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

When I mentioned pragmatism earlier I had in mind something I said during my maiden speech, which is that pragmatism in pursuit of principle is no vice. The principle here was to get a resolution of the issue of the debt limit. The opposition were not willing to agree to the $500 billion debt limit. They wanted a process where they hoped we would be forced to keep coming back to the parliament on debt. We wanted to do it once, do it comprehensively and get it over and done with and remove uncertainty from the financial markets.

The Greens, after sitting through Senate estimates and questioning the Secretary to the Treasury, have raised one of the options that had been mooted by the Treasury with the government—to remove the debt ceiling completely. Seeing that that had an economic and rational justification, the Greens embraced that proposal and raised it with us. So it became an alternative way to achieve resolution of the matter.

None of this takes away from the debate that we will have in a more informed manner than ever before about the composition of the budget and the role that debt plays. I remind people of Senator Milne's media release of last week where she said, amongst other things:

Because of the Greens agreement, the public will now be able to see whether the government is incurring good debt to invest in our future, or bad debt to cover up a shortfall in revenue.

That is actually quite a stringent fiscal policy because it suggests that operating revenue must cover operating costs of government and that infrastructure is essentially focused on investing for the future. Of course, there has to be good governance around infrastructure. You do not just borrow for the sake of investing in things; it has to be economically appropriate. In this regard the Greens have made the point in the past—and I agree with them on this—that in evaluating infrastructure projects you have to make sure you are making appropriate use of existing infrastructure before you talk about new infrastructure. They argue in some areas that putting in new infrastructure may lead to environmental costs that may be avoided if we are using the existing infrastructure more efficiently. On that point we have a degree of agreement. Why shouldn't we agree when a proposition is made that makes economic sense? Why shouldn't we agree? It is not a case of looking at a party and saying that everything that that party says is wrong, just as the Greens have recognised in some of the stuff we have put up to them that we are saying the right thing and they agree with that. That is a normal, sensible process. It was open to the opposition to do that as well.

Yes, there are debates within the coalition. Debate is a good thing. There should be debate. We should allow debate within the coalition or within any political party around the costs and benefits of doing various things. The fact of the matter is at the moment Australia is going through some significant structural changes which will require potentially some hard decisions. As I mentioned before, we have to double our productivity growth over the next few years because our income per head is lagging.

Some of the areas that Senator Cameron talked about addressing actually imply increased government spending or increased debt. So we have this situation where on the one hand he rails against us having a propensity to increase debt yet he is calling on us to increase the debt. This is the very paradox that led to the blow-out in debt under the last government. When they had the opportunity to stay within certain limits they kept coming back to the parliament because they were blowing those limits. It is time to bring the debate to an end and accept that what the Greens are suggesting and which we have embraced will give greater transparency.

Before I sit down, in passing I note that there were some comments made about direct action. Grant King, the Managing Director of Origin Energy, praised direct action today and thought that emission reductions were capable as a result of direct action. Is he an economist? No, he is a senior CEO of a major Australian energy company, someone who is at the front line of these debates. We talk about evidence based policy making—that is further evidence in that regard.