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

My question is to the Minister representing the Treasurer, Senator Wong. I refer the minister to the government's decision to abandon two of its key budget measures—its plan to automatically index the passenger movement charge regardless of economic conditions facing the tourism industry and its plan to double the withholding tax on managed investment trusts. Is this further evidence that two weeks before these measures are due to begin, on 1 July, Labor's budget is in complete chaos? Isn't this just another example of a government that has lost control of its own budget?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The only party in chaos when it comes to its budget position is the opposition. The only party that is unable to make its budget position add up is the coalition. The only party that would be in deficit in 2012-13 is the coalition.

Opposition Senators:

Opposition senators interjecting—

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I am sorry, I do not include the Greens—but they were not actually a party of government last time I looked.

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

Senator Wong, come to the question, please.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Mr President, I was asked about chaos and I am making the point that we have a budget and we have laid out our plans. It is interesting that the coalition pretend to want a surplus but in relation to the two issues about which I am asked they come in here and say they do not want to support them but they want a surplus. We have been transparent and have said to the Australian people that these are the changes we require to ensure the budget returns to surplus. We have done that.

The coalition's leader has confirmed that $70 billion worth of cuts is what you have to make, but he will not tell any Australians what those cuts will be. Will you not pay the age pension for a couple of years? Will you not pay family tax benefit? Will you cut back on Medicare? You will not tell people. You hide your costings and then you have the temerity to come in here and criticise the government's budget.

The reality is that we have laid out our plans to bring the budget back to surplus. That includes a range of decisions. We would welcome in the passage of budget bills an opposition that was actually prepared to show its economic credibility to the Australian people, but those opposite will not. This is an opposition that used a catering company to do its immigration costings, an opposition that will not be upfront with the Australian people about what it will cut.

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

Mr President, I ask a supplementary question. Has the government backed down on these budget measures because it realises the error of its ways, and that the doubling of the withholding tax on managed investment trusts, for example, was bad for the economy, or because the Greens and others told the government they would not vote for them?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I am very happy to talk about managed investment trusts. I am asked whether or not the proposal was bad for the economy. When Mr Costello opposed our dropping the managed investment trust tax rate, was that bad for the economy too? I notice the opposition's position now is 180 degrees opposite. Mr Costello said that it was a bad thing for us to change the managed investment trust position because that was a tax cut for foreigners. That is completely opposite to the position that Senator Cormann is now advocating. So who is right—Peter Costello or Senator Cormann?

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

Both are.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Both are? Given that they have opposite positions, I think that is completely problematic. The reality is the government is intent on ensuring the budget returns to surplus.

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

Mr President, I ask a further supplementary question. If government budget measures like these do not survive for six weeks, how can anyone believe that the government's promise of a wafer-thin $1.5 billion surplus will survive the next 15 months?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I invite those in the chamber to consider the hypocrisy of what I have just been asked. The opposition, which opposes certain savings measures, is now criticising the government for having to deal with the reality that the opposition and the Greens may combine to stop a savings measure. That is what is occurring. The opposition is saying they will vote with the Greens in order to stop this government budget measure going through. For all of the complaints by Senator Cormann and all of the criticisms about how the Greens are the arch enemy of economic growth, Senator Cormann is coming in here and advocating a position that is the same as the position of Senator Christine Milne. I am not critical of Senator Milne on this issue—she is not in a party of government; you are, Senator Cormann, and you are an economic spokesperson. You are lining up with the Greens to stop a budget savings measure and that says volumes for your lack of economic credibility.