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Wednesday, 29 May 2013
Page: 4454

WYATT ROY (Longman) (13:31): I will try and pick up where the member for Herbert left off—and I am sure he and I share some clairvoyance on some of these issues!

When Australians are crying out for confident and prudent economic stewardship, this federal Labor government budget serves up more turmoil, more debt, more spin and more broken vows. There is nothing in this budget to give hope that tomorrow is better than today. It is as unsightly and ill-defined as a dog's breakfast. It is nothing but nebulous figures—while the local families of my community are left to their own devices to come to grips with costs of living pressures, economic uncertainty and poor services. It should not be this hard. Treasurer Wayne Swan says that this budget is about jobs and growth, but it actually forecasts an increase in unemployment—up to 5.7 per cent per cent— and lower growth—down to 2.75 per cent. By my reading, that is fewer jobs and slower growth. In my community, where there is already higher unemployment, this is intolerable.

Last year the Treasurer said in his budget speech, 'tonight I announce four years of surpluses'. This year he has delivered a $19.4 billion deficit and projected a deficit of $18 billion for 2013-14. Labor promised no carbon tax and yet we are living with a carbon tax and record deficits, and in this budget we witness the ditching of tax cuts and family payments. So much of the so-called modelling in this budget is fatally flawed. It is not creating a stronger Australia, and the assumptions and commitments are fundamentally dishonest. Labor is relying on the money tax to prop up its bottom line. This is merely a best guess based on a favourable terms of trade and royalties not being increased by state governments—altogether an entirely implausible and untested proposition. The government is announcing $44 billion of prescribed savings, but of those savings, $25 billion are tax increases. That is almost 60 per cent of the deemed savings as new or increased taxes. The interest bill on our national debt will grow to be $35 million a day and the debt will surge past $300 billion. This is a budget that should have been written in pencil. I reiterate that, if it is fully implemented, this budget will mean total gross debt breaching the $300 billion debt ceiling in coming years, no credible path back to surplus, new borrowings of $49 million every single day, Labor's fifth record deficit in five years and at least two more deficits to come, and more than $25 billion in higher taxes over the next four years, with 99 per cent of these new tax increases starting after the next election.

Families and businesses have to live within their means, but this federal Labor government does not bring to bear that wisdom. At the last election the Prime Minister promised that Australia's net debt would peak at less than $90 billion. This budget has revealed that net debt will now peak at more than $191 billion, more than double what the Prime Minister promised the Australian people. Twelve deficits from the last 21 budgets—that is Labor's perfect record. For the last Labor surplus we must hark back to 1989, the year before I was born. It is all due to the fact that Labor has a spending disease, not to a revenue riddle.

In fact, revenue in 2013-14 is projected to be $80 billion more than it was at the end of the Howard government, yet the Treasurer has delivered his sixth deficit in a row. Spending in 2013-14 will be $120 billion greater than it was at the close of the Howard government. Australia's climbing terms of trade, the price paid for our exports compared with the cost of imports, have bolstered this nation's wealth. Indeed, the government's own much-trumped Australia in the Asian century white paper, released last October, highlighted how Asia's rapid growth, fuelled by demand for our coal, gas, iron ore and other minerals, has realised Australia's highest terms of trade in 140 years.

One would imagine that with these terms of trade still buoyant, 15 per cent higher than at any time during the Howard government, the budget would already be back in surplus. Yet, over the past five years, the government has spent $192 billion more than it has raised. Every year spending as a share of GDP has been bigger than it was in the final years of the Howard government. Labor's latest pledge of a return to surplus is no more dependable than its past forecasts. With it, once more, comes the potential for a crater in future budgets. Flying in the face of current market indications, the claims of surpluses in the two out years relies on the terms of trade sustaining at close to historic highs.

This myopic government introduced the mining tax and its splurge of spending initiatives to allegedly spread the benefits of the boom. But it did so just as the boom showed signs of peaking. It was too slow to act and we are paying the price now, and we will feel more pain in the future from its ragged economic projections in the terms of trade as they fall back to a more normalised position. Already, we know that the forecast revenues from Labor's sneakily negotiated mining tax have shrunk, from $22.5 billion to $3.3 billion over its first four years. Mining tax revenue in 2012-13 is an astonishing 95 per cent less than originally forecast by the Treasurer. He missed it by that much. Yet, despite such a comprehensive failure, the Treasurer's 2016 surplus insists on mining tax revenue increasing by 1000 per cent on this year's MRRT intake. Perhaps the only not-so-strange chapter of this sorry story is that references to spreading the benefits of the boom, a package of measures at the centre of Treasurer Wayne Swan's last three budgets, now seem to have evaporated from the budget documents.

This Labor government's carbon tax revenue predictions simply defy belief. Confronting a disintegrating EU carbon price, the government continues to forecast receipts of $38 a tonne in 2019-20. While the forecast carbon price for 2015-16 has dropped to $12 a tonne, stripping $5 billion from revenue, it is still grossly inflated, at double the European market forward price for 2015 of just $6 a tonne.

In the meantime, as I move around my local community I see the damage a carbon tax is inflicting. I speak to hardworking business owners and managers demanding an end to the impost and relief from this federal Labor government's overregulation and inflexibility in the workplace. One shop owner in Burpengary told me he was coughing up an extra $1,300 a month in carbon tax bills alone. Nearby, a popular coffee shop owner wanted to expand and hire more staff but rising overheads and reams of paperwork were a serious barrier. Another key local business, a manufacturer of heavy machinery components, estimates it will be billed $30,000 extra in electricity charges this year alone as a direct result of the carbon tax. The manager explained an additional shadow of concern over slowing housing and mining and a softening of Australia's economy. With commodity prices dipping, he said, the capital expenditure on infrastructure projects from mining companies was melting. They are just not spending the money. Confidence in the economy needed a boost. He went on to tell how similar businesses to his were 'falling by the wayside'. He also complained of dealing with numerous regulations and compliance documents. 'It is getting more difficult all the time,' he said.

Since coming to power this federal Labor government has introduced or increased 26 new taxes including the biggest of them all, the carbon tax. Labor has created more than 20,000 new regulations for the repeal of just over 100. Two years ago, Treasurer Wayne Swan promised there would be half a million jobs created by 30 June this year. So far, with one month left to run out this financial year, he has delivered around half that number—another shattered budget promise.

Labor has also lost control of our borders with well over 200 boat arrivals since the last federal election poll on August 21, 2010. The budget papers reveal a blow-out in the management of Australia's borders of at least $4.7 billion in the past 12 months. This week, immigration department secretary, Martin Bowles, admitted to a budget estimates hearing that the department vastly underestimated the number of asylum seekers expected to arrive in Australia this financial year. After last year's projections of just 5,400 asylum seekers landing in Australia in 2012-13, Mr Bowles discovered the staggering truth of more than 22,500 arrivals in the financial year. That is about 2,200 a month or more than four times the initial forecast.

What does this government do when caught in the headlights of such a glaring policy failure? It tosses up more dubious accounting in the columns of its latest budget, where it has the audacity to suggest that boat arrivals will: 'phase down over the next four years'. I do not think anyone in the Australian public seriously believes that proposition.

By way of contrast with this litany of, at worst, malicious deceit and, at best, false prophecy, I would like to turn to the coalition's road map to prosperity, beginning with the abolition of the carbon tax which, if elected, we will carry out because it will immediately lower the cost of living and the cost of business. Since the election of the Rudd/Gillard government, electricity prices have soared by 94 per cent and gas prices by 62 per cent, but the carbon tax elimination will immediately remove upward pressure on power costs. At the same time, a coalition government will keep income tax and fortnightly pension and benefit increases—that is a tax cut without the carbon tax. In total these steps will allow families, households, retirees and pensioners to make their way again.

The end of the carbon tax will also advance the position of Australian businesses relative to their international competitors, instead of flailing businesses with the world's biggest carbon tax. We will reduce emissions with targeted incentives. If elected, a coalition government will abolish the mining tax—the fastest way to support investment and jobs. We will cut red-tape costs by at least $1 billion a year to give small businesses the chance to breathe, grow and innovate; and parliamentary days will be slated for the repeal of laws, not their creation. By cutting taxes and regulation, we will boost productivity which will even up the playing field for Australian manufacturers—essential if they are to remain at the core of a five-pillar economy alongside services, education, agriculture and resources. We will have a once-in-a-generation commission of audit so that government is only as big as it needs to be. As I have stated several times before in this place, the Liberal philosophy is of a hand up, not a hand-out.

We will establish a root-and-branch review of competition policy to ensure fairness for small business. Small business will be a cabinet portfolio within the Treasury Department. Under a coalition government, there will be an affordable and responsible paid parental leave scheme; a work for the dole scheme will also be revisited, and we believe people who are capable of working should work—if not for the preferable outcome of a wage, then at least for the dole.

Let me conclude by invoking a wonderful facet of my local community: the many veterans who have chosen to call Longman home. I must mention them here because this federal Labor government's budget does not deliver them a fair go. This was the last opportunity before the election for the government to implement equitable indexation of military superannuation pensions. With the handing down of this budget, Labor has categorically failed to do so. As far back as 2007, Labor led people to believe it would provide a fairer deal for ex-servicemen and -women and their families. However, since the 2010 election, the coalition has twice tried to pass legislation through the parliament to achieve rightful indexation for military superannuants. Each time, Labor, the Greens and the Independents have combined to defeat the move. If the Labor government is re-elected in September, veterans will be worse off—denied the indexation they deserve—while the coalition will keep faith with those who have served and protected Australia. A coalition government would ensure that 57,000 DFRB and DFRDB superannuants aged 55 and over have their superannuation pensions indexed in the same way as aged pensions. Our plan is fully costed and we will fund it in our first budget.

The upcoming election represents a blunt choice—three more years of broken promises and scrambling excuses from Labor or the sure-footed coalition team with a plan to restore hope, reward and opportunity.

Sitting suspended from 13:46 to 15:30