Monday, 9 December 2013
Commonwealth Inscribed Stock Amendment Bill 2013; Consideration of Senate Message
I have received a message from the Senate returning the bill and acquainting the House that the Senate has considered message No. 2 of the House relating to the bill. The Senate does not insist on its amendment to which the House has disagreed and has made a request for an amendment in its place and has made further amendments to the bill, as indicated by the annexed schedule. The Senate requests the House to make the amendment in place of the amendment disagreed to by the House and requests the concurrence of the House in the further amendment made by the Senate, signed by the President of the Senate.
I take this opportunity to congratulate the member for Moore for his fine maiden speech. I move:
That so much of the standing orders be suspended as would prevent the following from occurring in relation to the House's consideration of the Senate message relating to the Commonwealth Inscribed Stock Amendment Bill 2013:
(1) the message being considered immediately;
(2) the House considering the Senate s request for an amendment;
(3) the House considering the Senate s further amendments; and
(4) on conclusion of the House s consideration, a message being sent to the Senate advising it of how the House has dealt with the request and further amendments.
Question agreed to.
Message from the Governor-General recommending appropriation for requested amendments announced.
Senate’s requested amendments
(1) Schedule 1, items 1 and 2, page 3 (lines 5 to 11), omit the items, substitute:
1 Section 5
Repeal the section.
2 Subsection 51JA(2)
Omit ", disregarding stock and securities of the kind mentioned in subsection 5(2),".
3 After subsection 51JA(2)
(2A) In working out the total face value of stock and securities for the purposes of subsection (2), disregard:
(a) stock and securities issued in relation to money borrowed under the Loan (Temporary Revenue Deficits) Act 1953; and
(b) stock and securities loaned by the Treasurer under a securities lending arrangement under section 5BA of the Loans Securities Act 1919, or held by or on behalf of the Treasurer for the purpose of such an arrangement; and
(d) stock and securities on issue as at the start of 13 July 2008, other than Treasury Fixed Coupon Bonds.
Note: The time referred to in paragraph (d) is when item 4 of Schedule 1 to the Commonwealth Securities and Investment Legislation Amendment Act 2008 commenced.
4 At the end of section 51JA
(5) For the purposes of this section:
(a) the face value of a Treasury Indexed Bond is taken to be its face value at the time it was issued; and
(b) the loan of stock or a security is taken to include an arrangement under which it is sold and repurchased.
(2) Title, page 1 (lines 1 and 2), omit "amend the Commonwealth Inscribed Stock Act 1911, and for related purposes", substitute "remove the limit on stock and securities on issue, and for other purposes".
(3) Page 3 (after line 11), at the end of the bill, add:
Schedule 2—Amendment of the Charter of Budget Honesty Act 1998
1 At the end of clause 2 of Schedule 1
Additional statements about Commonwealth stock and securities
(7) In certain cases where the face value of Commonwealth stock and securities on issue has increased by $50 billion or more since a previous report or statement under the Charter of Budget Honesty, the Treasurer is to table a statement setting out reasons for the increase (see Part 9).
2 Subclause 3(1) of Schedule 1
Commonwealth stock and securities means stock and securities on issue under the Commonwealth Inscribed Stock Act 1911 (the CIS Act) or the Loans Securities Act 1919 (disregarding stock and securities of the kind mentioned in subsection 51JA(2A) of the CIS Act).
debt statement, for a report under Part 5 or 7, means a statement that includes:
(a) the following information about Commonwealth stock and securities on issue, atthe time of the report and for the financial year to which the report relates and the following 3 financial years:
(i) the value of the stock and securities (including their market and face value, and their value as a proportion of gross domestic product);
(ii) the total expected interest expenses relating to the stock and securities; and
(b) a breakdown, by maturity and timing of interest payments, of Commonwealth stock and securities on issue at the time of the report.
3 At the end of subclause 12(1) of Schedule 1
; (f) a debt statement.
4 At the end of subclause 16(1) of Schedule 1
; and (c) contain a debt statement.
5 At the end of subclause 24(1) of Schedule 1
; (e) a debt statement.
6 At the end of paragraph 26(a) of Schedule 1
(v) the information required by paragraph 24(1)(e); and
7 At the end of Schedule 1
Part 9—Additional statements about Commonwealth stock and securities
33 Additional statements about Commonwealth stock and securities
(1) This clause applies when the actual face value of Commonwealth stock and securities on issue has increased by $50 billion or more since whichever of the following last occurred:
(a) a budget economic and fiscal outlook report, a mid-year economic and fiscal outlook report or a pre-election economic and fiscal outlook report was publicly released;
(b) a statement under this clause was tabled.
(2) The Treasurer is to table in each House of the Parliament, within 3 sittings days of that House after the increase referred to in subclause (1), a statement setting out the reasons for the increase, including the extent to which any of the following contributed to the increase:
(a) lower than expected revenue;
(b) higher than expected spending;
(c) capital purchases;
(d) grants to State and Territory governments for infrastructure.
8 Application—statements under clause 33 of the Charter of Budget Honesty
Clause 33 of Schedule 1 to the Charter of Budget Honesty Act 1998 applies in relation to a report referred to in paragraph (1)(a) of that clause that is publicly released on or after the commencement of this item.
That the requested amendments be made.
The government has agreed to the proposed amendments by the Greens to repeal the statutory debt limit and amend the Charter of Budget Honesty Act to improve transparency regarding government debt. We have worked together to resolve this issue and provide certainty to the markets about the government's capacity to finance the budget and ancillary debt. We have done this with no thanks to the Labor Party. They created the debt. They have done nothing to find a credible solution to us approaching a binding debt limit of $300 billion. It is just that their legacy is debt that well exceeds $400 billion. Today we are removing the instrument for parliamentary brinkmanship that was introduced by Labor—in fact, by the member for McMahon back in 2008—when they created a legislative limit on debt of $75 billion. So they created the debt, they created the debt limit and now they are trying to prevent us from dealing with their problem. In fact, they are making it worse.
Labor had to increase the debt limit three times, so they introduced a $75 billion limit and said they would never get there, and they did. Then they introduced a $200 billion and they said they would never get there, and they did. Then they introduced a $250 billion limit and they said they would never get there, and they did. Then they introduced a $300 billion limit and brought down a budget that had peak debt of $370 billion, and then tried to prevent us from dealing with it. It was an artificial construct. It was never intended to be a target, but it did end up being a target under Labor. And congratulations to Labor; they hit the target every time.
We have a clear plan to fix the budget and to start paying down Labor's debt. It involves getting rid of the mining tax and associated expenditure of over $13 billion, and we will take that off the debt. We have a plan to get rid of the Clean Energy Finance Corporation, and that immediately prevents us from proceeding with further debt-raising to finance an operation that involves a total of $10 billion of borrowed money.
Even the Labor Party, which have become pious in opposition—not that they were particularly pious in government—have proven just how hypocritical they are. They are seeking to oppose their own savings, which they took to the last election, including $2.3 billion of savings associated with the higher education proposal to fund the Gonski education initiative. The tax cuts that they announced would not be necessary because they were terminating the carbon tax they now want to proceed with. So Labor are not only asking us not to continue with our initiatives, they are voting against their own initiatives, which are all about trying to live within the means.
Today we have also agreed with the Greens on a number of measures to enhance transparency around government debt reporting in the budget papers. In particular there will be a debt statement published in every budget, every Mid-Year Economic and Fiscal Outlook and every pre-election economic and fiscal outlook.
I will come to that in a moment. These debt statements will include information about Commonwealth stock and securities on issue at the time of the report for the financial year to which the report relates and for the following three financial years. They include: the value of Commonwealth stock and securities, including their market and face value and their value as a proportion of GDP; the total expected interest expenses relating to the stock and securities; and a breakdown by maturity and interest payments of the stock and securities on issue at the time of the report. An additional debt statement will also be published should debt increase by $50 billion or more since the last debt statement or additional debt statement was made. These additional debt statements would set out the reasons for the increase in debt, including the extent to which the increase was caused by lower than expected revenue, higher than expected spending, capital purchases and/or, alternatively, grants to state and territory governments for infrastructure. In addition, debt statements and additional debt statements will facilitate a parliamentary debate on government debt. At a minimum a debate will be held twice a year and more often if debt is increasing at a rapid rate.
We commend the Greens for coming to the table with sensible proposals to enhance transparency. Before the member for McMahon gets up to speak I would just remind him of his own words in relation to dealing with the Greens. When he said on Saturday, 'Sitting down and doing a deal with, of all people, the Greens,' he was criticising us. Madam Speaker, I seek an extension.
The member for McMahon is a cracker. The member for McMahon, in 2010, said: 'The Greens are a party who have a very clear policy objective but also a party that you can sit down and discuss policies with.' That is what he said in 2010. And how about this, he said: 'We go into discussions of a very intense nature with the minor parties and there is often brinkmanship to the last minute, but we have found the Greens accommodative to good policy.' So the member for McMahon is the complete hypocrite in any judgement. He is out there saying that it is absolutely ridiculous—
I withdraw. The member for McMahon contradicts himself on a regular basis with no underlying principle. He criticises us for doing a deal with the Greens when, in fact, he has recommended doing a deal with the Greens in the past.
Mr Husic interjecting—
This is the same member for McMahon who does not know the difference between net debt and gross debt. Come on! He was actually Treasurer just for a few days, but he does not know the difference between net debt and gross debt. I thought it was a bit of a slip of the tongue; like the time he came into this place and described the Chinese currency as the yen.
Honourable members interjecting—
Yes, he did. I know it is hard to believe, but he did. I thought it was just a bit of a slip of the tongue and I gave him the benefit of the doubt, and he did come into this place and talk about the debt limit applying to net debt, but I still gave him the benefit of the doubt. I tried with this man; I really tried. Then, when he wrote to me and said that he was going to distribute it to the whole world and talked about net debt being subject to the debt limit, he did not know the difference between net debt and gross debt. I thought, hang on, this guy is not fit to run a tuckshop let alone to run an economy. And, as we know, the member for Watson is over there preying on him.
What we do know is that when it comes to credibility the Labor Party has none. Do you know why they have no credibility? Because they have no principles. Not only do they vote against our savings, they vote against their own savings. Not only do they not know the difference between net debt and gross debt, they created the problem and they are trying to stop us from fixing it. That is the Labor Party way. Here is a tip for a new opposition: you actually have to be a little bit consistent. You actually have to believe in something. I know you believe in debt. I know the Labor Party believes in debt; I know the Labor Party believes in racking up the credit card.
You save him, Tony—good idea. He needs your help like he needs a bullet in the head.
Madam Speaker, I rise on a point of order. The Treasurer should be speaking through the chair. He is making terrible allegations against you, unless he is speaking through the chair.
I will tell you what: there is no way on God's earth the member for Mackellar would do anything other than act responsibly when it comes to debt, handling debt and paying down debt, because the member for Mackellar knows, like every other member who is mature about this sort of debate, that you do not play Russian roulette with a loaded gun when it comes to debt. The Labor Party has been playing Russian roulette with a loaded gun and it has gone bang in their face, because they have been dealt out of the equation by, of all people, the Greens. Now the Greens are proving to be more middle-of-the-road, more responsible, than the Australian Labor Party who have consigned themselves to somewhere way past the Democrats at the bottom of the garden; they have buried themselves along with their lack of credibility when it comes to handling the economy. I would say to the Labor Party: one day, for just one day, have some integrity, have consistency, have some principles—actually, do us a favour and stick to your election promises, especially when it comes to paying down your debt.
'Stick to your election promises when it comes to paying down the debt.' The Treasurer just said it himself. Apparently the Australian people got it wrong, because when they heard the now Prime Minister and the now Treasurer say, 'We'll pay off the debt,' as one of the three fundamental promises, what they really meant was, 'We'll vote with the Greens to get rid of the debt limit.' Remember the Prime Minister on the Bolt interview—and the Manager of Opposition Business very correctly pointed out to the House that you have to work really hard to get a bad interview as a Liberal Prime Minister on the Bolt show—where he said, 'We'll keep the promises we made, not the promises people think we made.' Apparently a promise the people think the Liberal Party made was to pay off the debt. The promise they really made was to vote with the Greens—the economic fringe-dwellers, as the Prime Minister explained—to actually abolish the debt limit, which the then opposition voted against increasing twice, in 2009 and 2012, despite the Prime Minister of Australia standing at that dispatch box and denying it, saying 'We never voted against increases to the debt limit.' They twice voted against increases to the debt limit in this House and/or the other house.
What we are seeing today is the hypocrisy of a party which is voting with another party, which they described as economic fringe-dwellers—those are not my words; they are the Prime Minister's words—to get rid of Australia's debt limit. This is a Treasurer and a Prime Minister who said before the election, 'We have a budget emergency on our hands.' And what have they done since? The Treasurer has given $9 billion to the Reserve Bank—
Yes, that is right, Treasurer; that is what you did. He storms out of the chamber, shaking his head. The fact of the matter is that he has given $9 billion to the Reserve Bank, which increases this year's deficit and increases our interest bill by $1 billion over the next four years. He borrowed money and gave it to the Reserve Bank. They watered down Labor's tax integrity measures and made changes to support people with more than $2 million in their superannuation accounts. Those are this government's priorities—all things which increase the deficit and increase the debt. So what do we see? We see the Treasurer asking for an increase in the debt limit, first to half a trillion dollars. That was his first act, and he acted surprised and hurt that the opposition did not just say, 'We know you said you'd pay off the debt, but, if you want half a trillion dollars, that's all right.' No—it does not work that way. What happens is: you have to justify it. On each occasion when the former government asked the House for an increase to the debt limit, it was justified by a budget or an economic statement—on every single occasion. Not once did the member for Lilley, the then Treasurer, come into the chamber and say, 'By the way, I need an increase in the debt limit and I'll show you the figures later'—not once, because that is the wrong thing to do. You justify yourself to the parliament by releasing the midyear economic forecast and a statement, but what we see is the new Treasurer saying, 'I need half a trillion dollars and I'll show you the paperwork later.' Australia's biggest no-doc loan—that is what the Treasurer wants.
The Treasurer found that he could not get that through the parliament because the Greens' position then was that an increase of $200 million was not justified. Now their position is that we do not need a debt limit at all. So the Greens have had a change of position over the last few weeks. That is okay; political parties are allowed to do that. But the biggest change of all is from the government, which told the Australian people solemnly that they would pay off the debt. The Treasurer had a chance to explain. He said, 'You've got to let us fix up the mess,' as he calls it; 'You've got to let us fix the debt.' So his position is: 'We've got to get rid of the debt limit to pay off the debt.' He has not explained the internal inconsistency in that little equation: 'We've got to pay off the debt, so we'll get rid of the debt limit.' Well, I think there are Liberal voters around Australia scratching their heads, thinking: 'Is this really the government we voted for? Is this really the government that promised to pay off the debt and said that we are open for business; the same Treasurer who showed that we are open for business by knocking back a foreign investment application—
in the national interest—and who said, 'We need more foreign investment, so I'm going to knock this one back,' to paraphrase the Treasurer? The Treasurer is a cracker. He said, 'We need more foreign investment, so I'm going to knock one back, and we need to pay off the debt so we'll get rid of the debt limit.' This sort of stuff catches up with you, and it will catch up with the Treasurer, because he seems to think it is a matter of pride that they are voting to get rid of the debt limit. He is very proud of it and the fact that he has done a deal with the Greens. He thinks that is an achievement for him. I beg to differ. I think it shows a complete lack of integrity on behalf of this government. (Time expired)
I rise to speak in support of these amendments to the Commonwealth Inscribed Stock Act, which have their genesis in amendments moved by the Greens in the Senate. They will lead to a more sensible discussion about debt in this country. I was listening very closely to what the member for McMahon said. Far too often in this chamber, now and over previous years, we have seen the unfortunate case of Labor trying to out-Liberal the Liberals, sometimes on refugees and in this instance on debt. Every time that Labor try and turn the issue of debt or the issue of refugees to their political advantage, it comes back to bite the progressives. There can be no clearer instance than with the issue of debt.
In the last parliament, every time the question of debt came up we watched the opposition, as they then were, stand up and berate the government about the level of debt that had been incurred. In all of that there was not one single sensible argument about why it was that we had that debt in the first place. Of course there was a thing called the global financial crisis and there was a need to borrow to spend to ensure that Australia did not go into recession. The Greens supported that because it was the right thing to do. As a result, the country incurred debt. Even after incurring that debt, Australia still has a remarkably good position in OECD countries on both net and gross debt.
Separately, if you come from the progressive side of politics then generally you would think it is a good place to mount the argument that governments, especially the Australian government at the moment, should be quite happy to take advantage of the relatively cheap money that is on offer at the moment to borrow to fund the infrastructure that this country needs to set itself up for the 21st century. Maybe instead of having pieces of legislation that say maybe we will or will not do something about high-speed rail in five or 10 years time, we could actually get on with the job of building it—if people were prepared to have a sensible discussion about debt. In part because of the creation of this artificial debt limit which Labor supported, we end up in this situation where we miss having a sensible discussion about debt and, instead, all debt is apparently evil.
Anyone will tell you that there is a difference between the mortgage and the credit card. If you are borrowing to fund some long-term infrastructure, to fund something that at the end of the day is going to be useful to you, or if you are borrowing in the short-term term to meet some speed bumps or some even bigger challenges like we saw in the global financial crisis, then that is a good thing. But if what you are doing is extending the credit card limit just to meet your expenditure, then it is not a good thing. Most people would understand that and that is the discussion we need to have with the Australian people. If we routinely beat each other over the head about a number without any sensible debate over what the money is actually being spent on we are going to get into the worst discussion in this country. Ultimately, if and when Labor gets back into power, it is going to hurt them even more. I suspect there are many on the Labor side of politics who are quietly happy that this has happened because they know that when they get back into power it will make their life easier—if they choose to stop trying to out-Liberal the Liberals and instead say, 'Yes, it is a good thing to borrow to fund the infrastructure that this country needs.'
I am very proud of the transparency measures that we have secured, and they are timely too. As we head towards the budget, what is clear from the national account figures that have been released is that as mining investment comes off the boil there are many places in Australia and sectors in the Australian economy that are now reliant on government spending to keep them going. Now we have removed one of the last hurdles in the way to the Treasurer stimulating the economy, there will be no excuse for savage budget cuts in May, and we will not support them.
It has become clear this afternoon that the Treasurer bear hugs the Greens that the Minister for Immigration and Border Protection rejects. On one day we have on one side of the chamber the Minister for Immigration and Border Protection rejecting the Greens and talking about all the heinous things the Greens do. The minute those opposite need to get a deal through they suddenly welcome the Greens with open arms and cannot believe that they have got the opportunity to do this type of deal. It is unbelievable for the Greens to think that this will lead to a bold new era of transparency. I would hate to actually have them, by their own actions, reinforce the view that that they are economic fringe dwellers—but their own actions will do that if they think this government is committed to transparency.
There was a simple proposition extended by us to those opposite, to those in government, which was we will support an increase in the debt ceiling to $400 billion. If those opposite want to go beyond that then be transparent, table MYEFO and let the public know the state of the books. That was the simple test of transparency that they refused to meet. When will they table MYEFO? They will table it next week. When? After the Australian parliament goes into recess for the break. The Greens are all after transparency but not if it actually involves the most official document, which is MYEFO.
This is not really about transparency, this is not about being upfront, this is not about having a conversation—that well worn phrase—with people about debt; this is about one thing and one thing only. It is about Joe Hockey, the Treasurer, avoiding coming back here to explain that all the bravado and all of the bluster that they engaged in pre-election cannot be matched by post election performance. They are unable to demonstrate why, when they said that if debt is the problem then more debt is not the answer, they cannot deliver a strain of logic that actually says why this is the case.
While the Parliamentary Secretary to the Treasurer has to sit here on his own, defending the case of the government, it is very hard—and I am sure he could come up with lots of reasons. In fact, I reckon he could come up with 93 reasons that could try and help him justify this deal to the parliament! He is unable to, because they all know, with a red face—
An opposition member: Don't pick on Barnaby.
I will not pick on the agriculture minister. But, frankly, they know what we know and had to deal with for quite some time: national incomes across the globe are contracting. Economies are not growing. Monetary policy is not giving the same kick that it once did. As a result, budgets come under pressure—as ours have for many years, and as they know theirs will, which is why they will not release MYEFO. So, in an effort to avoid actually admitting to people that their bluster before the election on surpluses—because remember, Madam Speaker, those on that side of the chamber made a commitment that they would get to surplus in one year—
Mr Mitchell interjecting—
One year, they said, Member for McEwen. They said they would get to surplus in one year. And when did they ditch that promise? They ditched it in the quiet of January this year. When no-one was really paying attention, they moved away.
Exactly—it gets measured in a quantum that we mere mortals cannot understand! But they have been dragged to economic realism, and yet they will not be up-front with people about the reasons they need to increase the debt ceiling. It is outrageous that, in this last-ditch effort, as the shadow Treasurer indicated, their way of getting rid of debt is to lift the debt ceiling. It is preposterous logic. It does not sit at all well with the rhetoric used before the election, and they should be explaining fully why they are going to this position. And they should not just back it up with words. They should back it up with the numbers contained in MYEFO, and they should do it this week.
It is quite extraordinary to stand in this debate on the Commonwealth Inscribed Stock Amendment Bill 2013 and to have listened to the contributions from Labor members opposite on how debt was a problem under the coalition and how the Australian people needed to be vigilant and on guard, and how it was in the national interest for the Australian Labor Party to stand opposed to the deal that is being done between the coalition and the new economic centrists—certainly, relative to the Labor Party—the Greens! Members of the public up in the gallery were probably scratching their heads as they heard the Australian Labor Party start to lecture the Australian people on the dangers of debt. This is the Australian Labor Party! Let us not ever forget the track record of Labor, because if you had only tuned in to the last 10 minutes you would have thought: 'Well, they seem reasonable. The solution to debt is not more debt—that seems to be a reasonable comment to make.' And if you did not know that the Australian Labor Party was the party that presided over the most significant deterioration in Australia's debt position in our history, and if you did not know that the Australian Labor Party inherited $45 billion of net assets and turned that $45 billion into a mountain of over $400 billion worth of debt, you might think they had a skerrick of credibility. But, in a continuation of form for the Australian Labor Party, we know that they will say absolutely anything if it happens to suit their argument at any given point in time.
I heard the shadow parliamentary secretary turn around and make comments about how the coalition was being dragged to economic realism and I heard him start to criticise the coalition, saying that we promised there would be a surplus. Again, if I cast my mind back, it was only about six months ago that we heard the Australian Labor Party promise, on over 600 separate occasions, that they were going to deliver an economic surplus. We recall the way they completely bastardised the Australian company tax collection system when they turned around and said, 'We're going to change from quarterly PAYG to making sure that it is paid monthly.' Why did they do it? They did it for one reason and one reason alone: the Australian Labor Party did it because it was all part of their phoney campaign to try to get back to surplus. And after Prime Minister Rudd, and Prime Minister Gillard, and Prime Minister Rudd, and Treasurer Swan, and Treasurer Bowen, we saw the Australian Labor Party left in a situation where, after promising on over 600 occasions that they were going to deliver a budget surplus, they actually delivered a nearly $31 billion deficit.
The Australian people are not fools, I am pleased to say. They see straight through this lot opposite. And I am very pleased to stand on the track record of the coalition, time and time again, because our track record—and I say this for the benefit of the members opposite—is a good track record. We have paid down Labor's debt before and we will pay down Labor's debt again. And if that means that we have to take hard decisions, and if that means that we have to make responsible decisions, then the coalition will always step up to the plate. That is the reason the Australian people thoroughly rejected the Australian Labor Party at the last election. They rejected you because they know you will say and do anything, members of the Australian Labor Party. These kinds of silly games from the Australia Labor Party just underscore why the Australian people know that the cupboard is bare when it comes to genuine policy decision making.
So I say to the Australian Labor Party: get with the times. It is a bad strategy, Australian Labor Party, when you are outflanked in the centre ground by the Australian Greens. So if that does not send you a message, members of the Australian Labor Party, I do not know how on earth you are ever going to get the message. But I would say to you: the signs are there. You do not need a crystal ball to gaze in; you do not need to try to read the tea leaves. All the signs are there, members of the Australian Labor Party. The Australian electorate rejected you. You have got a mountain of debt of over $400 billion. And now you have the Australian Greens being the sensible centre. So read those cryptic clues and see what you can come up with. (Time expired)
I was loath to raise a point of order while the member for Moncrieff kept failing to refer his remarks through the chair, because I do enjoy that speech from the member for Moncrieff. I enjoyed it the first time I heard it and I have continued to enjoy it on each subsequent occasion that we have heard that speech. The thing that we hear time and time again, in the refrain from everybody on that side, is that they are not doing what they told the Australian people they would do. We went through that debate last week with respect to education. We go through that debate repeatedly in the vast gulf between what the Minister for Immigration and Border Protection promised and what he is doing now.
But I do not think there is an example more clear to the Australian people than when the same people who were railing against debt and railing against deals with the Greens then do a deal with the Greens for unlimited debt. I do not think you can get a quinella quite like that when it comes to what is being done by the government. I heard one of my favourite lines from the member for Moncrieff in his speech and I enjoy it every time he gives it. He says that they have to 'make the hard decisions'. Unlimited debt is hardly a hard decision. Unlimited debt is avoiding future hard decisions. Unlimited debt means they are just going to remove any level of public restraint and debate into the future. Then they say how proud they are that they managed to do a deal with the Greens.
I am disappointed, obviously, to see that they have been so willing to jump in and team up with the Greens. When the House divides on this motion, we will see the Greens sitting side by side with members of the coalition, and that is a decision for them. But for those opposite to pretend that it was really hard to get the Greens to agree with unlimited debt is really missing the point of basically every public debate that we have had on debt issues over the last few years. What is not lost on the Australian people is that the Prime Minister himself said that you should not do cheap and tawdry deals with the Greens. Well, I concede that this one might be tawdry, but it ain't cheap. There is nothing cheap about this deal at all. Those opposite told people that they would turn around the figures and start delivering surplus—they would shift from deficit to surplus. If you go to surplus, what occurs? Debt starts to go down. Yet they, on the economic pathway they have now chosen, know that they are heading down a path where, under their government, debt year on year will become higher. That is the pathway they have chosen and that is why the action they have taken now is for debt to be unlimited. Unlimited debt is the pathway that those opposite have chosen.
They are so desperate to say that, even though it has happened since they have been in office, the continued increases are somehow Labor debt. Those opposite need to recognise: they are in government now, which means what happens on their watch is their responsibility. As debt goes up, it becomes their responsibility. The final record that was the responsibility of those on this side of the House was reflected in the pre-election fiscal outlook. The Charter of Budget Honesty, which Peter Costello used to back in and which those opposite used to support, did not require the figures to go to a half a trillion dollars. But there is nothing like the hypocrisy of going from bringing the debt down, to needing it to go to half a trillion dollars, to then saying, as those opposite do, that they want debt to be unlimited.
As the shadow Treasurer held up that ad last week, I think it struck a chord with people when they could see next to the Prime Minister the words that he would reduce the debt—and now we have the sheer hypocrisy of their not merely saying they will not reduce it and not merely saying they want to take it to a half a trillion dollars but saying the sky is the limit. Unlimited debt is now what those opposite want, which is the exact opposite of what they told the Australian people they would do. On issue after issue, be it education, their handling of immigration issues or debt, they are a government who say one thing and do the exact opposite. (Time expired)
The last thing this House needs is a lecture on budgetary matters from fiscal pygmies. That is what those people on the opposite side are: they are fiscal pygmies. They are the group who have taken this country from being in the black to facing an absolute fiscal nightmare after five to six years. We are the ones trying to clean up this mess. Each and every day we open a cupboard to another budgetary skeleton. Those people sit over on the other side of the chamber with a great sense of commitment to their cause, when we are the ones trying to clean it up.
They slid money out of education and spent three to four years of the infrastructure forward estimates in the first year, leaving nothing in the cupboard. They then come to this place and, even after the evidence of officials from Treasury at Senate estimates, refuse to accept the fact that we need to increase the debt ceiling. We would not need to have this debate right now if the Labor Party had decided to do what was in the best interests of the country, upon the advice of senior officials, and taken the debt limit to the $500 billion that was proposed. But, no, they want to take advantage of the political environment. They want to be political opportunists. They want to do absolutely anything they can to be economic vandals. They continue to be economic vandals in this place and it is an absolute disgrace. So do not lecture us on debt. Yours is the party that has taken us into fiscal oblivion.
We are comfortable on this side of the House with the Charter of Budget Honesty and the agreement that has been made between this side of the House and the Australian Greens to get us through this period. We have no qualms with that because we have nothing to hide. When it comes to the Charter of Budget Honesty, we have nothing to hide. You are the guys who are absolutely useless when it comes to managing Australia's finances.
They are the party that after six years took a country with money in the bank and no interest payments on debt to one now with in excess of $400 billion in debt and $10 billion in interest payments. They think it is funny, but it happened on their watch. It happened on their watch in six short years. They need to admit the fact that that is what occurred.
No. The debt limit is a construct of the Australian Labor Party. Let's not forget that this was brought in in 2008. Let's keep in mind that at that point we had no debt, as a legacy of the Howard-Costello government. We had money in the bank. We were in a super position fiscally. In 2008 the Australian Labor Party came to this place on the back of the perception of a new superhero fiscal conservative in Mr Rudd—and what did we see? The first debt limit was set at $75 billion. Then they asked, 'Mr Bank Manager, can I have more?' It then went to $200 billion. Then they asked, 'Mr Bank Manager, can I have more?' It went to $250 billion. It went on and on. Thank goodness the Australian people spoke so loudly on 7 September and said, 'Enough is enough. We need to get the finances of this country back under control.'
What is absolutely ironic about this is that at the start of this whole process, when this bill was first introduced by the Treasurer, those on the opposite side were offered briefings. They refused to have them. The dead giveaway, when the Treasurer was bringing this matter to a conclusion today with his speech earlier, was that the accused, the shadow Treasurer, could not face the prosecutor. That is always a dead giveaway. He sat there. He twirled in his seat. His eyeballs rolled around in their sockets. He could not look the Treasurer in the eye. The Treasurer nailed him. The shadow Treasurer left a massive black hole. He left skeletons and black spiders in every cupboard. We are here now to declare, 'We will clean up the mess.' But those opposite should not stand in our way. The Greens have come to an agreement with us to make sure that we can continue to pay the bills when the time comes in the very near future. It is about time that those on the opposite side woke up to themselves, because they are nothing but economic pygmies.
The question is that the question be now put.
The question now is that the requested amendment be made.
The House will now consider the Senate's further amendments. I understand it is the wish of the House to consider the Senate's further amendments together.
That the further amendments, including an amendment of the title, be agreed to.
Madam Speaker, if you ever needed a more clear demonstration of how the Australian Labor Party have dealt themselves out of this debate, of how the Australian Labor Party have lost any credibility at all when it comes to this debate, then you just saw it when the Greens and the two Independents walked to this side of the chamber. By walking from there to this side of the chamber, they demonstrated that they were willing to put economic orthodoxy on the table. It stands in contrast to the new economic fringe dwellers, which is the Australian Labor Party.
I have heard members of the Australian Labor Party claim repeatedly that they could not understand why the debt ceiling of more than $400 billion needed to go. They did not understand why there needed to be a debt ceiling of $500 billion, which was of course the first call that the coalition made. The reason—and it is really not that complicated—is that, as was attested to by members of the Australian Labor Party, peak debt under Labor was forecast to reach $370 billion. We know from the tabled Australian Office of Financial Management minute that you need a $60 billion buffer. Let me go very slowly through it for the benefit of the Australian Labor Party: 370 plus 60 equals 430. I will break it down again: 370 plus 60 equals 430. So there you go, Madam Speaker, there is the great riddle that the Australian Labor Party cannot work out.
When the Australian Labor Party say with their hands on their heart, 'Oh, we only want it to go up to $400 billion,' let them now understand why. It is because 370 plus 60 equals 430. So I say to the Australian Labor Party that is the reason your $400 billion was nothing other than a political gimmick and that is the reason we walked away from it. When we could not get any agreement from the Australian Labor Party, we spoke to the Greens—and guess what? The Greens were the sensible ones who were willing to recognise the best way forward and what was clearly in Australia's national interest.
Opposition members interjecting—
I now hear Labor members opposite repeatedly making remarks, 'But that's not until 2016.' The extraordinary thing is that Labor still does not get it. They still think it is acceptable to simply kick the can down the road.
Mr Danby interjecting—
Mr Sukkar interjecting—
Labor still thinks it is acceptable to say: 'We'll deal with that down the track. We don't want to deal with it now.' I say to members of the Australian Labor Party that that might be how Labor governs but that is not how the coalition governs. That is not our approach. We are not prepared to kick the can down the road. We want to deal with the issue once and we want to deal with it in a way that provides certainty to the economic markets and that does not invite in the kind of Tea Party politics that the Australian Labor Party so warmly embrace.
I never really thought that the member for Melbourne Ports would necessarily be someone who would embrace Tea Party politics, but he is. Like all the members of the Australian Labor Party, he is willing to jeopardise Australia's national interest on short-term political opportunism. So, for that reason, we were willing to talk to anybody else who was willing to put the national interest first. Lo and behold, the Greens were willing to put Australia's national interest first—and that stands in contrast to the Labor Party.
What the Senate has proposed and what we have agreed on with the Greens is a number of measures to enhance transparency around government debt reporting in the budget papers—in particular, there will be a debt statement published in every budget, in every Mid-Year Economic and Fiscal Outlook and in every pre-election economic and fiscal outlook. In addition, the debt statements will include information about Commonwealth stock and securities on issue at the time of the report for the financial year to which the report relates and for the following three financial years; the value of the Commonwealth's stock and securities, including the market and face value and their value as a proportion of GDP; the total expected interest expenses relating to the stock and securities; and a breakdown by maturity interest payments of the stock and securities on issue at the time of the report. An additional debt statement would also be published should debt increase by $50 billion or more since the last debt statement or additional statement was made.
The amendments that have been put forward are good amendments. The Senate recognises these amendments in a spirit of putting Australia's national interest first, of advancing our national interest and of providing certainty and stability, which stands in contrast to the juvenile approach that we have seen from the Australian Labor Party.
What an extraordinary contribution from the member for Moncrieff. We have heard it about four times already in this debate. Frankly, taking a lecture from those opposite, particularly from the member for Moncrieff, on political obstruction and opportunism is like taking a lecture from Ronnie Biggs on train safety. It really is. Their approach in the 43rd Parliament was to say no to everything. Even when it was consistent with their own policy, they said no to everything. They said no, whether it was about assisting the government to find savings through measures like putting an indexation on the private health insurance rebate—they talk about debt; well, they could have done some things when we were in government to assist in dealing with the issue of debt—or whether it was, as the member for Melbourne Ports has pointed out so many times, their belligerent approach when it came to the people transfer agreement with Malaysia. So taking a lecture from those opposite on the issue of obstructionism is really a little bit too much to take.
This bill, the Commonwealth Inscribed Stock Amendment Bill 2013, is an extraordinary bill, which is why members on this side of the House cannot support it. It is extraordinary that the members on that side of the House would be speaking in favour of it, because, not three months ago, they were all standing in front of billboards and waving pamphlets around, saying, 'We will reduce the debt.'
Where is the debt truck now? The government members have gone from being the party of no debt to the party of no debt limit. I cannot understand why they are willing to stand there and speak in favour of this bill. It is Buzz Lightyear economics: 'To infinity and beyond!' We are all looking for Woody to make an appearance in this debate! They have only got themselves to blame. They would like to sheet home all of the blame to us on this side of the House, when we did the right thing by the country and we did the right thing by the parliament during the global financial crisis. Yes, we were willing to put the budget into the red to ensure that businesses stayed open and that people stayed in work. It was the right thing to do by the economy. It was the right thing to do by the nation. We got no assistance from those opposite, yet they come in here and complain to us about obstruction.
We might be able to take them a bit more seriously if, when they came back into government, they had done the right thing by the budget. But what was their first act? What was their first act when they came back into government? It was to give an $8 billion gift to the Reserve Bank. That is right—an $8 billion gift to the Reserve Bank, no strings attached. Yet they come in here and they complain about debt. Well, there is a fair bit of debt that was racked up on their own watch. They have only got themselves to blame.
From looking at what is in the chute, we believe the debt is actually going to get worse. What have the government's first acts been, on regaining the treasury bench? They have given a tax hike to low-superannuation earners and a tax cut to high-superannuation earners—an increase for high-superannuation earners. They have denied themselves a revenue stream. They like to take the fun out of the minerals resource rent tax, which is a growth tax: the tax increases when profits increase and decreases when profits are flat. But one of their first acts in government is to bring a bill into parliament to reduce the government's capacity to raise revenue in the future. It would seem that, if you want a tax cut in this country today, you have to own a mine. You can see where their priorities are. In fact, if you want help with your school expenses, your name has to be George Brandis. You can see where their priorities are and who they are looking after.
Those opposite puff up their chests and talk about the great deal that they have been able to do with the Greens. You can see how tough those negotiations must have been, Mr Deputy Speaker Vasta! 'Dear Senator, I'm here; I want to ensure that we have no brakes on debt into the future, no debt limit.' You can imagine that that negotiation went on for weeks and weeks! We on this side of the House oppose the legislation. It is the right thing to do by the country.
In August this year, the then opposition leader, Mr Abbott, launched a stinging attack on the Greens political party. He said they had 'fringe' economic policies. When asked about his decision to put the Greens party last in all Liberal preferences, he said he was making a 'captain's call'. Mr Abbott said:
There is a world of difference between the Greens and as far as I'm aware just about everyone else who is contesting this election … because everyone else in this campaign supports economic growth and supports a more prosperous economy.
He was then asked, if he disliked the Greens so much, whether it had been a mistake to preference the Greens over Labor in 2010, thereby ensuring that the current member for Melbourne won that seat. Mr Abbott waved his hands and said:
That was then, this is now.
And 'that was then, this is now' is a good summation of where we have ended up in this debate. Back then, the Greens were 'fringe economic dwellers' that were on the extremes of Australian politics. Now we see the Greens literally sitting on the front benches in a division moments ago. Back then, if debt was the problem, more debt was not the solution. Now it turns out that an uncapping of the debt limit is exactly what Australia needs; the right medicine for Australia is unlimited debt! We are seeing what I think is best summed up in the words of Mr Abbott himself:
… a litany of betrayals, of broken promises, of disappointed hopes …
If, before the election, the then opposition had gone to the people and said, 'We think that the real problem is debt and our policy is going to be to strike a deal with the Greens to remove the debt limit,' I think people would have voted a little differently.
Of course, it is not the only broken promise that we have seen from this government. They have been in office for only a matter of months, but already we have seen them break their promise to bring down a budget update within 100 days. We might not have needed to have this debate at all if that promise had not been broken by the Treasurer—if that 100-day limit had not been broken. We are now pushing into December, a period well beyond where Labor ever went in releasing the Mid-Year Economic and Fiscal Outlook. We have seen the government breaking their pledge that no public servants would be fired, breaking their pledge that there would be no adverse changes to superannuation arrangements, breaking their pledge to the schoolchildren of Australia that they are on a unity ticket in education and breaking the pledge that there would be a boat buyback. It is passing strange that just before the election Mr Abbott said, in an interview with the doyenne of the Press Gallery, Michelle Grattan:
… you should move heaven and earth to keep commitments … and only if keeping commitments becomes almost impossible could you ever be justified in not keeping them … And I suspect the electorate would take a very dim view even in those circumstances.
Let us apply Mr Abbott's test to what has happened today. Is it impossible not to keep the opposition's pledge to bring down debt? Not at all. The Labor Party would have been very happy to support a $400 billion debt cap which allows a $30 billion buffer in 2016-17, when debt is expected to peak. But, if the government believes that the situation has changed—if they believe that debt is peaking higher—then they can bring down the budget update and be very clear with the Australian people about what has shifted. Has the $9 billion to the Reserve Bank—the thimble and pea trick which says, 'We'll give you $9 billion now so that we can pull out a bigger dividend later—had an impact? Has the $17 billion of tax cuts to mining billionaires and big polluters had an impact on the budget? It is important that the people of Australia are not put in the position of Mr Abbott and Mr Hockey suggesting that this is somehow Labor's debt. The people of Australia are entitled to see whether the budget has deteriorated in this government's time in office. We have seen disappointing consumer confidence numbers out today suggesting that all is not well under this government. We have seen closed economy decisions on foreign investment— (Time expired)
In response, I would like to speak about the fact that it is Labor's debt, and I would like to discuss where it came from. It is very clear to me that the money has already been spent. This is the reason the debt cap needs to be increased and, as the amendment has come back, to be deleted—to have no debt ceiling. Quite simply, the money was spent on things like school halls. I have been to many locations, up to 100, where the school hall was replicated side-by-side with one which they already had. When I said, 'Why do you have a second school hall exactly the same as the other one?' they said, 'We were told we had to spend the money; we didn't have a choice.' That is not the way we do business on this side of the House and it is certainly the way business should not be done, but I will give them some credit. In areas like Tara, Miles and St George, where there was absolutely nothing, where there was no local community facility, there was some benefit. But in the many hundreds of coastal locations there were literally thousands of replications, whether they be libraries or other BER projects. The very first school project I went to I said to the construction company, 'Are you sure this cost $2 million?' They said, 'Absolutely: design and construct project,' I said, 'How many do you have?' They said, 'Ten,' I said, 'What do you have to do?' They said, 'Same again.' I asked, 'What about the design component?' They answered, 'That's fine; we covered that in the original quotation, no problems at all.' It cost hundreds of millions of dollars.
Just because somebody sends your credit card in the mail, that does not mean you necessarily have to fill it. Just because we have an option to use the money, that does not mean that we are going to spend it. We are not the United States. This is Australia, and this is the Australian parliament.
I sat in this place in recent weeks as a new member of the House. I continue to hear from those opposite how they represent the union movement. I am more interested to hear what it is that they intend to do for their electorates. Over and over they say that they represent the unions; that they represent the workers. I find it absolutely outrageous that they would indicate to those on this side of the House that they do not fairly represent all people because I am a worker. That is exactly where I come from. I hold a trade qualification. I work on a farm. I also have a degree in engineering. I represent people equally. That is why we are here and that is why I am on this side of the House and sit with the Nationals—because the Nationals are for regional Australia. That is what we are about.
I would like to talk briefly about a gentleman called Craig van Rooyen, who is an immigrant to this country. He came through with the correct process. It took years to arrive and they work hard. They have a lychee farm in my electorate of Hinkler. They were the people who broke the story on backpacker cheques. You may recall a story in The Australian during the election campaign. Mr van Rooyen came to me and said, 'How is it possible that I have a cheque for a backpacker who has not worked at this location for two years, yet they get a cheque for $900?' That is an absolute waste, yet it continues.
The house insulation scheme: as an electrician I think it was criminal. People lost their lives because of that project. They should be very careful about what it is that they put forward because it was clearly poorly-planned. There was evidence provided to people in this place, and they knew that over and over people with no training were put at risk in areas where they should not have been—and some lost their lives. It is time that people on this side of the House recognise that those opposite are not interested in what we do for Australia. What we do here is in the best interests of all people in our electorates—not just union members, not just workers but all people in the electorate. I look forward to the process where this legislation goes through the Senate and we can get on with the business of running this country.
There are many examples of this government saying one thing before the election and doing something completely different after the election. There are plenty of examples we could point to, but nothing is more stark than this, where before the election the government said they were going to reduce debt. They went around telling everyone they were going to be responsible and reduce debt. Then, not more than four sittings weeks in, they are asking this parliament to pass an unlimited cap on debt—no debt ceiling whatsoever.
The now Treasurer said during the election campaign that he would like to ensure there was less debt and that more debt does not reduce debt. It seems kind of odd for him to change his tune within four sitting weeks. I imagine that the Australian people are scratching their heads. Before the election he said, 'Reduce the debt,' but after the election he says, 'Give us a licence to have as much debt as we possibly can.'
I think the Australian people would be scratching their heads not only over that backflip but also about the Liberal Party now courting the Greens for their economic policy. Before the election, there was a lot of criticism on any occasion that the Greens voted with the Labor Party, despite the Liberal Party voting with the Greens on numerous occasions—for example, to trash the Malaysia solution, which was a responsible solution in relation to asylum seekers. In public, with their megaphones, they were saying, 'Don't trust the Greens. The Greens have irresponsible economic policies.' Indeed, Tony Abbott described the Greens as the fringe dwellers of economic policy. But today we see once again the Liberal Party doing a complete U-turn and courting the Greens to support their irresponsible economic policy.
Let us be clear about why we are in a position where the Liberal Party have had to court the Greens. It is because the Greens and the Liberal Party actually do not want to talk about where the debt is coming from. All Labor asked was, 'Just be honest—why do you need this increase?' Since the election, we have had the Liberals spending a lot of money in a lot of areas. They are secretly spending it—in terms of the Reserve Bank—and not wanting to be transparent with the Australian people about where the debt is coming from and why they now need unlimited debt. Into the future, they also want to continue hiding and not come back to this parliament to report on why they need more debt. So it is not surprising now that we see the fringe dwellers—I am talking about what Tony Abbott called the Greens—getting on with the Liberals and voting for this.
But we still see the Liberal Party having an incoherent economic message. We see them wanting to abolish the debt ceiling while at the same time refusing to recognise why the spending was required during the global financial crisis. They fail to recognise that the then Treasurer, the member for Lilley, received the 'world's best Treasurer' award for the way he dealt with the global financial crisis, ensuring that Australians kept on working.
While it was the priority of the previous, Labor government to put jobs at No. 1, over the last few days we have seen constantly that the Liberal Party will refuse to put jobs at No. 1. They are happy to see jobs in my electorate and in my state of South Australia, and indeed in the southern states and right across Australia, go by the wayside. This government has no narrative. Increase debt, but do not focus on jobs. Jobs are not a critical component for this government. They refuse to protect jobs in this economy.
I call on the government to reconsider this. It is irresponsible and the hypocrisy is quite rank in terms of their dirty deal with the Greens. (Time expired)
It is time that we reflect on financial management. I am not here to cast aspersions across the House about whose fault it is. Let us have a look at where we are and how we got to this point. There was a time not that long ago when Australia was not in debt. We walked into a financial crisis globally, and there was an argument for a legitimate stimulus package. But now the challenge is how we lift ourselves up into the future.
Debt has a place. It has a place in business. I have run a small business and I have used debt. Debt can be constructive, but it can also be an inhibitor. The question is not so much whether we want to increase our debt limit; the question is, 'What are we doing it for,' and then working out what we are going to do into the future. We have a situation where we have to walk a balance between a level of austerity and a level of confidence in the Australian economy. I am a strong believer that debt can play a part, but I am also a strong believer that a government should send a signal to its population that it can live within its means. Our ambition as members of the new government is to live within our means to send a signal to the Australian people that our government can live within its means.
However, in the very short term we find ourselves in a situation where we will need to invest and drive productivity across the country, and doing that is going to require capital. It is going to require capital that is not just going to come from the tax revenues of Australians; it is going to require some foreign capital, and that is the reason we have had to expand the debt limit. To have this argument that somehow the coalition government is not, in the long term, going to live within its means and that, therefore, asking for an increase in the debt limit means the government is going to go from a $300 billion debt to a $500 billion debt and then just keep racking it up, I think, misses the point. The point is that governments need to ambitiously aim to spend the taxpayer revenue effectively. They need to ambitiously aim to live within their means. But there are times when we are turning the corner that we need to keep a level of confidence in the economy and we need to borrow. This is the reason.
When looking at whether the coalition government should have done a deal with the Greens, the situation was this: the argument that we were going to hit the debt ceiling of $300 billion and go through it did not appear to be resonating with the Labor Party. They had a political imperative and saw that they could somehow score some points here. We put the argument to the Greens that there was a practical imperative here and that we needed to borrow more money to keep confidence in the economy and after that we could begin the process of living within our means and eventually paying back that debt. But this is a long-term project. This is not something that is going to happen in one year; it is going to take a number of years. I hope that both sides of the political sphere will see the sense in that.
Anyone in small business knows that there are times that you have to borrow. But there are always times when you have to pay it back. This is a time when we need to cut through that threshold. But our ambition and our stated aim—backed by our past history as a coalition government through the Howard years—is to pay back the debt. But we have to instil confidence in the Australian economy to do that.
This is good fiscal management. It is not about scoring points and playing political games; it is not about saying, 'You racked up debt'; 'We didn't rack up debt'; 'You can't be trusted'; 'No, you can't be trusted.' This is about what is in the best interests of Australia. We have challenges ahead. We have a slowing global economy. We have to make sure that we have a high level of confidence. To do that, we will borrow. But our stated aim is to get back to a situation in which the total expenditure of this government is less than the total tax revenue. Hopefully, some common sense will be seen on both sides of the House, and particularly on the Labor Party side, about the reason we needed to make that deal. The challenge is immense. But with strong fiscal management we can do it. Debt has a place. But ultimately debt has to be paid back.
The position taken by the government in this debate is utterly bizarre and, I must say, somewhat hypocritical, because some 3½ months ago, those opposite were gallivanting around the country campaigning vehemently against debt. They were saying that the debt level in Australia was much too high. They were driving around with a big truck with numbers ticking over saying that this country's debt was ticking up every minute and every second and it was out of control, when in fact the situation was that Australia had a very reasonable level of debt and one that was the envy of most of the Western world and most advanced nations when comparing it to their fiscal positions.
It is a fact that Australia has a level of debt. But we need to be conscious of why we have a debt position at the moment. It is because in 2007 the world was hit by the global financial crisis. Australia was not immune. We are an open, global based economy. We were affected by the global financial crisis. It affected growth, it affected consumption and, most importantly, it affected projections for growth within our economy. There was a very big risk that Australians would be forced out of work and that small businesses would be affected, as has occurred in Europe—and we have all seen the carnage that has been wrought by debt crises in Europe—and in the United States. But the Australian government acted swiftly and decisively to prime our economy to ensure that demand continued. To do that, we needed to take out a level of debt. That debt was spent on productive infrastructure and on creating and protecting jobs in our economy.
Examples of that productive infrastructure are well known in my state of New South Wales. If you drive up the Pacific Highway, you will go past the Bulahdelah bypass being built. That is a road construction job that will improve the productivity of the Pacific Highway. You will drive through the Kempsey bypass, the world's longest continuous road bridge. That was built during the period of the previous Labor government using a level of debt. You will go past the Ballina bypass. That was again built during the reign of the Labor government using a level of debt. And you will go past the Woolgoolga, which is being built at the moment. They are all good, productive pieces of infrastructure that are building and growing our economy and creating jobs. That is what the debt was devoted to in our economy. While Labor was government, those opposite were saying that that was an irresponsible position to take. They like to airbrush out of history the effect of the global financial crisis on the Australian economy and the job that Labor did in projecting jobs and building productive infrastructure.
The reason Labor is taking the position that it is taking in this debate is that those opposite have done not one thing to justify the increase in the debt and indeed the removal of the debt ceiling. Picture this: a married couple go into a bank to consult their bank manager. They say to their bank manager that they would like to increase their mortgage, not by a small amount but by 65 per cent. The bank manager says: 'Gee, that's a large increase. Can we see some of your figures? Can we see your income? Can we see records of your current level of debt? Can we see records of any personal debt that you may have—credit cards or any personal loans? And can we see some records of any assets that you own that might be collateral?' And the couple say: 'No, we're not going to supply you with any of that. We just want you to provide us with a 65 per cent increase in our mortgage.' That couple would be laughed out of the bank. And that is exactly what the government is asking the Australian people to do by attempting to increase the level of debt without the proper checks and balances.
On the latest figures that were produced by Labor when in government, gross debt was forecast to peak at $370 billion in 2016. That is why Labor has taken a position of supporting $400 billion worth of debt—$370 billion with a buffer. It is up to those opposite to justify the increase that they want to the Australian public, which to date they have not done. That is why Labor has taken this position.
We have heard some common sense uttered in this chamber in this debate. The Parliamentary Secretary to the Treasurer, the member for Moncrieff, certainly had some good comments to make about why we need to increase the debt ceiling. We have just heard from the member for Hinkler and the member for Mallee. Both made some very good, practical and reasonable comments on why we need to increase the debt ceiling.
We have also heard hypocrisy writ large. We heard that from the member for Kingston, who went on about jobs. Nobody in this chamber is not focused on creating more jobs. But in the last parliament all we ever heard about was the Labor Party protecting their own jobs. Their whole focus was on who would be Prime Minister, who was going to stab whom in the back—it became the focus of the whole 43rd Parliament.
We just heard the member for Kingsford Smith talking about the infrastructure projects that Labor allegedly got on with in the 43rd Parliament. I will admit there were some good infrastructure projects but—certainly in my electorate—there was far too much focus on buying back productive water. He also talked about the Pacific Highway. It is my understanding—and I think I am pretty right here—that under previous coalition governments the split between Commonwealth and state governments was 80:20, but under Labor it became fifty-fifty. So there was more emphasis on the state governments providing that fifty-fifty amount of money, whereas we only required a small input from the state government. We should not politicise the upgrade of the Pacific Highway. It is something that we as governments just need to get on with. Whether the split is 80:20 or fifty-fifty, we just need to improve that road so that people can get on with the business of driving from Queensland to New South Wales without the threat of driving on a goat track—and that is what it is.
We are getting on with the job of having a commission of audit, and we are getting on with the job of a strategic review into the National Broadband Network, because they are necessary. It has been 20 long years since we have had a commission of audit, and it is necessary. The commission is going to assess the current split of roles and responsibilities between state and federal governments, and that is necessary to avoid areas of duplication. It is also necessary to look into every way we can save money, because of the debt and deficit left to us as a legacy from Labor. Under its terms of reference:
The Commission is asked to review and report on the extent, condition and adequacy of Commonwealth sector infrastructure and, if found to be deficient, factors that may have contributed to the current situation and possible remedies.
That is necessary. And it is going to report back to the Prime Minister and the Treasurer, something that was not done under Labor—there was no consultation; they just went out, squeezed the life out of the money for the Pacific Highway, bought far too much productive water out of the Murray-Darling Basin and held no cost-benefit analysis into the NBN. Who in business goes into a deal without making sure their money is going to be well spent? No-one does that but Labor, because of lot of them have not been in business, a lot of them have never had to worry about where their next income was going to come from because they have had this history of being in trade unions and this history of coming up through the staff ranks. Not that there's anything wrong with that: unions have a place and there have been any number of political staffers who have become good, contributing members of parliament.
But I put it to you, Deputy Speaker, that sometimes it is good to also listen to those with a world of experience—either in having had a job, having been an employer, or having had to sniff the oily rag and not know where the next dollar was going to come from, or having been in business, or actually having had the responsibility of making sure families could have a future next week and the week after. Not too many of the Labor members who I looked across at when they were in government had that experience, and it is so necessary.
It is so necessary also for us to have this debt ceiling of $500 billion, because of the legacy of debt and deficit that we inherited from Labor. With that, I move:
That the question be now put.