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Thursday, 18 August 2011
Page: 8600

Budget

Mr HOCKEY (North Sydney) (14:44): My question is to the Prime Minister. I refer the Prime Minister to the concerns she expressed early this year about the impact the Queensland floods would have on the budget bottom line leading her to impose a $1.8 billion levy on Australian families to make up for the potential shortfall. Given the government's own figures suggest her carbon tax will create a $2.9 billion hole in the budget this year, how does the Prime Minister intend to make up for this shortfall?

Honourable members interjecting—

The SPEAKER: Order! The member for Dickson, the member for North Sydney and the Treasurer will sit there quietly or they will have a conversation outside. The Prime Minister has the call.

Ms GILLARD (Lalor—Prime Minister) (14:45): I thank the shadow Treasurer for his question. Yes, earlier this year, working alongside the Treasurer, the finance minister and my cabinet colleagues, I had to work out how, responsibly, we were going to finance the rebuilding of the nation and most particularly Queensland. We made the determination that we would do that by budget cutbacks and a large number of budget cutbacks were made. They were not easy but they were necessary to have the resources to rebuild Queensland and the rest of the nation. We also took what was not an easy decision but was the right decision to impose a flood levy which would predominantly be paid by upper income earners and we brought that legislation to the parliament.

Mr Ewen Jones interjecting—

Ms GILLARD: At that time the opposition, the shadow Treasurer and the Leader of the Opposition claimed—

The SPEAKER: Order! The member for Herbert has had a warning. He will leave the chamber for one hour under standing order 94(a).

The member for Herbert then left the chamber.

Ms GILLARD: that this would destroy the economy, it would destroy families and it would destroy everything in Australia—and of course they have been proved absolutely wrong.

Mr Hockey: Mr Speaker, I rise on a point of order on relevance. I asked the Prime Minister: how will she fund the $2.9 billion hole now created by the carbon tax this year?

The SPEAKER: That was the last portion of the question. The Prime Minister has the call. She knows that she has to be directly relevant and the question was more than what was just repeated.

Ms GILLARD: The question drew a direct comparison between decision making earlier this year on the flood levy and that on carbon pricing and so I am addressing the first part of the question. In addressing the first part of the question, we saw a fear campaign from the opposition and now they do not even utter the words 'flood levy', as far as I can tell. I have not heard them utter them once since 1 July, when it came into effect. It was an opposition fear campaign that just fell away, the same way in which the carbon pricing fear campaign of the opposition falls away piece by piece as the inconsistencies and untruths in it are revealed. In terms of the necessary decisions in relation to the budget, what we said, at the time of the announcement of the carbon pricing package, was that all of the figures were there for people to see and that we would do the necessary updating in the Mid-Year Economic and Fiscal Outlook.

Mr Hockey: Where are the savings?

Ms GILLARD: What I would also say to the shadow Treasurer—who seems very interested in these matters and is now, quite remarkably, saying to me, 'Where are the savings'—is that when we announce the Mid-Year Economic and Fiscal Outlook you will see yet again this government making savings. I would invite the shadow Treasurer on the same day to publish the opposition's figures including how they are going to cover the $70 billion black hole. If the shadow Treasurer is seriously interested in matters of fiscal consolidation and fiscal prudence then I think he will jump to the challenge and the opportunity to publish all of his figures on the same day as the government, including accounting for the $70 billion black hole. I would be very interested to see where the cutbacks are coming from, whether it is from pensions, hospitals, Medicare or defence. That $70 billion is the same as not paying the age pension for two years. Maybe that will be one of the Leader of the Opposition's decisions, but I will be very keen to see the facts and figures of it.