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

I move:

That the Senate take note of the Minister's explanation.

The Treasurer is treating the Senate with absolute contempt. We have a question here which has been on the Notice Paper. These are not questions from estimates, Minister; these are questions which were put on the Senate Notice Paper. One question here, in relation to how much of the stimulus package remains to be spent in the financial years 2010-11, 2011-12 and 2012-13, has been on the Notice Paper not for 30 days, 40 days, 50 days or 60 days; it has been on the Notice Paper for more than 115 days.

I have written to the minister about this twice now. I signed the letter to the minister first thing this morning, so I apologise if it went through later in the day. But I wrote to the minister back on 25 May asking why all these questions, some of which have been on the Notice Paper since 11 March 2011, had not been answered. These are pretty straightforward questions, such as: how much of the stimulus package remains to be spent?

We have a Treasurer who has delivered four successive deficit budgets. We have a Treasurer who has taken a budget that was in surplus, had no government net debt and was in very good shape and given Australia a budget of four successive deficits, including two of the highest deficits in the history of the Commonwealth—a $55 billion deficit in 2009-10 and a $50 billion deficit last financial year. And there will be a $22.3 billion deficit this financial year. We have a Treasurer who has made a complete mess of our public finances. We have a Treasurer who has imposed more than $46 billion worth of new taxes in the first four budgets he has presided over. We have a Treasurer who has created $107 billion worth of new government net debt, after he inherited no government net debt. We have a Treasurer who sought to get from the states and territories, at the expense of the states and territories, $50 billion worth of GST revenue to prop up the government's finances. Yet this Treasurer is not capable of providing an answer to a very basic question: how much of the stimulus spending remains unspent?

The finance minister says that this is a government that, supposedly, is being fiscally prudent and is sticking to very tight fiscal targets and restraining its spending growth, because spending growth over the current forward estimates remains below two per cent. What the finance minister of course does not tell us is that over the last two years spending in real terms went up by 17 per cent. Under this government over the last two financial years, spending went up by 17 per cent. We were told that that was based on the fiscal stimulus—on the fact that we needed to spend more to keep Australia out of an economic recession—but the minister is now using what were supposed to be crisis levels of spending as the new base for government spending moving forward.

I have to make a little observation here. One of the many promises broken by the Prime Minister is that she told Australia that under her leadership Australia would move forward. But my perception of Australia's current state is that it is like groundhog day: the things that we are talking about today are the things that were in a mess when the Prime Minister took over the government. At that time she said she would fix the mining tax, she would fix the carbon tax and she would fix the fiasco at our borders—but everything is still in a mess.

Here we have a whole series of questions in relation to the government's reckless and wasteful spending through the fiscal stimulus package, the government's failed attempt to take $50 billion worth of GST revenue away from the states and dress it up as health reform and the government's failed and bad proposal to impose a massive new tax on the mining industry—an industry which is very important for our economic prosperity moving forward—and the government is incapable of providing straight answers to those simple questions. We get this from the government. Minister Wong herself was asked some very basic questions in question time today, and the record will show that the minister did not even try to get anywhere near answering the questions. But for the Treasurer of Australia to be so unaccount­able to this parliament that he does not even respond at all to questions put on notice through the proper processes of the Senate is bordering on complete and utter arrogance.

This is a government led by a Prime Minister who promised that this would be a new era of openness and transparency; this is a government led by a Prime Minister who promised that she was going to let the sun shine in; and one of the most basic account­ability mechanisms available to the Senate is not being observed. One of the most basic opportunities the parliament has to hold the government to account is to ask questions of the government, and we are entitled to expect timely and appropriate answers from the government.

The Treasurer is a repeat offender. Whenever he is in a sticky situation—whenever he wants to cover up one of his many failings; whenever he is embarrassed about the information that he might have to release—he will duck and weave and try to avoid it. He will do everything he can to avoid answering the question. But the Australian people deserve an answer to the very specific question of how much of the fiscal stimulus package remains unspent.

We have a government which is telling us that we need to have a mining tax, a carbon tax, a flood tax and a student tax. As soon as the Greens arrived here to support the government and the government knew it had the numbers in the Senate, in a flash they were here to get this student tax legislation, a $1 billion slug on students across Australia, back before the chamber. Students across Australia are being asked to pay the price for this government's reckless spending. The mining industry is being asked to pay the price for the government's fiscal reck­lessness. The government wants the states and territories to pay the price for this fiscal recklessness. Of course, generations of Australians to come will carry the burden of the fiscal recklessness of this government.

Senators on the Labor side of the chamber will go down in the history of Australia as having been the most reckless when it comes to looking after our public finances. We have seen record levels of debt and record levels of deficit and yet they are not prepared to answer some basic questions about it. We are in a situation where, over the current forward estimates, we—that is, Australia; this government—will be spending $26 billion just on interest to service the debts that this government has accumulated. Just imagine: $26 billion worth of payments on interest to service the debt that this government has accumulated. Why? Because this govern­ment cannot live within its means. This govern­ment is incapable of making responsible decisions when it comes to our spending and revenue arrangements.

We have Minister Wong out there again and again trying to tell the Australian people how Labor are now the most virtuous when it comes to fiscal responsibility. The minister keeps talking about an early surplus that will somehow come out of nowhere. I say to the government: you can keep talking about surpluses, but you will continue to deliver deficits. People across Australia know that Labor in government always makes a mess of our public finances and that it is always up to the coalition to come in after a period of Labor in government to fix up the mess. That is what we did in the period between 1996 and 2007, and that is no doubt what we will have to do again when we get the opportunity from the Australian people to again take control of the financial mess that the Labor Party has left behind.

This is a pretty important issue that goes to accountability. If we cannot get any answers at all about some of these very core and fundamental issues, how are we expected to do our job here in the Senate on behalf of the Australian people? The Senate is entitled to get answers from the govern­ment—and now very specifically on the mining tax. I asked a pretty important question, dare I say, in relation to the mining tax. There was a recent Federal Court decision, Esso Australia Resources Pty Ltd v the Commissioner of Taxation, in 2011, which raises questions about how much revenue will be raised by the government in the context of the proposed minerals resource rent tax and the proposed onshore expansion of the petroleum resource rent tax.

I asked questions about whether Treasury had done any assessment or modelling to determine the impact of this decision on revenue implications for the government's minerals resource rent tax and asked: 'If so, please provide this assessment or modelling, please provide full details of the projected revenue implications; and, if not, why has it not been done?' That is a very reasonable question, particularly given that the govern­ment is basing the illusionary early surplus it claims for 2012-13 principally and nearly exclusively on the revenue that would come out of the proposed mining tax.

But this is, of course, one of the many fiscally irresponsible things that this government are doing. They are proposing a mining tax—which includes a minerals resource rent tax and a proposed expansion of the petroleum resource rent tax—which would raise a certain amount of revenue in the early stages but which will go down over time as the record levels of trade that we are experiencing at the moment go down to more normal levels, whereas the cost of all of the related measures that are linked to the tax, like the government's proposal to phase in an increase in compulsory super, will continue to increase. According to the government's own budget papers, the proposed increase in compulsory super to 12 per cent, once fully implemented—which will not be until 2019-20—will impose a cost on the budget of $3.6 billion. But do not take my word for it; that is the figure in the government's own budget papers—$3.6 billion once the government's proposal to increase compulsory super to 12 per cent is fully implemented.

That same year, according to Treasury modelling, the MRRT—the so-called pro­pos­ed national profit based mining tax—is expected to raise $3 billion. So here we have the situation where in 2019-20 we have got $3 billion in revenue and one single measure that the government has attached to it as part of its so-called mining tax package will cost more in that financial year than the mining tax is supposed to raise in revenue. But we are expected to take the government on trust. We are expected to just sit back and accept that the government is not providing any answers to any of our questions. We have a situation here where the government is exposing Australia to another fiscal train wreck just because it is so focused on its political short-term interests. It is focused so much on creating this illusion of an early surplus that it is exposing Australia to another fiscal train wreck.

The structural deficit of the federal government will continue to worsen as a direct result of the mining tax that the government are putting forward; yet we are not supposed to get answers from the government to the questions that we are asking. Towards the end of last year Treasury put out a paper to say that the federal government in Australia will be in a structural deficit position until 2019-20. That was in October-November last year. Treasury officials put out a paper to say that Australia will be in a structural deficit at a national level until 2019-20. And here we have the mining tax proposal which, on the basis of the government's own figures of $3 billion in revenue and $3.6 billion in expenses related to the proposal to increase compulsory super—without even talking about the proposal to action in the company tax or a whole range of other measures that are attached as part of the package—will clearly make that structural deficit worse.

Of course, that Treasury paper came out before we were told about the significant deterioration in our budget position, between the budget update towards the end of last year and when the budget was delivered. In the six months between MYEFO, the Mid-Year Economic and Fiscal Outlook, and the budget being delivered in May, the budget position for 2010-11 had deteriorated by $8½ billion. Before Christmas 2010 we were told that the deficit for 2010-11 would be $41.5 billion. Six months later it was nearly $50 billion. We were told before Christmas 2010 that the budget deficit for 2011-12 would be about $12.3 billion, but in the budget six months later we are told that it is going to be $22.3 billion—another deterioration of $10 billion. Then we are asked to believe that somehow in 2012-13 out of nowhere there is going to be this significant turnaround.

There has been a deterioration in every single budget before. Labor have delivered four deficit budgets in a row under Wayne Swan's stewardship as our Treasurer and delivered five deficit budgets before that under previous governments. But we are asked to believe that there is somehow going to be this significant turnaround in 2012-13. On the basis that the Treasurer is so reluctant to provide an answer to a basic question about how much money remains unspent from the stimulus package and that he is not prepared to give us an assessment of what the impact of that particular court decision that I quoted would be on the revenue from the proposed minerals resource rent tax package, I smell a rat. I think the Treasurer has something to hide. I think this government have something to hide.

This Treasurer has always got something to hide. This is a Treasurer that is never up-front. When he first came out with the revised mining tax proposal, he did not tell anyone. That was the one that was negotiated exclusively and in secret with the three biggest mining companies, excluding all of the competitors from the process. Everybody was surprised. Given all the changes that have been made between the resource super profits tax and the minerals resource rent tax, how come there is such a small fiscal impact? We were told only $1.5 billion in revenue was lost. The Treasurer never volun­teered that there was a significant change in commodity price assumptions. The Treasurer never volunteered that until he was shamed into it, because the Treasury secretary let the cat out of the bag. Of course, ever since we have been trying to find out what the government's assumptions were to estimate the revenue from its proposed mining tax. Do you think we have got an answer about that? No. The Treasurer has a track record, again and again, whether it was in the past parliament when we were chasing informa­tion about assumptions around the modelling of the Carbon Pollution Reduction Scheme, whether it was in relation to assumptions used to estimate the revenue from the mining tax or whether it was around basic questions about how much remains unspent from the stimulus package. This is not a Treasurer who knows how to be open and transparent.

Openness and transparency is in the national interest. Openness and transparency makes for better government. Secretive government, like we are getting from this government, makes for bad government. This is a shocking government. Whatever this government touch, they stuff up. The reason is that they cannot think things through, because they cannot afford to expose themselves to proper scrutiny. If they opened themselves up to questions put to them by the Senate, they would probably be a better government. There is a question mark around that, but at least there would be a chance that it would actually force them to think things through a bit more.

I think I have made my point. I can well understand—

Senator Wong interjecting—

I can see that Senator Fifield would like a further explanation and I can well understand why Senator Wong would like me to finish, because Senator Wong is clearly as embarrassed as all of her colleagues on that side of the chamber about the parlous state of the public finances after four years of a Labor government. After four years of a Labor government, our public finances are in as bad a shape as they were when they last lost government. It is high time that there was a better government here in Australia. It is high time that Australians had a govern­ment that can bring back good financial and economic management.

The reason the government are incapable of answering questions properly is that they are worried about what the answers would reveal about their terribly incompetent way of managing our public finances. That is the reason why Wayne Swan is incapable, after 115 days, of answering a very basic question which goes to the core of the government's fiscal strategy, and that is: how much of the fiscal stimulus spending remains unspent? We need that information to be able to make a proper assessment of the fiscal strategy for Australia moving forward.