Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of the fiscal outcomes of recent state government budgets? What do the growing deficits and debt levels at state government level say about economic management?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Bonner for his question. I think I can say without a shadow of doubt that he is the greatest member for Bonner that this House has ever seen. It is probably known in this House that the Commonwealth in its most recent budget balanced the budget, cut tax and further reduced debt. In fact, the Commonwealth is now building a net asset position. Now that we have had all of the states except for New South Wales deliver their budgets, we can say that collectively the Labor states have left their budgets in deficit, have increased tax and are building up debt—the very reverse of what the Commonwealth is doing. For example, Queensland will increase its vehicle registration duties from 1 January 2008; Western Australia announced increases in water, electricity, public transport and motor vehicle registration costs; South Australia announced increases in compulsory third party premiums, motor vehicle registrations and water; and Victoria announced increased taxes on poker machines and that it would abolish its petrol subsidy by 0.429c a litre.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Parliamentary Secretary for Treasury) Share this | Link to this | Hansard source

Ms King interjecting

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I want members of the House—and the member for Ballarat, who is interjecting, in particular—to focus on this. A moment ago Labor was complaining about the price of petrol. I point out to the Labor Party that the Victorian Labor government withdrew a petrol subsidy in its recent budget. And the Tasmanian government did the same thing. It withdrew a subsidy of 1.95c per litre on petrol and 1.99c per litre on diesel. So it would be very interesting to know whether the Labor Party has criticised any of the state governments that have recently withdrawn petrol subsidies and put prices up as a consequence. If any of them have, they can speak now or forever hold their peace. They have held their peace. In addition to that—

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

The priest normally gives you longer than that!

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Yes.

Government Member:

Government member interjecting—

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

No, you do not get a second chance at that one. A lot of marriages would fail if you had two chances to speak! Not only has Labor increased all those taxes but the Labor states are not balancing their budgets as a whole. They are budgeting for deficits of 0.3 per cent of GDP and—get a load of this—as a whole, building up debt over the next three years by $58 billion. Over the next forward estimates, the Commonwealth will save $50 billion and the states will borrow $58 billion. This is the difference between Liberal federal government and state Labor government. With state Labor government, you get increased taxes, budget deficits and a build-up of debt. With the coalition federal government, you get tax cuts, balanced budgets and a reduction of debt. If you want the Labor way to spread from the states to the Commonwealth, you have a great opportunity. You have Mr Rudd and his focus group driven advisers and the Deputy Leader of the Opposition or you could have real economic management in the coalition government.