Monday, 9 December 2013
Commonwealth Inscribed Stock Amendment Bill 2013; Consideration of Senate Message
It is time that we reflect on financial management. I am not here to cast aspersions across the House about whose fault it is. Let us have a look at where we are and how we got to this point. There was a time not that long ago when Australia was not in debt. We walked into a financial crisis globally, and there was an argument for a legitimate stimulus package. But now the challenge is how we lift ourselves up into the future.
Debt has a place. It has a place in business. I have run a small business and I have used debt. Debt can be constructive, but it can also be an inhibitor. The question is not so much whether we want to increase our debt limit; the question is, 'What are we doing it for,' and then working out what we are going to do into the future. We have a situation where we have to walk a balance between a level of austerity and a level of confidence in the Australian economy. I am a strong believer that debt can play a part, but I am also a strong believer that a government should send a signal to its population that it can live within its means. Our ambition as members of the new government is to live within our means to send a signal to the Australian people that our government can live within its means.
However, in the very short term we find ourselves in a situation where we will need to invest and drive productivity across the country, and doing that is going to require capital. It is going to require capital that is not just going to come from the tax revenues of Australians; it is going to require some foreign capital, and that is the reason we have had to expand the debt limit. To have this argument that somehow the coalition government is not, in the long term, going to live within its means and that, therefore, asking for an increase in the debt limit means the government is going to go from a $300 billion debt to a $500 billion debt and then just keep racking it up, I think, misses the point. The point is that governments need to ambitiously aim to spend the taxpayer revenue effectively. They need to ambitiously aim to live within their means. But there are times when we are turning the corner that we need to keep a level of confidence in the economy and we need to borrow. This is the reason.
When looking at whether the coalition government should have done a deal with the Greens, the situation was this: the argument that we were going to hit the debt ceiling of $300 billion and go through it did not appear to be resonating with the Labor Party. They had a political imperative and saw that they could somehow score some points here. We put the argument to the Greens that there was a practical imperative here and that we needed to borrow more money to keep confidence in the economy and after that we could begin the process of living within our means and eventually paying back that debt. But this is a long-term project. This is not something that is going to happen in one year; it is going to take a number of years. I hope that both sides of the political sphere will see the sense in that.
Anyone in small business knows that there are times that you have to borrow. But there are always times when you have to pay it back. This is a time when we need to cut through that threshold. But our ambition and our stated aim—backed by our past history as a coalition government through the Howard years—is to pay back the debt. But we have to instil confidence in the Australian economy to do that.
This is good fiscal management. It is not about scoring points and playing political games; it is not about saying, 'You racked up debt'; 'We didn't rack up debt'; 'You can't be trusted'; 'No, you can't be trusted.' This is about what is in the best interests of Australia. We have challenges ahead. We have a slowing global economy. We have to make sure that we have a high level of confidence. To do that, we will borrow. But our stated aim is to get back to a situation in which the total expenditure of this government is less than the total tax revenue. Hopefully, some common sense will be seen on both sides of the House, and particularly on the Labor Party side, about the reason we needed to make that deal. The challenge is immense. But with strong fiscal management we can do it. Debt has a place. But ultimately debt has to be paid back.