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

I thank the member for La Trobe for that very important question. As I indicated to the House earlier we are facing uncertainty and turbulence in global financial markets. I made the point earlier that there is a long and painful adjustment to take place both in Europe and in the United States and therefore we are not going to see for some time strong growth in either of those areas. All of that makes it much more important that we put in place very strict fiscal policy, predictable fiscal policy, in this country.

We have many things going for us in this environment, as the Prime Minister was saying before. We have lower debt than major advanced economies. One of the reasons our debt is lower is we put in place a responsible fiscal stimulus and therefore we avoided the capital destruction and the very high levels of unemployment that are now being experienced in many other countries around the world. But when we moved to put that stimulus in place we also put in place our fiscal rules and were determined to come back to surplus as soon as was responsibly possible. We have been applying those rules from the time that we put that stimulus in place in February 2009.

The consequence of that is we did get a very big tick for our economic management from the IMF when they were here recently. They gave the economy a very big tick and said it had been very well run in very difficult circumstances and that we had handled the global recession in one of the most responsible ways of just about any other developed economy in the world. We realised when we put those strict fiscal rules in place that we would have to restrain spending growth and that we would have to put in place responsible savings and that is what we are doing. We are putting in place that fiscal policy. I will quote from the IMF report of only a week or two ago:

On fiscal policy, we commend the authorities for remaining committed to returning the Commonwealth budget to surplus by 2012/13 … This consolidation is faster than in many other advanced economies and is more ambitious than earlier envisaged …

This discipline, this commitment, stands in stark contrast to the position taken by those opposite. It was only one year ago when the Treasury and the department of finance found there was an $11 billion black hole in their election commitments.

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