Senator BRANDIS (3:22 PM) —I always find it hard to come to terms with the fact that so many of the opposition spokesmen in this place have a problem dealing with facts. We have just seen an example of that from Senator Gibbs. Senator Gibbs makes an accusation against the government by saying, `What you have done to the aged people in this country is disgraceful.'

Senator Gibbs —It is.

Senator BRANDIS —Is it disgraceful, Senator Gibbs, that this government has maintained increases in the age pension above the level of the CPI throughout the life of the government? The increase in the CPI, Senator Gibbs, to March of this year was six per cent. In the same period the rate of increase in the age pension was eight per cent. Not only that, the increase was paid prospectively—as Senator Knowles has pointed out—not retrospectively. The increase was made prospectively last year. If the rate of the age pension is increasing at eight per cent and the CPI, including the GST effect, is increasing at the rate of six per cent, I find it difficult to see how it could fairly be said that age pensioners are being left in the lurch.

What is the problem, Senator Gibbs, in giving a $300 benefit, a social equity benefit, to age pensioners—not in compensation for anything but in recognition of something? That is the point, Senator Gibbs. It is in recognition of the fact that these people built Australia's 20th century and now after a period of prolonged economic prosperity these people, more than any other citizens in the community—the people who built the 20th century—are entitled to an equity dividend, a social bonus, which is what this payment is.

Dennis Atkins, the Canberra correspondent of the Courier-Mail observed in yesterday morning's Courier-Mail that it would take a heart of stone to say that this budget is not a generous one. This morning in the Australian Malcolm McGregor made this observation:

Isn't it interesting that when the Labor Party have brought out their spokesmen—whether they be the Leader of the Opposition or Simon Crean or the other frontbenchers—to attack the budget they cannot identify a single expenditure priority that they disagree with. All they will say is—and Senator Gibbs's speech and question today are examples of this—`We will pass that. We agree with that but you should have gone further. We support your increase in payments to pensioners. We support your increase in the tax-free threshold. We support your social equity program for older Australians but you should have gone further.' Yet at the same time they say that they will maintain existing programs and increase the surplus.

So where does the money come from? We are all a bit perplexed about that. We had our suspicions but we had to wait until today to have those suspicions confirmed by our friend Senator Conroy, the shadow minister for financial services. This morning Senator Conroy gave an answer to this question: `In order to fund this knowledge nation that Labor keeps talking about, would you be willing to increase revenues in some way?' Senator Conroy might be mean and tricky but at least on this occasion he was not being dishonest when he said:

So there it is on the table for all to see. Senator Conroy this morning has put increases in the rate of tax back on the political agenda. We can thank Senator Conroy for his candour. He has now let the cat out of the bag and he has told us how the Labor Party's alternative budget will be funded.