Matt Williams (Hindmarsh, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline the importance of fixing the budget and repairing the debt? How will the government's economic action strategy reduce debt over the next decade?

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for his question. As a new member, he knows how important it is to address the legacy of debt and deficit that has been left behind by the previous Labor government. If we do not take action now the debt that will be apportioned to every man, woman and child in Australia within 10 years will be $25,000—in total, $667 billion. The interest bill on that debt will be nearly $3 billion a month, and 70 per cent of the money that we pay in interest goes to people living overseas, because they have lent us the money to pay for Labor's programs, particularly over the last six years.

At the moment of course we are paying $1 billion in interest, and 70 per cent of that, over $700 million each month, goes overseas to pay people the interest on the debt. When confronted with that, Labor says, 'Don't worry, if we were re-elected we would have got the budget back to surplus.' The fact is that that is plainly untrue. That is not just our observation in the budget papers; the secretary of the Treasury identified that that was plainly untrue. When we tried to peel back exactly how they managed to make this claim, we saw that Labor used an assumption that they would reduce government expenditure to two per cent growth in real terms. That is a magical number, because they left 3.7 per cent growth. They said, 'Don't worry, we would have got to two per cent.' After we have done what we have done in this budget, after all the argument about co-payments and the pensions, after all the arguments about cuts in health and education, we have only got that expenditure down to 2.7 per cent. We have brought it down from Labor's 3.7 to 2.7 per cent growth, but Labor said they would get it to two per cent growth. How did they do with it? What a magic pudding it is!

Ms Rishworth interjecting—

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

The member for Kingston will desist.

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Labor were miraculously going to go further and harder than the coalition in cuts to the budget in order to bring it back to surplus.

So let us get it right: Labor is not just opposing $40 billion of savings that we have in our budget—which gets it from 3.7 per cent to 2.7 per cent—but Labor is opposing $20 billion before the budget, including $5 billion that they took to the last election. So, they are not only opposing everything we are doing and everything that they promised at the last election but they would need to find tens of billions of dollars to meet their target. It just shows you that they are complete hypocrites.