Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank all senators who have contributed to this debate, though listening to the contribution by Labor senators, I have to say it is very sad to see that Labor continues to be in complete denial about the debt and deficit disaster they left behind after six years of bad government. Labor created the budget mess that we are now dealing with. Labor created the budget mess that we are now working very hard to fix. But instead of taking responsibility for their mess by helping us to fix it, here they are—even more reckless and irresponsible than they were during their six years in government.

We know that in their first five budgets in government, Labor delivered $191 billion in accumulated deficits. Labor spent $191 billion more than they raised in revenue in their first five years in government and left us with a final budget—the 2013-14 budget—which projected another $123 billion in deficits. They put us on a trajectory that was taking us to a government debt of $667 billion within the decade and growing beyond that. Government spending as a share of GDP as a result of the decisions made by the previous government was heading for 26.5 per cent when our current tax revenue as a share of GDP ratio is below 22 per cent, with the long-term average at about 23.7 per cent. That is clearly unsustainable, clearly unaffordable and clearly unrealistic for the future.

Now here we are with the Labor Party recklessly and irresponsibly opposing $5 billion of their own savings—savings they initiated in their last budget; savings they banked in their last budget; savings they failed to legislate because they were either too lazy, too incompetent or in too much confusion and chaos, given all of the leadership turmoil that took place post the last budget. Whatever the reason, they failed to legislate $5 billion in savings they had already banked in their last budget. Now we are doing the heavy lifting and the hard yards to do their work for them, they are turning around and saying: 'No, we are going to oppose that.'

All up, Labor is currently opposing nearly $40 billion in savings measures. Do we have an alternative plan from Labor on how they would fix the budget mess they left behind? No, we do not. There is no alternative plan—just politics, just reckless and irresponsible posturing that is even worse than what we experienced during a period of government that was bad enough for Australia—the Rudd-Gillard government.

Clearly what Labor wants us to do after $191 billion in deficits in their first five budgets, after another $123 billion in projected deficits in their last budget, is to continue to borrow from our children and grandchildren to fund our lifestyle and consumption today. Labor wants us to continue to borrow from our children and grandchildren so we can give the money away in various cash handouts which Labor does not want us to remove. That is incredibly reckless and irresponsible, because what will the effect be? The effect will be to reduce opportunity for our children and grandchildren, to force our children and grandchildren to pay the price for Labor's cash handouts today with interest, either through higher taxes then or through lower spending then. There are no two ways about it: at the end of the day, government cannot keep spending money that it has not got, and that is a fundamental truth that Labor just does not seem to understand.

The point that every senator in this chamber has to reflect on is that, while you might think that some of the measures in our budget are tough, if we do not start making the decisions required in order to get our spending on a more sustainable, realistic and affordable growth trajectory today, those decisions will only become harder. It will not become easier from here. If we continue to borrow from our children and grandchildren to fund our lifestyle today and in order to give cash handouts, it will only become harder when, ultimately, we have to make decisions to get Labor's budget mess back under control.

In conclusion, I was listening to Senator Lundy's remarks there and I was struck by how she said that she had been here during the period when the Howard government delivered its first budget back in 1996, and how all of this was deja vu. What I would say to Senator Lundy and to all Labor senators, and indeed to all senators in this chamber, is this: just reflect on where that journey led us. In 1996—it is indeed deja vu—we had a coalition government which, like us, inherited a budget in a mess, courtesy of a previous Labor government. We had a government that had to make tough but necessary decisions in order to get us back on track, in order to ensure that government spending was sustainable and affordable into the future.

And where did that lead us? It led us to a very strong economy, to the government having no debt and to a strong surplus. The Howard government not only paid back all of Labor's debt and delivered surplus budgets but were able to deliver tax cuts and improved benefits and services on the back of their sound financial management. That is exactly what this government wants to do; that is exactly what this government is committed to. We are committed to repairing the budget mess we have inherited from Labor and to imposing sound financial management principles on our budget so that, over time—as we get our budget back under control, as we build a stronger more prosperous economy where everyone has the opportunity to get ahead—we can again, on the back of a sound and strong fiscal position, make the sorts of judgements that we have been able to make in the past.

That is the journey we are on. We are not doing any of this for fun. We are doing it because it has to be done and because not doing it now will only make it harder to ensure that we can live within our means in the future. With those few words, I commend these bills to the Senate.

Question agreed to.

Bills read a second time.