Dr CHALMERS (Rankin) (11:49):  I rise to speak on this collection of appropriation bills. The appropriation bills are largely to do with the running of the government, the departmental costs and the like, but they do afford us the opportunity to talk more broadly, as the member for McMillan and the member for Moreton have, about the budget settings in this country and the way we move forward. It is a privilege to follow the member for Moreton in particular. I thought he raised some very intelligent points about the state of the budget and the state of the government. It was a characteristically good contribution from the member for Moreton.

It is tempting to say that we want to talk about the budget strategy of the government, but in reality the government does not really have a budget strategy. It is confused and chaotic. One day you have the Treasurer saying that there will be more belt tightening in May and the next day the Prime Minister says there will not be. You have a minister saying something about the budget and on the same day another minister saying the opposite.

You have leaks in all directions. It is hard to open a newspaper in this country at the moment without one member of the ERC leaking on another or one member of the cabinet leaking on another. Even the other day in question time—I think it might have been Tuesday—the Treasurer answered one question and said that Australia is like Greece and headed for ruin and then about three or four questions later he said that Australia has a rosy outlook. Not even the Treasurer can come into this place with any sort of clarity in his own mind and talk about the budget strategy.

The government is at war over the personnel. The Prime Minister and the Treasurer are under pressure. The sharks are circling. They are under a lot of pressure. You can see it in question time when they all pretend to read while the Prime Minister speaks. They are at war over the means when it comes to the budget but not the ends. It is tempting to say that the biggest problem with this government is their disunity, the things they disagree on, but really the biggest problem with this government is the things they do agree on. They all agree on some of the worst aspects of this budget. They all agree on the GP tax. They all agree on $100,000 degrees. They all agree on pension cuts and the hike in the cost of petrol. They all agree on the hike in the cost of medicines. So really the biggest problem is not all this disagreement, disunity and confusion; the biggest problem is the things that are fundamental to the Liberal Party and the Abbott government, which are making life harder for people on middle- and low-incomes and asking the most vulnerable people in our community to carry the heaviest load when it comes to budget repair.

Every single member of cabinet—including the member for Wentworth and the member for Curtin—can pretend that they had nothing to do with this budget. But they did; they sat around the same cabinet table and agreed on the very worst elements of this budget. This budget is stapled to every single one of them. The Prime Minister can pretend that, all of a sudden, the days of good government are here, that there is some sort of reset. But when we look at their policy agenda—not what they say but what they actually want to inflict on the Australian community—we know that absolutely nothing has changed. Were it not such a serious matter, it would have been funny to see the Leader of the Government in the Senate in estimates earlier this week when he was asked what has changed with the Prime Minister since he promised that he would change. He had to take that question on notice! That was really an indication that the Prime Minister has not changed at all, the policy agenda is the same, and every member of cabinet has signed up to that policy agenda.

We need to look through the fog of chaos and confusion on the government side of the House. We need to look beyond the political difficulties of the Prime Minister and the Treasurer, substantial though those difficulties are. We need to look beyond the polls and personalities. We need a proper evaluation of where we are at and where we are headed. I did not agree with a lot of what the member for McMillan said. But he did say that we do need an assessment of where we are at and where we are going—and we have very different ideas of where we should head. I think it is true that we should take stock of where we are at and also understand properly the costs to the real economy of the ineptitude and incompetence that has infected the Abbott cabinet.

As the member for Wakefield, who is here in the chamber, would recall very well, those opposite promised they would make the budget better. We know that in the 18 months that they have been in government—and this is a fact, not an opinion—that the budget position has deteriorated. In the context of the bills we are discussing today, there is something like a $44 billion deterioration between the midyear update from two Decembers ago and the midyear update last December. That is a fairly substantial deterioration and it is nothing to do with Labor. It compares two numbers from midyear updates both handed down by Treasurer Hockey. They promised to make the budget better but they have made it worse.

That is not the only example we have of where there has been a promise to make something better and it has become worse. They said that, if elected, there would be an instantaneous adrenaline charge. The Prime Minister went to CEDA in Sydney and said that, on the election of a coalition government, there would be an adrenaline charge in the economy, that things would improve. While I was listening to the member for McMillan, something popped up on my email which is interesting in the context of the conversation we are having right now. I want to read that into the record. I got an email just before, which is the NAB quarterly ASX 300 business survey for the fourth quarter 2014. I quote:

Big business in Australia is losing confidence affecting medium-term growth and capital expenditure plans. Overall confidence among larger firms has now fallen below its long-term average and is weaker than for smaller companies and the broader economy.

That was from the National Australia Bank. It is not much of an adrenaline charge when you think about the stats that are coming through about confidence in the economy. I am privileged to be on the Economics Committee with my colleague over there, the member for Wright. Very recently the Governor of the Reserve Bank appeared before the committee. One of my colleagues—it might even have been the member for Wright—asked him what his biggest fear about the Australian economy was and he said it was the lack of confidence. So, far from the adrenaline charge that the Prime Minister promised, there has been a real problem with confidence in our economy.

The Australian Institute of Company Directors did a survey of directors. Almost 50 per cent of those directors said the performance of the government was having a negative impact on their investment decisions. Taking the politics out of it, that is a very, very worrying aspect of company and business culture in Australia at the moment. I will not quote all the other confidence numbers, but confidence is very weak in the economy at the moment.

We have also had the government promise to make the cost of living better for ordinary Australians. Instead, we have got things like the proposals to jack up the prices of medicine, petrol, visiting a doctor and university degrees. These are all the components of the cost of living, all the things that really matter to the economics of daily life. The Prime Minister said he would make things easier. Instead, he has made things much, much harder.

The problem with all of these factors, particularly confidence, is the way they flow through to the real economy. When the economy does not have the confidence it needs, it flows through into the hard data about the real economy. Growth in our economy is soft. I do not say it with any relish, but growth is softer than we would all like. That has particular implications for unemployment. The unemployment rate is the highest it has been since 2002. That is not an opinion, it is a fact. Unemployment is higher today than it was during the depths of the global financial crisis. Let's think about that for a moment. Right now in Australia the unemployment rate is higher than it was in the sharpest synchronised downturn in the economy since the Great Depression. That is an extraordinary thing that we need to contemplate. That should be a wake-up call for anyone in this place and anyone who cares about the condition our economy is in and our community is in right around the country. That is a stunning stat. The unemployment rate is higher now than it was during the global financial crisis.

I do not want to spend my whole time responding to points that the member for McMillan made, but he showed an extraordinary lack of awareness when he said that, after 18 months of the coalition government, the unemployment rate is somehow Labor's fall. He said that there was a lag. But there is not an 18-month lag in these figures. That is just an extraordinary attempt to state that the unemployment rate, which is higher now than it was during the GFC, is something that Labor should be responsible for—after 18 months of government! You have got to wonder why these people wanted to be the government if they want to spend their whole time saying that every piece of economic data is somehow the fault of the previous government.

We are now approaching the second budget and there is no clarity on the first one. As I said, when you are getting to your second budget the time has long gone when you can blame other people for the fiscal settings in the budget or for the economic parameters in the budget. Unfortunately that culture of chaos, blame and confusion does not just infect the 2014-15 and the 2015-16 budget; it also impacts on a whole range of other aspects of the Treasurer's job. I am thinking here about the Intergenerational report. The Charter of Budget Honesty has covered four treasurers—Costello, Swan, Bowen and now Hockey. Of those four treasurers, the only one who has breached the law of the Charter of Budget Honesty when it comes to handing down the Intergenerational report on time is Treasurer Hockey.

We also know, from estimates, that one of the reasons for that delay is that the government are interfering with the migration numbers. They are trying to work out a way that they can paint the worst possible picture about debt and deficit. We know that the Treasury officials have gone to great lengths to point out that this is the Treasurer's document and it is not a Treasury document. They have gone to great lengths to point to the sort of interference that is happening with some of these figures. The Treasurer called this document a critical document last week. I agree with him. If it is such a critical document, it really beggars belief that he cannot hand his homework in on time.

In that speech about the Intergenerational report, which I read with interest, the Treasurer said that it needs to be about three things. Obviously he did not mention climate change or other intergenerational issues around sustainability. He did not mention inequality or immobility or any of those things that we should also care about, but he did mention three important things: productivity, participation and budget repair. It is amazing that he talks about productivity when they are cutting education and training and they are trying to build an NBN on last century's copper network. If you cared about productivity, you would not do that. They talk about participation at the same time as they take $1 billion out of the childcare system. If you cared about participation, you would not be doing that. And, if you really cared about budget repair, you would not be giving tax breaks to the 20,000 wealthiest people in the superannuation system and you would not be reopening tax loopholes for multinational corporations that let them shift their tax overseas and sell the Australian people short.

You notice that, when the Treasurer gets up at the dispatch box, some of his colleagues sort of delight in his discomfort.

Mr Champion:  They drop off, don't they?

Dr CHALMERS:  They drop off. You can just see the wry smile from some of the colleagues, who quite like the idea of Treasurer Hockey underperforming. But what I say to those colleagues is that you are all responsible for this budget. Everyone who sits on the front bench here and in the cabinet nodded eagerly when the Treasurer and the Prime Minister said they wanted a GP tax, $100,000 degrees and pension cuts. You all nodded your head. You all signed off on it. It is not just their names on it; it is all of your names on it. The member for Wentworth, the member for Curtin—all of the colleagues are responsible for this budget.

There could not be a worse time for this incompetence, division and chaos, when we do have very substantial challenges in our economy and in our society. The member for McMillan was right to say that revenue is down. There are holes in our tax system. It beggars belief that they would reopen one of them at the same time as they talk about holes in the revenue, but that is the truth. The revenue is down since Howard and Costello, and that is a challenge that we need to address. There is more than one way to skin a cat, though, I think we would say about that. The way they are going about it—asking the most vulnerable people in Australia to fix the budget, while everyone else gets tax breaks and gets off scot-free—is really not the way forward. For a country that cherishes the fair go, that is not the way you go about this really important task.

We will be guided, as we always are when it comes to the budget, by what is right for Australia, what is right for the broad mass of the Australian people—not one or two people in the economy, but the economy in the broadest sense. We want more people to participate in this remarkable quarter-century run of growth that we have had in Australia. Australia is in the midst of one of the most extraordinary periods of growth in the modern economic history of the planet, and we want more and more people hooked up to the opportunities that that brings. Our problem with the budget is that it says: 'We want two Australias. We want two tiers of Australia, with one group, the most vulnerable group, asked to do the heaviest lifting and another group that gets all the gains from economic growth in this country.' That is not what we want. We want a burden fairly shared. We cherish, like the Australian people, the fair go in this country. For as long as the fair go lives and breathes in this country, the Australian people will reject a budget like this. And, for as long as there is breath in the Australian Labor Party, we will stand up for the people who are under attack in this budget. We had a record of savings in the former government—$180 billion worth of savings. We have also ticked off on $20 billion of savings in the current budget. So we are up for a conversation about belt-tightening. So are the Australian people, but they will not cop a budget which is as fundamentally unfair as this one.

We also know, from estimates, that one of the reasons for that delay is that the government are interfering with the migration numbers. They are trying to work out a way that they can paint the worst possible picture about debt and deficit. We know that the Treasury officials have gone to great lengths to point out that this is the Treasurer's document and it is not a Treasury document. They have gone to great lengths to point to the sort of interference that is happening with some of these figures. The Treasurer called this document a critical document last week. I agree with him. If it is such a critical document, it really beggars belief that he cannot hand his homework in on time.

In that speech about the Intergenerational report, which I read with interest, the Treasurer said that it needs to be about three things. Obviously he did not mention climate change or other intergenerational issues around sustainability. He did not mention inequality or immobility or any of those things that we should also care about, but he did mention three important things: productivity, participation and budget repair. It is amazing that he talks about productivity when they are cutting education and training and they are trying to build an NBN on last century's copper network. If you cared about productivity, you would not do that. They talk about participation at the same time as they take $1 billion out of the childcare system. If you cared about participation, you would not be doing that. And, if you really cared about budget repair, you would not be giving tax breaks to the 20,000 wealthiest people in the superannuation system and you would not be reopening tax loopholes for multinational corporations that let them shift their tax overseas and sell the Australian people short.

You notice that, when the Treasurer gets up at the dispatch box, some of his colleagues sort of delight in his discomfort.

Mr Champion:  They drop off, don't they?

Dr CHALMERS:  They drop off. You can just see the wry smile from some of the colleagues, who quite like the idea of Treasurer Hockey underperforming. But what I say to those colleagues is that you are all responsible for this budget. Everyone who sits on the front bench here and in the cabinet nodded eagerly when the Treasurer and the Prime Minister said they wanted a GP tax, $100,000 degrees and pension cuts. You all nodded your head. You all signed off on it. It is not just their names on it; it is all of your names on it. The member for Wentworth, the member for Curtin—all of the colleagues are responsible for this budget.

There could not be a worse time for this incompetence, division and chaos, when we do have very substantial challenges in our economy and in our society. The member for McMillan was right to say that revenue is down. There are holes in our tax system. It beggars belief that they would reopen one of them at the same time as they talk about holes in the revenue, but that is the truth. The revenue is down since Howard and Costello, and that is a challenge that we need to address. There is more than one way to skin a cat, though, I think we would say about that. The way they are going about it—asking the most vulnerable people in Australia to fix the budget, while everyone else gets tax breaks and gets off scot-free—is really not the way forward. For a country that cherishes the fair go, that is not the way you go about this really important task.

We will be guided, as we always are when it comes to the budget, by what is right for Australia, what is right for the broad mass of the Australian people—not one or two people in the economy, but the economy in the broadest sense. We want more people to participate in this remarkable quarter-century run of growth that we have had in Australia. Australia is in the midst of one of the most extraordinary periods of growth in the modern economic history of the planet, and we want more and more people hooked up to the opportunities that that brings. Our problem with the budget is that it says: 'We want two Australias. We want two tiers of Australia, with one group, the most vulnerable group, asked to do the heaviest lifting and another group that gets all the gains from economic growth in this country.' That is not what we want. We want a burden fairly shared. We cherish, like the Australian people, the fair go in this country. For as long as the fair go lives and breathes in this country, the Australian people will reject a budget like this. And, for as long as there is breath in the Australian Labor Party, we will stand up for the people who are under attack in this budget. We had a record of savings in the former government—$180 billion worth of savings. We have also ticked off on $20 billion of savings in the current budget. So we are up for a conversation about belt-tightening. So are the Australian people, but they will not cop a budget which is as fundamentally unfair as this one.