Senator SINODINOS (New South Wales) (16:43): It is a pleasure to take part in the debate on this matter of public importance concerning more deficit, debts, broken promises and policy uncertainty. I am speaking, of course, of the government. Let me begin by updating Senator Polley, who early in her speech spoke against middle-class welfare. Stop press: at lunchtime at the National Press Club, in a luncheon address, the Treasurer, Mr Swan, gave a vigorous and spirited defence of middle-class welfare. In fact, he took great exception to the term. He said targeted family payments are important because they provide us with a way of providing support for the next generation. He took umbrage at the term 'middle-class welfare'. Indeed, many on the other side other than the now Treasurer have used this term all too loosely. I mention that because the capacity to have provided baby bonuses and targeted family payments, to have paid down the debt that the Howard-Costello government inherited in 1996 and the capacity to provide income tax cuts were all ticked off through the 1990s and into the 2000s by the Treasury. The target of one per cent to 1.5 per cent of GDP for a surplus was ticked off by the federal Treasury and, indeed, by the Reserve Bank. A myth has grown up that the only way the Howard government ever achieved anything was because of the increase in national income through the terms of trade in the latter part of its term. Well, as Peter Costello reminded us the other day, it was a government that produced 10 or 11 surpluses out of 12 budgets—think about that. In other words, in good times and bad, it was a government that had the management capacity, the sagacity and the courage to make the decisions that were required. There are many on the other side of the house who will recall the way in which they opposed many of the measures taken at that time. So I take umbrage at the idea that, somehow, the mantle of fiscal conservatism has been appropriated by a government which is yet to produce a surplus. It is a government which has, indeed, produced the four successive biggest deficits in our history, which has three more deficits to go, and whose definition of the economic cycle now extends well beyond seven years. It now has a target of achieving a surplus over the cycle. Well, the cycle is getting longer and longer. The sad truth for the Australian economy and for our vulnerability to future downturns is that in their almost dying days, five minutes to midnight, this government are taking measures which, if they were genuine about being fiscal conservatives, they would have taken six years ago when they came into power. They have had a deathbed conversion to making savings to make up for their increased spending. They have had a deathbed conversion to taking a conservative approach to making revenue forecasts. They should have realised, once the initial numbers came in after the global financial crisis, that revenue would not be growing as strongly as it had pre the global financial crisis. In this budget they are budgeting for revenue to grow by something like seven per cent, which has been the average over the last few years. Finally, they are conceding the obvious point that you need to budget according to the revenue that you have, unless you want to keep raising taxes—and I will come back to taxes. The real issue that has dogged this government since the recovery from the global financial crisis has been the fact that they have not been willing to take the action required to bring spending under control. The reason the coalition focuses on spending as opposed to tax is that we believe, fundamentally, if you want an economy which rewards enterprise, rewards initiative, then to the maximum extent possible you should keep the pressure on efficient, effective public spending and try to reduce the pressure on the tax base. It is a very important principle. That principle has underpinned what we did in government with things like the switching between inefficient, indirect taxes and the goods and services tax, and then the trade-off between those indirect taxes and cutting personal income tax. All those years in the early 2000s when the coalition was cutting tax the Treasury was putting into the budget statements estimates of the impact that that was having on the incentives to work, save and invest, which are, principally, the incentives to greater labour force participation. They knew, as we knew, that they were supply side measures; they were not just giveaways. So, no more of this idea that they were just giveaways. They had a discreet and important economic as well as social purpose. This government is in the position it is today because no-one believes what it has put into this budget, and the people have to cop it for four months until the election. In their bones the people out there know that they cannot believe what is in this budget because for too long, unconditionally, they have been promised things that have not come to pass. The Prime Minister and the Treasurer have sworn black and blue 300 or 400 times that there will be a surplus come what may. At the Press Club last year the Treasurer, in answer to a question from Mark Simkin, said that he would deliver a surplus come what may. Now, any economist could have said, 'What? You're going to cut spending in the middle of a recession just to achieve a surplus? You'll override the automatic stabilisers just to achieve a surplus?' What that betrayed to me, if not to other people, was that the Treasurer did not understand his job. He was making an unconditional political point. In this game that always catches up with you. You always get mugged by reality whether you like it or not. This budget will only reinforce in people's minds the litany of broken promises of this government. The principle broken promise, of course, goes back to beyond the 2010 election when the now Prime Minister pledged that there would be no carbon tax under a government she led. That started the rot. Her credibility was under a cloud already, but that really started the rot. So we have a government which has produced deficits when it said it would produce surpluses, which said it would reduce debt when it has increased debt, which has broken promises that it tries to make up for by making more promises, more estimates, more assumptions. It is hoping, like Mr Micawber, that something will turn up, that the terms of trade will be a bit stronger than it thought, that external stimulus in some form will be stronger than it thought. Senator Faulkner: Didn't you design non-core promises, though? Senator SINODINOS: And another myth from the government about core and non-core promises. I will address that on another day; that is the subject of a chapter all of its own. I will not be distracted by the bleachers on this occasion; I will keep talking about the policy uncertainty induced by the actions of this government. What do I mean there? Here is a classic example: all of a sudden, again, the government are the champions of improving our schools. But, hang on, $2 billion is ripped out of universities to help achieve that. A couple of years ago the government were lauding the role of universities in our system and talking about how they were uncapping places and so on and so forth. My colleagues the Greens made a very important point about the consistency of messaging: if you support education, you sacrifice one element of education in order to buttress another. This is where the mixed messages of this budget come to the fore. This is not how you sell a budget. This is not how you sell a consistent message. There is no message left. The only message is, like Mr Micawber said: 'Something will turn up. Let's just get through the next four months. Let's lay down a few fiscal booby-traps and maybe the other side will have to pay for all the promises that we've made.' That is not to say that over the years the government has not made some good decisions, but the fact of the matter is that, unlike truly successful long-term governments, it has failed to create a consistent and coherent message around what it is doing. People opened the Daily Telegraph today and saw a list of measures. They saw all the family payments being cut and all the other payments being cancelled or postponed, which were flavour of the month, as it were, last year or the year before. They were championed—that only Labor could protect Medicare, and they started to slash Medicare to build DisabilityCare. They said there would be no more taxes, and then there were new taxes to support DisabilityCare. The mixed messages will bury this government.