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Wednesday, 2 March 2016
Page: 1607

Budget


Senator WHISH-WILSON (Tasmania) (14:20): My question is to Senator Cormann, the Minister for Finance, representing the Treasurer. Minister, projections in last year's MYEFO show the budget returning to surplus in 2020 and 2021 and remaining in surplus for the out years. However, Parliamentary Library modelling done for my office, based on MYEFO projections, shows that the budget will now fall back into deficit by 2024 as a result of the extra $30 billion announced in the defence white paper. Minister, do you confirm these numbers, and where has the government's credible path to surplus gone?


Senator CORMANN (Western AustraliaMinister for Finance, Deputy Leader of the Government in the Senate and Special Minister of State) (14:21): Firstly, the government stands by the forecast published in the Mid-Year Economic and Fiscal Outlook; and, in the ordinary course of events, as always happens, there will be a further update in the budget. Secondly, I would have to review the assumptions that were used.

Certainly, the government, in the 2014-15 budget, reflected the commitment that we took to the last election of a return to defence funding of two per cent as a share of GDP by 2023-24 in our medium- to long-term forecast, so that might be an assumption that the Parliamentary Library might not have been aware of. The point is that the cost in the defence white paper has been reflected in the medium- to long-term fiscal outlook of the budget for some time. As such, it was also reflected in the Mid-Year Economic and Fiscal Outlook delivered just before Christmas in 2015.


Senator WHISH-WILSON (Tasmania) (14:21): Mr President, I ask a supplementary question. The extra $30 billion was totally unexpected by just about everyone. Every extra dollar spent on the military-industrial complex is a dollar that needs to be funded. The Treasurer has previously stated that his budget rule is that any new spending must be fully offset with savings. What programs is this government going to cut to make up for the $30 billion in defence? Will it be more cuts to health or education? Will it be more cuts to crucial environment and climate programs?


Senator CORMANN (Western AustraliaMinister for Finance, Deputy Leader of the Government in the Senate and Special Minister of State) (14:22): I do not believe that Senator Whish-Wilson actually listened to the answer to the primary question. The defence white paper is fully funded, fully costed. The medium- to long-term fiscal impact of the funding allocated through the defence white paper was already reflected in our medium- to long-term forecasts in the Mid-Year Economic and Fiscal Outlook before Christmas.