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

The Gillard government's budget is indeed a budget of cooked books, with the toxic carbon tax as its centrepiece and with yet more debt. Before I make any observations about last night's budget, let me make this observation about what has just happened in the Senate. When it comes to spending taxpayers' money as fast as possible, this Labor government has no shame. This Labor government has no shame when it comes to getting taxpayers' dollars out the door as quickly as possible. What just happened is the first step, the first instalment, in executing Labor's cooking of the books. What just happened was all about helping this dodgy Labor government deceive the Australian people, make the Australian people believe that somehow there will be a genuine surplus in 2012-13, when of course when it is all said and done there is certainly no prospect of there being anything near a budget surplus delivered by this Labor government.

This budget does nothing to strengthen our economy in the face of serious economic storm clouds on the global horizon. In fact it does not cut spending and it does increase taxes, and of course it lifts the debt ceiling yet again to $300 billion. And of course it does impose the world's largest carbon tax on the Australian people—a tax which we were promised we would not get, which will push up the cost of living, which will make Australia less competitive internationally, which will increase the cost of doing business in Australia, which will cost jobs and which will impose all those economic sacrifices on the people of Australia without doing anything whatsoever to reduce emissions either on a global level or here in Australia.

In the budget tabled by the Treasurer last night there is no consistent economic strategy and there is no specific focus on increasing our productivity and international competitiveness. It was a traditional Labor budget—a budget with more spending, more taxes and more debt. The government this time around promised that it would deliver a surplus in 2012-13. Minister Shorten this morning was getting a bit ahead of himself—he was already saying at a breakfast with about 600 accountants that the government had delivered a surplus, that the budget was now back in surplus. Of course I had to remind Minister Shorten this morning, as I remind Labor senators in this chamber, that, no, this government has not delivered a surplus; this government has not got the budget back into surplus—all this government has done is promise a surplus, because right now we are of course in a massive deficit situation.

Let me talk for a moment about what we do know about where our public finances are at. We know that in this financial year, according to the budget tabled last night, our deficit will be $44.4 billion. That is quite staggering. There are still six weeks to go in this financial year, so who knows how much more spending they can rack up on the nation's credit card in this last six weeks. I just reflect on the fact that when this government went to the last election, when it released its pre-election economic and fiscal outlook, we were told that the deficit this financial year would be $10.4 billion—and $10.4 billion is already a very serious deficit. It is clearly evidence of a government that does not know how to live within its means, that does not know how to manage money, that does not know how to manage public finances carefully; $10.4 billion is a very serious deficit in anyone's imagination.

Within three months of that statement having been made by the Labor Party before the last election, the deficit for this financial year had gone to $12.3 billion and by the time of the budget last year it was a deficit of $22.6 billion. By the time of the Mid-Year Economic and Fiscal Outlook, just before Christmas last year, it was a deficit of $37.1 billion, and now it is going to be a staggering deficit of $44.4 billion. That is a blow-out in the deficit for this financial year of more than $34 billion since the last election. How can anyone take seriously what this government says when it tries to make us believe that somehow in 2012-13 it will deliver a wafer-thin surplus of $1.5 billion. Of course it will not.

The government has used every accounting trick in the book to make it look like it will deliver a surplus in 2012-13. It has shifted expenditure from 2012-13 to 2011-12. Shifting expenditure for next financial year into this financial year is not a spending cut in 2012-13—it is cooking the books to create the illusion that there will be a surplus, to make people believe something that is not there, to deceive the Australian people yet again. People across Australia understand that this is what is being done. People across Australia are not being fooled by this. People across Australia know that this is a government that over the last four budgets has delivered $174 billion worth of accumulated deficits. People across Australia know that this government inherited a strong budget position. This government inherited a budget with no government net debt and with a $22 billion surplus. The government inherited a budget position where we had invested $60 billion in accumulated surpluses in the Future Fund, in order to cover the expense of future Public Service superannuation liabilities. And what has this reckless, incompetent, weak, divided and dysfunctional government done? They have been spending like drunken sailors. They have not been able to balance the books in a single budget so far when they have had to deliver a budget outcome, despite having benefited from the best terms of trade in 140 years and despite having imposed more than 20 new and ad hoc taxes on the people of Australia.

This is not the only thing the Labor Party have done to cook the books. They have done the shifting of spending from this year into next year, rather than cut spending. They have also done the typical Labor Party trick where they have included the most optimistic revenue growth forecasts in 25 years. This Treasurer has a habit of making overly optimistic revenue growth forecasts. To take you back a couple of months to the Mid-Year Economic and Fiscal Outlook just before Christmas, the government downgraded their GDP growth forecasts and, at the same time, they massively upgraded the expectation of revenue from company tax receipts. Of course it did not make sense and, sure enough, what happened? The revenue did not come in according to expectations. The revenue was lower than expectations because the Treasurer's expectations were wildly excessive and wildly overoptimistic. And when that eventually came out the Treasurer threw his hands up in the air and said, 'The revenue's been falling away. The revenue is not what we thought it would be.' Of course it was never going to be and a prudent government, a government that manages our public finances properly plans for this.

So what has the government done in this budget? The government wants us to believe that between this year and next year government revenue will increase by a staggering 11.8 per cent or $39 billion. The government wants us to believe that revenue will increase to about $369 billion, even though the terms of trade have been downgraded to 5¾ per cent and even though our GDP growth is still expected to be only 3¼ per cent. We have not seen this sort of revenue growth in more than 25 years. At that time we were experiencing significantly stronger growth in the terms of trade.

There is much I could say about this budget but let me conclude by saying this. This is a typical Labor budget. It is a spend, tax, high-debt budget. It is a budget for which generations of Australians will have to pay for many years to come. Of course, already in this budget many Australians are being asked to pay the price for the reckless and wasteful spending of this bad Labor administration over the last four and a bit years.