Daniel Hurst, political correspondent

theguardian.com, Thursday 31 July 2014

The treasurer asks senators to nominate alternate savings as Tony Abbott says he will not budge on paid parental leave

The Australian Greens leader, Christine Milne, plans to propose alternate budget savings at the expense of mining companies. Photograph: AAP

The treasurer, Joe Hockey, has launched a round of talks with crossbench senators in a bid to resolve the deadlock over key budget measures, as the government demanded critics spell out their cost-saving alternatives.

Labor and several crossbench senators renewed calls for the dumping of the expanded paid parental leave scheme, while the Greens flagged a fresh push to abolish fuel credits for the big miners to save $13bn over four years.

The Greens leader, Christine Milne, said a job-seeker filling up their car on their way to an interview would pay 38 cents in each litre to the government but “these multibillion-dollar mining companies don’t pay a single cent in tax” on the fuel.

“They call it a fuel tax credit; we call it a fossil fuel subsidy and a blatant rort,” Milne said on Thursday as she announced plans to present a bill to parliament after the winter break.

The government faces a showdown with the upper house over Hockey’s first budget after the opposition, crossbenchers and a range of interest groups declared key measures to be unfair.

The Senate appears likely to block the $7 co-payment for GP visits, university fee deregulation, the stripping of unemployment benefits from young people for months at a time, and resuming indexation of fuel tax.

Before rising for the winter break the Senate voted down the abolition of the mining tax after the government insisted on the scrapping of a number of spending measures in the same legislation, including the schoolkids bonus and low-income superannuation contribution.

Tony Abbott said the government wanted to work constructively, collegially and respectfully with crossbench senators to “to get the budget back under control”.

“I just want to stress: Australia cannot go on borrowing $1 billion a month every single month to pay the interest on Labor’s debt,” the prime minister said during a visit to Tasmania on Thursday.

“Now, this is a debt and deficit disaster. It has to be tackled, and I respectfully say to the crossbench senators, if you don’t like our savings, tell us what your savings are. We have a plan. It’s a plan that does bring us back into budget balance within four years. It’s the only plan on offer and we intend to press ahead with it.”

Abbott rejected Clive Palmer’s call for the Coalition to prepare a new mini-budget or call a fresh election, saying Australia did not need another election but a parliament that respected the government’s mandate.

He also signalled he would not budge on his planned full-replacement-wage paid parental leave scheme as the Coalition had taken the “clear commitment” to the past two elections.

On Wednesday Hockey met with South Australian senators Nick Xenophon (independent) and Bob Day (Family First), who called on the government to abandon the scheme.

Labor’s treasury spokesman, Chris Bowen, told the ABC he would be happy to enter “constructive” discussions with Hockey, but the government was wrong to pursue changes to pensions and family tax benefits at the same time as it sought to introduce a $5.5bn-a-year paid parental leave scheme.

The government’s proposal involves a 1.5% levy on big business – a funding measure that would still have to be legislated for the dumping of the associated parental leave spending to deliver a major budget benefit.

Hockey visited Tasmania on Thursday and was expected to meet with the Palmer United Party senator Jacqui Lambie.

Milne said she would launch an online campaign on Thursday “comparing the massive subsidies given to the big miners with the brutal cuts in Tony Abbott’s budget”.

Her proposed bill would abolish the diesel fuel rebate for the mining industry, accelerated asset depreciation, and the immediate deduction for exploration and prospecting expenses. A costing prepared by the parliamentary budget office for the Greens estimated the measures would deliver about $13bn over four years.

Milne said her planned bill would not abolish fossil fuel subsidies for agricultural purposes, sparing farmers from the impact.

The opposition leader, Bill Shorten, said Hockey’s talks with crossbenchers were unlikely to save the budget.

Labor left the budget “in reasonable shape” at the last election with AAA credit ratings, Shorten said.

“We believe in sensible reforms over medium term to our budget, but we don’t believe that any case has been made by Joe Hockey or Tony Abbott to engage in incredibly difficult cuts to education such as the schools we are at here today,” he said.

“I think everyone, everyone in Australia except Joe Hockey and Tony Abbott know that their budget is grotesquely unpopular. No amount of last-minute trips to talk to crossbench senators makes this unfair budget anything other than totally unfair.”

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