Delivering Tax Cuts, Not Taxes

This session is with Treasury’s Fiscal Group, the division tasked with delivering federal budgets, analysing fiscal policy, and ensuring efficient public spending. The group’s core duties span three main areas: budget production, managing financial arrangements and payments between the Commonwealth and States and Territories, and providing spending advice.

In this advisory role, the group guides portfolio ministers on government spending regulations and resource allocation across policy areas, including health, education, labour markets, infrastructure, and defence.

Coming from a business background, I always look for ways to streamline and reduce major costs, especially while everyday Australians are facing a cost-of-living crisis. With that in mind, I asked for a complete accounting of the Albanese Labor Government’s net zero policies and measures, including departmental costs, grants, co-investments, spending to date, projections across forward estimates, and contingent or “off-the-books” liabilities (which reports suggest could reach a trillion dollars).

Mr White noted this was a massive query not fully covered by Budget Paper No. 1, so I asked Treasury to take it on notice.

I also asked for the costs since 1 July 2022 (plus forward estimates) of federal agencies or departments duplicating services where constitutional authority rests with the states, particularly in areas like health, education and the environment.

Despite concerns raised by Treasury and Minister Gallagher regarding the scope of the requests and the distinction between federal and state roles, I reiterated that reducing government waste is vital. Given the cost-of-living pressure on Australian households, the focus should be on delivering tax cuts and cutting expenditure rather than raising taxes.

In business, identifying and then cutting unnecessary duplication is a huge opportunity to reduce spending and ease the burden on taxpayers.

Transcript

Senator ROBERTS: Thank you for being here tonight. I asked these questions of the previous group, the Markets Group, and they recommended that I ask you. Could I just check, please, because it seems like you’re perfect for it, that the Fiscal Group is a core division within the Australian Treasury responsible for delivering government budgets, analysing fiscal policy and ensuring efficient public spending.  

Mr White: Yes.  

Senator ROBERTS: It works to achieve sound fiscal outcomes through structural policy advice, coordinating the federal budget and managing financial transfers to states and territories—correct?  

Mr White: Yes.  

Senator ROBERTS: Key responsibilities—three of them—are budget production; Commonwealth-state relations, managing the timely and accurate payments and financial arrangements between the federal government and the states and territories; and spending advice. It advises portfolio ministers on whole-of-economy government spending regulations and resource allocation across policy areas like health, education, labour market, infrastructure and defence—correct?  

Mr White: Yes.  

Senator ROBERTS: I’m used to being in business—companies, small business and large corporations— where we look at our costs, especially our bigger costs, and try to work out ways to improve them, so that’s what I’d like to ask you about. There are two big costs. Could you tell me, please, what are the full costs across the breadth of the Albanese Labor government of net zero measures, net zero policies, including departmental costs, co-investments and grants. Also include a figure for contingent liabilities, including off-the-books matters, which I’ve seen referenced in mainstream media as potentially a trillion-dollar liability. Could you please include spending to date as well as projections across forward estimates. Are you the people?  

Mr White: That’s a very large question.  

Senator ROBERTS: It is a very large cost, in fact.  

Mr White: We don’t have that in front of us. Budget Paper No. 1, page 121, has an appendix B that goes to this, but not in the way you’re asking the question. It has some information about net zero transformation and net zero spending measures, but they’re really new measures, not the whole of the government. Answering that question would take quite some time.  

Senator ROBERTS: Could you take it on notice?  

Mr White: We can.  

Ms P Brown: I might just point you towards paragraph 1 on page 124, which provides similar information that is there for this budget but gives the figures in previous budgets, so you can look at those numbers and see the impact over time.  

Mr White: Yes. If we took it on notice, we’d have to work out what we can do. It might not be an easy thing to pull together in that way, but we could look.  

Senator ROBERTS: Thank you. Take it on notice. Second, you’re involved in allocating money to the states. Could you please provide the costs since 1 July 2022 of any Commonwealth department or agency which duplicates agencies existing in the territories and the states and for which the constitutional mandate for that power vests with the states, not the Commonwealth. Could you please include data through forward estimates.  

Mr White: That’s possibly an even bigger question than the first one.  

Ms P Brown: I don’t know how we would do it.  

Senator ROBERTS: It’s a huge opportunity.  

Ms P Brown: What are you specifically after? Is it whether there are similar functions being done at the Commonwealth level as at the state level?  

Senator ROBERTS: The states have responsibility for certain services, and the Commonwealth is duplicating them.  

Mr White: Yes, it’s an interesting question. Essentially, ever since Federation started, there have been certain things where Commonwealth and state governments have done things in similar areas, and we have a lot of that now. We have a whole budget paper, Budget Paper No. 3, federal financial relations, which has $200 billion a year we give to the states. The question of duplication versus cooperation and doing things in different areas for the same sorts of things is an interesting question. Is us giving money to the states to run hospitals duplication or not is kind of a tricky question.  

Senator ROBERTS: I don’t think giving money to the states as part of grants and things like that is a duplication. It’s where you’re doing the same services. It seems to be rife in health, education, environment.  

Senator Gallagher: We have slightly different responsibilities, though. In health, states primarily run the hospital system, but we have responsibility in primary care—GPs, Medicare, aged care, those kinds of things. In education it’s more universities, early education and care; states have public schools. So there are differences. I’m just not sure how we would provide an answer to that on notice in a way that would not take a lot of effort.  

Senator ROBERTS: Well, how much is a lot of effort compared to the benefits once we work them out? Australians are in a cost-of-living crisis. The government’s increasing taxes, so why not look at cutting the need for taxes?  

Senator Gallagher: We’re cutting taxes as well. There’s tax reform, which includes tax cuts. But fundamentally, we probably have a disagreement that the Commonwealth duplicates functions of the states. I think the Federation and its roles and responsibilities are pretty well understood, and the architecture of the Commonwealth Public Service reflects that, just as the states’ reflect theirs.  

Senator ROBERTS: I think it’s a huge opportunity to at least have a look at it and investigate it.  

Senator Gallagher: We’re always looking at ways to streamline. We genuinely are. We have no appetite to be in places that the Commonwealth shouldn’t be involved because we have enough in the areas of our responsibility. But I’ll see if there is anything useful that Treasury can provide.  

Senator ROBERTS: Thank you.