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Monday, 23 May 2011
Page: 4016


Mr HOCKEY (North Sydney) (12:31): I would hope the member for Canberra does not leave at this time because I would like to respond to an issue that she chose to raise. There are three pieces of legislation here that the parliament is being asked to deal with, and two of them are explicitly appropriation bills. Appropriation Bill (No. 1) 2011-2012 is the primary budget bill to appropriate money from the Consolidated Revenue Fund for 'the ordinary annual services of government and related purposes', and that is $72.85 billion. There is a second bill, the Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012. The key purpose of this bill is to appropriate funds from the Consolidated Revenue Fund for expenditure within parliamentary departments. This totals $180 million. I note that the Department of the Senate appropriation is $22 million, the Department of the House of Representatives appropriation is $23 million and the Department of Parliamentary Services appropriation is $135 million.

The third bill we are being asked to vote upon, which I would like to talk a little bit more about, is the Appropriation Bill (No. 2) 2011-2012. This bill has two key purposes. The first is to allow annual appropriations for services that are not the ordinary annual services of government, including portfolio allocations and allocations to particular states and territories. But it is the second part of Appropriation Bill (No. 2) 2011-2012 where the coalition will be seeking to move amendments later in this debate to appropriately reflect the significance of the proposed amendment to the Commonwealth Inscribed Stock Act to increase the limit 'on the face value of stock and securities' that can be on issue under the Treasurer's standing borrowing authority. The total appropriation in this bill is $7.4 billion. We do not have any dispute with the appropriations. We stay clear to our word that we will not oppose appropriations.

What is rather interesting is the fact that this government has chosen to roll amendments to the Commonwealth Inscribed Stock Act into an appropriation bill. This is clearly in defiance of the recent precedent, which was the Commonwealth Inscribed Stock Amendment Act 2009. The government has done this in a manner that seeks to remove substantive debate about the fact that they want to increase the borrowing capacity of the Commonwealth from $200 billion to $250 billion. When the last amendment to the Commonwealth Inscribed Stock Act occurred it was under a separate piece of legislation that specifically increased the borrowing limit of the Commonwealth by $125 billion, from $75 billion to $200 billion.

From memory, at that time it was the Minister for Finance and Deregulation who introduced the bill. He did not have much to say about it at the time. When we specifically asked questions about it there was nothing more than obfuscation from the then Prime Minister and the Treasurer in response. However, I well recall a speech I gave on 4 February 2009 in relation to that bill. At that time, I pointed out that the change to the borrowing limit of the Commonwealth was not an appropriation and therefore that bill, which represented little more than one page, would inevitably be the beginning and not the end of the borrowing program of the Commonwealth.

There were lots of critics but I would say to you that I was right. Here we have buried in an appropriation bill an amendment to the Commonwealth Inscribed Stock Act that allows for a blanket increase in the borrowing limit of the Commonwealth from $75 billion to $200 billion. Previously there needed to be a declaration by the Treasurer but now the Treasurer is seeking to waive that declaration and simply have the money allocated instead. The Treasurer will say, 'This is an appropriation because there is a section in the Appropriation Bill (No. 2) that allocates for an appropriation to buy back our securities.' The fact of the matter is that in this budget the government is saying that it is getting back to surplus. Reading the press conference of the Leader of the House yesterday, you would have thought that the government has actually delivered a surplus. Frankly, no, that is not the case. It is not delivering a surplus this year, as the budget papers quite explicitly reveal. In 2009-10 the underlying cash balance was $54.8 billion; in 2010-11 it will be $49.4 billion, which is a significant deterioration from what was in MYEFO; and in 2011-12 the deficit will be $22.6 billion. The appropriation bill that the parliament is actually going to vote on allows for a deterioration in the budget deficit, not an improvement in the budget cash bottom line, and that is all at a time, as the budget papers reveal, when the economy is going to grow faster—it is going from 2¼ per cent growth in 2010-11 to four per cent growth. So the economy is growing faster, but the deficit is getting bigger.

We often hear the government talk about how it is going to create half a million jobs. In fact, business creates jobs, although I will come back to the Commonwealth Public Service in a moment. But employment growth is actually slowing, from 2¾ per cent today to 1¾ per cent in the forecast period, 2011-12 to 2012-13. Far from it being a badge of honour that the government is overseeing an economy creating half a million jobs, it actually represents a slowdown in the pace of employment growth. On top of all that, the unemployment rate is expected to grow from five per cent in the current year—a little below actually but in the reported figures it is five per cent—to 4 ¾ per cent and then 4½ per cent.

This is a failed Labor budget. The truest words the Treasurer said on budget night were that it is a Labor budget. It is a Labor budget: it has growing debt, a growing deficit and slowing jobs growth. However, the government inherited the best terms of trade in nearly 140 years. As I illustrated to the Press Club the other day, when you look at the graph that is in the budget papers about the terms of trade you will see emphatically that the terms of trade have been far more generous to the current government than they were to even the previous government. The government is fond of saying that we had rivers of gold in mining boom mark 1. As I said at the Press Club, it is all part of one mining boom. If you look at the terms of trade graph—and few have bothered to do that—you will see a continuation of the generous terms of trade from, effectively, 2005-06 onwards.

This is a Labor budget because the gains have been squandered, because the opportunity has been lost and because the Labor Party has chosen, yet again, to increase the size of the Commonwealth debt without proper explanation. I imagine that is the most frustrating issue for everyday Australians. This government is asking everyday Australians to cut their own costs and to rein in the family budget, yet the government is failing to do so itself.

It is rather disappointing that the member for Canberra repeats allegations made by the Special Minister of State about staffing levels but does not stand by to hear the explanations, which are in the government's own budget papers. I urge the member for Canberra to read her own budget papers—page 6-51 of Budget Paper No. 1, Estimates of Average Staff Levels: 2006-07, 238,623; and then 248,214; up to 250,566; up to 258,321; up to 261,891; and up to 262,995 in 2011-12. I give credit to this government. I said business was in the business of creating half a million jobs, but the government is giving it a fair old shake. It is employing 1,100 more public servants in this budget alone, 200 of which are in the Prime Minister's own department. The old Treasurer has got a bit of an increase, too—50. In our day we used to boast that Treasury was quite a lean department. The Public Service has increased by more than 20,000 employees since Labor was elected. The government says, 'Where are your cuts?' and we say, 'Well, we are going to have to make 12,000 public servants based in Canberra redundant within two years,' through natural attrition, I should say. It asks where are our cuts. On the one hand, it says that our cuts are phoney but, on the other hand, it accuses us of cutting the Public Service.

This is a typical Labor budget that leaves everyday Australians behind. How? Because everyday Australians are struggling with increased costs of living. They are the forgotten Australians. They are not just the forgotten people or, as my leader said, the forgotten families; they are the forgotten small businesses, the forgotten pensioners, the forgotten self-funded retirees and the forgotten veterans. Whilst there is a huge and significant benefit associated with the mining boom, unless there is the opportunity for others to participate—if they become the victims of the transition in the Australian economy rather than the beneficiaries of it—Australians will become resentful. They will do that on the back of the rising cost of living. Bananas are at $3.50 now and the defenders of the government say, 'Oh, that was Cyclone Yasi.' Yes, it was. There is always an excuse, and often they are legitimate. But it is what people have to pay for, such as more for rents and housing, for electricity, for water and sewerage, for education and for health. Yes, there may well be 1,000 good excuses, but the bottom line is that everyday Australians are feeling the pain associated with a higher cost of living. The government is making it worse by imposing a carbon tax, by imposing a mining tax and by imposing a flood levy. If you want the simple answer as to how the coalition will reduce the everyday burden of the cost of living, look no further: we oppose the flood levy, we oppose the mining tax and we oppose the carbon tax. They are taxes on Australians and they will flow through in one form or another to every Australian. You can only squeeze the lemon so hard. On top of all of that, as so many economists have pointed out rather emphatically, it is the case that there is nothing in this budget that is going to reduce the upward pressure on interest rates.

My colleague, the shadow minister for finance and member for Goldstein, will have something to say about the sneaky way this government has put in an increase in the credit card limit of the Commonwealth to $200 billion. From our perspective, as I said at the National Press Club, this budget was a lost opportunity. This budget was the last chance to do something for everyday Australians and, typical of a Labor budget, they blew it.