Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Can the minister outline the government’s strategy for strengthening the Australian economy in the face of the global financial recession? What is the government’s response to criticisms of this strategy?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Bendigo for his question. The government has set out its economic and fiscal strategy in the budget, and that is focused on three things: first, stimulating economic activity and sustaining jobs in the shorter term; second, investing for the longer term in the infrastructure and skills needed to drive the productivity growth that is crucial for Australia’s future prosperity; and, third, returning the budget to surplus in the medium term, repairing the fiscal damage that has been done by the global financial crisis.

It is true to say that there have been some criticisms of the government’s economic strategy—not many, but some, from the wider community and the business community, but most particularly from the Liberal-National parties opposition. I note with some interest that the focus of these criticisms tends to be on matters like the interest rates being paid by long-term bond holders, for example, early on in question time today. You do not hear a great deal from the opposition about jobs. You do not hear much from them about sustaining employment in the face of a global recession that is threatening the Australian economy and bearing down on economic activity. But, unfortunately, this is not the biggest problem with the criticisms from the opposition of the government’s economic strategy. They are entitled to choose their angles. They are entitled to choose the critique that they pursue against the government’s position. The biggest problem, however, lies with accuracy and coherence. It lies with their constant inability to get basic points correct. It lies with them, particular the member for North Sydney, the shadow Treasurer, consistently getting it wrong.

Now that the Higgins sideshow is over, the Costello sideshow has concluded, there is a very different situation that prevails with respect to the opposition. They have had three shadow treasurers in 18 months and I think people have been letting the member for North Sydney off a little bit lightly because they have assumed that he would not be shadow Treasurer by the time of the election on the current turnover rate. I think that has now changed because the person looming over both him and the opposition leader has pulled the pin.

Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order. Quite clearly, it is about relevance. This is just a personal diatribe and making an abuse of question time.

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

The member for Murray will resume her seat. The minister for finance is responding to the question.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I would just like to remind the House of a few examples of the problems that the member for North Sydney has with respect to accuracy and coherence. He claimed the budget papers showed that the government would need eight years of two per cent of GDP plus surpluses to pay off debt as projected, unfortunately neglecting to point out that in order for that to be true there would be zero growth in GDP for 10 years. In other words, he forgot that GDP grows over time, as projected in the budget. In a debate on Lateline with me he claimed that the current account deficit never hit six per cent of GDP under the Howard government. Guess what it was when we took office, when we inherited government from the previous government? It was well over six per cent of GDP.

The day after the budget the member for North Sydney claimed that the Howard government had saved all of the windfall money from the mining boom, something that even Treasury research at the time demonstrated was completely untrue. After the budget, the member for North Sydney claimed that two-thirds of the projected deficits could be explained by the government’s spending, conveniently neglecting to put in the equation a number of very substantial government savings measures. He just happened to overlook those parts of the equation.

Recently, the member for North Sydney and, indeed, the Leader of the Opposition have been claiming that projected government borrowing—not actual government borrowing yet, but projected government borrowing over a number of years—is putting upward pressure on global interest rates that, in turn, is increasing interest rates in Australia, when Australian government borrowing as a fraction is 0.001 of total global government borrowing. He has also accused me of not including, within the budget, projections for IT savings which I have talked up at some considerable length, failing to notice that in the budget update, the Updated Economic and Fiscal Outlook published in February—which he should, as shadow Treasurer, have read—there is in fact a statement of hundreds of millions of dollars worth of savings from the IT changes that the government is putting in place.

These are just the highlights, or the lowlights. But there is of course a wider picture that, soon, the opposition and the shadow Treasurer and the Leader of the Opposition are going to have to start filling in. The shadow Treasurer has said that the solution to Australia’s economic problems is quite simple: ‘The government should spend less money.’ Unfortunately, the actions of the opposition, the positions they are adopting, their behaviour in the Senate all point in the other direction. They have not yet announced a single savings proposal—not one. They continue to block government savings initiatives in the Senate. The shadow Treasurer has indicated that they would continue with the government stimulus initiatives. And they keep making expensive new promises into the bargain.

We are now beyond the halfway mark in the parliamentary cycle and the business end of the season is approaching. The time when the opposition can get away with loose rhetoric, inaccuracies and ‘facts’ that are incorrect in the economic critique of the government’s position is rapidly running out. We are going to hold the opposition to account on its rhetoric. We are going to hold the member for North Sydney to account on his rhetoric as we look forward to the time when the Turnbull opposition fronts up to the next election with the list of spending cuts, the list of savings, the list of cuts to programs and the list of increased taxes that it is proposing to put in place, if elected to office, in order to fulfil the position that it is adopting today. That is the implication of the opposition’s position; that is where they are heading. They are heading for a collision with reality. It is coming sooner than they think. We are looking forward to the time when they have to specify exactly what they are going to do for Australia.