3.6.2026 - Appropriation Bill (No. 1) 2026-2027 - Consideration in Detail

Ms SPENDER (Wentworth) (18:33): Government spending sits at 26.8 per cent of GDP against a 50-year average of 24.5 per cent, and it is forecast to remain elevated across the entire forward estimates. New policy decisions in this budget added $12 billion of payments over two years. Off budget, there's a record $32.5 billion in net cash flows from investments in financial assets next year alone. This was an expansionary budget delivered in an inflationary environment. The savings the government has relied on rely heavily on restructuring the NDIS, which I wholeheartedly support, but it is one of the most politically and administratively challenging reforms in recent memory. I support the intent, but these savings can't be banked until they're delivered. Beyond that, I don't believe the hard calls in this budget were made enough in spending, particularly in things like infrastructure and the EV discount. Why is this? Because the Budget Process Operational Rules make restraint structurally difficult. The offset rule sounds like a discipline; in practice it encourages ministers to hoard savings until they can be recycled into new programs. Combined with broad exemptions for election commitments and ERC discretion, programs only ever grow. Demand driven spending compounds this, with costs routinely exceeding budgets. In place of restraint, considerable spending has been pushed off-budget, where public scrutiny is weaker. This amounts to an extra percentage point of GDP. Next year, $7 billion of that is too commercially sensitive to even itemise. This is not transparency; it is the opposite. Spending concerns are compounded by an inability to show what it has bought. A recurring finding from the audit office is that agencies cannot demonstrate effectiveness, because evaluation was never built in. Programs run for years, get extended, get increased budgets and never face a rigorous test of whether they work. Productivity growth has averaged 0.2 per cent for seven years against 2.2 per cent in the 1990s. Addressing this decline is essential and urgent for our future prosperity. I welcome the productivity package in this budget on the performance tests, venture capital, loss refundability and carry back. The deregulation agenda is also welcome, but it is devoid of clear timeframes and metrics, and it is promised by every government. Like the NDIS savings, there is still a long road to the bank...