Senate debates

Thursday, 5 December 2013


Commonwealth Inscribed Stock Amendment Bill 2013; In Committee

1:42 pm

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

I will come to you, Senator Carr, in a moment. But the second aspect of that rule is: not to go into debt simply because there has been a reduction in revenue. That is actually quite a stringent rule—that operating revenue should cover operating costs of government. That is actually quite a stringent budget rule. So no-one should think that this is somehow a free lunch. The standards which have been set in terms of transparency are very high. But we will meet those standards because we are committed to reducing the deficit and debt we inherited. The Mid-Year Economic and Fiscal Outlook will outline the full extent of the problem, including the extent to which the former government postponed necessary capital and maintenance. And this goes to another point about the transparency that we are talking about today: within the Commonwealth sector, we have to get to a point where we make appropriate provision for capital and maintenance, because too often what has happened is that maintenance has been short-changed because it is a short-term budgetary hit and so we put it off until a problem escalates to the point where it has major consequences and that actually escalates the cost of dealing with it. So we need to have a balance sheet which properly recognises short- and long-term considerations, in terms of both our assets and our liabilities, and provides a framework for looking at this in the appropriate way.

The transparency involved in this process means that every time the debt increases by $50 billion or so the Treasurer will have cause to provide a report, within three days or so, outlining the reasons for that. So there is no escape from talking about growing debt—


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