Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Fraser proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The government's attempt to confect a budget emergency to justify the harsh measures in the Commission of Audit report.

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—

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

This morning I received an email from one of my constituents which read in part: 'I am 48 years old and unemployed. The fact that I have not been able to find another job makes life difficult but just manageable because my husband works. He is 52 years old and works for the federal government. He is very good at what he does but unfortunately the program he works with has been cut and he finds out today if his job has been cut.'

My constituent goes on to say that she has two teenage daughters in Catholic schools and has a mortgage on a small, three-bedroom house north of Canberra that has been refinanced a couple of times in the last few years and some credit card debt. All of this is manageable, my constituent writes, if her husband keeps his job. But then she says, 'If he loses his job, we have no option but to sell the house and count on the kindness of relatives and friends, or to live on the streets'. My constituent concludes, 'Cutting 16,000 Public Service jobs will destroy the economy in Canberra and destroy thousands of lives, including those of my family'.

My constituent is a battler, one of millions of battlers across Australia. But recent decades have been a time in which billionaires have made out far better than battlers. Earnings have grown three times as fast for those in the top 10 per cent as for those in the bottom 10 per cent. The income share of the top one per cent of Australians has doubled over the past generation. The income share of the top 0.1 per cent has tripled. It has been a generation that has been good to the cigar-chomping plutocrats and not so good, unfortunately, for low- and middle-income Australians.

And yet what have we seen since this government has come into office? We have seen a government that has ripped away supports for low- and middle-income families: targeted supports such as the schoolkids bonus, the income support bonus, the low incomes superannuation contribution—all taken away by this government. Equity funding from schools ripped away; trades training centres, which aim at keeping low-income students at school, taken away; and the very cleaners who clean the Prime Minister's office are going to likely see a pay cut as a result of decisions made by this government.

In an era in which the earnings of financial dealers and anaesthetists have risen so much more rapidly than the earnings of cleaners and checkout workers, we have a government whose No. 1 business adviser thinks that we have a wages problem—not the wages problem that CEO earnings have risen twice as fast as average earnings while the minimum wage has risen slower, but a wages problem that the minimum wage is too high. And we have a government that is going soft on the top end of town: saying no to modest measures to crack down on profit shifting by multinationals, giving back $700 million of revenue that now has to come out of the pockets of low- and middle-income Australians, giving a mining tax cut that will cost—well, do not take my word on this; let us go to the Treasurer's own budget papers—$1.8 billion in 2016-17. The result of that mining tax cut will see the benefits go to some of the richest people on the planet.

Government Member:

A government member interjecting—

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

I have just told you, anonymous interjector, of the Treasurer's estimate. If you have a different idea on that, you should take it up with the Treasurer.

We have a government that wants to put in place a parental leave scheme that gives maybe $75,000, maybe $50,000 if they are going to strike a deal with the Greens, to the most affluent families when they have a child. It is a scheme that is at odds with the means-tested system of social supports that has been fundamental to Australia's social state.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

It's not a welfare policy!

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

I hear an interjector over there: 'It's not a welfare policy'. And that would sit with the government's policy document, which reads as follows:

… paid parental leave is an economic driver and should be a workforce entitlement …

In other words: for the most affluent Australian families it is, 'Welcome to the new age of entitlements.' So much for the government's rhetoric.

We will hear suggestions tonight that the Treasurer has suddenly become Robin Hood. Let us face it: even the Sheriff of Nottingham occasionally got the odd knight or dame offside, but this is not going to be a Robin Hood budget. This will be a budget that will slug the battlers and will help the billionaires. This is a government that wants to strip away financial protections from vulnerable Australians, which will have the effect of boosting earnings in the financial sector, I am sure, but if the government puts FOFA back on the agenda, it is going to hurt low-income Australians. It is going to hurt pensioners, the very victims of the Storm Financial collapse five years ago.

This hit on low- and middle-income Australia is going to reverberate in so many other areas too. The government claims to be committed to closing the gaps. You cannot close the Indigenous-non-Indigenous gap if your policy is to widen the economic gap in Australia. This government says that it is committed to closing the pay gap between men and women, but you cannot close the pay gap between men and women if your industrial policy is to attack unions and to make it impossible for unions to bargain to assist gender equity across the community.

I say to the Prime Minister: enough of the tribalism, enough with the class warfare; it is time to govern in the interests of all Australians. We have heard talk lately that the government wants to engage in means-testing. That would be news to those of us on this side of the House, who sat through six years in which the coalition in opposition opposed means-testing at every turn. We tried to put in modest changes to the baby bonus, and the Treasurer compared it to China's one-child policy. When we put in place modest means-testing to the private health insurance rebate, the now Minister for Health said that it 'represents a betrayal of the 12 million Australians who contribute to their own health care', and many coalition speakers decried means-testing the private health insurance rebate as class warfare. And on page 93 of Battlelines, the Prime Minister has criticised means testing itself.

This is a Prime Minister who has no deep philosophical commitment to means-testing. Let us be honest: he has very little intellectual commitment to anything. This is a Prime Minister who, after all, when talking about carbon pricing some years ago said, 'If you want to put a price on carbon, why not do it with a simple tax?' And yet, in order to win the Liberal Party leadership, he was willing to backflip on that. This is a Prime Minister who promised Peter Reith that he would support him for the Liberal Party leadership and then backflipped and supported Alan Stockdale, with poor Mr Reith afterwards saying:

I honestly do not know, I really don't. But he certainly did ask me, and he did not just ask me, he asked people around him to join my campaign, as it were … I am a bit disappointed.'

Australians will be pretty disappointed by a Prime Minister who has said literally dozens of times, for example, 'What you will get under us are tax cuts without new taxes.' He said that there would be 'no new tax collection without an election'. He said, 'No country has ever taxed its way to prosperity,' and he said, 'Personal income tax will be lower under a coalition government in its first term than it is now.'

This is a Prime Minister who said in his budget reply just last year—the now Prime Minister was standing at this very dispatch box here—'No-one's personal tax will go up.' Let's see whether that holds up tonight. This is a Prime Minister who was pretty willing to have a go at our side of politics any time he thought that there had not been promises kept. In fact the Prime Minister in criticising former Prime Minister said:

I am not a doctor but I think that we are in the presence of a condition, a chronic condition, TDD, truth deficit disorder.

(Time expired)

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I have got to say that, after listening to that 10 minutes, there is a little part of me that actually does want the member for Fraser to stay in the chamber. The thought that the member for Fraser might be shaping the minds of young Australians at some tertiary campus somewhere is so horrific that there is a soft spot that would like him to stay in the chamber. No-one takes him seriously, and that is just that side. We are even more dismissive than that side when it comes to the member for Fraser. I have got to say that would have to be one of the most pedestrian examples of an MPI that I have heard, and to think that this was the crescendo for the shadow Assistant Treasurer. Here we are on budget day, a chance to shine, and we had at best what would be considered an understudy's performance when it comes to actually making a contribution to economic debate.

The MPI before the House today was an attempt by the Labor Party to sledge whether or not Australia faces a budget emergency. I thought that there might be some argument from the Labor Party. They usually lead out in this debate talking about how the world's greatest Treasurer—as they like to refer to the member for Lilley—had obtained a AAA credit rating. I thought that might be one of the arguments that Labor would lead with, but they did not even mention it. What I find strange is the argument that Labor put forward, the one example they use to try to claim that Australia was in tiptop, perfect economic shape, which always neglects the starting point when Labor was elected. On any measure, if you look at what it was that the Labor Party inherited a little over six years ago, you will see Australia's financial position was that we had no net debt and that the Labor Party inherited a budget surplus of some $20 billion. In six short years the Australian Labor Party presided over budget deficits to the tune of $190 billion. They left us with a cumulative budget deficit forecast to be some $123 billion and on a pathway to projected debt of $667 billion.

Labor says there is nothing to worry about; there is no concern here; do not worry; things were never better. Unfortunately, that is not the view of anybody who is right in the brain, frankly. It is also not the view of the IMF. The IMF published an interesting publication about a month or so ago and in that publication they revealed that under the Australian Labor Party Australia had the fastest increase in expenditure of any government in the developed world. That was the finding of the IMF. It is entirely consistent with what we have been saying on this side of the chamber and when we were on that side of the chamber in opposition about Labor's performance.

The Labor Party like to say, 'Hang on, we were going to make sure that expenditure only grew at two per cent a year.' Great in theory, but unfortunately not the practice of the Australian Labor Party as they spent money hand over fist. Frankly, the only thing that exceeded Labor's ability to spend money was Labor's ability to borrow money. Today we are left with Labor's legacy—$123 billion of cumulative budget deficits, $667 billion of forecast Labor debt and a financial situation that, if left unchanged, would see the Australian people have deficit after deficit after deficit for 16 years.

So I say to the Australian Labor Party: don't sit there and pat yourselves on the back and claim that you did an outstanding job. You did nothing of the sort. The Australian Labor Party were beneficiaries of an economy that was handed over to them in tiptop shape. What they left were the smouldering ruins, figuratively, in terms of the kinds of decisions that they took in government which saw us have the biggest increase in expenditure by governments in the developed world. So the Australian Labor Party certainly cannot crow about their economic stewardship.

Unfortunately as well, when it comes to Labor's performance they have been left wanting in a number of different areas. It is not only in relation to debt and deficit; it is also in relation to their management when it came to the expenditure. We saw what they did on one occasion—on the back of an envelope, I think it was, in one of the VIP aircraft. The former Prime Minister, Kevin Rudd, and the former communications minister, Senator Conroy, were sitting back and on the back of a coaster—as I believe the accounts recall—they came up with a you-beaut idea to develop the NBN. We remember the NBN because originally it was going to be about an $8 billion exercise to provide high-speed broadband. Then that was scaled up to being about $14 billion or $15 billion and then we saw projections of $29 billion. We understand, when you look at the costs of Labor's rollout—how slow it was, how many targets were missed, how many inefficiencies were built into the system, how many disputes there were with contractors—that we saw the actual cost of Labor's NBN rollout forecast to reach over $90 billion. I see in recent media reports that Telstra on their 4G wireless communications network are providing speeds of—you guessed it—100 gigabytes.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

You're rewriting the laws of physics!

A government member: A hundred megabytes.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Up to 100 megabytes, I am corrected.

A government member: Megabits.

Megabits. I have not rewritten the laws of physics at all, actually. The reality is that, when it comes to commercially viable opportunities, there are download speeds the private sector provides on wireless communications today that are comparable with what Labor wanted to do with over $90 billion of taxpayers' funds. So we see forecasts as well that predict under 4G and possibly the 5G network that is currently in the R&D stage download speeds of up to one gigabyte and not at a cost of some $90 billion of taxpayers' funds. This is just another example of the way in which Labor was recklessly spending people's money.

But, of course, in the current climate let's not lose sight of an inquiry that is currently taking place into the pink batts fiasco. If there is one example, one crowning glory of Labor incompetence—and there is a lot to choose from—it is the pink batts scheme. It was Labor's design again, Labor's rollout. In every respect Labor's DNA and fingerprints were all over the pink batts scheme, where we saw billions of dollars wasted to roll them out and then billions of dollars wasted to get them back out of ceilings. Meanwhile, lives were lost, the industry was destroyed and Labor walked away as if nothing ever happened. In that respect, the Australian Labor Party will stand condemned for many years.

It was not just about the fact that they took a strong economy and in many respects left it bruised, bashed and dented. It is not about the fact that Labor inherited $20 billion surpluses and left the Australian people with $50 billion deficits. It is not about the fact in isolation that Labor took a situation where we had no net debt and put us on a pathway to $667 billion worth of debt. It is also not exclusively about the fact that Labor put us on a pathway for 16 years of budget deficits. It is also that Labor, in spending the money, chose to spend it so poorly—so much so that we have today an inquiry taking place as to why, unfortunately, Australians lost their lives under their stewardship and why billions of dollars were wasted.

But the other key example—the other crowning glory of Labor's incompetence—would have to be their approach to Australia's border protection. There is very little that can be said in any way, shape or form that would characterise Labor's decisions around border protection as being positive. Under Labor we saw a situation where over 50,000 people came to Australia on over 700 boats. Over 1,000 lives were lost at sea, and Labor said they were brilliant when it came to economic stewardship and management of policy.

That is just the latest example where in a relatively short eight months the minister responsible, the member for Cook, has done an outstanding job stopping the boats, delivering on our promise and, when it comes to economics, saving Australian taxpayers billions of dollars as a consequence of our ability to have a backbone and make the tough decisions. Tonight will be further evidence that we are a mature, adult government with a methodical approach and that will make the hard decisions.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I actually rise to speak on the MPI, which was about a budget emergency. I got waylaid and got to hear the member for Moncrieff for 10 minutes talk about the usual three speeches he makes; however, it was a bit unfortunate, because obviously there is going to be a ministerial vacancy coming up, and I always go for the Queenslander when it comes to any vacancies! With respect to the member for Kooyong, I always want to plump for the Queenslander, but after that speech getting on his CV I just cannot believe the member for Moncrieff let me down like that. But, nevertheless, best of luck; if that is the start of your job application, you've got a lot of work to do. Opportunity rich, I think we say, Steven!

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Look where you're sitting!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Good point! But nevertheless, let's go back to the budget emergency. We heard that speech. This is the no-surprises government, remember? The member for Moncrieff is a member of the no-surprises government and the no-new-taxes government. This MPI is important because obviously we need to see it through that prism. There is no budget emergency. There are impediments coming in the future with an ageing Australian community, but that does not mean an emergency. The fact that I will be looking for a retirement home in 20 or 30 years does not mean that I call the ambulance today. There will be issues in the future. There are obviously some challenges, but a prudent, adult government would recognise that rather than confecting this thing called a 'budget emergency'.

I still see that footage—and I have seen it a lot the past couple of days—of the Prime Minister saying they will be the government of no surprises. It is funny, but every time I see him say that I hear the theme music from Jaws because that is what Tony Abbott, the Prime Minister, the member for Warringah reminds me of—no surprises like the movie Jaws. That shark is coming, we know; it is coming along tonight. The member for Warringah is really the poor man's political Steven Spielberg with basically the same storyline, and tonight he has created—or tried to create—this budget emergency as if to cloak what they are doing. The member for Moncrieff mentioned things being in a party's DNA in his speech, and we have seen it in the LNP. I have no problem with the member for Moncrieff. He knows sharks very well; he has sharks in his electorate on both sides of the beach. However, sharks do what they do, what they are programmed to do and what is in their DNA, and that is what the LNP are programmed to do as well. They cut health services, they neglect education and they attack pensioners and even people with disabilities. It is sad to say.

I mention this because the member for Moncrieff did mention an IMF report, but he mentioned the most recent one, not the one before that talked about the Howard government, which was basically the front bench opposite repeated. The Howard government was the most profligate government in the history of Australia.

Government members interjecting—

I know you are laughing at the Howard government history, but that is the reality. If we wanted to sell every asset, obviously, we would have been in a much strong position.

Government members interjecting—

You laugh, but look at what actually happened. Let us look at those realities. Under the Rudd-Gillard government we were a lower-taxing government. As a member of the left, I am a little bit confronted by that, because I think good, responsible governments should be able to tax to provide responsible services. Under the ALP, we taxed at 22.5 per cent, whereas the Howard government taxed across its history at 25 per cent. So many of those opposite on the front bench were part of that drunken sailor collective that did so much damage to Australia.

Admittedly, in hindsight we embraced a lot of tax cuts in 2007 that perhaps we should not have. As a candidate at the time, I thought it was good policy—in hindsight, not so much. The reality is that we have a budget that is manageable and in a good, strong position. (Time expired)

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

A book entitled Disconnected has been described as:

A forensic examination of Australian life, this insightful book suggests that contemporary society has lost touch with its communities and its people.

It was written in 2010 by the author of this matter of public importance, none other than the member for Fraser, Dr Andrew Leigh.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I hope you didn't pay for the book!

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I did not pay for the book; I googled it, Member for Cowper, and found it on Google. The subject of that book and the title of that book, Disconnected, is exactly what I am afraid the member for Fraser is with this MPI, which is about:

The Government's attempt to confect a Budget emergency to justify the harsh measures in the Commission of Audit report.

He knows that the Commission of Audit is a report for government, not a report by government. And he knows, being an economist and having spent the last three years in the Rudd-Gillard-Rudd government, the absolute fiscal emergency that we have been placed in by that government, of which he was a member.

When they came back to office in 2007, Labor inherited a surplus of $20 billion with no net debt and $45 billion in the bank. It was a good position, but between 2008-09 and 2012-13 Labor delivered deficits totalling $191 billion. Despite all this, not that long ago I heard the member for Fraser say that had things been left to go unchecked by our side—by our government—we would be back in surplus by the year 2016-17. He made that point. How disconnected is the member for Fraser? How disconnected is he from the state of the economy? He knows that Labor left additional projected deficits of $123 billion over the next four years—2013-14 to 2016-17—when he claimed that we would be getting back into surplus. Over six budgets, Labor increased spending by more than 50 per cent—$137,000 million. The International Monetary Fund, as the member for Moncrieff quite correctly pointed out, recently found that Australia's spending is projected to grow faster than any of the 17 advanced economies it profiled.

Labor's waste and mismanagement knew no bounds—a cost blow-out of at least $29 billion with the National Broadband Network. How much would it have cost? Seventy-four billion dollars? Who would know? There was a blow-out of more than $11 billion in border protection costs. When Labor inherited office under Mr Rudd, there were just four adult males in detention centres in Australia. When we regained control of government, 55,000 men, women and children had unfortunately come to these shores in 800 boats, costing more than $11½ billion. That is straight off the bottom line of this country.

There was a $6 billion to $8 billion blow-out in the cost of overpriced school halls. Admittedly, there were some school hall projects in my electorate which have proven to be very good, but they were managed by the independent schools. The ones for the public schools were absolutely ripped off, and public school teachers tell me this. Every time I visit a public school, they point to how they were not allowed to manage their own project and what they could have possibly done with the money had they been able to do so. Stimulus cheques of $900 were sent to around 27,000 Australians living overseas and 21,000 people who had died.

Treasury projects that without policy change the budget would have been in deficit for the next decade. This would mean 16 unbroken years of deficits unless brought under control by the Liberal-National coalition, which is what we are doing, and it starts tonight. The adults are back in charge. As Tony Abbott, the now Prime Minister, promised prior to the election, we would get the economy back on track and the absolute confidence of the people to do that. People have been ringing and telling us, 'Don't squib it.' They want us to get in and make the hard decisions on behalf of the people and on behalf of the taxpayers of this nation, who deserve better. They deserved better over the last six years; they did not get it, but they will certainly get it under the Abbott-Truss Liberal-National government.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

It is of course a pleasure to stand here before the parliament to help to debunk the myth that there is a budget emergency. There is no budget emergency despite what those opposite have tried to convince the Australian public to justify their ideological attacks on public services in this country. Despite the rhetoric from the Liberals and Nationals, Australia's economy is the envy of the world. We have a record of continuous economic growth over the last 22 years that is to be acknowledged and celebrated.

During Labor's period of office we moved from being the 15th biggest economy in the world to being the 12th. Our GDP per capita ranking moved from being the 17th best in the world to the eighth best. We have a AAA credit rating from the three main ratings agencies, and we maintained it through the global financial crisis. By the time we left office we were one of only eight countries in the world that had these three AAA credit ratings with a stable outlook. According to Credit Suisse's Global Wealth Report, in 2013 Australia was number one in the world for median adult wealth. Our net debt is just 11 per cent of GDP. It is the third lowest net debt in the OECD, and yet the Liberal-National Party carry on as if there is a budget emergency.

Let us talk about the figures in MYEFO—$68 billion added by the Treasurer since the pre-election fiscal outlook. What did the Treasurer do? He looked at the way unemployment was being calculated and forecasted and he changed the way unemployment was being forecasted, even though they were the same forecasting arrangements that had been in place under the Howard government. What did changing the forecasts for unemployment do? It hit revenue and, of course, it hit spending.

What else have we seen from this Treasurer? Removing the two per cent spending cap. After the global financial crisis Labor maintained its spending cap. We kept spending growth to below two per cent after the global financial crisis. As the shadow Treasurer has said, it is a two-card trick—you take away the two per cent spending cap in MYEFO and you put it back on in the budget and claim to have improved the deficit position. People are not going to fall for that.

What else have we seen from this government? The trick they are trying to play on the Australian people in the way that foreign aid was calculated and projected to grow under MYEFO. They have admitted in question time, in this place, that they had no intention of spending that money on foreign aid. Of course people are right to be dubious about MYEFO; people are right to be dubious about the $68 billion that the Treasurer has added to the deficit over the forward estimates. Why should people be sceptical? Because we are being softened up for cuts to services that are ideological.

This mob opposite us have wanted to get rid of Medicare since before its inception. We celebrated 30 years of Medicare this year. If it was not for the Liberals and the Nationals it would have been 40 years of Medicare. They have always hated universal health care. They have always hated spending Australians' money on making sure there is universal access to health care. That is why tonight we will see the shameful end of universal health care in this country with the introduction of a GP tax. When I was running in the Griffith by-election only a matter of months ago I was accused by people opposite of running a scare campaign about the GP tax. We had everybody from the foreign minister to the Prime Minister swanning in to Griffith to say, 'We've got no plans for a GP tax.' Yet here we are, a few short months later, and what are we expecting tonight? What do you think it is? Is it a GP tax? It is a GP tax. It is the end of universal health care in this country.

The people opposite, the Liberals and Nationals, have always hated Medicare and universal health care. People in the electorate of Griffith who I represent and people across Australia love universal health care; they love Medicare because it is one of the defining achievements of our social democracy in Australia. If, as predicted, a GP tax is included in tonight's budget then the Liberals and the Nationals will understand very quickly how people feel about that change to Medicare. They will understand very quickly the backlash to the GP tax, not to mention the petrol tax, the personal tax increase, the failure to fund education as they had promised—the broken promises from a Prime Minister who claimed he would have no excuses. (Time expired)

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

Here we are again on budget day witnessing more Labor denial. We are all forgiven on this side for thinking we have just heard three speeches much the same. When you analyse them, the member for Fraser was a bit different from the member for Moreton. I think the member for Fraser knows that Labor has a big apology to make to the Australian people and he is not quite comfortable with that fact. He very carefully managed to not mention any of the things he has advocated in a previous life that might reform some of the structure of the budget. With the member for Moreton, on the other hand, I think the Labor brainwashing machine has done a pretty complete job. I think he actually believes everything he said. He said he was confounded by a few things. We would say he is confounded by most things. That is what we say; that is our experience. It falls to the coalition government—here we are again—on the first budget of a coalition government to clean up Labor's mess. Peter Costello stood here in 1996 and began the clean-up: $96 billion of debt, a $10 billion budget black hole—

Opposition Member:

An opposition member interjecting—

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

You might learn something if you listen. You did not learn much with Conroy. You are new, you have got a chance.

There was $96 billion and a $10 billion budget deficit that had been promised as a surplus right through the campaign, and what did we get from Labor? No apologies, no concession and they fought every step of the way to fix the mess they had created. They created the chaos and then they complained about the clean-up. What happened when they won in 2007? No net debt, a $20 billion budget surplus and Wayne Swan came in on budget night six years ago and said the surplus was not big enough. The skyscraper should have had another floor on it. In his budget speech six years ago he said: 'We've honoured our commitment to deliver a budget surplus of at least 1.5 per cent of GDP and gone further to a budget surplus of 1.8 per cent. The previous government forecast a surplus of only 1.2 per cent for 2008 and 2009.' As all of those opposite know, and most of them were complicit in it, they wrecked the budget. I will tell you what the member for Fraser did not mention while speaking for 10 minutes on an MPI—and this is a first for any shadow economic minister on budget day: he failed to mention debt or deficit once, not once. You sat there through that government, complicit in the fiscal mess that was created.

The member for Moreton we give a leave pass to. We accept that he did not know what he was doing. We absolutely accept that. But you knew what you were doing, Member for Fraser—$123 billion of deficit into the future and $667 billion of debt. And what does Labor say today? The member for Moreton says nothing ever happened and the member for Fraser does not mention it. Just keep on keeping on—that is the Labor way. Stay on the debt train. And then you have the member for Griffith, who, unfortunately, has been given some talking points about OECD figures, as if we would aspire to OECD debt figures. How ridiculous! As if we would aspire to OECD debt figures. In other words, you see OECD debt figures as a target. This is an incredible proposition we face on budget day.

What is clear for the people of Australia is that Labor will not apologise and Labor will not do anything to clean up the mess that they have created. It falls to a coalition government; it is our historic duty to clean up Labor's mess. We are going to have to do it again, and we are doing it again so that we can have a stronger economy and a better future for all of our constituents.

For those opposite on budget day, here they are—no mention of debt or deficit. Now the member for Fraser is typing an op-ed on inequality or something.

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

I just got bored, mate!

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

You just got bored, did you? I tell you what, I will finish on this note: maybe it was the shadow Treasurer's idea to keep you out of the lockup as long as he could.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to speak on this matter of public importance raised by the member for Fraser. What we have seen since the last federal election is one of the great con jobs in Australian political history. The coalition's so-called budget emergency is a smoke-and-mirror show to provide political cover for an extreme, ideologically driven attack on the Australian way of life. The 'budget emergency' is the big lie that underpins the coalition's economic strategy. It is the big distortion, the big confection, the big fib, the big falsehood and the big untruth at the core of the coalition's extreme and out-of-touch agenda for Australia.

By any objective measure, the previous Labor government left Australia with a strong and stable fiscal outlook. Our budget position is the envy of the advanced world. Labor left Australia with a triple-A credit rating and a stable outlook from all three ratings agencies. Australia is one of only 10 economies in the world with three triple-A ratings, putting Australia's credit rating in the company of nations like Germany, Canada, Sweden, Singapore and Switzerland. In 2013-14, Australia's net government debt is just $191.5 billion, or just 12.1 per cent of Australian GDP—a level of net debt that is not even one-sixth of the advanced economy average of 74.7 per cent of GDP recorded by the International Monetary Fund. The data just does not support the drama from those on the other side of the House.

What is the real root of the fiscal hysteria that we see from those opposite? It is nothing more than base political opportunism. During the global financial crisis, when millions of jobs were being lost in economies around the world, the coalition put their extreme ideology ahead of the jobs of hundreds of thousands of Australians. They opposed the job-saving fiscal stimulus introduced by the Labor government in 2008-09—an economic policy described by Nobel prize laureate Joseph Stiglitz as one of the 'best designed' stimulus packages of any advanced economy.

But how does one justify this extreme ideological position to the Australian public? Parroting the words of their conservative allies in the United States and the United Kingdom, the coalition imported a political attack from countries with vastly different fiscal situations than our own. Unfortunately, the facts in Australia never match their imported political rhetoric. While the deficit in Australia grew to $54.5 billion, or 4.2 per cent of GDP, in 2009-10 in the wake of Labor's job-saving fiscal stimulus, it never even reached half the average deficit of advanced economies during this time. Similarly, as the global financial crisis passed, Labor dramatically reined in the deficit, reducing it to just $18.8 billion in our last full year in office, or just 1.2 per cent of GDP—less than one-fourth of the international advanced economy average of 4.9 per cent. Labor continued this budget discipline by deciding on over $180 billion in responsible savings to fund investments in hospitals, schools and the NDIS, which, at the time, those opposite claimed to support. This was fiscal discipline, I might add, that was consistently opposed by the Leader of the Opposition, and it also included means testing the private health insurance rebate—a saving that is still not supported by those opposite. A set of long-term structural savings was delivered by Labor that left the budget cumulatively better off by over $300 billion by 2020-21.

Of course, none of these facts suited the coalition's narrative, so after those opposite entered government they needed to start changing the fiscal facts to meet their budget confections. The Treasurer set to work moving the goalposts. In the six months after the federal election, the Treasurer made a series of decisions designed to double the budget deficit. A combination of their own spending decisions and changed economic assumptions, or what a layman might call 'cooking the books', added $68 billion to the budget deficit in this period of time. And now they are trying to frame up the Australian Labor Party as being responsible. If this were just a matter of political game playing, it would be one thing, but the real reason for this fiscal hysteria—

Government Members:

Government members interjecting—

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

Order! Those on my right!

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

The real reason for what has happened is that the Prime Minister is trying fit up the Australian people for a hairshirt. Despite promising no cuts to health, no cuts to education and no changes to the pension before the election, we finally saw Tony Abbott's true agenda when his Commission of Audit report was released. It is no surprise that he held back the release of this report until after the WA Senate election. It is no surprise that he did not tell voters about his extreme ideological agenda before the last federal election.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I would like him to provide evidence that he is being framed.

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

No, that is not a point of order and it is verging on being disorderly.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

I can understand the sensitivity from those opposite. It is no surprise that they did not tell voters about their real plans for Australia. They knew that the Australian public would not have a bar of it if they knew about it. The Australian people did not vote for this and they do not want it, and at the next election we are going to hold the government to account.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

The approaching budget has flushed out a whole new breed of politicians and commentators—the debt and deficit deniers. Unflustered by the facts, impervious to any crisis and unwilling to listen to their opponents, their ranks are bolstered by disaffected types who simply want the government to keep spending on their latest cause. In these circles it is completely unfashionable to recognise the need to stop spending. Labor already suffers from this disease and I fear that the crossbenchers in this House and in the other place will soon catch it. Almost two weeks ago I took part in a regular panel on ABC radio with the member for Fraser, the shadow assistant treasurer. I was stunned to hear him argue that we are in fine shape. On ABC's Lateline on the very same day he went on to say that, when you look around the world, Australia's public finances are in extraordinarily good shape. The member for Fraser knows better. As a newly-minted politician I understand the opportunism of his position. When I survey my constituents, which I do constantly, I find that cost of living, health and immigration often trump debt. If I were just looking for votes I would look to the extraordinary precedent set by European politicians-just keep spending until you are bankrupt.

A day is a long time in politics so why worry about a deep impending crisis which can be hidden from mainstream voters by opportunistic spin merchants? The debt deniers' approach has evolved over time. When in government Wayne Swan gave lip service to fixing the problem. With a hopelessly flawed mining tax as his main weapon he was never going to deliver. Due to the relative freedom of opposition, lip service has now given way to full-blown denial aided and abetted by partisan loyalists in the economics profession. It is always easy to present a couple of facts to whisk the problem away. In the great tradition of our national broadcaster it is time for a more comprehensive fact check. It may be true that we are currently in a better position than many other countries in terms of the ratio of public debt to GDP but we should take no comfort in comparisons with Portugal, Ireland, Greece, Spain and other economic basket cases. With mining investment growing from next to nothing only years earlier to now be topping more than $100 billion, close to 10 per cent of GDP, and the strongest terms of trade for 150 years we should have a strong starting position, but we do not.

The Commission of Audit has made the gravity of the situation clear. Our biggest spending programs, roughly half the budget, are set to grow much faster than GDP for decades to come and Labor has made no attempt to curb the trajectory. Their promises on aged care, education, disability and pensions, particularly those promises made beyond scrutiny of the forward estimates, entrench totally unsustainable spending growth. These expenditures are driven by demographics—and demographics is, of course, destiny. All of this adds up to the fastest rate of growth of expenditure amongst all developed countries recently surveyed by the IMF. Meanwhile, Australians have amongst the highest level of household debt in the developed world, at over $1.5 trillion. Since the early 1990s, our mortgages and credit card debt have grown much faster than the overall economy. This creates a level of vulnerability to rising government debt for Australian families, businesses and workers through upward pressure on interest rates, crowding out of private sector jobs and a reduction in the government's ammunition to deal with a global downturn.

It was irresponsible to run large budget deficits during a mining boom with skyrocketing household debt. However, leaving the problem for another day would be a huge threat to the prosperity of those households with high debt burdens, many of whom are in my electorate, and to the prosperity of all those businesses which rely on those households for their prosperity. We are falling off a fiscal cliff and we still have a long way to fall. The debt and deficit deniers are screaming that it is all okay because we have not yet hit the bottom. I suggest that they look down to see the bodies sprawled below, mostly European. (Time expired)

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

This important discussion goes right to the heart of the falsehood that is being peddled by those on the other side of the House. It sits at the heart of the debate about the budget. Over the past weeks we have heard some ridiculous claims made by those on the other side of the House as they go around Australia. You get the feeling that the Treasurer believes if he repeats that we have a budget emergency frequently enough and loudly enough then it will start to come true. There is a problem, though. The facts do not support the statement. Let us turn to some of these facts.

As previous speakers have mentioned, we have a public debt to GDP ratio in Australia of somewhere around 20 per cent, about a fifth of GDP. The member for Casey asked who do we want to compare ourselves to. Is the OECD the right spot to put the bar? Let us take a look at those who have AAA credit ratings. Australia is one of 13 countries around the world which has a AAA credit rating. By my list Australia has the lowest debt to GDP ratio of all countries with a AAA credit rating. I have not worked out the average myself, but by eyeballing this list I would say the average debt to GDP ratio is about 55 per cent, so we are sitting at just under a half of the debt to GDP ratio for all those countries with a AAA credit rating. You do not have to take my word for it because, as is becoming quite apparent, we are struggling to find a serious economist in Australia who will stand behind some of the fatuous claims made by the government. Even Tony Shepherd, who produced the infamous Commission of Audit report, would not state that Australia is in a budget emergency. The only people who are making this claim are those who are sitting on the other side of the House.

Given all this evidence, why do we see all the rhetoric? We have heard some very interesting views from this side of the House speculating on what they are trying to do. I have been thinking about this for a few weeks and I have my own theory. I think what we are seeing on the other side of the House is what economist Paul Krugman has called a very serious person syndrome. This syndrome occurs when right-wing politicians want to get up and create some sort of crisis. They get really serious and really tough on the topic to show off a professional veneer. The problem is, as we have just talked about, the facts just do not support it. I do not like the politics but I think you have to admire the moxie, given how far away from the facts they are.

There is another problem with the rhetoric that is being spun on the other side of the House—that is, the government decisions that are being made simply do not line up with this idea that we are heading into a huge fiscal crisis. What we have seen in the announcements that the Treasurer has made so far are some massive new areas of spending going to some of the wealthiest people in our community. One of the examples that I know we will hear more about is the paid parental leave scheme, which will give somewhere between $50,000 and $75,000 to some of the richest women in the whole of Australia. This scheme is going to cost $5.5 billion a year. That is about as much as the whole amount of federal spending on child care. If you go out and talk to the mothers of Australia about what they would prefer investment in, I think we all know what the answer will be.

Something else I want to talk about is the government's attempt to abolish carbon pricing and in its place create this taxpayer-funded slush fund that will pay the companies which are the biggest polluters in Australia to try to cut down carbon emissions—a scheme which we know is not even going to help Australia meet its carbon goals.

What we see along with these massive areas of spending are some significant areas of cuts. The cuts, as we have come to expect from those on the other side of the House, are affecting the Australians that can least afford to pay. I am talking about a tax on people who are sick. I have been doing mobile offices during the sitting break, and I am sure that you guys have had this experience: constituents have been coming up to me and they have been so afraid; these are people who have illnesses and just cannot afford to pay $6 every time they go to the doctor. I know that those on the other side of the House tend to represent electorates where there may be fewer people in this situation, but I can tell you that the constituents of Hotham are incredibly concerned about things that will tax people who might be sick.

All the while, we have these very serious people on the other side of the House paying $140,000 for a private jet to bring them to Canberra and having a lovely time sitting in the parliamentary courtyard puffing on Cubans. I would just say to those on the other side of the House that it might be time to stop trying to pretend you are so serious and tough, get real with the facts and start listening to those on the other side of the House who actually have some experience and understanding of economics.

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

The members opposite have accused this government of overdramatising our nation's situation. These allegations seem a little rich coming from the party so famous for drama. Labor's long-running soap opera confused and captivated voters over six long seasons, starring Kevin and Julia, then Julia and Kevin, and finally, back by popular demand, a solo act by Kevin.

For Labor to suggest that a deficit nearing $667 billion is overdramatised shows that clearly they have moved from drama to comedy, but this is no laughing matter. So let us cut the drama. Let us set aside the opposition's rhetoric for a moment and address the facts. Let us revisit Labor's legacy, to examine where we are today. Unfortunately for Labor, the facts are pretty damning. In their first year in government, Labor delivered a budget deficit of $27 billion. In the very next year, the deficit had blown out to $54.5 billion. In five budgets between 2008 and 2013, Labor delivered $191 billion of budget deficits and $123 billion of accumulated deficits over the forward estimates.

The facts are clear: when they came into office, Labor inherited a surplus of $20 billion, with no net debt and $45 billion in the bank. By the end of their six-year spiral of spending, they left Australians with a dizzying legacy of projected debt, the product of structural spending measures which promised to take us on a road into the red to $667 billion by 2023.

So, before the opposition accuse us of overdramatising the very real deficit they have left behind, I would ask them to check the facts. If they really see the numbers as not a big problem, they deserve to stay in opposition for a very long time, because it is going to take a very long time to fix their mess. When they were in office, Labor's best financial minds behaved like rich kids playing with daddy's credit card. They threw money at pink batts and school halls and committed to an NBN spend that, ironically, has blown out into the clouds. Their total disregard for fiscal responsibility has led us to where we are today.

Today's deficit is not of our doing, but it will be our undoing if we fail to respond to it. That is why tonight this government will deliver a budget to put our nation back on track and pay down the debt. This budget represents the first steps towards delivering our promise to the Australian people. Labor may accuse us of confecting a budget emergency but, while they streak through the halls of parliament offering a lot of rhetoric but no plans to address the debt, we on this side of the House have started the difficult task of making the hard decisions they did not have the fortitude to make. We have looked closely at the facts, rolled up our sleeves and come up with a plan to restore the budget to surplus.

Labor have levelled another attack against this government in the lead-up to tonight's budget. They say we have somehow broken our election promise to be a government of lower taxes by promising a levy on high-income earners. So, again, I propose that we take a look at the facts. Tony Abbott has been faithful to his low-tax mandate. Tonight's budget will outline our plans to relieve taxpayers of billions of dollars in tax burden by reducing taxes in many areas across the budget. This government is asking everybody to do their share of the lifting to fix Labor's mess. The levy is an appeal to those who are fortunate enough to earn a high income to get Australia back on track. This levy is about making sure responsibility for the heavy lifting is shared fairly, and it is time that those opposite stopped making mischief on this proposed policy to pay back the debt.

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

Order! The discussion is now concluded.