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

The Labor government has introduced its sixth budget. As we say, we have grave concerns about that budget. It has betrayed the trust of the Australian people because on more than 500 occasions the Prime Minister, the Treasurer and a range of others in the government promised a surplus. This year that promise has been broken. There will be no surplus this year. There will be no surplus next year. There will be no surplus the year after. A balance will be delivered in 2016. If anyone is around four years time, that will be when Labor delivers its first budget surplus—after what was previously described as a 'temporary' deficit in 2008. If a temporary deficit in 2008 looks like being seven deficits in a row, that would have made World War II very temporary. It went for six years—less than the deficit period of the Labor Party. But still their bravado, their chutzpah shows no limit.

I could not believe this. I had to reread it and then I sourced the document. The Treasurer on 22 May last week at a doorstop in Melbourne said:

No other government in our history has done what we have done in this recent Budget, …

He is right. I do not dispute that. No-one has done what this Treasurer has done in the recent budget! He is absolutely right. But then it gets better. He continued:

… which is bring the Budget back to surplus—

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

Well, he hasn't done that yet!

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

No, that has not happened. But then, to be fair to him, he says, 'over time'. I am glad he put that condition on it. The member for Batman would welcome that. It just goes to prove that, even after deliberately misleading the Australian people on hundreds of occasions, the Treasurer still has the gall on 22 May—yes, this year, 2013—to say emphatically:

No other government in our history—

in the history of the world, ever, throughout time—

has done what we have done in this recent Budget, which is bring the Budget back to surplus over time …

Fair dinkum. That is what he said.

Labor have never delivered a surplus and never will. It is not in their DNA. That was best illustrated by the carbon tax package, when they raised the tax and then spent all of the money and more, and the mining tax package, where they raised the tax and then spent money against it, and more. If, on individual taxes like that, the government not only go to spend it but actually go to spend more, then that would say to you this is not a government that is capable of living within its means.

So there is a clear sign that the Treasurer is delusional, and I think I have some basis for saying so. Last week, he was asked about the Parliamentary Budget Office report into the structural position of the budget. There were two reports released last week on the structural position of the budget. They happened to come out on the same day that I was giving a response to the budget at the Press Club—but I will give the Parliamentary Budget Office the benefit of the doubt in that. And then there was this working paper from the Treasury that was released that day. That was a pretty rapid turnaround, as the Treasurer announced that he had asked Treasury to do that just a few days before and had to backfill, and then said he had asked them some months before. We have been asking for it for two years, but that was lost. So we welcome the structural papers. But this is what the Treasurer said about the structural balance report from the Parliamentary Budget Office:

I've had a brief look at that material from the Parliamentary Budget Office and what it shows is that the structural deficit started as far back as 2001-02 and really accelerated under the final years of the Howard Costello Government …

This guy is a comedian. Wayne Swan should be a stand-up comedian. He is wasted in politics! He is the Jerry Seinfeld of modern-day Australian politics. He is in his own league. Where he gets this figure from, that 'the structural deficit started as far back as 2001-02', is just beyond me. I was looking carefully at the chart on page 2, and it actually shows structural surpluses all the way throughout the coalition government. So now, not only is the Treasurer content to say he is delivering the best budget in history, not only has he spent years claiming that deficits were surpluses, but he is now trying to claim that surpluses were deficits—because, under Labor, deficits have magically become surpluses over the years and, under the coalition, in his view, a surplus really is a deficit. What logic. Everything is roundabout. Everything is the other way around. Maybe he could compete with Mem Fox, writing children's literature, fanciful stories—a book titled When the Deficit Became a Surplus and the Surplus Became a Deficit, by Wayne Swan. How absurd.

This report shows that every year under the coalition there was a structural surplus and every year under Labor there is a structural deficit. It also happens to be the case under this report that it is quite clear we got the budget back into good shape. No-one in Australia in May 2007, our final year, when Peter Costello delivered the last coalition budget, for a moment suggested the surplus should have been bigger. No-one held up their hand and said: 'Hang on, don't give us tax cuts! Really, you should be hoarding that cash and having larger surpluses.' Wayne Swan was so opposed to that so-called looming structural deficit that he embraced the tax cuts at the 2007 election and then delivered them. Of course, he was wise beyond his days. The Treasurer had the view that somehow he foresaw the huge surge in the terms of trade.

There is a terrific graph on page 8 of the Parliamentary Budget Office document that shows the massive surge in the terms of trade, which then benefited the government because it created a cyclical variation, which in turn illustrated that it would have a deficit on top of the tax cuts, a structural deficit. That graph shows you how lucky Labor has been. The terms of trade just keep going up. In fact, in June 2012—and from the budget papers in the years beyond—you can see the terms of trade way beyond anything the coalition had.

This revisionism, this new way of approaching the history not just as it occurred but the history as it is written, from the Treasurer is quite amazing. But it does not stop with his interpretation of events. It is even better, as evidenced in this budget itself. The Treasurer said, 'I am proud of this budget; I am proud of all the numbers.' And so on.

I said on budget night that we will unpeel this onion. We are going to do it piece by piece. Another piece came off today. We were questioning how on earth it is possible that you can have revenue forecasts for traded carbon permits out of Europe at around $6 to $7 a tonne and yet the government is forecasting revenue at over $12 a tonne going up to $28 a tonne. How is it that the government in the Treasury papers completely ignores the market pricing of carbon permits in Europe but manages still to say that it is going to proceed with it and, in fact, it is going to end up with $38 a tonne by the end of the decade? How do they do that?

We had climate change officials appear before Senate estimates today. A report says that the department's deputy secretary, Steven Kennedy, told a Senate hearing in Canberra this morning: 'The projection method, as I understand it, is a straight-line method.' This is an extraordinarily new development in economic modelling—the straight-line method, where there is a market. Let us get this right. Dr Kennedy said: 'Although it was common for budget forecasts to be based on market trends'—no, you don't want to do that! Don't think about the market for a moment. We consider the market when it comes to the Australian dollar and we consider the market on commodity prices, but when it comes to carbon trading—'No, leave the market behind.' Dr Kennedy said:

… although it was common for budget forecasts to be based on market trends, Treasury officials—

that is a buck pass in the great Yes Minister tradition; it does not talk about department of climate change but Treasury officials—

had opted to draw a line between market prices in 2014-15—about $5.60—to the $38 projection in 2019-20 contained in the Gillard government's initial carbon scheme.

But he said questions about "the pros and cons" of the modelling needed to be directed to Treasury.

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

Aha!

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

Aha! That is where it is at. I see—the department of climate change has nothing to do with the forecast revenue about climate change. No, that is Treasury. Treasury has come up with this figure of $12.10. That is quite interesting. It is interesting because you saw the hot potato travel faster than a speeding bullet from Senate estimates across to the Treasury building, so when Treasury appear they can explain it. But what is more revealing is that we now have a new economic model in Australia called the straight line. The straight line comes about like this. You lick your finger and then you draw a line upwards. That is how you do it. A fantastic new form of economic modelling: the straight-line model! It is pretty simple. You can use a ruler, you can wet your finger, and have rising revenue. Rarely do you wet your finger and have falling revenue—no, that does not suit the government's case. This is a new economic model that only goes in one direction.

This is a classic example of why this budget just does not stand up. They knew we were looking at this. They knew we had been looking at the modelling in relation to the mining tax. We got it right on the mining tax. We will get it right on the carbon tax. At some point someone has to tell the truth about the state of the budget. But, whilst Labor is in office, you will never get the truth, whether it be the historical truth or the truth about what is real today.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

In the absence of any government speakers in support of their budget, let me make some more contributions on behalf of the opposition in the hope that there may be a more realistic assessment of the budget's presentation Tuesday a week ago than we heard from the Treasurer.

The Appropriation Bill (No. 1) 2013-2014 and the cognate bills before us are really all the evidence anyone needs to demonstrate this government's chaotic mismanagement of our national economy. It is of course going to be Australian families that will end up footing the bill. In this budget the government delivers to families taxes at least $25 billion higher over the next four years. There are more taxes on super and on their income through increased Medicare levies, there are cuts to promised family benefits, there is the abolition of the HECS upfront discounts, there is a cap on self-education expenses, and there are perhaps 10 or a dozen more.

The Treasurer is always full of excuses as to why the government is in such a lamentable position. They have been so unlucky to be in government when everything is going wrong around them! It is all beyond the government's control! We hear all the lame excuses: 'The dollar's too high,' 'The resource boom has slowed,' 'It's the GFC' and 'The revenue has collapsed.' Those are all the kinds of excuses that the Treasurer used on budget night and has used again subsequently.

In fact, the revenue in last year's budget did not collapse as the Treasurer has said. It was actually up by six per cent. Revenue went up, not down! In this year's budget the revenue is forecast to grow another seven per cent. Most businesses would be happy to settle for a six or seven per cent growth in their revenue. It adds up to more money than any Australian government has collected in history. This budget will collect more tax than any other budget in Australian history. The revenue raised will be $80 billion more than in the last year of the Howard government—$80 billion more. Labor spending $120 billion more than was spent in the last year of the Howard government. So this government does not have a revenue problem; it has a spending crisis.

The Treasurer has also complained that the dollar is too high; but that was one of the only forecasts in last year's budget that was actually confirmed by the figures Tuesday week. The dollar was precisely, on average, the value that the government had predicted: US$1.03. That was one of the rare things that they actually got right. And now the government is trying to blame it for the failure of their budget strategy.

Over 500 times, going back as far as 2010, the government promised that there would be a surplus in the 2013 budget. The Prime Minister herself made that promise on at least 165 occasions, but each one of those 165 commitments were broken like so many of the other promises that she has made to the Australian people. For the fifth consecutive time the budget handed down last week has a deficit, a whopping $19.4 billion.

The original promise was a surplus of $1.5 billion. But three weeks before the budget the Treasurer finally owned up to the fact that he would miss his target as a result of revenue drops of $7 billion. Two weeks before the budget, it was $12 billion. And as little as one week before the budget it was $17 billion, and then on the night it came in as $19.4 billion. Who knows where it will really be by the end of June?

With this year's forecast deficit, it brings the government's record to $192 billion in cumulative budget deficits—the biggest budget deficits in our nation's history. When they first brought down a deficit budget it was supposed to be temporary; six budgets on, it is still in deficit and this budget forecasts at least another two deficits before they finally break even. But since they cannot get their estimates right for even a week, who could believe them in three years time?

The budget confirms that the government gross debt will exceed $370 billion at its peak, way beyond anything we have ever known before in our country. When the credit card limit is next raised—and it will be the fourth time under this government—it will have to be to a number around $400 billion. Is there really any end in sight at all? That is the debt Australians are going to have to pay back. Government debt is no different from the debt that householders or businesses face. The banks expect their interest, and they expect the debt to be paid back. It is all about waste and out-of-control spending.

The Prime Minister, the Treasurer and this government inspire a lack of confidence. The central theme of the budget now that the government has lost all interest in surpluses was that the budget was to 'grow jobs and grow the economy'. But the budget has failed its first test. The budget forecasts indicate higher unemployment at 5¾ per cent, and lower growth at 2¾ per cent.

Labor's plan to return to surplus in three years is simply not credible. The potential for a black hole in future budgets is enormous. There are just so many time bombs in this budget. There are so many commitments that have been made that are not funded. And let us also remember that there are still $28 billion worth of taxes promised in the last federal budget that have not even been legislated.

Here we are with four weeks of sittings of parliament left, and Labor still has $28 billion worth of tax increases from the last budget that have not even been passed by the parliament—we have not even sighted the legislation for some of them. So they cannot get last year's taxes in place—and many people believe that they are not being put in place because they simply cannot be administered; they will require new taxation returns to be lodged by thousands, perhaps hundreds of thousands, of Australian taxpayers—and that legislation still has not been introduced, yet the government has banked the revenue as though it was all being collected. It is counted on the revenue side but it has never been legislated and it has never been collected. This is an example of the way in which this government is leaving behind big name promises and big launch occasions, while the programs are actually not properly funded.

We hear about the Gonski report and what a great revolution it is supposed to be for education—but this budget actually spends $300 million less on school funding over the next four years. So if there is going to be more money under Gonski, it is not provided for in this budget; it is another time bomb waiting to go off when somebody else has to pick up the trouble. And what about the National Disability Insurance Scheme, something all Australians support? This budget does include a 25 per cent increase in the Medicare tax levy but that only funds 40 per cent of the NDIS. There is no sign in this budget as to where the other 60 per cent is going to come from. This, too, is a time bomb, waiting for someone else to have to deal with it.

There has been deceit also in relation to Labor's commitments in relation to infrastructure. On the day before the budget, we were told in the morning newspapers that the $100 billion centrepiece of the budget was going to be expenditure on infrastructure. When the announcement was made on budget night, it was not $100 billion; it was just $24 billion over five years. That compares with $36 billion over six years in the previous package. So Labor has actually significantly cut road and rail funding. And many of the projects announced are barely funded, if indeed there are any funding commitments for them at all. For example, the Melbourne Metro link rail project was announced as a $3 billion scheme but the four-year estimates in the budget only allocate $75 million. The rest is simply not funded. WesConnex in Sydney is a $1.8 billion commitment for Labor—but with so many strings attached that it will never go ahead. Of that $1.8 billion, in the first four years only $200 million is allocated. The rest is not funded. And it is a similar story with the $5 billion Cross River Rail tunnel in Brisbane. Despite the billions required for the project, only $100 million has been allocated—and then with conditions that Labor knows the state government can never meet. It is irresponsible budgeting, but it is also plain dishonest. It is about rhetoric and spin. When it comes down to it, the money is simply not there. It is a time bomb sitting around for future budgets.

There is no new money for projects like the Bruce Highway, beyond what has already been announced many times over. The government is spruiking $4 billion for the Bruce Highway but we know that much of that is not new money—in fact, the Minister for Infrastructure and Transport admitted before the budget that only $2.4 billion of that is actually new money. It short-changes the Bruce Highway—and his own promise—by at least $2 billion. Under Labor, communities along the highway will play an anxious waiting game. They will be waiting to see which one of the projects announced has not been funded by the government; which one of the required roadworks that the government claims to support will not in fact be funded. It is the same story with the Pacific Highway: there is no new money at all in this budget, which still leaves Labor $2 billion short of the funding that is going to be required to finish the project. By contrast, the coalition is already guaranteeing the extra $2 billion needed—and that is on top of the $3.5 billion currently tied up in this government's dangerous game of charades with the New South Wales government over funding shares. But it goes on. Labor announced further work on the Ipswich Motorway, which is a long way off. There does not seem to be any actual funding for this project in the four-year estimates at all. Then they said they are prepared to meet only half the cost of the Ipswich Motorway upgrade, despite the fact that the former Prime Minister promised faithfully the people of Ipswich and the southern suburbs of Brisbane that the federal government would meet 100 per cent of the project cost.

When you look at this government's budget, you see that it is simply collapsed all around but perhaps nowhere more dramatically than the mining tax. Revenue from the mining tax, personally and secretly negotiated by this Prime Minister, has collapsed from an estimated $22.5 billion to just $3 billion over the next four years. The actual collection so far is 95 per cent below the estimate. As a result, many of the projects that were to be funded through this sharing of the boom have had to be abandoned. The words 'sharing the boom' do not appear anywhere in the budget this time around. The Labor government has killed the boom with its taxes and its IR changes, and with its red and its green tape, all sending a message to the world that Australia is closed for business. As a result of the collapse of the mining tax, the Regional Infrastructure Fund has been largely abandoned. Many projects will have to be abandoned because the revenue stream does not exist.

What other projects is Labor lining up to announce before election day? Does Labor intend to borrow more money to fund them or are they just an empty mirage? The budget was honest enough to strip $2 billion from future projects which were supposed to go to regional Australia. Minister Crean has gone but so has the money. The Independents from northern New South Wales agreed to back the mining tax because it was going to do great things for regional Australia. In reality, most of the money has been spent in the city, and for most regional communities these promises have been only a mirage.

Another area where the budget collapsed is obviously the carbon tax, set at $23 this year, $24 in a couple of months and $27 next year. But the carbon price has collapsed, and the revenue from the tax is simply not there. The tax has destroyed jobs, has done nothing for the environment and now the promised revenue is not there either.

In this budget, the government talks about making $43 billion in savings, but they use the word 'savings' very broadly. Of the $43 billion, $25 billion will come from new or higher taxes, with more taxes on superannuation, self-education, 457 visa fees, Medicare offset changes, cuts to R&D concessions, monthly reporting for smaller companies and increased Medicare levy. This government's expenditure is simply out of control and Australians are being forced to pick up the bill. Is it any wonder voters are looking forward to 14 September, just like kids look forward to Christmas Day, 25 December?

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

During the budget week, the Australian public gained an important insight into Australia's main political parties, their values and the qualities of the leaders that will take our country to the next election. It was a week when the curtain was pulled back on the Gillard government. Behind the smoke and the mirrors and the spin there was nothing apart from broken promises, bad policies and record debt and deficits. Whereas the Howard government used the budget before the

2007 election to establish a platform for Australia's long-term future, including the establishment of the Higher Education Endowment Fund to create world-class institutes of learning, the Gillard government has chosen to play political games and lay traps in the event of a change of government.

This government is so obsessed by its own survival and on attacking the Leader of the Opposition that it has lost sight of the national interest, if it ever understood that concept. Whereas John Howard and Peter Costello paid off Labor's debt, the Prime Minister and the Treasurer are happy to pass the burden to future generations. The Howard government paid off $96 billion in net debt, saving the country over $8 billion a year in interest payments. In 2007, the incoming Labor government was left with zero net debt, a $20 billion budget surplus and money in the bank. Yet in 2014-15, the Rudd-Gillard government's net debt will peak at $192 billion. Eight point four billion dollars will be spent servicing the interest on Labor's debt—money which could otherwise be spent on education, health or defence.

On 165 separate occasions, the Prime Minister confirmed that the government would deliver a surplus this year. 'No ifs, no buts; failure is not an option,' the Prime Minister trumpeted. Despite announcing seven successive budget deficits, the government expects us to believe that it is not its fault. This government does not have a revenue problem; it has a spending problem. Let us be clear. If re-elected, this Labor government will not deliver a surplus, not in 2016 or 2017 or any time thereafter. The Treasurer is like the traveller lost in the desert, stumbling off in different directions, chasing the mirage of a surplus that suddenly disappears just when it seems to be in reach.

The Australian people want a mature government that will make their lives easier, not harder. They want a government that will provide a stable economic environment so that they can raise their families, grow their businesses and live their lives without an incompetent government needlessly interfering. As the Leader of the Opposition made clear in his budget in-reply speech, should the coalition win the election there will be no nasty surprises and there will be no lame excuses. We will ensure that government is not at the forefront of everybody's everyday concerns. The Australian people do not want sleepless nights worrying about the next policy disaster from this incompetent government that increases taxes, constantly meddles with superannuation and savings and breaks promise after promise. We will restore the bonds of trust between the Australian people and the parliament that have been so treacherously broken by this wretched Gillard government, and we will make sure that the Australian government once again lives within its means.

After five years of wasteful spending and miscalculations, misjudgements and gross mismanagement, the grim reality of this government's recklessness is becoming clear. The government has been forced to slash spending, and this budget emergency is of its own making. As usual, its priorities are skewed. For example, the government's decision to cut funding to the Department of Foreign Affairs and Trade comes at a time of growing uncertainty within the region as increasing levels of prosperity have enabled the expansion and modernisation of Asia's militaries. The recent displays of nationalist sentiment in our region, driven in large part by unresolved territorial disputes, have added a dangerous and unpredictable element to Asia's strategic make-up.

In a rapidly evolving strategic environment, a prudent government will always hope for the best while planning for the worst. On every measure of national security the Prime Minister has failed. From failing to attend meetings of the National Security Committee of cabinet and sending her bodyguard instead to slashing the country's defence budget, the Prime Minister's priorities do not reflect the national interest. This year, defence spending will fall to historic lows not seen since 1937. Ensuring that Australia has the capabilities it will need in an increasingly complex strategic environment cannot be achieved overnight. It requires long foresight, planning and commitment.

Having significantly weakened the Australian Defence Force, the Prime Minister is now set on reducing the other arm of Australia's national security, our diplomatic corps. This budget will see further cuts to DFAT of one per cent in real terms. Its share of total government expenditure is expected to decline to 0.31 per cent by 2016-17, representing a one-third reduction in funding when compared to the final year of the Howard government.

Whereas funding for diplomacy and defence is on the decline, spending on foreign aid continues to grow, reaching 1.4 per cent of total expenditure in 2014. If Australia's national interests are to be advanced, we must ensure that all three arms of Australian foreign policy apparatus are properly aligned: defence, diplomacy and development.

In her speech to the National Security College at the Australian National University, the Prime Minister stated that this:

… will be an era in which diplomacy will be critical as we and our friends and partners in the region strive to master the complexities and new dynamics of a multipolar world.

She said the government would:

… increase our diplomatic footprint abroad, and increase the expertise of our professionals working in the Asian region.

If diplomacy is as critical to Australia's fortunes as the Prime Minister states, why is she cutting funding to record lows? Once again, spin has triumphed over substance for this government.

The hollowness of the Prime Minister's words is matched only by the false promises and motherhood statements of her Australia in the Asian century white paper. The government indicated that it would open an Australian embassy in Mongolia as well as additional consulates in China, Thailand and eastern Indonesia. Without funding or even a time frame, such an aspiration is more akin to fantasy.

The government's record gives little reason to hope that such an expansion of Australia's diplomatic network will ever be achieved. Only 12 months ago, the government promised to establish a new mission in Senegal. At the time, Foreign Minister Carr stated:

Expanding our diplomatic footprint in Africa sends a clear signal of the Government's commitment to building a long-term and credible Australian partnership with the countries of Africa.

One year later, this new embassy has been added to the Prime Minister's pile of scrapped policies and broken promises. Long-term planning is a concept this government is yet to understand, let alone implement. Given its disastrous handling of the budget, the government is struggling to keep the lights on at Australia's existing missions, let alone open new ones.

In the lead-up to the budget, the government announced that it would close Australia's embassy in Hungary as part of its need to find further savings. Its failure to advise the Hungarian government of its decision before leaking the fact to the press shows it has learned nothing since its incompetent mishandling of the live cattle issue with Indonesia. The government's decision to close the Australian embassy in Hungary follows years of public concern about the level of Australia's overseas representation.

The Joint Standing Committee for Foreign Affairs, Defence and Trade's inquiry into Australia's overseas diplomatic representation found that there are strong reasons for on-the-ground Australian diplomatic representation. Such representation facilitates a deeper understanding of a country, allowing quicker and more informed responses to changing circumstances. It provides the ability to develop long-lasting networks which in turn enhance Australian influence and the ability to effectively promote an understanding of Australia's position on international issues. Such relationships enhance Australia's trade and other interests and allow for the provision of effective support for Australians travelling overseas.

The report quoted then secretary of the Department of Foreign Affairs and Trade, Dennis Richardson, as saying:

Closing a mission saves very little, the reason being once you have got a mission up and running your running costs are quite low. It might cost you $25 million over three or four years to open a post, but if, 10 years later, you were to close that post you would probably only save about $2 million a year.

Is this what it has come to for this government? The hole in this country's finances is now so large that it is scrounging for loose change.

The committee also drew attention to the risks inherent in closing overseas posts. The Lowy Institute too suggested that careful strategic consideration should be given to closing embassies, because turning posts on and off is really damaging to us as it causes enormous resentment. I would have thought that the last thing this government needed was more resentment at home and abroad. The coalition has announced that, should we be elected, we will undertake a complete review of the Department of Foreign Affairs and Trade to ensure that Australia's overseas diplomatic network reflects our country's wide range of national interests in the 21st century.

Having made a habit of breaking its solemn promises to the Australian people with its litany of spin and deceit, the Gillard government is now making a similar name for itself overseas. As part of its campaign for a seat on the United Nations Security Council, the government promised to increase the Australian aid budget to 0.5 per cent of gross national income by 2015-16. It was a promise made to developing countries in particular, in order to win support for the government's UN Security Council bid. At the last budget, in 2012, this commitment was pushed back to 2016-17. In this year's budget, the time frame has been pushed back again, to 2017-18. With the vote undertaken and the seat secured, the government has felt free to break the very promise that was central to its campaign. At the bottom of the government's Security Council campaign brochure, it read:

Australia, we do what we say.

At least Australia did until the Gillard government came to office.

The decision in the budget to defer the target date to 2017-18 follows the stripping of $375 million from the aid program to help cover the blow-out in the government's border protection costs. In doing so, the Gillard government makes itself the third-largest recipient of Australian aid.

The Prime Minister's failures unfortunately extend well beyond diplomacy. According to the budget papers, funding for Austrade, Australia's export promotion agency, will be cut by $1.9 million. Australian businesses who are reliant on exports have a right to feel aggrieved. Between Foreign Minister Carr, the country's dilettante-in-chief, and Minister Emerson, who mistakes media appearances for actual achievement, there has been a complete indifference to the interests of Australian exporters.

Rather than hide behind excuses, the government should go out and finalise the free trade negotiations started by the Howard government. Since the launch of free trade agreement negotiations with China in 2005, 18 rounds of discussions have been held without result. This government's lack of action stands in stark contrast to the action of New Zealand, which concluded a free trade agreement with China in 2008 after just three years of negotiations. Since then New Zealand's good exports to China have trebled, with more than 90 per cent of its goods now entering China duty free.

The government's disregard for bilateral free trade agreements and the benefits they provide to Australian exporters and investors is exemplified by the statement of the Minister for Trade and Competitiveness, Craig Emerson, that a free trade agreement with China is 'overrated'. This is despite a joint feasibility study finding that a free trade agreement could have boosted Australia's real gross domestic product by approximately $24 billion had it been concluded for the period 2006 to 2015.

The government's failure to conclude a free trade agreement with South Korea has likewise resulted in the loss of real export income. The failure to conclude this agreement at a time when the United States has concluded a free trade agreement with South Korea means, for example, that the United States is now capturing a large part of the beef market into South Korea, at the expense of Australian beef producers. I recently met with representatives from a mineral sands company in South Australia that had been supplying the South Korean market with its value-added processed product for use in high-end manufacturing in technology. The signing of the South Korea and United States free trade agreement has resulted in this Western Australian company losing its competitive edge. Its product is now being sourced from the United States, which is undertaking the processing of the raw product and then delivering it into South Korea. So we are losing an advantage that we had over the United States.

Until the Australian government concludes this agreement, more local companies will lose their market share. When the competitiveness of our exports is lost, so too are Australian jobs. Compared with Canada, for example, which has signed free trade agreements with nine countries and has entered into 19 sets of free trade agreement negotiations, covering 74 countries, since 2006, the Gillard government has been missing in action. Rather than assisting Australian exporters, the Gillard government has made it worse by imposing an economy-wide carbon tax, a tax that our competitors are not imposing on their economies.

This budget is more proof of the government's focus on headlines rather than outcomes. The widening chasm that exists between its foreign policy rhetoric and reality was recently picked up by Richard Woolcott, a former Secretary of the Department of Foreign Affairs and Trade. In a speech to the University of Melbourne law school, Richard Woolcott drew a comparison between the Gillard government and the former Soviet Union:

The fact is that we are not doing as well with our Asian engagement as the regular rhetoric and diet of spin emerging from ministerial offices would have the public believe …

This budget shows the government rhetoric for what it is: nothing but hollow spin from a government bereft of new ideas. It has proven what we all know, and it starts at the top—the Prime Minister herself admitted she does not have an interest in foreign affairs. Foreign and trade policy under a coalition government will be designed to protect and project Australia's reputation as a prosperous economy and a virtuous nation. (Time expired)

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

This budget again confirms that the government has a spending problem and a forecasting problem, not a revenue problem. Under this Treasurer and the Minister for Finance and Deregulation, Penny Wong, this government spent $192 billion more than it raised in the past five years. Expenditure as a percentage of GDP has remained higher under every year of Labor than it was under the last two years of the Howard government. Revenue for 2013-14 is projected to be $80 billion higher than it was at the end of the Howard government, yet spending this year will be $120 billion higher. The most up-to-date figures, released last Friday, show that $304 billion in revenue was raised through to April. This compares to $284 billion at the same time last year—an increase of more than seven per cent. Not many households, businesses or workers would be bemoaning this type of increase.

The hits to revenue the government constantly blames for its mismanagement are in fact hits to pollyanna forecasts. The government have consistently treated their most inconsistent forecasts about revenue growth as gospel. They lock in spending at those levels and then cry, 'Woe is me!' when the forecasts are never realised despite revenue continuing to steadily grow.

It must be highlighted that the terms of trade remain extraordinarily high—15 per cent higher than at any other time during the Howard government. Labor has wasted this mining boom. In fact, what you see this morning in today's paper is evidence that Labor is prematurely killing off the mining boom. We see a front-page article: 'Gas boom at risk from rising costs.' It says:

AUSTRALIA is missing out on a $100 billion surge in the resources boom as exorbitant costs … force global companies to reconsider their investment plans.

Workplace disputes and overlapping "green-tape" regimes are being blamed for driving up costs at major gas export facilities, as new research from McKinsey & Company shows the nation has lost a crucial pricing advantage when shipping gas to Asia.

Company executives are … warning that Australia faces a narrow "window of opportunity"—

and are calling for—

"significant national leadership" to lift productivity and improve industrial relations.

You will not get this leadership from this government and this budget. You see in this budget, despite the developments I have just referred to, despite the evidence on the ground, claims that the mining tax will raise just $200 million this year and will somehow miraculously raise $2.2 billion in 2016-17. It simply cannot be believed.

The ultimate symbol of budget chaos occurred in the weeks preceding the budget. On 21 April, the Treasurer whined about a supposed sledgehammer hit to revenue of $7.5 billion. A week later, the Prime Minister bemoaned a $12 billion hit to revenue. Then a week after that Senator Wong complained that it was a $17 billion hit. What perception does this leave with the business sector, with investors? What does it leave with households when you have this chaos, this weekly change of massive amounts from $7.5 billion up to $17 billion in the space of two weeks, rewriting the revenue downgrade?

Labor will have delivered 12 deficits from its last 12 budgets. The last Labor surplus was in 1989. As the business community has observed, Labor has lost control of the nation's finances. Despite all the talk about belt tightening and fiscal consolidation, the budget papers shows that spending continues to increase not decrease. Table 2 on page 75 of budget paper No. 2 shows that government spending over 2012-13 and 2013-14 actually increases by $2.2 billion. So much for belt tightening. The same table also reveals $464 million of spending in the category of 'Decisions taken but not yet announced' for 2012-13. Without doubt, this will form part of Labor's election slush fund—hundreds of millions of dollars hidden in the budget papers for later announcement in the run-down to an election.

This is the government that says it is being prudent with the nation's finances. These problems should have been anticipated. For more than three years we have called for the budget papers to include an update on the structural state of the budget. In the 2009-10 budget there was such an update. It showed a structural deficit at that time of around four per cent of GDP, about $50 billion. This was an embarrassment to the Treasurer and the Prime Minister. As a consequence, we have not since seen any structural deficits produced in budget papers. That piece of work back in 2009-10 showed that the budget would return to structural balance in 2015-16. It showed that the budget would be restored to a position of structural surplus of two per cent of GDP by 2020.

In other words, it showed that the government would stop spending more than it was raising. Up until now, our calls for an update have been ignored—obviously for crass political purposes. This has been a continuing embarrassment. But if the government had put this in the public arena, it would have imposed some pressure on this government to do what it should have done over the last few years—that is, live within its means, not spend revenue that it has not received.

It took the establishment of the Parliamentary Budget Office, under the leadership of Phil Bowen, to bring some added transparency to the budget. To its credit it heeded the call, and last week produced the structural analysis that has been so lacking under this Treasurer. The analysis shows that in the period between 2006 and 2008 the budget was in structural balance. It then plunged to a structural deficit of up to 4.25 per cent of GDP by 2011-12. This followed the unnecessarily high levels of stimulus spending that, in so many respects, has caused the problems that we now confront. It shows that in 2016-17 the budget will remain in structural deficit by up to 1.5 per cent of GDP.

This is a far cry from the earlier assessment by the Treasurer in 2009-10. What has happened to the 2015-16 structural surplus that that budget paper laid out some years ago? What has happened is that this government has lost control of the finances. This government has not been able to manage the spending requirements to fit within the revenue that has come into this country.

In his Treasury note on Friday, the Treasurer said that some months ago he asked his department to finally update the structural position. By pure coincidence, we are told, it was released on the same day as the Parliamentary Budget Office's analysis. It begs the question: why wasn't it included in the Treasurer's 2013-14 budget papers a week earlier? Is it because it estimates that under current policy settings the budget will possibly remain in structural deficit through to perhaps 2021-22? Unbelievable! Treasury says that even in 2012-13 the budget was in structural deficit by up to four per cent of GDP.

It is worth noting that both the PBO and Treasury assume that the structural balance will improve in the future, but all of this analysis depends on very heroic assumptions—heroic budget assumptions that the terms of trade are basically going to flat-line for several years at a level 15 per cent higher than the peak in the Howard government years. I have been involved in commodities for half my professional life and I know that what goes up comes down, and for this budget to assume flat-lining of the terms of trade at still record levels for many years to come is simply irresponsible in the extreme. To budget and plan on that basis is going to put the country in a very vulnerable position. And that is what this government has done and is doing.

So you can never assume that things will get better under this government. They always promise that things will get better in the future. They promised budget surpluses this year and in coming years; instead we get a $19.4 billion deficit—the fifth biggest in our history—and an $18 billion deficit for 2013-14. The budget papers reveal that the government will breach its $300 billion debt ceiling within the forward estimates. In fact, gross debt is expected to approach $400 billion during the forward estimates. Despite this, the government lacked the courage to increase the $300 billion debt limit in these bills, as it has done in previous budgets. It is too ashamed to have a debate in this place about debt. It would prefer to leave its mess for others to clean up. That is the Labor way. It was what Paul Keating did in 1976. At the last election Julia Gillard promised that net debt would peak at less than $90 billion. The budget reveals that net debt will now peak at over $191 billion—a blow-out of more than 110 per cent.

Australia is facing a sea of red ink as far as the eye can see, with unrelenting deficits, and a debt ceiling about to be breached. What Labor has created is a budget emergency. It is time Australia had a government that lives within its means. We need real solutions to take pressure off households and strengthen our economy so that over time there is more to go around for everyone. To this end, if the coalition gets the privilege of government on 14 September, we will build a stronger, more productive and diverse economy, with lower taxes, more efficient government and more productive businesses that will deliver more jobs, higher real income and better services. We will get the budget back under control, cut waste and start reducing debt. We will help families get ahead by freeing them from the burdens of the carbon tax to protect Australian jobs and reduce cost-of-living pressures, especially rising electricity and gas prices.

We will help small businesses grow and create more jobs by reducing business costs, cutting taxes and cutting red- and green-tape costs by more than a billion dollars every year. We will create stronger jobs growth by building a diverse, world-class, five-pillar economy by building on our strengths in manufacturing, innovation, advanced services, agricultural exports, world-class education and medical research as well as boosting mining exports. We will build more infrastructure to get things moving, with an emphasis on reducing the bottlenecks on our gridlocked roads and highways.

We will deliver services, including health services—much better health services—by putting local communities in charge of hospitals and improving cooperation with the states and territories. We will deliver better education by putting local communities in charge of improving the performance of local schools. We will deliver stronger borders, where the boats are stopped with tough and proven measures. And we will take direct action to reduce carbon emissions inside Australia—not overseas. We will deliver strong and stable government that restores accountability to deliver a better future for all Australians.

Sadly, those measures are not happening at the moment. There is no hope in this budget. There is no coherent strategy to create jobs and growth and to restore an appetite for risk and investment. The forecast surpluses are a mirage, because there is level of fundamental dishonesty pervading key elements of this budget. The revenue forecasts are blatantly overoptimistic. Claims of revenue write-downs are a nonsense, with revenue up 7.2 per cent, and the budget greatly underestimates, by many billions of dollars, the real cost of illegal boat arrivals, the collapse of the carbon price and the collapse of the mining tax revenue. The budget has embedded within it a $370 billion debt landmine with a continued record rate of growth of debt threatening our AAA credit rating.

As the architects of all these problems, the Treasurer and the Prime Minister are not the people to fix it. There is another way. The government must stop taxing, borrowing, spending and regulating and start living within its means. The growth and role of big government must be displaced by fostering robust growth of our millions of small and large businesses and restoring consumer confidence to spend. Government must once again provide a measure of certainty and stability and encourage an appetite for risk and investment. The coalition's plan for government is designed to deliver such a change.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

In rising to speak to these appropriation bills I acknowledge the sort of atmosphere in which this is occurring. I look at the speakers' list and, to my absolute amazement, there is not one government speaker to speak in favour of the Labor Party's budget. I think that speaks volumes for the Labor Party itself, particularly the backbenchers, whose dismal faces we saw on budget night when the Treasurer delivered this document. It was one of despondency and despair. Indeed, the government could not even fill the galleries and, when it was completed, aside from a hug from Ms Gillard for Mr Swan, that was it—everybody left. Now they seem to be leaving the budget as the forlorn and abandoned orphan that it is.

But why am I not surprised? The document itself was a very poor and tawdry document in presenting itself to the Australian people as a way forward. So much of the expenditure is not only into the future—as we have seen as a practice by this government—but some of it is also two elections henceforth. There are projections over 10 years—which, instead of being a method of having proper transparency, is used as a tool to say, 'Look what we are promising and look what we are going to give,' but in fact it is so far in the never-never that one can put no faith in the projections at all.

That brings to one's mind the fact that this is a government that has always erred in presenting figures that are by far the most optimistic that could possibly be conceived. This is in contradistinction to what used to happen under the Howard government when Mr Costello was the Treasurer, when he would take a very conservative view about estimates of revenue so that, in the event that they changed, it was a change for the better and indeed a surplus or a larger surplus than had already been anticipated was able to be announced. Whereas this government, since it came to office in 2007—both under Mr Rudd and under Ms Gillard, but with the constant of Mr Swan—has continually taken a very optimistic view of what the revenue might be and then proceeded to spend the money without it ever coming in. It is time that we saw a return to living within our means. Perhaps we are going to return to handbag economics. That means you can only spend what is in the handbag and not tie future governments to expenditure which, quite frankly, the Australian people may not wish.

There was a lot of talk about the money that is being provided in this budget for the NDIS, which is a policy which is being supported by both sides of parliament. I hear shibboleth which the Labor members use when they are talking about it such as, 'This is what Labor governments do.' But, in truth, it is the philosophy of the Liberal Party and the National Party, where we follow the philosophy of individualism, which means that every individual matters. That means everybody, not just the right in the land or ordinary folks getting along; it means people with a disadvantage or a disability. They are part of us and they are our responsibility.

The principles of free enterprise define for us what is the business of government, and it is to do those things that the private sector cannot or will not do and provide for those who cannot provide for themselves. That surely is people with a disability. Tony Abbott has described it as 'an idea whose time has come'. This means, quite frankly, that the NDIS is right in line with the things in which the Liberal Party believe. So to try to claim it as something that belongs to one side of politics simply is not true. For a long time, Mr Abbott has offered to hold a joint committee with the Labor Party to oversight the rollout of the NDIS because there is so much detail which is yet to be determined.

It is very disappointing that people over the age of 65 will not be covered. That is in the bill. That means that somebody who has a catastrophic accident, who is over the age of 65, who becomes a paraplegic will be treated in the aged-care sector, whereas somebody who is 64 would be treated by the NDIS provisions. Perhaps I should not be particularly surprised by the fact that older Australians are being discriminated against by the Labor government, because they do it perpetually.

When I brought in a private member's bill to ensure that those people who were 70 and who remained in the paid workforce received their superannuation entitlements, I remember that the Labor Party—the Labor government together with Mr Oakeshott, Mr Windsor and Mr Wilkie—voted against that bill and voted it down. That was in 2011. Subsequently, Mr Shorten said he would bring in a bill to remedy that situation. The only problem is the bill did not do that, even though he put it in his second reading speech and put out a press release to that effect. All his bill did was change the age from 70 to 75. Consequently, I drew this to the attention of the Speaker and suggested it might go to the Privileges Committee—and that did not happen, of course. But some little time later, Mr Shorten brought in some amendments that made his bill just like my bill, except that the provisions in his bill do not start until 1 July 2013. There are still many older Australians in the paid workforce who are not receiving their entitlements. But, surprise, surprise: Mr Windsor, Mr Oakeshott and Mr Wilkie voted for the bill this time because the government brought it in—even though it was not as effective as my bill would have been, which would have made a remedy to the situation in 2011. I am not surprised that there is continuing entrenchment of disadvantage for people who are over the age of 65 and of course that is of great concern to me as shadow minister for seniors.

If one goes to the budget figures, one will see once again that there are many projections there which are, quite frankly, never going to come to fruition. To call the figures rubbery is the best description I can think of. The Treasurer is responsible for a rubbery budget with rubbery figures that cannot be relied upon—that is the real message from this budget that has been brought down. One good example of why I call them rubbery figures relates to the question of superannuation.

This particular budget will increase the concessional cap from $25,000 to $35,000 for people over the age of 60 beginning in July 2013, and from July 2014 for people over the age of 50. The problem with this is that a previous budget announced that the cap would rise from $25,000 to $50,000, but that was never enacted. However, that did not stop the Treasurer, in fact, banking the difference between the revenue to be received as a saving—because he is no longer promising the $50,000 cap but reducing it to $35,000 and claiming that it is a saving because in a previous budget it was put in at $50,000. So you can see how rubbery figures are.

With regard to the question of superannuation generally, fairly recently in my electorate we had a round table discussion with senior and mature-age Australians, who were in both the accumulation stage and the draw-down stage with their superannuation. It was very interesting to hear that people are now feeling more and more concerned about the safety of their superannuation investments—and it is an investment of their wages because the money that is taken by way of the superannuation guarantee charge is in fact the wages of people paid into a superannuation fund, and a concessional rate is paid on that money. The interesting thing, of course, is that it works so long as people have confidence and they have to have confidence that future governments will not steal their money. Yet, we have seen announcements by this Labor government of a theft of some people's superannuation, which the government glibly say will only affect 16,000 people. But if one goes to an excellent article written by Mr Henry Ergas some two or three weeks ago, you will see that by 2050 those provisions alone will mean that it will apply to 20 per cent of people with superannuation.

People are starting to doubt whether or not their money is safe. That is what came out of that round table discussion. One employer, a mature-age worker but still in the paid workforce, who employs a range of age groups said that, whereas there was concern from mature-age workers about their superannuation, he was quite alarmed to hear that younger people on his payroll were concerned that they were compulsorily having to put their money into a superannuation fund that some future government, two or three decades on, might choose to steal. Now if you undermine the beliefs that people have that their money is safe then you start to undermine the whole system, and that is precisely what this Labor government has done.

There are so many issues that are raised with me, as I go around Australia during seniors forums, where I find that people are so well informed that their questions and statements echo many of the things that are debated in this chamber. They do their research, they are prudent, they are suffering enormously from the cost of living and they understand that this next election will be a referendum on the carbon tax. They understand that the carbon tax is a cascading and compounding tax which affects every aspect of their life. They understand that electricity is what makes the difference between being a First World country and a Third World country. They understand that when the carbon tax is placed on electricity it cascades onto the price of everything else. They know that it impacts on the cost of lighting, refrigeration, air conditioning and getting petrol into the family car, which Ms Gillard said would never be impacted by the carbon tax. Yet how do you think the petrol gets out of the tank in the ground and into the tank in the car? It is electricity operating pumps that allows the petrol into their car. Even when they pay the bill at the cash register, electricity is involved. Every aspect of their life is affected by it.

I will end on this saddest note, one comment I heard from a young family. We have heard of older people who remain in bed when they do not need to be there simply to stay warm. But this concerns a young family who left the outdoor solar lighting in the garden during the day and would bring it in at night and put it in the bathroom and toilet so that they did not have to turn on the light. That is not the Australia that Australians were brought up to believe was their inheritance. That is not the Australia that our men and women fought in World War II to bequeath to subsequent generations. The carbon tax is something that robs individuals of their ability to enjoy their birthright and it will be abolished should we be successful in winning the next election.

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

I rise to follow my good friend the member for Mackellar after her terrific remarks on the budget bills that are before the parliament, which are consistent with the previous budgets that the Treasurer of this government has handed down because they are built on debt, deficit and deceit. There is a consistent approach from this Treasurer, which is to spend more money than he receives every year. There is another consistent approach of this Treasurer, which is to claim that it is always somebody else's fault.

This year we saw the shenanigans in the lead-up to the budget with the predictions by the finance minister, Senator Wong, who was sent onto Sky AM Agenda on the Monday morning to explain that there was a $7 billion budget revenue write-down. Just a couple of days later the Treasurer was out there saying it was a $13 billion budget revenue write-down. A couple of days later Senator Wong was back on Sky AM Agenda saying that actually no, it was a $17 billion budget revenue write-down. This was all within the space of a week!

The truth is, as has been so well articulated by the Leader of the Opposition in his budget in-reply speech and by the shadow Treasurer at the National Press Club last week, that revenue in Australia has grown in fact in the last 12 months. We saw the lecture from the Prime Minister in the lead-up to the budget on what we can only describe as 'Johnanomics'. The average wage earner, John, as she described him, expected his income to grow by 12 per cent in a calendar year and, low and behold, it only grew by 7½ per cent and the advice that the Prime Minister gave John—through her Johnanomics lesson—was to borrow for the gap 'because your income will come back, the expected income will return, so don't worry about it and just keep borrowing until it does'. I think the shadow Treasurer summed it up nicely later that day when he said the best advice he could give to John was not to trust the Prime Minister and to vote Liberal. I think on 14 September that is advice that the Australian people should take heed of.

With this budget we have seen a debate about the forecasts that the Treasurer and the minister for finance have signed off in their budget bills. They are responsible for the budget. Of course they are as their names are on the front page of the budget papers—documents that Treasury and Finance are obviously heavily involved with, as are all government departments, but in the end the content of the budget is a matter for decision by the Treasurer, by the Prime Minister and by the minister for finance. So the claim that somehow they have no influence, and that it is all about independent forecasting in the budget papers, does not pass the sniff test and certainly was not the history under the Howard and Costello government. You are right, as a government, to take the best advice available, and we say the Treasury offers that advice, but it is also within the realm of the Treasurer to give indications to the Treasury about what he would like the forecasts to come out with, depending on the decisions that the government wanted to make.

If you go back to the Howard and Costello government, you saw year after year budgets which underestimated revenue. They took a cautious approach to their estimations and when there was additional money that came through the door—through taxation revenue because the economy had performed better than expected or because China had grown more quickly and our terms of trade had improved better than what we had expected—you had a situation where for budget after budget in the 2000s there were tax cuts which were paid for out of budget surpluses. The Labor government likes now to make all these grand claims that somehow the Howard and Costello government were responsible for the fact that we are now in deficit and that they spent too much during the so-called boom years, although even at their highest peak the terms of trade were some 14 per cent lower than what they are under this government.

The truth is, as Peter Costello said on the 7:30 program just recently, even before the boom years began he had delivered five surplus budgets. He delivered five budgets under which he was able to live within his means—a government living within its means. Then, during the times when there was additional revenue because the government was prudent and conservative in its forecasts, it had additional money to be able to allow some extra headroom for tax cuts to make the cost-of-living pressures on Australians that little bit easier. The government was able to ensure that businesses could get on and create opportunities, knowing that ultimately it is business and the entrepreneurial desires of our countrymen and women that grow our economy and make us a better country—not government, as those on the other side would have you believe.

Contrast that with the last 5½ years of the Rudd and Gillard governments and you see just what a difference there has been. Of course there were revenue reductions during the GFC; no-one has ever argued the point. The Treasurer would have you believe that the coalition did not support action at the time; we did. But on the second stimulus package we said it was too much, and we were proven right. It was too much. The then Leader of the Opposition, the member for Wentworth, was the first off the blocks to say that we needed a banking guarantee. The Treasurer, appropriately, followed suit. We supported the first stimulus package when it was announced.

But we did not support the breadth of the second stimulus package—that is the truth and the history. The Labor Party will try to reinvent the history and try to have you believe that we did not support any action; we did. We said the second amount was too much because the second stimulus package had programs such as overpriced school halls, and pink batts in people's roofs which burnt people's houses down and cost double to take out as they did to install—without any ministerial responsibility for that, I might add. We were proven right.

What has been a bigger issue for this government in its budget management has been that it never underestimates what revenue will come through the door. Take the mining tax, which Senator Matthias Cormann has done such a terrific job at exposing what a fraud it has been. It has increased the sovereign risk for companies making investment decisions in Australia—companies such as BHP Billiton with its Olympic Dam decision, which has had such a devastating impact on my home state of South Australia. It is a tax which was estimated to raise some $4 billion this financial year. It was a deal that the Treasurer and the Prime Minister did with the big miners, days after the now Prime Minister knifed the former Prime Minister, and as one of the things she had to fix because the government 'had lost its way'.

This tax in this financial year has raised some five per cent of expected revenue. Interestingly, 100 per cent of expected revenue that the government banked on has been spent. So they have spent more money than they have received; spent it before they got it; and spent it from what they themselves described as a volatile tax. They sell this tax as being virtuous because it will move with the movement in the commodity price. They say this with a straight face. They put in place a payment to families off the back of this mining tax's so-called 'expected revenue', which does not exist. So they have to borrow money from our children's future to hand it to their parents. They do not even have the grace to send the bill to the children when, ultimately, that is what they are doing.

We have a responsibility here for those who are living and for those who are yet to join us. If we leave a massive debt we will have an intergenerational debt issue, which we already have, which the next generation—the schoolchildren in the gallery today—will have to deal with when they enter the workforce. They will have to pay more tax than need be because this government cannot find a way to live within its means. It is always someone else's fault. They have never taken responsibility for the utter failure of their forecasting; their utter failure to be a government that does not waste taxpayers' money; and their utter failure as a government that cannot live within its means.

The other example in the budget papers that highlights the inability of the government to manage this budget is the expected revenue over coming years from the carbon tax. The so-called price on carbon apparently is a market based mechanism that just happens to move in a linear fashion between 2015-16 and 2020 to reach the price the government needs in 2020 to achieve its target. It moves up by a perfect increment each year in a so-called floating market price—what a joke! That is what the so-called road to surplus is based on. We all know that that is a fiction, as it was a fiction the 500-odd times previously when this Prime Minister and Treasurer had said that they would deliver it.

In South Australia we are seeing the diabolical double of a bad federal Labor government and a really bad state Labor government. Business confidence is at a real low. Investment in South Australia is at a real low. The impact of the Olympic Dam decision—the much hyped, much promised 10-year expansion of the Olympic Dam project—is still flowing through and having consequences.

We do not see any relief for South Australia in the budget papers and in these bills. The only relief we can see for South Australian people is that in September they will have an opportunity to change the government, and I urge them to do that. We have a plan—a real solutions plan—which will help to encourage business again. It is a plan to take the red and green tape burden off Australian businesses to allow them to get on and create opportunities.

In South Australia—as the member for Boothby, at the table, knows—we are a small business state. We need small business to be successful. We do not need the retailer in the main street of Mount Barker to continually tell me how difficult it is now to run his business. We do not need the combination of federal and state governments creating additional half-day public holidays, making it impossible for restaurants to open on New Year's Eve. Talk about a decision that has had an absolute impact on the cultural and economic opportunities in our state!

That half-day public holiday decision, supported all the way by this federal Labor government, had a massive impact on our restaurateurs, our bars and our pubs over the last Christmas season. It was so badly thought through and had such an impact that it will take time, and should be repealed as soon as it possibly can be.

We have a plan in South Australia to upgrade the Darlington interchange, something the member for Boothby has fought for passionately for years—you can barely have a conversation with him without him raising the prospect of this being upgraded and all the benefits it will have for people coming in from parts of my electorate in the beautiful McLaren Vale and Happy Valley, bordering on the Boothby electorate. It will make the lives of those people so much easier if a coalition government is elected. It was disappointing in this budget not to see an announcement from the minister for infrastructure for the second interchange on Bald Hills Road in Mount Barker. This is something I have been fighting for in my community for some time. It is my No. 1 priority. I took a plan to the last election for half funding of that, with the state government to commit the other half. The state government has opened up a lot of areas for development around Mount Barker, and it is only right that those people get the opportunity to improve the infrastructure to make their lives easier. It is something I will continue to fight for.

What I will fight for every day between now and the next election is to give Australian businesses the confidence of a government that knows what it is doing; that does not change its mind every couple of days; that does not tell the electorate it will not have a carbon tax and then inflict a carbon tax on them, lifting their cost of energy and their cost of doing business; that does not regulate their workplaces to such an extent that people cannot have the flexibility required to ensure they can create jobs; that encourages entrepreneurs and small business people to grow; and that does not attach people for success. This government refuses to support its small business community. This is why I was also pleased at the Leader of the Opposition's announcement to put off the increase in superannuation for a couple of years to give small businesses that extra bit of time to adjust in a difficult economic environment. The coalition has a real solutions plan and a five-pillar approach to our economy to ensure that jobs can be created, that real wages will be lifted and that we will return to an era where government will once again live within its means and create a better and stronger economy for all Australians and for future generations.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I rise to speak to the Appropriation Bill (No. 1) 2013-2014 and cognate bills. I do not always speak on budgets, and I do not always speak in the House on budgets, but I have witnessed many over my near 40 years in public life. I have to say that few have disappointed me as much as this budget has. I want to talk about it in context, because I think it is a budget of enormous lost opportunity. If you listen to the arguments from the Treasurer you would believe that this is a difficult environment in which to budget and a difficult environment in which to meet all of your expectations, and that the government should be excused for not being able to meet realistic expectations of what government should be able to achieve.

In my youth I used to sit at the feet of my late father. He was an economist. He had a master's degree in economics. He was employed by Labor governments up until 1949, implementing rather oppressive policies in relation to price control. It convinced him that governments intervening in relation to budgetary issues really do not have very much idea about what should be done and how it should be achieved. He used to talk to me, and to a lot of others, about how he believed that there were different approaches to budgeting. He used to speak of the Liberal Party and its philosophy in terms of creating wealth and generating opportunities for people to be able to use their full potential. He used to say that the coalition were experts in baking a bigger cake. He used to say of our political opponents that their only expertise in relation to the cake was the way in which they could cut it up.

This budget says much of that. I was here with the Whitlam government. They were full of good intentions. They wanted to deliver more for people, for families. They wanted to deal with a lot of issues in relation to infrastructure, and sewerage was one of the major issues which was pushed. Neither of these ideas were what one would regard as inappropriate, but the government did not have the money to pay for them. They were not thinking about how to generate the money in order to pay for them. It may be forgotten that they went out and borrowed more money in order to pay for them. They went to Mr Khemlani to get help in borrowing the money from Iraq, as I recall. It is very interesting to me, as one who watches these matters, that over time some members of the Labor Party who witnessed what they did in those early seventies came to a view that it was a mistake: their names were Hawke and Keating. They set about to reform budgetary processes to help make Australia more productive. They even instituted some changes to industrial relations to make business more productive. They did not do all that was necessary—and I am glad of that, because they left something for John Howard to do—but they recognised that they had made a major error of judgement. What I would have to say about this government is that they have forgotten all that Keating and Hawke had learnt. This is evident in the budget that is before us.

I have talked to people about visions. This is a government that would like you to think that they are visionary, but I suspect that they are more a government that is having visions—and you understand what I mean when I say that. When you do not know how you are going to pay for it, when you do not know how you are going to implement it, it is fine to have a vision but you do not get a great deal from it. I think about the visions. We have a vision in relation to a very fast train—I think this is the best example. It is a vision in which the government said: 'We're in government for another six months, but we can deliver a very fast train. It might take 40 years and $120 billion, but we have a vision. Give us credit for having a vision.'

We have a plan in relation to education. I walk around the corridors and I see it: we are going to have a Gonski. I do not think anybody knows what a Gonski is, but we do know and understand that a Gonski is really about spending more money on education. It is not necessarily about getting better outcomes in education—I have not heard as much emphasis on improving standards and outcomes, but I have heard about spending money. We have a budget which is about implementing a Gonski. As I understand it, the budget is in fact ripping more money out of education than it is putting in. It is certainly taking it away from higher education, ostensibly on the basis that schools will get more. In fact, when you study the budget itself there is no immediate appropriation, no real increase for schools now. There is a vision, and it is sometimes forward. The vision is outside the period of what we call the forward estimates.

We all have a vision about what we would like to do to help people with disabilities. When you ask us, 'Do you want to help people with disabilities?' I want to help people with disabilities and their carers. Tony Abbott wants to help them. He is even prepared to raise money personally to help them, something in the order of $700,000 or $800,000 through his Pollie Pedal. This is real and substantial effort, but when it comes to the proposals we have a vision to implement a new regime, recommended by the Productivity Commission, which we are going to implement in some regions. If you are lucky enough to live within a particular region, you will get to try it. We are prepared to raise extra tax money by way of a levy. That is fine, but we are only prepared to raise half of what it will cost to implement it. This is another vision. If you get the impression that I am unimpressed with a budget that does not outline how the money is going to be raised to implement the measures that the government wants to take credit for, you are right. I am extremely disappointed as a result of that.

I am a member who has an electorate with some very significant needs. I am fascinated that the visions now have extended to my electorate. Over a long period of time there have been proposals for governments to address the major infrastructure need for Sydney, and that is to move traffic, particularly heavy transport traffic, around Sydney. At the moment there are roads like the M7, which was built by the Howard government, and earlier roads like the Cumberland Highway, Villawood Road and Silverwater Road, and they all direct traffic to one point on one community road through northern Sydney: it is called Pennant Hills Road. I knew Pennant Hills Road when it was two lanes, one in each direction. This is the major infrastructure route to get traffic around Sydney. People have talked about it for a long time, but we had Labor governments in New South Wales for some 16 years who were not prepared to address it. We have a federal Labor government that now finds that when its seats on the Central Coast are at risk and residents are held up, it may be time to look at it.

The Prime Minister even went to the Central Coast last week and with Mr Albanese, the Minister for Infrastructure and Transport, and Deb O'Neill—I notice they left out the other member, Mr Thomson, but maybe that is understandable—was there to affirm the federal Labor government's $600 million plan to ease congestion and to cut travel times on the M3:

That's real money for real projects that will make a real difference.

Yes, real. This is to take some 700 trucks a day and 75,000 cars off Pennant Hills Road. The centrepiece of their plan is $405 million to bring forward construction of a much-needed, long-talked-about missing link. Gee, I was glad! This is something of substance. I started going through the budget documents to try and find out what the substance was, but I could not find any money appropriated in the immediate forward estimates. In fact, what I find when I start reading the budget documents are statements that tell me that there will be 'mega transport projects' that have a 'dedicated private finance component' and 'We will leverage the private sector for a mega infrastructure project such as the M2 to F3 link.' When I go over the page and start to look for some further information it tells me that the government is investing $400 million to allow a missing link to go to market and be constructed, and the project will be delivered in consultation with the New South Wales government. But I cannot find any money. When I look for the money I find that it is in 2015-16, 2017-18, 2018-19—not even in these immediate forward estimates. I say to myself, 'Here are my people again having to worry—

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

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. The member for Berowra will have leave to continue speaking when the debate is resumed.