Wednesday, 13 November 2013
Commonwealth Inscribed Stock Amendment Bill 2013; Consideration in Detail
I move the amendment circulated in my name:
(1) Schedule 1, item 1, page 3 (line 6), omit "$500", substitute "$400".
This bill just passed the House. The Labor Party supported it. Unlike the Liberal Party in 2009 and 2012, we will support an increase in the debt cap. That is the responsible and measured thing to do. The Prime Minister erroneously claimed that the Liberal Party did not vote against increases in the debt cap. He did it in question time today. He misled the House in his first question time as Prime Minister, an inauspicious start. But the Labor Party takes a more sensible and mature approach. We have approved the increase in the debt limit. But we do have an amendment, which I have moved. The amendment is that we only authorise an increase in the debt cap of $100 billion. That is not a small or a trifling amount of money. It is a significant increase.
Let the member for Moncrieff or the Treasurer say here at the dispatch box that that would not be enough to get them through December. Would it be enough to get them through December? Of course it would—unless the budget has deteriorated more than the Treasurer has let on, or unless he is planning more giveaways, like the ones he has made since he became Treasurer, like the grant to the Reserve Bank of $9 billion. The Treasurer claims that the Reserve Bank asked for that. The Treasurer claims that the Reserve Bank asked for $8.8 billion. I asked him to release the request. He refused. I FOI'd the request. The Treasury refused to release it under FOI. We have moved in the Senate that the Senate demand the release of the document. If that passes the Senate, the Treasurer will be obliged to release the letter. He says that he would love to. If he would love to, he could release it. If he has nothing to hide, he could release the letter from the Governor of the Reserve Bank that says, 'Please give me $8.8 billion this year.' He says that he would like to release it. He could release it, but he has not and he will not, unless he is forced to.
He could release the incoming Treasurer's brief. It was released in 2007. It was released in 2010—and not just the incoming Treasurer's brief, but the incoming government brief. I got an incoming Treasurer's brief not that long ago. But this Treasurer is refusing to release his. That is part of the culture of secrecy of this government.
We have moved an amendment that would give the government a $100 billion increase in the debt cap. That would see it through and allow for the net debt to peak and allow for a buffer. The last figures before the Australian people, which the Treasurer quoted today, were released by me. This Treasurer has refused to release a mid-year economic statement. We saw the Prime Minister again mislead the House today when he said, 'We'll release it in December like you did.'
The Prime Minister said today that the previous government released MYEFOs in December, and that is an incorrect statement. It was not released once in December under the previous government—not once—contrary to what the Prime Minister asserted in the House today. The Treasurer could justify this increase in the debt limit by releasing his mid-year economic forecast, which is in effect a mini budget. It would reflect his decision to give $9 billion to the Reserve Bank. It would reflect his decision to reverse tax changes made by the previous government in relation to tax integrity as part of the G20 agenda, which Australia will soon chair. It will reflect his decision to give a tax break to individuals with more than $2 million in their superannuation accounts—good people who have worked hard but to whom it is not a priority to give a tax break in the view of the Labor Party but apparently it is a priority in the view of those opposite, the government and the Treasurer.
All these things will be reflected in the mid-year economic forecast—the Treasurer's mini-budget. So when the member for Moncrieff, representing the Treasurer –who has not bothered to turn up to sum up this very important bill—says, 'It's Labor's debt', well, the Labor Party fully acknowledges that the debt limit needed to be increased. That was acknowledged in the pre-election economic forecast. (Time expired)
Congratulations are in order for the opposition. The dog of a debt that Labor birthed, fed and nurtured with the Greens is just about nearing maturity. Having force-fed what was a little puppy with a steady stream of record deficits for six years, Labor and the Greens watched their dog of a debt outgrow its doghouse four times, from a debt ceiling of $75 billion in 2008 to $200 billion in 2009 and from $250 billion in 2011 to $300 billion in 2012. And the member for McMahon talked about being responsible and measured with this amendment. Well, it is their irresponsible spending that has led to the near immeasurable debt that this country is going to be in. They raised the debt limit by 300 per cent in four short years. And their dog of a debt is now even outgrowing that. They abandoned it on the doorstep of this new government, ringing the bell and running away. Well, congratulations: your puppy is moving into a $500 billion doghouse. And they sit opposite pointing the finger at the size of the doghouse needed to house their dog of a debt, deliberately oblivious to their own heinous budget crimes. The opposition should stand back in awe of the sheer size of their success and proudly say, 'This is Labor socialism at work'—created by reckless Labor-style socialism and nourished by true socialist economic ignorance.
The previous Labor government made it clear where their sights were set, holding up Greek debt as the model to which they aspired. Every time those opposite came in here, they said, 'Our debt isn't as bad as Greece's.' They established these boundaries of acceptability for socialist-inspired debt. They spread the field to give themselves more room—room for bigger government; room for more bureaucracy, more welfare and more handouts; room for more failed policies to be paid for by the taxes of hardworking families and by saddling future generations with this huge tax burden.
If you keep spending like there is no tomorrow, as those opposite did while they were in government, tomorrow will always come, because someone—some day—has to pay the debt off. And that someone is the taxpayer. Today's taxpayers are already being hit up for more than $200 million a week just to pay the interest on Labor's legacy of debt. Every month that goes by, $1 billion worth of taxes are wasted to service Labor's debt. So, in the month of January, we could have completely funded the Mount Isa to Townsville rail corridor upgrade and all the scheduled Bruce Highway safety upgrades—in just one month. But we cannot, because we have to spend that money on servicing Labor's debt. In February we could have funded the upgrade of the Warrego Highway between Helidon and Morven in just one month, but we cannot, because we have to service Labor's debt. In March we could have done the Swan Valley bypass, but we cannot, because we have to service Labor's debt. In the month of April, we could have done the inner-city regional bike network as well as the capacity improvements and expansions of the Metro commuter rail network in New South Wales, but we cannot do it in that month because we have to spend money servicing Labor's debt. In the month of May we could have done Western Sydney bus and road upgrades as part of the North-West integration package, but we cannot in that month, because we have to service your debt. In the month of June we could have done the improvements to the Dandenong rail capacity, but we cannot, because we have to spend that money servicing Labor's debt. In July through to November, in fact, we could have done the Brisbane cross-river rail project and the entirety of the Ipswich Motorway upgrade, but we cannot, because all that money is going to servicing Labor's debt. And then we could have had December off, because we would have done it all, but we cannot, because Labor's debt needs to be serviced.
So, every month that goes by, that money is wasted, and I say to those opposite: congratulations; your work is done, our country is broke, your party is the one that broke it, your party itself is broken, and your ideology is bankrupt. You have left this nation holding your massive dog of a debt, and we will fix it up. We will fix it up. This Liberal-National government will fix it up, because we have been here before and we have done it before. We will get this country back in business. We will actually cut the wasteful spending that you guys presided over, and we will cut the red tape that is strangling productivity, the red tape that you brought in over your lifetime in government. But we will not take responsibility for this record debt conceived by Labor, birthed by Labor and allowed to run rampant by Labor. This is Labor's debt that we are sorting out.
That was an extraordinary proposition from one of a group of people who are learning that you cannot run a country with three-word slogans. That is what they did prior to the election. But now, today, we are seeing something very different. We are seeing something rammed through this parliament with just two hours of debate to increase the debt cap by $200 billion. Before the election, they said that there was an economic crisis. They said that there was a budget emergency. Today, what we see is that they actually have nothing to say in terms of MYEFO, nothing to say in terms of what the state of the budget is, but come in here and make the absurd statements such as—I get them all confused; one of those North Queensland Nats—the member for Dawson has: the bloke who we funded the Mackay ring road for and put money in the budget for and who has gone out there and campaigned against infrastructure spending. Then, in that contribution, he spoke about the things that they could not do. Well, I will give him a big tip: the Dandenong rail, just like other rail in Melbourne, is necessary, but a precondition is the Melbourne Metro project. We have $3 billion in the budget for it, but they are ripping it out. Unless you fix the Melbourne Metro, you cannot do anything else. You cannot have an airport link, you cannot have a Dandenong extension—just like unless you do the cross-river rail project in Brisbane you cannot then satisfy the needs not just of people in Brisbane but also people of the Sunshine Coast and the Gold Coast. It is a precondition.
Those on the other side have an ideological objection to funding any public transport because they believe, like Margaret Thatcher did, that, if you find yourself in your late twenties on a public bus then you consider your life to be a failure. That is the attitude that those opposite have towards public transport. Those opposite want to increase the debt by $200 billion, without putting an argument up, at the same time as they are making massive cuts to infrastructure projects, such as the cross-river rail and Melbourne Metro, and major cuts in important projects. Forty-eight hours before the election they put out their hit-list of infrastructure projects: projects like the Tourle Street bridge in Newcastle, projects like Bolivia Hill—projects disappeared under the weight of their ignorance as to the need for future productivity investment. We see them wanting to increase the nation's credit limit up to $500 billion at the same time as they are making massive cuts, including to important infrastructure such as regional projects and local government projects.
As the minister for local government, in June this year I announced the next stage of the Regional Development Australia Fund: $150 million allocated, according to the Commonwealth grants formula, between $30,000 and $2 million to each and every local government area. So large councils, such as Blacktown and Newcastle, got more than the smaller councils, but every council benefited, with weighting particularly for regional councils and those in disadvantaged communities, which tend to be in regional Australia. The then spokesperson, now minister, went along—they were all happy to go along and speak to the Australian Local Government Association and say how fantastic all this was and how they supported local infrastructure. Now we are seeing them ripping this money away from local councils, even though the local councils have planned for these projects.
What we see from those opposite is absolute hypocrisy when it comes to this question. They are finding out that government is a bit more difficult than just saying, 'No, no, no', as they did when they were in opposition—just wrecking things. They actually have to build something now that they are the government.
I see what is going on here: the lights opposite are on but there is no-one home. The shadow Treasurer and the member for Grayndler have stood up and said, 'We haven't heard any arguments about why the debt limit needs to go above $400 billion'. As has been said, indeed by the shadow Treasurer: in the now opposition's own pre-election fiscal outlook, gross debt was anticipated to reach $370 billion. The opposition's own tabled information, from the Australian Office of Financial Management, said that there must be a buffer of between $40 billion and $60 billion. So, based on Labor's own numbers in isolation, $370 billion plus $60 billion is $430 billion. Based on those numbers alone, I have news for the Labor Party: $430 billion is more than $400 billion! The Labor Party stand at the dispatch box and says, 'We haven't heard any arguments; what possible arguments could there be?' How about your own numbers, Labor Party?
In addition to that, the extraordinary thing is that the member for Grayndler stands up and says, 'What's the urgency? What's the rush? They're trying to ram this bill through; it just shows that the government can't be trusted.' How extraordinary that another member from the Labor Party would make a comment like that. We know, again based on Labor's own information, that the debt ceiling will be reached in December—in weeks. Now, I have news for the Labor Party: the Senate is not sitting next week. The reality is that there is urgency to this bill, and it is because of the parlous state that was left by the Labor Party. Never forget: it was the former, former Treasurer—or, I should say, the former, former, former Treasurer—who said, 'Well, it'll be someone else's problem to deal with the debt limit.' So Labor, under the member for Lilley, said, 'Someone else can deal with this problem; we're not going to deal with it.' And now the shadow Treasurer says, 'Let's make it $400 billion because we don't see any reason why it should be more than $400 billion'—even though their own numbers make it clear that it is $430 billion.
But the real cherry on top of the cake came from the shadow Treasurer. The shadow Treasurer stood up at the dispatch box, with a straight face—he would make a great poker player, I am sure—and said, 'Well, government, the reality is that this will get you past December', as if in some way that is an appropriate approach to take to good governance. And the Labor Party stands up, with the pinnacle of economic excellence on the Labor Party side, the shadow Treasurer—
That was a half-hearted 'Hear, hear' from the member for Fraser! But, anyway, we will just leave that! I think he got the joke. I am not sure that the shadow Treasurer did—I think he thought I was being serious! But the reality is that we do not intend to manage Australia as a month-to-month proposition. We think economic security is more important than that. We think sending signals to the market is more important than making decisions on a month-to-month basis. We know that that is Labor's approach—we get it. The government gets that Labor's approach is to come and ask for an increase in the credit limit, scurry off, spend more money, come back, ask for another increase in the debt limit, scurry off, spend more money, come back and ask for another increase. That is not our approach.
Let us be clear: once we have fixed up the damage that Labor has left behind, once we have got the budget back in a state of repair, once we have Australia back on her feet, then we know we will be able to start paying down Labor's debt. But we need you to get out of the way. We need the Labor Party to stop blocking us from saving money and to actually support us when we try to actually consolidate the amount of debt that this country has. We need to repair the damage that you left behind. Don't stand up and make yourselves out as caricatures by saying, 'We don't understand why it needs to be more than $400 billion'. Let us make it clear: we do not support the amendment that has been put forward by the Labor Party. We do not support it because, on their own numbers, which they left behind, it will be breached on their own forecasts.
I rise to support the amendment. I spent what must surely have been some of the worst hours of my life here in this place listening to the then shadow Treasurer Joe Hockey import the worst of American Tea Party tactics into this House and, together with some of the members who are sitting at the table at the moment, rail against the evils of debt. And it was not just when motions were brought before this House to increase the debt limit. On almost every day we heard the then Leader of the Opposition channelling the worst of United States politics telling us there was never a conceivable reason why a government might want to borrow. And they fought tooth and nail against any attempts to increase the debt limit.
It came as a significant surprise then when one of the first orders of business of the new Treasurer was to ask for half a trillion dollars as the new debt limit, a significant increase on the current debt limit. The Greens response to the new government was straightforward and simple: 'If you want such a significant amount of money, an increase of an order that has not been approved by this parliament before, tell us what you want to spend it on.' On the available information that has been published at the moment, which this government has endorsed, we can accept that, by December, there will need to be an increase to the existing limit. But not a single argument has been put forward as to why, in December, half a trillion dollars is going to be needed.
The Greens take the approach that most orthodox economists take to debt: if you are borrowing to fund recurrent expenditure, then you might have questions to look at; but if you are borrowing to fund world-leading infrastructure that sets this country up for the 21st century, then it could be a sensible investment. Every time we tried to mount that argument in the last parliament, we were met with resistance on this side. So we are perfectly entitled to say, 'If you want such a large sum of money that hasn't been approved by this parliament before, tell us what you're going to spend it on.' What was the government's response to that? It was not to come and sit down and say, 'Here's what we want to do, so let's discuss how we can get it through.' The response has been consistent with everything we have seen in the last few days of the last few weeks, which is to treat this parliament with absolute contempt, to withhold information and to try and use the sheer force of numbers to ram it through.
I suspect that this will get through this House tonight, given the numbers in this place. But at the last election 20 per cent of this country said it did not want Labor or the coalition and voted for someone else. When it comes to the Senate, you are going to find there is a sizeable proportion of the population who are saying, 'No, we're going to exercise some accountability on you.' A government that has a large majority in the lower house cannot expect to get its own way by treating the parliament with contempt. This high-handed arrogance will not wash. This should be a salutary lesson for this government: if they intend to continue as they have started, they are going to meet resistance when they withhold information and treat the parliament, the media and the people with contempt. We the Greens are prepared to act on the published information which suggests that there is a need to increase the credit limit, but we are not prepared to write a half-a-trillion dollar blank cheque for a government that has not explained what it wants to spend the money on.
I think we finally have a few explanations, after listening to the member for Melbourne's contribution to this debate. If he thinks the Greens vote is sitting at about 20 per cent in Australia following the last election, then there is a good explanation as to why he does not understand why we need to lift the debt limit to $500 million.
Mr Bandt interjecting—
Well, you keep using the figure of 20 per cent. If the member for Melbourne represents economic orthodoxy, then I confess to being a radical evangelical—praise God!—because I do not believe the Greens could be associated with economic orthodoxy. This debate from the Labor Party has been completely disingenuous. We have seen the shadow Treasurer come in here and say, 'We're increasing the limit,' and the member for Melbourne back him up and say, 'What are the arguments? Why do we need to increase the debt limit?' This money hasn't been spent already.' Well, member for Melbourne, the forecasts already show us that this debt will peak past the debt limit already; the money has been spent. It is not for the government to show what we will spend the money on; the money has already been spent by your coalition partners in government, the Labor Party. The money has gone; the horse has bolted; you cannot shut the gate.
Mr Perrett interjecting—
Hearing a lecture on economics from the member for Melbourne is bad enough. If you can be the world's best Treasurer, the member for Lilley, you have certainly got a lot of economic advisers on the backbench; but I do take umbrage at getting economics lectures from the member for Moreton, who is continuously interjecting, 'Why does the Reserve Bank need a reserve fund?' Don't give up your day job, member for Moreton, because you are certainly not going to make an economic adviser!
The facts of this debate are that the Labor Party created the debt, they created the debt ceiling, and they busted through that ceiling over four times. And now the Labor Party is getting in the way of the people that have been elected to fix the debt problem that it created.
Opposition members interjecting—
You created the problem, you created the ceiling, you busted the ceiling, and now you're trying to tell us that we cannot do our job—that is, responsibly manage the economy and bring us back from your high debt levels. What are the arguments; what is the principal argument? What is this really all about? The shadow treasurer is telling us that he will approve 400 billion dollars. We are going to go past 400 billion, shadow treasurer. It won't be enough.
We do not know when, but it is forecast to be quite soon. We will go past 400 billion dollars. The principal argument that we are having here is about a buffer. The Labor Party is pretending that there is no need for a buffer—fully in defiance of the advice from Treasury and the advice that the government has received. A buffer is essential. A buffer must be given to a government, because we don't know the state of the world economy and we don't know how the situation will change—a buffer is necessary. We already know it is going to be $430 billion. The advice is, a buffer must be there for the government to do—
Yes, a buffer. 70 billion is about right. That is what you need. So 500 billion dollars is a reasonable request for this government to make, given the context of the budget mismanagement that you have put together.
Opposition members interjecting—
And it is galling for you to be sitting here lecturing us on economics. It is galling for the member for Melbourne to be lecturing us on economics. You have created this problem. This is a problem of your making. For the shadow treasurer to say that Labor has approved an increase of just 400 billion is, I think, completely disingenuous and rude to the Australian people. I think the Australian people are going to see through this debate. Talk about Tea Party tactics—I mean, this is a Tea Party tactic. I have got a newsflash for you. You have been studying over the break because this is exactly what the Tea Party would do in the United States—
Order! The member for Mitchell will listen to my explanation for a moment. I have been giving a lot of leniency to a number of members today. This is a general comment for all members in this chamber. Would you desist from referring to the occupant of the chair as 'you'? It is not me; you are speaking through and not at the occupant of the Speaker's chair. It is a common habit. It is not good and it is not parliamentary practice. It is very disrespectful to the occupant of this chair.
Mr Deputy Speaker, I want to put on the record that I regard you as a model of fiscal rectitude. But I do not regard the Australian Labor Party that way, and certainly not the Greens. It is offensive for them to lecture us and say that they are lifting the debt ceiling when, quite clearly, they are deliberately using a Tea Party tactic here to attempt to spike our early days in government. The Australian people will see through it, and we see through what is going on here, Mr Deputy Speaker.
Mr Deputy Speaker, who are these people? Who are these people who, before the election, were talking about budget emergencies and railing against debt, and then they come in here and they are saying something different. It is like they have been to one of these RSL hypnosis shows and they have been told, 'when you hear the clap, you will no longer be vandals and you will no longer rail against debt and deficit, and you will say, "we need to increase the debt limit".' This is magic! It is amazing to see. The problem for the coalition is that they are all of a sudden doing something that the rest of the public would never expect them to do. The public would never expect them to suddenly become the friends of debt, lifting up the debt limit to 500 billion dollars. You would never believe it, but the Treasurer has been talking about the need, possibly, for stimulus. After telling us we should not be having it, he has been saying, 'we need stimulus'. And he has been talking about the need to invest in infrastructure. The coalition is suddenly talking about all these things. Their problem is that the message now does not match with what they said before.
There is a way to fix it though—that is, give us the facts. How could those facts be presented? Here is a suggestion: why not release the incoming Treasurer's brief? We had PEFO; it outlined the state of the books. Now you have the incoming Treasurer's brief. And what happened? Apparently, Treasury will not release the detail because they think the working relationship is more important than the relationship with the Australian public. Apparently, their emotional intelligence is more important than giving us the actual economic data that can help, potentially, paint a clearer picture of where things stand. They will not do it. The Treasurer comes in today, like he did in question time, talking about everyone else's stats. He quotes every source other than, I don't know—Treasury! He does not actually quote Treasury to the Australian people, as to what the state of the books are.
We are prepared—as the shadow treasurer has indicated through his amendment—to allow $400 billion right now. We will allow $400 billion to accommodate what was already anticipated in the Pre-election Economic Forecast. We said we would do that. And if you want to go above it, come back and tell us why. And the way to do it—
Next week—the member for Mitchell seems know something that the rest of the public does not know, as to how quickly the government is looking to rack up debt. So you guys know, but you won't release the figures. Here is the other thing: we have said that if you come back and put the case, we will allow it to go further. The best way to do it is to release MYEFO. But they won't do it, because they are gutless. They will not allow the public to scrutinise it. This whole control approach that they have in other portfolios—like Scott Morrison, the Minister for Immigration and Border Protection: he is hiding the boats and he has hidden himself. You can't even see him in the chamber anymore because he is in hiding behind the Speaker over there. And now they want to hide the state of the books until Christmas. Effectively, when Santa is getting soot on his suit, that is when they will release MYEFO—when no-one can really analyse it and look at it. So why won't they do it? They are saying they want to lift the debt limit to $500 billion—with no data, with no figures, with no substantiation. Why do they want to do it?
They have also suddenly realised that revenue is soft. Well, we have been saying that for ages. When we were in government, we had been saying for ages that the world economic outlook, as soft as it is, is going to impact on us. Exchange rates are going to have an impact on us as well. And they said—about all these things—'no, this is an expenditure issue, and you have got to get your house in order.' But they are not announcing anything at all that they plan to do to address expenditure. What have they done? They have set up a commission of audit. By the way, I love this commission of audit. They have put Amanda Vanstone on it—how much money did she spend on her renovations in Italy?—but they would not even put Peter Costello on; their own Treasurer! They were too embarrassed to put him on their commission of audit. They are going ahead with this commission of audit, but when will it report? Down the track sometime they will put forward their expenditure cuts, but they won't put them in now. This is the problem. As I said, they need to come up with the data and the facts, and explain precisely why they reckon debt is going to go the way it is going to go and take the public with them.
Mr Deputy Speaker, congratulations on re-election to your high office. It is always interesting to follow my colleague the member for Chifley, and I always appreciate the comments along the way from the member for Moreton. We stand here again to reflect on the financial mismanagement of the former Labor government over the last six years. It is a situation that reminds me of a party. The Labor Party has had a party for the last six years and has woken up with a hangover the next morning—beer bottles all over the lawn, a few bottles of wine off to the side—and said, 'Party—what party?' The Australian people are paying the price as a result.
It is well within the sensible economic management of the future of this country to look at increasing the debt limit once and doing it properly. That is unlike what we have seen from those opposite over the past six years, where they started off at $75 billion, went to $200 billion and said, 'We've had another deficit. We wonder what's going on. We can't manage our finances. Let's increase it to $250 billion,' and then said, 'Let's increase it to $300 billion to give us a bit of a buffer.' They used up that buffer and now, when we say that debt is going to peak at about $370 billion, so we want an extra $40 billion or $60 billion as a buffer, based on the advice of the Australian Office of Financial Management, they do not want to entertain that idea. Yet that is exactly the argument they have used previously. The Greens have not helped the situation over the past few years, aiding and abetting the former government in their spendathon.
As we have constantly seen, it is about controlling your expenditure and, in the process of reviewing what we committed to in this election—to cut the waste and get the budget back in order—that is the very thing we need to do. That debt limit increase gives the flexibility to adjust, to get budget expenditure back under control, but at the same time to reflect varying economic circumstances so that we do not make cuts at times when it is going to hurt our economy. We have to have flexibility within our fiscal arrangements to accommodate any shocks in the global economy. It is prudent to do that up-front and to be honest with the Australian people about why we are going to do it and the reason we are doing it—
Well, we do it once and we do it properly, unlike you guys, with constant budget deficits—always more than you originally anticipated because you were not able to control spending. Even the member for Lilley, earlier this year on national radio, said that he knew the debt limit would have to be increased but that that would be somebody else's problem. What is the benefit of passing the problem off down the track to the never-never and hoping that somebody else will fix it? That is exactly the problem that we have; it is the reason we are in this situation.
Over the past six years we have witnessed the greatest deterioration in our nation's financial situation. We have seen a government that, despite over 30 tax increases, still racked up record budget deficits and almost $300 billion in debt. We have seen this example in Queensland as well, where the former Labor government stripped government entities of dividends over and above what was prudent. We have seen the situation arise with the Reserve Bank, where dividends have been stripped out, leaving the reserves for the bank below what they should be. Again through prudent economic management, we restored the reserves of the Reserve Bank. We make no apologies for that, because we want to set this economy up for future generations in this country—something the former Labor government never thought about. They just thought about the here and now.
This is about the future of this country. It is only a coalition government that is going to get our finances in order. That is what this bill is about—working to get our finances in order in a sensible, measured, methodical way for the future benefit of this great country.
A while ago the member for Chifley said that the public had no inkling of the need to raise the debt cap. He must have missed his own Treasurer's media statements, when he said it was someone else's problem. In an interview with Neil Mitchell on 3AW on 15 May, he said, 'It's a matter for them; it's a matter for someone else.' The member for Chifley must have missed numerous interviews in which the member for North Sydney was calling the former Treasurer to account. This issue was not only known to the Australian public; it was well known to the former government, and it is shameful that they ignored it.
In 2½ years as a full-time candidate, debt and deficit has featured prominently in my electorate. I have sent out surveys and those that were returned mostly mentioned local issues, but a whole swag of them talked about the debt and deficit that had been racked up by the previous government since the 2007 election.
The first responsibility of the Treasurer is to be responsible when it comes to matters of economic management. The former Treasurer failed to deal with this issue, and the reason for that is abundantly clear: it was politically unpalatable. There was a lack of courage in the lead-up to the election to accept responsibility and to deal with the consequences of their reckless spending. The need to increase the debt limit was frequently foreshadowed by the member for North Sydney. Just as he foreshadowed that those opposite would never achieve a surplus, he correctly foreshadowed that debt would run out of control, and so it has proven to be the case.
What this bill represents is redressing the failure of the former government. NAB, UBS and the Bank of America have all said the debt limit would be reached. We had indicators last June from Treasury officers that the face value of Commonwealth government securities, which of course make up most of the debt, would hit $290 billion by this December—just $10 billion short of that $300 billion limit. The pre-election fiscal outlook indicated that the $300 billion limit would be breached by Christmas. In short, there is irrefutable evidence that the debt ceiling must be increased—irrefutable evidence that debt is projected to reach $370 billion in the financial year 2015-16. With the deterioration since the 2013 PEFO, the current economic trend suggests peak debt will now exceed $400 billion.
Those opposite have said, 'Don't worry about debt; debt is not a problem. In comparison to all those European countries that have been spending unsustainably for decades with debt to GDP ratio above 100 per cent. Let us benchmark ourselves against the sick men of Europe.' And so the debt has increased under the government. Members opposite do not talk much about the growth of that debt over time. What is the speed of the growth of that debt since 2007—that comfortable straight line extrapolation of debt in the last six years? Why not benchmark ourselves about where we were at the 2007 election with money in the bank, with a Future Fund, with a Higher Education Endowment fund, with responsible fiscal management during the Howard government that had put us in a wonderful financial position.
Those opposite in the chamber say, 'Let's ignore AOFM advice about prudent buffers.' They repeat their reckless approach to fiscal management by ignoring the advice from AOFM, which was formally tabled in parliament by the former Treasurer 18 months ago on 10 May 2012, advice that said it was prudent and responsible to have a buffer of between $40 to $60 billion of additional head room. Your debt kept rising. Labor economic policy—
Irresponsible spending, imprudent promises. So rapid was their erosion of the AOFM recommended head room that they raised the debt limit on four occasions. Instead of head room, Labor saw it as a target for accelerated spending. Every few years another target and another opportunity for the Rudd-Gillard governments to keep spending—$75 billion, $200 billion, $250, $300 billion. Our message to those opposite is let us get on with fixing the mess that you have created. The former government was unwilling to deal with this issue during the election; it is time they let us get on with the job.
Yes, Mr Deputy Speaker. It has been claimed that I and another backbencher will not be here for the vote tonight, because we do not want to vote on it. I most certainly want to vote on it; I most certainly want to support the government, because I think an incoming government should have latitude in these areas. I do not want to mention names—they can speak for themselves—but I just want it established in the House that I would have supported the government very strongly on this issue. They need to be given latitude, just as the outgoing government deserved latitude in their period. We are very worried about the debt and we call upon the government to acknowledge that.