Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Hansard source

I take this opportunity to congratulate the member for Moore for his fine maiden speech. I move:

That so much of the standing orders be suspended as would prevent the following from occurring in relation to the House's consideration of the Senate message relating to the Commonwealth Inscribed Stock Amendment Bill 2013:

(1) the message being considered immediately;

(2) the House considering the Senate s request for an amendment;

(3) the House considering the Senate s further amendments; and

(4) on conclusion of the House s consideration, a message being sent to the Senate advising it of how the House has dealt with the request and further amendments.

Question agreed to.

Message from the Governor-General recommending appropriation for requested amendments announced.

Senate’s requested amendments

(1) Schedule 1, items 1 and 2, page 3 (lines 5 to 11), omit the items, substitute:

1 Section 5

Repeal the section.

2 Subsection 51JA(2)

Omit ", disregarding stock and securities of the kind mentioned in subsection 5(2),".

3 After subsection 51JA(2)

Insert:

  (2A) In working out the total face value of stock and securities for the purposes of subsection (2), disregard:

     (a) stock and securities issued in relation to money borrowed under the Loan (Temporary Revenue Deficits) Act 1953; and

     (b) stock and securities loaned by the Treasurer under a securities lending arrangement under section 5BA of the Loans Securities Act 1919, or held by or on behalf of the Treasurer for the purpose of such an arrangement; and

     (c) stock and securities invested under subsection 39(2) of the Financial Management and Accountability Act 1997; and

     (d) stock and securities on issue as at the start of 13 July 2008, other than Treasury Fixed Coupon Bonds.

Note: The time referred to in paragraph (d) is when item 4 of Schedule 1 to the Commonwealth Securities and Investment Legislation Amendment Act 2008 commenced.

4 At the end of section 51JA

Add:

  (5) For the purposes of this section:

     (a) the face value of a Treasury Indexed Bond is taken to be its face value at the time it was issued; and

     (b) the loan of stock or a security is taken to include an arrangement under which it is sold and repurchased.

(2) Title, page 1 (lines 1 and 2), omit "amend the Commonwealth Inscribed Stock Act 1911, and for related purposes", substitute "remove the limit on stock and securities on issue, and for other purposes".

(3) Page 3 (after line 11), at the end of the bill, add:

Schedule 2—Amendment of the Charter of Budget Honesty Act 1998

1 At the end of clause 2 of Schedule 1

Add:

Additional statements about Commonwealth stock and securities

  (7) In certain cases where the face value of Commonwealth stock and securities on issue has increased by $50 billion or more since a previous report or statement under the Charter of Budget Honesty, the Treasurer is to table a statement setting out reasons for the increase (see Part 9).

2 Subclause 3(1) of Schedule 1

Insert:

Commonwealth stock and securities means stock and securities on issue under the Commonwealth Inscribed Stock Act 1911 (the CIS Act) or the Loans Securities Act 1919 (disregarding stock and securities of the kind mentioned in subsection 51JA(2A) of the CIS Act).

debt statement, for a report under Part 5 or 7, means a statement that includes:

     (a) the following information about Commonwealth stock and securities on issue, atthe time of the report and for the financial year to which the report relates and the following 3 financial years:

     (i) the value of the stock and securities (including their market and face value, and their value as a proportion of gross domestic product);

  (ii) the total expected interest expenses relating to the stock and securities; and

     (b) a breakdown, by maturity and timing of interest payments, of Commonwealth stock and securities on issue at the time of the report.

3 At the end of subclause 12(1) of Schedule 1

Add:

  ; (f) a debt statement.

4 At the end of subclause 16(1) of Schedule 1

Add:

  ; and (c) contain a debt statement.

5 At the end of subclause 24(1) of Schedule 1

Add:

  ; (e) a debt statement.

6 At the end of paragraph 26(a) of Schedule 1

Add:

     (v) the information required by paragraph 24(1)(e); and

7 At the end of Schedule 1

Add:

Part 9—Additional statements about Commonwealth stock and securities

33 Additional statements about Commonwealth stock and securities

  (1) This clause applies when the actual face value of Commonwealth stock and securities on issue has increased by $50 billion or more since whichever of the following last occurred:

     (a) a budget economic and fiscal outlook report, a mid-year economic and fiscal outlook report or a pre-election economic and fiscal outlook report was publicly released;

     (b) a statement under this clause was tabled.

  (2) The Treasurer is to table in each House of the Parliament, within 3 sittings days of that House after the increase referred to in subclause (1), a statement setting out the reasons for the increase, including the extent to which any of the following contributed to the increase:

     (a) lower than expected revenue;

     (b) higher than expected spending;

     (c) capital purchases;

     (d) grants to State and Territory governments for infrastructure.

8 Application—statements under clause 33 of the Charter of Budget Honesty

Clause 33 of Schedule 1 to the Charter of Budget Honesty Act 1998 applies in relation to a report referred to in paragraph (1)(a) of that clause that is publicly released on or after the commencement of this item.

I move:

That the requested amendments be made.

The government has agreed to the proposed amendments by the Greens to repeal the statutory debt limit and amend the Charter of Budget Honesty Act to improve transparency regarding government debt. We have worked together to resolve this issue and provide certainty to the markets about the government's capacity to finance the budget and ancillary debt. We have done this with no thanks to the Labor Party. They created the debt. They have done nothing to find a credible solution to us approaching a binding debt limit of $300 billion. It is just that their legacy is debt that well exceeds $400 billion. Today we are removing the instrument for parliamentary brinkmanship that was introduced by Labor—in fact, by the member for McMahon back in 2008—when they created a legislative limit on debt of $75 billion. So they created the debt, they created the debt limit and now they are trying to prevent us from dealing with their problem. In fact, they are making it worse.

Labor had to increase the debt limit three times, so they introduced a $75 billion limit and said they would never get there, and they did. Then they introduced a $200 billion and they said they would never get there, and they did. Then they introduced a $250 billion limit and they said they would never get there, and they did. Then they introduced a $300 billion limit and brought down a budget that had peak debt of $370 billion, and then tried to prevent us from dealing with it. It was an artificial construct. It was never intended to be a target, but it did end up being a target under Labor. And congratulations to Labor; they hit the target every time.

We have a clear plan to fix the budget and to start paying down Labor's debt. It involves getting rid of the mining tax and associated expenditure of over $13 billion, and we will take that off the debt. We have a plan to get rid of the Clean Energy Finance Corporation, and that immediately prevents us from proceeding with further debt-raising to finance an operation that involves a total of $10 billion of borrowed money.

Even the Labor Party, which have become pious in opposition—not that they were particularly pious in government—have proven just how hypocritical they are. They are seeking to oppose their own savings, which they took to the last election, including $2.3 billion of savings associated with the higher education proposal to fund the Gonski education initiative. The tax cuts that they announced would not be necessary because they were terminating the carbon tax they now want to proceed with. So Labor are not only asking us not to continue with our initiatives, they are voting against their own initiatives, which are all about trying to live within the means.

Today we have also agreed with the Greens on a number of measures to enhance transparency around government debt reporting in the budget papers. In particular there will be a debt statement published in every budget, every Mid-Year Economic and Fiscal Outlook and every pre-election economic and fiscal outlook.

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