Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

I am very pleased to speak on this matter of public importance raised by the member for Fraser. What we have seen since the last federal election is one of the great con jobs in Australian political history. The coalition's so-called budget emergency is a smoke-and-mirror show to provide political cover for an extreme, ideologically driven attack on the Australian way of life. The 'budget emergency' is the big lie that underpins the coalition's economic strategy. It is the big distortion, the big confection, the big fib, the big falsehood and the big untruth at the core of the coalition's extreme and out-of-touch agenda for Australia.

By any objective measure, the previous Labor government left Australia with a strong and stable fiscal outlook. Our budget position is the envy of the advanced world. Labor left Australia with a triple-A credit rating and a stable outlook from all three ratings agencies. Australia is one of only 10 economies in the world with three triple-A ratings, putting Australia's credit rating in the company of nations like Germany, Canada, Sweden, Singapore and Switzerland. In 2013-14, Australia's net government debt is just $191.5 billion, or just 12.1 per cent of Australian GDP—a level of net debt that is not even one-sixth of the advanced economy average of 74.7 per cent of GDP recorded by the International Monetary Fund. The data just does not support the drama from those on the other side of the House.

What is the real root of the fiscal hysteria that we see from those opposite? It is nothing more than base political opportunism. During the global financial crisis, when millions of jobs were being lost in economies around the world, the coalition put their extreme ideology ahead of the jobs of hundreds of thousands of Australians. They opposed the job-saving fiscal stimulus introduced by the Labor government in 2008-09—an economic policy described by Nobel prize laureate Joseph Stiglitz as one of the 'best designed' stimulus packages of any advanced economy.

But how does one justify this extreme ideological position to the Australian public? Parroting the words of their conservative allies in the United States and the United Kingdom, the coalition imported a political attack from countries with vastly different fiscal situations than our own. Unfortunately, the facts in Australia never match their imported political rhetoric. While the deficit in Australia grew to $54.5 billion, or 4.2 per cent of GDP, in 2009-10 in the wake of Labor's job-saving fiscal stimulus, it never even reached half the average deficit of advanced economies during this time. Similarly, as the global financial crisis passed, Labor dramatically reined in the deficit, reducing it to just $18.8 billion in our last full year in office, or just 1.2 per cent of GDP—less than one-fourth of the international advanced economy average of 4.9 per cent. Labor continued this budget discipline by deciding on over $180 billion in responsible savings to fund investments in hospitals, schools and the NDIS, which, at the time, those opposite claimed to support. This was fiscal discipline, I might add, that was consistently opposed by the Leader of the Opposition, and it also included means testing the private health insurance rebate—a saving that is still not supported by those opposite. A set of long-term structural savings was delivered by Labor that left the budget cumulatively better off by over $300 billion by 2020-21.

Of course, none of these facts suited the coalition's narrative, so after those opposite entered government they needed to start changing the fiscal facts to meet their budget confections. The Treasurer set to work moving the goalposts. In the six months after the federal election, the Treasurer made a series of decisions designed to double the budget deficit. A combination of their own spending decisions and changed economic assumptions, or what a layman might call 'cooking the books', added $68 billion to the budget deficit in this period of time. And now they are trying to frame up the Australian Labor Party as being responsible. If this were just a matter of political game playing, it would be one thing, but the real reason for this fiscal hysteria—

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