Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

My question is for the Minister for Finance, Senator Cormann. In your government's brutal budget, you have made cuts to health, welfare and education, you have saddled students with decades of debt, you have slashed funding to the states and you have left vulnerable people out in the cold—all in the name of a contrived budget emergency. At the same time, Australia's tax concessions are the most generous in the world, amounting to $115 billion last year. Why did the government rule out winding back generous tax concessions to the big end of town and instead target pensioners, people with disabilities, students and the sick?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Di Natale for that question. What this government is doing is fixing the budget mess left behind by the Labor-Greens government. When we came into government in September last year, we inherited an economy growing below trend, which had rising unemployment, low consumer confidence and business investment that had plateaued. The budget was an absolute mess, with a spending growth trajectory that was unsustainable. Labor's carbon tax, mining tax and massive additional red tape had reduced the level of economic growth, which had flow-on implications for the revenue raised by government. We are fixing that.

The Labor and Green reckless approach to government spending put us on a spending growth trajectory that was going to take spending, as a share of GDP, to 26.5 per cent—up from 23.1 per cent in the last year of the Howard government. That is at a time when we are raising less than 22 per cent, as a share of GDP, in tax revenue, with a long-term average of about 23.7 per cent. You do not have to be Einstein to know that you cannot balance your budget by continuing to spend at the levels the previous government wants to spend at.

There is no easy way to cut and reduce an unsustainable, unaffordable spending growth trajectory, but we cannot keep spending money we have not got and we continue to borrow from our children and grandchildren in order to fund our lifestyle today. We are saying that it is not appropriate for us to continue to borrow in order to fund consumption today. We think that we owe it to our children and grandchildren to protect our living standards, to build prosperity and to build opportunity for the future so that we leave to them a country that is in at least the same position, if not a better position, as the country we inherited from our forefathers.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

I have a supplementary question. Minister, your colleague the Treasurer, who often accuses his political opponents of waging class warfare, this week claimed the average Australian has to work for a month to pay for the welfare of his or her fellow Australians. Minister, can you confirm the reports today that the average Australian works for two days to pay for the unemployment benefits of others but nearly 10 days to pay for tax concessions that go to the wealthy?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Di Natale for that follow-up question. The Treasurer's speech last week at the Sydney Institute was an outstanding speech, indeed. It explained the efforts of this budget to repair the budget mess that we have inherited from the Labor-Greens administration. We inherited a budget situation where Labor, in their first five years of government, accumulated $191 billion in deficits.

Michaelia Cash (WA, Liberal Party, Assistant Minister for Immigration and Border Protection) Share this | Link to this | Hansard source

How much?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

They accumulated $191 billion in deficits. Their last budget left behind another $123 billion in projected deficits, and government debt was heading for $667 billion. We are forced to pay $1 billion a month in interest, just to service the debt that has been accumulated by the Labor Party. And remember, there was no government net debt in 2007; there was a $20 billion surplus. There was money in the bank. In the last year of the Howard government, the government was collecting more than $1 billion in net interest payments on the back of a positive net asset position.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

I have a further supplementary question. Minister, this is a very straight-forward question. Why has the government chosen to prioritise concessions such as the $5½ billion going in the form of fuel tax credits that benefit industry over medical services for sick people? Why have they done it? Minister, if the age of entitlement is over, why do mining companies at the big end of town continue to get handouts while ordinary people are forced to do the heavy lifting?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I do not ever expect the Greens or Senator Di Natale to understand this—but guess what? A strong mining industry is actually in our national interest. A strong mining industry helps to create jobs. A strong mining industry helps to create opportunities for people to earn a living.

I say to you that I completely reject the assertion that, somehow, there are concessions provided to the mining industry. The senator well knows that the fuel tax arrangements are effectively a road-user charge and that the mining industry, farmers and others get a rebate in relation to off-road fuel use. Why should you be paying a road-user charge in relation to fuel that is not used on roads? It is a very simple proposition.

We are focusing on building a stronger, more prosperous economy where everyone has the opportunity to get ahead. That includes a competitive taxation arrangement, where businesses across Australia can be successful, because we understand that only if businesses are successful across Australia will the country be successful.