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Tuesday, 14 August 2012
Page: 5087

Senator FEENEY (VictoriaParliamentary Secretary for Defence) (16:04): I am pleased to rise this afternoon to make a contribution to this debate on a matter of public importance. When considering the subject of 'broken promises, raised expectations and unfunded commitments' there is no-one better qualified than those in the coalition to comment on these matters. In considering the contribution that I would make to this debate my first thought was that Labor had kept not only its most important promises but also the most central promise of all—a promise to manage the economy, to manage reform, to manage prosperity and to deal with the extraordinary challenges of recent times. That is a promise that Labor has kept and it has kept it in spades.

The government is returning the budget to surplus on time and as promised after what can only be described as some of the most momentous times in world economic history. Budget 2012-13 has cut spending by $33 billion—the greatest fiscal consolidation in the history of our economy—an extraordinary, remarkable achievement and one that means this country and this government will be heading back into surplus at a time when much of the rest of the world can only dream of such a scenario.

When one considers the promises that this government has kept, the one that we can be proudest of, the one that affects every Australian, is that promise to manage the budget and to manage it well. Economic growth is expected to be stronger than in every major advanced economy over the coming two years: solid growth and real GDP of 3¼ per cent in 2012-13 and three per cent in 2013-14. Unemployment is forecast to remain low at 5½ per cent in the next two years. We saw only a few days ago that unemployment number again deliver a very strong result for Australia and again a number that surprised many commentators. No doubt, it grievously disappointed those who make it their business to talk down this economy.

Official interest rates are lower now than at any time for our predecessors and make a mockery of the boast that those opposite used to make that interest rates would always be lower under a coalition government. Well, the Australian people can now see that that boast was an empty one, and that in fact it is Labor and our economic management that have provided the lowest official rates in memory and delivered real and tangible results for mortgage holders across the country. By mid-2014, our economy is expected to be over 16 per cent bigger than it was before the global financial crisis, again outstripping the major advanced economies.

Despite a $150 billion loss of tax receipts since the GFC over the five years to 2012-13, the budget forecasts strengthening surpluses in each of the next four years, beginning of course with a $1.5 billion surplus in 2012-13. This year, tax as a proportion of the economy is just 22.1 per cent, compared to the 23.7 per cent we inherited from our predecessors. That means that this government is taking $24 billion less than our predecessors. The tax burden on the economy has shrunk and the proportion of the public sector as a part of the whole economy has also shrunk. So, of the whole mythology that those opposite have tried to build of big government, big taxation and economic failure, none of them bear the results. None of them are able to stand up to scrutiny, and clearly this government's economic management credentials sit at the very heart of its achievement in recent times.

Over 750,000 jobs have been created since late 2007, while around 27 million jobs have been lost around the world over the same period—again, an Australian result that stands in stark contrast to what is happening in the rest of the world. Of course, this is not unknown to Australian families. They sit at home and they watch the nightly news. They see Greece, they see Italy and they see the instability of the European economy and the Euro, and they comprehend that Australia is sailing very well in very fraught waters. Australia has strong economic fundamentals: solid growth, low unemployment, record levels of mining investment and commodity prices still around historical highs.

The strength of our public finances is a key reason behind Australia receiving a triple-A credit rating, with a stable outlook from all three major rating agencies for the first time in our history. We are now one of only eight countries that currently meets this standard, so clearly Australia is measuring up by international standards as well as by those very stringent standards this government has set itself. Independent economic commentary website Economy Watch said:

Spurred by robust business and consumer confidence, Australia’s economy is expected to grow even quicker in the next five years. 2011 to 2015 should see Australia’s GDP (PPP) grow by 4.81 to 5.09 precent annually …

Likewise, Australia’s GDP (PPP) per capita is expected to experience healthy growth.

The Wall Street Journal opined:

Mr. Swan unveiled the biggest package of budget cuts in 30 years hoping to turn a deficit of A$44.4 billion in the 2011-12 fiscal year ending June 30, into a surplus of A$1.5 billion in fiscal 2012-13.

So these extraordinary accomplishments have not gone unnoticed. This means that the government has already achieved bigger saving measures than anything the Howard government ever managed.

These are extraordinary accomplishments; these are extraordinary promises kept, but there are of course others. One that springs to mind is the minerals resource rent tax. This was a very important Labor policy, one that was taken to the people and taken to the parliament. At its very heart, the minerals resource rent tax was about the principle that the mineral and resources wealth of this country belonged to every Australian in equal measure. While of course those who risk their businesses, their capital, their entrepreneurialism in exploiting those resources should be and are appropriately rewarded, it was appropriate for the people of Australia to take a seat at that negotiating table and say to those companies, 'You are experiencing superprofits as a consequence of record commodity prices—in the case of iron ore, a 600 per cent increase in the price—so it is appropriate that Australia and Australians get a bigger cut of this dramatically expanding pie'.

That message has been understood. It has been understood by the people and it has been embraced by most of the industry. Now we see today that that promise has not only been kept but been kept in a way where we see the support of most of the industry. The proof of that is in the most extraordinary investment pipeline in the history of the Australian resources sector. In the order of $430 billion is now in the pipeline, with something like $82 billion in this year alone, which is up from $35 billion only two years ago. Clearly, there has been spectacular investment in the sector.

Those opposite, in railing against this eminently reasonable tax, have made two contradictory points, the first being that this tax will not realise any receipts and the second being that this tax will ruin the mining industry. They have not been deterred by the fact that these two claims are mutually exclusive. It cannot on the one hand beggar the mining industry and on the other hand produce no receipts for government. But this is just one of many anomalies on many occasions and in many critical debates where the opposition walk on both sides of the street and can be found on both sides of the argument. I will raise further examples.

One of them is climate change. We see in the climate change debate the opposition pandering to those who insist that climate change is not real, that anthropogenic climate change is a fantasy, a fraud, and we see the opposition pandering to those who believe that climate change is real. The opposition hide the fact that their policy to abate carbon and their targets in that policy are the same as the targets in the government's policy. Again, we see them walking both sides of the street.

Sometimes this enters the world of high farce. Recently in the foreign investment debate we saw coalition senators, including Bill Heffernan and Fiona Nash, pushing for further strengthening of foreign investment rules only a week after the opposition had purported to land a policy on this very subject. I have said in this place before that we on this side are, within reason, sympathetic to the enormous challenge that Liberal Party senators have in herding the cats that are the National Party. We know they are policy eccentrics. We know that the National Party's understanding of the importance of foreign investment in this economy is little understood, but last week we had the Nationals calling for sweeping changes to a policy that was barely a week old. Deputy President, it is one thing to tolerate the eccentricities and strange utterances of the National Party when they are talking about our policies, but it seems they are now bagging yours as well.

Of course, when we talk about unfunded commitments we come to the most spectacular part of the hypocrisy of the opposition. When talking about unfunded commitments I must confess I am in the presence of experts, because this coalition intends to face the people at the next election with a $70 billion black hole. You have turned unfunded commitments into a grand new place. The coalition's proposal to abolish the minerals resource rent tax will cost the government exchequer $11.1 billion—and while that no doubt will earn you the lasting friendship of the 'Billionaire Liberation Front' in Perth, it is $11.1 billion that the coalition has to find from the budget. Its plans to axe the carbon price mean there are $24 billion in commitments to refunding the big polluters for carbon permits. But wait, Deputy President, that is not all. There is the $3.2 billion of taxpayers' money to fund the coalition's direct action plan. As you have heard me say before, this is a plan that Ceausescu would have been proud of, a plan that comes straight from the politburo of Eastern Europe: a plan to dispense with supply and demand and introduce the big five-year plan from Chairman Abbott.

On top of these extraordinary commitments and extraordinary policy pronouncements, we see the coalition currently purporting to support $8 billion in pledged tax cuts with absolutely no idea how it is going to go about delivering that. We see it again in its policy on superannuation where on the one hand the coalition asserts that it is going to get rid of the minerals resource rent tax but on the other hand says it will keep the increases to superannuation that are funded by that plan. Then we have Tony Abbott in a brain snap, one might say, coming out with his own one per cent levy to fund his very own policies in the world of social welfare.

Again and again we see this opposition opposing a budget that has been managed second to none in the world and talking down an economy which is booming by any standard. We see the opposition itself hiding behind a fig leaf of a $70 billion black hole and a determination to be on both sides of every major argument confronting the people of Australia. For those who care to look at the detail of the political debate, can I commend the scribblings of van Onselen—not someone who could be said to be a Labor supporter, a keen enthusiast for the other side but someone who in recent times has been scathing about the opposition and the political opportunities they have squandered. His recent article was entitled 'A case of one bad government replacing another' and in his writings he has offered free character assessments for most of the Liberal Party's front bench. This is an opposition not ready for government, criticising an economy that is the envy of the world.