Senate debates

Thursday, 22 March 2007

Questions without Notice

Ageing

2:18 pm

Photo of Mitch FifieldMitch Fifield (Victoria, Liberal Party) Share this | | Hansard source

My question is to the Minister for Finance and Administration, Senator Minchin. Minister, one of the biggest economic challenges facing our nation is the ageing of the population. What plans does the government have to address this issue? Is the minister aware of any alternative policies?

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

I thank Senator Fifield for his question. I think he knows better than most that this country does face a very significant demographic challenge over the next decade, as our first intergenerational report, in 2002, demonstrated. Unless we put money away now to deal with that challenge, the Australian government will have much more difficulty looking after older Australians properly in 10 years time and onwards. The nation, on the basis of this first intergenerational report, will be in deficit. Either services will have to decline or taxes will have to rise. We will release the second intergenerational report as part of the upcoming budget. I predict that that will show that we continue to need to put money aside now for this demographic challenge.

This government has implemented a plan to deal with that problem. That plan is the Future Fund. In its most recent statement on Australia, the International Monetary Fund said that the establishment of the Future Fund means that Australia is well placed to face the challenge of an ageing population. By locking money away and having an independent board invest it wisely, we can build savings to sustain the budget when the demographic pressure really does hit.

That is why Labor’s policy to raid the Future Fund is so irresponsible. I probably should describe it as ‘policies’, because Labor is planning to raid the fund in two different ways. Up until now, their policy has been to strip all the earnings out of the fund—and that was bad enough—but now we learn that their policy is actually to strip capital out of the fund. How on earth can a savings fund grow to meet the nation’s future needs if it is not allowed to keep its earnings for reinvestment and, even worse, if its capital is being ripped out of it? We call on Mr Rudd to release his costings now to show how on earth you can raid the fund in the way Labor proposes and still grow the fund to meet the challenge.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Senator Carr interjecting

Photo of Paul CalvertPaul Calvert (President) Share this | | Hansard source

Senator Carr, you are warned as well!

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

The nation has a superannuation liability that will be $140 billion in 2020. The Future Fund currently has $50 billion in it, so how on earth can it grow from $50 billion to $140 billion if it is being raided to pay for Labor’s vote-buying plans?

Opposition Senators:

Opposition senators interjecting

Photo of Paul CalvertPaul Calvert (President) Share this | | Hansard source

Order on my left!

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

They are raiding it not just for broadband. Today both Mr Tanner and Mr Smith refused to rule out raiding the Future Fund for other vote-buying initiatives. Nothing will stand in the way of Labor making these big spending promises, not even their supposed principled opposition to the sale of Telstra.

Photo of Chris EvansChris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | | Hansard source

Senator Chris Evans interjecting

Photo of Paul CalvertPaul Calvert (President) Share this | | Hansard source

Order! Senator Evans!

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

I wonder where Senator Carr was when Mr Rudd said they were going to sell all the Telstra shares. Mr Rudd, the Labor Party leader, described retaining Telstra in public ownership as ‘core Labor policy’.

Opposition Senators:

Opposition senators interjecting

Photo of Paul CalvertPaul Calvert (President) Share this | | Hansard source

Order on my left! Senator Evans, I would remind you of parliamentary language when you are addressing senators across the chamber.

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

The new leader, Mr Rudd, described retaining Telstra in public ownership as core Labor policy. Even after T3, Labor promised they would not sell another single Telstra share. So Labor’s policy, up until Tuesday, was to force the Future Fund to retain in perpetuity all of its Telstra shares. That was the policy: to force the fund to retain every single share. Today, two days later, the policy is to force the fund to sell all the shares and hand the cash over to a future Labor government. As the Treasurer quite properly said yesterday, this is probably the most irresponsible economic policy that Labor has come up with in its 11 long years of opposition.