Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister explain if there are any limits on his government’s magic pudding surplus—a strategy which spends and saves the same money?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for his question. The government’s strategy for investing in nation building is clear cut and stands in complete contrast to that of our predecessors. Our predecessors took surpluses and spent them on consumption. We save surpluses for the purposes of investment in long-term productive capacity. That is the difference. It is the strategy which was called on by the Reserve Bank in its 20 sets of warnings, when it asked, ‘What are you going to do about capacity constraints in the economy?’ The BCA and other peak industry bodies across Australia year in and year out asked, ‘Will you invest in long-term productive potential?’ I referred earlier to a quote from Saul Estlake. There was an avalanche of commentary in the 12 long years that those opposite occupied the treasury bench asking, ‘Will you take the proceeds from this revenue bonanza which comes off the back of the commodity price boom and invest it in long-term productive potential?’ It is pretty interesting to reflect on what the member for Dickson had to say this morning. This is what he had to say about surpluses:

Well, I think you have got to, as the Reserve Bank has said, and in actual fact as the Treasurer said in his May budget, you have to preserve an amount of capital post the budget. At the moment in the next year that is projected at just over $20 billion. That’s over 1.5 per cent of GDP

It is pretty interesting that the member for Dickson is now saying that we need a surplus of $20 billion, a surplus of 1.5 per cent-plus of GDP. Why are you raiding the surplus to the tune of $6 billion?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Prime Minister will resume his seat. Has the Prime Minister concluded? The Prime Minister has concluded his answer.