Wayne Swan Lilley, Australian Labor Party, Shadow Treasurer
2:14 pm
My question is directed to the Treasurer. Will the Treasurer inform the House when Australia’s half a trillion dollars in foreign debt will go down?
Peter Costello Higgins, Liberal Party, Treasurer
I would like to say something about foreign debt because, as a result of this government, the Australian government owes no net debt.
Unidentified interjection - Hansard doesn't record who said this
Opposition Members:
Opposition members interjecting—
David Hawker Speaker
Order! The Treasurer has the call and will be heard.
Peter Costello Higgins, Liberal Party, Treasurer
As a result of this government, the Australian government has no net debt. As a consequence—
Kim Beazley Brand, Australian Labor Party, Leader of the Opposition
Mr Speaker, I raise a point of order which goes to relevance. A very succinct question—
David Hawker Speaker
The Leader of the Opposition will resume his seat. The Treasurer is answering the question and is in order.
Peter Costello Higgins, Liberal Party, Treasurer
As a result of the efforts of this government, the Australian government has no net debt. We have repaid $96 billion of Labor debt. What that means is that all foreign debt in this country is borrowed by the private sector—every single last dollar. More than that—
Wayne Swan Lilley, Australian Labor Party, Shadow Treasurer
Mr Speaker, I rise on a point of order. When are we going to see some cold anger about foreign debt?
Peter Costello Higgins, Liberal Party, Treasurer
As a consequence of that, every dollar that has been borrowed overseas is owned by the private sector. In fact, if you break it down, 80 per cent of the foreign borrowings of Australia are held by the commercial banks—that is, foreign debt is held by Westpac, the National Australia Bank, ANZ and the Commonwealth Bank.
Wayne Swan Lilley, Australian Labor Party, Shadow Treasurer
Mr Swan interjecting
David Hawker Speaker
Order! The member for Lilley has asked his question.
Peter Costello Higgins, Liberal Party, Treasurer
We have done stress tests in relation to those banks and, as a consequence of those stress tests, the RBA, the IMF and the Australian government are satisfied that Australian banks, which are amongst the most profitable in the world, are not exposed in respect of their borrowings and are quite able to handle those borrowings. Let me repeat: unlike 1996, not a single dollar of foreign debt—
Wayne Swan Lilley, Australian Labor Party, Shadow Treasurer
Mr Swan interjecting
Peter Costello Higgins, Liberal Party, Treasurer
Unlike 1996, not a single dollar of foreign debt or any other debt is held by the Australian government. All of it is held by the private sector and principally by the commercial banks.