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Monday, 20 June 2011
Page: 3304

Senator CORMANN (Western Australia) (17:33): I will not hold the Senate up much longer. I will make just one final point in response to the minister's comments about cost in the budget, because the minister clearly was not in the chamber when we went through the second reading debate. All the evidence so far is that Treasury has completely overestimated the revenue that would be generated from lowering the applicable interest rates in the context of capital protected borrowings, as they proposed in May 2008 and have not so far implemented. We believe that there is evidence to the committee that Treasury has overestimated the impact of this particular measure. Here I refer the minister specifically to an exchange between Senator Bushby and Dr Lynch where Senator Bushby asked whether any calculations had been done on the impact that that might have, and Dr Lynch said:

… we advised Treasury in 2008, that the market would fall back substantially. It has done that. Further, the level of activity in the income generator within that part of the industry has declined commensurately. Also the number of people employed in that part of the industry has been reduced. For a variety of reasons we think revenue certainly will not meet the expectations that are in the forecast.

I emphasise: 'revenue certainly will not meet the expectations that are in the forecast.' He continued:

We cannot be precise with those numbers because I do not have the full basis behind the Treasury estimates.

…   …   …

Looking at the longer term, if the market continues in the direction it is going at the present, there will not be very much revenue collected at all through this process.

So I would caution the Senate when the minister is putting forward the sorts of estimates that he has just quoted, because invariably those sorts of estimates are found to be wrong in hindsight. Question put:

That the amendments (Senator Cormann's) be agreed to.

The committee divided. [17:40]

(The Chairman—Senator Ferguson)

Question negatived.

Bill agreed to.

Bill reported without amendment; report adopted.