Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

I thank you for not upholding the member for Mayo's point of order, Madam Speaker. It was not just the member for Warringah who made a habit of talking about debt caps. We heard a lot from the then opposition about debt of course. It was at crisis levels, a budget emergency, we were like Greece. Our children and our grandchildren would have to pay it back, and their children. But, specifically about debt caps, we had the then shadow Treasurer, the now Treasurer, in this place at this dispatch box on 21 May last year say this:

Now they are saying they are living within their means but are also saying, 'Just in case, please give us an increase in the credit card limit to $300 billion.' It does not sound like a lot if you say it quickly but it is a hell of a lot of money that Australians have to repay. Enough is enough.

So $300 billion is a lot of money, but $500 billion—that is OK. He was in full bluff and bluster mode, as only the member for North Sydney can be, as he was just now. They went on of course to vote against the increase in the debt cap in the other place. So we will not tolerate for one second the member for North Sydney lecturing us about why we must vote for increases in debt caps when he did not vote for one—or instructed his senators not to vote for one—just a little over 12 months ago. He said this:

The quest for a debt ceiling increase is also the clearest evidence that the claim of returning the budget to surplus is a hoax.

If you are going to return the budget to surplus, as the government says they will in 2016-2017, he says the need to increase the debt cap demonstrates that it is a hoax. Now that he is the Treasurer he has changed his tune quite remarkably.

We saw the Prime Minister of Australia say on television this morning: 'We never opposed the former government's decision to increase the debt limit. We were critical but we never played fast and loose. We never did that. They are bunging on a Tea Party situation.' Wrong yesterday, wrong today on Channel 9, wrong in the House at question time—the Prime Minister should apologise for misleading the House.

In 2009, the now Prime Minister voted against the increase in the debt cap. Hansard does not lie. It records 78 ayes and 53 noes—the 53 who sat on this side of the chamber. In the Senate the Hansard records 36 ayes and 34 noes. The 34 votes came from the Liberal and National parties. They even voted against it at the third reading. You only do that when you feel really passionately that a piece of legislation should not pass. They voted against an increase in the debt limit at a third reading, so they should not lecture us about the Tea Party.

These are important matters to discuss. The government, in its infinite generosity, has given us an hour to discuss this 67 per cent increase in the debt cap! The Labor Party will not take the same irresponsible approach that the Liberal Party took in opposition. We will not oppose an increase in the debt limit. We will support an increase in the debt limit and we will pass the bill in this House and in the other house, with an amendment. We will move an amendment in the other place and in this place—I think our chances of getting it through the other house are slightly better than getting it through this House!—to authorise a debt cap increase to $400 billion. A $100 billion increase is not an insubstantial amount, but we will authorise it because we recognise, for the sake of responsibility, that an increase in the debt cap is not only warranted but is necessary.

We will move an increase in the debt cap to $400 billion. We will even facilitate it through this House and the other house very expeditiously. It could pass tonight. We would pass this debt cap increase tonight. We are happy to sit late. I am sorry to tell the backbenchers that we are happy to sit late tonight if that is what is required. We would pass it tonight, but this government have come nowhere near close to justifying a half-trillion-dollar debt cap. The government say, 'We may need to come back to the House in six or 12 months to ask for more if you only give us $400 billion.' Well, if they need to come back for more they should come back, and we will consider it based on the evidence put before the House. And we will be constructive, just as we are being constructive on this occasion.

Here is an important point: the Treasurer says, 'We are going to get to $370 billion, at least.' I agree with that; that is what the pre-election forecast said. We are prepared to go to $400 billion, which provides a $30 billion buffer. The $370 billion net debt peak comes in 2016-17. That is not now. My old friend the member for Hughes clearly did not read the Pre-election Economic and Fiscal Outlook, because he asked me a question about it before. If you look at PEFO—I strongly recommend it to you; it is a great read—you will find that it says:

Based on current estimates, CGS—

that is, Commonwealth government securities—

outstanding is expected to reach the limit within the 2013-14 financial year (around December 2013) and will remain around that level from December 2013 onwards.

It will remain around that level. Here is an important sentence in the PEFO. It says:

It is important to note that there is a debt issuance strategy for the budget year only.

The Australian Office of Financial Management does not, this year, issue Commonwealth government securities to cover debt in 2016-17. The Australian Office of Financial Management issues Commonwealth government securities year by year. So what is going on here? What is the Treasurer's tactic? Why is he moving this extraordinary increase that he did not tell the Australian people about before the election? Why is he doing this? I think we saw the reason during his contribution in this second reading debate. He was at pains to say, 'This is your debt; you'll have to wear this.' He was playing politics. He is trying to make this year's budget deficit bigger than it might otherwise be. He is trying to ram this through now, just after the election, so that he can, in a political point, paint this as Labor's debt.

Mr Briggs interjecting—

I have a news flash for the member for Mayo, who is now a minister. He has been sworn in; he might remember popping down to Government House and taking the oath. The news flash: you are now responsible. The Treasurer is now responsible for decisions which increase the debt and deficit—like the decision that he has taken to transfer $8.8 billion to the Reserve Bank. That decision was taken to blow out this year's deficit in a quite transparent political tactic. Maybe the Treasurer thinks we were born yesterday. Maybe he thinks the Australian people were born yesterday, but it is a pretty clear and cheap political tactic, which tries to blow out this year's deficit. But I correct myself: I said it was a cheap tactic. I apologise: it is a very expensive one. Why?—because he has to borrow that $8.8 billion, and that comes at a cost.

We asked the Treasurer today to confirm or deny that the impact of the borrowing of $8.8 billion is more than an extra $1 billion in interest repayments over the next four years. He would not answer. He would not confirm nor deny that to the House. He could not deny it, and he would not confirm it, because he does not want to admit that the cost of his cheap political tactic is to give the Australian people a bill of more than $1 billion in increased interest repayments. There is no better example than this of the hypocrisy of this government. The Treasurer came into this chamber and bluffed and blustered. He is like a B-grade actor in the C-grade sitcom which is this government. Maybe he is a C-grade actor in a C-grade sitcom, but the bluff and the bluster will not work.

The Treasurer stood on the opposite side of the chamber a few moments ago and tried to bully this House. He said, 'If you don't pass the debt increase you'll be responsible.' He said, 'We'll have to make cuts so that we do not go over the debt limit.' He will not have to make cuts so that we do not go over the debt limit; he can just accept the will of the parliament. The will of the parliament is to increase the debt cap to $400 billion if that is what happens in the Senate. I feel that, because of the indications that are coming from the Senate, the simple fact is that the government will not get parliamentary approval. If you get parliamentary approval good luck to you, but if you do not get parliamentary approval you will have to accept the will of the parliament. The will of the parliament is to give you an increase in the debt limit, but not half a trillion. You have not justified it. You have not made the case. You have not done what you said you would do in opposition. You have treated this parliament with arrogant contempt.

We will move an amendment in this House, Madam Speaker, in the consideration in detail stage. The amendment will replace the term '$500 billion' with '$400 billion'. We will press that amendment in the House. It will probably not pass. My colleagues in the Senate will move the same amendment. If it passes this government has a choice. The Treasurer can beat his chest and do his old huff-and-puff act, which he is very, very good at. He can say, 'We won't cop it.' He has a choice. He can have an increase in the debt limit tonight or he cannot. It is up to him.

If he wants to hold this parliament and the Australian people to ransom, because he has made the political calculation that he does not want to come back before the House and justify further increases in the debt limit, then that is a matter for him. But I can tell him, through you, Madam Speaker, that we will be holding him to account. If he thinks that we are going to blithely go along with his arrogant theatrics and say, 'Okay, Joe, you said you'd pay down the debt, but now you're not going to, and you're going to increase the debt to half a trillion. We'll go along with it,' well, he has made a mistake.

I hope the Treasurer does the responsible thing. I hope he remembers at some point that he is the duly commissioned Treasurer of the Commonwealth of Australia and has responsibilities. It is a very high office and it is an office that I have been honoured to hold—it is a huge honour—and it is an office that I will hold again someday. It is a great responsibility that the Treasurer has, and he should live up to that responsibility and do the right thing by the Australian people and accept the will of the parliament. He should accept the view of the parliament that this is a clear example of where the government has campaigned for one thing and is governing to do another. It has campaigned to reduce debt and is governing to increase the debt limit. If he does not do that, he will be held responsible for the results.

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