Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

The Rudd government got into trouble because it was a bad government. The Gillard government nearly lost the election because Australians were not sure whether it would actually be a better government. The Rudd government was a high-spending, high-taxing, high-borrowing, secretive government full of dishonest spin. Listening to members on the other side this morning when they patted themselves on the back about how wonderful the government was over the last three years, you really wonder why it was that ultimately the Labor caucus came to the conclusion that the government was so bad that they had to execute a first-term Prime Minister. At the end of June, when we last sat, in came Julia Gillard. She conceded that the government had lost its way and said that things would change for the better. But have they? And, more importantly, now that Julia Gillard has scraped back into government, will things change for the better, moving forward?

Let us remind ourselves where the Rudd government lost its way. Having promised that he would lead a government of economic conservatives, Kevin Rudd’s government turned out to be a bad, old-fashioned, old Labor style government. It was a big spending, big taxing and big borrowing government. If it moved, Labor taxed it. This big spending and big taxing agenda did not just start when the global economic downturn hit us; it started right from the word go. Remember the alcopops tax in April 2008, even before Labor’s first budget? There was a 70 per cent hike in the tax on ready-to-drinks. It was dishonestly sold to us as a health measure. It was going to stop binge-drinking. There was a binge-drinking epidemic out there and this tax was going to fix it. With any problem, any challenge, the only way this Labor government thinks it can fix it is through another tax. That was a $3.1 billion tax, and the evidence is now in: it did not work.

We told the government at the time that there was no evidence that this would help reduce at-risk levels of drinking and that in other parts of the world where taxes like this had been tried they had not worked. In fact, Treasury conceded at the time that they were actually assuming that, rather than reducing consumption of alcopops, it would increase, moving forward—which it now has. At-risk levels of drinking of alcopops have continued to increase and Treasury are raking in the benefits, because, of course, this alcopops tax was nothing but a lazy, bad, old-fashioned tax grab.

The next month was Labor’s first budget, in May 2008. We had a $2½ billion tax grab on the North West Shelf gas project in Western Australia; we had the half a billion dollar tax grab on so-called luxury cars—all taxes where Labor thought that politically they could run a line which would make them acceptable to the Australian people. In Labor’s first budget, long before anybody had heard of a GFC, taxes went up by a staggering $20 billion and spending went up by $15 billion in net terms. Yet, despite all that additional revenue, massive reckless spending and waste and mismanagement meant that Labor did not deliver a single surplus budget in the financial years in which they were solely responsible for the management of the books.

Indeed, the last surplus that was delivered at a national level was for the 2007-08 financial year, the year that Kevin Rudd and Wayne Swan took over from John Howard and Peter Costello halfway through the financial year. That year, we had a surplus of $19.7 billion. What has happened since? There was a $27.1 billion deficit in 2008-09 and a $54.8 billion deficit in 2009-10, with the government patting themselves on the back, saying that this was not a bad deficit to have—the worst deficit we have ever had in the history of the Commonwealth, $54.8 billion. At present we are on track for a projected deficit of $40.7 billion this financial year. It has nothing to do with any significant decline in revenue either, which is one of the lines that those on the other side have been trying to run. Revenue declined by only about $7 billion between 2008-09 and 2009-10. It was all driven by reckless spending, by waste and mismanagement, by things like the school halls fiasco and the handouts, by not properly managing government programs that were running completely out of control.

Then there are the many broken promises we had in the Rudd government era. Private health insurance rebates—remember them? Back in the lead-up to the election, the government promised that they would retain the existing private health insurance rebates. The Minister for Health and Ageing, Nicola Roxon, in the middle of their term, at a time when she was working with her department and Treasury to get rid of the rebate for millions of Australians, was still pretending publicly and telling the Australian people that the Rudd government was committed to retaining those rebates.

Now we have had the student taxes—yet another tax. That was another tax that, before the election, the then Rudd government promised not to impose. Since then, we have seen Labor, true to form, introduce yet another tax, trying to take choice away from students across Australia who do not want to be forced into paying taxes and fees for services they do not need. The government are at it again: they are now in the process of reintroducing that same tax.

There is failure and incompetence everywhere you look: the failure to protect our borders and the changes in government policy which led to an instant and dramatic increase in the number of boat arrivals at our borders; the home insulation fiasco; the school halls fiasco—you name it; wherever you look you see failure and incompetence.

That brings us to, you guessed it, yet another tax: the mining tax. This was of course what got the government into trouble. Kevin Rudd and Wayne Swan were faced with a political problem in the lead-up to the last election. They had deficit after deficit, and debt was running out of control. Clearly, the levels of deficit were continuing to put upward pressure on our interest rates, so they needed a political fix as they approached the election. They came up with what they described as a $12 billion mining tax—the resource super profits tax. There was no consultation with anyone in the mining industry and no engagement with the states and territories, some of whom were being asked to give away their own revenue streams under the state royalty arrangements. There was no proper process followed at all. It was just a quick political fix which did immediate and incredible damage to our economy, to jobs and, in particular, to states like Western Australia, Queensland and New South Wales, where things stopped. Even the government realised they had done things wrong. Poor Kevin Rudd has since lost his job. Yet the guy who actually drove the tax, the guy who came up with the scheme, the Treasurer, Wayne Swan, not only still has his job; he got promoted. He got promoted to the point where he is now just one execution away from being the next Prime Minister.

I am going to dwell a little on this mining tax, because Her Excellency the Governor-General said in her speech:

… the government will pursue plans … to obtain a more equitable distribution of the nation’s natural wealth through the minerals resource rent tax agreed with our nation’s biggest miners and now the subject of wider consultation.

I regret to advise Her Excellency that the government are not conducting wider consultation in relation to the minerals resource rent tax. Yes, they have negotiated, in secret, a deal with the three biggest mining companies—who were given the opportunity to directly influence the design of that tax, who were able to put their data into the process to help shape the design of that tax and who were given access to government assumptions and government thinking about that tax, which gives them a clear competitive advantage. But 99 per cent of the mining industry was excluded from any of those discussions. To this day, the government are keeping secret and are protecting from public disclosure, as if it were the most important national security related state secret, some very basic information which is critically important for us to be able to scrutinise the actual impact of this mining tax proposal.

I just remind people that after Julia Gillard announced a new mining tax deal on 2 July she said, ‘Oh well, we have reduced the rate, we have increased the threshold at which it will kick in and we have made a whole series of other changes, but the impact on the budget bottom line is just going to be $1½ billion.’ Everybody was surprised—how can that be? Very, very dishonestly, the Treasurer and the Prime Minister failed to advise the Australian people that they had made a whole series of changes in underlying assumptions to achieve that particular outcome.

In fact, if the same assumptions were used for the original resources super profits tax as were used to assess the revenue for the mineral resource rent tax and expanded petroleum resource rent tax, then Kevin Rudd’s original tax would have raised $24 billion rather than $12 billion. Yet the government to this day has not publicly released very basic information in relation to the commodity price assumptions it has used, in relation to the production volume assumptions it has used or in relation to the exchange rate assumptions it has used—information which the state government in Western Australia publishes in its budget papers as a matter of course. This secretive government is refusing to release that information, which is absolutely necessary if we are to properly scrutinise the impact of this massive new tax on mining on the budget, on the economy, on jobs, on investment, on the cost of living and on states like my home state of Western Australia and states like Queensland and New South Wales.

After Julia Gillard became Prime Minister two or three weeks after the election, she asserted how this was going to be a new era of openness and transparency. Because of the new paradigm we were in and given the circumstances in the House of Representatives, she said there would be this new ‘operation sunlight’. In fact, I have heard some of the Independent members of the House of Representatives who are supporting the government use the term ‘operation sunlight’ quite frequently in recent weeks. I had heard that term before. I thought, ‘I am sure I have heard about “operation sunlight” before.’ Madam Deputy President, I am sure you would have heard that term before, too, because the then Minister for Finance and Deregulation, Lindsay Tanner, released this document here in December 2008. Do you know what its title is? You guessed it: Operation Sunlight: enhancing budget transparency. That was in December 2008. It was all talk and no action then and it is all talk and no action now, because if the Gillard government were serious about openness and transparency it would be releasing today information about the assumptions it has used to estimate revenue from the mining tax going forward.

Without the $10½ billion mining tax revenue estimate, the budget would never get into surplus. We have already heard from Access Economics that, at best, there would be one year when the budget goes into surplus. We have already heard that. If the mining tax revenue estimates are not credible, if they are wrong—and we have got a very serious question here as to whether they are credible at all—then there will be no surplus. This whole budget has been built on a house of cards and serious doubt has been raised as to whether this tax would actually raise $10½ billion over the forward estimates. If the government has nothing to hide, why would it not just come clean? Rather than just having all this talk and no action, why would it not come out and release some very basic information that would enable us to assess whether there is any credibility at all in those mining tax revenue estimates. I suggest that, rather than ‘operation sunlight mark 2’, we probably need ‘operation x-ray’. I think we need a different name. We need to move on a bit in the world.

Her Excellency also spoke about the government’s promise to increase the superannuation guarantee levy from nine to 12 per cent, saying that this is to ensure working Australians enjoy greater security in retirement and to considerably boost the nation’s pool of savings. You might recall the government commissioned the Henry tax review. The Henry tax review made a whole series of recommendations in relation to super and it made one specific observation on the proposed increase of the superannuation guarantee levy from nine to 12 per cent, saying that it would hurt low-income working families. We want to know why it is that the Henry tax review came to that conclusion. We want to see the underlying modelling, we want to see the assessments, we want to see the briefing notes that were prepared in order to help the Henry tax review come to that conclusion and we want to see what work the government has done, what Treasury has done, to come up with a different view. We do not think it is right for the government to go ahead with a policy that will hurt low-income working families. Again, if the government has nothing to hide, why does it not release that information? Why does it not come into this chamber today and table all of the modelling and all of the assessments that have been done to assess the impact on low-income working families of the super changes that it is proposing, which are contrary to what was recommended by the Henry tax review?

The Henry tax review was supposed to be this root-and-branch reform of our tax system, making it a fairer and simpler tax system. Really, all we got out of it was just another tax, the mining tax. I say to the Australian people that this is a government that is addicted to tax, to more taxes and to increased taxes because it is addicted to spending, because debt is out of control and because it has lost complete control of our country’s finances. That is why it is looking for yet another opportunity to whack on another tax.

I mentioned earlier how we have had this track record of failure and incompetence over the last three years, and it is well demonstrated. Now we have got former senator Graham Richardson out there today in the Australian telling us that the Prime Minister wanted to sack two ministers because they were incompetent.