Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the importance of maintaining a responsible fiscal policy and returning the budget to surplus as planned?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Deakin for his very important question. The government has in place a very strong fiscal strategy which will see a return to surplus well ahead of our peers. This strategy will mean that we will have some of the strongest public finances in the developed world. This is important because our economy will reach capacity in the years ahead. It is important that we maintain a very strong fiscal strategy.

This is, of course, despite the awful disasters that we have seen, which will impact on growth as we go forward. We know the impact of the floods and cyclones in Queensland will detract from growth this year, but, to counter that, the underlying fundamentals of our economy are strong. We have very strong employment growth—over 300,000 jobs in the past year and 700,000 jobs over a three-year period. We are still seeing incomes strengthen and we have a very solid investment pipeline, particularly in resources—something like $380 billion. All of this underscores the need for a very strong and tight fiscal policy and the return to surplus.

That is why the government acted responsibly. It is why we put in place the flood levy. It is why we made the savings to finance what we have to do to rebuild Queensland and other parts of the country. It is why we have our two per cent cap on spending growth. It is why we will continue to implement this strategy, to make sure that when the economy is stretched to capacity we have the appropriate fiscal policy. It was appropriate when the global recession came along for us to support our economy. Now it is appropriate for us to step back in these circumstances because of the strength of the employment pipeline.

This has been consistent from day one and stands in stark contrast to the approach of those who sit opposite. Those who sit opposite pretend be concerned about levels of deficit and debt. They do this at the same time that they are blocking something like $5 billion worth of budget savings in the Senate. We hear the Leader of the Opposition and others on the front bench from time to time make suggestions about what we can do with spending, but we do not get any suggestions for savings. Indeed, we get the damage and the vandalism to the budget bottom line. On the one hand, they are running around the country saying, ‘Deficits are bad,’ and on the other hand they are saying, ‘How can we make them bigger?’ That is their approach to fiscal policy. It is one that is reckless and it is one that is absolutely irresponsible. That is why people absolutely understand that the economics team on the other side of the parliament is the most incompetent in generations. But we on this side of the House will keep on with responsible economic management and a responsible fiscal strategy.