Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Chapman for that astute question. It is a fact that over the last 10 years the financial position of the Australian government has improved enormously. When we came into government, the budget deficit was $10 billion annually and we inherited a debt of $96 billion. Today we are on track to record a surplus of $11½ billion, and government debt will be eliminated entirely in the next few months. It really is important that the Australian government runs surpluses when the Australian economy is strong. That helps us keep pressure off interest rates, and it makes sure that as a government we are contributing to national savings.

Unfortunately, while the Australian government is adding to national savings by more than one per cent of GDP this financial year, on the other hand, state and local governments are actually detracting from national savings by 0.3 per cent of GDP because, unbelievably, those state governments are heading into deficit and running up debt. Last year, of course, we saw the biggest state government, New South Wales, under its Labor administration, trying to do something to address its parlous economic position. It is incredible that, after 10 years of strong economic growth, an unprecedented property boom in Sydney and massive net benefit from the GST, Labor in New South Wales is facing these horrendous deficits. Unfortunately, in the case of South Australia, the Rann Labor government seems intent on going down the New South Wales path.