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Tuesday, 30 October 2012
Page: 8418


Senator BUSHBY (TasmaniaDeputy Opposition Whip in the Senate) (15:31): A number of years ago, the member for North Sydney, the honourable Joe Hockey, predicted that this current Labor government, the combined Rudd-Gillard government, would never deliver a surplus. Indeed, the record shows at this point that they have failed dismally in that regard. I think in the first budget they handed down they actually predicted a surplus, but when the actual figures came in that went on to be one of the four largest deficits that this country has ever seen. Indeed, the four largest deficits that this country has ever seen were in fact the first four budgets that this Labor government actually delivered. I am not talking about what they handed down on budget night. I am talking about what the actual figures showed when the final accounts for each of those financial years came in. That is despite predicting a surplus when they handed down their first budget. The current budget they handed down this year, also predicting a surplus, will also end up in deficit. Just as an interesting historical note, the four largest surpluses that were ever delivered in this country were actually delivered in the last four years of the Howard government. It makes for an interesting contrast.

Senator Moore stood up here earlier and said there is no way the government could stand up and make a promise that there would be a surplus delivered and that the best they could do was provide a commitment that they are working towards a surplus. That is actually true because it is not possible to take account of the vagaries of what might happen in international developments and even domestic developments and how that might play out on taxes and expenditure. But this is exactly the point we are making. The Prime Minister and the Treasurer on numerous occasions—and Senator Brandis outlined some of those when he was speaking—have promised that they will deliver a surplus. That first occurred with the Treasurer, I suspect, in response to those comments that the member for North Sydney was making when he raised the likelihood that this government would never deliver a surplus. I suspect the Treasurer and the government of the day felt a political need to go out and say they would deliver one. So they nominated a date when they thought they could do it, and that was the 2012-13 year.

But the reality is that, since then, things have changed. As Senator Moore noted, circumstances do change, and it has put them in a little bit of a political tight spot because the reality of being able to deliver that surplus has got harder and harder as they have gone on. It is instructive to look at what happened in the last financial year before we transfer that on to what might happen this financial year. Two years ago, Wayne Swan predicted that the budget would run at a deficit of $12.3 billion for the 2011-12 year, which is the year that has just ended. Two years ago he said, 'We will be looking at a deficit of $12.3 billion for the 2011-12 year.' But when the budget for the 2011-12 year was released six months later, that $12.3 billion that they were predicting then had blown out to almost double that at $22.6 billion. In December of 2011, that figure had climbed from $22.6 billion to $37.1 billion in deficit. So it was $12.3 billion when he first mentioned it, it went to $22.6 billion in the budget and then it went to a $37.1 billion deficit by the time of MYEFO in December last year. The final figure in August this year was $43.7 billion. So we have gone from $12.3 billion to $22.6 billion to $37 billion to $43.7 billion over the course of about 18 months in predictions. I think that is instructive of the challenges the government is facing by having put itself in the position two years ago where it promised that it would deliver a surplus in the current financial year. The reality is that the underlying economic conditions that have led to the massive deterioration in the budget of the 2011-12 year have been at play in the figures and their forecast for the 2012-13 year. So the government has had to, as a result, perform more accounting tricks and more twists and turns than you would see at the Moscow Circus.

Just looking most recently at MYEFO, even the timing of the release of MYEFO is enough to raise eyebrows as it is the first MYEFO that has been released in the month of October where we did not have a federal election the following month. You could suspect that maybe we are going to have an election in the following month, but I think that is probably unlikely, although not completely out of the question. The only other alternative for bringing it forward and releasing MYEFO so early is that the Treasury was trying to deceive the public by reporting the figures before they became even worse. (Time expired)