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

This government is incompetent, it is divided, it is deeply dysfunctional. It has senior ministers either at each other's throats or with knives in each other's backs. The motion that the government has put before the Senate today to change the program of Senate estimates less than a week before we fulfil that very important function of ours of holding the government to account is just another demonstration of the government's incompetence, the government's division and the government's deep dysfunction.

We have a Prime Minister under pressure. We have a Prime Minister who stuffed up the reshuffle. We have a Prime Minister who broke her promise to the Australian people not to introduce a carbon tax. We have a Prime Minister who stuffed up the mining tax deal. And, no doubt, because the Prime Minister is under so much pressure one of her spin doctors—perhaps the guy that she imported over from Britain, who used to be Tony Blair's spin doctor—said to her, 'Prime Minister, if you want to get rid of some of this pressure and if you want to get yourself into a better position you should try and shift the debate onto the economy'. This is extraordinary advice. It is advice that could only have come from somebody who has not experienced firsthand the disastrous economic and fiscal policy track record of this government over the past four years, consistent with the disastrous fiscal and economic track record of previous Labor governments.

But the Prime Minister took the advice. The Prime Minister tried to shift the debate onto the economy. Yesterday in the other place she said, 'Bring it on. Bring on the debate.' And at the first opportunity to engage on the economy and to put her government forward to the scrutiny of parliament on the performance of the government on the economy, what does the government do? They try to weaken the capacity of the Senate and they try to under­mine the capacity of the Senate Economics Committee to submit the government's performance in the economic area to some proper scrutiny.

The government claims that Australia is in so much better economic shape because of the actions of the Gillard Labor government. If that is the case, why are they not prepared to submit themselves to some proper, detailed and forensic questioning about that during Senate estimates? The reason the government does not want to submit themselves to some forensic questioning in Senate estimates is because they know that the claim does not stand up to scrutiny. They know that the claim that the Gillard govern­ment is somehow responsible for Australia's superior economic position in the world does not stand up to scrutiny.

The government know that four years ago they inherited a $22 billion surplus and a $70 billion net asset position by the Common­wealth. They know that over the last four years Labor has delivered $167 billion worth of accumulated deficits. They know that between the 2010-11 budget being announ­ced and the 2010-11 budget outcome—eventually—the budget position had deteriorated by more than $8 billion. They know that in 12 months the 2011-12 deficit deteriorated under this government from $12.3 billion to $22.6 billion to $37.1 billion by the time of the midyear economic and fiscal outlook.

This is a very important point, because this government, which is so afraid of public scrutiny of its economic performance, deliberately delayed the release of the midyear economic and fiscal outlook until after the parliament rose for the summer break in order to minimise scrutiny of the figures in that midyear economic and fiscal outlook.

The estimates Senate Economics Committee next week will be the first oppor­tunity to submit Treasury and the govern­ment to some detailed questioning about the figures in the midyear economic and fiscal outlook. And what does the government do? The government takes something out of the Education, Employment and Workplace Relations Committee—tertiary education, which has never been part of the Economics Committee—and puts it into the Economics Committee in order to squeeze down the time that we have to question the govern­ment about its economic performance. It is completely inappropriate.

It is not as if we have time to spare in the Senate Economics Committee. The Senate Economics Committee always runs out of time. There are always more important questions to be asked than what we have time for. And, of course, there is a lot of time wasting in the Senate Economics Committee because Labor senators, desperate to protect the weak, incompetent, divided and dysfunctional government, run interference whenever they can. And there is a lot of ducking and weaving going on, avoiding questions—taking 20 minutes to explain why a particular question cannot be answered before taking it on notice.

Here is this government's track record on openness and transparency after we were promised by the Prime Minister back in August 2010 that this would be a new era of openness and transparency: in the last Senate economics estimates Treasury took 851 questions on notice; today 303 of those questions remain unanswered. As we go into the estimates next week to scrutinise the midyear economic and fiscal outlook and to scrutinise the government's bad performance across the economic policy and fiscal areas; and as we go into estimates next week to scrutinise issues, initiatives and proposals like the bad mining tax, the carbon tax and all of the other revenue measures of the government, the government has allocated two hours. This is a high-spending, high-taxing government and it gives us two hours to ask questions about all of its various tax grabs. If you are going to be a high-taxing government you have to provide proper time for the parliament to be able to ask questions about all of your various tax measures. So 35.6 per cent of the questions taken on notice by Treasury remained unanswered; this is pretty concerning.

I will focus on a particular issue. The Senate is well aware and, Mr Acting Deputy President Cameron, you are well aware that I have a particular interest in the implications of Labor's bad mining tax, which came out of a bad process. In order to make the Senate economics estimates committee process as constructive and as productive as possible, before the last estimates I wrote to Secretary to the Treasury Dr Martin Parkinson to advise him specifically about a series of issues that I wanted to ask questions about in order to ensure that Treasury officials would be in a position to provide answers.

Mr Acting Deputy President, as you are well aware, the government has so far refused to release the mining tax revenue assumptions, commodity price assumptions, production volume assumptions and so on even though that is information that is readily released as part of the budget process in states like Queensland and Western Australia, whose revenue is sensitive to variations in those variables, as would be the case for the Commonwealth budget if the mining tax becomes law. For Treasurer Wayne Swan it is a national secret. He is not prepared to share the mining tax revenue assumptions; no doubt because he has something to hide and no doubt because the serious questions that have been raised about the credibility of the mining tax revenue estimates are justified.

I wrote to Dr Parkinson a week before the last estimates and said: 'The government has attached all of these promises to the mining tax. They have attached a promise to increase the superannuation guarantee from nine to 12 per cent; the superannuation tax rebate for low income earners; a 50 per cent discount on interest income; the increase of concessional contribution caps for over-50s; the phasing down of interest withholding on financial institutions; early company tax cuts for small business; small business instant asset write-offs; standard deductions for work related expenses; the lowering of company tax rates; and the regional infrastructure fund.' The government has never provided the proper costings over the forward estimates for these measures. When the initial Rudd version of the RSPT package was announced many of these measures only had one year to run in the forward estimates. Since then we are into yet another budget cycle and we now have three years where these particular measures are going to be part of the budget.

So we said we wanted to have the costings of each measure that the government has attached to the mining tax over the forward estimates. That is a very reasonable question to ask. We gave the Treasury secretary a week's notice before the last Senate estimates. When Senate estimates came along we thought, 'The senior Treasury official should be in a position to answer these questions,' and guess what? They spent 20 minutes explaining why they were not in a position to answer. When you look through all of the mumbo jumbo and the weasel words you find it was because the government did not want Treasury to provide answers to those questions.

Ultimately, Treasury took the questions on notice, and guess what? As of this morning answers to these questions have still not been provided. The government is refusing to let the Australian people know what all the promises it has attached to the mining tax will cost the budget, and we know why. The reason the government wants to hide this from the Australian people is it knows that its mining tax package is a fiscal train wreck in the making, and it is trying to cover it up and avoid the scrutiny.

I am sure that Treasury officials are telling the government privately what I am telling the Senate now, which is that the mining tax revenue is highly volatile and is downward trending over time. Right now we are in a situation where we have record terms of trade—the best terms of trade in 140 years. Revenue is at a high. It will be highly volatile because of commodity price changes, exchange rate changes and product­ion volume changes. It is highly volatile and downward trending. The cost of all the promises that Labor has irresponsibly attached to the mining tax is fixed and increasing over time. Over the medium to long term the mining tax package will seriously put the structural stability of the budget at risk.

Over the current forward estimates, based on the best available information put to the Senate inquiry into the mining tax and extracted from Treasury in various hearings, our best estimate is that already the cost of all the promises Labor has attached to the mining tax exceeds the revenue by more than $3 billion. Added to that is the fact that the Gillard government made a promise to the three big mining companies that it would credit all state and territory royalties against any mining tax liability. There you have another $3 billion black hole.

We will stand corrected, but in our estimation right now the mining tax package will leave the budget worse off to the tune of $6 billion over the current forward estimates. That is $2 billion in state royalty increases out of Western Australia, which the government has to credit against the MRRT, $1 billion because the New South Wales state government is increasing royalties on coal, and the three billion dollar difference between the cost of all the promises Labor has attached to the mining tax and the revenue it says it will generate. And there is a serious question mark about whether it will raise revenue at all because the Prime Minister, the Treasurer and the Minister for Resources and Energy, in their secret, exclusively negotiated mining tax deal, gave those three big mining companies a significant upfront tax deduction by giving them the opportunity to use the market valuation method. There is a serious question mark as to whether it will raise any revenue at all over the current forward estimates.

These are the sorts of questions that are appropriately pursued in the Senate economics committee, along with a series of other questions. Of course, these are the sorts of questions that the government continues to avoid. Here we have it: yesterday the mining tax bills hit the Senate. But to this day, on the three key issues we are confront­ing—how much the mining tax will raise, how much the promises that Labor has attached to the mining tax will cost and what the net effect on the budget is—the govern­ment is ducking and weaving to avoid scrutiny. Not only have they refused to answer the questions put to them in Senate economics estimates; they have also completely and flatly ignored a Senate order for the government to provide that information passed on 1 November 2011. So much for the promise by the Prime Minister of a new era of openness and transparency. I think it is fair to say that we can put that particular promise into the very, very long list of broken promises by this incompetent Prime Minister who does not know where to turn next to put out yet another bushfire.

We now have the Mid-Year Economic and Fiscal Outlook for 2011-12, which was released in December last year—just two or three months ago. It showed that the deficit in 12 months went from $12.3 billion for 2011-12 to $37.1 billion. That is a tripling in the course of 12 months. Clearly we need to explore in great detail the reasons for that. We have also seen there that the net debt position is now expected to go over $130 billion. In the Mid-Year Economic and Fiscal Outlook three months ago the government said that their expectation was that unemployment would be at 5.5 per cent in both 2011-12 and in 2012-13. Less than two months later the acting Treasurer, the would-like-to-be-Treasurer-soon, Mr Bill Shorten—who would like to probably be anything from Prime Minister down, however close he can get to it—conceded that the unemployment rate was expected to balloon to six per cent this year. So here we have the Mid-Year Economic and Fiscal Outlook in December 2011 which says the government expects unemployment to go to 5.5 per cent—up from 4.2 per cent when we were in government, by the by—both this financial year and next financial year, and less than two months later the acting Treasurer says, 'No, sorry; it's six per cent.' This government is all over the place. What are the implications of that for the budget bottom line? What does it mean for the government's claim that it will deliver a surplus in 2012-13? The $1.5 billion surplus they are claiming for 2012-13 is already a wafer-thin surplus.

To put that into context, the government's budget position deteriorated by more than $8 billion in 2010-11. It has so far deteriorated by more than $25 billion in 2011-12. But the government wants us to believe that, in the context of increasing unemployment and all of the wasteful spending that the government is pursuing on a regular basis as part of their DNA, somehow there is going to be this magical turnaround in 2012-13 and there is not going to be any deterioration whatsoever in the face of a $1.5 billion claimed surplus.

I would have thought that these are the sorts of areas that deserve proper scrutiny. But these are, of course, the sorts of issues that this government is desperate to avoid scrutiny on, which is why we get this stunt today where the government, with less than a week to go, comes into this chamber and tries to further squeeze down the time that this Senate has to ask important questions about the state of the economy, the state of the budget and the government's fiscal performance, if you can call it that. We get less than two hours to ask questions about all of Labor's new taxes and all of Labor's revenue measures, less than two hours to talk about the state of the economy and less than two hours to talk about all of the additional red tape that the government wants to impose on the financial services sector. This is just not serious. If the Prime Minister were serious about 'bringing it on', she would make sure that the Senate Economics Legislation Committee had a proper opportunity to scrutinise the government's performance. (Time expired)