Monday, 5 February 2018
Matters of Public Importance
Debt is not a dirty word and nor is deficit. Deficit is not a dirty word. It's fascinating that this MPI has been brought by Senator Bernardi to the chamber for us to sit here and debate whether or not we have too high a debt and too high a deficit. Quite simply, it actually is—and I heard his contribution earlier today—a debate about small government. He's all for small government, as are Senator Paterson and the Liberal Party.
When we think about deficits, I think about the current account deficit. The current account deficit is the one to focus on. Interestingly enough, that's both the private sector and the government sector. We look at their total spending and their total debt across the nation. It includes exports. It includes imports. It includes all economic activity. This country has run a deficit since Federation, and I don't hear them ever mention that. It's okay for private individuals or businesses—and I think everyone in this chamber has had some debt in their life, if they don't already have it, as has just about everyone who may be listening to this debate. Debt is not a dirty word; it can be a very useful thing. Governments and businesses are no different. We've run a current account deficit—big debts—since Federation because we needed that foreign investment to finance the establishment of our industries and ultimately create the employment and the communities that we've got right around this country.
Let's talk about small government because that's really what this is code for. It's interesting to hear Senator Leyonhjelm say—it doesn't surprise me, by the way—that anybody who believes in debt being spent on a social safety net is immoral. I would say it's an investment. I would say investing in a social safety net, investing in education or investing in public health care or in public housing is an investment in people and it's an investment in our community. And it pays dividends. It's good for all of us, ultimately even those in the Liberal Party in the language they understand. It's good for the economy at the end of the day. Senator Leyonhjelm also said:
If only the next generation could contribute to this debate.
I tell Senator Leyonhjelm: if the next generation or the next two, three, four or five generations could be here to contribute to this debate, what they might tell us to do is get on and do something about climate change. If we want to talk about intergenerational equity, they might tell us to act on climate change. They might also say: 'Why don't you invest in long-term infrastructure projects, productivity-enhancing projects, investments not necessarily for monetary gain but for the public good? Invest in long-term infrastructure projects if you really care about my future.' That requires going into long-term debt. I don't think there's any decent economist out there that doesn't believe that investment in capital in long-term spending is also, like an investment in people, good for our economy, good for our community and good for our country.
What's important is how you service your debt and debt serviceability, and Australia, on all metrics that measure this, isn't considered to be a risk by the investment community. If you don't want to take that as gospel from a Greens senator, go speak to the ratings agencies. There's a reason that Australian government debt and a lot of our private debt have AAA ratings, and that is that we're not considered to be a debt risk, because we can service our debt. I'd also say here, now that I have the opportunity, that I was proud to be part of a party that led the discussion on debt in the last two years, that led this government to at least state in their national accounts around budget time what kind of debt they are allocating to long-term capital versus the short-term recurrent spending. We can at least get an idea of what they're spending money on for future generation.
Unfortunately, at the moment, most of it's on the defence industry. Most of our long-term capital spending has been hidden with defence expenditure, which I don't believe is necessarily good investment for our future either when there are so many other things we could be investing in, especially continuing our record of investing in renewable energy and medical technology. I could stand here for hours and talk about the things we should be investing in rather than becoming a global arms dealer.
Nevertheless, debt's not a bad word, if it's spent the right way, and nor is deficit. We need some maturity in this debate.