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Tuesday, 8 March 2005
Page: 35

Senator MACKAY (2:57 PM) —My question is to Senator Minchin, representing the Treasurer. Is the minister aware of reports today that the federal budget surplus has climbed to $10 billion? Don’t these reports demonstrate the magnitude of the Howard government’s continuing tax grab from the pockets of every Australian family and give further confirmation to data from the ABS showing that the Howard government is in fact the highest taxing government in Australia’s history? As the Treasurer of the highest taxing government ever in this country, why isn’t Mr Costello focusing on delivering real services like major infrastructure development to the taxpayers he is ripping off in this record way?

Senator MINCHIN (Minister for Finance and Administration) —In fact, our proudest boast is that we have stopped the haemorrhaging of the federal budget. We inherited a budget in a disastrous state, one with massive deficits. They lied to us about the deficit going into the 1996 election. They said it was in surplus when it was $10 billion in deficit. They racked up $70 billion of debt in the last five years they were in government. They left us with $96 billion of debts, which was putting pressure on interest rates. One of the biggest expenditure items in the budget was in fact paying interest on the debts they had accumulated. We are in fact very proud of the hard work we have done to get this budget back into surplus and we are envied, as the Governor of the Reserve Bank said, by countries all over the world. The specific question was about a report in the Sydney Morning Herald this morning saying that we would have a surplus of $10 billion in this financial year. They do not say how on earth they arrived at that figure. I am not sure what the basis of the report is at all. I have no idea what they are talking about.

The government’s official position is as reported in MYEFO—the Mid-Year Economic and Fiscal Outlook—in December last year, just 2½ months ago. Our forecast then for 2004-05 was a surplus of $6.2 billion. Our forecast at that stage for 2005-06 was $4.5 billion. They remain the government’s projections, up until we release our revised figures in the budget itself. So we have no idea what the basis for the $10 billion figure is. We stand by the figures that we have provided, which we think are appropriate and sensible surplus figures. We are doing everything we can to ensure that we contribute to savings and that we minimise the extent to which there is pressure on interest rates, if any, from the fiscal position adopted by the government, and we will continue to deliver surpluses while the economy is growing so strongly.

Senator MACKAY —Mr President, I ask a supplementary question. Is the minister aware that, while the federal government collects 70 per cent of tax revenue, it accounts for just $6 billion, or 22 per cent, of public investment? As the highest-taxing government in Australia’s history, will the government now accept the OECD’s advice and follow the lead of the Australian states by lifting infrastructure spending?

Senator MINCHIN (Minister for Finance and Administration) —The opposition is simply revealing its utter ignorance of the responsibilities of the federal government. Our single biggest expenditure is the age pension. We have responsibilities for the whole social security system and for Medicare, defence and national security. The states have different responsibilities. Their responsibilities are largely in the field of infrastructure. They are the ones who own the ports, the power stations, the gas and electricity systems. The government do not own infrastructure. Our expenditure is around $200 billion a year—which they always say is never enough; they always complain that we are not spending enough. Our expenditure priorities are focused on the national government’s responsibilities for defence and national security, for looking after elderly Australians, for providing Medicare et cetera, and we will continue to provide them, while delivering surplus budgets.

Senator Hill —Mr President, I ask that further questions be placed on the Notice Paper.