Stuart Robert Fadden, Liberal Party
2:38 pm
My question is to the Treasurer. Does the Treasurer stand by his election commitment to ensure that tax does not increase as a proportion of GDP? Isn’t it the case that this commitment will be broken by the more recent announcement that the government will hoard future increases in revenue?
Wayne Swan Lilley, Australian Labor Party, Treasurer
I thank the member for his question. In our five-point plan to combat inflation, to tackle the inflationary pressures in the Australian economy, we made it very, very clear that we would allow the automatic stabilisers to work. It is very important that we put in place a fiscal policy that backs up the monetary policy which is put together by an independent Reserve Bank board. And because, as the Minister for Finance and Deregulation was saying, spending has been out of control, we have got to bring it back into control. We have had the fastest increase in spending in the past four-year period out of any four-year period in the past 15 years. That expansion of Commonwealth demand simply has to be brought under control. That is why we have said that we will set an objective of a surplus of at least 1.5 per cent of GDP in our next budget.
Tony Smith Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training
They are all going pale again, Wayne.
Wayne Swan Lilley, Australian Labor Party, Treasurer
The Commonwealth will provide the leadership that those opposite could not provide in recent years.
Tony Smith Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training
What about the percentage of GDP?
Wayne Swan Lilley, Australian Labor Party, Treasurer
It was interesting watching the ABC last night. The ABC last night showed in all its glory the disunity in the coalition—
Peter Dutton Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation
I rise on a point of order, Mr Speaker: relevance. This is his best answer yet; it is just an answer to the wrong question.
Unidentified interjection - Hansard doesn't record who said this
Government Members:
Government members interjecting—
Harry Jenkins Speaker
Members on my right are not assisting. I call the Treasurer.
Wayne Swan Lilley, Australian Labor Party, Treasurer
We will pursue our objective of having a surplus, as a percentage of GDP, of at least 1.5 per cent. We will provide the leadership to restrain the spending that those opposite could not restrain. Of course, the former Treasurer is on the record, in the Howard biography, complaining that the previous Prime Minister, in 2004, went on a reckless spending spree—a reckless spending spree that put upward pressure on inflation and upward pressure on interest rates. The consequence of that has been seven interest rate rises in the last three years.
Joe Hockey North Sydney, Liberal Party, Manager of Opposition Business in the House
Mr Speaker, I rise on a point of order. It relates to relevance. It was a very specific question about tax as a proportion of GDP and whether the Treasurer stood by his previous commitments—a very specific question.
Daryl Melham Banks, Australian Labor Party
Why weren’t you on Four Corners last night, Wilson?
Harry Jenkins Speaker
The member for Banks knows that he cannot be disruptive like that. He has had his one warning for the session. As an urger, he knew he was on thin ice. I call the Treasurer.
Wayne Swan Lilley, Australian Labor Party, Treasurer
We have a very specific commitment in this budget process to have a surplus of at least 1.5 per cent of GDP and to keep our commitments over the cycle.