Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Hansard source

We can get to that in a minute, if you like, Senator Ludlam, but the faith we put in our fellow man is to be optimistic. This coalition is optimistic about the human condition and puts its faith in people.

We see the government's relentless negativity in its focus on class warfare, pitting one Australian against another. In his maiden speech—maiden speeches are always very interesting—Wayne Swan talked about the bosses and workers, and recently the Treasurer, Mr Swan, returned to the theme of class warfare, pitting one Australian against another. He talks almost as if the economy is a zero-sum game, where my gain is at your expense. No, you put your faith in individuals, they grow the pie and we are all better off. That is not trickle-down economics; that is fundamental market based economics.

This class warfare focuses on promoting a now mythical working class—I say 'mythical' because most working Australians today are aspirational, and the Labor Party has left them behind. That is what has happened. The former Leader of the Australian Labor Party, Paul Keating, laments to this day the way in which the Labor Party has failed to embrace the aspirational classes that he claims were to some extent created by the Hawke-Keating economic reforms, carried on by the Howard-Costello government. He is right. Too often Labor speaks in class terms and not in aspirational terms. It does not seek to embrace those who are trying to do better.

You see this in the budget policies, which try and knock the tall poppies off. Labor tries to introduce more and more means testing into the system, and often these means tests are not at really high levels. We are talking about means tests which are now cutting in at increasingly lower levels. That stops people from working more hours. It disincentivises people. That is relentlessly negative. We talk about the need to raise revenue in this country. The government talks about tax as the solution—we need to tax more. That is relentlessly negative, because more tax means more disincentives. That is why we need to look at reducing spending and reducing the obligations that future generations inherit on our behalf.

We talk about a future economic growth scenario for the country. I contrast Australia with the United States, where, by hook or by crook, perhaps through a mixture of good luck and good management, they have developed a more competitive economic structure off the back of recent discoveries of oil, gas, shale and all the rest of it. I mention that not to particularly praise one energy source but to make the point that they are finding new drivers of competitiveness. We are going in the opposite direction. Our costs are going up relative to the rest of the world. It is not just the high dollar; our costs are going up across the board. The United States are finding ways to reduce their costs and are now driving manufacturing onshore when it used to be offshore. Parts of the United States are actually getting manufacturing back, and they do not need an industry plan from Washington to do that; it is happening because the market is dictating through these competitiveness changes that more manufacturing comes back onshore. And, of course, the American market is famously very flexible, including the labour market.

But where is the competitiveness agenda here, in this country, under this government? The manufacturing and innovation statement released the other day was a relentlessly negative document for two reasons. First of all, a so-called $1 billion spend is a net spend of possibly $600 million or less. In other words, about half of it appears to be spending which will not actually happen but will be diverted to funding other budget measures. In other words, the net new spending is $600 million or thereabouts; the $1 billion package as such does not exist. The main savings proposal is to reduce the access of large Australian companies and multinationals to the R&D tax incentive. It applies to companies above a certain threshold. According to advice that has been tendered in the newspapers, the Department of Innovation, Industry, Science and Research and, I think, the tax office have warned that these large companies may rearrange their operations in order to fall below the threshold and, therefore, retain their eligibility for the R&D tax incentive. That means that saving may not be there. How relentlessly negative is that? The $1 billion spend is not what they said it would be and the main savings measure may not make the savings that are being claimed. Why is that relentlessly negative? Again, here is another set of policy proposals which will actually increase the call on public resources and on borrowings.

We have already seen it with the mining resource rent tax—$126 million raised this year. There is one more instalment to go. It will get nowhere near the two or three billion dollars it was meant to raise. We have seen the carbon tax which, if Labor is re-elected, will leave a black hole of potentially $4 billion by 2015—because when we link with the European market there is no way the Europeans will inflict a $29 a tonne carbon price on themselves by 2015 in order to please the Australian Treasury.

If only we had that power in the world, so that we could say to the Europeans, 'Fix the carbon price at $29 a tonne in 2015.' We could say to the United States, 'Do this or that for us.' We could say to the Middle East, 'Peace is around the corner. We ordain peace.' We cannot do any of that. We cannot rely on the Europeans to provide us with a carbon price which protects the revenue built into the budget. It will be a very interesting budget in May, where the government will have to front up about the potential revenue from a carbon tax in 2015-16. So, again, both the mining tax and the carbon tax are spending linked, and that spending will have to be paid for by borrowings.