Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Broadband, Communications and the Digital Economy (Senator Conroy) and the Minister for Finance and Deregulation (Senator Wong) to questions without notice asked by the Leader of the Opposition in the Senate (Senator Abetz), Senator Brandis, the Leader of The Nationals in the Senate (Senator Joyce) and Senator Sinodinos today relating to the Budget.

Today marks the first day of parliament since Julia Gillard sent Wayne Swan to dump the government's—

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Scullion, refer to the Prime Minister by her correct title, please.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

Today marks the first day of parliament since the Prime Minister sent Wayne Swan to dump the government's 'come hell or high water', 'failure is not an option' guarantee to return the budget to surplus in 2013.

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

You are sensitive about Tony Abbott. Show the same courtesy.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I was not sensitive about anyone, Senator.

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

You are; you are very sensitive.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Scullion and Senator Wong, you need to refer to members of the other place by their correct titles.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I will correct that and refer to Wayne Swan as the Treasurer, Mr Deputy President. So we have had this litany of garrulous assertions from both the Prime Minister and the Treasurer. I understand that the government as a whole—and Senator Wong has obviously made her contribution. I understand that on some 142 occasions she promised that a surplus would be delivered in 2012-13. We have heard today that, across government, 650 promises, the same promise, were made. Absolutely certain that this would be delivered, the entire government has come behind this promise.

The Prime Minister has promised this on 165 occasions since becoming the Prime Minister on 24 June. 'Failure is not an option' was the catchcry. It is probably a little like 'You won't have a carbon tax under a government I lead'. Something that is said with the sort of gravitas that the Australian people should believe. She followed up by guaranteeing that. 'Guarantee' is a word that people associate with something that is not going to be wishy-washy. This was a core and fundamental promise. The Treasurer then went on to promise it on another 366 occasions. On 366 occasions the Treasurer stood up and said that he would deliver it 'come hell or high water'—again using the sort of vernacular that is woven around something that is absolutely core and something that Australians can trust. It is the sort of wording they can put their trust in.

The Prime Minister said, 'You can't run this country if you can't manage its budget.' That makes sense. If you cannot manage a budget you cannot run the country, and we would agree with the Prime Minister on that. I am sure a lot of other Australians thought that was very sensible. The Prime Minister then went on to say: 'We've saved jobs, we've stayed out of recession and'—prophetically—'we are back in surplus.' 'We are back in surplus!' Not something that has actually been forecast but we are actually back in surplus. Many Australians would have thought: 'Well, I haven't been following politics but that's a relief. That is a relief. I do know that the Prime Minister does bang on a bit about the cost of living, interest rates and all those things that an unbalanced budget can provide, so I am probably feeling a bit relieved.'

That was to the McKell Institute on 4 July, and we all know now that that was complete rubbish. Why? Quite sensibly it is because it will help with relieving cost-of-living pressures. This is the rationale. Wayne Swan said, 'Coming back to surplus is about making sure we help those people sitting around the kitchen table figuring out how to make ends meet.' In that regard, he said:

We'll be back in the black by 2012-13, on time, as promised. The alternative - meandering back to surplus - would compound the pressures in our economy and push up the cost of living for pensioners and working people.

He went on to say, 'It's important we bring the budget back to the black in 2013 because we don't want to exacerbate price pressures in the economy during the period.' Those are matters that were continued by the Prime Minister, who said it was important for families and that 'It's the best thing we can do for families under cost-of-living pressures not add to inflation pressures and ensure that in this budget we won't.'

Of course people were quite relieved about this. In my view, this is clearly an acknowledgement that their decision to abandon the policy of delivering a surplus will lead to additional inflationary pressures, will lead to additional increases in the cost of living and the pain for every single Australian. Everybody understands that the pain in the wallet at the moment is the toughest pain. If the Australian people could not trust the Prime Minister on the carbon tax and the surplus guarantee, how can they now be asked to believe her when she says, 'We care about any element of the cost-of-living pressures on families,' or in fact believe any promise she now makes on the eve of this new election?

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to participate in this debate to take note of answers to questions without notice today. The situation we are in is, I suppose, very open and clear. We have an opposition that is pursuing a budget surplus and we have a government that is pursuing a budget surplus, with an underlying net debt position at the moment of 10 per cent of GDP—that is, one-tenth the level of most other advanced economies. So, in a nutshell: do not worry about the economy, do not worry about the people who work in it and do not worry about the people in it who need to be educated or looked after. Get a surplus. On the other hand, we have a responsible position, taking into consideration all of the global factors. If we were just to look at one simple global factor which has come to light today: the seasonally adjusted trade deficit of $427 million in December 2012 is an 85 per cent improvement on the revised $2.8 billion November deficit. The volatility that exists outside our control is what impacts on the budget.

I am sure those opposite know this fully well. They know it better than the average punter out there who votes. But they see no tactical or political advantage in telling the truth or putting the real case up. They want to confect a situation where they malign the reputation of the Treasurer, malign the reputation of the Prime Minister and advance their ruthless, short-term political aims.

Basically, they lost the last election and never got over it; two of their mates came to the right side of the table and from that day forward everything has been about destruction. Nothing has been positive. Last night we saw swinging voters say, 'We know the position on deficit; we know the position on surplus. Can you cost a policy and tell us about it?' And the answer was, 'No, we're not going to. We will do something before September 14, but we are not going to tell the average voter anything at all about what our policies cost, or what we would be doing.'

All I can say as a very new senator is that I have seen the results of some of the spending. I have travelled the length and breadth of the electorate of Grey. I have seen and heard from the small business operators who kept apprentices on. They have built trade training centres, they have built Building the Education Revolution libraries and science facilities. And that stimulus funding has kept people in rural communities, and a lot of Liberal-held seats, in the game—in the economy.

Let us look at some of the simple things that the Labor government is doing with parental leave. Parental leave is great for the time that you enjoy to have your child at home and either partner looks after it. But what is it really about? It is about people participating in the economy. It is about participation rates; it is about women participating at a greater level than they have been. It is about them enjoying paid employment, contributing to the economy and growing the size of the pie.

As with the NDIS: the Productivity Commission highlights the fact that we can get a genuine economic benefit out of putting these very notable and worthwhile reforms into our economy. And there is a cost, but the cost will be paid over the long term.

I think, really, that the situation we are in is that Labor governments do not walk away from the economy, their constituents or the population in pursuit of a symbol of a surplus. We want a surplus, and we will deliver a surplus. The reality is that we do not ditch people, we do not gut the economy and we do not stagnate the economy. We prime the economy because it is in the best interests of all Australians to be able to contribute, to earn, to work, to have a useful life, to pay their taxes and to provide for their children.

I think that is the ultimate difference between the debate on this side and the debate from the other side, which is purely short-term electoral advantage. The vomit principle is alive and well on the other side. If they continue to repeat their untruths and their statements, they believe the electorate will suddenly wake up and say, 'I've heard that 1,400 times—it must be true'.

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

I am grateful to Senator Gallacher for putting those matters on the table and explaining what he feels the benefits are of Labor's administration. But as questions in question time today very amply demonstrated, the problem with making promises like paid maternity leave, NDISs and so forth is that, worthy though they might be, you have to deliver them sustainably. And to deliver those sorts of promises sustainably to the Australian people, you have to have balanced budgets. That is at the very nub of these sorts of processes, because without balanced budgets you end up having to borrow money.

The coalition has made very clear that we stand for the kind of fiscal management which brings Australia back to sustainable, continuous budget surpluses of the kind that Australians saw almost without interruption throughout the days of the Howard government. That is the kind of process which brings Australians the real benefits that Senator Gallacher has spoken about.

This government inherited a very strong fiscal position. Effectively, it inherited $45 billion of assets tucked away. It inherited no net debt and it inherited a budget in surplus. Of course, it has turned that around in just a few short years into massive deficits and into enormous amounts of debt—$107 billion worth of debt today, climbing upwards at the rate of about $100 million a day. One hundred million dollars a day! A billion dollars every 10 days that this government is in office.

The problem for the government is, of course, that today it faces a struggle toward the light to reach its surplus. It was supposed to be delivered this financial year; it was promised faithfully that it would be delivered. In fact, it was promised on more than one occasion that it had actually been delivered. I received in my letterbox a note from Senator Lundy, Community NewsI gather along with everybody else in the ACT—in which she said:

The 2012 Federal Budget has not only returned to surplus as promised – it has ensured that families and small business will share in the benefits of the resources boom.

Well, the budget has not been returned to surplus. Presumably, she is referring there to the mining tax delivering benefits of the resources boom to families and small business. Of course, we know that the mining tax has delivered nothing to the Australian people today. Not one penny! She went on to say at the bottom of the page:

How do we compare on jobs and the economy?

…   …   …

Under Labor:

…   …   …

Our Budget has been returned to surplus in 2012/13.

We find a few weeks or months after that page was delivered into everybody's letterbox in the ACT that in fact it has not been returned to surplus. The budget is very much still in the red, and it looks like being in the red for quite some time to come.

I think that Senator Gallacher and others on that side of the chamber who extol the virtues of the government's budget process need to understand that getting to a surplus this year, or next year or whenever it is going to be, if they ever do it—and I have my doubts—is just the beginning of their problems. Because, once they get to a surplus, they have then got to start to use whatever that surplus is to pay for the mountain of promises which the government have already made to the Australian people and for which there is no plausible means of delivering.

You have promised an NDIS, at a cost of $10½ billion a year, once fully operational. You are then paying another $3.7 billion in new money over five years for aged care. You have promised low-paid workers another $1 billion. You have promised to buy a number of key assets in defence—$36 billion for submarines and $16 billion for Joint Strike Fighters. You have not promised but you have had to find the money to pay for your mistakes in border protection. You are now paying $2.1 billion to reopen the Nauru and Manus Island refugee processing centres. You are increasing the refugee intake, costing the Australian taxpayer $1.4 billion over the forward estimates. There are also the Gonski recommendations, costing $6½ billion a year once fully operational. Today, you cannot even reach a budget surplus five years after weathering a fiscal crisis—five years ago the GFC happened. You still cannot get to a simple budget surplus, a wafer-thin budget surplus of $1.1 billion. How are you going to pay for those promises? This does not add up. Labor is off the rails with this and all Australians can see that. (Time expired)

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

It confuses and bewilders me on certain levels why it is that the opposition focuses so much on one single issue when it comes to describing what is the Australian economy, an economy that the Prime Minister rightly referred to as 'one of the seven economic wonders of the world'. Our strong fiscal management has meant that we are the envy of treasurers the globe over. It was the Australian Labor government that bullet-proofed the Australian economy and kept it out of recession during the worst economic downturn in three quarters of a century, which those opposite seem incapable of grasping.

Since December 2007, when Labor came to power, the Japanese economy has shrunk around 1½ per cent. The euro area economy has shrunk almost two per cent, the US economy has grown by merely 1.25 per cent, yet the Australian economy has grown around 13 per cent over the same time. That meant that we were able to protect jobs and can still protect jobs, as we did during the global financial crisis. In fact, around 840,000 jobs have been created since we were first elected. In contrast to that, the completely irresponsible Newman Liberal-National government in Queensland has been shedding jobs at an average of 65 jobs per day. Mr Abbott himself, the Leader of the Opposition, has referred to the outstanding job being done by Campbell Newman and his band of what I would only describe as economic illiterates. If this is the template by which the opposition leader intends to govern the country, should he ever have the privilege of taking the position of Prime Minister, we should all be very nervous.

As far as interest rates are concerned, it is this government's strict fiscal discipline that puts downward pressure on interest rates. Interest rates are now at three per cent, compared to 6.75 per cent when those opposite left office. Compared to when the Liberals were last in government, a family with a mortgage of $300,000 is now saving around $5,000 a year on a mortgage.

We are actually giving working families a tax cut—from July last year—so that they get more money in their fortnightly pay cheques. Currently, we are experiencing a record investment of more than $36 billion in projects around the country. With this obsession about a surplus, those opposite are failing to recognise that Labor has done a remarkable job of steering the country through the financial crisis. We are one of the strongest economies in the world, we have low unemployment, contained inflation, solid growth, record levels of investment and low debt. Tony Abbott has no plan for the country, just destructive negativity—

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Thorp, 'Mr Abbott,' please.

Lin Thorp (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy President, I beg your pardon: Mr Abbott. 'Misterabbit' just runs off the tongue. He comes from a strong tradition of irresponsible economic management. The International Monetary Fund itself—

Senator Fifield interjecting—

Those opposite may find this interesting. The International Monetary Fund itself has run a fine tooth comb through the financial records of 55 countries over 200 years. It has identified only two periods of wasteful spending in Australia in recent years, both in the period of the Howard Liberal government.

In contrast, Nobel Laureate economist Joseph Stiglitz has said: 'The federal Labor government saved the country from the worst of the global financial crisis and only Labor has the proven credentials to maintain economic strength in the face of adversity.'

Although our economy remains resilient, we also know that the impact on taxes caused by global volatility and uncertainty, lower commodity prices and the high dollar means that tax revenue is way down. But this government is responsible and does not believe that cutting harder or filling a hole in tax revenue that jeopardises jobs is the way to go. We believe in a very strong future. As a Tasmanian, my main concern is what would happen should the economic policies of those opposite ever be applied to my dear state of Tasmania, taking over $600 billion per year out of our coffers.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

Senator Thorp, who spoke before me, commenced her address by expressing some degree of confusion as to why the opposition focuses on this issue. I will tell you why the opposition focuses on this issue: because every dollar borrowed is a dollar of future taxation. Every dollar borrowed is pushing off the cost of what you wish to do today to future generations. And what this government is doing, with the much-lauded Schoolkids Bonus it was talking about in question time today, is actually borrowing from the very kids whose parents are receiving it, just like it did with the stimulus to build overpriced school halls that crowded out the schoolyard—

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

That you guys turned up to the openings of!

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

I went to one: the school my mother teaches at. I plead guilty that I actually went to one. Just as this government did with the disastrous stimulus program of 2009 where money was borrowed from the kids in schools, in the very halls, to build those halls at a cost higher than any other school halls had ever—

Senator Wong interjecting—

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order, Senator Wong! Resume your seat, Senator Ryan.

Senator Wong interjecting—

Senator Carol Brown interjecting—

Order, Senator Wong and Senator Brown! Senator Ryan, you have the call and please do not acknowledge interjections. Direct your remarks to the chair.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

For the information of Senator Wong, I actually did explain to the principal and deputy principal of the school that I voted against it—I did; at the very opening. It happened to be the school I went to and my mother teaches at. So, if you want to begrudge me that, Senator Wong, do not question my honesty.

Why this betrayal of a surplus promise is so important is that it continues the pattern of excuses provided by this government as they seek to justify what has been an unprecedented increase in spending—one of the fastest run-ups in spending by a Commonwealth government since the Whitlam era. The government like to talk about the burden of taxation but they do not want to talk about the burden of taxation plus what they are borrowing. We now have hundreds of billions of borrowings, to which Australia is now exposed. We are a capital-importing country, and to have a capital-importing country add government debt to the burden of private sector debt exposes this country to risk.

What we have seen is excuse after excuse. We saw the global financial crisis. The write-down initially in revenues in that year, I believe, was marginally greater than the surplus the government were actually bequeathed by the previous government. We have seen the government complain about the very resources investment that Senator Thorp talked about earlier. Last year we had the government complaining that it was this very investment that was depressing tax revenues and making it harder for the government to balance the books.

But the truth is this: revenues for this government today are more than $70 billion higher this year than in the year they came to office—$70 billion more this year than when they came to office. What that tells the people is that the government have a spending problem—a huge spending problem. The government are unable to restrain themselves, not just in spending increasing tax revenues; they are unable to restrain themselves from borrowing to pork-barrel and borrowing to send out money to favoured groups at the expense of future taxpayers in this country.

This surplus was the litmus test this government set themselves. This surplus was bragged about during the stimulus debates of early 2009. I remember two budgets ago the headline in one of our newspapers was 'Back in the black'. Whenever anyone on this side questioned whether or not they would bring forward a surplus, they were pilloried. They were accused of being economically irresponsible and, ironically, not having faith in the Treasury. But we now know that the government were bluffing all along, because all we hear is excuse after excuse as to why they have been unable to control their spending.

We are going to hear more, I imagine, in the lead-up to the next budget about savings or 'saves'—to use the jargon the government try to use to sound like they have some control over the budget. But we know that more than two-thirds of the savings this government brought in here have actually been tax hikes on the Australian people. And now we are seeing a big target placed over the future of every Australian who wants some independence in retirement. We are now seeing a big target, a big bullseye, to actually say, 'We are coming after your money—money you have saved; money the government have in fact prohibited you from accessing through the compulsory superannuation scheme; money the government have done deals in the past with unions whereby you might not receive a pay rise but you get a super payment.' Now the government are going to say to those on an income of $50,000 a year—which is what a million dollars would buy a 65-year-old—'We are going to go after that pile of money that is yours merely to feed our incredible spending problem.' The government have shown that they cannot be trusted, and this surplus is the greatest betrayal of all.

Question agreed to.