Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

I just want to draw the attention of Senator Murray to two matters. I do not want to be unkind, but he did go back to 1996 in his reference to better-off Australians having been doing very well—saying that the wealthier and the richer are better-off. I know these are his last two weeks, and I am actually going to say some very complimentary things about him in the valedictory speeches later in the week. However, I take this opportunity briefly to say, Senator Murray: if your figures are correct and if better-off Australians have been doing very well—and I think you quoted a figure of 86 per cent—I would have to say that I think the GST was a bit of a help to wealthier and better-off Australians. We know the part you played in that. I am not going to be unkind, and I am not going to take the time of the chamber, but if those figures are correct—and I do not know the 86 per cent figure—the debate around the GST and its implementation and the general favouring of the higher income earner by the introduction of the GST is a debate we have canvassed up hill and down dale in this place for many years. I think that would be a factor if your figures are true.

The only other issue I want to touch on is, again, that the tax cuts should not be seen in isolation. I referred to the government’s fiscal approach in the budget and our determination to be fiscally conservative, to have a significant surplus, to put downward pressure on inflation, to fight inflation and to put downward pressure on interest rates. Another component of the budget that was announced was significant investment in education, health and infrastructure, which in turn helps to address one of the issues that Senator Murray raised, about inflation and lack of investment in public infrastructure, broadly defined. As part of the budget, again looking at the totality of economic measures that the government have put forward, we are investing $11 billion in a new Education Investment Fund, we are allocating a further $10 billion in establishing a Health and Hospitals Fund and we are allocating $20 billion, I think, for the infrastructure fund—I will get an accurate figure. It is a significant investment in infrastructure. So we are dealing with some of the critical areas of neglect in investment in infrastructure, broadly speaking, and I include within that education and health. I put that on the record in terms of the fight against inflation.

Finally, Mr Glenn Stevens, the Governor of the Reserve Bank, when questioned about the issue of inflation and inflationary impact, said:

It strikes me that in the popular discussion about fiscal policy, many participants talk past each other because they are looking at different time dimensions. It is not unreasonable to say that if the budget is perpetually in surplus, there is no debt to speak of and no other looming large unfunded liability, taxes should probably, over some long-run horizon, be lower.  This, it seems to me, is the economic case for structural reductions in taxes, which some observers articulate. Others argue that such reductions should be delayed, for cyclical reasons, given that demand needs to slow to contain inflation. So there is a structural case for taxes to fall, and a cyclical case for them not to. It is no doubt difficult for any government to reconcile these two, equally valid, points of view, the more so if the same tension persists for a number of consecutive years.

We believe the government’s approach as a whole, the budget as a whole, the surplus we are delivering, the fiscal conservatism, the fight against inflation, the downward pressure on interest rates, the tax cuts and the investment in the various areas of infrastructure that I have outlined, are a balanced and appropriate package. I will reserve any further remarks, if needed, until the Green amendments that we will get to shortly. We will oppose these amendments.

Question negatived.