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Wednesday, 29 February 2012
Page: 1220

Fiscal Policy

Senator THISTLETHWAITE (New South Wales) (14:31): My question is also to the Minister for Finance and Deregulation, Senator Wong. Can the minister outline why it is important for governments to have properly costed and fully funded policies? How has the government shown the importance of costing and funding policies through the implementation of its Paid Parental Leave scheme?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:31): I thank the good senator for his question. He is one of the senators in this place who have shown an interest in economics. I have to say that, apart from Senator Sinodinos, it appears those on the other side are no longer interested in economics and certainly not interested in sensible fiscal policy.

This government does understand the importance of ensuring that policies are properly costed and fully funded. One would have thought that was an uncontroversial proposition, but apparently with this opposition, this shadow Treasurer and this shadow finance minister it is now a controversial proposition that you would actually have to properly fund and properly cost your policies.

The government, whether it was in the previous budget or the previous mid-year review, have shown that we make the decisions, sometimes difficult decisions, to offset spending and to find savings. We delivered a net improvement to the budget bottom line of $6.8 billion across the forward estimates in MYEFO, when you consider particularly the significant revenue downgrades the government was hit with. This followed some $100 billion of savings across four budgets.

But what do we have from those opposite? The first thing we have is a $70 billion black hole—they are not my figures; they are Mr Hockey and Mr Robb's figures. Take it from them.

Senator Cormann: That's just not true.

Senator WONG: Senator Cormann says that is not true. I suggest he might want to rock up occasionally to the ERC on that side and let them know that they have got their costings wrong.

But, on top of all of this, we have an opposition led by a man who is completely reckless when it comes to the economy, who shoots from the hip and who has a Paid Parental Leave scheme that is 'practically friendless' in his shadow cabinet. We know that, even inside the Liberal Party room, the sensible people are starting to worry about Mr Abbott's economic recklessness and his refusal to do anything sensible— (Time expired)

Senator THISTLETHWAITE (New South Wales) (14:33): Mr President, I ask a supplementary question. Can the minister outline, in the context of running a clear fiscal strategy, why it is important to ensure that spending priorities are fully funded?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:34): As I said, good budget management does require some difficult decisions. We saw that in the last budget and we saw that again in the mid-year review. But, of course, the alternative is a series of unfunded, unaffordable, undeliverable promises from those opposite. The real story of what is happening in the coalition is that they are having to walk away from a surplus. They are having to walk away from support of the National Disability Insurance Scheme. They have had to walk away from tax cuts because they know they cannot balance the books. So, instead of properly funded, properly costed policies, they have come up with a new one. They call it an 'aspiration'—a budget aspiration; a policy aspiration that you kind of hope about but you never actually have to fund. That is what your election promise will be: an aspiration. (Time expired)

Senator THISTLETHWAITE (New South Wales) (14:35): Mr President, I ask a further supplementary question. Can the minister outline any approaches to funding spending promises other than making tough choices and prioritising spending? What would the impact be of those alternative approaches?

Senator WONG (South AustraliaMinister for Finance and Deregulation) (14:35): The alternative approach is obviously one where you see a $70 billion black hole and where you have to cut services to Australian households drastically because you have been so undisciplined in the policies that you are promising. One of the things that should be noted is this: the Leader of the Opposition claims that the coalition are the party of lower taxes. They say it is in their DNA.

Senator Abetz interjecting

Senator WONG: Perhaps Senator Abetz would like to explain why their paid parental leave policy is funded by a new tax. The party that claims to be the party of lower taxes wants to say to Australians, 'We don't believe in taxes, but you know what? We're going to whack a bit more tax onto the company sector to pay for a Paid Parental Leave scheme that our party room and our shadow cabinet does not support.'