Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to the fact that he has presided over the two biggest spending budgets in Australia’s history, including $26 billion of new spending since last year. I ask: why does the Prime Minister only become an economic conservative at election time? Why would anyone believe that, after three years of being addicted to binge spending, with an election looming the Prime Minister can now go cold turkey?

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

I thank the Leader of the Opposition for his question. Let us go to the facts first. In this budget, spending as a share of GDP falls from 26.2 per cent of GDP in 2009-10 to 23.6 per cent of GDP in 2013-14. That is less than the average under the Howard government, of 24 per cent of GDP. That first point is a matter of fact. Secondly, I would draw the attention of those opposite to this: when they were pursuing expansionary fiscal policy, the economy itself was expanding. They were being pro-cyclical; they were fuelling the fires of inflation. As a result, we had 10 interest rate rises in a row. What is the hallmark of an economic conservative? Acting counter-cyclically. When you have a global economic crisis of the type which has come in, what you do is you support the economy. That is what we have done. That is why, in the course of the global financial crisis, the Australian economy has emerged with the fastest growth, the second lowest unemployment, the lowest debt and the lowest deficit, and is the only economy of the major advanced economies not to go into recession. The reason why is that this government stepped up to the plate and injected a national economic stimulus strategy. That is why, if you look around the world today, they constantly ask this question: how did Australia do it?

This government is proud of the fact that we negotiated this economy through the worst global economic recession since the Great Depression. This government is proud of the fact that we kept unemployment down, to now 5.3 per cent. This government is proud of the fact that we defended hundreds and thousands of small businesses from going bust. This government is proud of the fact that it has engaged in the building of the biggest school modernisation program in the country’s history. And this government is proud of the fact that, unique of  the major advanced economies, we kept this economy out of recession. This is a budget of responsible economic management, and I challenge those opposite to reflect on how the previous government fuelled the fires of inflation, with one pro-cyclical, pro-inflationary budget after another, particularly in pre-election years. We are proud of our economic record and determined to prosecute the case of long-term economic reform.