Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank the senator for that question. The Rudd government delivered a responsible economic budget that struck the right balance, given the difficult global and domestic conditions that we face. We built a strong surplus to fight inflation and to buffer our economy against global turmoil. This surplus also acts as the foundation for responsible investments in nation-building infrastructure. The Rudd government are committed to ensuring Australia’s future long-term economic prosperity. That is why we set up the Building Australia Fund to finance critical investments in infrastructure that will lay the foundation for future economic growth and productivity. The irresponsible opposition wants to punch a $6.2 billion hole in the surplus—a surplus that will help secure Australia’s future.

It is clear that we diverge from the opposition on fundamental policy choices and values. Take our proposal to increase the rate of the luxury car tax. In the budget the government announced an increase in the luxury car tax rate from 25 per cent to 33 per cent for cars with a price tag of more than $57,000. This would, for example, add about $2,600 to the price of an S-type Jaguar. This measure has an ongoing gain to revenue which is estimated to be $555 million over the forward estimates period. It is an important measure to ensure that we deliver the surplus the Australian economy needs in these challenging times. Yet in their quest to pursue short-term political tactics the opposition have indicated they will not support the measure. This reminds us of the depth to which their economic credibility has sunk. Rather than protect the surplus in order to fight inflation and secure future investment, they propose to vandalise the surplus.

We keep hearing interjections and questions from people who are supposed to know a bit more about the economy. These are senators who formerly worked in the Treasurer’s office. They continue to demonstrate their economic illiteracy by saying: ‘Look, we can just wish away the surplus. It does not matter.’ This is the sort of irresponsible economic advice that got this country into the difficulties it is currently in. They ignored the Reserve Bank’s warnings. There were up to 20 warnings. When Senator Fifield worked in the Treasurer’s office, he ignored, and advised the Treasurer to ignore, 20 warnings from the Reserve Bank about the irresponsible spending initiatives of the Howard government. What did this achieve— (Time expired)