Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline to the House the importance of a clear plan to return the budget to surplus? How is this approach being received and what are the consequences of not taking fiscal policy seriously?

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

I thank the member for Greenway for that very important question. I spent last week travelling around the country talking to businesses and to families about the importance of bringing our budget back to surplus and, of course, keeping our economy strong. I particularly enjoyed my visit to Cumberland Ford in Sydney, where I spoke to the workforce and to a group of very good, ambitious and hard-working young apprentices. In particular I met with Justin Poore, who is in the NRL with Parramatta, and another very impressive apprentice by the name of Justin James, who had just won the Ford apprentice of the year for the whole of the country. I spoke to them about the importance of having a better trained workforce and the importance of improving our apprenticeship system, particularly retention in the apprenticeship system. As I moved around the country I spoke to communities right across the country about the importance of better healthcare, the importance of better education and the importance of investing in mental health. I spoke to them about all of these things and, of course, doing all of those into the future is only possible if you can bring the budget back to surplus, and bring it back to surplus in 2012-13, so we do not compound the pressures that will come from the mining boom. It is very important we do not compound those pressures when that investment pipeline hits top gear. This is the quickest return to surplus on record. This is what Tim Toohey from Goldman Sachs has had to say about the government's fiscal policy: 'represents the biggest fixed fiscal contraction since 1970 when comparable data commenced.' This was highlighted in the Reserve Bank board minutes, which were published last week: 'members also noted the prospect of significant domestic fiscal consolidation over the next couple of years.'

Bringing the budget back to surplus is all hard work. Hours and hours are spent in the ERC doing the really tough grind of expenditure restraint, something not done by those opposite when they were in power, when they went on a spending spree at the height of the mining boom mark 1. There was no expenditure restraint during that period. We all know what happened then: 10 interest rate rises in a row from those opposite. We had the budget reply this week from the shadow Treasurer, where he proved there was no plan whatsoever to keep the economy strong, there was no plan to return to surplus, despite the fact he had told everybody the week before that we could come back to surplus next year. There was no demonstration of that and he could not offer a single alternative saving. So what we have is a federal opposition that has no alternative economic policy, none whatsoever. We have a Leader of the Opposition who gave a speech in this House that barely mentioned jobs and a shadow Treasurer who went to the Press Club and maybe mentioned them once. Both of them did not mention the floods or their impact on our economy at all, which just shows how unqualified they are to assess our economic situation, let alone to do the hard work that we need to do to make sure our budget comes back to surplus so we can maximise all of the opportunities that will flow from the mining boom. They are simply incapable of doing the hard work. They are not up to the job. They are totally incompetent.