Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer advise the House of the importance of sound fiscal policy to back Australians who are out there working, saving and investing in our transitioning economy? Will the Treasurer also update the House on the progress the government is making to improve the budget and promote growth and jobs?

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Petrie for his question. I am sure he would agree that the way I would like to respond to his question draws on a fairly unfamiliar source to this side of the House—Paul Keating. I agree with Paul Keating, who said today that higher taxes for higher spending is not a plan for jobs for growth. What he said today is that the big falls in commodity prices means Australia's income has been cut. We cannot pretend we can go on spending as though nothing has happened. Those opposite may think that, but this is what Paul Keating said:

The world has trimmed us down. We now have to trim ourselves down, trim our spending and not accommodate more of it by ever more taxation.

He says the aim of policy should be to make the private sector larger. He is right—

Mr Champion interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Wakefield is now warned.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

That is the aim of our policy—not to restrain it with a burgeoning public sector. That is what this government is doing. That is our plan. We are interested in things that will ultimately see taxes fall in this country, not see taxes ever higher to chase ever higher levels of spending which it can never catch—and, as a result, you borrow more and more and more. That is why the government has credible measures in place to reduce government spending as a share of the economy in this country from 25.9 per cent this year to 25.3 per cent at the end of the forward estimates. This was reinforced in our midyear statement, and that midyear statement was well received by the rating agencies. Moody's said: 'Notwithstanding the fiscal challenges ahead, we expect the government's fiscal position to remain within a range consistent with its AAA rating. The MYEFO incorporates a realistic view of the fiscal implications of lower growth. The government's commitment to fiscal consolidation is evident in the projected narrowing in the fiscal deficits. The policy's focus on improving the government's fiscal position supports the sovereign's credit profile.' That is our plan. That is what we are doing. We are reducing the share of government as a share of the economy so we can let the private sector expand and continue the strong jobs growth that we have seen. We saw 300,000-plus jobs last year. What we have is job-intensive economic growth in this country. There are more jobs in every single inch of that growth we are achieving in these difficult circumstances.

Those opposite have a very different point of view. What they are saying is that, of all the big 'savings' measures—they call tax increases 'savings'—they have come up with $7.6 billion in higher taxes. But that does not even get them to the point of the almost $14 billion in new spending they have announced just since the budget. On top of that, there is some $30 billion in savings that we have put in place. They want to put spending back on the agenda and almost $13 billion in measures they continue to block.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer and refers to his previous answer. Why did the Treasurer fail to mention another Paul Keating quote from this morning:

The GST is just a flat, bang you over the head, tax. It changes nothing; no behaviour, other than to put the tax weight onto the wrong people.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for McMahon will not use props in questions.

Mr Dutton interjecting—

The minister for immigration will cease interjecting. The Treasurer has the call.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

We all remember that it was Mr Keating himself who was the proponent of option C for a consumption tax all those years ago and we do know that he opposed the changes to the tax system that were introduced by the Howard-Costello government, and I remember that those opposite never changed a jot of them—they never changed a jot of the changes to the tax system that were introduced by the Howard-Costello government over all the years they had to do that. Now the former Prime Minister and former Treasurer has made some very good points today. He says that higher taxing for higher spending is no way to support jobs and growth and to support growth in this economy. He also says that a higher rate of GST should not be used to fuel higher spending. This government has no such plans for that. This government has no plans for higher taxes for higher spending.

Mr Champion interjecting—

Ms Plibersek interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Wakefield and the member for Sydney, this is your final warning.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

What this government contemplates as part of a broader debate is: how can we reduce the burden on Australians who are working and saving and investing, because the taxes on their earnings are getting higher and higher? Those opposite have no thought of empathy or compassion for those who are working more every day and have to pay higher taxes; no empathy whatsoever for small businesses who are working harder every day and are getting no relief in the tax system for their extra effort. On this side of the House we know that that is a priority, but you have to be able to pay for it. These are the decisions that governments have to make, and we are going through a very open process, we are consulting and we are trying to ensure that we have a growth-friendly tax system that supports jobs and supports growth.