Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. I refer to the Treasurer’s warm endorsement of state governments’ financial management generally and their business enterprises in particular, and his assertion that their borrowings were being incurred to ‘invest in capital projects, not to fund recurrent outlays’. I also refer to the fact that over the last three years the New South Wales Labor government has ripped out of Sydney Water as tax and dividends 91 per cent of its entire profit before tax. Given the urgent need to invest in water infrastructure, does the Treasurer seriously contend that the management of Australia’s largest water utility as a cash cow is a model of sound financial management?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his question. The member is continuing with this assertion that somehow the borrowings of state government business enterprises are having an impact on inflation and therefore let them off the hook when it comes to seven interest rate rises in the last three years. Well, they are not going to get off the hook when it comes to their responsibility for high inflation—the highest elevated inflation in 16 years; seven interest rate rises in three years. It is absolutely essential that state governments invest in critical economic infrastructure—critical economic infrastructure such as water; critical economic infrastructure such as transport and ports. The previous government was simply—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. It was a very specific question about whether Sydney Water was borrowing money to pay a dividend to the New South Wales government rather than spending the money on infrastructure and whether the Treasurer agreed with it—a simple question. I draw attention to relevance.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Drawing on precedence, as I have been invited to do on other occasions, I believe that the Treasurer has been relevant, whether he is specific or not.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

This government is determined to end the blame game when it comes to federal-state relations—absolutely determined to work to reform federal-state relations so we can put in place First World infrastructure that will put downward pressure on inflation and downward pressure on interest rates.