House debates
Thursday, 14 May 2009
Questions without Notice
Budget
2:23 pm
Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source
My question is to the Treasurer. I refer him to his own budget papers—Budget Paper No. 1, page 9-4. It indicates the government is borrowing now at least $300 billion in this budget cycle at a rate of $3 billion a week. I ask the Treasurer: what is the average interest rate Australian taxpayers will have to pay over the life of this debt?
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
If I could just follow up on that question and make this very simple point. The shadow Treasurer has said that he would borrow $25 billion less—that is what the shadow Treasurer has said, so he is admitting to borrowing $275 billion. He is admitting to borrowing $275 billion, and the interest on that will be the market rate at the time that it is borrowed.
Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source
What is the answer to the question?
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
That should be obvious to anybody.
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order! The Treasurer will resume his seat.
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
Perhaps—
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
The Treasurer will resume his seat.
Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source
Sit down, Wayne!
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
The Manager of Opposition Business is sometimes his own worst enemy. He has got to be very careful about doing those sorts of things if he wants the call. The Manager of Opposition Business.
Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source
Mr Speaker, on a point of order: under standing order 104, the Treasurer was asked for a figure. He does not need to embroider his answer with anything else—
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order! The member for Sturt will resume his seat.
Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source
We have simply asked a specific question, the average interest rate over the life—
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
The member for Sturt will resume his seat.
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order! The Treasurer is responding to the question. The Treasurer.
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
So further borrowings to support employment, further borrowings to support infrastructure, further borrowings to support jobs will come at the market rate at the time the money is borrowed. But the average interest rate paid on recent bond tenders has been 3.88 per cent.
2:25 pm
Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source
My question is to the Minister for Finance and Deregulation. How is the government’s fiscal strategy supporting jobs; and what would be the consequences for jobs and the economy of adopting a different approach towards temporary deficit?
Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source
I thank the member for Page for her question. Members who have perused the budget papers will note that the government is forecasting a dramatic drop in government revenue over the next few years, and I particularly draw their attention to the figures for the next two financial years: $49 billion and $55 billion. Of course, the government is projecting deficits over those two years of $57 billion in each case. This does indicate that the vast bulk of the problem the government is dealing with in this fiscal situation is derived from the fact that we have had a huge hit to government revenue as a result of the global recession. That has been a major contributor to the fact that we are now in a position of temporary deficit.
These circumstances do present the government with a choice. The government can either seek to contract the economy, to contract to the fiscal position, to increase taxes and to reduce spending in order to cover that deficit or, alternatively, borrow temporarily to cover that deficit. That is essentially the choice that the government is presented with. The government has chosen to borrow over that period of time and it has chosen to stimulate economic activity through its Nation Building and Jobs Plan and other initiatives in the budget to sustain jobs, to sustain economic activity and to sustain businesses in the face of the most savage global downturn in living memory. Treasury estimates that this package will sustain GDP to the tune of about 2.75 per cent in the forthcoming financial year and 1½ per cent in the year after that and that it will in the process support over 200,000 jobs in the economy.
I note that the Australian Financial Review in its editorial yesterday stated this—and it is not normally given to praising the government in its editorial, I might add. I am sure the Prime Minister will be astonished to hear that! Normally it does not praise the government in its editorial but it did on this occasion state:
The government cannot be faulted for running deficits to stimulate activity and protect jobs. That is what governments are meant to do when the world economy turns down …
That is the Financial Review. The opposition, of course, are advocating an alternative strategy which they say would mean a much lower deficit, which inevitably would mean either higher taxes or lower spending, or both, and in particular would mean sucking vast amounts of money out of economic activity—that is, tens of billions of dollars out of the economy, out of sustaining jobs, out of sustaining business activity. That is precisely the error that conservatives in many countries made in the 1930s through things like the Premiers Plan in Australia, which cut wages, which cut benefits and which ultimately compounded the problem of recession and turned it into the Great Depression. It created a downward spiral of ever-mounting unemployment, ever-mounting business losses and ever-mounting misery. We do not intend to repeat the mistake that conservatives made in the 1930s.
But it is still unclear what the opposition’s position actually is on these issues. We note that the member for North Sydney says that the deficit should be $25 billion lower than what the government says, yet the Leader of the Opposition says that if he were in charge there might even be a small surplus. So you have got a deficit of $30-odd billion from the member for North Sydney, but the Leader of the Opposition suggests that if he were in charge there might have been a small surplus.
We will see some indication of where these divisions land this evening. This evening when we finally hear the budget reply we will see some indication of how these divisions within the Liberal opposition come into collision and where the final landing point is. They have become so divided and such a rabble that in recent weeks they have even been given to giving themselves names that are so offensive I am not even allowed to mention them in parliament! They have even been able to give themselves and their internal workings some appellations that would be unparliamentary if I referred to them in this House. That is an indication of how bitter and how deeply divided the Liberal opposition have become and how incoherent they have become on the fundamentally important issues facing this nation.
Tonight the opposition has to front up and explain how its position of less spending and lower taxes would lead to lower deficits and less debt and yet without any savings and with lower taxes how that all would add up to a single coherent position. Tonight is the time you have to front up, when all of the one-liners and all of the rhetoric and all of the contradictory grabs between the member for North Sydney and the Leader of the Opposition have to be added up to a single position. Tonight we will be watching with great interest to see where all this lands and how the great Ponzi scheme of the Liberal opposition’s position adds up. We wait with great interest to see how you can get together more spending, lower taxes, lower debt and lower deficit into a single position in a single reply.
2:31 pm
Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source
My question is to the Treasurer of the biggest spending government in modern history.
Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source
Temporary Treasurer! I refer the Treasurer to the fact that the government has increased its borrowings now to around $3 billion a week to fund its record spending budgets. Will the Treasurer confirm that more than two-thirds of that is being borrowed from overseas?
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
In terms of the government’s borrowings, roughly the same percentage is being borrowed overseas now as was borrowed overseas when those opposite were in government.
Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source
Mr Robert interjecting
Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source
The biggest spending finance minister in Australia’s history—that’s you! You get the title.
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order, the member for North Sydney!
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order, the member for O’Connor! The Treasurer has the call and he should be heard in silence. Order, the member for Paterson!
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
When those opposite were in government and when they left office I think there was something like $55 billion worth of Commonwealth securities on issue. I know it is a bit inconvenient for those opposite to acknowledge that but that is the fact.
Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source
Mr Robert interjecting
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
Order! The member for Fadden is warned!
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
About two-thirds, or a little less than that then, was borrowed overseas and the same percentage, roughly, is the case today—about two-thirds. What we have seen on display here is just monumental hypocrisy. Those opposite know that the government is borrowing because revenue write-downs have hit $210 billion and the alternative to borrowing that money is to savagely jack up taxes or savagely cut services. If they are sitting here today saying that they are not going to borrow then the Leader of the Opposition has to come into this House tonight and show where he is going to cut $210 billion from the revenue write-downs. That is what he has to do tonight. If he does not do that he does not have a shred of economic credibility. Nothing could better demonstrate how out of touch the Liberal Party has become than their proposition that in the middle of the sharpest contraction since the Great Depression that a government should not borrow to support employment in the economy. What we are doing is in the national economic interest.
Our budget is all about nation building for recovery, nation building for jobs and building the productive capacity of the economy for the future, particularly to deal with the ageing of the population. To do those things to protect our people from the ravages of a global recession we are borrowing responsibly. But the thrust of the questioning in here day in and day out is somehow to make us believe that if they were in government today they would not have to borrow one cent. If that is the proposition that is being advanced then the Leader of the Opposition must tonight show how he is going to make up for the revenue that has been lost to this country—that is, a revenue loss that has been imposed on this country by the rest of the world. Revenue of $210 billion has been lost, which is the equivalent of all the spending on health and hospitals over the forward estimates.
Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source
Mr Speaker, I rise on a point of order on relevance.
Harry Jenkins (Speaker) Share this | Link to this | Hansard source
The Treasurer is responding to the question that referred to increases in borrowings. It went to percentages of the borrowings of $3 billion a week. Has the Treasurer concluded?
Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source
This evening the Leader of the Opposition has to indicate to the Australian people where he is going to make the savings to make up for the revenue loss or what taxes he proposes to dramatically increase to make up for the revenue loss. That is what he has to do this evening; otherwise he will be endorsing the responsible borrowing that this government is doing.
2:37 pm
Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source
My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. How will the government secure sustainable pension reforms, support carers and prepare Australia for the challenges of the future?
Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source
I would like to thank the member for Canberra not only for her question but also for her leadership on behalf of carers as the chair of the House of Representatives inquiry into support for carers. The government’s secure and sustainable pension reform package will deliver essential and long overdue recognition to people with disabilities and to carers. From 20 September this year, the government will deliver increases to people on the carer payment and those receiving the disability support pension of $32.49 for singles on the full rate and $10.14 for couples on the full rate. These rises are on top of the existing allowances for GST, utilities, telephone, internet and pharmaceuticals. There are 720,000 disability support pensioners and 140,000 carer payment recipients who will receive this increase.
Around 500,000 carers across Australia will also receive a new payment, the new permanent $600 carer supplement. This supplement will go to people who receive the carer payment, the veterans carer service pension or the carer allowance, and it will be $600 for each of the people that they care for. People who receive both carer payment and carer allowance will receive two carer supplement payments. This supplement and the additions to the disability support pension and carer payment have been welcomed by both carer groups and those representing people with disabilities. Carers Australia Chief Executive Joan Hughes said, ‘The $600 a year supplement was very welcome because its status was assured in future budgets.’ From the Spinal Injuries Association we had, ‘People with disability are pleased that their living costs have been recognised.’ I am very pleased to be able to tell Australia’s carers that just a short time ago today the Senate passed the bill introducing this new permanent $600 supplement. This is a huge win for Australia’s carers. Their first $600 supplement will be delivered before the end of June.
The government’s reforms have involved some very difficult decisions—decisions like lifting the age pension age—decisions that in 12 years the previous government did not make despite the former Treasurer’s enthusiasm for releasing reports about our ageing population. Here are just a few words from the member for Higgins back in 2007. He said:
The first Intergenerational Report put the ageing of the population on the map.
… … …
We started talking about fertility rates and pushing back retirement ages …
Now here we are five years later. The member for Higgins of course was still only talking, as he is today. The member for Warringah by contrast has at least woken up to the fact that talking about something is not the same as doing it.
Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source
Steady on, Jenny! The member of Warringah has woken up to something?
Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source
The member for Warringah has woken up! This morning he actually said that the age pension age should go up more quickly than that being proposed by the government. So we hope to hear from the Leader of the Opposition tonight in his budget reply: is this now Liberal Party policy? Is he going to confirm the member for Warringah’s statement this morning that the age pension age should go up more quickly? Of course the member for Higgins was not prepared to act when he was in government. Let us see whether the Leader of the Opposition is going to support the member for Warringah tonight.