more normal levels. As a consequence, those surpluses are meaningless and are, once again, built on quite false and overoptimistic forecasts.

This budget is built on shifting sands, because it grossly misrepresents the cause of the budget blow-outs. All through the budget papers the Treasurer blames the high Australian dollar and low commodity prices for the budget blow-out and for the so-called 'hit to revenue'. We hear it again on the radio, we see it in the papers, we hear it on the television—the high dollar taking a sledgehammer to their revenues. We hear the endless rhetoric about how their revenues have been hit to leg by a high dollar and commodity prices coming off.

As the shadow Treasurer mentioned in his remarks, the fact of the matter is that about the only thing that the budget last year accurately forecast was that the dollar would stay high, at around $1.03, and that the trade-weighted index would be around 77. In other words, quite clearly, the government anticipated 12 months ago what would be the exchange rate all year and what would be the trade-weighted index all year. Those numbers were exactly what the Treasurer and the Treasury thought they would be. So how can you now claim that the dollar and commodity prices have hit their revenue to leg?

Mr Ewen Jones interjecting—

It is the spin—it is the disingenuous way in which this budget presents its numbers and its arguments. So all the breast-beating by the Treasurer about the 'huge revenue whacks out of the blue' and about the 'doggedly high dollar taking a sledgehammer to revenue' is all a fabrication, designed to avoid blame for Labor's real problem, namely, the profligate spending of this government. The revenue this year is $80 billion greater than that of the last year of the Howard government, yet spending this year is $120 billion greater than that of the last year of the Howard government. That says it all! This government does not have a revenue problem—revenue is going up seven per cent—it has a spending problem. I would like to see any household that would not be happy with a seven per cent year-on-year increase in revenue. I would like to see any business that would not be happy with a seven per cent year-on-year increase in revenue.

The budget is built on shifting sands, because it has embedded within it a debt landmine—a rate of growth of debt that will threaten our AAA credit rating, a rating that was so hard won by the Howard government and a rating and an economy that got this country through the global financial crisis in good order. That is what got us through the global financial crisis: an economy that was inherited by those opposite, an economy which had no debt and which had money in the bank, an economy which had unemployment with a four in front of it, and an economy which had people who had had a 22 per cent increase in real wages over the previous 11 years. The economy was in an unprecedented position. That is what got you through the global financial crisis, along with the automatic stabilisers.

Now we have a debt landmine, five years later, buried inside the budget. We have a rate of growth that will threaten our AAA credit rating, a rating threatened by the sea of red ink represented in this budget, which will push gross debt through the $300 billion debt ceiling, as confirmed by the Treasurer this afternoon. This budget is built on shifting sands, because it is a budget which greatly underestimates, by many billions, the real loss of revenue of various measures, such as the cost of dealing with illegal boat arrivals under Labor's policies and the loss of revenue through the collapse of the carbon price and the mining tax revenue.

Labor claim that their asylum budget costs will fall by 50 per cent over the forward estimates to less than $1.5 billion under their failed policies. That is clearly absurd. If Labor simply spend what they budgeted for next year over the forward estimates there would be an additional blow-out of $4 billion. Once again, they are just making it up. The numbers of boat arrivals grow every week and every month. What Labor have allowed for in the current budget is inadequate, given a blow-out of $4 billion this year with respect to boat arrivals. They have consistently underestimated, and again in this budget, so many of the costs in so many areas. This budget is built on shifting sands and it houses fundamental dishonesty about so many things. It is why the business sector sees it as a budget which embodies no coherent strategy to create jobs and growth or to provide certainty, nothing to restore an appetite for risk and investment and nothing to restore consumer and investor confidence.

Consumers and business people alike know that continuing on with our fragile budgetary and debt position exposes Australia to any hard landing in China, which could feed quickly through to export earnings, unemployment, defaults and difficulties with bank financing, foreign investor confidence and Australia's debt levels. It is why this debt, this constant sea of red ink, is undermining confidence. It is why people are not spending and why investors are not investing. It is why there is great nervousness about unemployment and the future.

There is another way: the government must stop taxing, borrowing, spending and regulating and start living within its means. The growth and the role of big government that we saw in this budget last night must be displaced by fostering robust growth of our millions of small and large businesses and by restoring consumer confidence to spend. Government must, once again, provide a measure of certainty and stability.

Bernie Ripoll (Oxley, Australian Labor Party, Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

This budget is all about choices and responsibility. This budget keeps our economy strong, makes smart investments for our future and ensures every Australian gets a fair go. It is about supporting jobs and supporting growth, and we are doing that by investing in infrastructure, investing in the real economy, investing in people, investing in the things that make a difference, investing in the things that keep the Australian economy ahead of other economies, investing in the things that give us a future and put this budget on a sustainable path to surplus. That is what this budget is about. It is an honest budget about where we sit in the global economy, about what has happened over the past five years with our fiscal position—where Australia is in terms of its revenue base. We have made the structural changes, the big reforms. We have taken responsibility. We have made the hard decisions—not always politically palatable, not always the sorts of things you do in your own political interest but the things you do in the national interest, the things that have to be done. That should always be the measure of a government. It should always be the measure of a budget—doing the right thing by the economy, doing the right thing by Australians, doing the right thing by our kids in terms of education, looking after the most vulnerable in society through DisabilityCare, making the tough choices.

There is one thing that always comes to mind. When tough choices have needed to be made, no matter where the economy was at, no matter what time period it was in Australian history, it was always left to Labor governments to make those decisions. There was never going to be a good time for universal superannuation, but Labor did it because it was the right thing to do by the economy and the right thing to do by workers. On every other call, on every other hard decision, it is always us who are left with the responsibility—which we take—to make those tough decisions. We saw it again last night in the budget. We saw the tough decisions.

It does not matter who is in government; the revenue write-downs will be exactly the same. The difference here is the choices you make. That is why this budget is about choices. That number will be the same whether it is us or them getting that information from Treasury. It will be the same Treasury officials, the same Treasury, the exact same people who provided the Howard government with their figures, data and analysis for 11 years. But the choices will be different because we have stepped up to the plate and put a stronger economy, jobs and growth first.

If people have a job, they have a chance. That is why there is hope. That is why we still have a good economy. I actually say to people that is why we have an economy. I talk, as most people do, with people from all walks of life and international visitors who come to this country, and they cannot believe it. They look at our economy and say, 'We would give our right arm for an economy like yours.' A strong economy where unemployment is around five per cent is not good enough but certainly good in the current global environment. It was once considered full employment. I would like to think that means a lot of people are still in jobs.

Since we came to government, our economy has grown by 13 per cent. Compare that to every other economy in the world: the United States, Japan, Germany, France and anyone in the EU. Their economies have grown by barely one per cent over that same period. Ours is 13—hence why we still have jobs and economy, hence why interest rates are at historic lows in this country. I will never forget that when the Howard government was sitting on this side of the table they promised that interest rates would always be lower under a Liberal government. Wrong. That has not been the case. They are lower under us.

We have kept the economy strong and we have kept interest rates low. We have also kept inflation under control. Inflation is low as well. How does that translate to the ordinary person in the street? It means they have a job. Their mortgage is less. It means there is more investment in their children's future and their families because we support them through the money we have spent in education. We support them through better quality infrastructure in schools which everyone can see every day. It means we have paid for more, better quality teachers, for more programs and for special assistance where kids need a hand up because some kids do it a bit tougher than other kids. We have put money there as well. It is about delivering a fairer economy, not just a stronger economy. Plenty of people can look after themselves, but a government's responsibility is to everybody, not just the strong. It has to be fair as well, and that is what we have done.

So, yes, it is a tough budget. Yes, we have had to make the tough calls on savings—$42 billion worth of savings at the same time that revenue write-downs are around $60 billion over the forward estimates. That is a lot of money to make up, but we have stepped up to that challenge. We have made the necessary savings. We are not going to cut to the bone. We are going to pull up short of where the mob on the other side want to go, and that is cutting to the bone.

We have seen it in Liberal state governments. We have seen it in my state of Queensland, and that is easy to translate on the ground into massive, instant job losses and a stop in investment. Ports that were about to be built were stopped. No-one wants to pay for them anymore. There is no leveraging of government funds to leverage the private sector to invest in ports. Instead you just see a halt. At the same time that we see commodity prices coming off and a need for government to step up to the plate, what does the Queensland Liberal state government do? It stops the investment. It halts the growth. It cuts the jobs. It does the exact opposite of what you need to do. You need to invest in your people. You need to invest in skills. You need to invest in jobs and growth. And it is not just rhetoric; you do it through budgets. You do it through programs, through skilling Australia.

What did we do when we came to government in 2007? Some of the very first things are two that I am really proud of. One is that we made our first major investment in people who receive the age pension. We accepted and recognised that they were falling massively behind and we made a massive structural change, indexing age pensions properly, not handing out $500 cheques before an election, not piecemeal payments to people who have worked all their lives for Australia, for the economy, making a contribution. We did it properly so it would be indexed and permanent, and no government in the future can take it away.

The other major thing we did to keep the economy strong is invest in infrastructure. We set up the Building Australia Fund. We set up Infrastructure Australia. We did not just talk about it; we actually built roads. We actually build rail. We actually build ports. My good friend the member for Blair reminds me of the Ipswich Motorway—not that I need reminding of the Ipswich Motorway! But the reality is that we fought tooth and nail for over a decade to get that project up. In 2007 there was a local referendum on a lot of things, but there was one in particular on that road. It was: 'You vote for Labor; you get the road. You vote for the Liberals; you get nothing.' You get a pipe dream of some alternative bypass which was uncosted, unfunded and engineers were telling me was going to cost twice as much if it ever got built. And we have a good news story to tell. We have a further good news story to tell in this fiscally responsible budget. We have put more money on the table. We are signing an agreement with the Queensland state government. I do not care what colour they are; I want to deliver for the people of Queensland, and we are going to put $290 million to finish off the Ipswich Motorway job. Yes, it is tough times, yes, you have got to make savings, yes, you have got to cut in the right areas, but you need to invest in the right areas at the same time. That is stronger, with jobs and growth; that is smarter, by investing in schools and education and investing in our future; and that is fairer, because DisabilityCare—just like we did with Medicare—is looking after the most vulnerable in society and making sure that we have got a fair economy that delivers for everybody. That is what we are doing.

What an absolute sham it is when the other side come in here with this disingenuous matter of public importance: 'The failure of the government to manage the economy.' What did they do to manage the economy when it was their opportunity to step up to the block? Let me tell you what they did during the GFC: they opposed every single measure that the government put forward to support jobs and families. Every time they were dragged kicked and screaming, but opposed every single measure to keep jobs. Since we were elected to government, 960,000 jobs have been created in this economy. Every other economy in the world has lost jobs—globally it is millions of jobs—but in Australia we bucked the trend because government had the tenacity to make the investments. Yes, that does mean borrowing. It is good borrowing, and our national net debt position is a healthy one. It is as simple as that. It is around 11 per cent and it is affordable; we can afford that.

Where are we spending that money? We are spending it on ensuring that we have a strong economy, a fair economy and a smarter economy. I will never begrudge the money where we have spent it: on kids, education, infrastructure and jobs. It has been spent on making sure that we actually have a path to the future, a path to surplus—delayed, yes, but a path to surplus. The only time a AAA rating has happened is under a Labor government—with all three ratings agencies, AAA. The big test was last night: what were they going to say about our budget when it was analysed at an international level? They retained our AAA ratings across the board because it is a strong budget, a responsible budget, a fair budget, a smart budget and it helps people get through the global crisis we are all facing. (Time expired)

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

This matter of public importance on the budget, on the day after the budget, now follows a new pattern in the House of Representatives. We have a Treasurer who will not front for the MPI. We have a Treasurer who will not front to the parliament and will not front to defend his budget. This is a curious thing. As I was watching the Assistant Treasurer front for the Treasurer, who does not deign to come to this place to talk about a matter of public importance, I wondered: is it because he thinks his budget is of no public importance? Is it that he just does not want to talk about his budget to the parliament? This Treasurer, year after year, refuses to debate his budget as a matter of public importance the day after the budget.

The interesting thing is that—as someone reminded me—when he was the shadow Treasurer he did not want to move the MPI either. One year, famously, on the day after Peter Costello's budget there was no MPI on the budget. You do not need to take my word for it because, thanks to the former Chief Government Whip—the member for Hunter, Mr Fitzgibbon—we know about this. He told his then friend Mark Latham, who wrote about it. He wrote about how, in 2005, Wayne Swan as shadow Treasurer refused to move the matter of public importance the day after the budget because he was—too nervous, or too busy? It became a big talking point, and now he is the Treasurer he will not come in for the MPI.

Here we are debating his budget. It is a budget that strings together one aspect of consistency, I have to say, and that is that every year, with this Treasurer, the question is: how much will he miss by? My friend the member for Wannon has heard me recite how much he has missed by on every deficit projection. I will not labour the point. The only thing you can say with this budget is that people are already looking back and seeing how much he missed by, and looking ahead and asking the question: how much will he miss by again? What is that mathematical calculation you should factor in—the Swan factor—to adjust immediately every figure he puts out and everything he says. As the shadow Treasurer said, in rough terms it is about $20 billion on the budget. That is basically the miss. In the year gone, as we all know, the deficit was $44 billion. A year before he said it would be $22 billion. This year we were told on 360 or more occasions that there would be a small surplus and, of course, there is about a $20 billion deficit.

As the shadow Treasurer pointed out, this government does not have a revenue problem. Its problem has been that it has overforecast. That is his problem. As the shadow Treasurer and the member for Goldstein pointed out, revenue is going up this year. It is going up six per cent, it is projected to rise seven per cent in the following year and nearly seven per cent in the year after. It is worth actually looking back at their overoptimistic projections. Before I forget, just today the member for Hunter said, 'It has always been my approach to underpromise and overdeliver,' in reference to the Treasurer, who does precisely the opposite.

But let us nail this absolute falsehood from this government that they have had a reduction in revenue. They have had an increase in revenue. The problem is that their overoptimistic forecast was not that they waited to see, but that they spent all the money. If you look back at last year's budget—and it is a good table to look at because it gives a very factual account, and the Prime Minister says that she likes to talk about facts—at what they promised and what happened, if you were to believe the government you would be looking for this decline in revenue.

In the 2012-13 budget the 2011-12 estimated outcome was about $330 billion for receipts, and for the 2012-13 year the Treasurer thought that the increase in revenue would be about $36 billion—which would go up to about $368 billion. It did not stay at $330 billion. It has not declined from $330 million. It went to about $350 billion. It increased by quite a bit. As the member for Goldstein said, this government does not have a revenue problem; it has got a spending problem, and if you look at what they said they would spend and what they actually spent, the figures tell the story. They have spent more than they said they would, and I will not bore the House with every single figure.

The problem with the Treasurer is that he is about to do it all again. His exhibit A is his mining tax, the mining tax that in the first six months collected about $120 million when it was going to bring in billions. We found out last night that it will raise $200 million. As my friend and colleague in the other place the shadow Assistant Treasurer pointed out, that is an incredible 95 per cent below the Treasurer's original $4 billion revenue forecast that he issued before the last election.

Having missed it by that much—and as I have said before, you can only imagine the word pictures that this Treasurer presents on missing targets—what this budget says is that in about four years time, it will bring in about $2.2 billion. That is the year he says we will return to surplus. This Treasurer's past is his future and it is this government's pattern. All the time it leads to deficit upon deficit, a promised surplus that is a broken promise, replaced with a promise of being achieved in a few years time. As long as this Treasurer is in office, it will always be in four years time until he takes all the steps to ensure that it is pushed out and out and out. The upshot is more deficits and more taxes to try to fill the hole he has created and of course much, much more debt.

Net debt was not zero. It was $45 billion in the bank when this Treasurer began. We are now seeing in the budget papers the $147 billion peak that we used to talk about becoming the peak net debt in 2015-16 being close to $191 billion. Add $45 billion to that and he is on his way to a quarter of a million turnaround. This is a failed budget with a Treasurer that will not even front.

Andrew Leigh (Fraser, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

It is my pleasure to rise on this matter of public importance to speak about the strength of the Australian economy and the important choices that this budget makes. The Australian economy is performing strongly by international standards. As previous speakers have noted, we have grown 13 per cent since 2007. It is a period when the United States has only grown a couple of per cent and when all of Europe has actually shrunk. The European economy is smaller now than it was then. Australia's economy has moved up the rankings from being the 15th largest to the 12th largest in the world. We have seen faster productivity growth over recent years than we saw under Work Choices, giving the lie to the notion that all that stands between Australia and stellar productivity performance is cutting back workers' entitlements. We have seen the sharemarket up. In fact the sharemarket is up more than 10 per cent just this year.

You do not have to take my word that. As former Prime Minister John Howard has noted:

… our debt to GDP ratio, the amount of money we owe, to the strength of our economy, is still a lot better than most other countries.

Former Prime Minister Howard has been willing to speak the truth on this. While the member for North Sydney used question time to fearmonger about debt, former Prime Minister John Howard has acknowledged that Australian debt levels are low. In fact the Leader of the Opposition himself has a debt to income ratio well over 200 per cent, so it is hard to see why he would envisage a debt to income ratio of 11 per cent as being unsustainable.

If we go back to 2009, we had the Leader of the Opposition telling Lateline that Labor's stimulus package was 'not going to stop the recession being long and deep'. He was of course completely wrong about that. Thanks to the stimulus package, Australia avoided going into recession entirely. We did that because we did not cut back on government spending when the private sector turned bad. Two-thirds of the debt that Australia took on was due to revenue write-downs with just one-third being due to the stimulus spending we put in place. So when you hear those opposite fearmongering about debt, they are really saying that the Australian government should have cut back when the private sector was cutting back. That would have led to a long and deep recession of the kind the Leader of the Opposition forecast incorrectly in 2009.

Mr Deputy Speaker, if you believe those opposite, you would believe that coalition governments spend more, tax less and have less debt than this government. Indeed, I even heard a voice from one of those opposite. 'Yes, we can do that,' they said. The problem is it is mathematically impossible. You have got to make choices. You actually have to make choices—and our budget does that. We make difficult choices but they are responsible savings measures: $430 billion in savings adding up to $180 billion in savings under this government. We understand those trade-offs. It is not sure those opposite do. Those opposite have a fiscal crater which was $70 billion before the revenue write-downs and now, with nearly $20 billion of revenue write-downs, it must surely be in the order of $90 billion.

Part of the reason they have that is their unfair paid parental leave scheme, which gives the most to those who have the most. Of course, you do not need to hear my criticisms of this scheme, which may cost between $12 billion and $17 billion over four years, as you can simply go to those opposite. The member for Mitchell said it did 'not pass the fair-go test'. The member for Tangney said he was 'aware of a number of colleagues that have similar concerns on this policy'. The member for Moore said, 'The Labor Party scheme is quite good.' He said he was not sure 'why it is necessary to go to this level and how it will assist productivity'. The member for Wentworth said he was 'not going to comment on whether it should be reviewed or not'. Senator Cormann said that he is yet to announce how they will fund it, and they have not released the costings yet. Peter Reith goes further. He just says 'it is obviously bad policy'. Nick Minchin: 'I have been on the record many, many times as saying that I'm not a supporter of the paid parental leave scheme of the opposition.' He says, 'I think Tony and the opposition should now put that in the aspirational category.' And Peter Costello says, 'My view is that it is a very generous scheme.' Well, yes, it is generous, but it is generous to the most affluent; it is not generous to the neediest.

The opposition leader claims that he can pay for paid parental leave with a 1.5 per cent impost on Coles and Woolies customers. The trouble is that was predicated on company tax revenues being up and we have seen company tax revenues being written down, so 1½ per cent likely does not cover the cost of the opposition's unfair paid parental leave scheme. It is likely they would have to increase company taxes and therefore increase grocery prices by even more.

They have claimed that the tax increase combined with parental leave could even save the affected businesses money. But, unfortunately, business leaders have quickly come out to say that this did not fit the mathematical test—again similar to the claim that they can increase spending, cut taxes and pay down the debt faster. The opposition leader could not name a single business that would be better off under his parental leave scheme, because there is not one. It is no wonder that former Liberal leader John Hewson said the opposition leader has no interest in economics and called him 'innumerate'.

That brings me to the opposition's soil magic plan, a direct action plan which they originally said would cost $3 billion over four years and now will cost $2 billion over three years. But that is at odds with the costings of independent experts. The Grattan Institute say that it will cost $100 billion to achieve the coalition's emissions reduction target via soil magic, with $1,300 in new taxes because the opposition will not deal with foreigners in order to combat climate change and that again drives up the cost. If they were serious about this policy, they would submit it to the Parliamentary Budget Office for scrutiny. They would come clean with the Australian people. They would not go around making statements like the Leader of the Opposition has made that 'we will spend no more and no less on reducing emissions than we allocate'. The fact is that something has to give. Clearly the opposition cannot both meet its budgetary targets and meet its emissions reductions targets. It will have to do one or the other.

Then there is the coalition's $30 billion policy to construct dams. That shows the priorities of the coalition: $30 billion on a very odd dam scheme which seems to bear a curious resemblance to a major coalition backer's plans to develop the north. But there are no plans for investing in the education of Australia's children and no plans for paying for disability care. The opposition want to spend $1½ billion on drones, another thought bubble. When I first heard of this policy I thought we should just remind them that their coalition with the Nationals still remains strong. So there is $1½ billion on drones apparently and there is $10 million for upgrades to the opposition leader's football club, Manly-Warringah Sea Eagles, and there is $400 million for a green army.

I could go on all day but the coalition's fiscal woes are the result of saying yes to every special interest and no to every sensible revenue-raising measure. What the opposition leader must do tomorrow night is come into this place and back Labor's responsible saves. He must come into this place and he must say that he backs our revenue measures, because if he does not then all he has done is dig deeper into his $70 billion crater—and, as advice goes, when you are down deep the best thing you can do is stop digging. The opposition leader could stop digging by backing Labor' measures to get rid of the baby bonus and replace it with a targeted $2,000 for those on family tax benefit part A. He could back our company tax changes which see a fairer and more responsible company tax system being put into place. He could back the series of these measures but then he would still have to make swingeing cuts. When he is asked about his cuts he likes to speak about the cuts that he will make in my electorate of Fraser and the 20,000 Canberra public servants that he will get rid of. But that is only a small drop in the ocean compared to the budget gap that the coalition leader finds himself in. He wants to give tax cuts to big miners and big polluters. They have been guaranteed. But he does not want to provide tax cuts to the Australians who are at the bottom of the income spectrum. He is going to reverse Labor's cuts to superannuation contributions taxation for low-income earners. He is going to reverse our tripling of the tax-free threshold. Both are policies that will disproportionately hit women. Budgets are about priorities and values. It is time for the opposition leader to show tomorrow night where his are.

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

I welcome the opportunity to speak on this matter of public importance in relation to the 2013-14 budget announced by the Treasurer last night. This is a budget that does nothing for regional Australia. What last night's budget speech confirmed to all Australians is that this government is in chaos. It has no credibility and it has no plan for the future of Australia. Despite all the government finger-pointing and spin about why their budget is in tatters, the reality is the responsibility for the chaos which has engulfed this government rests with the government itself.

Over the past five years federal Labor have borrowed more than $260 billion and saddled future generations with a mountain of debt. They have lost control of our borders which is costing Australian taxpayers billions of dollars each and every year. They have wasted billions on school halls, pink batts and the rollout of broadband infrastructure. As a result of this waste and mismanagement, last year we saw the Treasurer desperately attempt to lay out the government's plan for a future return to surplus. Indeed it was a very wafer thin surplus. The plan was based on assumptions that no credible commentator accepted and that most Australians just did not believe.

As the member for North Sydney highlighted this time last year, the federal Labor government will never deliver a budget surplus because what we know about federal Labor governments is that they have no respect for taxpayers' money and they do not know how to manage programs. It therefore came as no surprise when, less than six months into the current financial year, the Treasurer broke another promise and dropped the government's commitment to return to surplus. Since then the forecast deficit has continued to rise as cost blow-outs and further economic mismanagement paralyse the government's leadership. Any inkling of credibility that remained soon evaporated as the government's deficit forecasts continued to rise in the lead-up to last night's government Swan song.

Despite manipulating the figures and using every trick in the budget book last night, the government confirmed that the $1.5 billion surplus was now a $19.4 billion deficit—a $21 billion turnaround which came on the back of deficits under this government of $27 billion in 2008-09, $54 billion in 2009-10, $47.5 billion in 2010-11 and $43.4 billion in 2011-12. Yet, despite this, the Treasurer last night stood up in this place for the second consecutive year and claimed the government had a new road map of how to return to surplus. It will not happen this financial year. It will not happen next year. This financial year we have an $18 billion deficit forecast. But apparently through the magic of manipulation the Treasurer wants the Australian people to believe that a small surplus of $800 million will be delivered in 2015-16. The truth is that no-one honestly believes this government and no-one honestly believes the assumptions that this government has based its claim on that the budget will eventually return to surplus in 2015-16.

The majority of Australians know they simply cannot trust this government, and today I would like to demonstrate how last night's budget confirms why. Last night we again saw the government making all sorts of wild claims about funding for the Pacific Highway. Minister Albanese distributed a media release claiming that over the next 12 months work would commence on at least five new projects on the Pacific Highway. These five projects were in addition to existing projects. The new projects had a cumulative cost of more than $3 billion. Such a substantial commitment would be very welcome, if only it could be believed. Despite Minister Albanese's media release, when you go through last night's budget papers there is not one mention of the Pacific Highway and not one extra dollar of funding detailed in the 2013-14 budget papers. There is not one mention of the Pacific Highway in the budget papers, yet there is a media release from the minister claiming that more than $3 3 billion in projects is set to commence.

The government is treating North Coast residents as mugs. They are playing with people's lives, all for the sake of a headline. This is symbolic of what is wrong with this government and why they are in such a mess. Their addiction to policy by press release has got them into all sorts of trouble and this is just another example. The truth is that funding for future projects on the highway is in limbo because of a stand-off between the Commonwealth and the New South Wales government. When the O'Farrell government was elected to office, the federal minister, Minister Albanese, immediately tore up the 80:20 Pacific Highway funding model which had previously existed between federal Labor and the state Labor government. Instead the minister began insisting on fifty:fifty funding and as a result there is a $4 billion funding black hole which has to be filled if the road's duplication is to be completed.

Since changing the funding arrangements we have seen the federal government concoct all sorts of excuses for changing the funding model. The most recent came from the federal member for Page, who was put on the spot after the Gillard government announced that it would fund upgrades to the Bruce Highway based on the 80:20 model with the Queensland government. When the member for Page was asked why the same funding formula did not apply in New South Wales, this is what she told Prime Television News on 30 April:

It is not part of the Australian National Network, that the Bruce Highway is, and to those highways the contribution (from the State) is 20 per cent, but it is 50/50 for the Pacific Highway.

The member for Page either does not understand the existing classification of the Pacific Highway or she is deliberately misleading her constituents because the Pacific Highway has been included in the National Transport Network since 2005. This map here in my hand clearly illustrates that fact. I would like to table that document in due course. As the map shows, the National Land Transport Corridor clearly does include the Pacific Highway, as it does the New England Highway.

As a result of the 2005 determination by the Howard government to include the Pacific Highway on the national network, billions of dollars in federal funding have been invested in the duplication of that road. So the member for Page needs to explain to North Coast residents why she is not being honest about the status of the highway. The extent that the government is going to in order to mislead North Coast residents is a clear concern. When you look at the member for Page's lame excuse, then you witness the spin and deception which has emanated from this government, North Coast residents have every right to be concerned about the Gillard government's commitment to completing the highway upgrade. The real fear here is that behind all the spin the government actually intends to either cut funding for the highway or defer the funding for the highway. The member for Page and the member for Lyne, who have been conspicuous with their silence about the absence of any mention of the highway in the 2013-14 budget papers, must give North Coast residents a guarantee that funding for the highway will not be cut or deferred. They should explain how each project, which the minister claims are set to commence, will be funded in the next financial year.

Despite the chaos from the government, I am pleased to say that there is a better way. The coalition, if elected, will provide the strong economic management that the residents on the North Coast of New South Wales are seeking and we will also deliver the funding required to complete the duplication of the highway. We have announced and are committed to $5.6 billion. When combined with the New South Wales government's commitment of $1.5 billion that will deliver the funding necessary to complete the duplication of the road. That is $4 billion more than could possibly be delivered under the current funding arrangements.

Australians know they simply cannot trust anything this government says. They clearly understand, as businesses clearly understand, that they expect governments to live within their means. Last night's speech by the Treasurer was essentially a summary of all of the government's broken promises and a display of all of the incompetence involved in getting from the position that this government inherited—a budget surplus, money in the bank—to a situation where a budget is being delivered that provides deficits as far as the eye can see.

The 2013-14 budget papers show that this government has failed to detail a credible plan for our nation's future, and they really clearly show why this government is regarded widely as the worst government in this nation's history. Whether it is cost of living, border protection or the Pacific Highway, this government has simply run out of ideas and excuses as to how to address its policy failings. The sad reality is that all Australians are paying the price for this government's incompetence.

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

As there are no further speakers, the discussion has concluded.