Tony Smith (Casey, Liberal Party) Share this | Hansard source

The Appropriation Bill (No. 1) 2006-2007 and cognate bills, the budget bills, indicate and illustrate so many things on so many levels. The previous speaker said that the budget indicated that the government had no plan for the future—a statement the member for Ballarat managed to make without any sense of irony. But it reminded me of what Labor’s plan for the future was when they were last in government. When we look at a budget in isolation, of course, we look at the initiatives in it. But look at where, in budget terms, Australia has come from since 1996 and you see the plan for the future, compared to what the future would have been if the government and the country had not changed.

In 1996, the budget was more than $10 billion in the red. Total Commonwealth government debt was $96 billion. Interest rates were 10½ per cent. We still had a wholesale sales tax on multiple goods at varying levels. Ten years on, there have been successive cuts in income tax. This budget takes that a step further. There has been massive reform of our financial system. Our economy is more competitive. Home mortgage interest rates, which were at 10½ per cent in 1996, are significantly lower today. These are the things that have changed in the last 10 years.

Ten years ago, when there was an argument about the budget, the whole discussion was around how big the deficit was. If the deficit ended up being slightly smaller than had been predicted, the budget was considered to be good. There is no mention anymore in Australia of budget deficits. We now only talk of budget surpluses. Once budget surpluses were rare things because they went against the flow. When a government achieved a budget surplus it paid off just some of that mountain of Commonwealth government debt. Nowadays, surpluses do not have to pay off any debt; it has been paid off. What those surpluses do is go into a future fund that will be used to meet the future expenses of Australia. How could the member for Ballarat seriously suggest that that is not a plan for the future, when Labor’s plan for the future was continued high interest rates, continued high unemployment and punitive taxes?

This budget delivers huge benefits to families and businesses, it maintains economic responsibility with a large surplus and it delivers tax cuts to give money back to families and businesses. The reason the budget is able to afford those things is that we have paid off that $96 billion of debt. Commonwealth government debt that was left behind by the now Leader of the Opposition is something that none of the speakers on the other side will mention in this debate. You can guarantee that will not get a run from any of the speakers opposite. The history of the debt is worth recounting because, as I just said, it is the key reason why there are more resources available and it is the key reason why we have a future fund that, for the first time in a long time, will enable those big expenses in the future to be accounted for.

In 1990, Commonwealth government debt stood at $23 billion. In 1996, it had risen to $96 billion. That was the economic vandalism of the Keating years—$63 billion, which equalled the culmination of six massive budget deficits. They are not just figures that have no meaning to Australians or to the economy. The cost of servicing the $96 billion was $8 billion a year—$8 billion that was spent on interest payments; $8 billion that could not be spent on the sorts of priorities that all of us, on both sides of the parliament, hold dear; $8 billion that was spent on interest and could not be spent on schools, hospitals or roads.

Now that the debt has been paid off, that money is available, but you will not hear an apology or an acknowledgment from the other side. We know that not only did they not see the debt as a problem but also that, in policy terms, they felt it should not be paid off, because they opposed every step to pay it off. They opposed every step in the 1996 budget and all the difficult decisions in the budgets that followed. The $8 billion that was once spent on interest is now able to be spent on the sorts of local priorities that matter.

The member for Ballarat complained about road funding. In 1996 there was no Roads to Recovery program. The Roads to Recovery program was introduced in about 2000, before I was a member of parliament. The Roads to Recovery program for the first time directly funded local councils to fix roads. In this budget, the government—the Prime Minister and the Treasurer—did not just increase the Roads to Recovery program; they doubled it. How can you seriously stand here and impersonate a professional member of parliament and say there was nothing in the budget for roads?

The Roads to Recovery program, which did not exist under Labor, was doubled on budget night. What does that mean for the electorate of Casey, which I represent? For the Maroondah City Council, who were to get $339,246, for which they had budgeted this year, it means they get twice that much and they get it before 30 June to spend on roads. For the Shire of Yarra Ranges, a rural part of the electorate of Casey, $1.4 million was doubled by 30 June to spend on roads straightaway. These are the things that are possible because of the economic reform.

In the short time available, I would like to mention the tax cuts.

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