TEHAN(Wannon) (17:37): I rise tonight to talk on these appropriation bills and, more specifically, talk about Labor’s budget that was delivered?and what a budget we saw. Let us start with the Treasurer’s speech on that Tuesday night. He started by introducing his budget as a budget for growth and a budget for jobs, yet ultimately in the end what did the detail of the budget show? It showed quite clearly that this budget for growth and this budget for jobs actually did the opposite. It showed that growth was going to diminish. It showed that unemployment was going to increase. So our growth and jobs budget turned out to be completely the opposite.
As we continued to go into the budget we started to see that the Treasurer had been laid bare, that his rhetoric over 5 years had come to nothing. This idea of being an economic conservative, this idea of being able to deliver proper financial reform for this country, was laid bare as being absolutely hollow. This idea that the budget would be returned to surplus over a period of time was seen to be absolutely flawed, absolutely fundamentally wrong. Being kind, I would say that the Australian people have been misled and misled and misled by the Treasurer ever since the Labor government came to office. What we saw with that budget was that all the chickens had come home to roost. All of a sudden we had a Treasurer having to be honest. The facts had caught up with him. There was no surplus to be seen. As a matter of fact, what we have seen both from the Parliamentary Budget Office and then from the Treasury is this. Since 2007 Australia’s finance have deteriorated to the extent that we now have a fiscal imbalance, a structural deficit to the tune of around $16 billion.
So in 2016-17 our budget, if it continues on this trajectory, will hit a deficit of $16 billion to $17 billion if all other things stay consistent. As we know with this government, sadly, that is not the case. What this government has shown beyond any other thing is that it is addicted to spending. It cannot help but spend, spend, spend. That is its answer to everything. At some stage the spending has to stop. I think the truth of the matter is that the Australian people will get the chance to make the decision come election time. If Labor is re-elected history tells us that the spending will not stop.
What did the budget also show us? It showed us that gross debt, which is at $250 billion, will hit $300 billion. Yet the Treasurer will not have the honesty to go to the Australian people and say, ‘Through my forward policies, through my spending addiction, I will lift the gross debt ceiling.’ They are going to leave it to a future government. Once again, we are seeing budget dishonesty. Why not admit to the fact it is a mess? Why not say: we realise we have got a mess, now we are going to have the honesty to say okay, although it is too late, we are going to admit that we got it so wrong.
What happens to the budget in this financial year? Sadly, we are going to see a budget deficit in the vicinity of roughly $19 billion. And if history over the last few years shows us anything it shows us that that will be a conservative estimate. It is likely that $19 billion potentially could hit $30 billion if not $40 billion. It also adds to the fact that we have had the five largest budget deficits in a row in Australia’s history. What a record this Treasurer will take when he leaves this parliament. He has never delivered a surplus although he promised to deliver one well over 100 times. He will leave gross debt over $300 billion. He will have delivered the five largest budget deficits in Australia’s history?what a record.
It is going to be interesting to see how this record is tried to be buried, how this record is tried to be changed. It is practically indefensible. The sad thing is where is this going to leave the nation? We are currently seeing a lot of problems within the Australian economy. We are seeing them in our manufacturing sector, we are seeing them in our agricultural sector, we are seeing them in retail and there are no solution to these problems in the economic plan which was set out by the Treasurer in the budget.
It is very interesting to contrast that with what the Leader of the Opposition had to say on the Thursday night because he did set out an economic plan, a clear economic plan of what a coalition government if elected would do for the Australian economy. Business confidence, consumer confidence would be restored. We would get rid of the carbon tax but keep the tax cuts. I will repeat that because it was a very important message from that Thursday night. Get rid of the carbon tax but keep the tax cuts. I think you are going to hear that said long and loud between now and election day because it is a key component that really goes to the heart of our ability to manage the economy. Cut the taxes, cut the carbon tax and deliver tax cuts. You will hear it between now and election day. Prepare as you can to try and combat it because it is a powerful message.
To back it up, we have our record in government of reducing debt, cutting taxes and making sure the budget surpluses are delivered. Boy oh boy, do we need to make sure that we get the finances of the nation back in order, because the spending addiction we have seen has been like no other spending addiction any government has overseen. This one has the five largest budget deficits in Australia’s history?the $300 billion debt ceiling having to be lifted again, but the political courage is not there for this government to do it themselves. They are going to leave it as a legacy to the next parliament. The Treasurer will have delivered more than $25 billion in higher taxes over the next four years. Chaos, debt and spin.
Fortunately, there is an alternative plan. It will see the Australian economy set a trajectory of growth, will see unemployment decline and will see our key industries?agriculture, manufacturing, retail and services?have the confidence to grow. This is because we will reduce taxes and make sure that those taxes that are hurting our economy, most particularly the carbon tax, will go. It was an outstanding speech by the Leader of the Opposition because it was honest and frank with the Australian people. It was a speech that called the Labor government to account. It revealed all the warts that were presented by Wayne Swan on the previous Tuesday night and started the process of saying, ‘There is a better way that we can manage this economy.’ It was backed by the shadow Treasurer at the National Press Club the following week, laying out detailed plans of how we will find the savings within the budget to make sure that we live within our means.
Done properly, it will not be that difficult. It will be about having a serious economic discussion with the Australian people, laying out the plans, showing where the Commonwealth spends its funds and saying, ‘Okay, if we’re to tighten our belts, this is how we will have to do it.’ We cannot say to the Australian people: ‘We want you to tighten your belts during these times’ and not have the government do the same itself. That is the clear message we will be delivering. If we are to get rid of this structural deficit?which will hit $16 billion if nothing is done about it?we have to take action. That action was laid out there for everyone to see.
We will not make shock decisions. We will not make radical changes of policy. We will have a consistent approach to running the nation’s finances. That is all the Australian people are asking for, at this stage. They just want a government that will deliver them some certainty, a government that has a philosophy about the way it will run the nation, a government that will not focus on the opposition and the opposition leader, and a government that will focus on running the economy and running the country?and doing so in the interests of all Australians. That is what you will get from us, if we are elected at the next election. We will forget the spin. We will start to address the debt. We will start to address the deficit. We will give business confidence, we will give consumers confidence and we will get the economy tracking where it should be.
We need to do it if we are to have an economy which can live and operate in a globalised world. We have to make sure that production costs come down and that businesses can compete globally, because whether you operate in the domestic environment or whether you export and operate in the global environment, you do so in a globalised world. You have to be able to compete. One of the fundamental things that the Treasurer and the current Prime Minister have never, ever understood is that we are not isolated; we do not live in an incubator. We actually have to operate now in a globalised world, and this presents real challenges. It means that we have to keep our costs down if we are to compete with what is occurring in the US, where we are seeing a new energy source providing a cheap form of input to their industries. If we are to compete with that, we have to make sure that our input costs are kept down. That is why the carbon tax, when it comes to electricity prices, has hurt so much. I give one example: Murray Goulburn, the dairy processor. Their carbon tax bill is $14 million annually. That makes it a lot harder for them to compete internationally. You can run through industry after industry after industry and the same thing is happening.
We have to keep our costs down so that we can compete. It is no longer okay to say that we are going to put up some sort of protective blanket around our economy and that we will be able to survive. In a globalised world that will get us nowhere. We have to be able to compete. We have to make sure that our industries are able to compete. That is the key to our retail sector, to our services sector, to our manufacturing sector and, most importantly, to our agricultural sector. The opportunities are there with the growing middle classes in Asia, Latin America, Africa and the Middle East. There are opportunities there for the Australian economy, for Australian businesses, but we have to be able to compete to make the most of those opportunities. Sadly?and I wish I could say otherwise?the budget that was delivered does not do that. But there was a budget reply on the Thursday night which showed a clear direction on how it can be done, and I commend that budget reply to the House. (Time expired)