Wednesday, 3 June 2009
Questions without Notice
My question is to the Prime Minister. How can the Prime Minister take all the credit for Australia having the lowest net debt of any major developed country, when he inherited from the coalition a nation with no debt at all and cash at the bank?
This is the first smile I have seen on the face of the member for Higgins all day! Then again, I understand preselections have just opened in Higgins. Is that right? We will be waiting with interest to see what happens down Higgins way.
Opposition members interjecting—
These things, of course, were not relevant to the way in which they managed the question of Commonwealth net debt at the time. That is the first point.
The second point I would make is that the government’s economic strategy is based on: how do we provide sufficient stimulus for the economy in the short term, the medium term and the long term? That is why we have embarked on a strategy—
Mr Speaker, I rise on a point of order under standing order 104. The Prime Minister was asked about the inheritance of no debt and cash in the bank. He was not asked about the—
Order! The Manager of Opposition Business will resume his seat. With about three or four words since the previous point of order on relevance, I think that we should have perhaps listened a little bit. Reference in the question was made to the previous government, ‘no debt’ and ‘cash in the bank’. The Prime Minister is responding to the question.
Just taking the member for Sturt’s interjection: as of when the government assumed office there were $54 billion worth of Commonwealth government securities on issue. That is somewhat complicating of the script that—
Oh, I see, now we are talking about net debt, not gross figures. The member for Higgins has now entered the debate. I am sure he will be entering this debate in a more fulsome fashion once he nominates for preselection for his seat in Melbourne!
That is the first point for the member for Sturt. The second is: in terms of the debt position which the Commonwealth inherited in 2007, let us not forget the fact that the Telstra sale of $45.6 billion occurred under the previous government and the Commonwealth Bank sale of $6.8 billion occurred under the previous government. Can I just say that these factors were alive in what measures were taken by the previous government on the question of the retirement of elements of the net debt that occurred at the time. But there were $54 billion of Commonwealth government securities on issue, as the member for Higgins would be fully aware.
Then there is the question of debt—which those opposite have raised—and dare I mention it, foreign debt on the part of those opposite; foreign debt, which the member for Higgins said in 1995 was a terrible thing at $10,000 per head; foreign debt, which, by the time the member for Higgins had finished his period as Treasurer, had tripled to $30,000 a head—10, 20, 30; that is where it went to. It went to something like $600 billion. So the great debt truck, which, as the Minister for Trade rightly said yesterday, if those opposite had been honest about it, would have been not just a B-double rolling around the country but a B-triple because, although they made a promise to cut foreign debt to something under $200 billion, by the time they left office it was something in the vicinity of $600 billion—$10,000 per head to $30,000 per head. Those opposite—
Oh, the member for Higgins has come to life; he has come to life on the fact that he made a fraudulent undertaking to the Australian people in 1995-96 when those opposite said that they would reduce foreign debt. He did nothing of the sort. It went from about $200 billion to around $600 billion when they left office. On the question of debt those opposite are all over the place.
What they have also made very plain in the debate so far is that when asked these questions, what it all boils down to is as follows: those opposite have said they would borrow either $21 billion less or $25 billion less and would refuse at the same time to back $22 billion worth of government savings. I say to those opposite that ultimately it gets stripped away here. It means that at the end of the day your policy on debt and deficit is virtually identical to the government’s. Those who observe this debate closely know that to be a fact. But, instead, what you are doing is not prosecuting a real policy difference with the government; you are prosecuting a political strategy with one objective: to talk the Australian economy down, because that is the way in which you think your political interests are going to be served in the longer term. The government’s policy of nation building for recovery is one that we will continue to implement. It is the right strategy for Australia. We want to build the economy up, not tear the economy down like those opposite.