Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the importance of saving measures to return the budget to surplus? How has the approach been received, and what is the government's response?

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

I thank the member for Dobell for that very important question, because it is important to bring the budget back to surplus. Our economy has taken a significant short-term hit from natural disasters, but it has not been knocked off its long-term path. We have falling unemployment. Unemployment is at 4.9 per cent. We have the prospect of something like 500,000 additional jobs in Australia. We have record terms of trade, and we have an unprecedented investment pipeline. Investment is at something like 50-year highs. And, of course, we have the forecast from ABARES of an investment pipeline of something like $430 billion. It is absolutely vital that we ensure that we do not compound the price pressures which will flow from that investment pipeline.

That is why it is so important to constrain spending and to put in place savings. That is why we have spending growth of only one per cent over the forward estimates on average. Those opposite, when they were last in power, had spending growth in real terms of 3.7 per cent and made the mistake of going on a spending spree at the height of mining boom mark 1. In this budget, importantly, we have put in place $22 billion worth of savings—important savings to make sure that we do not compound those price pressures. Of course, that is why we have to bring the budget back to surplus in 2012-13.

If you are serious about economic policy you accept the economics of that. From time to time there have been some on the other side of the House who have been serious about economic policy, including Senator Minchin, who of course is the mentor of the Leader of the Opposition. This is what he said about the importance of savings, following the debacle in the party room last week:

When we take decisions to cut revenue and government we have to find ways to replace revenue.

That is a perfectly reasonable point. But of course it is not one that is going to be followed by those opposite, who are intent on wrecking the surplus and have now announced that they are going to go out and oppose a Howard government initiative of over five years ago. This 'just say no' strategy is not an alternative to putting forward an economic policy, of which they have none. They are so incompetent. They have no economic policy, no alternative framework and no embarrassment or shame at their political opportunism. They cannot come into this chamber and support important reforms. There is no alternative. What they prove is that they are completely incompetent when it comes to national economic policy.