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

Over the period of the forward estimates. As a result, it is necessary for the government to legislate an increase in the debt limit to $500 billion, because that will also take into account the fact that we have within-year variations in the amount of government bonds that have to be on issue to finance temporary needs. This is the answer, I think, to the point that was being made before by Senator Milne in her contribution, where she said: 'There's no rush. The peak is $370 billion based on PEFO. What's the problem?' Adding the $60 billion you require to meet peak needs to the $370 billion means that you are already facing $430 billion.

The fact of the matter is, as I indicated earlier, current trends suggest that the peak face value of Commonwealth government securities on issue will exceed $400 billion. So it provides a reasonable buffer, based on expert advice, if we raise the limit to $500 billion. It is the responsible course of action. It means that hopefully we do not have to come back within the term of this parliament to ask for a raise in the limit. There have been four increases in the limit under Labor in recent years, and each of them did lead to debate, but on a number of those occasions the government justified coming back and sought to close debate by saying: 'There is uncertainty in the financial markets. We just need to pass this and get on with things.' That is true; the more these things drag on, the greater uncertainty they create. We can remove that uncertainty for everybody by quickly voting on this bill.

We take stability for the economy seriously. On coming to government—in so many areas of government spending and taxation where we have had reviews initiated, and in so many areas of government where we have initiated consultation with the private sector before revisiting or revising government decisions—our modus operandi, where possible, has been to provide as much stability and certainty to decision makers in the private sector, the community sector and the general community. It is very important that we provide that stability and certainty.

By passing this bill, you provide a limit—it is not a target to be reached. This is not a debate about Australia making its way to $500 billion of debt. This government is committed to getting the debt under control and is putting in place the measures that will discipline government spending and create the circumstances in which we meet our commitments to have a surplus of one per cent of GDP within a decade—we are aiming to do that earlier, but certainly within a decade—while meeting other major commitments, offsetting all spending, reducing government spending as a proportion of GDP and reducing the burden of taxation over time. These are very important commitments.

Today is not a debate about whether the country should aim to achieve a target of $500 billion. This is a ceiling which we will work within. We will provide full transparency in the Pre-Election Economic and Fiscal Outlook. You will be able to see all of the decisions which have impacted on the budget balance that this government has taken since coming to government, and you will be able to see, through parameter revisions and variations, the impact of economic conditions on the budget and revised assumptions—it will all be laid out and transparent.