Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Cormann. Can the minister confirm that, under the Turnbull government, gross debt will pass half a trillion dollars in coming months, a total of $20,000 for every Australian man, woman and child?

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

What I can confirm is that gross debt will be lower than it would have been under Labor. That is what I can confirm. But don't take my word for it; look at your pre-election costings. Labor went to the last election fessing up to $16.5 billion in bigger deficits, and do you know what? That came after $100 billion in additional taxes.

Senator Wong interjecting—

I take the interjection here from Senator Wong. She has had a lot to say about the level of tax. Well, this government maintains a 23.9 per cent tax-as-a-share-of-GDP cap. Guess who got rid of it in their pre-election costings. Guess who got rid of the tax-as-a-share-of-GDP cap. It was the Labor Party. The Labor Party went to the last election with a commitment to higher taxes, breaking through the 23.9 per cent tax-as-a-share-of-GDP barrier, and was still delivering bigger deficits and delivering bigger and higher debt numbers. So we do not take any lessons from the Labor Party when it comes to good fiscal management. The people across Australia understand that the Rudd and Gillard Labor governments left the budget in a mess and that it came down to the coalition government to again clean up that Labor mess—and we are doing precisely that.

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

You made it worse.

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

Order, Senator Wong.

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

That is what you have done; you have made it worse.

Government senators interjecting—

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

Order on my right as well. Senator Ketter, a point of order?

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Yes, a point of order on direct relevance. My question related directly to the fact that gross debt would pass half a trillion dollars in coming months. The minister went nowhere near answering that question.

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

Well, he went very close to answering. He did confirm something, but probably not the exact question. I call the minister.

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

The hide! Let me say to the good senator that the numbers are of course all published in the budget papers. I know that the Labor Party comes into this chamber trying to play cute games. But let me tell you this: this government continues to work to fix up the mess that you left behind. You guys were spending like drunken sailors. You guys were putting us on a deficit and debt trajectory over the long term that we are still trying to sort out. We are now on track to bring the budget back into surplus by 2020-21, to the tune of $7.4 billion. We are now on track with a situation where net debt will peak as a share of GDP at 19.8 per cent in the 2018-19 financial year.

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

Higher than it was.

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

Senator Wong says 'higher'. That is because Labor— (Time expired)

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

Senator Ketter, a supplementary question.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Minister, given that in 2009 Mr Turnbull described the then approximately $200 billion of gross debt as 'colossal', 'unprecedented', a 'mountain' and a 'summit', what words would you use to describe Prime Minister Turnbull's projected gross debt of $725 billion?

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

As I said, the debt is less than it would have been under Labor. Let me just explain to the chamber the little dishonest trick that Labor used in their budget to hide the true budget numbers. They imposed an assumption on their spending forecast that spending over the medium term would not go up by more than two per cent above inflation at the same time as making policy decisions that were ramping up spending by 3.7 per cent, year on year, above inflation—nearly double, year on year. Everybody knows that—

Senator Wong interjecting—

If you want to look at it, look at the Pre-Election Economic and Fiscal Outlook in the lead-up to the 2013 election. The Treasury and Finance secretaries were so embarrassed by what Labor did in government that they felt the need to spell it out. They felt the need to spell it out because Labor were trying to fool the Australian people, suggesting that they would control spending without telling anyone where savings would come from. This government had to do the hard yards to fix up your mess, as we always do.

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

Senator Ketter, a final supplementary question.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Minister, I refer to Senator Abetz, who on Monday said, 'We do have a debt and deficit disaster.' Given that the deficit is 10 times bigger for the coming year than was predicted in the Liberal's first budget, is it safe to assume that nobody is listening to Senator Abetz?

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

The thing that the Labor Party does not understand is that the decisions we make today have medium- to long-term consequences. The decisions that Labor made between 2007 and 2013, locking in unsustainable, unaffordable spending growth, still have consequences today. We are still dealing with the consequences of Labor's fiscal mismanagement. Let me say it again very clearly: the budget, the economy, today is in better shape than it would be if Labor had still been in government, because we have been making significant progress in fixing up the mess that Labor made of our budget.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

My question is to the Minister for Regional Development, Senator Nash. Can the minister outline how this budget will help to secure the future of regional Australia?

Fiona Nash (NSW, National Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I thank the senator for his question and his ongoing tireless work for regional communities. This is a budget about fairness, security and opportunity, and that is exactly what we will be providing for regional Australia. We are investing in regional communities because we know that when we have strong regions, we have a strong nation. The regions provide the water for the cities, provide the food for the cities and provide the energy for the cities. Indeed, people in the cities every morning when they wake up should thank regional Australia for their way of life.

We are seeing in this budget $200 million extra for the Building Better Regions Fund, taking the total amount available for that fund to almost half a billion dollars. That fund provides investment in our local regional communities for things like infrastructure, airports, tourism and local leadership, where we see local people taking those ideas forward.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

You're not doing anything for Tasmania. You're punishing us because we threw the Liberals out!

Fiona Nash (NSW, National Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I wish I had time to take Senator Polley's interjection that we are not doing it for Tasmania, because I do not know what she has missed. All of the things I am talking about apply to Tasmania as well. We have also seen $272 million in the budget for major regional projects. It is going to invest in communities in regions undergoing economic change. There is going to be Commonwealth funding of over $10 million for each of these projects. This shows that it is this coalition government that has the confidence in our regional communities. We back those communities and respect them to be able to drive their future and take their communities forward so that they have a stronger future.

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

Senator Williams, a supplementary question.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I thank the minister for answering. Minister, what other measures in this budget will improve the lives of regional Australians, regardless of where they live?

Fiona Nash (NSW, National Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

It is a shame really that those on the other side did not spend more time developing rural policy than they do interjecting. Let me tell you that there is plenty we are doing for Tasmania and all of regional Australia. We are seeing now $15 million for the regional education hubs. This is going to allow our students in regional communities to access university education from their regional locations. There is $9 million going for access to telehealth for psychologists. For the first time, Medicare is going to foot the bill for this for rural and remote locations. There is $8.4 billion for the inland rail. For the first time under this coalition government the inland rail is going to be built, opening up a corridor of commerce from Melbourne to Brisbane. Those on the other side should stop carping and get on board.

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

Senator Williams, final supplementary question.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I have a tricky question now. Is the minister aware of any alternative approach to regional development?

Fiona Nash (NSW, National Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

On this side we do understand it, unlike the potentially three out of 26 senators on the other side who have any connection at all to regional Australia. That side brought in a carbon tax, which hurt regional Australia harder than anywhere else. They banned the live export trade, which, as my colleague Senator O'Sullivan was so eloquently talking about this morning, decimated parts of Australia. There was not one single dollar for mobile phone black spots. How many dollars? Zero. They put a second satellite up for Sky Muster. They were actually just going to let it bob around up there as backup. We were the ones who utilised it to increase the data for the community. When in government, those on the other side decimated the department of agriculture, cutting their funding by half. Those on the other side should stop whingeing, start thinking and get on board with the coalition.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. Can the minister confirm that tax receipts will reach 22.2 per cent of GDP in 2017-18, making him the highest-taxing finance minister in a decade?

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

I can confirm the numbers published in the budget papers. That is No. 1. No. 2 is this government is maintaining a very clear fiscal discipline. This government—and this has been the case for some time—has imposed on our revenue projections an assumption that tax as a share of GDP will not ever go past 23.9 per cent.

What has the Labor Party done? The Labor Party has removed that discipline. The Labor Party has removed that cap. When Labor went to the last election, they went with pre-election costings, letting tax as a share of GDP rip. There was no upward limit at all—none, zip, zero. Essentially, you were saying that there was no level of tax that could be taken out of the economy that was too high. You went to the last election saying there is no limit to how much tax we could take out of the economy, suggesting that somehow it would not hurt growth and would not hurt jobs.

This government is disciplined. This government is disciplined on the spending side and disciplined on the revenue side. We are raising as much as we need in order to be able to fund the essential services that Australians rely on. We are making sure that money is spent as wisely and efficiently and effectively as possible. Spending as a share of GDP is now, over the forward estimates, projected to go down to 25 per cent, which is actually very close to the long-term average of 24.8 per cent. When we came into government, it was headed for 26.5 per cent within the decade and rising. That is the trajectory that we inherited from Senator Wong as finance minister: spending as a share of GDP was heading for 26.5 per cent and rising over the medium term at the time. We have arrested the increase. We have brought spending growth under control. Instead of 3.7 per cent growth in spending year on year, we brought it down to below two per cent, on average, over the forward estimates per year. In the 2017-18 forward estimates, spending growth is under control. Spending as a share of GDP is lower now than it was— (Time expired)

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

Senator Polley, a supplementary question.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

In February, Minister Cormann said:

We do not want to increase taxes. Our commitment is to lower taxes.

He said:

The Liberal-National Party Coalition is the party of lower taxes.

Can the minister confirm that, under Prime Minister Turnbull, the Liberal-National coalition is now the party of higher taxes?

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

(—) (): I thank Senator Polley for that question because it gives me the opportunity to confirm that I stand by that statement. The coalition is the party of lower taxes. Our instinct always is to keep taxes as low as possible. Here is the reality: we inherited a spending growth trajectory that was unaffordable, unfunded and unsustainable. Since the 2014-15 budget, we have worked as hard as we can to reduce spending. Senator Wong and the Senate would well remember—she is not taking this very seriously right now—that the Senate was not prepared to support about $14.7 billion worth of spending reductions. Given that we are committed to bringing the budget back into surplus, because that is what is required out of fairness to future generations and what is required for our economy, revenue measures were the only other alternative to make up the difference. As Senator Macdonald said, it is essentially a tax that is caused by the Senate. (Time expired)

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

Senator Polley, a final supplementary question.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

Given that this budget breaks the minister's own commitments, is former Prime Minister Abbott's Chief of Staff, Peta Credlin, correct when, referring to the budget, she says:

It was short on Liberal values and long on survival instincts for a Prime Minister ...

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

Firstly, I do not accept Senator Polley's characterisation that I am somehow not sticking to my commitment. The government is absolutely stuck to the commitment that taxes will be as low as possible. Given the position adopted by the Senate to not support all of the savings that were reflected in our past budgets, we had to make some pragmatic and responsible decisions on the revenue side of the budget. We stand by that. That was not our first preference. That is not what we really wanted to do, but we had no choice.

In relation to the other part of the question, Senator Polley and the Labor Party might think this is all a game, but, you know what, on this side of the parliament, we actually care for our country. We care about making the right decisions for our country on the strongest possible foundations and projection of the future. This is serious business. Do not come in here with your juvenile political game. Do not come in here with your— (Time expired)