Thursday, 14 November 2013
Commonwealth Inscribed Stock Amendment Bill 2013; In Committee
I have circulated an amendment which I flagged in my speech on the second reading. I move opposition amendment 1 on sheet 7441:
(1) Schedule 1, item 1, page 3 (line 6), omit "$500", substitute "$400".
I want to speak to that and also ask a couple of questions of the responsible minister.
The first point I would make is this: there was a lot of talk about certainty and stability in that contribution by Senator Sinodinos. There were a lot of things he spoke about with which I do not agree. I do not have the time, given that we will behave in a responsible manner and facilitate passage of the legislation with amendment as I outlined. But there was a lot of talk about certainty and stability, and I have to say I thought, as I was sitting here, there was not much certainty and stability with the Treasurer of the Commonwealth of Australia threatening to shut down government services—not a lot of certainty and stability about a Treasurer going out and threatening to shut down services Australians rely on, threatening greater cuts to blame on the Labor Party. What sort of approach to economic management is that?
We all knew Mr Hockey was prone to scaremongering and being a little bit loose with the facts, prone to making statements which he then regretted and tried to chuckle and charm his way out of and move on to the next question. We all know that is what he is like. He gets his facts slightly wrong but relies on his joviality or bluster to get out of it. This is the bloke who likened the cut to the baby bonus to the one-child policy in China, said how dreadful it was and then supported it. So we know Joe Hockey is prone to a bit of drama when he feels like it. But really—for a government to say, 'We're about certainty and stability,' and then to have the Treasurer threatening government shutdown and cuts to services that they will blame on the Labor Party and they will wear like a crown of thorns really exposes his true character and his true agenda. He simply does not want to take the responsible path; he wants to take the warpath. He wants a fight over it. The test of that really will be very shortly, because we have moved an amendment that increases the debt cap by $100 billion to $400 billion. If the government do not accept it and seek to oppose it, I think they really will be exposed. Their political strategy will be exposed because it is a responsible amendment.
Senator Sinodinos made a number of statements about the global financial crisis. I have to say I did find it sort of ironic sitting here listening to him make what I have to say was a very good contribution in some respects, like when he said we are still dealing with the effects of the global financial crisis and the economy is going through transition, all of which I agree with. But I have to say that, given the sort of behaviour we saw from Mr Hockey and Mr Abbott in opposition, where they said we were drowning in debt, these were just excuses and what a dreadful thing it was, it is now interesting to hear Senator Sinodinos essentially acknowledging that those are the circumstances the nation is in and that is why you have to manage fiscal policy sensibly—which is what the Labor government did.
I want to ask the minister a couple of questions. First, when will the $400 billion limit be reached? It is a very simple question. You are seeking support in this chamber for a $200 billion increase on the debt cap on the basis that the debt will reach $400 billion. When will it be reached?
It will be reached at some stage over the forward estimates. If, for example, there is a greater deterioration in the Mid-Year Economic and Fiscal Outlook than the one that is in prospect at the moment, that may be sooner rather than later. But we have never hidden from the fact that we are talking here about a debt limit that covers the peak over that period and provides that buffer of $40 billion to $60 billion that I talked about before.
I think we see the sort of allergy to transparency that appears to infect all of you on that side. It is a very simple question. I asked, 'When will $400 billion be reached?' One of the key bases of the coalition's argument is that it is not enough, because it is going to be reached, and we need to buffer. When will it be reached? The answer I get is: sometime over the next four years, but we have to pass $500 billion now before you even give us the numbers. It is pathetic, really it is. This is the Commonwealth budget, and you are playing politics like this? You will not even tell the Australian Senate when you are going to hit $400 billion, but you want a blank cheque up to $500 billion without doing the Senate the simple courtesy of answering a simple question?
At which year in the forward estimates—the current year, the subsequent year or the outer years—is it anticipated on current advice that the $400 billion will be reached?
When the Mid-Year Economic and Fiscal Outlook is out, as I referred to before, that will lay out very clearly the time path for spending, for taxation, for the budget balance, for Commonwealth government securities on issue and for the rest. I run a risk trying to mentally add up on my feet whatever decisions are being taken by the government since we came to office, and I will not do that. The authoritative source for this—in a transparent way, with nothing hidden—will be the Mid-Year Economic and Fiscal Outlook. As I answered Senator Milne's implicit query before: with a peak of $370 billion and a buffer of $40 to $60 billion, we are already talking about $410 to $430 billion on current indications, without taking into account, for example, any other deterioration in the economy, which would have a further adverse impact on budget finances.
I think it is interesting that the minister says, 'I can't tell you now, because I would have to add it up in my head.' Maybe you should actually add it up and give it to people before you put this legislation forward. How about that? That is a novel thought, isn't it? I will come back to the debt ceiling, but since the minister raised it: what is the cumulative impact over the forward estimates of the decisions the government has taken since being elected?
No; it will be out there, but the authoritative source for this will be the Mid-Year Economic and Fiscal Outlook. I say that because there will be decisions—parameter variations as well as discretionary decisions—in the Mid-Year Economic and Fiscal Outlook which will impact on this matter.
We could do this all day, but we are going to be responsible, so I will not. I almost feel sorry for Senator Sinodinos, because he has been given a pretty impossible brief—go and sell a debt cap of half a trillion dollars without actually providing any information about it. Those answers demonstrate that. I am not actually entirely critical of Senator Sinodinos for wanting there to be the Mid-Year Economic and Fiscal Outlook in order to provide information about the position of the budget. As finance minister, I did that too; I said we would update the numbers.
I am exceedingly critical of the government seeking a debt cap increase without being prepared to share that information with the parliament and the Australian people. As I said earlier, I think it exposes that this is all about politics and about Mr Hockey wanting to make a political point. It is not about good governance and it is not about transparency. I note the Assistant Treasurer has indicated to me that the $400 billion will be reached at some point in the forward estimates. Is he able to at least indicate whether or not it is anticipated that it will be reached in the current financial year?
Don't you love it! The deal we are offering is an increase to $400 billion. They are not even prepared to say whether or not that is sufficient for the current financial year. They will not even tell Australians that. It is really quite extraordinary. There is nothing the minister has said today which indicates that the opposition's amendment is not a responsible path. If it were the case that the minister said, 'We will reach $400 billion in the next couple of weeks and we are prepared to provide that information to the Australian people,' that would not be an unreasonable proposition to consider, but they are not saying that. They are saying, 'We are not going tell you what we really need,' and, 'We are not going to tell you why we will not accept your deal—your proposition of $400 billion—for any reason other than to play politics.'
I think the minister's performance today really demonstrates why this amendment is a very responsible one, why it should be supported and why Mr Hockey and his colleagues should support it in the lower house when it is returned today. I want to make it very clear again to Mr Hockey that the government can have an increase to $400 billion—an increase of $100 billion—today. That would pass the Senate chamber. They can vote on this today, and, if they refuse to, it is on their head.
The CHAIRMAN: The question is that the amendment moved by Senator Wong to the Commonwealth Inscribed Stock Amendment Bill 2013 be agreed to.
Bill, as amended, agreed to.
Bill reported with an amendment; report adopted.