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

I seek leave to move the following motion:

That the House:

(1) notes:

(a) before coming to office, the Coalition railed about a debt and deficit disaster;

(b) global economic conditions are the best they've been in years, with the International Monetary Fund stating "120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010";

(c) since this conservative Government came to office gross debt has increased to a record half a trillion dollars and is expected to be even higher in tonight's Budget with no peak in sight;

(d) net debt has doubled and is growing as a proportion of the economy more rapidly than almost every other advanced economy; and

(e) last night on 7.30, former Howard Government Treasurer, Peter Costello, said that he would be dead before the Government paid back its debt; and

(2) therefore, condemns this conservative Government for giving up on Budget repair and for its failure to address the long-term structural problems in the Budget.

Leave not granted.

I move:

That so much of the standing orders be suspended as would prevent the Member for McMahon from moving the following motion forthwith—That the House:

(1) notes:

(a) before coming to office, the Coalition railed about a debt and deficit disaster;

(b) global economic conditions are the best they've been in years, with the International Monetary Fund stating "120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010";

(c) since this conservative Government came to office gross debt has increased to a record half a trillion dollars and is expected to be even higher in tonight's Budget with no peak in sight;

(d) net debt has doubled and is growing as a proportion of the economy more rapidly than almost every other advanced economy; and

(e) last night on 7.30, former Howard Government Treasurer, Peter Costello, said that he would be dead before the Government paid back its debt; and

(2) therefore, condemns this conservative Government for giving up on Budget repair and for its failure to address the long-term structural problems in the Budget.

Mr Speaker, you will recall that in 2013 we were told the debt and deficit disaster and the budget emergency existed. Not only were we told that they existed, we were told they would be fixed. Some members opposite even told us that they were the fire truck arriving at the scene of the emergency—the budget emergency—and that the then Prime Minister, the member for Warringah, was driving the fire truck. And this mob got out and poured petrol on the fire, and now they're driving away and saying it was not their fault. That's what they've done to the debt and deficit disaster and the budget emergency, and now the poor old former Treasurer has lamented on the 7.30 program that he's going to be dead before the debt is paid off under this government's trajectory.

I wish the former member for Higgins the very best of health. I hope that he has a long and successful retirement, but I fear that he may be right. This government has given up on the task of debt and deficit reduction. This government has other priorities. Everything has changed. Do you know why it's all changed? Because it's all too hard. It's all too hard. We're washing our hands of it. It's all too hard. The government talks about headwinds. The Treasurer likes to talk about international headwinds. I'll tell you where the headwinds are going at the moment. The headwinds are going all the government's way when it comes to international circumstances. We have the most synchronised global improvement in economic circumstances in a decade. What does that mean? There are no alibis for this government and no excuses. There is nowhere to hide for this government. It mightn't be so bad if things were tough in Australia, but things were getting worse elsewhere in the world as well, so we're all in this together. But here we have the situation where Australia's general government net debt as a percentage of our economy has increased, since the election of this government, by 46 per cent. That's a lot. What's happened over the same time frame in other countries? Germany's has fallen by 20 per cent, New Zealand's has declined by 41 per cent and Canada's has fallen by five per cent. The UK and US have at least managed to stay stable; they've managed not to go backwards. But, on this government's watch, after the fire truck arrived, the fire has gotten worse, all because of this government's wrong priorities and its complete lack of agenda when it comes to getting the debt and deficit under control.

We on this side of the House believe in budget repair because we believe in having the room to move if things get worse internationally. We believe that there are better things to spend money on each month, like hospitals, schools and investment in our young people, than paying the debt interest to overseas bondholders. We actually believe that we must maintain and protect our AAA credit rating to maintain confidence in the Australian budget. We believe in those things, but, more than that, we're prepared to achieve them. And we're prepared to achieve them by making tough choices. Nobody suggests this is easy, but the Labor Party hasn't engaged in leading the economic debate for fun. We didn't say we should reform negative gearing because we felt like it. We didn't say we should reform capital gains tax because it just felt like something good to do on the day. We didn't say we should reform the way that people can claim tax deductions for minimising their tax just because it seemed like a good idea at the time. We didn't say that we should reform dividend imputation refundability which sends tax refund cheques to people who have not paid income tax because it was just a really popular thing to do. We decided to do these things because we believe in making the budget fairer and better. We believe in actually improving the integrity of the tax system and we believe in it for a higher purpose. We believe in it for the purpose of improving our budget over the long term so that future governments have the room to invest and make the necessary decisions.

What does this government believe? They believe in giving away $80 billion over the next decade to Australian big businesses on the condition of absolutely nothing—no conditions, no requirements. No promises are required to be given. There was a little note sent by the BCA to the Senate which said, 'We promise to try to do better.' But they wouldn't promise to pay their tax; they wouldn't promise to employ more Australians. No. So we've actually designed a better policy which provides tax relief up-front for businesses on the condition of investment in Australia—not on the hope and the prayer, not on the plea, not on the vain wish but on the condition. We have a better designed policy which actually produces growth, which actually guarantees growth, whereas they have a wing and a prayer—a wing and a prayer which makes the budget worse, which deteriorates the budget bottom line by $80 billion over the next decade.

Know this: regardless of what the budget numbers are tonight—and we'll know soon enough—they would be $80 billion better if this government had dropped their corporate tax cuts. They would be $80 billion better over the next decade. There would be $80 billion worth of budget repair, some of which could be used to invest in schools, hospitals and TAFE. There would be $80 billion which the Australian people would know was locking in the NDIS and locking in and protecting the pension. Instead, we're giving it away. Why? Because the fire truck has given up. It's because these guys have given up on debt and deficit and budget repair. They just don't care.

We know their track record. In 2015-16, we were forecast to have a $17 billion deficit. It ended up being more than double that, at almost $40 billion. The 2016-17 deficit was forecast to be $10.6 billion. It ended up at $33.2 billion. The 2017-18 deficit was forecast to be $2.8 billion and, at the last budget update, was eight times bigger than they forecast. It was not the Labor Party's forecast but their own forecast they couldn't meet when it comes to the budget deficit.

So the Treasurer will be out there tonight. You might be shocked to learn he'll be puffing himself up a little bit. He'll be huffing and puffing. He'll be saying, 'Be grateful, Australian people: I'm not going to increase your income tax as I told you I would last year,' as if it's great news that he was deciding to increase income tax and now he's not.

He'll also be riding that economic wave, but what he won't be doing is locking in surpluses, which are necessary to ensure the health of the Australian budget going forward. He won't be doing that because, regardless of what else he does, he'll be giving away $80 billion. That's the centrepiece of this budget. The finance minister himself has told us. The most important thing in the budget, he told us, was the $80 billion worth of giveaways for corporate Australia, not the tax cuts for low-income earners, which they've been dragged to do after years of campaigning by this side of the House, when they were going to increase the tax on every Australian earning more than $21,000 just last year. We're not talking about 2013 or 2014. We're not talking about lamented treasurers long departed like Joe Hockey. This Treasurer, last year standing at the dispatch box, said he would increase the tax on working Australians and now has changed his mind.

Let's be very clear: we very much welcome an election based on a contest of budget plans and budget repair, because we'll be going to the Australian people saying, 'We will fix your budget and we will take you to the safety of a better budget surplus, because they will give away $80 billion for no good reason.' We will go to the election saying: 'We will invest in young people, we will invest in schools, we will put TAFE back at the centre of our vocational education and training program and we will invest in skills, but we will do so in a way which is responsible, because we've done the hard work. We've done the work of policy development. We've taken the hard decisions. We'll make the tax system fairer. We'll fix negative gearing. We'll fix capital gains tax. We'll fix dividend imputation while they sit and do nothing and watch that fire get worse on their watch.' This Treasurer will not be able to say that he has taken the Australian budget to a position where it is safe from international downturns. A budget surplus of half a per cent of GDP will be blown over in a short, small breeze. We want to see budget repair which is real and also fair. (Time expired)

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

Is the motion seconded?

Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

I second the motion. These characters opposite have been run over by their own debt truck. They are the roadkill on the road to budget responsibility. We have gone in five years from budget emergency to budget hypocrisy. We don't hear peep anymore about the so-called budget emergency. They went round the country for years in the debt truck, in the fire truck that the member for McMahon mentioned, going on and on and on about budget emergencies and debt and deficit disasters, and we don't hear peep about that anymore, for a very good reason. They haven't just failed the test they set for us; they've failed the test they set for themselves.

On this side of the House, we expect them to fail the fairness test. That's how they roll. When they stand up in May each year, we expect them to fail the fairness test, but they've also failed the fiscal test, and they've been doing so consistently now for five years, and tonight will be the fifth budget. What ever happened to that budget emergency? What ever happened to that debt and deficit disaster that we used to hear so much about? It's not that we don't hear about it because it's been fixed—far from it. We don't hear about it because we're close to an election now and they're conceding, by not mentioning, that we've seen five years of failure—five years to meet the test they set for themselves.

Remember the last time that the member for Wentworth was the temporary leader of his party. He said that $200 billion in debt was a 'frightening' amount of debt. He said $300 billion was an almost inconceivable amount of debt. And now we have gross debt well over half a trillion dollars in this country. Senator Cormann, in 2013 and 2014, went on and on about budget emergencies, debt and deficit disasters. He described debt at $200 billion in 2013 as 'a budget emergency'. In November 2013 he said that their top priority was to fix 'the budget emergency that we've inherited'. By March 2014, he said he was 'methodically setting out to repair' the budget emergency. Of course, the member for Warringah as well, all through that period, went on and on about a debt and deficit disaster.

The reality, as the member for McMahon went through in some detail, is worth reminding the House about. Those opposite inherited net debt at about $175 billion. It's now twice that. They inherited, when it comes to gross debt, $277 billion. It's now $525 billion. The only government in Australian history ever to preside over more than half a trillion dollars in debt is this one—the only government in Australian history. And the debt is growing, and it doesn't peak over the current 10-year horizon. The other thing that people don't appreciate is that those opposite are accumulating debt at a faster rate than their predecessor, and we had the global financial crisis to deal with. They accumulate gross debt $1.1 billion a month quicker than Labor did. They've had rosy global economic conditions, and we had the GFC to deal with.

As the member for McMahon also said, we're dropping down the league table when it comes to government debt. We've gone from eighth in the developed world to 15th. Our budget performance, which used to be the envy of the world, has dropped behind that of the UK, Japan, Canada, France, Germany, the G20 as a whole and the euro area as a whole. That is their record that they have to defend in this budget week. We heard Peter Costello, the longest-standing Liberal Treasurer—also the highest-taxing Treasurer in Australian history, but we leave that aside just for now—and even he thinks that those opposite have been a spectacular failure when it comes to managing the budget.

What we say on this side of the House is that we've got to close the tax loopholes. We've got to not give tax handouts to big multinationals, including the big banks as well. This record and growing debt on their watch is not because the global conditions are bad; they're the best they've been in a decade. Chris Richardson says they've got a humungous amount of money rolling through the door. The reason we've got record and growing debt is that those opposite will go to the wall to defend the biggest tax breaks going to those who need them least. Remarkably—and the Australian people have to understand this—those opposite hear what's happening at the royal commission into the banks, and they want to compensate the banks, not the victims, for the behaviour that's been uncovered at the royal commission. We want to compensate the victims of the banks' rorts and rip-offs. Those opposite want to compensate the perpetrators of those rorts and rip-offs.

And that's what tonight is actually about. That's what this budget is about: an $80 billion handout to the top end of town; $17 billion for the big banks. That's what it's about, not some half-hearted attempt to repair the damage of the last five years and four budgets. (Time expired)

Alex Hawke (Mitchell, Liberal Party, Assistant Minister for Home Affairs) Share this | Link to this | Hansard source

The hypocrisy of the Labor Party knows no bounds. Listening to the member for McMahon and the member for Rankin, you'd think this was a party of fiscal rectitude, a model of fiscal rectitude. But this is a party that wants to spend more. This is a party that wants to tax more, with $200 billion of new and proposed taxes if the Labor Party were to be elected to government in Australia—$200 billion of new taxes.

And the members for McMahon and Rankin conveniently overlook an important number, a number that they haven't mentioned in this House—that is, 1,100 jobs a day in the last year. This economy generated 1,100 jobs a day, the highest jobs growth on record in this nation's history. That is a direct result of the economic policies of the coalition government and of the Prime Minister and the Treasurer's careful and methodical management of our budget. We won't be lectured by a party that comes to the table with vastly higher expenditure and, to fund all that expenditure, $200 billion of new proposed taxes that we know of. We haven't even got into an election campaign yet. We have another year of government to go, and the Labor Party still has the opportunity to put up more taxes.

What do we hear as the centrepiece, the common theme that comes out of this Labor Party in 2018? Gone is the respect for economic credibility that was there in the Keating and Hawke eras, the economic reform era of the Labor Party. The person that the member for McMahon proposes to venerate, their former Treasurer Paul Keating—it's all gone. What is this critical complaint, the core issue that they have? They have a core issue with the reduction of the company tax rate for small and medium businesses—that is, $50 million of turnover or less—in this country that the government has pursued. Where do they think these jobs come from, Mr Speaker? Who generates these jobs? These aren't government jobs and they aren't part-time jobs; these are full-time jobs generated by the private sector as a direct result of the government cutting the company tax rate for Australian small and medium businesses.

What does this Labor Party have against the small Australian mum-and-dad family businesses that they propose to reverse the tax cuts that the government has given to small and medium business? Why didn't the shadow Treasurer look the Australian public in the eye? Why didn't he come forward just now and say: 'We don't believe that Australian small business should have got a company tax cut. We don't believe that the jobs and growth that we've seen in this economy is a direct result of the coalition government's policy working.' Well, it is working: 1,100 jobs a day. Small and medium Australian businesses are now more competitive. Yes, we do believe that if we continue to cut company tax to make us internationally competitive we will see more investment, more growth and more jobs in this country.

We won't be lectured by a Labor Party which has not produced a surplus in any government since 1989. By the time Australia gets back to surplus under this government—which it will under this government, and the Treasurer will speak to that tonight; we will get back to a credible pathway to surplus finally—it will have been over 30 years since the Labor Party has delivered a surplus. Thirty years, and they're the party that the Australian public are supposed to listen to? We're supposed to listen to a shadow Treasurer whose party hasn't delivered a surplus in government for over 30 years. Get some credibility, you guys, please! We know what's going on. We know that the credible pathway that the coalition has put us on to get back to surplus is dealing with the legacy of failure that we had. If you listen to the member for McMahon and the member for Rankin, they've been channelling Billy Joel. If you listen to them, they say: 'We didn't start the fire. It was always burning since the world's been turning.' But when they came to government in 2013 there was zero net debt.

Who started the fire, speaking of the member for McMahon's fire truck? The Labor Party started the fire. They racked up the debt and deficit. They spent like there was no tomorrow, against all the advice and all the warnings of the opposition, us at the time, saying: 'You are spending too much in the global financial crisis. You are digging a deep hole for Australians. You are not spending it properly. You are generating a debt and deficit disaster.' We won't be lectured by the member for Rankin. We won't be lectured by a man who worked for the member for Lilley, announcing years of surpluses that never appeared. You've never apologised to the Australian people, Member for Rankin. You've never come forward and said, 'I apologise for writing that speech for the member for Lilley saying that there would be four years of surpluses.' There were no surpluses, Member for Rankin, and you had the hide to stand here today and lecture us on delivering a surplus.

Ever since this government came to office we've been opposed by the Labor Party at every turn. Every expenditure cut that we've put forward, they've opposed. On every single one they've had their senators and members oppose us. We've said, 'Let's reduce the welfare bill'—and, guess what: under this government, from when we came to office to today, there are 160,000 fewer people in the welfare queues—160,000 people off welfare.

Ms Macklin interjecting—

I think the member for Jagajaga is proposing to cheer and say thank you to the government. I think that's what she's trying to say over there. I've got a news flash for you, Member for Jagajaga: 160,000 people out of the welfare queues is good news. There's no need to get upset about it. It means that we have a lower expenditure for the Commonwealth. It means that people have income. It means they pay income taxes.

Ms Macklin interjecting—

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

The member for Jagajaga is warned.

Alex Hawke (Mitchell, Liberal Party, Assistant Minister for Home Affairs) Share this | Link to this | Hansard source

It's actually good. We don't want them back in those welfare queues, Member for Jagajaga; we want them off welfare. We want to get more people out of the welfare queues, and under this government's policies what we're seeing is 1,100 a day, the strongest jobs growth on record. Australian small, medium and family businesses are more competitive and we have plans to make our economy even more competitive.

You are going to see a responsible budget tonight from the Treasurer and you are going to see, of course, a responsible and credible path to surplus. We've been able to retain our AAA credit rating. We have done that. The shadow Treasurer says we should do it. Well, we have done it. It is this government that has retained the AAA credit rating, under great strain, I might add, from the fiscal irresponsibility of the Labor years—under great strain from the record of the member for Rankin and the member for Lilley, who are here. The surpluses they never imagined were ghost surpluses, Member for Lilley. You might have been the world's best Treasurer, according to an international body, but you never delivered a surplus. Thirty years without delivering a surplus and you had no role in creating the debt and deficit that Australia has today? Let's just remember who the wreckers are in this economy—who it is that always does damage to the economy when they come to government and who it is that racks up the debt for Australians to pay off. It is always the Australian Labor Party, and it is left to the coalition to fix these things. We get about and do it in a way that makes sure we are still able to deliver the essential services that our economy relies on.

While we are charting a path back to surplus, we are also seeing record spending on education and on health. We are able to make sure the dividend of a strong economy means that this year the Commonwealth will spend more on education than ever before and more on health than ever before. We retained our AAA credit rating. We continue to look at every opportunity to cut the tax burden on Australians, whether they are individuals or the companies that generate all the jobs we are talking about. These aren't public sector jobs. The Labor Party has a plan for only two things: increased taxes and increased expenditure. That is the result, the inevitable consequence, that the member for McMahon can't escape. He can't escape the fact that $200 billion more in taxes means increased spending by the Commonwealth, as well—so, for the member for McMahon to start this parliamentary day by getting up, with the member for Rankin, to lecture us on debt and deficit and economic credibility!

He says he welcomes an election on it. We welcome an election on it, member for McMahon. We welcome a daily conversation on the economy, on how to generate jobs in this country, on how to reform the tax system, on how to reduce the tax burden on hardworking people and on how to reduce the tax burden on the generators of jobs in our economy, they being the small and medium businesses. We welcome an election and a fight on it every single day of the week.

It is a truism of budgets that if you don't have a limit, if you don't set yourself a limit on what you're prepared to tax in the economy, then you will have endless taxes and endless spending—if you're prepared to endlessly tax. The one thing we again didn't hear from the member for McMahon today, which is an indictment on his approach, is that he did not outline what he will do to limit his tax increases and limit his expenditure. I say it again: we have come to a point in Australia where the Australian Labor Party has abandoned any economic credibility. They are proposing $200 billion of new taxes and endless expenditure and they have the hide to stand here in the House today and say that they are concerned about debt and deficit in this country and how to track back to surplus. The way you won't do it is by spending more and taxing more. It is this government that will spend less and tax less.

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

The time allotted for this debate has concluded. The question now is that the motion moved by the member for McMahon be agreed to. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after the discussion on the matter of public importance.

Debate adjourned.