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.

The government's centrepiece growth thesis is Future Made in Australia. I support investment in clean energy where Australia has a genuine comparative advantage, but building strategic redundancy in the name of national security is the explicit antithesis to productivity. There may be a price worth paying, but it should be named honestly, costed honestly and evaluated honestly. We do not have that.

So the government must do three things. Firstly, a bottom-up build of every portfolio, with existing measures scrutinised line by line and justified in, with the goal of returning to structural surplus without raising taxes. Secondly, every policy proposal must state publicly what they think success looks like, by when and against what benchmark, and programs that don't meet the mark must be reconsidered. Finally, the government must commit to real timeframes to deliver its national single market and deregulation agenda.

When government takes income through taxation and returns it through spending, it substitutes its own judgement for that of the people who earned it. That is sometimes right, but it should not be the default. The people of Wentworth are not asking for more programs; they're asking for better ones. They're asking for the room to shape their own lives on their own terms. That requires lower taxes on working incomes. The income tax cuts in this budget are welcome, but they are insufficient and are undermined by an expenditure trajectory that keeps pressure on the fiscal position indefinitely. There is a choice: a government that grows its own footprint and crowds out the choices of its citizens or one that trusts people to build their own futures.

There are a number of issues with the government's budget, and these are the fundamentals that need to be addressed. I can see that the government is trying to address some of the issues in relation to spending, but it needs to go significantly further. Our economy has changed; our population is ageing. That does put additional spending pressures on the budget. But the speed at which the government has moved from a more traditional percentage of GDP spending to its current level of spending does not reflect demographic changes. It just reflects a different way of running the country, which is a way I don't think the Australian people have supported.