Mitch Fifield (Victoria, Liberal Party) Share this | Hansard source

I should not admit this but I am actually becoming a little misty-eyed today. I am feeling a little bit wistful because I have been reminiscing during question time about a time in our recent history when banks respected and maybe even feared the Treasurer, when the Treasurer of the day did more than watch and when the Treasurer used to speak about economic fundamentals rather than genies and bottles. It was a time when Australia was called the ‘miracle economy’ and the ‘wonder down under’ and a time when a series like The Hollowmen would have been considered satire rather than a documentary. I think fondly back to those days.

In the nine months that this government has been in power things have changed. This government has transformed the Australian economy into one which is slowing and where unemployment is forecast to increase, according to the government’s own budget forecast, by 150-odd thousand. The Reserve Bank of Australia have also predicted a further 100,000 on top of that. Inflation is rising, confidence is at record lows and the economy is on the verge of a swan dive.

Senator Conroy must have been watching too many episodes of The Hollowmen because he tried a bit of satire today. He spoke about punching holes in budget surpluses and black holes. I have to say that the concept of a black hole has certainly changed from my recent experience. Black holes certainly are not what they used to be. I well remember that in 1996 the Labor government left the nation a $10 billion budget deficit. A deficit is a black hole. I well remember Labor leaving us, the nation, $96 billion in Commonwealth government debt. Debt is a black hole. How much help did we get from the Labor Party? None. If you listen to Labor’s view of what a responsible opposition should do, what a responsible Senate should do, you could be forgiven for thinking that Labor in opposition created some sort of Senate nirvana for the coalition government. It was anything but. Labor opposed each and every savings measure we presented to this parliament to repair the budget and to pay down Labor’s debt. But we balanced the budget. We repaid every cent of Labor debt despite that opposition and, at the election, we passed to Labor a government with an asset position, a government that was debt free, a government that was in surplus. Also, we left Labor with record low unemployment and a strongly growing economy.

Clearly that is not a crisis—you would be grateful to inherit that sort of economy—so Labor had to manufacture a crisis. Labor turned an inflation challenge into a crisis. Wayne Swan talked down the economy, talked up inflation and egged on the Reserve Bank to increase interest rates, which is exactly what they did. Having created this sense of crisis, Labor hold out their budget as the only economic hope for the nation. There are a few points to bear about Labor’s budget. On a no-policy-change basis from the previous government, the budget would be in surplus in the order of magnitude of about what Labor have.

Labor’s budget is not built on savings; it is built on new taxes. And Labor have done something that we have not seen before. They are counting revenue—tax—as a saving. This budget is not based on savings; it is based on new taxes. And these taxes were not flagged before the election. Labor cannot claim any sort of mandate theory here. Worse than that, these taxes are inflationary. They are not needed because we left the budget in a strong position in surplus. They were not flagged, they are not needed and they are inflationary.

We have a pretty simple approach to budget matters. Once you have provided for schools, hospitals, defence and security and paid down debt, if you have money left over you should return it because, if you have money left over after providing for services and paying down debt, it means that you are taxing too much. Rather than doing that, this government is increasing taxes. They should be condemned. These taxes were not flagged and they should be opposed.