Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

On behalf of Senator Fifield, I move:

That the Senate notes the Labor Government's ceaseless and ongoing commitment to debt and to deficit budgeting, which is putting upward pressure on interest rates and further pressure on household budgets.

Earlier this week Senator Wong, our Minister for Finance and Deregulation, made a very insightful remark to the Sydney Morning Herald. She said that this budget would be 'a Labor budget'. Of course, that was quite at odds with all of the things that we had been led to believe before. We were led to believe that this would be a tough budget, but here she is, the day before the budget, letting the cat out of the bag by saying it would be a Labor budget. And a Labor budget it was: a budget with more waste, more taxes, more deficits, more debt, more class warfare; targeting those Australians who are aspirational, who want to get ahead; trying to penalise success. And, of course, we have had more spin, trying to mislead the Australian people over what was truly happening.

This government wants to make us believe that this is a tough budget. This government wants to make us believe that it has have saved money in this budget. This govern­ment wants to make us believe that it has made tough decisions to cut spending. The Treasurer in his budget speech on Tuesday night said that he had made tough decisions to cut spending to the tune of $22 billion. You know what? The biggest single indi­vidual so-called spending cut in the list of $22 billion worth of spending cuts is the $1.725 billion flood tax. I am sure that people across Australia would agree with us that a tax is not a spending cut.

Let us look at the detail in this budget. Spending over the forward estimates is up by $19 billion. That is on the basis of decisions made over the last six months, since we had MYEFO back in November. So in the last six months this government has made decisions that have increased spending by $19 billion. The government tell us that that has been offset by $22 billion worth of spending cuts. The government tries to make us believe we are still ahead. Well, if it was not for new taxes like the flood tax, if it was not for other tax increases, if it was not for other revenue measures to the tune of $6.2 billion, this government is actually increas­ing net spending over the forward estimates, not reducing it. So that is the first big lie by the Treasurer, Wayne Swan, on Tuesday in relation to the budget.

This government wants to make us believe that somehow the budget is going to be back in the black in 2012-13. That is just completely unbelievable. This year the budget position has deteriorated by about $8 billion, to take us to the second largest deficit in the history of the Commonwealth—a deficit of $50 billion this year. The budget position for next year has deteriorated to the tune of $10.3 billion, to take us to another deficit, of $22.6 billion. Yet, miraculously, in the year 2012-13 where the Treasurer has put his political capital on the line, not only is there not going to be any deterioration at all, there is going to be a significant turnaround.

We actually have the strongest terms of trade in 140 years of Australian history now. The budget should be in a much stronger position now. The budget should be in surplus now. If it had not been for Labor's waste and mismanagement, for their incom­petence across many areas in government, there would be no need for us to be in this deficit position. And in no area is this more obvious than in Labor's failed approach to border protection.

I remember well when, back in August 2008, they came into this chamber, as sanctimonious as anything, telling us how offshore processing did not work, how temporary protection visas did not work: 'We can do away with all this. We're going to have a compassionate response. We think that what you guys did was totally inapp­ropriate.' What did they do? They dismantled a system that worked. They dismantled a strong border protection system, a system that had stopped the boats, and the results are there for all to see. In the last year of the Howard government we spent $100 million a year on managing illegal arrivals. You know what the government is spending next year? More than $1 billion. That is more than a tenfold increase in less than four years. Over the forward estimates, the budget to manage illegal boat arrivals at our borders is increasing by $1.75 billion. If you put that against the $2 billion assault on working families across Australia then you really get a sense of the wrong priorities of this government. This government does not care about the cost-of-living pressures faced by families across Australia. This government needs to make those families pay for the incompetence across so many areas in government, in particular its failure and its bad decision to dismantle our strong border protection policies back in August 2008.

This government is borrowing right now $135 million a day. This government is spending about $20 million a day every day of every week of every month of every year over the next four years. That is $26 billion in interest payments over the forward estimates because of the incredible blow-out in the level of debt.

Wayne Swan and Penny Wong, on Tuesday night, could not bring themselves to mention the debt figure. They were too embarrassed. They were too ashamed. They could not spell out the words '$107 billion worth of net debt'—up from $94 billion net debt only last year.

After the Treasurer had finished his speech, everybody was out there patting him on the back—not everyone but some Labor members, while others got out of the chamber very quickly—and what happened that night? Bill Shorten snuck in quietly, introduced the appropriations bill and, on the sly, came in and asked the parliament to increase the debt ceiling—the approved level of debt the government is allowed to take out—by another $50 billion.

Madam Acting Deputy President, you may well remember, as all of this on this side of the chamber do, that two years ago the government asked the parliament to more than double the debt ceiling. It went up from $75 billion to $200 billion. Actually, there was a little proviso attached to it that this would be for special circumstances, that the Treasurer would have to make a declaration, which had to be gazetted and tabled in both houses of parliament, and that there would have to be a statement explaining the reasons as to why the additional debt was justified.

You know what the government now wants to do? They want this parliament to give the government a blank cheque to put another $50 billion worth of debt on the Labor government's credit card. They want to repeal the requirement to table the statement of reasons in both houses of parlia­ment. They want to repeal the requirement to have the special circumstances declared in the government's Gazette. Madam Acting Deputy President, you tell me why that would be justified.

The Minister for Finance and Deregulation, Senator Wong, today was certainly not able to explain it. She sneers at us, she abuses us, but she does not provide any explanation. When she refuses to provide explanations to us, she refuses to provide explanations to the Australian people. Minister Wong was not prepared to tell us today when the government expects to reach its current debt ceiling of $200 billion. This is important because we have two figures in the budget papers. We have got the figure of the face value of the government securities that are out there, which is expected to be about $192 billion by 30 June. In the balance sheet, the same government securities are presented on the basis of market value. The market value of government securities right now is expected to be $200.6 billion by the end of June. That is less than six weeks away.

There is no information at all as to when the government expects to reach the $200 billion limit. The government must have known for a long time that it was borrowing so much money and spending so much that it would need to come back to this parliament to ask for approval to borrow more money. Why has it left it so late? It is just another example of this government's absolute incompetence in managing the budget. This government is so out of control when it comes to spending that it cannot keep up with the need to organise the process to get hold of some more money so that it can spend and waste some more of it.

This government has to provide a proper explanation as to why it needs another $50 billion dollars worth of debt and why the parliament should approve another $50 billion worth of debt. The reason the parliament needs that explanation is that the Australian people deserve that explanation. It is quite extraordinary that Minister Wong today was either unable or unwilling to come clean with when the government, based on its projections, expects to run out of money unless the parliament agrees to this additional $50 billion for the Labor govern­ment's credit card.

This is a budget which will hurt Austral­ian families much more than this government is prepared to let people know, because there is a big hole at the heart of this budget. This government has told us that there will be a carbon tax come 1 July 2012. The Prime Minister told us before the last election, looking down the barrel of the camera, 'There will be no carbon tax under the gov­ernment I lead.' Given that she had to come to some understanding with Senator Bob Brown and the Greens so she could scrape back into government, of course we now know there will be a carbon tax from 1 July 2012 if this parliament happens to agree to it.

If there is going to be a carbon tax from 1 July 2012, we know that the revenue figures, the expenditure figures, the inflation figures, the growth figures and the employment figures are all wrong from 2012-13. That just happens to be the year that the government tells us it is going to be back in surplus. But it has left a $12 billion-a-year tax out of the budget. It has left the economic impact of a $12 billion-a-year tax out of the budget. It has left the cost-of-living impacts on Austra­lian families from the carbon tax out of the budget. It has left the impact of a carbon tax on jobs and our international competitiveness out of the budget. This is very different from the way the government has been going about the mining tax. The mining tax has been in the budget for 12 months. It is supposed to come into effect on the same day, 1 July 2012.Madam Acting Deputy President Boyce, do you know why the Labor Party treats the mining tax differently from the carbon tax? Because the govern­ment needs the cash from the mining tax in its budget now so it can create the illusion of an early surplus.

One of the many fundamental flaws of the mining tax is that it will worsen the structural deficit of Australia because the revenue is high now when we have record terms of trade. It is expected to go down over time as a supply response in commodities will necessarily see a reduction in current record commodity prices, but the related budget expenditures that the government has put out will go up significantly over the next decade. There is hardly any expense at all in the budget related to the mining tax right now, but there is a lot of revenue in the early years. The revenue is going to go down over the years and the expenses that are related to it are going to go up and the expenses are going to be more than the revenue that will be collected from the mining tax. This mining tax is worsening the long-term structural deficit of this government.

But that was not the Treasurer's worry. The Treasurer was only worried about one thing. He was worried about 2012-13. As long as he could get enough cash out of the mining tax to create the illusion of an early surplus based on record terms of trade then he was not worried about the long-term impact on our public finances. This is how this government does business.

The Treasurer's hollow men, the Treasurer's spin doctors and the Prime Minister's spin doctors have been working the press gallery overtime over the last week, saying this is what the Howard government used to do, that when the Howard govern­ment announced the GST they did not put it in the budget. That is completely false, that is completely incorrect. The GST was announced by the then Howard government, by John Howard and Peter Costello, in August 1998. We went to an election in October 1998, and that is my first very im­portant point. Not only did we not introduce the GST without taking it to the Australian people, but we put it into the next budget. The announcement was made, we went to an election, we put it in the budget.

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

We got a mandate.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

As Senator Humphries said, we got a mandate from the Australian people. The GST was announced in August 1998, we had an election in October 1998 and the next budget, in May 1999, contained all of the budget information about the GST. These are the sorts of misleading statements that the spin doctors of this deceitful government go out and spread in the press gallery. I could go through a whole list of other examples, but I will not bore you with it today.

This is a government that does not care about the cost-of-living pressures faced by Australian families. This is a government that has Australian families squarely in its sights. Do you know which families it has in its sights in particular? Families that aspire to get ahead, families that want to do the best for their family. They want to get a better job, they want to earn some more money, and what is going to happen if they do so under this government? They will be hit with more penalising taxes or with variations of tax, taking tax breaks away from them. This is what the Labor Party does. There is a range of examples. For sometime now we have had on the government's book the proposal to abolish the private health insurance rebate for millions of Australians. This is an absolutely ridiculous proposal.

I was on Richo last night and I will share my experience with the chamber. Former Senator Graham Richardson was the federal Minister for Health back in 1993. He inherited that portfolio after 10 years of Labor government attacks on the private health system. The private health system was collapsing when Senator Graham Richardson became the federal Minister for Health. Private health insurance membership was in freefall and former Senator Richardson was desperately trying to do something to halt the decline. Do you know what he came up with as a proposal at the time? He proposed to have a Medicare levy surcharge. He proposed to have a surcharge applied to those Australians without private health insurance that earned above certain thresholds. Of course, Paul Keating and the unions stopped him from doing it. They stopped him from getting away with it.

John Howard and the Howard government introduced a package of measures that restored balance to our health system, that actually provided incentive for Australians to take additional responsibility for their healthcare needs, that encouraged them to take out private health insurance to take the burden off our public hospitals. This was a very, very successful package of initiatives. What has this government done? They have not learnt from history; they want to go back to the failures of the Hawke-Keating government; they want to again attack and pursue those Australians who are prepared to take additional responsibility for their healthcare needs by taking the private health insurance rebate away from them.

This budget is full of class warfare. It is full of more taxes, it is full of more waste. The debt and deficit are blowing out and this a very sad situation for Australia. It is time that we return to good government. It is time that we return to a coalition government which can restore strength and resilience to our budget and which can restore strength and resilience to our economy.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Cormann was certainly very loyal to the coalition in that he did not give away any of Mr Abbott's budget reply speech. Certainly he presented nothing new to us. He ran along the same old tracks of trying to make a case that the coalition are better economic managers than the Labor Party. But in fact this budget is quite solid proof that the opposite is true. Labor has presented a budget that is a solid foundation for the future, as have been the last couple of budgets. This makes a nonsense of the motion that we have before us. As Senator Cormann did, I will read it out:

The Senate notes the Labor government's ceaseless and ongoing commitment to debt and to deficit budgeting …'A ceaseless and ongoing commitment to debt and deficit budgeting' which will cease next year—

So much for the veracity of that part of the statement. This is a solid commitment which has been a commitment of the Labor government for some years now. The Labor government is committed to a surplus in 2012-13 and this budget shows that the Labor Party is able to and will deliver a surplus next year and that those surpluses will continue. That is completely reflected in this budget and upholds the Labor government's commitment.

Once again we have heard 20 minutes of debate from members of the coalition government where they conveniently overlook that the world has experienced one of the greatest financial crises in 70 years, that the GFC was real, that quick action was required and that the Labor Party took that action. The Labor Party took necessary measures to ensure that our country was not plunged into a recession. Australia was one of the only countries that got out of the crisis relatively unscathed, but that does not mean it was not affected. What is horrifying is that had we taken the coalition's approach Australia would have been probably in greater deficit because we would have coped with falling economic revenue from the effect of being in recession and we would have had major unemployment with the depressing effect that has on the economy and on revenue and the resultant increase in welfare expenditure.

The Labor government tackled that issue in the teeth of opposition from the coalition parties and introduced stimulus spending. Stimulus spending was targeted to have longer term benefits in the way of infrastructure. Having spent the last few weeks going to a number of country areas in the Yorke and Eyre peninsulas and opening much-needed infrastructure in those schools in the form of libraries, outdoor areas and classrooms, I at least saw very clearly and practically the effect of this stimulus spending. The government committed that stimulus spending and Australia came out of the GFC relatively well. At the time the Labor government promised that we would, at the right time, reduce that stimulus spending and put the economy back on an even keel, and that is what we have delivered in this budget. Thankfully, the Labor government did have that vision and foresight, because over 700,000 jobs have been created since Labor was elected in 2007.

What are the economic credentials of the coalition government? Again, we hear time after time, and one understands this, the coalition spruik their economic credentials. In fact the evidence shows the opposite—first of all in their response to what was happening with the GFC and, second, in the economic outlook that they took to the last election—the $11 billion black hole. If the coalition government had been put into office at the last election, they would have started off with another $11 billion of expenditure that they had to take over. They tell us that they would have returned the budget to surplus earlier—that they would have returned this year. It is laughable really, quite laughable.

To go back to the budget, not only did the Labor government have to cope with the effects of the GFC, which we are now overcoming, but of course we had the effects of terrible floods and natural disasters which have softened the revenue side of the budget. That has affected the first two years of the budget. However, the surplus is still there and it is still on track. Another significant problem which the government have had to face is that, yes, our terms of trade are very good at the moment but there is the well-canvassed matter of the patchwork economy, of trying to get into our economy a system which will spread the benefits of the increase in mining revenue to all Australians and to have a more even growth. I think that the government are doing a very good job in this budget to ensure that that happens.

It is a tough budget in some senses. There has been cutting in expenditure to make sure that we are not adding to the inflation and cost-of-living pressures in the years ahead. The Labor government understand those pressures very well, unlike, one might say, the Howard government in the final years of its government when Australians were faced with one interest rate rise after another caused by heavy spending from the Howard government. Middle-class welfare, regional rorts and the proverbial spending like drunken sailors happened under the Howard government and that at a time when it was already taking in strong tax receipts from an already burgeoning mining and resources sector. The government are not ignoring those issues at all. This has been a budget that combines good restraint in spending, substantial savings measures, with responsible measures to spread the benefits of the resources income around Australia. Let us go back and look at where we stand at the moment. We can highlight some of the actions that the government has taken up till now that have benefitted Australia. First of all, and pre-eminently, there is unemployment. Australia has an unemployment rate of 4.9 per cent and it is expected to go down. This is in comparison to nine per cent unemployment in the United States. The European Union has a combined statistic of 9.5 per cent unemployment. So Australia is a world leader when it comes to jobs. Those are jobs that the Labor government has saved and jobs that the Labor government has created. In just this last year 300,000 jobs were created. The real GDP growth is forecast to remain at a strong 4.4 per cent in 2011-12. This year's GDP growth was of course affected by natural disasters, but the forecast shows that real growth is strong and that we are heading in the right direction.

Regarding the deficit, we can compare the forecast deficit to the two major comparable nations in the world—the United States and the United Kingdom. While Australia's deficit will reach 1.5 per cent of GDP in 2011-12, the United States will have a deficit of 10.8 per cent of GDP and the United Kingdom will have a deficit of 8.6 per cent of GDP. That is a very stark comparison: 1.5 per cent for Australia compared to 10.8 per cent for the United States and 8.6 per cent for the United Kingdom. I doubt very much that the United States or the United Kingdom will be looking at a surplus any time soon.

Another key fact is that the real government spending growth of 0.5 per cent in 2011-12 is the smallest increase since the 1980s. The Howard government never delivered a cut to real spending. Under this government, spending is projected to decline in 2012-13 in real terms. Senator Fifield was a staffer when former Prime Minister Howard and Treasurer Costello were delivering increases in interest rates and inflation. They never delivered a real spending cut. Where was Senator Fifield then to make the case for real spending cuts? If he was there it was certainly not in evidence in the actions of the former Howard government.

What future benefits are we looking at from this budget? The budget delivers cuts and savings but it also creates opportunities for employment and provides necessary services to the community that will drive our economy. Delivering productivity is the sort of thing that this side of the chamber has been talking about for many years, because it will position our economy to be strong in the future. The Labor government will create an extra 500,000 jobs over the next two years; however, we recognise that there are 320,000 young Australians not currently employed and 230,000 long-term unemployed. Labor is firm in its belief in the dignity of work and is putting in place measures to get people back into work.

The government will phase out the dependent spouse tax which gives spouses no incentive to get back to work. Of course we recognise that it provides important benefits to families but it is one of the tough cuts that was deemed necessary to make. There is also an incentive for young people to go back to work. The incentive to leave study and go straight onto the dole is to be removed by extending the 'earn or learn' requirements and by creating pathways to full-time employment. The same goes for the long-term unemployed, with $233 million to be invested in new support programs to encourage employers to hire those who have not worked for more than two years.

The growth of the disability support pension in Australia is of concern to the government. That is why the government will be bringing in strict new work tests, updating the definition of incapacity and introducing new requirements for younger recipients. It will provide more wage subsidies and will allow more hours to be worked before payments are suspended. So the government is introducing measures to increase participation in the community and provide incentives for people to go out to work, but it is also giving essential support to people on disability pensions.

Skills levels are always an important issue for the Labor government because it understands the benefit of skills in increasing productivity in our economy and ensuring that the resources boom keeps on going and that other areas of the economy can be stimulated. There is a $100 million invest­ment in a national apprenticeship mentoring program, another $100 million to develop new apprenticeship models and a $281 million support package for additional tax-free payments. Skills and jobs are not separate; they are linked to each other. That is why the government is providing $550 million for a new workforce development fund. That is a fantastic outcome for industry.

There are also benefits for working fam­ilies. Health services in regional Australia will benefit considerably. In my state it was a great joy for me to hear that there will be health benefits in my duty electorate of Grey. The Wallaroo Hospital and Health Service will have $3.3 million to establish a five-surgery public dental clinic. Also, $39.2 million was made available for the redevelopment of the Port Lincoln Hospital and Health Service. It is an area I know well and I am extremely pleased that the Labor government facilitated this investment. Furthermore, the Mimili, Pipalyatjara, Pukatja and Amata communities will be receiving $2.3 million for the construction of four new two-bedroom staff and visitor houses. Those are all very welcome pieces of infrastructure for a regional area. Finally, the area of mental health, which has been neglected for far too long, will benefit greatly from this budget. This is a necessary amount for a very deserving issue, and it is the largest mental health package ever delivered by a Commonwealth government.

We look forward to hearing the opposition's reaction to the budget; we look forward to hearing Mr Abbott's reply. The opposition told us that they would bring the budget back into surplus in the current year, so we look forward to hearing about the ways in which the coalition say they will do this. At the last election, the opposition's mental health package was mainly based on cuts in other areas of the health sector. What other cuts will the coalition be suggesting now? The coalition need to provide substan­tial input on this budget in their reply, because Senator Cormann and other senators in this chamber have tried again and again to reinforce the coalition's economic credentials but that has not been our experience on this side of the parliament. Mr Hockey has been making reckless promises about a return to surplus without indicating where it will come from. There was the $11 billion budget blowout at the last election. Last year, the suggested cuts not only were publicly derided but even embarrassed people in their own party. The coalition need to come clean, not make vague statements like 'the govern­ment should have cut more', 'they should have spent less', 'it should've been a tougher budget' or 'they should have spent more in other areas'. It is important that tonight we see Mr Abbott back up the commitments that the coalition have made. I suspect that the budget reply will be deficient in that respect, because the budget produced by the Prime Minister and by the Treasurer, Wayne Swan, is a solid budget that delivers on the promis­es made by this government and will provide a solid foundation for the future.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

You must admit that, generally, out there—look at the chamber now—people's interest in the budget is pretty dead. No-one is staying up late at night worrying about the Labor budget. Even the fourth estate, when they are asked, 'What's it like?' say, 'It's pretty boring; there's not much there.' People have switched off. It is just another day in the office. And it is not because it is not important; it is just that they do not believe the Labor Party anymore. It is like a new pair of socks on the town drunk: who cares? You have a look, have a think about it, but it does not really change them. It does not make them more charismatic, it does not make me want to invite them round for dinner; they have just got themselves a new pair of socks.

You might have missed this, but I have got this thing about gross debt; I have been talking about it for a couple of years. So during the budget lock-up—one of my staff members, Matt, was in there—I said, 'We'd better have a look around for the debt position. Obviously, they are about to max out the credit card, so we'd better have a bit of a hunt around.' Sure enough, there it was: they have maxed out the credit card and they are looking for an extension. There it was.

So what does this mean? You have to go back into the history of this whole national credit card thing—how we ended up with it, where it came from and what it is all about. Basically, in 2009 a wondrous gentleman, a luminary, Wayne Maxwell Swan, Treasurer of the Commonwealth of Australia, stated in the budget papers:

The … emerging economies of China and India are now expected to slow markedly—

Therefore, 'We have to extend the credit card.'

He also said, on 10 March 2009:

As a result of the deteriorating global economy and consequent falling tax revenues, it will be necessary to increase government borrowing.

Therefore, under the Commonwealth Inscri­bed Stock Act 1911, they decided to up the credit card by $125 billion. What's $125 billion between friends? That is from $75 billion to $200 billion. I remember going to the Senate estimates. They sat down and I said, 'That's a remarkable amount of money.' They said, 'But you don't have to worry too much about it; we'll never get there.' It will be in 2013-14. If things are at their worst, 2013-14 is when they will get there—unless we have a major turnaround.

But a couple of things happened, you see. China never missed a beat, nor did India. And, because China never missed a beat and there was never negative growth in India, the demand for our resources kept going and we did not have a recession. It was nothing to do with ceiling insulation, school halls, $900 cheques or the NBN. It was due to the fact that we had these black rocks over on our east coast and these red rocks over on our west coast—one is called iron ore, the other is called coal—and these wonderful people over in South-East Asia who want to keep buying them. They buy as much of them as they can get, at a pretty remarkable price. Naturally enough, that drove our economy forward.

Mr Swan would like to make you think that it had something to do with $900 cheques—that a splurge in retail spending and gambling revenue at the local pub somehow kept Australia from a recession. It is the same sort of logic, I suppose, as saying that buying a new PlayStation will get you a wage rise at work. I do not know how they came to that logic, but that is apparently what it was. However, the result of their squandering was that our credit card charges kept going up and up and up and up. I remember doing the debt graphs—here is Keating; here is us paying Keating off; here is Rudd; here is Gillard. Now we are going up here, right off the graph, because the Labor Party just cannot handle money. They have no idea. The Labor Party just cannot handle money. They have no idea.

Let's look at what would happen if Australia was a business, a shop. With record sales for the produce that that shop produced, we would end up with a $54 billion loss in the shop, followed by a $49 billion loss in the shop. Then they say things get better because we end up in the following year with a $22 billion loss in the shop. We all know what happens to a shop that trades like that. We all know what happens to the people who rely on that shop for an income. We all know how fearful people get. We know how the people who are relying on that to support their hospitals and defence force and to build roads feel when that is how the shop is run. We all know what is going to happen to the shop: the shop is going to close its doors. What is important is that, if we did not allow you to increase your credit card limit, the shop would close, and it would close in the next month or so. That is startling. That scares me.

Maybe it scares Mr Swan as well, because just this morning I watched him and saw a terrified man with a shake in his voice tip and then smash a glass on a table up at the ABC studios. I see a person out of his depth, a person who is really struggling. He is really struggling because he just does not have the competency to manage, and this is an issue. If he was a heart surgeon you would have a bit of a problem, a quandary. If he was about to operate on that sacred vessel, your head, you would have a bit of a problem seeing a man obviously under the pump. Mr Swan is the nation's accountant; he is supposed to bring it all back under control. He is supposed to be the cool, level-headed and competent architect bringing it all back under control.

The best we have been able to get from him thus far is, 'Coalition, you have to explain to us what you would do.' It is all about what Tony Abbott announces tonight. I will translate that for the Australian people. It is like this: if you were a complete and utter stuff-up like the Labor Party and had completely and utterly botched the books, what would you do next? I do not know—drown yourself? I do not know what you would do next if you were that bad. What does one do? What a peculiar question: 'If you were as bad as us, what would you do about it?' I would remove myself from the building—that is what I would do about it, and I think that is what the Australian people are going to do about it.

When you say, 'Hang on, we're selling all this produce. Our soft and hard commodities are going out the door at record prices, but we can't balance the books, we can't make it work, we can't make it stack up,' the problem is not ours; the problem is yours. And the way to solve it is to get rid of you. That is step number 1. That will start making things better.

The Labor Party always comes up with, 'When in doubt, talk about net debt'—this magical, mythical money that is going to appear from somewhere. They always say: 'You don't worry about the gross debt. You don't worry about going to the Australian Office of Financial Management website and looking at Australian government securities outstanding and seeing exactly where we are'—that is their actual overdraft state­ment—'You just make up a number and you call it net debt.' If this magical, mythical money exists, let's test you. Grab some of that magical, mythical money and drop it in your bank account and bring the debt down. Grab some of it and drop it in the bank account so you do not have to extend your credit card.

In the place where I and many others grew up, the bank manager says to you: 'I don't think I should extend your credit card because you seem to be out of control. I've been looking at what you've been buying and I notice you bought about $2½ billion worth of fluffy stuff which you stuck in the ceiling and then ripped out again. I don't know what the purpose of that was. Then you went on this manic episode of building school halls all around the countryside. Then you spent $22 billion on $900 cheques. I've got a bit of a concern about you as a client, a customer, of this bank. I think we'd better pull your horns in a bit, so we're not going to extend your credit card. But you've told us that you have this magical, mythical money, $100 billion; we want you to go find some of that magical, mythical money and drop it in the account.' Mr Swan cannot do that because he cannot find it. He does not know where he put it. It is somewhere out there, though!

We had a search for it and we found some of his magical, mythical money. About $68 billion of it is in the Future Fund. The Future Fund is, of course, the money that is put aside for public servants' superannuation. So what Mr Swan is saying when he talks about net debt is that he is going to pay off the nation's debt with public servants' savings, their retirement fund. I want to know if the public servants know about this. They must be happy to know, especially the people in Canberra, that the government might be going to use their money to pay the debt off! They are going to their savings to pay Wayne's debt. I suppose that is the way it works. My suggestion is that the public servants will not accept that. Maybe that is another reason why we are extending our credit card.

The Labor Party stand back and say: 'Australia's not that bad. Australia's fine. Everything's fine.' Well, there is another bloke who has a different opinion, and his name is Professor Ken Rogoff. He is from Harvard University, in Massachusetts, in the United States of America. He has a different view. He did an analysis on cumulative public debt throughout the world from 2007 to now. 2007 is very interesting because that is when that crowd, the Green-Labor Party Independent alliance, got elected to govern­ment. From when the Green-Labor Party Independent alliance got elected to government to now, in an assessment of the cumulative increase in real public debt, the worst in the world is Iceland, and then comes Ireland. We have heard a bit about Ireland and Iceland. Iceland has basically completely fallen off the ledge. Ireland—well, that is hopeless.

Guess who No. 3 is. Is it Portugal? No. Is it Spain? No. Is it the United States? No. Is it Australia? Australia is the third worst. With our trajectory to disaster, we are right up there with the best of them. We are worse than Mexico, Chile, Belgium, Greece, Portugal and Spain. And the government say it is not a problem. They do not think this is an issue. I am starting to have concerns about this client.

In the old days, I had a great old boss, Philip Mawby, a chartered accountant and an auditor with Price Waterhouse. When people were coming unstuck, he would say to us, 'Go get a dump on all their drawings and bring it into the office.' You would go through their drawings one by one and then you would find all this rubbish: a new boat, new stereo, new trip, new this and new that—nothing to do with business. He would hand it to them and say, 'That is why you are about to go live in your son's or daughter's caravan at the back of their house—because you're going to lose your own.' That is what happens when you lose track. You have to really shake people to try to break them out of their false sense of security. Australia is on that trajectory. I think it was a clarion call this morning when Wayne Swan dropped the glass. It was a sign. He understands and that is why they are sneaking these things in now. With $250 billion we have finally got ourselves into the realm where we can start talking about things in portions of a trillion. We are heading to having a quarter of a trillion dollars in credit card debt. We are borrowing this money from the Chinese, from trusts in the Middle East and from superannuants in Japan, who probably want it back because they have a few problems over there. These people have not given us the money; they want us to repay it. We actually have to repay them. We have to send them back their dough. There is not a skerrick of a sign that the Green-Labor-Independent alliance and Mr Wayne Swan can do that. So where do we go from here?

That is why the Australian people have switched off. Mr Swan could have done cartwheels with a wig on, been whistling Dixie or been quoting poetry. No-one cares anymore. No-one listens to him anymore. What he says is irrelevant. He has never been able to hit a target and he cannot deliver the goods. The ramifications for Australia are shocking.

I have had a look at some of the things we are spending money on. Regional develop­ment always fascinates me. I have seen some of the accounting tricks. They must think we are all simpletons with the way they are dealing with it. First of all, to create the Green-Labor Party Independent alliance they got a couple of blokes and said, 'We'll give you $1.4 billion,' and that sounded great. As soon as they did that they had two major disasters they had to cover. One major disaster was Cyclone Yasi, and they ripped $350 million out of the budget to repair things in North Queensland, and the other disaster was the member for Lyne, and they had to pull another $50 million out for him. So these two disasters cost them $400 million. One is finished and one is still going.

Then we were down to about $1 billion, so we thought they were going to spend $1 billion on regional Australia. But when you look at the figures, you see they are cunning and shrewd people. Of the $1 billion, they are spending $300 million and then the rest sits out in never-never land. We will get to that later on. Only $300 million is in the forward estimates. Unfortunately, Mr Oakeshott and Mr Windsor have been touched, and either they do not acknowledge it or they are stupid, because it is not going to be spent, it is not going to happen.

I was fascinated to see the regional development document put out by Simon Crean. It was to be the saviour of regional Australia. I was very interested in the Flying Fruit Fly Circus. I can see that pulling us out of the position we are in. The Flying Fruit Fly Circus is highly recommended. It made its way into the regional development doc­ument. We also have research into crazy ants, which is important—I was thinking more of the crazy ants in the western suburbs of Brisbane, but why not?

Then we had the biggest appropriation of money for regional development—in excess of $400 million—for a poor little regional town. It was not Bollen, Kununurra, Temora or Bellingen. What was the regional town's name? Perth. They are building a new road in the regional town of Perth and they have banged it under regional development. I have nothing against building a road in Perth—it is a great idea—but do not call it regional, not unless you are building it all the way to Kalgoorlie. I suppose it would become regional once it got outside the city limits. This is just being mischievous with the terminology to try to cover your tracks. If Mr Oakeshott and Mr Windsor are stupid enough to swallow that, then explains why they were stupid enough to put in a Labor-Green-Independent alliance.

They are spending money on a whole range of things in regional Australia. This will be of great interest to the people of New England, especially those in northern New England. In the regional development document is investment in the Australian Antarctic Division. I know it is getting chilly at this time of year and there is a bit of snow about—maybe that is having an effect—but I think it is a bit of a stretch to say the Australian Antarctic Division has something to do with part of regional Australia. If it is, what part? Mawson and Davis?

This is how absurd our nation has become. This is where we have got to. If you did not laugh, you would cry. Underneath it all it is the same old story. The debt just keeps marching ahead, racing ahead. You see they are borrowing roughly $1.6 billion every week. There are a couple of new public hospitals in that every time, major road improvements or the Toowoomba range crossing. Those are the sorts of things we could do with that money. But we have arrived in this twilight zone of Labor Party economics, of 'Swan-onomics'. We would have built dams, railways and ports to create wealth, but they just squander it and cannot work out where it has gone, and borrow it from overseas.

I heard Mr Albanese the other day announcing the inland rail again. This thing has more entrances than Nellie Melba had exits. It gets announced every second day by Mr Albanese. It is never going to be built. They will never build it. It is just another one of those mythical beings, like their mythical money.

What depresses me is that the Australian people have switched off from you. They really have. They have stopped listening and they do not care anymore. You can do anything and say anything. All you are doing now is annoying them. You annoy them more and more every day. Every day they see Julia Gillard overseas the whole set-up annoys them. The whole process annoys them. Mr Swan annoys them. The Australian people are becoming gradually more and more angry. On top of that you have these other mad policies. The Malaysian refugee expedition is the most recent one. To conclude on a sombre note, wherever you people got the idea to send 800 people to a country that still believes in caning and still believes in capital punishment and where there are huge question marks over its humanitarian values is beyond me.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Whilst those opposite have again chosen to launch attacks on the federal budget, on this side of the chamber we intend to pursue and achieve our plan to bring the budget back into the black, to get more Australians in jobs and to spread the opportunities of the mining boom to more Australians. We have imposed the strictest spending limits, delivering $22 billion in savings to make room for our key priorities, ensuring our country lives within its means. Australia emerged strongly from the global recession, creating hundreds of thousands of jobs while our peers shed millions of jobs. Our public debt is a tiny fraction of that carried by comparable countries, our fiscal position is the envy of the developed world and the investment boom is gathering pace.

On budget night, Mr Swan detailed a course that has us back in surplus in 2012-13—on track, on time and as promised. This budget is tough but it is fair and it helps those most in need in our community. It is responsible, it balances opportunities for all Australians and it gets the fundamental economics right. The budget delivers for Australians in health and education; it delivers for families, for our regions and for businesses. I note that in his contribution Senator Joyce talked about investment in regions. He forgot to say that one of the first actions of the Howard government when it came to power in 1996 was to abolish the Department of Regional Development. Senator Joyce obviously has a very selective memory.

We are, as promised, on track to build a stronger economy for all Australians whilst delivering more jobs and more opportunities. The reality is that, as we move from the challenges of the global financial crisis and the natural disasters into a resources boom and economic growth, we are cutting spending to make sure we are not adding to inflation and cost-of-living pressures in the years ahead. As far as reducing upward pressure on interest rates is concerned, let us be clear: interest rates are set by the independent Reserve Bank of Australia. Our job is to be fiscally responsible and return the budget to surplus—which is exactly what we are doing. This motion is just an attempt to undermine the government's responsible fiscal management and to block the savings that we are making to curb inflation and to reduce cost-of-living pressures in the years ahead.

What will Mr Abbott do to reduce upward pressure on interest rates and further pressure on household budgets? What is Mr Abbott's plan to cut spending? Where will he find savings? Let's face it: the fiscal incom­petence demonstrated in the last series of coalition costings does not paint a pretty picture of what we are likely to hear tonight in the Leader of the Opposition's budget reply speech. Last year, Mr Abbott failed in the budget reply—a failure that left an $11 billion black hole in the budget costings. He also failed in his response to the flood levy and the National Broadband Network. Whilst Mr Hockey claims that he can get the budget back into surplus in 2011-12, the fiscal ineptitude that has been shown in the coalition's earlier costings still haunts those opposite. Mr Abbott has failed time and again to produce a detailed plan on how he will deliver a surplus—a year earlier, no less. Given his track record and the scale of his fiscal mistakes to date, it is obvious Mr Abbott represents a $1.3 trillion risk to the Australian economy and to the budget. If Mr Abbott refuses to back the government's savings tonight, he risks the budget surplus, which would put pressure on interest rates and damage the economy.

The motion we are debating now should be about those opposite with their ceaseless attempts to wreck the government's budget and to try to add spending to the budget bottom line through their private members' bills. It is this ceaseless and ongoing commitment by those opposite to derail the budget which is putting upward pressure on interest rates and further pressure on household budgets.

This budget provides more opportunities to help more Australians to get ahead, no matter where they live. This budget will enable us to deliver more than half a million more jobs over the next couple of years, which builds on the 750,000 we have already created. To help deliver this jobs target, we are investing $3 billion over six years to help skill Australia's workforce as part of our Building Australia's Future Workforce plan. As part of this plan, we will be helping industries get the skilled workers they need to drive future productivity and increase growth. This plan will begin by appropriately training the workforce that Australian businesses require. To help achieve this, we have announced a $558 million National Workforce Development Fund, which will help deliver 130,000 new training places over four years. We will help industries and regions get the workers they need by committing $101 million for a national mentoring program to help 40,000 apprentices finish their apprenticeships. Apprentices will also be supported through the government's $100 million investment to deliver more flexible training models. They will allow apprentices to progress through their training as they acquire the skills they require, allowing them to gain their qualifications sooner.

We are also making an additional $1.7 billion investment in vocational education and training over five years. This builds upon our existing $7 billion investment and will help deliver our reforms to the vocational education and training system. We will do this through our national partnership with the state and territory governments, which will help make the VET system more transparent and productive. The budget will provide $143 million to deliver 30,000 additional places in the Language, Literacy and Numeracy Program to give people the basic skills which are essential for any job. In addition, for the first time we will allocate 16,000 skilled migrant places to the regions, also reducing skills shortages in regional Australia, through our regional migration agreements. The budget will also deliver major investments in health, particularly through our historic mental health reforms. This budget delivers $2.2 billion over five years for mental health. The government's package will provide more intensive support services and better coordination of those services for people with severe and persistent mental illness who have complex care needs. The package will target support to the areas and communities that need it most, such as Indigenous communities and socioeconomically disadvantaged areas that are underserviced by the current system. It will also help to detect potential mental health problems in the early years and support young people who struggle with mental illness.

We have heard Professor Patrick McGorry and Adjunct Associate Professor John Mendoza speak of the debilitating impact mental illness has on individuals, their families and communities. They have spoken particularly of their belief that the focus should be directed towards youth mental health services. I am pleased to say that this mental health package delivers targeted services across the board. As part of the mental health package, we will deliver $571 million over five years for more and better coordinated services for the severely mentally ill. This will include the expansion of successful mental health programs such as Support for Day to Day Living in the Community, and Personal Helpers and Mentors, PHaMs.

We have delivered $220 million to strengthen primary care and to better target services to those in need, including an expansion of the Access to Allied Psychological Services program. We will also deliver $491 million to boost services for children and young people. This will be used to expand mental health services for teenagers and young adults by providing more funding for the successful headspace centres and Early Psychosis Prevention and Intervention Centre programs. Our mental health package will deliver an extra 30 headspace centres, taking the number around Australia to 90. We will also provide extra funding to existing headspace centres to help them better service existing demand. When up and running, at full operation, the 90 centres will have the capacity to assist approximately 72,000 young people. The government will also provide funding and seek matching contributions from the states and territories to provide more early psychosis prevention and intervention centres.

The budget also contains provisions for providing $16.4 billion in extra growth funding for public hospitals as part of the new health deal signed between the states and territories. We will have a regional priority round of the Health and Hospitals Fund to deliver new investment in hospitals and health care for regional Australia. We are providing $717 million in new funding over five years to expand access to diagnostic imaging services by subsidising MRI scans through Medicare, particularly for those living in regional areas.

This budget reflects the government's commitment to empowering Australians through education and training. We are delivering over half a billion dollars in funding to improve schools and reward quality teaching. We are also delivering $200 million to support students with a disability.

This year's budget has new measures to help with cost-of-living pressures, with a renewed emphasis on low-income earners and families with kids at school. We have increased the family tax benefit part A for older teenagers by up to $4,208 a year—that is, around $161 a fortnight. The result of this is that families with a teenager will now be eligible for up to $4,000 more a year if their child stays in education or training. The education tax refund will be increased by $460 million to extend to school uniforms, which will be a great bonus for families. We are also providing payment advances of up to $1,000 for family tax benefit part A recipients at any time to ensure they can meet unexpected family expenses. These changes also give parents more flexibility in when they receive childcare support.

We will provide more tax assistance to 6.5 million Australian taxpayers on lower incomes. This will help encourage work and provide some modest help with cost-of-living pressures. The government will increase the low-income tax offset from 50 per cent to 70 per cent. This will put an extra bit in the weekly pay packet and, while the amount is modest, we know that every little bit helps. The increase to the low-income tax offset will mean that someone with an annual income of $30,000 will get an extra $300 during the year in their regular pay. It is also worth pointing out that, as part of our historic pension reforms which began in September 2009, maximum pension rates are no2 $128 per fortnight higher for singles and $116 per fortnight higher for couples. We have introduced these measures because we are committed to helping those most in need. As the Treasurer said on budget night:

We know too many Australians are squeezed by rising costs of living and we help where we responsibly can.

That is why we cut income taxes substantially in each of our first three budgets, so that an average income earner now pays around $1,000 a year less tax and why we have ensured pensions are now … higher for singles and higher for couples since … our historic boost two years ago.

We will see the benefit of unprecedented investment in regional Australia through our record $4.5 billion package for hospitals, health care, universities and roads. As the Minister for Infrastructure and Transport, the Hon. Anthony Albanese, has outlined, compared to the last full year of the former Howard government, 2006-07, we will be providing more than twice as much regional infrastructure funding. This package includes $1.8 billion for critical health infrastructure, $500 million for the regional priorities round of the Education Investment Fund, $916 million for projects under the Regional Infrastructure Fund and $1 billion through the Regional Development Australia Fund.

As well as the measures I have outlined in the budget that relieve the pressure on households, it is also worth noting the additional taxation benefits included in the budget that will flow to small businesses. The government will reduce pay-as-you-go instalments for 2011-12 for the majority of small businesses, providing a $700 million cash flow benefit. These measures will reduce the amount of tax payable or improve cash flow for up to 2.7 million small businesses. The investments in regional Australia will flow directly to my home state of Tasmania. For example, in Tasmania, up to 12,603 apprentices may benefit from the investments aimed at modernising the apprentice system. The long-term unem­ployed in Tasmania will benefit from new funding to assist training and work exper­ience. Over 19,000 local families and over 23,000 teenagers in Tasmania may be eligible for the extra $4,200 per child between 16 and 19 years of age under changes to the family tax benefit. Of course, there are benefits that will flow from the extension of the education tax refund to school uniforms. And this year Tasmania will benefit from $121 million in rail and road infrastructure as well as the additional $46.4 million to assist Tasmania's councils to maintain and upgrade their local roads. This is on top of the funding that will continue to make highways and roads safer.

As we know, Tasmania will benefit from new investments in health, mental health and dental care. We have the $240 million Royal Hobart Hospital redevelopment, a new medical centre in Cygnet and a new health precinct in Sheffield. We will also receive assistance to reduce community dental waiting lists. The University of Tasmania, as a regional university, will benefit from the EIF—the education infrastructure funding—increased regional loading payments and the Higher Education Participation and Partner­ship Program. This list is by no means exhaustive.

As I said in the beginning, this budget is responsible. It balances opportunities for all Australians and gets the fundamental economics right. That is because we, in the government, are making the investments we need, through the budget, to position Austr­alia to take full advantage of the mining boom. Australia's high terms of trade, strong growth outlook and tightened macroecon­omic policy settings have seen the Australian dollar appreciate to post-float highs. As the government has outlined in the budget papers, in the current macroeconomic context, the high exchange rate and the with­drawal of fiscal and monetary policy stim­ulus are helping to moderate inflationary pressures as the economy returns to full employment.

We have also delivered on our promise to set out a strict fiscal strategy through identifying significant savings so that we can fund new priorities whilst balancing the costs of the recent natural disasters and returning the budget to surplus. To that end, the government has also held growth in real spending to two per cent and has placed significant restraint on government expen­diture. With fiscally responsible policies and approaches such as these, it becomes obvious that the criticisms being levelled by those opposite lack a true depth of analysis and have no substance.

This afternoon, the Minister for Finance and Deregulation, Senator Wong, highligh­ted that Australia's position is amongst the best in the world in terms of net debt compared to other advanced economies. Australia's net debt is expected to peak at less than one-tenth that of major advanced economies, and the government is on track to bring the budget into the black in 2012-13. With that in mind, whilst others in the developed world seemed to envy the finan­cial position of Australia after the GFC, it is difficult for me to comprehend why those opposite cannot offer their support for the fiscally responsible approach this govern­ment has taken in this budget. This budget is tough, but it is fair and it helps those most in need in our community. It is responsible, it balances opportunity for all Australians and it gets the fundamental economics right.

During the Howard government's term in office, the only thing that they seemed intent on doing was stripping the rights and conditions off workers—and, of course, that was through Work Choices. What we saw during their Work Choices time was an attempt, through AWAs, to have workers forced to sign new AWAs. We saw many examples where they were asked to sign an agreement for the job they were doing for a lot less money. Those opposite who come in here with this ridiculous motion to suggest that this government is not being fiscally responsible and not having a mind to care for less fortunate Australians really need to look back on their record—because all Australian working families got during the Howard government years was Work Choices, lower wages, fewer entitlements and less job security. (Time expired)

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The government's budget handed down this week is a prime example of Labor's ceaseless and ongoing commitment to debt and deficit budgeting. I would contend that the figures speak for themselves. A soaring budget deficit of $49.4 billion this financial year and an expected deficit for 2011-12 that has blown out by a whopping $16 billion—from $9.6 billion to $22.6 billion.

This government are addicted to spending and they are asking Australian families to fund it. This budget fails to ease the rising costs of living for families, who face higher prices every day. In fact, under this Labor government, electricity prices have risen by 51 per cent since 2007, grocery prices are up by 14 per cent, education and health costs are up by about 20 per cent, the price of petrol has soared and there have been seven interest rate rises in a row under this government, placing pressure on Australian families struggling with their mortgages—those very families that the Australian Labor Party went to the election in 2007 saying that they were going to help. The Labor Party said that they were going to address the cost-of-living pressures that those families were facing under that 'evil Howard government'. They said that they were going to fix it, but just look at those figures. Those figures speak for themselves.

Government Senators:

Government senators interjecting—

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! Previous senators have been listened to in almost complete silence. I think the same courtesy should be extended to Senator Bushby by both sides of the chamber.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Thank you very much, Mr Acting Deputy President. This government plan s to means test the private health insurance rebate, which will further hurt Australians trying to provide for their families. And if that is not bad enough, they have now announced in the budget that they will strip $2 billion from Australian families by freezing the indexation of key family tax payments and income thresholds for the next three years. I will talk a little bit more about that later.

This government claims to want to get more Australians into work but at the same time it is hellbent on punishing the hard workers who are already out there having a go and trying to get ahead. This Labor go vernment has spent recklessly and is now forcing middle-class Australian families and small businesses to pay it back. Australians are being forced to pay for a multitude of the Gillard Labor government ' s policy failures. Labor ' s failure to control our borders has increased the cost of offshore asylum seeker management by a whopping $1.7 billion. And now Australian taxpayers are being asked to pay a further $292.3 million for the Malaysian solution. So ridiculously out of control is asylum seeker management under this government that they now need to build a detention centre in my home state of Tasmania, at a cost to taxpayers of $15 million, to house illegal entrants coming through Far North Australia.

Then of course there are all the other costly policy failures. There was the Building the Education Revolution, which delivered buildings that schools in many cases neither needed nor , in some cases , could even use.

Senator Polley interjecting —

An example from your home state and my home state, Senator Polley, is Port Sorell School. The Wesley Vale Primary School is due to be closed down upon the building of the Port Sorell School, which the state Labor government says it is going to build —but we have not seen a lot of proof that it is going to happen. Nonetheless, it has committed to build a new school at Port Sorell, less than 10 kilometres away from the Wes ley Vale Primary School. This will leave four students at Wesley Vale . Basically the school will be closed down when the Port Sorell School is built. So they got a million-dollar new building at the Wesley Vale Primary School—a school that is due to close in the next couple of years. What an absolute waste of money!

But there is more. The computers in schools program has blown out by a further $200 million, taking its total cost so far to $1.4 billion—more than double what was originally budgeted. There have been the numerous green schemes that have failed, such as the cash-for-clunkers scheme that was in itself a clunker, and the tragic and grossly wasteful pink batt scheme that has seen hundreds of millions of dollars having to be spent to fix the problems that it created. And let us not forget that this is the government whose solution to the GFC was to send $900 cheques to people living overseas.

To add insult to injury, Australian families are not only paying for these failed schemes but also funding the advertising campaigns too . There was $13 million wasted on adve ­ rtising Rudd ' s now obsolete health reforms.

The ACTING DEPUTY PRESIDENT: Order! You should ensure that you correctly refer to members of this chamber and the other chamber by their correct titles.

Duly noted, Mr Acting Deputy President. There was $13 million wasted on advertising the then Prime Minister Mr Rudd ' s now obsolete health reforms. And they cannot rule out a $30 million ad campaign to try to justify their carbon tax.

The Gillard Labor government have squandered the financial prosperity that the coalition left them. They have exceeded Prime Minister Keating's debt record of $96 billion and, for the first time in eight years, they have delivered a budget that has not delivered tax cuts for everyday Australians. However, even in the face of such appalling circumstances, they have not learnt their lesson. In their ongoing commitment to debt and deficit budgeting, they have hit Australian families and businesses with $6 billion in new and higher taxes. Along with the Greens, they have committed to intro­ducing a carbon tax from 1 July 2012. However, they have not included any of the detail in the budget. They do not want to tell Australian families and businesses how much it will cost them, but they do expect them to pay for it.But this in itself is amazing: given the proposed starting date of 1 July 2012—right in the middle of the figures contained in this week's budget—it is impossible to take anything the budget includes beyond that as at all relevant or accurate. This is the case even if you accept the Labor government's argument that it is not possible or appropriate to include forecasts of the effect of the carbon tax in these figures—and I do not accept that. What is undeniable is that the carbon tax will have a massive impact on those figures, both directly and in second- and third-round effects and so on once it is implemented. Those figures are not worth the paper they are written on.

So as ordinary Australians continue to face real challenges to meet the cost of their household bills, Labor continue to waste money and to present their accounts in ways and with exclusions that mask the true state of where we are heading. The fact remains that this Labor government are tough on families and tough on household budgets but fail to be tough on their own wasteful spending. Treasurer Wayne Swan has told us that he will have balanced the budget by the 2012-13 budget year.

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

Do you believe that?

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

No, I do not. This is as unlikely to happen as him bringing about the enormous surpluses that will be required to repay the more than $250 billion in gross debt that will have accumulated by then. The reality of the combination of events being as fortuitous as predicted in order to achieve this result is highly unlikely given the vagaries of events that we have witnessed in recent years. It is even acknowledged in the government's own budget papers that only a small fall in the terms of trade from their current record and totally unprecedented levels would completely eliminate the projected surplus for 2012-13 and probably for years after, not to mention the potential impact of further international economic shocks, the fragile debt situation of some European countries, a fall in commodity prices, inflation uncertainty and other economic threats to China's growth and so on—any of which would overturn the assumptions upon which the government's claims of returning to surplus in 2012-13 are based.

The other challenge that defies belief is this Labor government actually delivering real cuts in spending. I am not talking about the government's tricky use of accounting methods and highfalutin economic terms and sophistry to include new taxes as savings; I am talking about real belt-tightening: actual decreases in government outlays and the slashing of spending by the government on programs not otherwise due to end—savings that actually result in falls in the amount of taxpayers' funds spent by the government. This challenge remains, because it would be a standout first for any Labor government in Australia's history to deliver real cuts in spending. With respect to the members of the Labor caucus who valiantly defend the toughness of this budget, it is not reflected in the far less than tough budget measures that are delivered in the other place this week. The problem is, and always has been, that when Labor is in government, they spend big. Under Whitlam, spending increased to such an extent that the Commonwealth share of GDP went from 19 to 24 per cent. Thirteen years of Hawke and Keating saw that figure increase to 26 per cent—a figure that was much reduced under John Howard. The Howard years saw the rolling back of the Commonwealth share of GDP as Costello fought to balance the budget after Labor left us $96 billion in the red in 1996 dollars. But since November 2007 the Rudd Labor government, and continuing under the Gillard Labor-Green government, all of that work has been undone.

Sitting suspended from 18.00 to 20.00