Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The government strategy does have within it a number of initiatives that are due to run out in a short order of time, particularly things like the first home owner grant boost and the incentive for businesses to invest in equipment. The stimulus strategy is calibrated to tail down over a period of time, but I refer again to the Australian Chamber of Commerce Industry, ACCI, press release today which does warn everybody about the risks of peremptorily withdrawing, prematurely withdrawing, the stimulus strategy. The government does not speculate about what may happen with interest rates in the future, but I remind the opposition of their recent track record on these issues. After having promised at the 2004 election to keep interest rates at record lows, they then delivered an economy which saw 10 interest rate increases in a row.

The government’s policy settings are not putting and will not put upward pressure on interest rates. Finally, I remind the opposition of the government strategy to return the budget to surplus and point out, as I have pointed out in the media over the last couple of days, that the stimulus strategy is a relatively small proportion of total government spending. In order to return the budget to surplus the focus is not going to be on that small proportion of government spending; it is going to be on the ongoing totality of government spending across the board. That is where the focus will be.

We do have a major challenge to return the budget to surplus, because $210 billion over four years of revenue has been knocked out of that budget by the global financial crisis and the global recession and much of that is not going to return in a hurry because of a resumption of growth. That is why we have put in place a restraint of two per cent real growth on government spending once growth resumes, that is why we have put in place strategies to deliver more savings, that is why there were tough savings initiatives in the budget this year; and that is why it is really important that the opposition passes all of those tough savings initiatives in the Senate and starts to put its money where its mouth is instead of coming in here every day and criticising the government for not exercising enough fiscal restraint.

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