PARLIAMENT HOUSE, CANBERRA: I also rise to speak on the appropriations bills before us. These appropriations bills, of course, form this year’s federal budget. They were not just a missed opportunity but irresponsible given the economic situation that we find ourselves in. Our high-level numbers still look reasonably healthy in unemployment and growth prospects, but these cloud underlying weaknesses and there are significant storm clouds on the horizon.
When you take out Western Australia, for example, South Australia, Tasmania and Victoria are all close to zero or negative growth. Retail has flatlined, manufacturing has flatlined and is laying off workers week in, week out and housing approvals are at their lowest levels for many years. Meanwhile, when you look at the situation overseas, it looks quite dire. Greece is facing a political and economic crisis which will have implications for the finance sector across the globe. Many China analysts are predicting that their growth is slowing. And America, while it seems to be recovering, is still not fully out of the woods yet.
This is the context of this year’s budget, where we have economic insecurity at home and storm clouds on the horizon abroad. It is because of this that the budget is particularly irresponsible, because it further undermines economic confidence, does nothing for cost-of-living pressures and increases employment insecurity. At this time under these difficult economic conditions we should be doing everything we can to make the economy stronger in order to create wealth. This means running budget surpluses, curtailing government expenditure and, where possible, reducing government taxes so that there is a healthier environment for businesses to thrive. But in fact this budget does the opposite. Let us go through and look at some of the top-line figures.
To start with, the budget continues the government’s spending spree. They would have you believe that this budget was all about fiscal consolidation. That was the mantra from the government this year. But when you look at the figures they tell a different story. The budget papers actually increase expenditure by $2.2 billion over the next 14 months—an extra $2 billion in the next two months alone and an additional expenditure of $0.2 billion over the following 12 months. On a cash basis there is an additional $8.7 billion of expenditure next financial year. The government talk about fiscal constraints but clearly they are not delivering in this regard, because the bottom line is that they simply cannot control their expenditure.
When you look at the overall aggregate expenditure, the government is now spending an unbelievable $100 billion a year more than what it inherited in 2007. That is a 40 per cent increase in government expenditure from five years ago, when inflation was only 13 per cent. What has that extra $100 billion a year delivered? Do we look around the country and see that all the freeways have been fixed, that there are new rail lines in place, that the port bottlenecks have been addressed? Do we see the Rowville rail finally built after all these years or the Eastern Freeway connection to the Tullamarine? No. We do not see any of those things. We do not even see those under construction at this stage. Rather expenditure has been out of control and the quality of expenditure has been as poor as the overall volume of expenditure.
We have had 20,000 additional public servants with that extra money. We have had pink batts put in hundreds of thousands of people’s roofs and then ripped out of hundreds of thousands of people’s roofs. We have had school halls built at twice the price at which they could have been built. We have had billions extra spent on border control. We have seen waste after waste of expenditure. That is the legacy of this additional $100 billion per annum. This is the travesty: that we have so little to show for all of this additional money which the government has been expending. We have so little to show for all the additional taxpayers’ funds.
We have talked about the expenditure side. When you look at the revenue side there are another six new taxes in this budget, bringing the number of either new or increased taxes since the government came to office 4½ years ago to a grand total of 26.
Next year residents will be slugged an additional $39 billion in tax compared with this year. That is the fiscal consolidation—and extra tax slug of $39 billion for next financial year.
And, of course, the company tax—dare not speaks its name—promised for so long failed to materialise on budget night. The government made a big song and dance about this, saying it was going to be delivering tax cuts to all of these companies and small businesses. The member for Deakin, who sits in the seat adjacent seat to me, wrote to every business in his electorate, two days before the budget, claiming that there was going to be a company tax cut in the budget. And, of course, it did not materialise. It was another broken promise from this government.
We have looked at the expenditure and at the revenue; now let’s get to the debt, because this is the granddaddy of them all. As you would be aware, over the last four years we have had the four biggest government deficits in Australian political history. This government continues that pattern. The debt ceiling will increase, incredibly, to $300 billion. It has gone up to $200 billion, then to $250 billion, and in the fine print of these budget papers it shows that they need to increase the debt ceiling by an extra $50 billion to $300 billion. This shows the farce of the government’s claim to be in control of their expenditure and running surpluses. Clearly, if they were running surpluses they would not need to increase the debt ceiling to $300 billion. Net debt will climb to $145 billion, an increase of almost $40 billion since last year’s budget.
By 2015-16 the government will spend $8 billion a year just on interest repayments. That money just disappears. It does not go towards anything. That $8 billion a year could build eight tertiary hospitals around Australia. It could build the Rowville rail link four times over, year in, year out. It would build the connection from the Eastern Freeway to the Tullamarine Freeway, in Melbourne. But that $8 billion will be gone next year and the year after that and the year after that, just on paying the interest on the debt. That is the price of Labor’s legacy of waste and reckless spending.
It took the coalition almost a decade to pay off the $96 billion of debt we inherited back in 1996. It is now $145 billion, and still growing, and Labor is still in power. How many years is that going to take us to pay off once we get back into power? I do not know. Certainly, at the rate of the surplus the government claims it will deliver next year, it will take 100 years.
Let me make a couple of other points on the specifics of the budget. First, the carbon tax. At the end of the day this budget was a carbon tax budget. It may not have been mentioned by the Treasurer in his speech and it may not be mentioned in the $37 million of ads that are running non-stop at the moment, but the 2012-13 budget was very much a carbon tax budget. This carbon tax will increase electricity prices by 10 per cent in the first year alone. It will increase gas by nine per cent in the first year alone. According to the Victorian Treasury it will cost 24,000 jobs in Victoria alone, including 500 in my electorate. It will increase government rates by an estimated three per cent across the board, according to the Municipal Association of Victoria. That is an extra $1.5 million in the municipality of Knox. Over the next 40 years—and this is perhaps the most astounding figure, and it is in the government’s figures—the carbon tax will cost the economy $1.3 trillion, which is the equivalent of an entire year’s GDP of this nation, gone on the carbon tax.
That means we will have to work for an entire year, every single man and woman in this country will work for a year, just to pay the carbon tax. That is what they are doing. It is an incredible figure and it is the government’s own figure—it is not ours. These price increases that I have been talking about are just the start, because the tax will increase—it is legislated to increase from $23 to $29 over the next three years, and that is forecast to continue to go up and up, all the way to $135 by 2050.
There are a couple of other items I would like to touch on. Firstly, the NDIS. On this side of the chamber we are very supportive of the NDIS. We have called on the government to make this a bipartisan commitment and to have a bipartisan team look at that and oversee its implementation. We were pleased to see that at least some money was put towards it in the budget—$1 billion. What I am disappointed about is that the Productivity Commission recommended $3.9 billion. So there is a $2.9 billion shortfall. I believe that the government is raising the expectations of the disability sector and it will not be able to deliver on those expectations.
Secondly, the schoolkids bonus. The government, day in day out, have been saying that we do not support providing additional assistance for families to pay for their school education costs. That is wrong. We do support that. We supported the existing education tax offset program. In fact, we took to the last election a policy to increase the education tax offset program to $1,000 for a secondary school child and $500 for a primary school child. But, importantly, we insisted that there be a strong nexus between the program and what the money is spent on. That means that an individual simply had to collect their receipts and they got their money back through the tax system. It is called ‘accountability’. I know it is a word which the Labor government have difficulties with, but on this side of the House we think it is important. It is important for the taxpayer to ensure that their money is going towards the stated purpose and it is important that the recipients of the benefit use the money for its stated purpose as well. ‘Accountability’ is an important principle on this side of the House. We just wish the government would pull out the dictionary and work out for themselves what that word means, and apply that term to more of its government programs.
Finally, school funding. There were big expectations about this budget’s delivery on the Gonski review. We had heard that the government was going to be legislating for the next quadrennium of funding for nongovernment schools and government schools. But when you look at the figures, it does not deliver on the additional $5 billion, which the Gonski review recommended. In fact, it does not even deliver on $1 billion. It does not deliver on $500 million. It delivers over the forward estimates only $5 million—that is, Gonski has been scrapped. It will be another broken promise. It will be another case where expectations are set up in a government sector and with millions of parents, and those expectations will not be delivered. In conclusion, this is a missed opportunity. This is an irresponsible budget. It is based on increased taxes and on spending which is out of control, and it will simply increase government debt, which future generations will have to pay for.