David Bushby (Tasmania, Liberal Party) Share this | Hansard source

We have Senator Sterle over there saying, ‘Are you going to stop the spending in the schools?’ That is not an economic reason for continuing the stimulus package; that is a political reason. The government have gone out and promised all these new buildings for schools, and they have to keep on doing it four years after the threat has passed. They keep on spending not because there is still an economic need to go out and spend money to stimulate the economy but because they have promised it and they cannot afford politically not to deliver it. That comes with consequences, because we have to keep on borrowing money to pay for that. Continuing to spend as the economy recovers also adds inflationary pressure, which ultimately leads to added pressure for interest rates.

The fact is that this government inherited the best economy in the world. We so often hear the government comparing our current situation and how well we are doing to the situation in the rest of the world. But you just have to take a step back and look at how we were placed when we went into the global financial crisis. We were the best in the world at that point. We had the lowest unemployment rate. We had more money in the bank. We were consistently delivering surpluses. If we had not been in that situation, the spend that the government did, as large and as poor quality as it was, would not have delivered the results that it did. What is more, they would not have had the flexibility to be able to do massive stimulus spending on the projects that they did. They just would not have had the available funds or the money in the bank. They would not have been able to have the notional $21 billion surplus that they were supposed to deliver in their first budget to be able to spend on it, because they just would not have had that opportunity. If they had not gone into it as well as they did, they would not be coming out as well as they are now. We as a nation are very lucky that this government inherited an economy in the shape that it did. It is the height of hypocrisy to say now that they are somehow doing well because they got us out of the mess more quickly than they thought they could.

If this government were really serious about getting us out of the debt situation and putting us back in surplus, it would make the tough decisions. This year we are going to come in over $50 billion in deficit. The government is predicting that in the coming financial year we will be $40.8 billion in deficit. If this government were really serious about getting us out of debt, it would make the tough decisions and they would be in this budget. There would be serious savings. The government would be making tough decisions to cut spending and have us back in surplus in this coming year, not the year after. Get serious: if you really want to do it, do it now, show us and make tough decisions. There is not one tough decision in this budget.

Another interesting fact in respect of the $40.8 billion that is due to be the deficit in the coming year and the $1 billion surplus the year after that is that, if you get into the budget and have a look at it a bit, you can see that there is an awful lot of spending that would normally have occurred in the following year—the year when we are going to have the $1 billion surplus, so they claim—but that has been brought forward by a year. Sure, it pushes up your $40.8 billion deficit in the coming year, but what it means is that the government can get their $1 billion surplus the year after. It is a very nice little trick, that one: move $10 billion or $15 billion forward a year. It fattens out the next year, but you are ignoring that, because you can now say, ‘We’ll be in surplus three years early.’ It is a nice little trick.

It is important to remember also that this out of debt line, as I mentioned, refers to annual budget. It is not the net debt position. We are not going to be out of debt as a nation for close to another 10 years, even on the heroic and positive assumptions that are built into this budget. Sure, in accordance with this budget, we will be in surplus three years early—if you believe everything we are told. But it is a lot longer than that before we actually get out of debt. There is still going to be close to $100 billion net debt that has to be paid off, and that is still accumulating now. As Senator Fifield said, we are borrowing $700 million a week: $100 million a day is being added to our debt as we stand here and speak. I hate to think how much money we have had to borrow just in the few minutes that I have been standing here speaking.

There is no doubt that under the Rudd Labor government Australia is rapidly heading towards new records—new highs and new lows. But the records that they are looking to set are not ones that Kevin Rudd and those sitting opposite should be proud of. On the contrary, this Labor government should be ashamed of the direction in which it has taken the nation. Sitting right at the front of the government’s historic achievements in this regard is the new record that they are setting as the biggest-spending government of all time. They claim they will return us to surplus, but the budget deficit this coming year, with a massive $40.8 billion, is the second-biggest ever—only beaten by the one they are delivering this year.