Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

Over the course of the last hour or so we have seen a chorus of congratulations from those opposite for the award given to the Treasurer by Euromoney magazine overnight—a chorus of congratulations that not even they believe; a chorus of congratulations that former Treasurer and former Prime Minister, Paul Keating, certainly does not believe. Those over there know in their heart of hearts that this award is a joke. The reason that they are protesting so loudly is that they know that—and that is confirmed in their actions.

The Leader of the House is known for his overstatement in this House, but I did not think it would be matched by the previous speaker, who said that this award was entirely due to the Treasurer's actions and the Australian Labor Party. The Australian economy is performing better than economies in Europe and North America because of the strength of our economy when we entered the global financial crisis. We entered that global financial crisis in the best possible shape. We entered it with our fiscal house more than in order. We entered it with our fiscal house in the best shape it had been in a generation.

The member who just spoke compared the Treasurer to Cadel Evans. I would like to compare him to Cadel Evans too. There was the Tour de France—and, I have to say, I am not a cycling freak, like some on this side of the House; my mode of travel is the car, I regret to say—and Cadel Evans rode for three weeks. He did the hard yards. Of course, as we know, at the end of the second-last day, because he was in front, by convention he had won the race. All he had to do was roll down the Champs Elysees the next day. He just had to stay upright. Are you getting the picture? Wayne Swan is the kind of person who would hop on the bike for the last day and claim credit for winning the race. That is the story of the Australian economy over the last 12 years.

If it were just that Euromoney magazine had looked at the Australian economy, saw a strong economy and made the mistake of assuming that the current Treasurer had something to do with it, that would be bad enough, but it is actually much worse than that, because the Treasurer of this country did everything with his colleagues opposite to prevent Australia getting into the strongest possible fiscal shape. Let's make no mistake about it.

Back in 1996, the Howard government inherited $96 billion of debt, a $10 billion budget black hole and an interest servicing cost on that debt of $8 billion every year. It set about paying off that debt by returning the budget to surplus. It took hard and difficult decisions. Every single measure in every budget was opposed by those opposite and opposed vigorously by the member for Lilley. The member for Lilley, if he had had his way with those opposite in this parliament, would have continued on the road of debt and deficit. They would have had the new government continue with annual budget deficits and they would have had that $96 billion net government debt continue to mushroom. That was their policy when they had been in government and it was their policy in opposition.

They opposed the Treasurer, Peter Costello, and the Prime Minister, John Howard, and all of the ministers every single step of the way. They opposed fiscal consolidation every step of the way. They opposed the sale of Telstra, the provisions of which were used to pay down a huge portion of that net government debt. So, by the time the member for Lilley became Treasurer, because everything that he had stood for and everything that he believed in had been successfully opposed by the government in spite of him, he inherited the best fiscal position possible—not only a budget in healthy surplus, where he was looking at $20 billion surpluses rolling down the line at him as far as the eye could see, and not only no net government debt but, as previous speakers have pointed out, $45 billion in the bank. To give the Treasurer an award for the state of the Australian economy, which he had nothing to do with—in fact, if he had had his way, we would not be in this position—is like giving the prodigal son an award for fiscal restraint because he has only burned half the family's finances. That is the situation we find ourselves in today.

Some of those opposite mentioned Paul Keating and the fact that he won the same award. I will give Paul Keating this: he had done something in 1984 and 1985—he floated the dollar. He actually did something, whereas this Treasurer, as the shadow Treasurer pointed out, has never had a budget surplus. Even on the day this award is announced, he is wobbling on his promise of a budget surplus. He always has a promise of a budget surplus; it is just that he is always moving it further out into the future. As the shadow Treasurer pointed out in question time, this rock-solid promise has moved from an objective to an expectation to a determination to a plan to a guiding principle, and then this morning the Treasurer said he would give it his best shot. That is very worrying news because the Australian public know and those opposite in their heart of hearts know that the Treasurer's best shot is not good enough. This small projected surplus that he is now moving away from really sums up the Treasurer's complete economic and fiscal failure.

Today we had the IMF report released that the shadow Treasurer went through in some detail. Confronted with forecasts of a more difficult situation, the Treasurer's response is to compound that difficulty with the introduction of a carbon tax and a mining tax. If you just take the mining tax, which he plucked from the Henry review, announced in the days before last year's budget, he handcuffed pieces of expenditure to it. You look at the fiscal responsibility of that when we have record commodity prices, which everyone knows will not last forever—in fact, the real warning today is about such a small decline in the terms of trade; indeed, as the shadow Treasurer pointed out at the Press Club earlier this year, it is a decline of just four per cent—the small reduction in the terms of trade would plunge next year's budget into deficit. But he uses those record high terms of trade to fund, through his mining tax, ongoing expenditure year after year. So, when the revenue falls off, that expenditure will open up a hole in his budget. The Treasurer knows this. He knows that it is fiscally irresponsible. He knows that a mining tax, in the way he has put it forward, in any way, shape or form will harm not only the budget but our great economic strength. He knows that the carbon tax is going to make life economically difficult for Australia, acting ahead of the rest of the world. This Treasurer was not worthy of that award. Those opposite know it in their heart of hearts. The Australian public knows it because it lives with the consequences of his economic mismanagement. (Time expired)

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