Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for Franklin for her very important question. Since last year’s budget, government revenues have been written down by $210 billion. That is the biggest write-down in government revenues in living memory. It equates to something like the entire Commonwealth health spend over the forward estimates—just a huge, huge contraction in government revenues. And, of course, that contraction in government revenues is responsible for something like two-thirds of the write-down in the budget position. That is the enormity of what has occurred through the global recession. In 2010-11 alone, revenues have been written down by $55 billion. That is why we have said that there are no easy answers in this situation and it is why we take our responsibility very seriously to engage in borrowing for a temporary deficit, because, if we did not do that, taxes would have to rise or services would have to be massively cut.

We took this issue very seriously and we put in place in the budget serious long-term structural changes to expenditure, rebalancing sustainable support for private health insurance and ensuring that families on increasingly higher incomes do not receive family payment benefits—a whole list of things which we went through last night, a list where everybody has to do a bit to make up for this huge cut in revenue which has come to national income. So we do take our responsibilities very seriously.

As the finance minister was saying before, what is the alternative to not running a temporary deficit? Massive cuts to services or massive increases in taxation. The Minister for Finance and Deregulation was talking about events that occurred in the 1930s. Herbert Hoover responded by doing precisely that—absolutely nothing. And, of course, the sit and wait and see attitude of Herbert Hoover is the attitude of those opposite. In fact, if you want to equate the Leader of the Opposition to somebody in those days, he is the Otto Niemeyer of Australian politics because that was the recommendation—that governments should not stimulate the economy, that governments should raise taxes and that governments should cut back on services.

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