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

The Gillard government's budget is indeed a budget of cooked books, with the toxic carbon tax as its centrepiece and with yet more debt. Before I make any observations about last night's budget, let me make this observation about what has just happened in the Senate. When it comes to spending taxpayers' money as fast as possible, this Labor government has no shame. This Labor government has no shame when it comes to getting taxpayers' dollars out the door as quickly as possible. What just happened is the first step, the first instalment, in executing Labor's cooking of the books. What just happened was all about helping this dodgy Labor government deceive the Australian people, make the Australian people believe that somehow there will be a genuine surplus in 2012-13, when of course when it is all said and done there is certainly no prospect of there being anything near a budget surplus delivered by this Labor government.

This budget does nothing to strengthen our economy in the face of serious economic storm clouds on the global horizon. In fact it does not cut spending and it does increase taxes, and of course it lifts the debt ceiling yet again to $300 billion. And of course it does impose the world's largest carbon tax on the Australian people—a tax which we were promised we would not get, which will push up the cost of living, which will make Australia less competitive internationally, which will increase the cost of doing business in Australia, which will cost jobs and which will impose all those economic sacrifices on the people of Australia without doing anything whatsoever to reduce emissions either on a global level or here in Australia.

In the budget tabled by the Treasurer last night there is no consistent economic strategy and there is no specific focus on increasing our productivity and international competitiveness. It was a traditional Labor budget—a budget with more spending, more taxes and more debt. The government this time around promised that it would deliver a surplus in 2012-13. Minister Shorten this morning was getting a bit ahead of himself—he was already saying at a breakfast with about 600 accountants that the government had delivered a surplus, that the budget was now back in surplus. Of course I had to remind Minister Shorten this morning, as I remind Labor senators in this chamber, that, no, this government has not delivered a surplus; this government has not got the budget back into surplus—all this government has done is promise a surplus, because right now we are of course in a massive deficit situation.

Let me talk for a moment about what we do know about where our public finances are at. We know that in this financial year, according to the budget tabled last night, our deficit will be $44.4 billion. That is quite staggering. There are still six weeks to go in this financial year, so who knows how much more spending they can rack up on the nation's credit card in this last six weeks. I just reflect on the fact that when this government went to the last election, when it released its pre-election economic and fiscal outlook, we were told that the deficit this financial year would be $10.4 billion—and $10.4 billion is already a very serious deficit. It is clearly evidence of a government that does not know how to live within its means, that does not know how to manage money, that does not know how to manage public finances carefully; $10.4 billion is a very serious deficit in anyone's imagination.

Within three months of that statement having been made by the Labor Party before the last election, the deficit for this financial year had gone to $12.3 billion and by the time of the budget last year it was a deficit of $22.6 billion. By the time of the Mid-Year Economic and Fiscal Outlook, just before Christmas last year, it was a deficit of $37.1 billion, and now it is going to be a staggering deficit of $44.4 billion. That is a blow-out in the deficit for this financial year of more than $34 billion since the last election. How can anyone take seriously what this government says when it tries to make us believe that somehow in 2012-13 it will deliver a wafer-thin surplus of $1.5 billion. Of course it will not.

The government has used every accounting trick in the book to make it look like it will deliver a surplus in 2012-13. It has shifted expenditure from 2012-13 to 2011-12. Shifting expenditure for next financial year into this financial year is not a spending cut in 2012-13—it is cooking the books to create the illusion that there will be a surplus, to make people believe something that is not there, to deceive the Australian people yet again. People across Australia understand that this is what is being done. People across Australia are not being fooled by this. People across Australia know that this is a government that over the last four budgets has delivered $174 billion worth of accumulated deficits. People across Australia know that this government inherited a strong budget position. This government inherited a budget with no government net debt and with a $22 billion surplus. The government inherited a budget position where we had invested $60 billion in accumulated surpluses in the Future Fund, in order to cover the expense of future Public Service superannuation liabilities. And what has this reckless, incompetent, weak, divided and dysfunctional government done? They have been spending like drunken sailors. They have not been able to balance the books in a single budget so far when they have had to deliver a budget outcome, despite having benefited from the best terms of trade in 140 years and despite having imposed more than 20 new and ad hoc taxes on the people of Australia.

This is not the only thing the Labor Party have done to cook the books. They have done the shifting of spending from this year into next year, rather than cut spending. They have also done the typical Labor Party trick where they have included the most optimistic revenue growth forecasts in 25 years. This Treasurer has a habit of making overly optimistic revenue growth forecasts. To take you back a couple of months to the Mid-Year Economic and Fiscal Outlook just before Christmas, the government downgraded their GDP growth forecasts and, at the same time, they massively upgraded the expectation of revenue from company tax receipts. Of course it did not make sense and, sure enough, what happened? The revenue did not come in according to expectations. The revenue was lower than expectations because the Treasurer's expectations were wildly excessive and wildly overoptimistic. And when that eventually came out the Treasurer threw his hands up in the air and said, 'The revenue's been falling away. The revenue is not what we thought it would be.' Of course it was never going to be and a prudent government, a government that manages our public finances properly plans for this.

So what has the government done in this budget? The government wants us to believe that between this year and next year government revenue will increase by a staggering 11.8 per cent or $39 billion. The government wants us to believe that revenue will increase to about $369 billion, even though the terms of trade have been downgraded to 5¾ per cent and even though our GDP growth is still expected to be only 3¼ per cent. We have not seen this sort of revenue growth in more than 25 years. At that time we were experiencing significantly stronger growth in the terms of trade.

There is much I could say about this budget but let me conclude by saying this. This is a typical Labor budget. It is a spend, tax, high-debt budget. It is a budget for which generations of Australians will have to pay for many years to come. Of course, already in this budget many Australians are being asked to pay the price for the reckless and wasteful spending of this bad Labor administration over the last four and a bit years.

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

This matter of public importance this evening is a perfect irony because it mentions the words 'cooked books'. Who wrote the book on accounting tricks? Who made an art form of fiddling the figures? Who are the patrons of nobbling the numbers in this country? If you go to the encyclopaedia and look up the term 'cooked books', four words appear—'Liberal Party of Australia'. That is the definition in the encyclopaedia of 'cooked books'. Some people may say I am taking a partisan critical view of the Liberal Party and that is understandable. I am not the biggest advocate of Liberal Party policies, I must say. But do not take it from me; take it from the Institute of Chartered Accountants, the independent body established by the accounting profession in this country to self-regulate accountants and auditors, to ensure that the people of Australia can trust and have faith in accounting, in accounting practices and in accounting firms.

What was the view of the Institute of Chartered Accountants regarding the Liberal Party of Australia and their election costings? Their view was simple. They fined the Liberal Party of Australia's accountants $5,000 each—two partners—for breaches of professional standards. One may ask how this situation came about. How did it come to pass that the Liberal Party of Australia's accountants received fines for breaches of professional standards? It is quite simple. They received fines because they agreed to audit the Liberal Party of Australia's election costings at the 2010 election. They agreed to produce a work of fiction, to produce a fantasy, to dress it up as reality. In fact, they were hoodwinked by Joe Hockey, they were hoodwinked by Andrew Robb and they were hoodwinked by the Leader of the Opposition, Tony Abbott.

It is incumbent upon me to explain the circumstances under which the Liberal Party of Australia received these fines from the Institute of Chartered Accountants. At the last election, when it came time to submit their election costings to Treasury—a process which they are again opposing and refusing to do for the people of Australia—they came up $11 billion short. It was not $11 million, it was not $111 million, it was not $1 billion but $11 billion. There was an $11 billion black hole in their election costings.

Can you imagine it if a large corporation, if a managed investment scheme, if a superannuation trust produced accounts that were $11 billion in the red and tried to dress them up as if they had balanced the books? Any shareholder, any investor, any superannuation member would be livid, they would be angry. Importantly, they would want the person to be prosecuted. What was the view of Andrew Robb prior to the last election when the process of submitting election costings was criticised by the government, by Treasury and by the media? As the shadow finance minister, Andrew Robb's comment was, talking about their accountants:

If they make a mistake with the auditing of accounts for companies or prospectuses or mislead, they are at risk of being punished and going to jail.

They nearly did. The Liberal Party of Australia's accountants nearly went to jail because they teamed up with the Liberal Party and attempted to dress up these figures which were shown not to be election costings and say that they were an audited set of accounts. What did the Institute of Chartered Accountants find in respect of the fictional work produced by the Liberal Party? They imposed the fines on the Liberal Party's accountants because their costings of coalition policies failed to contain 'a statement that the procedures performed do not constitute either an audit or a review'. That was the view of the independent Institute of Chartered Accountants, the body set up by the accounting profession to self-regulate and ensure that the Australian people have trust and confidence in audited accounts in this country. The Liberal Party failed. The Liberal Party let down the people of Australia.

Prior to that they were saying that the people of Australia can have trust and confidence in their accounts, that the Liberal Party's figures can be trusted. In fact, Joe Hockey, the shadow Treasurer at the time said:

You know what? If the fifth-biggest accounting firm in Australia signs off on our numbers it is a brave person to start saying there are accounting tricks. I tell you it is audited. This is an audited statement.'

They were the words of the shadow Treasurer of Her Majesty's opposition. Then of course the independent Institute of Chartered Accountants found that to be a lie, found that to be a furphy, found that to be a work of fiction. It was not the case at all. The Liberal Party managed to convince—probably reluctantly—a poor firm of small business people, accountants, to sign off on a set of accounts that obviously were not audited books. This is the approach that those opposite take to our nation's finances. They come in here and have the hide and the temerity to criticise this government for delivering a budget surplus, for delivering a set of social programs and for delivering a pathway to economic growth that is fully costed and covered by the revenues in the forward estimates. They claim to be an alternative government, when in reality they are not.

Do not take it from me. Take it from Laura Tingle, writing in the Financial Review on 3 September 2010, in response to this trickery by those opposite in seeking to produce audited accounts to the Australian public in 2010. She said:

… they are liars and clunkheads.

But whatever the combination, they are not fit to govern.

That was the view of Laura Tingle, writing in the Financial Review in 2010 in the wake of this trickery by the Liberal Party of Australia in trying to deceive the Australian public into believing that their election costings would balance the books. Now they are trying to fit up the Australian public again. They come in here and criticise this government for producing a balanced budget, for producing costings covering all of the expenditure items in the forward year and the forward estimates, but they will not indicate to the Australian people how they intend to fund any of these reckless promises that they are making in their election commitments.

We find, through leaks from the shadow cabinet, that they are planning $70 billion worth of cuts to programs and services in this country. I believe, as a representative of New South Wales, that the people of my state have the right to know how the alternative government in this country is going to meet that $70 billion cut in services. Where will the cuts come from? Perhaps some of those opposite who speak after me can enlighten the Senate and the Australian public: which programs are you intending to cut from the federal budget? Will it be the childcare rebate? Will it be the increases to superannuation and retirement incomes that are programmed as part of this government's commitment to retirement incomes and workers? Will it be the increases in the pensions that are foreshadowed in this budget? Will it be the family tax benefit increases that are a crucial part of this federal government's budget? Why won't they and why can't they explain to the Australian people what cuts they are going to make to services and programs in our economy?

When the Leader of the Opposition replies to the budget on Thursday evening, we will get the same trickery, the same platitudes, the same rhetoric about being able to balance the budget, to deliver all these programs that they are promising whilst at the same time getting rid of the minerals resource rent tax and removing the carbon-pricing legislation yet somehow managing to meet their commitment to reduce carbon emissions in our economy by five per cent. Quite simply, they are not fit to manage our economy. They are not fit to manage the local corner store, let alone a $330 billion economy, with the faith and trust of the Australian people.

This week the Labor government delivered the budget, and it is a solid financial and economic management process to manage our economy back to a system of long-term growth, a system that will ensure that, as we reach that long-term growth trajectory, we do so in a non-inflationary manner, we do so by protecting jobs and we do so by promoting investment in our economy. The budget sets out a $1.5 billion surplus over this year, growing to $7.5 billion by 2015-16—again a process of transition to growth over a period of time coming off the back of the write-down in revenue that occurred because of the global financial crisis.

Our policies will iron out the ripples in industry composition of growth, ensuring that the right conditions are in place for non-mining sectors to share in the growth of the minerals boom. We are doing this of course through the minerals resource rent tax, diverting some of the superprofits that are made by these companies back into retirement incomes, into rural and regional infrastructure and into support for small businesses.

In this budget there is plenty of support for small business. From 2012-13 companies will be able to carry back tax losses of up to $1 million so they can get a refund against the tax that they have previously paid. From 1 July they will be able to immediately write off capital equipment expenditure in a particular year up to the value of $6,500. That is met with an instant write-off on vehicles up to the value of $5,000 in the year 2012-13. We have got an agreement through COAG to reduce red tape and we are working through that process with the various state governments. And of course we are rolling out the National Broadband Network, which will see improvements in productivity and ways of doing business in this country.

Last week I was fortunate to travel to Luke Hartsuyker's electorate of Cowper on the North Coast, where I met with representatives of Coffs Harbour City Council. They were telling me how overwhelmingly supportive they were of the Labor Party's program to roll out the NBN. They could not wait for the NBN to come to the North Coast of New South Wales. They get it: they see the advantages that will come in investment. Already, creative industries are beginning to set up in the Coffs Harbour area, in that local government area. Finally, when they have the NBN, those businesses will be able to thrive because they will not have to be based in Sydney. They will have the broadband capacity to send digital files that are produced in those regional areas to Sydney and to Melbourne. They see the job creation opportunities. They have produced a program called Coffs Connect, and they are ready. They are ready to sign up and be part of this revolution that will occur in the digital economy in Australia because of the National Broadband Network. They understand the productivity improvements that will be made because of this important economic program.

The budget contains a wealth of support for families over the coming 12 months and in the forward estimates. The family tax benefit A will be increased from 1 July 2013. That will benefit 1.1 million families in this country. The supplementary allowance will increase by $210 for singles and by $350 for couples. The schoolkids bonus, which we are just about to debate in this chamber, will provide much-needed relief for parents as they meet the costs of sending their kids to school. There are tax cuts for families. There is an increase in the tax-free threshold from $6,000 to $18,000. There are increases in pensions programmed in from 1 July this year. As well as that we are meeting our commitment to deliver a national disability insurance scheme. We are boosting the amount of funding going to aged care and increasing the number of aged-care places in our economy as our population ages.

We are continuing our investments in rural and regional infrastructure in this country. We are pushing up retirement incomes and of course we are doing this in the context of growing our economy.

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

We are getting towards the middle of the year, towards Christmas in July. There are only three things I wish for Christmas in July. Wish No. 1 is for the Labor Party to keep Julia Gillard as the Prime Minister. They must keep Julia Gillard as the Prime Minister. Wish No. 2 is that the carbon tax must remain the Labor Party's central plank, their central policy. Wish No. 3 is that they must continue to tell people that having $300 billion hocked up on the nation's credit card is not a problem. If I can have all three wishes, I will be a happy person but will not be in opposition for much longer. The only thing I could think of that would be better than that is if they were to make Craig Thomson Australian of the Year, but I do not think that is going to happen. This is really a statement about the complete financial ineptitude of this government and showing the Australian people just how ludicrous it has become.

I woke up this morning and heard that France has elected a socialist Prime Minister who is going to remove himself from the austerity measures that had been negotiated, and therefore the whole austerity plan in Europe is looking like it is going to fall over. I found out that Greece is one step worse—they do not even appear to really have a government at this current time. And the Germans do not seem too keen to keep on bailing people out. Then I read in our own budget papers that we are talking about an 11 per cent increase in our revenue streams. This is marvellous! It is a heroic outcome! Then we see that, as always, they are trying to sneak through the debt. It is easy for people to understand that, if you owe money, you must pay it back. There are no tricks to this. I tried. I thought: 'Maybe I should give them the benefit of the doubt. Today I will ask the finance minister of the Commonwealth of Australia a very simple question that any person who has any basic understanding of commerce and finance would understand, which is: what is your peak debt position?' Any person working in a bank will tell you that that is a fundamental question for any credit paper: what is the peak debt position? The minister's answer is there for posterity. You can watch it any time you want. It is the most agonising three minutes of film you will ever see—Penny Wong trying to answer the most basic fundamental question. A loan officer in a bank would be able to answer, but the finance minister of the Commonwealth of Australia could not.

Why are we giving ourselves a $300 billion overdraft? Why are we getting a $300 billion credit limit? These people who cannot answer the most basic question always run to something else. They said: 'It is not the gross debt, you see. It is the net debt.' It is so easy to fix it—change three simple letters and everything is better. I am curious. I am a very curious person, so I thought I would have a look. I thought: 'Here is our gross debt position. It is $274.231 billion.' You can buy a few Smarties for that. Our net debt was $143.345 billion. That is where they have latched on to it. I thought, 'We have to drill down through this to find out where this figure comes from.' I followed their accountancy statements and went up to the notes where they give the calculation that net debt equals the sum of deposits held, government securities, loans and other borrowings minus the sum of cash deposits, advances paid, investments, loans and placements.

I thought 'loans and placements' was interesting and I wondered how much we had there. There was over $100 billion in loans and placements. I thought I had better start digging through that and see what was going on there. I thought, 'Let's find out what is happening in loans and placements.' So I went and found it in their notes—$107 billion. It is made up of $30.6 billion of investments and deposits. Okay, I will grant you that. You can have that. Book it. There is an IMF quota of $8.8 billion. Well, I do not know about that. I thought I would have a close look at that. Then we have the other one—$68.3 billion of 'other'. It is like sundries. They have said: 'These are other things we do not quite know about, so we will just bang them under "other". If we bang them under "other" no-one will ask. No-one will ever inquire.' What is this 'other'? If this 'other' has $68.3 billion in it, you should grab some of that 'other' and put it in your account. Then you will not have to extend your overdraft limit. Problem solved. If this 'other' is there and the net debt is correct then grab some of the 'other' and put it in your account and therefore you will not have to increase the overdraft to $300 billion. But I think you will find you actually cannot grab that 'other' because it stands for 'other people's money'—predominantly public servant superannuants—and they do not like the idea of you using their money to pay off your debt.

This is the most dangerous thing. A Prime Minister can be fixed. We can forget about Craig Thomson. We can close our eyes and Peter Slipper disappears. When we get to government we will get rid of the carbon tax. But the debt—

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Joyce, I understand you are referring to members of the other chamber, so I am just going to remind you that one of those people does happen to be the Speaker of the House. I would just remind you about using their correct titles.

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

I accept your admonishment, Madam Acting Deputy President. You are dead right: Mr Slipper is the Speaker of the House. How could we forget that? Who put him there, pray tell? There is a question for the kiddies: who made Peter Slipper the Speaker? Let's think about it. It would have been Julia Gillard.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

That is the Prime Minister.

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

Yes, the Prime Minister—

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Joyce, I am reminding you that no matter who you refer to in the House of Representatives they have a title to be used.

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

Mr Peter Slipper is definitely the Speaker of the House. I agree. Mr Peter Slipper, the member for Fisher, is definitely the Speaker of the House and he was most definitely nominated and put there by the Australian Labor Party, whose Prime Minister is Ms Julia Gillard. What a marvellous decision that was by her!

If you are going to believe any person in accountancy or finance the only thing you can judge them by is their track record and their capacity for accuracy—how much of what they say becomes fact. Two years ago the government said that this year we would have a deficit and that we would be out the back door by $13 billion. That was a very bad outcome, so we were worried about that. But they told us about the sunny out plans of fiscal rectitude. They told us better days were ahead. They told us that after they put in place the carbon tax and had taken Jerusalem things would get better. But the next year things got worse. The next year they said that this year it would get much worse, that we would be out the back door by $22 billion. So they basically got close to doubling the figure in their previous statement. They were almost 100 per cent wrong. But we have had some consistency because the next year—this year—we find they are out the back door by $44.4 billion. So there is a consistency here. They are generally 100 per cent wrong one year out. So whatever they have said about the surplus next year, if they follow the trend—and the Treasurer talks about things following trends; he is a very trendy guy—they will be 100 per cent wrong next year as well.

I will take bets with any person who wants to tell me that they will have a $1.5 billion surplus even after they have cooked the books, because they are so totally incompetent that the only thing you can rely on is them being wrong. If this was a credit paper, it would get kicked out the door. You would get absolutely assassinated by the credit bureau. If you worked for them, they would say to you, 'You will lose your job if you keep presenting rubbish like this.' I remember an old boss of mine, Mr Muntz. He would have written all over it what an absurd proposition has been brought up.

Now we have these other mad things. We have all these things wandering off in the capital account, wandering off the balance sheet. The NBN is the classic one. Pray tell: do you honestly believe it is worth what you are borrowing for it? If it is not, shouldn't you be booking a provision for the loss? Do you think you can flog this white elephant off for the $50 billion we are going to borrow to build it? There is not a chance. If it is such a good deal, why aren't you just issuing NBN bonds? NBN would stand for 'next budget nightmare'. NBN bonds are what you should be issuing. If it is such a great proposition the market would love them and go and buy them. But it is not. No-one who is sane would buy an NBN bond, so it is coming through Australian government securities. The reason they would not buy one is that it would not be worth it. Our debt is going through the roof and, as Bill Mortley, my first boss in accounting, told me about this, if you did not laugh you would cry because it is so totally and utterly out of control. But we have to pay it back— (Time expired)

Lisa Singh (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on this MPI because it provides a good opportunity to put on record the positive benefits that will come out of this federal budget for the Australian nation and for Australia's people and to refute some of the claims put forward by Senator Joyce and those opposite, who continue to run a negative campaign that does not serve them well let alone Australians and certainly does not highlight the fact that this budget very much provides a positive benefit for so many Australians throughout our community. Why is that? It is because this budget is about spreading the benefits of the boom to all corners of our country by delivering a much-needed new financial relief to families and businesses who may be feeling under pressure at this time. We of course are returning the budget to surplus in that process. In doing so, we will provide a buffer in the uncertain global times that may lie ahead and give the Reserve Bank room to cut interest rates, which is another thing that will be very much welcomed by Australian families.

Not only are we delivering a surplus, despite various revenue losses; we are delivering reforms which will make our economy stronger, make our community stronger and provide for a much fairer society. Some of those reforms are groundbreaking reforms. They are Labor reforms. They include the first historic steps towards a national disability insurance scheme, something that is so welcomed by so many in the community sector, including those living with disability and their families and friends. On top of that of course is the much-needed aged-care reform to help senior Australians stay in their homes. That is very much welcomed by those in my state of Tasmania, which has Australia's fastest-ageing population. There is also a big investment in dental care, to deliver a blitz on our public dental waiting lists. That is very much welcomed by those in my home state, as it is by people across the country. As we know, the public dental waiting list has become quite long since the time that the Howard government scrapped the Commonwealth dental scheme. There is a huge investment in our health system, featuring 76 major projects in regional Australia. That is important and welcome for those in the health sector and for those who need to access it. This of course is all part of Labor's commitment to manage the economy responsibly in the interest of working Australians, not just the fortunate few.

There is something in this budget for just about everyone, but I am pleased to see the creation of a National Children's Commissioner. That is an important federal policy that looks to our responsibility to look after children who may be at risk. The National Children's Commissioner will have a broader role in the interests of children and children's policy in this country.

There are a number of other areas that will have benefits for the community. I am pleased to see that SBS has received funding additional to its base government funding over the next four years. There will be something like a 27 per cent increase in funding for SBS, which is important for that national broadcaster. SBS has also received funding to enable it to launch a new national free-to-air Indigenous television service, which will be so welcome to everybody in our nation, not just those of Indigenous background. It will be important in enabling the next generation to understand the culture of our first Australians.

Also in the budget were new, reduced limits on the amount of cigarettes and tobacco that people are allowed to bring into Australia. This is an important complement to some of the tobacco measures that have passed through the parliament. We take seriously the issue of tobacco related illness. Because of that, inbound travellers, who presently are able to bring in something like 250 cigarettes or 250 grams of cigars and tobacco products tax free, will from 1 September this year be able to bring in only 50 cigarettes or 50 grams of cigars. That very much complements our antismoking strategy, which includes, of course, the world's first plain-packaging legislation, the 2010 increase in tobacco excise, a significant investment in antismoking social-marketing campaigns, the restriction on advertising of tobacco products on the internet and subsidised nicotine replacement therapies and other support measures to help people quit smoking and discourage people from taking up the habit. We have done that, and the results are very positive. Something like 15.1 per cent of people aged 14 years and over smoke—that is a 2010 figure—as opposed to 30.5 per cent in 1988. Nevertheless, something like 15,000 Australians die from a smoking related disease every year, so there is still much work to be done.

This government's budget is really about sharing the benefits of the mining boom. It is about recognising that a fair go is not just a quintessentially Labor value but a founding principle of this nation. When the colonies came together to form this nation in 1901 they did so on the understanding that a Commonwealth should always mean exactly that: that the wealth and prosperity created in this country is common to all of us. In Australia we manage that wealth through a process of horizontal fiscal equalisation. This principle recognises that not all states have an equal revenue base. Right now, some states like WA and, potentially, Queensland are flush with mining revenue. They have the right minerals and are taking them out of the ground at the right time. Others, like Tasmania, rely on long-term industries such as manufacturing that are facing unprecedented issues such as the extraordinarily high Australian dollar and changes to freight and shipping conditions out of our state. All states should be able to provide a decent standard of care, and the Commonwealth exists to support states during those times.

That is why Mr Abbott's recent calls for the GST to be distributed on a per capita basis are an attack on Australian values and, in particular, on smaller states such as Tasmania. Tasmanian Liberal senators should be embarrassed by their leader's position. They have been incredibly quiet in relation to their leader's position on the GST. They probably are incredibly embarrassed and probably have been called by various constituents on the fact that they are not standing up for Tasmania and Tasmania's fair share of the distribution of GST.

We know that on 2 May, when visiting Western Australia, Mr Abbott responded to the campaign started by WA Premier Colin Barnett and recently joined by other Liberal premiers to change the GST allocation. In the estimation of these Liberal premiers, the policy of horizontal fiscal equalisation that has served Australia and their own states so well in difficult times, such as times of industry infancy when boom towns were gloom towns, is no longer good enough. Conveniently, it is not good enough right now when Liberal governments are reaping the benefits of the mining boom, but it was fine in 2006-07 when WA was a net beneficiary of the HFE policy. Never one to miss out on a short-term political grab, Mr Abbott said to his Western Australian audience that he was sympathetic to Mr Barnett's argument and that the current distribution of the GST needed to more closely reflect an arrangement based on population. That would clearly disadvantage the smaller states, which, naturally, have a narrow revenue base.

The federal Labor government will not disadvantage smaller states. It believes in the common wealth of this nation. It has provided a budget that does very much spread the benefits of the boom to all corners of our country by delivering to our families and businesses under pressure much-needed new financial relief that is very much welcomed by them.

Arthur Sinodinos (NSW, Liberal Party) Share this | Link to this | Hansard source

I only have a minute, but you only need a minute to talk about this budget. The budget has no coherent economic strategy to deliver stronger economic growth, sustainable budget surpluses and to tackle debt. What has happened is that the Labor government is on its knees seeking forgiveness from the Australian people over the carbon tax. That explains why it has broken a number of promises in order to deliver a further families package to try to take people's focus off the carbon tax. In the whole speech there was only one reference to the carbon price. People out there are asking, 'Doesn't the government still stand for the carbon tax?' No, they could not mention the name but they had to mention the extra compensation they are now trying to promote in the community in order to assuage the anger of people out there about the carbon tax.

In the course of doing that they have had to break further promises around company tax, foreign aid, our defence forces, flip-flopping on the business carry-back of losses— (Time expired)