Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Hansard source

Fully offset, Senator Wong, the fringe benefit tax on cars decision. And that was the major decision in that $3 billion.

We removed the self-education cap, which was a cap of $2,000. Eighty per cent of people who have self-education expenses of more than $2,000 earn less than $80,000 a year. A nurse on $55,000 a year, expending more than $2,000 on self-education was going to be $1,200 a year worse off as a result of what the government had enacted when it was scrambling to find money to pay for Gonski and other things.

So, yes, we took some hits to revenue, but we can justify every one of them. In net terms those hits were something around $1 billion because we had identified savings options on issues like the fringe benefits tax on cars before the election. So we are happy to stand in the public arena when the Mid-Year Economic and Fiscal Outlook is put out there and defend each of those measures and to set out the tasks that we have—the Everest we must climb.

Let me say in this regard that Senator Pratt referred before to what happened to the budget emergency. Do not take my word for it: go and get an article by Jessica Irvine—an independent journalist. She talked about the budget emergency last week. I mention a journalist because Senator Pratt mentioned TheAge. Go and get that article by Jessica Irvine which sets out in brutal detail the budget emergency.

The challenge we have in this country is that it really is like the boiling frog: the temperature is rising ever imperceptibly but conditions are getting hotter and hotter. And we are going to cook our goose if we—sorry to mix metaphors on geese and frogs!—are not able to get deficit debts under control because our population is ageing. The structure of our economy is changing and that is impacting on our revenue base. So we have real work to do. That is why there has been so much debate through the Productivity Commission report recently, and the Grattan Institute, about what we need to do about the various ages at which people become eligible for benefits. But that is for another day.

My point is simply this: there is a budget emergency, we are committed to bringing it under control and that is the substance of the issue, not the issues around debt limits or whatever. As I mentioned in earlier parts of this debate, economists like Ross Garnaut, Saul Eslake and others, who are not necessarily always friends of the coalition, made it quite clear that that debate is a sideshow. And the Secretary of the Treasury made it clear to us who were at the table at Senate estimates, including the Greens who were at the table—Senator Milne was there. The Treasury Secretary came under close questioning on these points, and he said that one of the options that had been raised with the government was the idea of abolishing the debt ceiling.

I actually think this is a much better way to go, ultimately. It will lead to a much more informed debate and I really think we should bring the matter on.