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

The coalition will, of course, not oppose these bills. However, let me just make a number of observations on behalf of the opposition. Budget time is always the time to take stock of how the government has been performing. When it comes to the management of public finances, this government has performed very badly indeed. This government inherited a very strong budget position back in 2007 when Kevin Rudd first became Prime Minister. The budget was $22 billion in the positive and we had $70 billion worth of net government assets. But last year we had a budget that was $55 billion in the red and this year we have a budget that is $50 billion in the red—and it is going to be $22.3 billion in the red next year. We are now on track for $107 billion worth of net government debt—the highest ever.

You have got to remember that back in 1996 the then Howard government inherited $96 billion worth of Labor Party debt. Through hard work, good government and sound financial management the Howard government was able to pay off that debt, return the budget to surplus and deliver tax cuts. But what we have had under this government is wasteful spending, more taxes and record levels of debt and deficit. In fact, this year we will have the second-highest deficit on record, after we had the highest deficit on record last year.

The people of Australia have to pay the price for this bad financial management. The people of Australia have to pay the price through the proposals in this budget by the Labor Party to abolish the private health insurance rebate for hundreds of thousands of Australians and reduce the private health insurance rebate for hundreds of thousands of Australians through means testing. People across Australia will pay the price for this government's reckless spending and mismanagement of our public finances.

Under the appropriation bills that we are asked to support here tonight, this Labor government will pay $26 billion over the next four years just to pay the interest on the debt that they have accumulated over the last four years. It is just extraordinary. Back in 2007 the government was paying $0 in interest on net government debt. Today, the government is paying $26 billion just on the interest to service the debt that they have accumulated since they came into government in 2007.

We have had four Labor budgets and they have been four successive deficit budgets. This Labor government has not delivered a single surplus budget. In fact, Labor has not delivered a surplus budget since 1989-89. We have had nine successive deficit budgets from the Labor Party.

Minister Wong has made it into the chamber. She keeps lecturing us about what she perceives to be our record in relation to fiscal management. I say to Minster Wong that people across Australia well understand that it is always the coalition that has had to fix up the fiscal mess that Labor govern­ments have created in Australia again and again and again. That is what happened last time—we had to come in and fix up the mess—and that is what will happen next time. The longer Labor stay in government the greater the mess they are making—and the more people across Australia have to pay the price for Labor's fiscal mismanagement.

In relation to Appropriation Bill (No. 2) the government is seeking an increase in its gross debt ceiling from $200 billion to $250 billion. It is important to pause to reflect on this. It is just over two years ago that the government asked for the debt ceiling to be more than doubled—to $200 billion—and now the parliament is being asked to increase the gross debt ceiling by another $50 billion. And the parliament will have to agree with that because by the end of June, according to the budget papers, according to the face value indicated that is being used for this, gross debt will already be at $192 billion.

The day before the budget, Senator Wong went out into the media and said that this year's budget will be a typical Labor budget. And she was right. It was a typical Labor budget. It was a high-spending, high-taxing Labor budget with more debt and more deficit, and it was sprinkled with a whole series of ideological attacks on Australians who have aspirations to get ahead. This is what Labor governments do when they get the chance. They spend beyond their means and then have to find some targets and some people across Australia that can pay the bill. Invariably, the people whom Labor wants to pay the bill for their reckless spending and incapacity to manage public finances are those who are working hard to make a contribution and to get ahead, and are a key part of driving the economic prosperity of Australia. This government is currently borrowing $135 million a day just to fund its day-to-day expenses. In the week after the budget, the Minister for Finance and Deregulation tried to make a virtue of the fact that it had been able to keep spending growth, in real terms, below two per cent. What she did not mention—and what was excluded from the graphs in the budget papers—was that over the last two years spending in real terms had gone up by 17 per cent. It has been the highest increase in spending, in real terms, since the Whitlam government: 17 per cent. If you start off from an inflated base, of course it is easier to keep your spending growth limited to below two per cent.

What Labor has done in this budget is establish what was described as crisis level stimulus spending as the new base. We had two years where the government was dishing out the money—it was spending money on pink batts and school halls and sending out cheques to people—and that inflated level of spending, spending at record levels, has become the new base. The government somehow wants us to think that it is being disciplined and doing a great job just because it is able to bring spending growth from that inflated base to below two per cent. That is not an achievement. It would be extra­ordinary if the government were not able to keep it below two per cent.

Incidentally, I have been asking some questions on notice in relation to this and they have been on notice for nearly 100 days. For more than three months there has been a question on notice to the Treasurer asking him how much of the fiscal stimulus spending for this year and next year remains uncommitted. I have not had an answer. For more than three months the Treasurer has failed to answer a question about how much of the fiscal stimulus spending has not been either spent or committed.

This is the one-year anniversary of the ascension of Prime Minister Gillard to the prime ministership. It was today, a year ago, that we all watched the new Prime Minister, Julia Gillard, tell us that she was going to fix the mining tax, fix the climate change mess that she had inherited from her predecessor and fix the border protection fiasco she had inherited from her predecessor. It is a bit like groundhog day, because if you look at the debates we have been having today, last week and the week before that—in fact, if you look at the debates we have been having every single week over the last 12 months—there has been no moving forward at all. The Prime Minister was going to move forward, but I think we are just stepping on the same step every day. It is like every day we wake up and it starts again.

We talk about the broken promise on the carbon tax, because the Prime Minister promised not to have a carbon tax and now we are going to have one. We talk about the mining tax mess. The more scrutiny that is applied to it the more obvious it becomes that it is a complete mess. It is a mining tax which came out of a flawed process, an exclusive, secretive negotiation with the three biggest mining companies, which of course is not a sound foundation on which to develop a tax policy. Then we have the border protection fiasco. The Prime Minister told us about the East Timor solution 12 months ago. That was going to be the big fix. Remember the East Timor solution? What has happened to that? Now we are talking about the Malaysian solution. That is not going anywhere either.

This is a government that has completely lost control of all aspects of government. It is a government that has lost control of the financial management situation. It is a government that has lost control wherever you look. Look at live cattle exports. Why would you impose a blanket ban on live cattle exports if you were concerned about some rogue operators doing the wrong thing? Why wouldn't you target those rogue operators and allow all the other abattoirs in Indonesia and other places that are complying with appropriate standards to continue operating? This is a government that does not seem to care about the flow-on consequences for real people across Australia—real people across Australia who are getting hurt. This government, being driven by the Greens in this chamber into one corner after another, does not seem to care when real people across Australia are getting hurt by its reckless and ill-considered approach to government.

These bills include Appropriation Bill (No. 1) 2011-12, which is the primary budget bill to appropriate funds from the Consolidated Revenue Fund and for the ordinary annual services of government and related purposes. It includes a total appropriation of $72.85 billion. We also have Appropriation Bill (No. 2), which includes the request to parliament to increase the government's gross debt ceiling from $200 billion to $250 billion. It is intriguing. The government is also asking the parliament to remove the requirement for it to provide a statement of reasons as to why it has to further increase gross debt before it goes ahead with it.

I would like the minister, in her second reading reply, to explain why the government is not prepared to comply with the transparency and scrutiny requirements that are currently in the legislation. Why does the government want to remove the particular requirement to table a statement of reasons in both houses of parliament? This is a government led by a Prime Minister who promised us back in August 2010 that this was going to be a new era of openness and transparency—that the government was going to let the sunshine in. Wherever you look, you find that this is a secretive government which is trying to reduce the capacity of the parliament to scrutinise its activities. It is a government that, rather than letting the sunshine in, closes the curtains wherever it can. Of course, secretive govern­ment makes for bad government. It is our job in this chamber to ensure that people across Australia can benefit from the best government possible, and this government seems to be a lost cause when it comes to that.

We also have to remember that this budget does not include the carbon tax. Even though we are told the carbon tax is going to start on 1 July 2012, the carbon tax is not included in the budget. Why is that? The government says, 'Oh, well; we don't know yet what we're going to do.' But the mining tax, which is supposed to start on the same day, 1 July 2012, has been in the budget for 12 months. Why do you think that is—why do you think the mining tax has been in the budget for the last 12 months and the carbon tax has not been? The reason is that the mining tax, which was developed through a deeply flawed process with no consultation and no engagement with state and territory governments—even though the mining tax in its original iteration was supposed to replace state and territory royalties—is supposed to generate significant revenue to help the government create the illusion of an early surplus.

It talks about all the associated budget measures, which the government says will be part of its reform agenda. They do not start to come into effect until a bit later, and the cost of the related measures will only really play out during the years beyond the forward estimates. But, of course, the mining tax revenue is in this budget. The mining tax revenue is what is required to help the government make its claim of an early surplus. But the carbon tax would raise $11.5 billion worth of revenue if the government stuck to similar parameters as were on the table in the context of the Carbon Pollution Reduction Scheme.

Now the minister will say, 'We don't know yet; we haven't made decisions yet,' but we were told that the Carbon Pollution Reduction Scheme parameters were the benchmark from which they started their discussions. I suspect it will be very difficult for the Greens to vote in favour of a carbon tax which imposes a lower carbon price than the Carbon Pollution Reduction Scheme. Why did they not vote for the Carbon Pollution Reduction Scheme if they are now be prepared to vote for a price on carbon than is lower than what was in that legislation?

The point here is that this appropriations bill, this budget, is actually inaccurate; it is wrong. From 2012-13 onwards the information is wrong, because we have the wrong revenue figures, the wrong expenditure figures, the wrong employment data and the wrong economic growth forecasts, because all of that is going to change once we know what the government's plans are in relation to the carbon tax—the carbon tax the Prime Minister promised before the election would not be introduced.

This budget is essentially a lie, because the carbon tax is not included, and neither is the National Broadband Network expen­diture. The government said: 'Well, that's an investment; we are going to make a return on it. Trust us; we're a Labor government. We're going to put $50 billion of taxpayers' money on the table and we're going to make some money for government. We're going to be running things again. We have to get back into the telecommunications business and we're going to make some money for you, so we can take it off the budget. We don't have to be accountable for what we are doing with this; we're just going to hide it. We're not going to allow you to scrutinise it as part of the budget process. Trust us: we're going to make some money out of it.'

Labor plans to borrow $18.2 billion for the NBN over the forward estimates. The potential for waste here is frightening. But they say, 'Oh, no, we will manage it very wisely; we will manage it very carefully.' Remember the pink batts? Remember the school halls? As I said earlier, people across Australia know that it takes a coalition government to bring the public finances back in order. It seems that the Labor government knows that too, because when they wanted to put a package together toward the recon­struction effort in Queensland, what did they do? They went to John Fahey, a former coalition finance minister, to make sure that there was going to proper scrutiny and proper processes. Labor does not trust itself to manage public finances properly, so how can the Australian people trust them?

Obviously the coalition will not be opposing the appropriations bills, but we do have very severe concerns about where this government is taking the country, given the record levels of debt and deficit that they have accumulated in just four years.