David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Do the government’s proposed changes to the CPRS undermine efforts to return the budget to surplus?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The government does face a very substantial challenge to return the budget to surplus after the impact of the global financial crisis and global recession on the budget, particularly with a dramatic drop in projected taxation revenue. The recent Mid-Year Economic and Fiscal Outlook papers did modify the projections in a positive way with respect to future deficits and projected debt but, nonetheless, we are still facing the prospect of debt peaking at around 10 per cent of GDP and at around $150 billion or so in net terms, which is still extraordinarily low in global developed world terms but does require serious discipline on the part of the government in order to get the budget back to surplus—at least by 2015-16, as projected in the Mid-Year Economic and Fiscal Outlook papers. We have set in place a couple of disciplines to ensure that that will occur—in particular, offsetting all new spending with savings and also placing a cap of two per cent in real terms on increases in spending once ordinary trend levels of growth have resumed.

Mr Speaker, like everybody in this House, you would be aware that we have received a great deal of advice and free character assessment from the opposition in recent times about the importance of getting the budget back into surplus and about the levels of debt and deficit. Unfortunately, the Leader of the Opposition does not always follow his own advice on these matters. We have had a number of budget initiatives that have been blocked in the Senate—budget initiatives involving billions of dollars worth of savings—such as the private health insurance rebate reforms, the reforms to the scheduled benefit for cataract surgery and also reforms to youth allowance.

You can imagine, Mr Speaker, that, given my responsibility, I approached the prospect of negotiations with respect to the Carbon Pollution Reduction Scheme with some degree of trepidation given some of the initial claims being put forward by the opposition. But I am very pleased to say that the proposals that have been negotiated between the government and the opposition have only a very, very modest impact on the budget over the forthcoming 10 years. In fact, the total impact in net terms is a deterioration of somewhere slightly higher than $750 million over 10 years. I think that augurs well that we may be seeing a slight change of heart on the part of the opposition on these matters, and I look forward to that being reflected in some other contributions that they make. I commend the opposition for their constructive approach in these negotiations. It is certainly very important that we maintain the integrity of the budget position in this regard and, given the position that the opposition have taken on those issues in recent months and given that they hold significant power over these matters in the Senate, it is certainly very important that they practise what they preach.

I could say more, but I am conscious of the fact that some members are part way through a very important meeting and they have to get away from question time soon in order to resume. I do not wish to add anything further on that point, but I would urge the opposition to complete the process, join with the government in a bipartisan way to get through what is a very difficult and challenging issue and support the amended Carbon Pollution Reduction Scheme proposal as negotiated between the government and the opposition.