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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. 

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Restore our productive environment

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I will say it again. We need our economic productive capacity to be restored, we need our economic resilience to be restored, we need our economic sovereignty and independence to be restored, and we need our economic security to be restored.

Transcript

Thank you madam acting deputy president. As a servant of the people of Queensland and Australia, I support this bill. We need though, to do far more. We need to get manufacturing moving. We need to protect Australia from the risks of sources of imported goods drying up, and we need, as Senator O’Sullivan has said, jobs, jobs, jobs.

Queenslanders and Australians everywhere have heard us speak about the gaps in our productive capacity, the gaps in economic resilience, the gaps in our economic sovereignty and the gaps in our national security. That was before COVID.

Now it’s even more so, especially since COVID revealed that we did not even have enough personal protective equipment to protect our valued healthcare workers and everyday Australians. And now we have to store our own oil, our own oil in the USA because we have nowhere to store it here.

And at first we couldn’t even after COVID, we couldn’t even manufacture ventilators, but thanks to Aussie ingenuity and a personal thank you to all those innovative Australians who did step up to fill this gap. Certainly, we need the skills.

Australia needs the skills and the capability to ensure that we can protect ourselves from future health disasters and economic disasters, especially things like the prolonged border closures of, or international transport closures or blockades cut the sea transport.

And these are possibilities. We see the news of what’s happening in the South China seas. We see the growing confrontation between America and China. We need to think about our security. So this government has presented a bill for the creation of the position of national skills commissioner.

Yet we need to ensure this is not just an advisory role. Just setting up this office for four years is costing taxpayers over $48 million. And I quite often hear Liberal and Labor people and the National saying, “We’ve spend a million here, “we spent tens of millions here, “we spent hundreds of millions here, “we spent a couple of billion here and there.”

It’s not the money that matters, it’s the environment in which that money can be turned into something beneficial for the people of Australia. So we expect a return on that 48 million. A return on investment by giving the commissioner the teeth to ensure that vocational training across Australia is high in quality, consistent and competitively priced.

Training by itself is not the answer. It needs to be good, effective training. So where is the accountability between the federal funding of approximately $1.5 billion a year to the States, to the vocational providers, to ensure that our vocational trainees, get a high quality education and an affordable education that really lands them a job.

If the government is going to invest $1.5 billion per year in vocational education and training, then Australians have a right to ensure that our taxes are well spent. So we need a review of the performance of the national skills commissioner after 12 months, or possibly after three years, we need that review.

We also need to understand that it is not the commissioner who is going to get us effective training. It is not the commissioner who is going to decide what skills are needed. Government, Liberal, Labor, Nationals have shown a very poor track record of anticipating demand for specific skills.

Those decisions must be based upon what the market needs. It’s the men and women in work. It’s the men and women investing, men and women leading corporations that determine the skills we need and actually going beneath that, it’s the market that drives those skills.

And they will tell us what skills are needed to service the market. More importantly, we need to restart manufacturing in our country, and that needs more than training. It needs much more than training. It needs an integrated approach and industry and economic environment, which enables and encourages Australian investment.

How the hell can people afford to invest when energy prices are so high? How the hell can it be that we don’t have reliable, affordable, stable, synchronous electricity? We have the cheapest coal in the world, the highest quality coal in the world.

We export that to China and they produce coal far, far more cheaply at about 40%, they sell it to their manufacturers at 40% of the price we sell it. Why, because our electricity prices have doubled in the last 10 years. Why, because of Liberal, Labor and Nationals policies’ based on rubbish, a climate scam.

That is what’s destroying our manufacturing industry. Labour costs are a smaller component of manufacturing these days than they used to be. Electricity prices are significant. We’ve gone from the lowest price electricity to the world’s highest prices.

And that’s been due to regulations based not on data, but on opinions from the Liberal, Labor and Nationals governments. How can it be that China, takes our coal thousands of kilometres and sells it at 40% of the price that we sell it for?

It’s regulations, it’s government screwing with the market, it’s government screwing with regulations. Listen to some of these factors, all government driven. The renewable energy target, introduced by John Howard’s government.

The national electricity market, introduced before John Howard, if memory serves me correctly, but worsened under John Howard’s government. National energy market is really a racket, not a market. And that’s the people in Australia are paying for the prices that the retail margins are guaranteed in some states at high levels with very little risk.

The networks are gold plated because of regulations. And then we’ve got privatisation. In Queensland, our state, the Labor Party up there, and the state government uses that as a tax, $1.4 to $1.5 billion a year in tax, due to excess charges from the generators.

Privatisation, the sale of assets, is failing around the country. That is an essential asset and it’s crippling our manufacturing. It’s crippling jobs right across. Agriculture, farmers won’t irrigate because the price of water is too high. Price of pumping water is too high.

Second thing, tax, that’s part of the business environment. Multinationals in our country are going without paying tax. Any company tax due to agreements from Robert Menzies’ Liberal Government in 1953, perpetuated with the lack of tax on the North West Shelf Gas that was enabled by Bob Hawke’s Labor Government in the 1980s.

Both sides have done that. Former deputy commissioner of taxation Jim Killaly, said in 1996 and the year 2010, that 90% of Australia’s large companies are foreign owned and since 1953 have paid little or no tax. What that means is that mums and dads, families, small businesses, Australian owned businesses have to pay more tax than they need to.

It also means that the Australian businesses are at a competitive disadvantage of about 30% because they have to pay company tax and large companies have to pay company tax and the foreign companies don’t.

So taxation, we need to set a level playing field by taxing multinationals and reducing the tax burden, simplifying the tax system, having a comprehensive review of tax, because that is one of the most important factors driving the lack of investment from Australians.

We also have an abundance of regulations that are crippling, that is crippling our country. We have red tape from the bureaucracies that state federal and even local level. We have green tape driven by rampant environmentalists. We have blue tape driven by UN, and that is arguably the largest component of tape.

The blue tape, most expensive of all, put in place by Liberal, Labor, Nationals Governments. And then we have economic management. How can companies prepare? How can companies plan for the longer term, which is needed these days when we have governments, making economic management decisions purely based upon electoral electoral payoffs, not just every three years as it used to be, but now it’s an annual cycle.

Budgets are based upon bribing taxpayers to vote for that particular party. Economic management is now 12 month issue, and it’s very short-term and it’s counterproductive to good business environment. We have states now with lower accountability because competitive federalism has been white anted.

The Queensland Labor Government can sit on closing its borders and decimating our tourism, decimating small business in our state. And why, because under the Commonwealth Constitution, we are supposed to have competitive federalism yet in 1943, the income tax was stolen from the States and given to the federal government.

And now essentially more than 50% of state government expenditure is from the federal government, tied to federal government conditions and guidelines, which means effectively that the federal government is running much of what the States do.

The federal government is running much of what the local councils do around Queensland and around Australia. I was in the Balonne Shire council in 19, sorry, in 2017 in February and they told me an answer to a question of mine that 73% of their annual revenue comes from the federal government with strings attached.

Not only does the federal government tell them how to manage their local community, the federal government only has three to five year windows, which means the local councils can’t go beyond that time frame during their planning. How can local councils make a long-term plan?

This is what’s hampering governance in this country. So I plead with the government to make sure that we focus on our economic productive capacity, our economic resilience, our economic sovereignty, our economic security, our economic independence, which has been smashed by the quest for the elitist quest for, interdependence which is really depending upon others, that is a loss of dependence.

Nonetheless, this legislation will help all Queenslanders to improve our state’s economy and to repay the debt hole in which Labor Government in Queensland has buried Queenslanders. We need training, but we need jobs. We need Australian jobs.

We need Queensland jobs, especially in regional Queensland. Training is a minor component, yet an important component. Beyond that, we need to get back to basics to create the economic environment, to drive the Australian investment.

As I said, I’ll say it again, we need economic productive capacity to be restored. We need economic resilience to be restored. We need economic sovereignty and independence to be restored. We need economic security to be restored. Australia has the people, has the resources, has the opportunity, has the potential.

We just need to get back to what we had, get back to the basics. And in the basics, Australia led the world in per capita gross domestic product per capita income in the early years of our Federation. When our constitution was followed and the States behave competitively toward each other.

That’s what we need to get back to a productive environment. Thank you Madam acting deputy president.

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Farm Household Assistance

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The Farm Household Allowance Bill was on today’s agenda as a matter of importance.

Transcript

As a servant to the people of Queensland and Australia, I support this bill. The reform to make the farm household allowance a flat rate paid on current income, helps to reduce the regulatory burden on farms, who already work long hours for decreasing rewards.

These income audits were a massive distraction, so this is a good move from the government, a welcome move, the extension of time for conducting an assessment helps farms involve their accountants, or bookkeepers, in a process that was previously an ordeal.

My concern in light of current events, is that COVID-19 assistance is targeted at urban, and not rural areas. Our farmers have come through the worst drought in 100 years and the drought may or may not be ending.

What we do know is that the rivers are full, but the damns are empty. Farmers are watching this water, this bounty of water, running down rivers and out to sea. General-security water licence holders are still on zero allocation, they have no confidence that irrigation licences will be honoured.

If international trade is being disrupted, we need to grow food, we need to allow more water to be taken for irrigation. The environment has had a drink, a bellyful, from recent rains, it’s now the farmer’s turn.

What good is farm assistance if farmers go broke, because we took too much water for the environment and not enough for food and fibre? And I’d like to talk about the productive capacity of our country, especially the rural productive capacity.

We have destroyed it in the last 20 years. Farmers have had their ability, their right, to use the land taken from them, stolen from them, to comply with international agreements starting with the UN’s Kyoto protocol.

We need that back, or farmers paid compensation for the loss of their rights. Secondly, water, I’ve just touched on water, but we need to have investment in water infrastructure, and make sure that farmers have that water, because its essential for food. And we need energy prices to be lowered.

We have the world’s biggest exports of natural gas and coal, and yet we have among the highest prices of electricity in this country. We have farmers not able to irrigate, because they can’t afford the electricity to pump water in a country that’s blessed with energy.

What is going on? We have to restore the productive capacity of our country, which means getting back to sensible electricity policies, energy policies, so that we have, once again the lowest prices in the world, the best policies, we’ve got now, the worst.

Restoring the productive capacity will involve, also, other sectors, including education, but it starts with land use, the right to use the land that farmers have bought, the right to access water at sensible prices, free of corruption, and the right to electricity at reasonable prices.

I also want to talk about one other aspect, and that is we have fallen for the globalist trap, of interdependence, inter-dependence, and what that really is, is dependence, because when we’re in interdependent on someone else, with around the globe, and they shut down, we’re suddenly dependent on them.

Australia has got abundant minerals, abundant energies, abundant agricultural resources. We’re not using these resources. Australia has enormous potential with its people, with its resources and its opportunities, and we need to rekindle these, and get back to putting Australia first.

No more interdependence, because that is simply dependence We need to become independent, as we were and we were independent we thrived. And that, when we restore our independence, we will restore our economic resilience and we’ll also restore our productive capacity.

So we compliment the government on this initiative, but we need to go much much further to restore the productive capacity, and economic resilience of our country. Thank you, Mr. President.

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