Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Hansard source

I can't leave these statements unanswered. The 2019 PEFO, independently released by the secretaries of Treasury and Finance, completely destroys any claims about supposed hidden spending cuts in our budget. They are ridiculous claims and they have been exposed as just another lie during the campaign. There are no assumed, undisclosed future spending cuts in the government's medium-term projections.

In contrast, though, when Labor were last in government what did Labor do? They assumed that a spending quote would be able to be contained to two per cent in real terms, year on year. Indeed, the 2013 PEFO exposed that Labor backed secret, undisclosed—in fact, then undecided—future spending cuts into the medium-term projections in the 2013-14 budget. The 2013 PEFO reported that real payments growth was expected to average 3.5 per cent per year over the medium-term, which was ignored by the then Labor government. They ignored that fiscal reality in front of them. Instead of doing the hard yards on saving decisions, their spending projections were artificially based on an imposed forecasting assumption that real spending growth would be kept below two per cent on average per year until the budget was in surplus of one per cent as a share of GDP.

Neither Labor's track record of actual real spending growth of four per cent on average per year during their time in office nor their own underlying spending growth projections of 3.5 per cent beyond the then forward estimates supported that forecasting assumption of two per cent. Imposing that two per cent cap on real expenditure growth on their medium-term expenditure projections, irrespective of what was actually expected to happen at the time, effectively locked in $175 billion of secret, undisclosed—in fact, then undecided—future spending cuts over that medium-term period into their budget.

In our budget—I'll say it again—the secretaries of Finance and Treasury made very clear that there are no assumed future spending cuts in our medium-term projections. The medium-term projections are based on an assumption of no policy change. That includes an assumption of no policy change to reduce expenditure.