Matters of Public Importance: Economy, 4 May 2016 - House of Representatives

Dr LEIGH (Fraser) (15:53): In mid-2009, the then Leader of the Opposition, Malcolm Turnbull, decided he would bring back an old stunt from the Liberal Party—the notion of a debt truck. He put a debt truck on the road, sat at its wheel and said that under Labor gross debt might go to $315 billion. That, he thought, was so terrifying that the Australian people had to be warned about it. Well, it is instructive to look at the budget papers to see where gross debt will be under the Turnbull government. Under the Turnbull government, gross debt is going not to $315 billion but to $624 billion. Gross debt will be nearly twice as large as when Malcolm Turnbull got his first debt truck. I have news for the Prime Minister: it is time to trade in his debt truck and buy a debt B-double. 

The fact is that, when this government came to office, the deficit—the gap between what government raises and what government spends—was $30 billion. Now it is projected to be $37 billion. A coalition that came to office promising a surplus in its first year and every year after that is now projecting red as far as the eye can see. This government, which said that it would have debt and deficit at its heart, has delivered an additional $123 billion of net debt. That is an extra $5,000 of debt for every man, woman and child in Australia. Does the government take it seriously? When asked about this by Leigh Sales, the Treasurer said:

Well, you're asking me about politics, Leigh. You're asking me about politics. What I'm talking about is what is actually happening with the budget.

You can only shake your head when you hear a Treasurer who has had more positions than a game of Twister on the issue of debt and deficit say that.

There are things to like in this budget. There is the low-income superannuation contribution. It is under a new acronym, but it is a Labor policy re-announced. There is tobacco excise, which is a good revenue raiser and good health policy. There are the measures on restoring some staff to the tax office—it is a veritable Xerox-led recovery. The trouble is that those opposite have been railing against many of these measures for the past few years. They cheered when the former Prime Minister, Tony Abbott, attacked Labor for suggesting that we might put more resources into the tax office to get more revenue out. The then Prime Minister, Tony Abbott said:

So far the only idea they have come up with is to spend $100 million on the ATO to raise $1 billion. Well, next time they will be telling us to spend $1 billion on the ATO to raise $10 billion. That is the problem.

It does not seem to be the problem in the glossies. When I look at the glossy I have here, I see a lovely little picture. It shows investment in the tax office of $679 million and revenue from the tax office of $3.7 billion. It looks pretty much like what former Prime Minister Abbott was deriding. We also have some suggestions in the glossies that this government is going to crack down on profit shifting to tax havens. It is funny that it does not actually put names underneath the tax havens. You might think some of these islands could be named—for example, Bermuda or the British Virgin Islands. What is the one I am missing?

Ms Butler: The Cayman Islands.

Dr LEIGH: The Cayman Islands—that is right! The government could well name them, and that is something that I am sure we can follow up.

The budget not only fails the government's own test of debt and deficit but also fails Labor's tests of whether it deals with growth, innovation and inequality. Labor recognises that our living standards have fallen four per cent since this government came to office, and a budget which rips $1 billion out of infrastructure investment is not going to spur that growth. We recognise that wage inequality has risen, with wages rising three times as fast for the top tenth as for the bottom tenth. And, yet, what are people being offered? There is no tax cut for the bottom three-quarters of workers. Workers earning between $80,000 and $180,00 get a tax cut which is not a sandwich-and-milkshake tax cut but a sandwich-or-milkshake tax cut—a mere $6 a week.

On the subject of innovation in Australia, just six per cent of ASX 300 firms think that they are highly innovative. In the budget we see an entrenchment of cuts to schools, vocational training and universities. It is exactly the opposite of what you would want to lay the plan for strong growth. There is nothing new in the budget about renewable energy, which must be an innovation sector for the Australian economy. This is a budget that is designed to get a political party through an election. It is not an economic statement designed to set a nation up for the decades to come. 

Be the first to comment

Please check your e-mail for a link to activate your account.

Stay in touch

Subscribe to our monthly newsletter


8/1 Torrens Street, Braddon ACT 2612 | 02 6247 4396 |