Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Evans. Can the minister confirm that Labor has budgeted for a deficit of more than $40,000 million next financial year, the second biggest budget deficit in Australia’s history, beaten only by Labor’s record-breaking $57,000 million deficit this financial year?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

It is fair to say that I had not prepared for that question, because I was not down for a dorothy. I do not know whether Senator Abetz has read the papers, but I think he will find that people have universally acknowledged that the government has delivered a responsible budget—one that is very much focused on repaying debt and one that has at its core the early repayment of debt. Three years early the debt will be repaid compared to the budget forecast from last year. So not only are we in a situation whereby our current conditions have our economy stronger than all other comparable economies—we are in very good shape—but the government has taken advantage of those conditions and the fact that we have come through the global financial crisis in such good shape as a result of the government’s investment in the stimulus activity to protect Australian jobs. Having come through that, this government has delivered a fiscally conservative budget—one that focuses on repaying debt and meets the constraints that we predicted we would apply.

So what we know is that we will repay debt three years early. The whole focus of the budget is on making sure that we repay debt as the economy recovers, that we have limited new spending and offset new spending with savings and that we are very much focused on returning the economy to a situation where we are in the black as quickly as possible. Unless Senator Abetz has missed all the commentary, even from those who are critical of the budget, he will know that they acknowledge that that is the centrepiece of the government’s response: getting rid of our debt as quickly as possible and taking advantage of the strong economic position we find ourselves in as a result of the government’s effective management of the economy— (Time expired)

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! On both sides I need order.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister confirm that, in order to fund its deficit and, as we have just been told, to focus on repaying debt as quickly as possible, the government is in fact borrowing $783 million every week—that is, some $77,000 every minute of every hour of every day?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Again I am perplexed as to why the senator seems to have missed the key component of the budget. The budget sees this country repaying its debt faster than any of the other major industrialised economies. We will be debt free before all our competing major industrialised countries. We already have lower unemployment rates and we have less debt as a proportion of our economy, but this budget delivers the return to surplus three years early. It is repaying the debt that was accumulated as we protected Australian jobs. We stimulated the economy to protect Australian jobs. What people ought to focus on is the figure for unemployment projection—down to 4¾ per cent. That is a great result for Australians. (Time expired)

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order on both sides! Senator Abetz is entitled to be heard in silence.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that within just three years Labor has turned $44,800 million in the bank into a debt of $78,500 million, a turnaround of $123,000 million, how can Labor seriously claim to be economic conservatives? Has any other government in Australian history ever racked up so much debt so fast, or is this another Labor first? (Time expired)

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! If senators wish to debate this, there is time at the end of question time.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I do not know whether Senator Abetz is operating in a parallel universe to everybody else, but, as I reiterate, the key direction of the budget was an attempt to reduce the deficit as quickly as possible. We set out to do that, and we achieved that three years early. Three years earlier than expected last budget, the budget will be back in the black. So that has been the focus. I do not know what Senator Abetz has missed, but that is the clear focus. We have kept fiscal constraint on the budget, we have matched all new spending with savings and we have focused the return to economic growth on reducing the debt. The budget delivers on that, everyone has recognised that and I think it is a hallmark of a very good budget.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer, Senator Sherry. Does the fiscally disciplined budget delivered last night by the Treasurer deliver on the Rudd government’s pledge to reduce taxes for working families, and has the Rudd government included in its third budget initiatives to ease the cost of living pressures on Australians?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

In addition to the issues touched on by my leader, Senator Evans—the budget delivering the lowest debt and deficit of any advanced economy in the world, and bringing the budget back into the black; into surplus three years early—there were a number of other important measures. One that I want to highlight to the Senate goes to a significant and major personal tax simplification. It is important that the government take action to address issues of cost of living pressures for working families and reward them for their efforts during the global financial recession.

From 1 July 2012, taxpayers will be able to claim a $500 standard deduction for work related expenses. This will increase to up to $1,000 a year later. Under the current system, as I am sure everyone is aware, taxpayers face costly and unneeded complexity as they try to interpret what is deductible, to quantify work related costs correctly and apportion expenses between income earning purposes and private purposes. Providing a standard deduction will remove this burden from many taxpayers.

No taxpayers will be disadvantaged. Taxpayers with expenses above the standard deduction will be able to continue to claim these expenses when lodging their tax returns. This will benefit 4.6 million taxpayers in 2012-13, and some 6.4 million taxpayers when that quantum increases to $1,000. Those 6.4 million taxpayers will no longer have to participate in complex claims. The standard deduction initiative delivers on another important recommendation of the independent Australia’s future tax system—report to the Treasurer.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. What other day-to-day benefits for ordinary Australians will the Rudd government’s responsible budget and strong economic management deliver?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Thank you. I have already outlined one very significant benefit, predominately for low- to middle-income earners, given the level of deductions they have in respect of the tax system.

We have also fulfilled our election commitment to working families by delivering a third round of tax cuts from 1 July. This includes lifting the low-income tax offset to $1,500 to provide an effective tax-free threshold of $16,000 for Australians with incomes up to $30,000. This third round of personal tax cuts means a person on $50,000 will be $450 per year better off than last year.

The same taxpayer will now be paying $1,750 less in personal income tax than they were when this government came to office. And, of course, this is at a time of global financial and economic crisis, which saw our budget go into deficit as a consequence. We have still delivered on our election promises in respect of tax cuts. (Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the Assistant Treasurer aware of any risks to the Rudd government’s bold plans for tax relief and to lower cost of living pressures on Australians?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Thank you. Before I get to risks, a third benefit is the 50 per cent discount on tax payable on interest income up to $1,000. That is another important benefit.

The real risk, of course, is that which we see from those opposite. The challenge is now down to those opposite—the Liberal and National parties under the leadership of Mr Abbott. When will you deliver a budget surplus? Will you deliver it any time sooner than this government has delivered it against the backdrop of a world financial and economic crisis?

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

That’s not relevant to the question!

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Name your dates! Name your date when you will put the budget back into surplus. Identify the savings!

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education and School Curriculum Standards) Share this | Link to this | Hansard source

Bring it on!

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Identify the savings! Fess up and tell us what you are going to do to keep—

John Hogg (President) Share this | Link to this | Hansard source

Order! Senator Sherry, you should address your comments to the chair. Those on my left should not interject.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

It is time those opposite fessed up. When are they going to deliver a budget surplus earlier? Where are they going to cut? When are they going to make the savings? Where are they going to make the savings? Plenty of glib lines, but no policy from those opposite—no responsible policy— (Time expired)