Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Minister Cormann. Last week, former Prime Minister Malcolm Turnbull stated in a letter to the Senate Environment and Communications References Committee that the Minister for Finance and the current Prime Minister were willing to fund a substantial six-year package for the Great Barrier Reef so long as it was all expensed in the 2017-18 financial year. Is Mr Turnbull telling the truth? Are the Minister for Finance and Prime Minister Morrison the joint architects of the $440 million unsolicited grant to the private Great Barrier Reef Foundation?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The first point I make right up-front is that I've read the letter by Mr Turnbull and I don't have any issues with the way he describes the process. As I've said to the Senate before, the decision to make this additional substantial investment in the future health of the Great Barrier Reef followed a proper process. It was a proposal that was put to the Expenditure Review Committee by the then Minister for the Environment and Energy, Mr Frydenberg. It was considered through the normal process, and it's right.

We had a number of considerations in front of us. One was the advice from the department of the environment which indicated to us that it would be easier for us to leverage additional private sector investment if we made this federal government contribution through a non-government vehicle, which is ultimately what we did. Also, of course, as a result of the good economic and budget management of this government, we're tracking well ahead of where we anticipated we would be in terms of our budget performance. Revenue was up substantially and payments were down substantially in 2017-18, so we knew that it was affordable in 2017-18 to make this one-off contribution, providing certainty to those philanthropists who were considering making additional private sector contributions, instead of locking the Commonwealth into an ongoing liability year on year. These are all considerations that led us to the ultimate decision to make a substantial additional investment in the future health of the Great Barrier Reef, and I don't understand why Labor is so opposed to our investment in the future health of a great national asset.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Keneally, a supplementary question.

Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr Turnbull also told the Senate committee that the Minister for Finance and the current Prime Minister did not think the budget could accommodate the proposed investment for the reef in subsequent years. Is the government's projected surplus in the 2020-21 financial year so vulnerable that the government had to resort to this sort of dodgy process rather than allocate funding to the relevant agencies in the normal way?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Firstly, I reject any suggestion that this was a dodgy process. This was a considered decision of the government, having considered a range of alternatives. The other point I would make is that, when we came into government, not only did we inherit a weakening economy and rising unemployment but we also inherited a rapidly deteriorating budget position. In the 11 weeks after Labor's last budget, the budget position deteriorated by $33 billion. In 2016-17 and in 2017-18 we delivered a substantially better final budget outcome than was forecast at budget time, an improvement of about $4 billion in 2016-17 and about $19.3 billion in 2017-18. Indeed for the first two months of this financial year the bottom line is $6.6 billion better to the end of August than was anticipated at budget time. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Keneally, a final supplementary question.

Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

In light of your answers, Minister, isn't it now clear that the government's decision to give $444 million to a private foundation that never asked for the money was not about getting the best outcome for the Great Barrier Reef but about using an accounting trick to get a political outcome for the coalition?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

No, I reject that absolutely. It was all about achieving the right outcome for the Great Barrier Reef in a way that was fiscally responsible.