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

The Tax Laws Amendment (2011 Measures No. 1) Bill 2011 is primarily about ensuring that the subsidies and grants given to victims of the floods and Cyclone Yasi are tax deductible, and the coalition of course supports the tax deductibility of these subsidies and grants for people who suffered such a terrible start to 2011. We are debating this bill on the day that this government is going to deliver its next budget—the fourth Labor budget, the fourth deficit budget, the fourth budget that no doubt in the great Labor tradition will deliver more wasteful spending, more taxes, more debt and yet another deficit—and of course the government will again use the floods and the cyclones as excuses for the budget being in such a disastrous position.

Floods, cyclones and bushfires are a sad part of the Australian reality. Good govern­ments ensure that the budget and the economy are resilient enough to be able to deal with these sorts of tragedies if and when they occur, because as sure as night follows day they will occur, and a good government budgets for those sorts of contingencies. But this government has so mismanaged our public finances and so mismanaged the budget that there is no flexibility in the budget anymore. There is no resilience at all and we are now of course in a situation where, as a result of Labor's waste, mis­management and reckless spending, our budget is already in record deficit territory yet again for this financial year.

The government for the last couple of weeks has been talking about how this is going to be a tough budget. Yet over the last five months, the budget deficit for this financial year alone has blown out by another $8½ billion. Five months ago when the government released the MYEFO, the deficit was going to be $41.5 billion. Now we are being told that it is going to be more than $50 billion. Next year's budget is going to blow out by more than $8 billion and last year we were told that the deficit would be about $12 billion plus and it now looks as if it is going to be more than $20 billion. There is no suggestion that the government is in any way, shape or form capable of ever delivering a tough budget. I draw to the attention of the chamber that, as we speak, the government is borrowing $135 million every day to fund the deficit for this financial year. When we have a cyclone or when we have a flood, like we had earlier this year, the government cannot help itself but go for yet another ad hoc tax grab—which was the $1.8 billion increase in income tax, also known as the flood tax. So here we are: it is borrowing $135 million every day. Next year the government will spend $6 billion on interest payments to service the debt that it has now accumulated. Six billion dollars worth of interest payments! Just imagine how much a prudent government, how much a good government, how much a government that spends taxpayers' money wisely, could do with $6 billion. That is six world-class public hospitals. Just imagine how many roads or how much infrastructure could be built. Imagine how much could be done in the reconstruction effort in Queensland if the government had not mismanaged the finances to the extent that it has.

Wayne Swan talks about the budget tonight as a tough budget. As I have already mentioned, this is not going to be a tough budget. I noted the description of the budget by Senator Wong earlier this week. I think it was in the Sydney Morning Herald. Senator Wong said that this will be 'a Labor budget'. I took that as being a bit of a threat to the Australian people—that the budget tonight is going to be a Labor budget. If it is going to be a Labor budget, we sure know that it is going to be a budget full of wasteful spending, full of more taxes, full of higher deficits and more debt, and full of ideological attacks on those Australians who are not seen to be part of the Australian Labor Party voter support base. It will be a tax on those Australians who take additional responsibility for their own health care by taking out private health insurance. These are the sorts of things, no doubt, that we are going to see in a good old-fashioned Labor budget.

Here we are, in a circumstance where we have a budget that is an absolute mess. This is, of course, a very bad tradition of the Labor Party. This will be the ninth con­secutive deficit budget of a federal Labor government. It will be the fourth consecutive deficit budget of this Labor government—four out of four. Of course, there were five consecutive deficit budgets under the previous federal Labor administration. So deficit budgets are part of Labor's DNA. Mismanaging the economy, mismanaging our public finances, is part of Labor's DNA. People across Australia know that, whatever happens, the Labor Party in government messes things up and it is the coalition that has to come in and fix it, through a sound approach to better financial management and by restoring good government. Labor always talks tough before a budget and then goes on to deliver yet another deficit. Labor does not know how to live within its means. This is no doubt going to be the way it is going to play out yet again tonight.

The other part of this legislation is an attempted fix of another Labor Party stuff-up. Remember the First Home Saver Accounts, which the Treasurer, Wayne Swan, announced back in 2008 with much fanfare? We were told as part of the budget then that the First Home Saver Accounts initiative would see 730,000 home saver accounts opened over four years. Just 24,000 people have taken it up because it is such a low-value offering, due to the way it was structured by the government back in 2008. This bill will make some changes which will make the offering slightly more attractive. In particular, the changes that will be made by this bill will allow savings to be paid into a mortgage at the end of the minimum qualifying period rather than requiring them to be transferred to a superannuation or retirement savings account. We support that change, but we make the point again that the government do not know how to manage any program competently. They do not think things through before they press ahead. Wherever you look there is failure, waste, mismanagement and incompetence. There is weakness, there is indecisiveness and there is budget mismanagement. So this is yet another fix for what was an example of Labor Party incompetence in Wayne Swan's first budget. With those few remarks, on behalf of the coalition, I indicate that we will be supporting this bill.