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Wednesday, 5 March 2014
Page: 1668


Mr McCORMACK (RiverinaParliamentary Secretary to the Minister for Finance) (11:09): In summing up I will deal with the amendment to Appropriation Bill (No. 3) 2013-2014, moved by the member for Fraser, and some of the issues raised in the quite extensive debate on these three bills: Appropriation Bill (No. 3) 2013-2014, Appropriation Bill (No. 4) 2013-2014 and Appropriation (Parliamentary Departments) Bill (No. 2) 2013-2014. These bills underpin the government's expenditure decisions, including pre-election commitments and decisions made in the Mid-Year Economic and Fiscal Outlook.

I have found it quite remarkable to listen to some of the contributions made by those opposite. Instead of even some token acknowledgement from Labor about the mess it left behind, we were subjected to a steady dose of deception, denial and hypocrisy from members opposite. Labor's budget strategy, it seems, is to simply hoodwink the Australian people and pretend that the past six years never happened, to pretend that 7 September, election day, never happened. But it is worth reminding the House what actually happened over those long and terrible years. Labor has tried hard but, no matter what it says, it cannot rewrite history. Let's look at the facts—the facts that those opposite seem so determined to airbrush from history.

In 2007, when we left office, we left a $20 billion surplus. In 2013, we inherited a $30 billion deficit. Labor would have us believe that it did not rack up record debt and record deficits; not a single surplus, not one in its six budgets. Instead, what we have been saddled with are huge deficits, or 'temporary' deficits, as only the masters of spin-offs could say with a straight face. In fact, Labor has not delivered a budget surplus since 1989, long before the member for Bowman was even born.

But how could anybody forget Labor's solemn promise in 2010 to deliver a budget surplus in 2012-13—a surplus that they promised to deliver on more than 650 occasions? The member for Lilley said it would be delivered 'come hell or high water'. The then minister for finance, Senator Penny Wong, said that a surplus was 'non-negotiable'. Have you ever? When asked what would happen if her government was not able to deliver on that promise, former Prime Minister Julia Gillard said: 'Failure is not an option'.

As the boy who cried wolf discovered: if you consistently make the wrong call, people will eventually stop listening—they stopped listening on 7 September—and call for change. But Labor will not let us get on with our mandate. Labor will not listen to the people's will. The Australian people did stop listening to Labor's pie-in-the-sky plans and instead turned to a coalition that they know they can trust—they always have been able to in the past and they will now—to get the finances of the nation back on track.

In an attempt to distract everyone from Labor's record, those opposite had the audacity to accuse us of—would you believe?—cooking the books. If you listened to Labor, you would think that the Mid-Year Economic and Fiscal Outlook was just a piece of creative accounting. According to Labor, we have painted everything a darker shade of grey in a piece of fiscal window dressing. The reality is that MYEFO adopts more realistic assumptions, and assumptions which better reflect subdued global economic conditions and the transition that the economy is going through, as the terms of trade ease off, and what this might mean for investment and employment. Recognising that forecasting key economic variables is a challenging task, MYEFO included information illustrating measures of uncertainty around the key forecasts included in MYEFO. That is all perfectly reasonable, all perfectly defensible and all very transparently set out by the government in the MYEFO document.

These bills are important because they are part of this government's clear commitment to deliver on the plans and the promises we took to the Australian people. Unlike Labor, we deliver on our promises. Importantly, we have made the necessary provision in this bill to enable the Department of Immigration and Border Protection to stop the boats. To that end, we have committed almost $750 million for offshore processing and to disrupt people-smuggling activities. With the passage of these bills, the Department of Immigration and Border Protection will be properly funded to deliver a credible offshore processing regime. And it is working. It is more than 75 days now since we have had a boat arrive on our shores illegally. We will address the funding shortfall of around $1.2 billion—that we inherited from the previous government—over the forward estimates.

This government is fulfilling this promise to the letter, and I commend Minister Morrison for his work. It is 75 long days since we have had a successful illegal maritime arrival. We are stopping the people-smuggling model. It has been more than two months since a boat has arrived. That is not to detract from the seriousness of the situation that emerged on Manus Island; in respect of that matter, we have established a fully independent investigation that will find out who was responsible, at the end of the day, for these matters.

In the area of Defence, we have included more than $660 million to further enhance Australia's military capabilities in order to promote stability and security in the region. Under Labor, Defence spending fell to 1.49 per cent of gross domestic product, the lowest level since 1938—and we all know what happened the year after that. The coalition remains fully committed to restoring Defence to two per cent of GDP. I can tell you, as someone from a home town of tri-city service obligations—with the Army, Air Force and Navy all in Wagga Wagga—that what Labor did to Defence was an absolute disgrace.

The largest item that these bills make provision for is $8.8 billion to enable the Treasury to make a one-off grant to the Reserve Bank of Australia. This grant will bring the balance of the RBA's main capital reserve—the Reserve Bank Reserve Fund—to 15 per cent of its assets at risk. At the point we came to government the fund had been depleted, partly because of losses associated with the sustained appreciation of the Australian dollar but also because of dividends taken out by the previous government, from a level of $6.2 billion in 2006-07—11 per cent of assets at risk. By 2012-13 the fund's balance had deteriorated to $2.5 billion, which is 3.8 per cent of assets at risk. This is a prudent step which will ensure that the RBA is properly resourced to meet the challenges of a volatile international economy. It puts beyond doubt that the RBA can and will be able to perform its core monetary policy and the foreign exchange functions in the face of financial market volatility.

The opposition makes out that this is all a huge surprise, when in fact the Treasurer flagged as early as February 2013 that this is something that we would discuss with the RBA on coming to government as a matter of urgency. Labor argues that it is too much, that we should have to tender a request slip from the RBA governor and, worse, Labor accuses us of doing this just to manufacture a larger deficit in 2013-14. What hypocrisy! What nonsense! It goes to show that the opposition just does not get it. According to Labor, you should only intervene at five minutes to midnight when you think politics demands it. But we understand that, in a volatile international environment, the best thing we can do is to instil confidence in the Australian financial system—and that is to ensure the RBA is primed and ready to respond.

We saw Labor's piecemeal approach on show when we brought before the parliament legislation to increase the debt limit to $500 million, which was what we understood was needed plus a prudent buffer. But all we got from Labor was again a game of political brinkmanship—an attempt to hold the country and its people, Australians, to ransom. What a shameless thing it was to watch those opposite rack up future debt when they were in government and to actually build it into the forward estimates but then not allow us to fund some of the programs we inherited. Then they had the hide to criticise us for negotiating with the Greens to not only allow us to fund some of Labor's very own programs but also improve transparency in the process. I appreciate that negotiation is a foreign concept to those opposite—those whose modus operandi in government was just to give in to whatever the Greens wanted.

Confected outrage about so-called broken promises, grants to the RBA and the abolition of the debt limit is one thing, but fearmongering about changes to social payments and Medicare is quite another. In all of Labor's hysteria about broken promises, they can still not list a single promise that we made prior to the election that we have walked away from—none. It just goes to show how reckless and irresponsible those opposite are. They will say anything to distract from the mess they left behind. It is further proof that Labor accept no responsibility for the dreadful fiscal mess they created.

Let us be clear: the Abbott-Truss government is committed to a strong and sustainable safety net for those who cannot provide for themselves. We have no plans to cut the Disability Support pension; in fact, we are actually increasing the DSP on 20 March. Scaremongering by Labor about a cut to the DSP is causing unnecessary angst amongst DSP recipients and shows how low Labor will go. While we have no plans to increase the age for the age pension, we need to have a conversation about what we can afford in the next 20 to 30 years about the taxpayers' outlay. That needs to be combined with a robust discussion around the tax and regulatory settings which influence how and when people save for their retirement. That is so important.

The coalition recognise the importance of primary health. That is why we are doubling the incentive for GP training to help build a health workforce that can support people in identifying health risks early and taking preventative action. But our healthcare system has to be sustainable.

We saw a lot of hand-wringing about jobs from those opposite while they were refusing to abolish the carbon tax. I might just quote from a speech given by the Australian Forest Products Association Chairman, Greg McCormack. Last night at the annual dinner, he said that the most difficult times he has seen in business have been in the past five years. He talked of green and red tape and said to the large audience:

Imposing a carbon tax which Australian producers had to bear when imports didn't has further made exports and locally produced products less competitive.

Domestic processors have carbon tax costs embedded in their cost of production through higher electricity prices, transport costs etc, imports do not have these cost imposts.

Similarly in export markets Australian producers not only have to cope with a high exchange rate, but have carbon tax costs embedded in their production costs that other competing countries do not have in their costs.

He had this message:

Prime Minister we urge you to remove the carbon tax as soon as possible.

I know what a valuable role the forestry industry plays in Australia. Indeed, it underpins the economies of the Tumbarumba and Tumut shires in my Riverina electorate. Australia has 80,000 direct forest and forest product employees and perhaps 200,000 indirect jobs. We need to follow exactly what the AFPA chairman has said and remove the carbon tax. Labor should get on board with us there.

In relation to both Holden and Toyota, let us be very clear that by those companies' own admissions there is nothing the government could have done to keep their factories open beyond 2017. It is worth remembering also that workers at these factories have several years to plan. They know what is coming; it is unfortunate that it is coming but it has been on the cards for some time and at least they have some time to do something about it. No-one is pretending that it will be easy for them or that it will not be stressful for the workers involved. We know it will be. We are putting the economic factors in place to grow the economy and to grow Australian jobs. As my parliamentary secretary colleague beside me, the member for Aston, said, we do have the infrastructure Prime Minister. We are going to create the economic conditions to grow our nation.

It is typical of Labor that its answer to every problem is more government, more regulation, more intervention. As the Australian Forestry Products chairman said, remove the carbon tax, get on board and let's get on with cutting red and green tape. I would go so far as to say that under Labor there is no problem so big that they do not maintain that regulation will fix it. But we are getting on with the job of removing regulation. Ironically, Labor wants the government to do the impossible to save industries which cannot be saved while refusing to do the one thing that would be good for all businesses operating in Australia and that is: repeal the carbon tax. That would have been of so much benefit to the automotive industry. Repealing the carbon tax would be good for manufacturers such as SPC Ardmona, it would be good for Qantas, good for Virgin Australia, good for Rex and good for small business. In short, it would be good for anyone trying to run a business and trying to run a family budget. If the Leader of the Opposition were fair dinkum about jobs, fair dinkum about helping out businesses operating in Australia and fair dinkum about families, he would get on board with us and tell his senators to get rid of the carbon tax.

Those opposite will not get behind our efforts to free Qantas from the regulatory shackles of the Qantas Sale Act—a piece of legislation that applies to Qantas and not its competitors. Instead, we hear the member for Grayndler fearmongering about regional services, when they are not even mentioned in the Qantas Sale Act.

With the greatest respect to the member for Fraser, his amendment is nothing short of a grand piece of showboating. While putting sentiment into law might seem like a worthy pastime to those opposite, there is no place in the statute books for grandstanding and hyperbole. It was just a try-on from the member for Fraser, and we have seen it before. This is the very same member who trivialised the $250,000 in savings achieved through the passage of the Tax Bonus for Working Australians Bill. According to the member for Fraser, this amount is too small—too modest to even consider worth saving. But $250,000 in the scheme of things is $250,000—and it is $250,000 worth of taxpayers' money. This type of attitude just sums up the modern Labor Party so well. Labor today have no respect for taxpayers' money and no credibility when it comes to managing our budget.

In closing I would say to the Australian people that this government is absolutely committed to implementing the plan which we took to the election. We were up front with the people. We said that we would remove the carbon tax. We said that we would remove the mining tax. We are trying to get on with the job of doing just that—of stabilising the economy and getting things back on track. We are getting no help from the party of negativity opposite, but we will get there.

Ms Kate Ellis interjecting

Mr McCORMACK: Absolutely. Thank you for agreeing with me, Member for Adelaide. The plan is to get Australia back on track, to rein in wasteful spending, to restore the economic fundamentals, to build prosperity and to create new jobs. This bill delivers on all those commitments.

The DEPUTY SPEAKER ( Mr Broadbent ): The original question was that this bill be now read a second time. To this the honourable member for Fraser has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.

Question negatived.

Original question agreed to.

Bill read a second time.