28.5.13 Appropriation Bills

Mr HAWKE (Mitchell) (19:45): I
rise to speak on the Appropriation Bill (No. 1) 2013-2014 and the other
appropriation bills. I want to confirm that this budget—another budget in
deficit and in crisis—is really another Labor budget of more debt, more chaos
and more spin. Nothing has been more pertinent in that regard than witnessing
the Labor Party's backbench on the delivery of the budget. I have seen budgets
over the five years since I was first elected to this parliament, and I have
watched budgets over many more years. The complete and utter lack of enthusiasm
for the budget from the individual Labor members is quite telling about what you
find with this budget, and that is: it does not have a sense of life. When the
former Treasurer Peter Costello delivered a budget, you got a sense of what he
was on about. You got a strong message. You got a set of policies. You got a
coherent narrative. And you got enthusiasm that flowed from the delivery of that
budget. Since Treasurer Swan has been in place, we really have no coherent
narrative. We do not have a set of policies that people can believe in and we
have a very confused mix of settings. That confusion and chaos are adding to
uncertainty in the economy.

I want to speak about some of the sectors that are experiencing
that confusion and chaos and the consequences that it is having. It is evident
that the Labor Party had to dragoon a whole series of backbenchers into speaking
on the budget. That is quite telling about how the lack of belief in what the
Treasurer is doing has really come to a head. Perhaps the best feature of this
budget that I have found is the fact that the government is saving $4.5 million
by not proceeding with plans to filter the internet of objectionable material.
As a long-term opponent of the government's mandatory internet-filtering
proposal, I was very happy to see that the government was forced into a
humiliating backdown on this proposal. That saving is entirely appropriate,
considering that that overblown government policy would not have delivered any
benefit to the Australian society and would have burdened us with overregulation
in the internet space, one of the least regulated spaces that we have left. That
is probably the best thing that I will mention about this budget. It does not
really get much better from there.

The Leader of the Opposition, in his budget in-reply speech,
stated very clearly that, if the coalition is fortunate enough to be elected in
September, he will ensure that there are days of deregulation in our parliament
and days where legislation will simply be repealed, consolidated or redressed.
The reaction of the Labor Party and the Labor Party's backbench was again very
telling. They looked at each other in stunned awe, saying, 'Is such a thing
possible?' or 'That's outrageous!' 'What a fool!' 'What an idiot!' 'How could
you do that?' But, when I speak to the business sector—the small business sector
in particular but also medium and large enterprises—in my electorate and all
around Australia, business and industry are crying out for less regulation, for
less interference from government, for a removal of the tens of thousands of
regulations that are burdening them and stopping them from making investment
decisions, from adding additional employees and from doing their job on a
day-to-day basis. For the Labor Party to react in such an incredulous way to
such a simple proposal highlights everything that is wrong with government
today. What we did not see from the government was a program of delegislation or
deregulation, of consolidating bad laws, of fixing things, of removing
unnecessary law—a deregulation program that could kick-start our economy.

Nowhere is this felt more than in the small business sector. It
is telling to note that, according to questions on notice returned recently, the
number of small enterprises structured as companies has dropped by 23,100 since
2006-07, the number of small enterprises that paid company tax has dropped by
19,400 since 2006-07 and the number of small enterprises with a turnover of
under $2 million has dropped by 2,400 since 2006-07. Those statistics are
important because they represent a diminishment of the small and medium
enterprise sector because of the increase in red tape we have seen under the
Labor Party, the increase in regulation and the increase in taxes and charges.
Indeed, over the last four years we have seen 29 new and increased taxes, 21,000
new regulations and record government borrowing and deficits, which I will turn
to in a moment.

These new regulations and taxes hit hardest on the small
business sector, on those businesses which have to generate the wealth and work
so hard to risk their own capital and enterprise, to employ a few people and to
add capacity to their business. This is where regulation and government
intervention hurt the most. The big corporations have armies of lawyers and
accountants and the ability to deal with change from government. Uncertainty and
constant regulation by government hit the small and medium business sector
hardest. Those statistics I have just read out for the benefit of the House are
indeed very telling and troubling, given that we have around two million small
businesses and that there has been such a reduction, and that they do most of
the employing in Australia today.

A government that ignores the small business sector, that does
not have a program to provide relief and lift the burden on hardworking family
businesses and small and medium businesses in our nation, does not have a plan
for the revival of our economy. So when we see a budget delivered that simply
takes us further into debt and deficit and that does attempt to correct some of
the errors of the past by cutting some expenditure but fails to do so
adequately, that does not assist the small and medium business sector by
deregulating or doing anything to relieve the burden they are facing—and that
burden has become intolerable.

In particular, I think all Australians will be most concerned
about the issue of gross debt breaching the $300 billion ceiling for the first
time. We have seen this Labor government increase the debt ceiling on two
occasions now. When asked about this issue the Treasurer, instead of providing
honesty and transparency for Australians in the House at question time, has
failed to answer whether he will lift the debt cap above $300 billion, given
that in all of the projections it is extremely likely that in the next few years
that Australia will need to borrow more than $300 billion of gross debt. The
dishonesty is amazing when you consider that it is there for everybody to
see.

We have also seen that the fifth record deficit in five years
and two more deficits issued in this budget have led to a record net debt of
about $192 billion. There is no credible path back to surplus in this budget.
Indeed, we have seen the emergence of structural deficit, and structural
deficits require structural solutions. Yet no structural solution has been found
to the structural deficit crisis in the budget. If you do not address the
structural deficit problem then you cannot hope to return to surplus. The claims
that the government will bring the budget back to surplus in a reasonable time
frame are completely unrealistic without the structural issues being addressed.
It is simply not enough to cut some expenditure and say, 'Look, we're cutting
expenditure.' You must address the structural settings when you have a
structural deficit. The government has failed in that regard. At the same time
they are raising more than $25 billion in higher taxes over the next five years
and they are breaking their election commitments—although that is a regular,
commonplace feature of this Labor government; it is hardly remarkable anymore
when they break a promise—such as the scrapped family tax cuts and family
payments and the other measures in the private health area. I think when you put
all that into the blender you find a country that cannot get a sense of where
this government is going.

There is no doubt that economic confidence is the other missing
feature in our economy at the moment. Not only are business conditions
difficult; not only is the global financial crisis continuing to impact upon the
operation of our economy and the confidence of businesses to invest; but the
ongoing chaos and confusion from the federal government level is producing
sovereign risk in relation to doing business in Australia and causing a crisis
of confidence. There is no doubt that Australians are waiting for 14 September
with bated breath so we can have a renewal of confidence in government in
Australia, refresh the settings of confidence in our economy and renew people's
willingness to spend, people's willingness to invest and people's willingness to
employ. I do not think that should be underestimated when you consider the
record of the government—and it does not matter what sector you go to.

I cannot let an appropriation bill speech go by without
mentioning that defence expenditure as a percentage of GDP is now at levels not
seen since 1938. Not since 1938 have we seen defence expenditure so low. On the
Labor Party's own website, it says that the first priority of government must be
defence, protecting Australia. If that is the first priority of national
government, and it is, why has $25 million been cut from the defence budget? The
coalition believes that the purpose of a national government, the first priority
of a national government, is defence of the nation. Under the Howard government,
defence expenditure was cauterised from cuts. It was protected from savage cuts.
Yet this government has sent our nation, with our proud Australian military
tradition, to defence expenditure levels not seen since 1938. It raises serious
sustainability questions for the operation of the Australian Defence Force, its
ability to engage in overseas operations in the region and its ability to deploy
when necessary to protect Australia's regional and national interests.

Again, it does not matter what sector you go to; the low
revenue and the problems that we have seen from the budgetary mismanagement over
the last five years are having an impact on confidence. Certainly, it is the
case that Labor has a spending problem, not a revenue problem. We have seen a
lot made of the fact that revenues have fallen. From the overblown projections
that we have seen, revenue has fallen. But revenue in 2013-14 from this budget
is projected to be $80 billion higher than at the end of the Howard government.
That sounds like a lot of money, but it is not as much money as the $120 billion
more in expenditure than at the end of the Howard government, which highlights
why we are in such deficit. It is not that we do not have more money than we did
in 2007—we do have more revenue and more income—but that we have expenditure on
a scale that has seen six budget deficits and debt continuing to balloon
out.

Budgetary mismanagement has consequences for all Australians.
It has consequences not just for small businesses and medium-sized enterprises
but also for individual families. For households, 29 increased or new taxes and
charges mean increased cost-of-living pressures. There is no greater issue in
any metropolitan city—I come from an outer-metropolitan electorate myself—than
cost-of-living pressures. We have heard today that evidence has been produced
that electricity prices will soon be double what they were when this federal
Labor government was elected. They will have doubled for households and doubled
for businesses.

Ms Rishworth
interjecting—

Mr HAWKE: In Sydney, that has had a huge impact. Not only do electricity prices have
an impact on households; they have an impact on businesses and on the cost of
doing business in Australia. Access to cheap electricity is of course providing
a resurgence in the American economy: cheap energy. Cheap energy is critical,
which is why you would not introduce the world's biggest carbon tax at a time
when electricity prices are already rising.

Apart from the revenue implications, the other issue is that
these are 'Treasury's figures'. The government have no responsibility for their
own budget, according to the Treasurer—and according to the members opposite,
including the member for Kingston. They have no responsibility for their own
budget. But somebody is getting these figures wrong. And somebody is getting
these figures wrong in terms of the carbon price, because I can tell the member
for Kingston and other members present that the carbon price will not sit at $12
per tonne when the European carbon price is now collapsing—

Ms Rishworth
interjecting—

Mr HAWKE: The member for Kingston does not understand the market, because the price
would not be set by Treasury and it would not be set by the government. The
market must flow, and the market in Europe says that the price per tonne is very
low. The market price is at rock bottom. So having an Australian carbon price of
$12, or having an Australian carbon price which could reach up to $30, is not a
market mechanism; it is an arbitrary mechanism. It is a failure of government to
be imposing the price well above what you can get in all the other markets in
the world today. It will not be good for Australia because you can buy emissions
at $4 or $5 a tonne in Europe, whereas here we are mandating $12 in the budget.
Of course, that is not the government's figure—the member for Kingston did not
come up with that—that is some Treasury bureaucrat!

Surely, it is the role of government to question the
bureaucracy and ask, 'Where did that figure come from and why is it not in line
with world expectations on carbon pricing?' It is yet another example of the
dishonesty and deceit that is in this budget. If the government bases its budget
on projections that are wrong, on forecasts which are unreasonable and on
figures which will never come to fruition it is setting our nation up for
failure. Australians, and all members of this House, are looking for a new start
in a new parliament with a government that has a consistent and firm approach to
budgetary matters. The coalition has a real solutions plan to restore hope,
reward and opportunity for Australians.