Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Hansard source

The member for Moreton knows it well; we share a boundary in Queensland.

Thank you to members of the government and the assistant minister for the opportunity to speak a little bit this afternoon about the 2018 budget, handed down about a month ago in this building. I think one of the defining features of the budget was that, for the first time in four prime ministers and four treasurers, we had the global economy making a big positive contribution to the budget, rather than a big negative contribution to the budget—something that we had, unfortunately, become accustomed to for much of the last decade or so. It really was welcome news that, with the global economy in such good condition, the best condition for a decade, we are seeing some of the revenue return to the budget. Obviously, it's a good thing that we have those conditions improving around the world, and that is helping the Australian economy and the Australian budget as well.

In the economic sense, we're seeing those global conditions feeding some good national accounts outcomes when it comes to investment and exports, in particular, which made a big positive contribution to the most national accounts. You can see the transmission from a stronger global economy, where we've got something like 120 different countries growing simultaneously for the first time in a long time, making a contribution to our export numbers and some of our other, broader numbers and measures of GDP as well.

But, despite those relatively welcome headline figures—in particular the GDP in that last quarter—there are some troubling undercurrents. Here, we're thinking about wages at historic lows; we're thinking about living standards being quite weak in historical terms; and we're thinking, of course, about low household consumption—soft household consumption—in those most recent numbers, as well as a lack of saving, and high household debt. So at the household level, below that headline rate of GDP, we've really got some quite soft conditions. We've got a lot of families experiencing a triple whammy of spending less, saving less, but still racking up more debt, and that's obviously a very troubling situation.

In the budget we also had something like $40 billion of additional revenue—taxes and charges—show up at the front door of the Treasury. There's $40 billion in this budget, yet we still have record net debt in this budget, twice what this government inherited. It went from $175 billion in September 2013 to $350 billion now. We've got record gross debt. Gross debt has only been over half a trillion dollars under one government in the history of the country—under this government. In these budget papers it's expected to be over half a trillion dollars every year for the next 10 years, and higher at the end of that decade than it is today. So despite the global economy helping the budget, $40 billion in extra revenue showing up at the door, we still have a budget in substantially worse condition than it was in September 2013. Probably most remarkably, despite this substantial new revenue showing up at the door, we've got a 2019-20 surplus which relies exclusively, entirely, more than entirely, on the bring-forward of a tobacco tax. We have a skinny surplus which relies on a timing change in tobacco tax, without which there would be no surplus in 2019-20.

Those are just the facts of the matter. No doubt we'll get into a bit of back-and-forth here, but I'm just establishing that the facts of the budget are good global conditions, soft conditions at the household level in the economy. We still have record net and gross debt. Debt is being accumulated per month at a faster clip now, on average, under this government than under the previous government. So despite having everything that you would ask from the global economy helping the economy, helping the budget, we still have very poor fiscal outcomes in the budget. With net debt doubled, with gross debt more than half a trillion dollars and with debt accumulating faster now than it did under the previous Labor government, what we really need to hear from the government representatives here today is, why we don't hear anything anymore about a budget emergency?

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