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Wednesday, 1 June 2011
Page: 5634


Ms O'DWYER (Higgins) (10:15): I rise today to speak on the appropriation bills that have been brought before the parliament: Appropriation Bill (No. 1) 2011-2012, Appropriation Bill (No. 2) 2011-2012 and Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012. But I would first like to make an observation that the Treasurer looked like a man under pressure in the weeks before delivering his fourth budget. He had every real reason to feel that pressure not because, as he would have the Australian people believe, he is yet again a victim of circumstances—a high Australian dollar, natural disasters and the financial crisis, all conspiring against him—but because even he understands that, deep down, after delivering three budgets the tired web of excuses does not stack up when you look at the economic data.

If you think of the budget as a 100-metre sprint, it is one thing to complain that you had to carry a heavy bag while competing. But when you start the race at the 80-metre point and are kitted out with all of the equipment to run it well, those excuses look hollow. The reason why the Treasurer looked under pressure is that he knows that he has not done the work that needs to be done by a Treasurer of this country. Using my sporting analogy, far from preparing for the event, doing the hard work, this Treasurer has done the equivalent of rocking up to compete after a big night out. He has squandered not only his opportunity but the opportunity of millions of Australians. This government's legacy of waste and mismanagement will be felt not just by this generation but by generations to come.

The Treasurer looked under pressure because Australians are now wise to the promises thrown around like confetti by this government—promises of a surplus but, instead, delivering deficit after deficit; promises of reduced spending, yet at the same time increasing borrowing; promises that it will reduce the cost of living for Australian families, while at the same time hiking up their private health insurance bills and slapping them with multiple new taxes. The budget very clearly reveals that this government does not have any plan other than to tax more and hope that our historic terms of trade and our high commodity prices will continue. There is no plan B. More disturbingly, there is no plan A.

Good budgets are about four things: accountability and discipline, providing for immediate needs, providing for challenges when they come, and long-term planning. Families know this. If a family spends more money on one area, such as repairs to the house or a health crisis, they cut back somewhere else because it goes to their bottom line. They understand that they have to exercise discipline because there is only so much money. They also know that they have to balance their immediate needs with their long-term goals, whether it be to own a home, send their children to a school of their choice or to take a holiday. They also know that they should prepare for that rainy day in case it interferes with their plans. Business also knows this. The coalition knows this. But it is clear that, after four budgets, the Labor Party and this government still have not worked this out. The budget failed on all of these four fronts.

In the time available, I wanted to touch on a couple of the key things in the budget that leapt out at me. Despite the talk of surpluses that have not yet been delivered and rapid fiscal consolidation, the government did a very curious thing. You only need to look at Appropriation Bill (No. 1) 2011-2012 to see this. In this bill the government has provisioned to amend the Commonwealth Inscribed Stock Act 1911—the CIS 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. What this means is that the government is seeking to increase its gross debt ceiling from $200 billion to $250 billion. But, more than this, this government is seeking to give itself full discretion to do this. It would not have to provide reasons. This comes not long after a previous increase. It was not all that long ago that the government's gross debt ceiling was $75 billion. This was increased up to $200 billion. So this government, while talking about making tough decisions, reducing spending and reducing the debt, at the same time has hiked up the debt on the nation's credit card. This is a government that says one thing and does another.

We should look to the current deficit that this government has delivered. It has soared to $49.4 billion, and the forecasted deficit in 2011-12 has already blown out by $9.6 billion to $22.6 billion. In November we were told that net debt would peak at $94 billion. On budget night that figure went up—no surprises there—to $107 billion. Not only that but net debt is going to stay above $100 billion for at least the next four years. This is a government that is continuing to borrow $135 million a day. With that borrowing comes interest payment bills that Australian families will have to pay. Labor's debt will mean an interest bill of $7 billion a year. In fact, the cumulative interest on Labor's net debt will be more than $26 billion over the next four years.

If we can, let us just stop for a moment and think about the real cost to Australian families of this interest bill. $26 billion is a lot of money. That money could be paying for real infrastructure investment. That sort of money could be invested in solving some of the long-term problems and challenges that Australia faces, such as escalating medical costs through the ageing of the population and the like.

This budget is very unkind on Australian families. It is worth noting that, since Labor was elected, electricity prices have gone up by 51 per cent, gas has gone up by 30 per cent and water has gone up by 46 per cent. Education costs have also risen by 24 per cent, health has gone up by 20 per cent and rent has gone up by 21 per cent. When my electors go to the grocery store, they can see that their bills have gone up by an average of around 14 per cent. Yet this is the first budget in eight years that has not provided tax cuts for everyday Australians, tax cuts that would help Australians with the cost of living. This government of course cannot do that because it has refused to be tough on itself. Instead, it would prefer to be tough on Australian families. I think it is fair to say that Australians are being squeezed tighter than the Treasurer's drinking glass. The government is stripping away $2 billion from families by freezing key family tax payments and thresholds. All families receiving family tax benefits will have some of their benefits stripped. At the same time Labor is hitting Australians with $6 billion worth of new taxes, including a flood tax. In my electorate of Higgins many residents, many electors, contributed very generously to the disaster relief in Queensland and Victoria. Yet they have been now slugged twice because of the mismanagement of this government.

My electors in Higgins have also been slugged through the changes within these budget bills to the private health insurance rebate. Seventy-seven per cent of my electorate in Higgins have got private health insurance. This will have a very real impact on their ability to keep and hold their private health insurance. It will have a very real impact on their ability to access quality health care. More importantly, because of this ideological war that is being waged by the Labor Party on Australian families, it will have a very real impact on the public health budget as well. It does not make a great deal of economic sense.

Interest rates will definitely go up. This budget has done nothing to reduce the pressure on Australian families and inhibit the Reserve Bank from increasing interest rates. Already the Reserve Bank has warned in its monetary statements that it will need to do this, and this budget has done nothing to stall that. Interest rates have risen seven times since the end of 2009 and are forecast to rise again twice over the next six months. We cannot forget, either, that when we talk about those debt and deficit figures it is not without very direct meaning for Australians. The fact that Labor's debt will reach $107 million means that that is $4,700 for every man, woman and child in Australia.

This government, as everybody knows, has presided over great waste and mismanagement. We have seen that with the installation of pink batts in roofs that are combustible and the resulting bill to fix that up. We have seen that with the mismanagement of the Building the Education Revolution program where some schools were paying double or triple the price they would pay in other ordinary commercial circumstances to build those buildings. We have seen blowouts in the processing of asylum seekers in Australia at a cost to this budget of $1.75 billion. We have seen money raided from the higher education endowment fund with the balance now down to $2.5 billion from $6 billion when the coalition established it. This government does not know how to manage taxpayer money.

Very revealingly, this budget is engaged in a number of deceptions on the Australian people. The budget papers show that revenue from the mining tax will be down by $5.9 billion from the figures that the government released just three months ago. So already the government has had to adjust. The budget says nothing about the carbon tax that it will be introducing before the next budget next year. This carbon tax will have a huge impact on our economy. There is nothing in this budget about the impact that it may have. Let us not forget that one of the greatest deceits in this budget is the handling of the NBN—the off-balance-sheet treatment of the NBN. It makes an absolute mockery of the projected surplus that the Treasurer keeps talking about. It is in fact the most creative accounting that we have ever seen in any set of budget papers.

Another deception is the claim by this government that it has brought forward $22 billion worth of savings. Yet included in this $22 billion worth of so-called savings is the flood tax, which comes to almost one-third of that amount. The government also claims it is going to increase spending on important initiatives like mental health care reform. It claims that it is spending up to $2.2 billion on this, but when you actually look closely at the figures you can see that, in fact, it is going to cut $580 million of GP rebates to fund it and that the real new spending is more like $530 million. This budget has failed the Australian people, this government is deceitful with the Australian people and we look forward to an election where the Australian people can cast their judgment.