Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

The member for North Sydney asked me about the government’s preparedness to put in place a fiscal strategy that deals with the challenges of the future. Indeed, we announced our medium-term fiscal strategy in the budget this year, and it takes into account fully the fact that at the moment we have weak growth globally and weak growth domestically. But, as the Prime Minister was saying before, as growth gradually returns and as the private sector demand comes back, the stimulus is gradually withdrawn and, of course, the Reserve Bank from time to time will make adjustments to interest rates—which are at 50-year emergency lows—because fiscal policy and monetary policy should work together when an economy grows. Of course, the logical proposition that those opposite are putting forward here is that in this country at the moment we should pull the rug out from under the recovery by getting rid of stimulus.

They want to walk into this House and pretend that there is some element of fiscal responsibility in their approach when, only a few days ago in the Senate, they knocked off a savings measure worth $9½ billion over 10 years: the means testing of the private health insurance rebate. That measure is an essential part of the medium-term fiscal strategy that we put in place in the budget, particularly in the context of the need to make savings for the long term, given the ageing of the population and the fact that we had to put in place justice in the pension system by giving a $30 increase in the base rate of pensions. What we demonstrated there was long-term fiscal responsibility—of the type, I assume, the opposition should be thinking of. But, the problem is, they are not. Over there they are a complete rabble. They are incapable of putting together an alternative fiscal policy. They are incapable of fronting up to their responsibilities in the Senate, where they should be passing long-term fiscal sustainability measures that we have put in place to make sure the budget is in good shape to cope with the ageing of our population as we go through the next 40 or 50 years.

The government are very serious about our medium-term fiscal strategy, very serious about applying our two per cent expenditure cap when growth returns to above trend, and very serious about doing all of those things that we outlined in the budget to make sure this country is in great shape for the future for our children and our grandchildren. But we understand the responsibilities of the here and now. The responsibilities of the here and now are that the economy requires substantial stimulus to support demand to keep the doors open in retail, to keep the construction sector going, and to give confidence a boost, given how weak the rest of the world is.

The end result of the resilience of the Australian economy, of our economic stimulus and of the lowest rates in 50 years in terms of interest rates and the confidence of the Australian people is the strongest growing advanced economy in the global economy. Those opposite should be celebrating that fact and celebrating the fact that Australians have come together to face down this global recession and produce some extraordinary results. But of course they are not capable of that. All they want to do is play a petty political game. They are not capable of supporting measures in the national interest, and for that they should be condemned.

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