Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. I refer the minister to his previous statement, and quote: 'More debt is clearly not the answer.' Can the minister confirm that the budget with his name on it delivers more debt and a higher deficit?

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

What I can confirm is that the economy is now strengthening, more jobs are being created and the budget is on a believable pathway back to surplus. What I can confirm is that we inherited a weakening economy from the previous government. We inherited rising unemployment and, of course, we inherited a budget position that was rapidly deteriorating. The government have worked very hard with a responsible, long-term economic plan to turn around the situation that we inherited. Of course, the results are there to see. Despite global economic headwinds, despite challenges that were unexpected and beyond our control, we are continuing on the same timetable back to surplus as in last year's budget.

What an extraordinary achievement. I would have thought that the Australian Labor Party would have been thanking us for fixing the mess they left behind. I would have thought the Labor Party would have come into this chamber today saying, 'How can we help to strengthen Australia? How can we help you create more jobs? How can we help you get the budget back to surplus more quickly?' Instead, all we are getting is more negativity, more no, no, no, more lazy opposition. There is no alternative plan, of course, from the Labor opposition. All we are getting from the Labor Party is a push for more new taxes. That is not a plan; that is just business as usual from the Labor Party.

The government are working very hard. The government have worked very hard for the last 18 months and more to strengthen growth, by getting rid of your job-destroying carbon tax, by getting rid of your job-destroying mining tax, by cutting red tape costs for business, by entering new free trade agreements with Korea, China, Japan. We are getting on with it and all we are getting from the Labor Party is negativity and political self-interest. It is time that you joined the actual conversation of what is in the best interests of the Australian people.

Honourable Senators:

Honourable senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Thank you, Minister. Order! On my left. Let us hope that all the excitement has been got out of that first question.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer to the minister's pre-election promise that under the coalition the budget bottom line will be better off. Isn't it true that under the Abbott government the budget deficit has doubled over the last 12 months?

Honourable Senators:

Honourable senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Just a moment, Minister. Order on my left. Order on both sides. Minister.

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

You do not have to accept every question that you have been given by your tactics leader. If you live with the facts, we inherited $123 billion in projected deficits. We brought that down to $82 billion in projected deficits. Yes, there is further to go, but we are making progress and heading in the right direction.

The Labor Party, over the last year, have opposed more than $30 billion in savings, including more than $5 billion in savings that they themselves initiated in their last budget. Don't you come in here and cry crocodile tears. If you were still in government the situation would actually be worse. In fact, if we had listened to all of your suggestions over the last year the situation would be worse. The truth is that we are now in a stronger, more resilient position as a result of the difficult but necessary decisions that we made. Yes, we have made some adjustments along the way, but we are now heading in the right direction. I say it again—the economy is strengthening, more jobs are being created, the budget is going back into surplus. (Time expired)

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I refer to the Prime Minister's pre-election promise that people can be confident that spending, debt and taxes will be lower under a coalition government. Can the minister confirm that the budget handed down last night has higher spending, higher debt and higher taxes, and is breaking every one of the Prime Minister's commitments?

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

The exact opposite is true. We inherited spending from the Labor government of about 3.7 per cent above inflation. Over the medium term we have reduced it down to 1.5 per cent above inflation. Taxes as a share of GDP are manifestly on a lower trajectory than they were under Labor. We got rid of the carbon tax, we got rid of the mining tax. Last night we delivered a company tax cut for all small businesses across Australia. Ninety-six per cent of small businesses across Australia will now pay less tax from 1 July 2015 onwards. We have provided additional depreciation benefits for small businesses. Of courses, taxes as a share of the economy are lower than they would have been under Labor—significantly lower. Not only that, a debt reduction in net debt will peak in 2016-17 and will start to come down as a result of the decisions that we have made and, of course, without any help from the Labor Party.

Senator Conroy interjecting—

Honourable Senators:

Honourable senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Order! Senator Conroy. Order on both sides.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

My question is also to the Minister for Finance and Minister representing the Treasurer, Senator Cormann. Will the minister inform the Senate how this year's budget will strengthen growth, create more jobs and opportunity, and get the budget back into surplus as soon as possible?

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

(—) (): I thank Senator Edwards for that question, and for his interest in the strongest possible foundation for Australia. When we came into government, as I said earlier, we inherited a weakening economy, a rising unemployment and a budget position that was rapidly deteriorating on the back of unsustainable spending growth. We came into government with a responsible long-term plan to strengthen growth, to create more jobs and to get the budget back to surplus as soon as possible. Guess what? We are making progress and our plan is working, and last night's budget keeps the momentum going. Economic growth is strengthening, more jobs are being created and the budget is on a path back to surplus on the same timetable as in last year's budget. We are achieving this despite some unexpected additional headwinds—global economic headwinds—and the iron ore price falling from US$120 when we came into government to about US$58 now. That is a very significant impact and is quite material given 21 per cent of our national export income comes from iron ore. Despite all of this, we are still getting back to surplus on the same timetable and that is because we have kept spending under control. Unlike Labor, who promised to control spending to two per cent above inflation, we have actually contained spending to 1.5 per cent of GDP. All this is after investing in the future success of small business and investing in a jobs for families package, where we will help families get into work and stay in work by giving them access to more affordable, simpler, more flexible childcare arrangements. We are looking forward to working with the Senate on our plan to strengthen growth, to create more opportunities, to help families and small businesses across Australia that are having a go— (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Will the minister inform the Senate on how the budget will help families and small businesses?

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

The two centrepieces of our budget—and I note the Labor Party is not interested in families and not interested in small business, otherwise they would listen to what I have to say about this—are a $4.4 billion jobs for families package and a $5.5 billion small business and growth package. What we are putting forward is a plan to help families across Australia get better and more affordable access to a simpler and more flexible childcare system, because we understand that that is what will help families to get into work and stay in work; it will help Australia increase workforce participation and it will help us drive stronger growth. With our small business tax cut, with our instant asset write-off, with our instant depreciation for investments of up to $20,000, we believe that small business across Australia will drive stronger growth. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the minister aware of any alternative plans to strengthen growth and to get the budget back into surplus?

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

There are some alternative suggestions from the crossbench, to be fair to the crossbench in the Senate, including the Greens. I do not agree with the plans put forward by the Greens, but at least they have got one.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mathias the big spender!

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

There is no alternative plan from the alternative government of Australia, and, going by the interjection from the worst finance minister in the history of the Commonwealth, she still does not understand that a tax cut is not expenditure. Cutting tax is not spending money. Cutting tax is allowing people to keep more of their own money. Cutting tax enables them to make judgements about where best to invest their own money to be more successful in the future. On this side of the chamber we understand that tax cuts are not expenditure, and it is clear that even after her 18 months in opposition Senator Wong still thinks that cutting taxes is actually spending money. This is going to be the choice for the Australian people at the next election—do they want to return to a high-taxing, high-spending government like the Labor Party or do they want to stay with a sound economic team? (Time expired)

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Cormann. How many new taxes and charges are in the budget handed down this year?

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

None.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I invite the minister to reconsider his answer as there are clearly new taxes in the budget announced yesterday. Does the minister recall his statement last year that the tax burden will be less under a coalition government? Can he now confirm that under him as finance minister government taxation receipts will increase to 23.4 per cent of GDP, two percentage points higher than when the coalition was elected?

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

Taxes under the coalition are lower and will be lower than they would have been under Labor. We have substantially lowered the tax as a share of GDP trajectory moving forward. It stands to reason—we scrapped the carbon tax, we scrapped the mining tax and last night we delivered a 1.5 per cent company tax cut for small business and an effective tax cut for unincorporated small businesses. We of course want to do more, we will do more, and we will do so when we can afford it and when it is responsible to do so.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I refer the minister to statement 10 in Budget Paper No. 1. Can he confirm that this demonstrates that under him and this government Australians will be paying $114 billion more in tax?

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

What I can confirm is that under the coalition taxes are and will be lower than they would have been under Labor.

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

Mr President, my question is to the Minister representing the Treasurer. You say you have listened to the community. You say, after the last budget was roundly rejected, that you have listened to the Australian community. But you continue on with your budget that continues the attacks on hospitals and on education. You continue to cut the foreign aid budget, you ignore action on climate change, and now you take money away from nurses and you take money away from aged care workers by cutting FBT entitlements. I speak to a lot of people. None of the people that I speak to want those things. Can you tell me who you are listening to?

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

May I congratulate Senator Di Natale on his elevation to the leadership of the Greens. Indeed, may I congratulate the Greens senators in this chamber that they have listened to my strong advice to pursue regime change in the Greens. I am very pleased that there has been regime change in the Greens. I hope that the new Greens leader will listen to his Green constituency when it comes to a very important budget measure from last year, which is to ensure that we maintain the real value of the excise on fuel. Because, of course, given that there is an expectation that we maintain the real value—

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

Mr President, I rise on a point of order on relevance. I know question time has become a bit of a joke in this place, but I asked who he was listening to in reference to some very direct budget measures, and he has brought in an issue that has nothing to do with the question. Can you please direct his attention to the question.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Di Natale, you had a very, very long preamble to your question, mentioning a number of facts, and then you quickly asked at the end, 'Can you say who you were listening to?' I did hear the minister say he was actually listening to the Greens at one point. The minister has one minute and 21 seconds left in which to continue his answer.

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

I am quite happy to tell Senator Di Natale who we have listened to. We have listened to the men and women of Australia representing the Liberal Party and the Nationals here in the Australian parliament, who are representing their communities strongly and effectively; we have listened to many stakeholders inside and outside the parliament in relation to all of the issues that we are addressing in this budget. I would say to Senator Di Natale, in his inaugural parliamentary week as leader of the Greens, that I hope that Senator Di Natale will take a more pragmatic and a more outcomes-focused approach when it comes to engaging with the government, because there are some things that we actually could do together in the national interest. There are some things that we can do together to put Australia on a stronger foundation for the future. There happen to be some outstanding matters from last year's budget where I believe there should be a common understanding about the best way forward. So I am looking forward to working with Senator Di Natale in his new role, in making the best possible decisions in the national interest for our great country. You know, we will not always agree, but I encourage you strongly to take a constructive approach.

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

Mr President, I ask a supplementary question. I should let the minister know that I do not smoke cigars, but I am more than happy to have a conversation with him. Given that the Australian community do not want money to be stripped out of health care, they do not want one family pitted against another family—

Honourable Senators:

Honourable senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Order!

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

Is that an opportunity to reset the clock?

Stephen Parry (President) Share this | Link to this | Hansard source

Yes, you can start again, Senator Di Natale.

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

Given that the minister has said that he listens to his National and Liberal Party colleagues, rather than the broader Australian community—who do not want money to be stripped out of health care, and who do not want to pit one family against another to pay for child care—can I ask the minister: why won't you take on the big end town and make sure that everybody pays their fair share when it comes to raising revenue?

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

I certainly agree with Senator Di Natale that we have to do everything that we can to ensure that every business that generates profits in Australia pays its fair share of taxes in Australia consistent with the laws of the land. The Treasurer tabled legislation in the House of Representatives yesterday to ensure, where multinational companies enter into contrived arrangements to avoid tax here in Australia, that the tax commissioner has the necessary powers to see through those contrived arrangements and ensure that the appropriate level of tax is paid here in Australia. Having said that, beyond that, of course, in any budget you have to make judgements about what the national interest is. You have to make judgements in the context of a whole series of competing priorities: a lot of meritorious causes that would like to see more money. You have to make judgements about what is affordable. We believe that in this budget we have taken a fair, measured and responsible approach, taking into consideration the particular challenges we are facing as a country right now. (Time expired)

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

Mr President, I ask a further supplementary question. Minister, I am pleased you raised the issue of multinational tax avoidance, and it was good to see it in the budget; however, when I looked through the budget papers I noticed that there was not one cent allocated next to that line item—not one cent! Is that because you have gutted the ATO so that there are so few staff in that organisation they simply do not have the capacity to enforce that measure?

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

There is so much wrong with the premise of that question, I do not know where to start. Firstly, the staffing reductions in the ATO were actually initiated and banked by none other than Senator Wong as the finance minister. So that is an important first point to make. The second point to make is that the tax commissioner actually clearly spelt out in Senate estimates that this is not impacting on the operational effectiveness of the ATO in any way, shape or form—that they were able to make the necessary efficiencies in order to give effect to their staff reductions. Finally, of course, the reason that we have not allocated any money to it is that—unlike the previous government, which allocated $12 billion in revenue against the mining tax, spent it all before they raised a zack, and then did not raise any money and exposed the budget to structural difficulties—we are taking the Keating approach. When Paul Keating introduced the petroleum resource rent tax, he estimated zero dollars in revenue in his first budget and then raised money. Well, we want to get the money we need in order to ensure that these businesses pay their fair share of tax, but we are not going to get ahead of ourselves; we are going to do the work first.