Wednesday, 13 November 2013
Commonwealth Inscribed Stock Amendment Bill 2013; Consideration in Detail
A while ago the member for Chifley said that the public had no inkling of the need to raise the debt cap. He must have missed his own Treasurer's media statements, when he said it was someone else's problem. In an interview with Neil Mitchell on 3AW on 15 May, he said, 'It's a matter for them; it's a matter for someone else.' The member for Chifley must have missed numerous interviews in which the member for North Sydney was calling the former Treasurer to account. This issue was not only known to the Australian public; it was well known to the former government, and it is shameful that they ignored it.
In 2½ years as a full-time candidate, debt and deficit has featured prominently in my electorate. I have sent out surveys and those that were returned mostly mentioned local issues, but a whole swag of them talked about the debt and deficit that had been racked up by the previous government since the 2007 election.
The first responsibility of the Treasurer is to be responsible when it comes to matters of economic management. The former Treasurer failed to deal with this issue, and the reason for that is abundantly clear: it was politically unpalatable. There was a lack of courage in the lead-up to the election to accept responsibility and to deal with the consequences of their reckless spending. The need to increase the debt limit was frequently foreshadowed by the member for North Sydney. Just as he foreshadowed that those opposite would never achieve a surplus, he correctly foreshadowed that debt would run out of control, and so it has proven to be the case.
What this bill represents is redressing the failure of the former government. NAB, UBS and the Bank of America have all said the debt limit would be reached. We had indicators last June from Treasury officers that the face value of Commonwealth government securities, which of course make up most of the debt, would hit $290 billion by this December—just $10 billion short of that $300 billion limit. The pre-election fiscal outlook indicated that the $300 billion limit would be breached by Christmas. In short, there is irrefutable evidence that the debt ceiling must be increased—irrefutable evidence that debt is projected to reach $370 billion in the financial year 2015-16. With the deterioration since the 2013 PEFO, the current economic trend suggests peak debt will now exceed $400 billion.
Those opposite have said, 'Don't worry about debt; debt is not a problem. In comparison to all those European countries that have been spending unsustainably for decades with debt to GDP ratio above 100 per cent. Let us benchmark ourselves against the sick men of Europe.' And so the debt has increased under the government. Members opposite do not talk much about the growth of that debt over time. What is the speed of the growth of that debt since 2007—that comfortable straight line extrapolation of debt in the last six years? Why not benchmark ourselves about where we were at the 2007 election with money in the bank, with a Future Fund, with a Higher Education Endowment fund, with responsible fiscal management during the Howard government that had put us in a wonderful financial position.