The credibility of the Gillard Government’s promise to deliver a budget surplus in 2012-13 has been undermined by the refusal of its Finance Minister to guarantee the carbon tax won’t erode it or wipe it out altogether, Shadow Parliamentary Secretary Simon Birmingham said today.
The Government has previously stated the impact of the carbon tax would be budget-neutral:
“The overall package of a carbon price mechanism and associated assistance measures should be budget-neutral.”
‘Principles for assessing carbon pricing mechanisms’, Multi-Party Climate Change Committee (chaired by Prime Minister Gillard), 21 December 2010
Finance Minister Penny Wong today repeatedly refused to commit to the budget neutrality of the Government’s carbon tax or whether neutrality would be in a single budget or over a number of years.
“I’m not sitting at this table and responding to every question from you about a policy that has not yet been finalised, details of which have not yet been finalised, and announcements have not been made and I don’t care how many times you ask me, Senator Birmingham…”
Penny Wong, Senate Budget Estimates, 23 May 2011
Senator Wong’s refusal today is in stark contrast to previous willingness to offer a very clear definition of budget neutrality.
“Do not spend more than you achieve through income streams.”
Penny Wong, Senate Additional Estimates, 21 February 2011
“The Finance Minister’s refusal to guarantee budget neutrality of her Government’s carbon tax seriously threatens an already wafer thin forecast surplus,” Senator Birmingham said today.
“The previous CPRS was forecast to operate at a deficit that exceeded $1.6 billion in some years. A repeat of such a deficit for the carbon tax would, in 2012-13, wipe out much of the $3.5 billion surplus forecast in that year.
“If Labor’s equally solemn promises of a budget-neutral carbon tax and a 2012-13 budget surplus are to be believed, why won’t they promise that a carbon tax will not erode their claimed surplus for 2012-13?”