Senate debates

Friday, 22 June 2012


Financial Framework Legislation Amendment Bill (No. 2) 2012; Second Reading

1:50 pm

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Hansard source

Thank you, and I am being relevant to the bill, because this bill is in relation to financial framework legislation. I am talking about the broad context of the financial management of this government. What frustrates me greatly in relation to this government's financial management—the broad financial framework, the grand architecture of this government's fiscal policy—is that the previous government worked extremely hard to pay off $96 billion of debt that was inherited. I know, because I worked on a Treasurer's staff. I saw how hard that was. I know, because I served as a senator during some of the time of the Howard government. I know how difficult it was to pay off that $96 billion and how it took the previous government the best part of a decade to pay off that money. It was done without any help from the Australian Labor Party. Every savings measure that was put forward was rejected. You would think that if you were responsible for racking up that debt in the first place you might feel some responsibility for actually repaying that debt. That did not happen, and already we are approaching a net debt of $145 billion. This government has already exceeded, in a little over four years, the debt that was accumulated under the Hawke-Keating government. So that annoys me, because I know how hard it is to repay debt, and I tend use the rule of thumb that for each year of bad government it takes three years of good government to undo the damage.

Another reason the profligacy of this government annoys me is in relation to my own portfolio—disabilities. The parliament is united, I am pleased to say, on supporting the establishment of a National Disability Insurance Scheme. The Productivity Commission has estimated, on advice updated by the Australian Government Actuary, that there would need to be an additional $7.5 billion per year to eliminate waiting lists for supported accommodation, aids and equipment, and other things that people with disability need. In the Commonwealth budget $1 billion was allocated towards the National Disability Insurance Scheme, on which the Productivity Commission, over the forward estimates—the period that the $1 billion covers—recommended that $3.9 billion be spent. So there is a shortfall there.

The current government is forecast to spend, in the next financial year, above $7 billion on its annual debt interest costs. That means that if different decisions had been taken over the course of this government—if the government had not gone into deficit, if it had not gone into debt—there would be the funds to fully cover the resources required for a National Disability Insurance Scheme. I come back to a point I made earlier, and that is that for every dollar spent there is an opportunity cost. We see that most clearly with the $7 billion plus per annum being spent on the government's debt interest bill. Every dollar of that $7 billion plus is a dollar that is going towards absolutely nothing—not to a bridge, not to a road, not to a school, not to a supported accommodation place but to absolutely nothing. That is what that $7 billion plus a year buys you: absolutely nothing.

I know it is in vogue now to say that going into debt does not really matter, and of course there are occasions when Commonwealth budgets go into deficit. But as far as possible a government should live within its means. As far as possible a government should be a careful steward of each dollar of taxpayers' money, because there is a cost to not being a good steward. The government can find $10 billion for Senator Bob Brown's legacy scheme, a scheme that will pick losers. It is bad enough when governments try to pick winners, but this scheme consciously, deliberately, goes about picking losers. Government should make sure that it focuses on its core business. For me, the core business of government is to assist people who find themselves facing additional challenges for reasons beyond their control. That core business is compromised when governments are profligate, when governments waste the taxpayers' money.

I hope that the government can bring the same rigour, the same evidence based approach, that is shown in the Financial Framework Legislation Amendment Bill (No. 2) 2012 to its conduct and management of the Commonwealth's finances so that maybe they can achieve what Kevin Rudd wanted, and that is to be economic conservatives. I live in hope, but I will not be holding my breath.


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