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Thursday, 16 May 2013
Page: 2782

Budget


Senator JOYCE (QueenslandLeader of The Nationals in the Senate) (14:00): My question is to the Minister for Finance and Deregulation, Senator Wong. I refer the minister to concerns reported today that the budget's assumptions about the value of the dollar and commodity prices might be overly optimistic and, if so, could lead to reduced revenue collections to the tune of $90 billion. Given the heroic assumptions in the budget about the terms of trade and the highly optimistic estimates about the revenue to be collected via the carbon price and the mining tax, will the minister, as one of the people most responsible for preparing the budget, accept a personal responsibility for any deterioration in revenue collections and any consequent impact on the deficit?


Senator WONG (South AustraliaDeputy Leader of the Government in the Senate and Minister for Finance and Deregulation) (14:00): I would make a few points in response to Senator Joyce on this. The first is: notwithstanding the attempt by the coalition to distract attention by attacking the Treasury or attacking forecasts, I would remind the coalition that the very professional officers of the Treasury and the very professional officers of Finance are the same institutions—and, often, in many locations, the same individuals—who served Mr Costello and produced the forecasts for Mr Costello. But what the coalition would have you believe is that, magically, suddenly, the Treasury has become some hotbed of a Labor Party faction. Well, we on this side actually have some regard for the professionalism of the institution and think it is very unfair and inappropriate for the coalition to continue to attack the Treasury in the way that it is.

I think there were two questions. The first might have been in relation to nominal GDP, and I would make the point that the forecasts for nominal GDP are in fact: nominal GDP growth below trend and well below the 20-year average, and in fact the nominal GDP forecast has been reduced since the midyear review. In terms of the terms of trade, the forecasts in the budget are broadly in line with those of many major forecasters and show a decline over the forecast period, and of course there is an assumption about decline over the projection period.

I would refer the senator—or perhaps I can, in the supplementary—to a number of comments by market economists about the government forecasts. (Time expired)


Senator JOYCE (QueenslandLeader of The Nationals in the Senate) (14:03): Mr President, I ask a supplementary question. Why should the Australian people have any faith in the forecasts and assumptions that the minister and the Treasurer have adopted in this election year budget when so many of the estimates, forecasts and assumptions in last year's budget were wrong, including the assumption that only 450 asylum seekers would arrive per month when, in fact, the actual number was around 2,000 people per month?


Senator WONG (South AustraliaDeputy Leader of the Government in the Senate and Minister for Finance and Deregulation) (14:03): We have a reprise from Senator Joyce of Senator Abetz's attempt yesterday to make sure that they do not actually talk about the economy, they do not actually talk about disability care, they do not actually talk about jobs, and they do not actually talk about how they grow the economy or employment, or what their plans for Australian schools are; all they want to do is talk about boats. But we know that that is the approach that the coalition take. I again remind the Senator that, in terms of the forecasters, the Treasury also forecast for Mr Costello and he is now attacking the same institution that served very well under both governments. I would remind him also of some comments by market economists: according to Citi, the economic forecasts look achievable and are similar to the RBA's, and our forecasts, according to UBS— (Time expired)


Senator JOYCE (QueenslandLeader of The Nationals in the Senate) (14:04): Mr President, I ask a further supplementary question. Given that, in the minister's time as finance minister, we have seen the cumulative total of deficits run up to over $40 billion—more than you and the Treasurer estimated at budget time; $40 billion over what they told us it was going to be—why should Australians have any confidence in your estimates? Why should we have any confidence in the next budget nightmare, the NBN? Is it the fact that Mr Swan just cannot help himself, grossly overestimating your ability to keep the nation's finances under proper control? (Time expired)


Senator WONG (South AustraliaDeputy Leader of the Government in the Senate and Minister for Finance and Deregulation) (14:05): I was talking about UBS, given I was asked about forecasts. According to UBS, the budget contains more:

… conservative and credible revenue forecasts—without unduly leaning on the economy’s near-term vulnerable economic recovery.

So the reality is: the market does not agree with what Senator Joyce is putting. Nor, I am reminded, does former Prime Minister John Howard—

Senator Conroy: What did John Howard say?

Senator WONG: He basically said the economy was in good shape, which of course puts him completely at odds with that master of negativity, the Leader of the Opposition.

Senator Conroy: 'When the Prime Minister and the Treasurer and others tell you that the Australian economy is doing better than most—they are right.' That is what he said.

The PRESIDENT: Order! Senator Conroy, Senator Wong is to answer the question.

Senator Joyce: Mr President, I rise on a point of order. I cannot hear Senator Wong's response over Senator Conroy's interjections.

The PRESIDENT: I am drawing the attention of Senator Conroy to the disruption as being disorderly. Senator Wong, continue.

Senator WONG: I remind the senator of Mr Howard's comments: 'When the current Prime Minister and the Treasurer and others tell you that the Australian economy is doing better than most—they are right.' So perhaps Senator Joyce could have a chat to Mr Howard. (Time expired)