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Monday, 23 May 2011
Page: 4029

Mr ROBB (Goldstein) (13:31): This budget confirmed in my mind that the Gillard government has all the look of one of those dodgy companies before they hit the wall. They put out a glossy annual report, they fill it with heroic assumptions and at the same time their debts continue to grow and on the sly they push for an extension to their credit limit. We have seen these companies. You know when it happens that they have been all front and no substance. It is like a company which has never turned a profit, like this government has never turned a surplus. Everything it touches turns to custard yet they tell us to trust them, that the best years are ahead of us. Does this ring true? Does it sound similar? This is what we have seen now for many months, in fact for years. They implore us to ignore their dreadful track record and to believe them, as an article of faith, when they claim they are getting back into the black. It is forever in the never-never; they never talk about the present. You have not heard anybody here today on the other side talk about the massive deficit last year and this year, the increased deficit this year over what was expected and the massive deficit next year. They are talking about some time well into the future. As Alan Kohler, a respected economic commentator said:

Any decent CFO would have been embarrassed by this budget. Revenue forecasts made just six months ago have proved to be way too high, yet spending has gone on regardless. What's more the optimistic forecasts remain just as optimistic.

Mr Kohler is on the money. He fingered this. This is a budget where forecasts have been shown to be rubbery and inaccurate again and again, yet the spending continues at this rate. It has the look of a shonky company that is about to hit the wall. The truth is that this government has all the look of a company in distress. It is acting without direction and it is concealing information. No credible company would deliver an annual report which ignored publicly announced revenue and expenditure measures.

The carbon tax, worth in the order of $11½ billion each year, does just this. No credible company would use accounting tricks to remove major new investments from the balance sheet; yet massive new investments are being made without so much as a cost-benefit analysis. So we see what they have done just with that budget treatment of the NBN, what will cost taxpayers $18.2 billion over the forward estimates—and, of course, a lot later—and we see nothing of it. None of the treatment of this NBN is disclosed. If this government were a publicly listed company, all of this information would have to have been disclosed. It would not be good enough for a CFO to ignore continuous disclosure obligations; yet the Treasurer and the Minister for Finance and Deregulation are happy to do just that.

Under the Corporations Act, companies must disclose any information that would have a material effect on the entity's finances. Think about the NBN. Think of the tens of billions of dollars being spent on the NBN. A lot of what is being done—a lot of the assumptions, a lot of the actions, a lot of the decisions—has a material effect on the entity's finance. All of this is withheld, not disclosed. The Corporations Act—an act brought in by a previous government and supported by this government—would require this disclosure of any publicly listed company, yet actions within the Corporations Act required of public companies are ignored by this government.

Despite the fact that every Australian taxpayer is a government shareholder, Labor does not hold itself to the same standards it expects of business. Such is the level of nondisclosure the government, if it were a publicly listed company, would be investigated for a breach of the Corporations Act. In fact, ASIC provides guidance regarding disclosure obligations and the government could do worse than take a note. This budget is all smoke and mirrors. This government has not met its obligations to support the ethical and effective running of the budget in the way in which it requires the ethical and effective running of companies. None of the standard procedures that are required by the Corporations Act and enforced by ASIC apply to the running of the business of government under this administration. It tells you a lot. They are running blind on the other side. There is, in many respects, an administration which is deluding itself. It is an administration which lacks direction. It is an administration in which the public has lost confidence.

This budget died overnight because it confirmed the view of typical Australians that this government cannot be trusted. What they saw was more of the same. It confirmed the view that has led to the great anxiety that is out there. Why have people across the country in the last 12 months gone from a minus one per cent savings rate to a plus 10 per cent rate? There are unprecedented levels of saving in this country amongst all the mums and dads and others out there. People are anxious. They feel vulnerable. They feel that this government has lost control. They feel that if something happened overseas they would not be prepared. They think that the government is not prepared. This budget confirmed that anxiety. People thought, 'This is just more of the same.' There is no interest in this budget except to the extent that it reinforces people's view that this government is a dysfunctional and dangerous government in many respects.

That 10 per cent increase in savings across the population is a reflection of millions of households who are seeking to live within their means. They feel, despite the great Chinese opportunity that is presented, the way in which we are blessed with resources demanded in the region and the way in which we have got the highest terms of trade in 140 years—despite all of that—that they are burdened by cost of living increases that they are finding insurmountable. They are waking up at night worrying about how they can meet their expenses. They are feeling anxious. They are paying off the mortgage. They are paying off the plastic. They are putting money in the bank. In fact, there has been $75 billion more saved this year by average Australians than is saved under our usual savings rate. People are seeking to live within their means and be in a position to deal with financial stress, yet all the while this government keeps spending, spending, spending; it keeps borrowing, borrowing, borrowing; and it keeps taxing, taxing, taxing.

This is a government that shows no example, is irresponsible, is dysfunctional, has no authority, has no leadership and is creating a crisis of confidence amongst the community. No wonder retail has been under enormous pressure. You take $75 billion out of the normal spending of the Australian community and you put enormous pressure on retail.

While families are trying to live within their means, the government is not. This is exemplified by a couple of numbers in this budget. Before this budget, this government was in the market every day for two years borrowing $100 million a day, competing with small business and mid-sized business, pushing up interest rates, putting enormous pressure on mortgages and, in the process, accumulating more and more debt.

Here is a budget that was supposed to be tough. That is what we got told for weeks: 'This is going to be a tough budget.' Yet, after the budget, it is not $100 million a day that this government is in the market for; it is $135 million a day—pushing up interest rates, denying small and medium sized business money to roll over their commitments, squeezing small business. This is a tofu budget in terms of spending.

Dr Southcott: Not as healthy!

Mr ROBB: Certainly not as healthy. The gross debt grows massively under this budget. While the government keep spending, the debt keeps going up and up. It grows massively, and they are trying to tell us they are acting responsibly. Then, in the middle of that, we find buried in Appropriation Bill (No. 2) 2011-2012 an amendment to the Commonwealth Inscribed Stock Act 1911. This has never happened before. This sort of amendment has never been buried in an appropriation bill. They want to raise the debt ceiling from $200 billion to $250 billion and eliminate the special circumstances clause.

Again, this has all the smell of a dodgy company before it hits the wall: delusional management team, heroic assumptions, never turned a profit and promises that the best years are ahead of us, yet a growing debt while pushing an extension of the credit limit on the sly. The Treasurer, away from the spotlight, had the Assistant Treasurer creep into this House on budget night after the speech was given and quietly introduce what had the appearance of a standard appropriations bill, but on the sly what this government did was slip in a proposal to lift the Commonwealth debt ceiling by another $50 billion. It has already raised it by $150 billion or $125 billion. It hoped nobody would notice. Well, we have noticed and something needs to be done about it. To that end, I move the following second reading amendment:

That all words after "That" be omitted with a view to substituting the following words:

"while not declining to give the bill a second reading, the House:

(1) condemns the government for incorporating in an annual appropriation bill provisions to increase the limit on government borrowings above the total of $200 billion;

(2) recognises that a special case must be made for such a significant increase in borrowing limits and that the government must explain any special circumstances that it believes justify such an increase; and

(3) demands that the parliament be given the opportunity to consider separately and vote on the proposed increases in borrowing limits set out in Part 5 of Appropriation Bill (No. 2) 2001-12 and on any occasion on which the government seeks to increase Commonwealth debt above $200 billion.

If this government is going to be reckless with Australia's money and increase debt willy-nilly while everyone is trying to live within their means, the parliament must scrutinise any increase above $200 billion. It must give its approval. The government must come into this House and, instead of removing the clause for special circumstances, it should be required to explain why this borrowing limit has to increase.

The DEPUTY SPEAKER ( Hon. Peter Slipper ): Order! I regret that the standing orders require me—it being 1.45—to state that the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the honourable member will have the opportunity of continuing for the balance of his time. The seconding of that amendment will be dealt with at that appropriate time.