Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Hansard source

That was so important. To go into the global financial crisis with no net debt provided a great basis of stability as well as a well-functioning, well-regulated financial system. So we can have a debate about all the things that contributed to why we got through the global financial crisis, but the fact of the matter is that, for a small, open economy like ours, maximum flexibility requires that we keep debt under strict control. In fact, when it comes to our foreign accounts, having more equity in those accounts than debt is a good thing because debts are fixed contractual payments that do not vary with the economic cycle, whereas equity payments do. It is very important to understand the structure of those foreign accounts.

All of this is why we are committed to getting debt under control and bringing the budget into the black sooner rather than later. But as I have said before, on average, gross interest payments on the debt alone are costing Australians over $200 million every single week, and that is before a dollar of debt is even paid back. The important point here is this: when we get the debt and our interest payments under control, we can devote that money to doing other things. That was one of the achievements of the Howard and Costello years: we got the debt under control, debt interest payments went down and we could afford to spend on other things.

As I said, we have spending pressures over the medium term that we have to meet—major commitments like the National Disability Insurance Scheme. They have to be met. We will deliver a first-class, world's-best-practice National Disability Insurance Scheme, but we will have to do it while at the same time finding the savings, because we are not going to get this country further and further into debt.

The key way to avoid having to continually raise this debt limit is through prudent management of the nation's finances. Australians elected a coalition government to do that—to get the budget back into the black and create a situation where people in the private sector, in the community sector and more generally can plan with certainty and stability for the future. The coalition government is taking the tough decisions to make Australia strong. I commend this bill to the house.

Question agreed to.

Bill read a second time.