House debates

Monday, 9 December 2013


Commonwealth Inscribed Stock Amendment Bill 2013; Consideration of Senate Message

5:39 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

The position taken by the government in this debate is utterly bizarre and, I must say, somewhat hypocritical, because some 3½ months ago, those opposite were gallivanting around the country campaigning vehemently against debt. They were saying that the debt level in Australia was much too high. They were driving around with a big truck with numbers ticking over saying that this country's debt was ticking up every minute and every second and it was out of control, when in fact the situation was that Australia had a very reasonable level of debt and one that was the envy of most of the Western world and most advanced nations when comparing it to their fiscal positions.

It is a fact that Australia has a level of debt. But we need to be conscious of why we have a debt position at the moment. It is because in 2007 the world was hit by the global financial crisis. Australia was not immune. We are an open, global based economy. We were affected by the global financial crisis. It affected growth, it affected consumption and, most importantly, it affected projections for growth within our economy. There was a very big risk that Australians would be forced out of work and that small businesses would be affected, as has occurred in Europe—and we have all seen the carnage that has been wrought by debt crises in Europe—and in the United States. But the Australian government acted swiftly and decisively to prime our economy to ensure that demand continued. To do that, we needed to take out a level of debt. That debt was spent on productive infrastructure and on creating and protecting jobs in our economy.

Examples of that productive infrastructure are well known in my state of New South Wales. If you drive up the Pacific Highway, you will go past the Bulahdelah bypass being built. That is a road construction job that will improve the productivity of the Pacific Highway. You will drive through the Kempsey bypass, the world's longest continuous road bridge. That was built during the period of the previous Labor government using a level of debt. You will go past the Ballina bypass. That was again built during the reign of the Labor government using a level of debt. And you will go past the Woolgoolga, which is being built at the moment. They are all good, productive pieces of infrastructure that are building and growing our economy and creating jobs. That is what the debt was devoted to in our economy. While Labor was government, those opposite were saying that that was an irresponsible position to take. They like to airbrush out of history the effect of the global financial crisis on the Australian economy and the job that Labor did in projecting jobs and building productive infrastructure.

The reason Labor is taking the position that it is taking in this debate is that those opposite have done not one thing to justify the increase in the debt and indeed the removal of the debt ceiling. Picture this: a married couple go into a bank to consult their bank manager. They say to their bank manager that they would like to increase their mortgage, not by a small amount but by 65 per cent. The bank manager says: 'Gee, that's a large increase. Can we see some of your figures? Can we see your income? Can we see records of your current level of debt? Can we see records of any personal debt that you may have—credit cards or any personal loans? And can we see some records of any assets that you own that might be collateral?' And the couple say: 'No, we're not going to supply you with any of that. We just want you to provide us with a 65 per cent increase in our mortgage.' That couple would be laughed out of the bank. And that is exactly what the government is asking the Australian people to do by attempting to increase the level of debt without the proper checks and balances.

On the latest figures that were produced by Labor when in government, gross debt was forecast to peak at $370 billion in 2016. That is why Labor has taken a position of supporting $400 billion worth of debt—$370 billion with a buffer. It is up to those opposite to justify the increase that they want to the Australian public, which to date they have not done. That is why Labor has taken this position.


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