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Transparent and Costed Policies

I moved a private member’s motion in parliament today about the importance of properly costed policies.

Parliamentary Budget Office, 18 March 2013

The House
1. Notes:

(a)    That a bipartisan parliamentary report recommended the creation of the Parliamentary Budget Office, which is now operational having passed Parliament;

(b)   That the Australian people deserve a proper policy debate in 2013, with all parties presenting properly costed policies;

(c)    That the updated information contained in the Pre-Election Economic & Fiscal Outlook (PEFO) will not affect the cost of most policies, and therefore release of fully costed policies should not be delayed until then; and

2. Calls on all parties to have their policies costed consistent with the Charter of Budget Honesty, and release them to the Australian people in enough time to have a well-informed debate.

Transparent, costed policies are fundamental to trust, to honesty and good public debate. The Parliamentary Budget Office was created in this spirit. It was created following a bipartisan parliamentary report agreed to by members from both sides of the House, including the member for Higgins, who is here in the chamber, and Senator Joyce.

The coalition support for the Parliamentary Budget Office however did not extend beyond that bipartisan report. By the time that the Parliamentary Budget Office came to be considered by parliament it had become apparent that the coalition’s costings hole was far bigger than had been thought at the time the report was written. The coalition then stepped back from their support for the Parliamentary Budget Office.

This is a pity for Australian politics in general. Australian politics has always depended on a robust opposition which presents alternative ideas for the governance of Australia. That is critical to the operation of our great democracy. The coalition’s tepid attitude to the Parliamentary Budget Office and the increasing suggestions that they will not place their costings before it, is deeply concerning to me and I think to many Australians regardless of their political views. I often meet people in my electorate who are Liberal Party voters—who have voted for the Liberal Party all their life and intend to do so at the next election—but they still say to me, ‘I wish they would be a bit clearer about what they want to do; I wish they would be a bit clearer about their policies.’

The Labor Party in government have put in place significant saves. Since the global financial crisis, all of our new spending has been offset by savings. We will now spend less than 24 per cent of GDP over the forward estimates—something not achieved since the 1980s. This $154 billion of savings over five budgets has not been easy to achieve. To take one example: when we said that the Baby Bonus would be reduced from $5,000 to $3,000 for second and subsequent children, the member for North Sydney compared it to the one child policy. When we have made targeted saves, such as getting rid of the out-dated Dependent Spouse Tax Offset—a measure that deterred secondary earners from working—we have been attacked by those opposite.

The opposition have, as a result of saying yes to every special interest but saying no to sensible revenue measures, got themselves into a substantial revenue crater. As a result, for example, of saying that they will repeal the price on carbon and repeal the minerals resource rent tax, they have around a $70 billion costings gap. That is not my figure. Anyone who thinks that this figure is a Labor figure simply needs to go to the transcript of Joe Hockey, the member for North Sydney, on Sunrise on 12 August 2011. That is where the $70 billion figure comes from. Seventy billion dollars is equivalent to stopping Medicare for four years or stopping the pension for two years. It is a huge amount of money. Where will the opposition get that from? We know a few things about what they will do. They have said they will get rid of the Schoolkids Bonus, a measure which is designed to help families with children at the times of the year when they have those education expenses.

We know that they are going to scrap income tax cuts for around seven million Australians. Recently the member for North Sydney has tried to hide that. He carried out a doorstep with the Liberal candidate for Parramatta, who said that the benefit of the tax cuts would be $3 a week. But that is a figure that applies to a tiny fraction of those eligible. For the vast majority of Australian taxpayers, their benefit from these tax cuts—and the pain that they will endure if the coalition is to increase income taxes on seven million hardworking Australians—will be much bigger. Most receive at least $300 a year. Many part-time workers receive up to $600. The member for North Sydney was so embarrassed by that that he edited his own transcript to remove the reference to a $3 a week tax cut.

We know too that the Liberal Party would, if it were to attain office, establish a commission of audit. That is a well-worn Liberal tactic, used on attaining office by Premier Newman, Premier Baillieu, as he then was, and Premier O’Farrell. It is simply a way of failing to come clean with the Australian people about what you will do.

The opposition frequently say that they have had their policies costed. The member for Goldstein, Andrew Robb, will frequently say that he has policies in his desk drawer which have covers on them—it’s great that they’ve designed those covers; I’m very happy about that!—and that they have been costed. But it is not clear by whom those policies have been costed. Have they been costed, as they were at the last federal election by a team of dodgy accountants who were subsequently fined for saying that they had carried out an audit when in fact they had not? Have they been costed by a catering company such as the catering company that did costings for Scott Morrison on immigration? We know that the coalition have costed policies, but we also know that those policies are sitting in a desk drawer. You have to ask yourself: if these policies were so good for the Australian people, would they be sitting in the member for Goldstein’s top drawer or would they be in the full glare of public scrutiny? I think Australian families know the answer.

We have some hints as to what the opposition would do from their statements on the goods and services tax. The opposition have said they are going to provide a larger share of GST to some states, which inevitably means they will have to provide a smaller share to others. So my colleagues in Tasmania and South Australia have raised concerns about the impact on their share of GST revenues if the opposition were to attain government.

We know also something about what the opposition might do as a result of two recent reports by Australia’s two leading right-wing think tanks. The Institute of Public Affairs has put out a list, and Alan Moran of the IPA was quoted in the Australian on 16 March 2013 as saying:

‘Some items have been discussed with Coalition politicians, many of whom are in the agreement with the principles against which list has been developed.’

Those cuts include cancelling the first stage of the NDIS and abolishing the FaHCSIA division implementing the NDIS; abolishing Fair Work Australia and Safe Work Australia; cutting the general research budget by 40 per cent; cutting all Commonwealth housing programs; cutting all foreign aid, excluding emergency aid; abolishing the agriculture, forestry and fisheries programs; and privatising the ABC.

They sound like savage cuts to me, but according to Senator Wong they amount to only $23.5 billion, so they are less than half of what the opposition would have to make in order to fill its costings gap.

Similarly savage cuts have been put forward by the Centre for Independent Studies. The Centre for Independent Studies have a TARGET30 report, suggesting that Commonwealth, state and local government spending should not amount to more than 30 per cent of GDP. That means significant decreases in the tax share for the Commonwealth government. The report is honest enough to note that Australia is now the third-lowest spending country in the OECD. Thirty per cent would make us the lowest spending country in the OECD.

How would the Centre for Independent Studies reduce our expenditure? They would do so by cutting back on health, education and welfare. The Centre for Independent Studies want insurance vouchers in our healthcare system rather than the world-beating Medicare system. They want cutbacks to compulsory superannuation. They want to abolish family tax benefit part B and they want to stop the Gonski reforms. These are significant cuts.

Meanwhile, you have the Leader of the Opposition, with his DLP tendencies, going about the place talking about what he will spend. He said at a Brookvale Oval function, for example, that he wants to redevelop Brookvale Oval at a cost of $70 million. No-one knows where this money will come from.

I hope that the Parliamentary Budget Office can contribute to a more transparent and open costings debate in Australia. Australians deserve no less.

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