Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation, Senator Wong. I refer the minister to her comments in the Australian on the weekend where she said that the government had a fiscal rule that would 'limit real spending growth to two per cent until you get back to a trend surplus of one per cent of GDP'. I also refer to the final budget outcome for 2011-12, which shows that real spending grew by 4.8 per cent in 2011-12, more than double the two per cent target when the budget was nowhere near a surplus of one per cent of GDP. Isn't it a fact that Labor ran a massive deficit of $43.3 billion, or three per cent of GDP, in 2011-12? If Labor were really committed to a fiscal rule of limiting real spending growth to two per cent until a trend surplus of one per cent of GDP had been achieved, why then did the government break that rule again last financial year?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The one thing I will say of that question is it is a little better than Senator Joyce did on Q&A last night when it came to his discussion about debt.

Opposition Senators:

Opposition senators interjecting—

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I will take that interjection and he was more entertaining than me, Senator Brandis; that is true and guilty as charged.

John Hogg (President) Share this | Link to this | Hansard source

Order! Ignore the interjections and come to the question.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Mr President, in answer to Senator Cormann, I would make this point: the government in which Peter Costello was Treasurer had a real growth in payment record of 3.6 per cent—

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, on a point of order in relation to the requirement for the minister to be directly relevant: I asked a question about the government's fiscal rules as outlined by the minister in the weekend press. I did not ask a question about what the Howard government's fiscal rules were. We all know about the Howard government's excellent track record when it comes to budget management.

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order. I am listening to the minister's answer. The minister still has one minute and 26 seconds remaining to address the question.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I am happy to discuss the fiscal rules. But isn't it extraordinary in this question time that every time there is any criticism of the opposition they are so quick to jump to their feet! There are a bunch of glass jaws over there. Tell us about the million jobs you say you are going to create without any policies. No, you won't do that, will you? You just come in here with the sort of political smear campaign that we are seeing in the other place. Senator Fierravanti-Wells is including in this chamber—

John Hogg (President) Share this | Link to this | Hansard source

Senator Wong, come to the question.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President—

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

But I will come to the point now, Senator Cormann.

John Hogg (President) Share this | Link to this | Hansard source

Senator Cormann, I have just asked Senator Wong to come to the question.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I have a point of order, Mr President. I cannot see how anything that the minister has just said can be seen in any way, shape or form to be directly relevant to the question, which was in relation to the government's fiscal rules which the government has been breaching year in and year out.

John Hogg (President) Share this | Link to this | Hansard source

Senator Cormann, if you have not just heard what I have said, I drew the minister's attention to come to the question. I draw the minister's attention to the question, and you have got 57 seconds remaining.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The senator should note that the average real growth in payments over the four years of the forward estimates is 1.1 per cent. The last time I looked, that is below two per cent. That compares very favourably with the 3.6 per cent average annual real growth in payments, which was the case for the last four years of the Howard government. While I am at it, I would remind the senator that, despite his rhetoric, we are also a lower taxing government. The level of tax to GDP that we inherited was significantly larger than that projected for this year and over the budget estimate period. I know the opposition do not like the facts to get in the way of their chants—they are very good at chanting—but the chants happen to be based on things that are simply not true.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer the minister to the recent MYEFO, which shows that government spending is projected to grow by 4.4 per cent in real terms next financial year, which is more than double the two per cent target even though the budget is still nowhere near a surplus of one per cent of GDP. In 2015-16, spending will grow by more than two per cent in real terms—all this without taking $120 billion in unfunded Labor promises into account. Is it not a fact that the government's own projections in MYEFO show that Labor has no intention of complying with its so-called own fiscal rules?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The senator might like to acquaint himself with pages 38 and 39 of the MYEFO, where reference is made to the $16.4 billion in savings measures that the government took in the midyear review. A number of those are opposed by those opposite. Let us remember that they talk about budget discipline but, when it comes to actually supporting savings measures, we hear very intelligent criticisms like, 'This is analogous to the one child policy in China.' I return to pages 38 and 39 of the MYEFO. There you will see again, Senator, that, in total, real growth in payments is estimated to be negative 4.4 per cent in 2012-13 compared with negative 4.3 per cent in the 2012-13 budget. The government is delivering on its commitment to restrain real growth in spending to two per cent a year on average until surpluses are at least one per cent of GDP while the economy is growing at or above trend. I refer him to table 3.3 on page 39, which makes clear that the average growth in real payments is 1.1 per cent.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that since the last election the minister co-presided over a $33.3 billion blow-out in the budget deficit just last financial year while continuing to ignore the government's own so-called fiscal rules and making $120 billion of unfunded spending promises on top of $172 billion of accumulated Labor deficits so far, why should anyone trust any promise from this Labor government that it will deliver a surplus in 2012-13?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The continual recitation of nonfacts, which is the senator's wont, disregards the global financial crisis; disregards the fact that, under this government, we have the fastest growing economy of all major advanced economies in the world for 2012; disregards the fact that, since this government came to power, we have seen some 800,000 jobs created at the same time as 27 million people have joined the unemployment queues around the world; completely disregards the fact that we are seeing interest rates lower than at any time under the Howard government; disregards the fact that the IMF has talked about the strength of Australia's public finances; and disregards the fact that we have a AAA credit rating from all three credit rating agencies. But do not believe them; believe Senator Cormann.