Thursday, 14 November 2013
Commonwealth Inscribed Stock Amendment Bill 2013; Consideration of Senate Message
That the amendment be disagreed to.
The opposition and the Greens have said there is no compelling evidence to have a debt limit of $500 billion and that, rather, there should be a debt limit of $400 billion. I table today the economic statement from the member for McMahon that says debt is going to peak at $370 billion. I table today the executive minute from the Australian Office of Financial Management that says that it would be 'prudent from an operational perspective to set it'—the debt cap—'at a level $40 billion to $60 billion higher—
Ms Owens interjecting—
than the peak projected within year CGS'.
I further add the point that the Labor Party has now declared it is voting against our mining tax repeal package, which reduces the debt by $13½ billion. The opposition have said that they are going to oppose our abolition of the CEFC, the Clean Energy Finance Corporation, which also reduces the debt. The total of the mining tax and CEFC abolition is going to reduce the debt by $20 billion, so that adds $20 billion. The Labor Party failed to deal with the challenges at the Reserve Bank and we had to borrow $8.8 billion to go into that. When you add it all up—and it is on the public record—that well exceeds $400 billion. That is a legacy of Labor.
But wait—there's more. As the Reserve Bank identified only last week, growth figures for next year are being downgraded, which will have a negative impact on revenues, which will have a negative impact on the budget. But wait—there's more. As you open each cupboard door in relation to the budget—whether it be the ACCC or one of any number of other areas which will soon be identified and revealed—you will find that $500 billion, including a cap, is the appropriate level to deal with the legacy of Labor debt.
The thing is that, whenever the Labor Party released an economic statement, they got the numbers wrong—absolutely wrong. We will not do that. We will not release the Mid-Year Economic and Fiscal Outlook until the September national accounts have come in, at the beginning of December. What a revelation that is! The Labor Party always tended to release those figures before they had released the September national accounts, and that is one of the reasons why they always got the numbers wrong. So we are taking the prudent approach. We are fixing up the mess. We are identifying right across the budget where the problems are. We are dealing with the legacy of Labor's debt. It is all on the public record. This chamber is the public record. Now the challenge is for the Labor Party to deal with it.
The Labor Party are running around saying that under the Abbott opposition we opposed increasing the debt limit. They are just dead wrong. I know the member for McMahon was never actually in the Senate, but what he does not understand is that we did move a procedural motion in the Senate to separate out the debate on the debt limit but it was rejected by the Senate. It was a procedural motion. We never voted against the debt limit. If Labor did not understand the challenges in relation to the debt limit when they were in government, how can we expect them to understand the challenges from opposition?
I am saying this to the Labor Party: on 12 December Australia reaches the $300 billion debt limit that Labor left. The Senate is going to have a bill before it to have the debt limit increased to $500 billion. That is Labor's legacy. The $500 billion is not a target; it is a limit. We do not want to get there, but I tell you what: we are not going to put the stability of the markets and the stability of the CGS program at risk as a result of Labor's incompetence in opposition.
We were promised a government of no excuses. We were promised a government of no surprises. We were promised a government with the adults in charge. And we get this childish performance from this trainee Treasurer. The Treasurer could have a debt limit increase right now. We could vote on this and we could have a debt limit increase right now. We voted on this last night and we supported a debt limit increase. But the Liberal Party will insist on transparency and we will insist on a lot more transparency than we are getting from this Treasurer—this Treasurer who is refusing to release the mid-year economic forecast as well as the incoming government brief, this Treasurer who stood at that dispatch box yesterday and said, 'I'd love to release the Reserve Bank documents,' this Treasurer who stood at that dispatch box yesterday and said, 'I'd love to release the request from the Reserve Bank for $8.8 billion.' It was FOIed and rejected. And today at two o'clock the government was obliged to table before the Senate the correspondence from the Reserve Bank, and the government has failed. The government is in breach of a Senate order.
What have you got to hide? Why are you going to such lengths to be so duplicitous with the Australian people and not release the request from the Reserve Bank for $8.8 billion? You say the Reserve Bank asked for $8.8 billion this year. Well, show us the request. It is nice and simple. Did they request it? Show us the request. Do not hide behind a breach of a Senate order. We just saw in question time—the second question time of the parliament—an amazing contempt of the parliament. When you are in contempt of the parliament, you are in contempt of the people. This Treasurer is in contempt of the parliament and the people. What have you got to hide?
The Reserve Bank transfer of $8.8 billion, of course, increases this year's deficit by that amount. But it goes much further than that. It increases the level of interest required by more than $1 billion over the next four years. Not only has the Treasurer declined to outlined the reasons for that; he has outright refused to release the documentation in breach of an order of one of the houses of the Australian parliament. What levels will you go to to hide the facts from the Australian people?
Let us be very clear: there is only one person talking about a crisis here; there is only one person talking about a shutdown of the government; there is only one person talking about a breach in the debt limit—that man there. The only person who is trying to confect a political crisis here is the Treasurer, because he could have a debt limit increase right now, today, of $100 billion. It is not a small amount, not a trifling amount. Does the Treasurer think for one second that he can argue that $400 billion would not be enough to get through to next year? Senator Sinodinos was asked in the other place: 'When will $400 million be breached?' He said, 'Oh, sometime over the forward estimates.' As I outlined to the House yesterday, the Australian Office of Financial Management has made clear that it issues bonds only for the budget year in question.
We are more than happy to work cooperatively with the government if they are up-front with the Australian people, if they reveal the impact of their decisions—of this man's decisions—since the election and if there is much more transparency to go with it. Before the election we heard all about the need for transparency when it came to increases in the debt cap. We heard the now Prime Minister—who went on 2GB, for a change, to do an interview—say:
… the Government has to justify this. Our money, our future, is too important to be mortgaged like this without the Government giving us the strongest possible arguments for it, because every dollar that they borrow has got to be repaid.
I have got news for the Treasurer. This is actually a hung parliament. The government has a big majority in this House but no majority in that house. A hung parliament requires a bit of cooperation, a bit of negotiation and a bit of transparency. It does not mean being arrogant. It does not mean saying, 'My debt limit or no debt limit.' It does not mean chest beating. It does not mean political stunts. It does not mean saying, 'You'll wear this like a crown of thorns.' It means being responsible, open, transparent and constructive—something this Treasurer is just not capable of.
Let me deal with a couple of issues here. The shadow Treasurer talks about being open and honest and responsible. Why did the Labor Party have a $300 billion debt limit when they forecast in the budget the debt would go to $370 billion? Why would you go out and buy a house and finance it on the basis that you will be able to raise $200,000 of debt but the bank will only give you $100,000? Why would you do that? Why would the Labor Party do that? Because they do not understand the implications of what they are doing.
I want to give you this promise. I will not bring down a budget that has projected debt that is greater than the debt limit. I will not do that. As you know, the AOFM has advised that you need to have a buffer of $40 billion to $60 billion for refinancing purposes. You do not even understand that. You just said they only ever issue for the year they have got to fund, but actually they have also got a whole lot of other challenges in funding as well, including off-budget funding. I really wonder about this.
In relation to the Reserve Bank, yes, I accept responsibility for the decision on behalf of the government. We do not need to hide behind advice. The Governor of the Reserve Bank will appear before the House Standing Committee on Economics, and you can ask the Governor of the Reserve Bank about that. Then you can ask the Secretary of the Treasury before estimates next week about the debt limit, and you can ask him about the advice that might have been provided to the government in relation to the Reserve Bank Reserve Fund.
But we are not going to be like your government in a whole lot of areas. One of the areas we are not going to be the same as you were is that we are not going to hide behind the advice. We are going to say, 'We accept responsibility for this decision, and this decision is in the interests of the nation.' That is how we are going to behave.
So, if you want to argue about the Reserve Bank Reserve Fund funding, let us argue about it. You tell me why they should not have that money, why the Reserve Bank Reserve Fund should be at 3.8 per cent. You explain that. You explain why the Reserve Bank should be in a position where it cannot deliver dividends for as far as the eye can see and why it has to work damned hard to replenish the Reserve Bank Reserve Fund in the face of potential headwinds coming out of Europe and the United States. You explain that to the Australian people. If that is your policy position, you explain it. But, when it comes to process, Labor are hiding behind a fig leaf, because they always treated the debt limit as a debt target. Last night I could not sleep too well and I wondered who the hell introduced that $75 billion debt limit in the first place. It was old buggerlugs. How about that!
And do you know what he said to the parliament when he introduced the $75 billion debt limit? He said, 'This government doesn't need to raise debt to finance its spending.'
Mr Bowen interjecting—
I haven't finished with you! You were the one who introduced the $75 billion debt limit. And then, just weeks before the election, he announces that the debt is going to $370 billion. But he wants us to be in a position where the can is kicked down the road.
We will not go down the path of the United States. We will not have the parliament kick the can down the road for another moment of attention, if it needs to come to that, to deal with the debt limit. We will not allow that to happen, because we are offering the Australian people stability and certainty, and the Labor Party is offering the Australian people, as they did in government—they are now in opposition—more debt and more deficit. And the Labor Party is going to stand in the way of every attempt to fix up the budget. They trashed the joint, and now they are stopping everyone from going in and trying to fix the house. That is unacceptable. That will be unacceptable to the Australian people. It will be unacceptable, at the end of the day, to the markets. I say this to the member for McMahon and I say this to the Greens: I am keeping to my word that we will not under any circumstances deliver a budget that has forecast peak debt that is higher than the debt limit. And if the Labor Party wants to play games on this, then they can also accept responsibility for the cuts that will need to be made to Labor's expenditure, which is associated with the challenge of trying to live under Labor's poor debt cap.
I think Australians are increasingly realising that the government they elected is not the government they were promised. We saw in question time today the minister for immigration refusing to answer basic questions, attempting to hide the boats. We have seen for months now the opposition hiding the ministers—ministers who were everywhere before the election are suddenly nowhere to be seen, because they cannot get permission from the Prime Minister's office. And now we are seeing the hiding of the budget update, a budget update that yesterday the Prime Minister told the parliament 'sometimes under Labor came out in December'. Afraid not. The Prime Minister was dead wrong on that. The budget update should be out now—and it should particularly be out now if you are asking for an increase in the debt limit.
The Treasurer is the only person in Australia who thinks he can ask for a doubling of his credit card limit from the bank and not give them a single piece of paper to justify it. And it is always someone else's fault: maybe it is someone else's debt, maybe the Greens did it, maybe 'the dog ate my homework'. But the very fact is that this Treasurer is making decisions that are going to worsen the 2013-14 budget. He is giving a huge tax break to mining billionaires, who I noticed were very well represented in the parliament today. He is giving $700 million back to multinationals because he cannot take cracking down on profit shifting seriously. And he is giving $9 billion to the Reserve Bank of Australia. Now, he says he is giving $9 billion to the Reserve Bank because they so desperately need it. He says it is because Labor raided the Reserve Bank dividends. It is just a pity we can actually go back and look at the facts. When you go back and look at the facts you see that the amount Labor took out per year by dividends was half as much in real terms as what the Howard government took out. So if we, according to the Treasurer's statement, raided the Reserve Bank, then the Howard government doubly raided the Reserve Bank.
The fact is that the Treasurer has given the Reserve Bank $9 billion not because they have asked for it—he has not shown us a shred of evidence of that—but because he wants to take out a bigger dividend in future years. He is like the coach who takes over a quarter of the way into the season and wants to blame his predecessor for the finals result. And he is still out here trying to trash-talk the economy, with this ridiculous suggestion that $400 billion would not be enough for the debt cap. The fact is, $400 billion is below projected debt. And if the Treasurer thinks projected debt is going to go higher then he can release an economic statement and explain why. He can explain how the decisions he has made have weakened the budget—why that tax break to mining billionaires, why that tax break to multinational companies, why that parental leave scheme that gives $75,000 to millionaires to have a child have worsened the budget outcome.
Of course, there is a clear pattern here. Before the election, in May of last year, we were told by the Prime Minister that the debt limit should only be increased where there are the strongest possible arguments for doing so. Now we are told that you can do it with the wave of a hand and a few mistruths in parliament. Before, we were told by the Treasurer that were they to win election on 7 September, 'We will own the economy from day one'. After, we are told, 'Actually, sorry—what I meant is, I'll own it from day 300, and for the first 300 days in office I'm going to say it was the other guys' fault.' We were told beforehand that we would see a government that would be transparent, in which the adults would be in charge. But after, we saw the misleading of parliament, not once but twice on this very issue. The Prime Minister came in here and said that he had not voted against the debt cap. In fact, he had voted twice against the debt cap. He said that Labor had released the Mid-Year Economic and Fiscal Outlook in December, but we had not done that.
The fact is that if the Treasurer wants an update on the debt cap he ought to listen to serious commentators like Laura Tingle, who said that 'Joe Hockey's failure to prosecute in the parliament a persuasive argument as to why an increase in the debt cap … was needed made it look more like a political stunt than a serious, needed piece of economic infrastructure'. And as Ms Tingle said, 'Why not $400 billion?' (Time expired)