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Wednesday, 24 June 2009
Page: 4145

Senator COONAN (2:00 PM) —My question is to the Minister representing the Treasurer, Senator Sherry. Given that the 2009-10 budget reveals a $210 billion fall in revenue over the forward estimates, will the minister advise the Senate what the major areas of revenue decline are?

Senator SHERRY (Assistant Treasurer) —Thank you for the question. Quite rightly, as has not been pointed out by those opposite on too many occasions, there is a significant fall in revenue of about $210 billion over the forward estimates and projections, and that has been brought about by—

Senator Ian Macdonald —A lack of business confidence in your leader.

Senator SHERRY —What a silly interjection!

The PRESIDENT —Senator Sherry, ignore interjections.

Senator SHERRY —What a silly interjection from Senator Macdonald. He claims it has been brought about by the Prime Minister, Mr Rudd. That is simply not true. As is well known—though perhaps not well known by some in the Liberal and National parties—the world has entered a significant financial and economic recession. We are seeing a significant decline in growth in every comparable economy around the world. In fact, I think Australia is one of two countries that is not in an official recession.

Senator Coonan —Mr President, I rise on a point of order. The reasons for the $210 billion fall in revenue are all very interesting, but the question, and the relevance of the question, was that we simply want to know what the major areas of revenue decline are—not the reasons for it; the major areas of revenue decline.

Senator Chris Evans —Mr President, on the point of order: I think Senator Coonan actually made the point in taking the point of order that Senator Sherry is directly answering the question as to the impacts of the recession on revenue and the impact on government budgets. I think in taking her point of order, she made the case that Senator Sherry is exactly trying to deal with what is a serious question and he is giving it a very serious answer.

The PRESIDENT —Senator Sherry, you have 56 seconds left to answer the question.

Senator SHERRY —The global recession obviously has an impact on the Australian economy and in turn has an impact on government revenue. Let me give you some examples, which Senator Coonan has asked for. They are on page 5-46 of Budget Paper No.1, Senator Coonan, if you would care to look. Company tax declines from $61.7 billion to $58.8 billion; superannuation fund tax receipts decline from just over $12 billion to $9.14 billion; fringe benefits tax declines from almost $3.9 billion to $3.4 billion— (Time expired)

Senator COONAN —Mr President, my supplementary question, which Senator Sherry touched on in his answer to the primary question, is: how does Australia’s decline in revenue compare with revenue levels in comparable jurisdictions—for example, Canada, Sweden or the United States?

Senator SHERRY (Assistant Treasurer) —Thank you for the question. Obviously, given that we are facing a global recession, the depths of which we have not seen since the Great Depression, other countries in similar ways will be impacted in terms of revenue right across the types of areas that I have indicated. Obviously there will be a reduction in comparable taxes in other countries, depending on the nature and the structure of the various taxes they would have. Certainly with respect to individual income tax, for example, given the significant rise in unemployment that is occurring in other advanced economies—far worse than in Australia, I might say—that will have an impact on revenue from income tax, because receipts from income tax will go down.

Senator COONAN —Mr President, I have another supplementary for Senator Sherry, because I am intrigued by this. Given the strong budgetary position that this government inherited from the Howard government—not in similar ways to other jurisdictions, as Senator Sherry alluded to—why have our budget revenue estimates declined so dramatically?

Senator SHERRY (Assistant Treasurer) —I think it would be a good idea if Senator Coonan did read the budget paper and the page that I have referred to. I do find it amazing that the opposition, in Senator Coonan, would ask a question like this. I have indicated and it is well known—unfortunately not by some opposite—that we are in a world economic recession of great depth which has impacted on revenues to the budget to the tune of over $210 billion. As Senator Coonan asked, I went to three specific examples on page 5-46 of Budget Paper No.1—

Senator Coonan interjecting—

Senator SHERRY —I am very happy to give you an answer, Senator Coonan. I have given you an answer in detail. In fact, I ask my own colleagues to draft me questions like this, but they do not seem to be particularly forthcoming; so I am happy to give you the response I have, Senator Coonan. (Time expired)