Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Will the minister outline the growth in government spending over recent years? What efforts have been made to cut government spending in previous years, and what steps is the government taking to cut spending now? What is the government’s response to proposals for new spending?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Inflation is at the highest level that Australia has experienced in 16 years and it is being fuelled by government spending, which is running at a 4½ per cent increase in real terms in the current financial year. Treasury analysis published last week gave us some indication as to why this is the case. It showed that over the past four budgets the former Liberal government virtually had no savings initiatives at all. Only about five per cent of the total new initiatives in the budget over the past four years constituted savings. In other words, in the budgets for 2004, 2005, 2006 and 2007, roughly 95 per cent was new spending and five per cent was savings. The Treasury document shows, when you get to the 2007 budget, that the savings bar on the graph is so tiny you can barely see it. That is one of the key reasons why we have an inflation problem in this country, and that is one of the problems that this government is committed to tackling.

Unfortunately, not much has changed on the other side. They do not believe that this is a problem. They do not believe there is an inflation problem. The member for Wentworth has said it is all a fairytale. The Leader of the National Party thinks the solution to the problem is to increase spending. And they are still advocating further increases in government spending. Recently we got a very interesting proposal for a new piece of very substantial government spending from the member for Mayo, the last of the Bourbons, in an article in the Adelaide Advertiser headed ‘Build us a beacon’, in which he put forward his view about what the government should be spending its money on. He called on the government to build:

... the most innovative, unique, attractive art museum in the southern hemisphere—

in Adelaide, with:

... a 1000-seat concert hall—

designed by Frank Gehry or Norman Foster; a building that would:

... excite the world in the way presidential monuments like the Pompidou Centre or the Quai Branly museum do in France.

And, of course, he suggested that it should be built in the hills, to keep the riffraff out, as well! The member for Mayo did raise some concerns about the cost, and I quote:

Alexander Downer (Mayo, Liberal Party) Share this | Link to this | Hansard source

Mr Downer interjecting

Peter Garrett (Kingsford Smith, Australian Labor Party, Minister for the Environment, Heritage and the Arts) Share this | Link to this | Hansard source

Mr Garrett interjecting

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

Order! The House will come to order. The minister for finance has the call.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The member for Mayo did express some concern about the cost. He said:

OK, it would cost hundreds of millions of dollars ... maybe $300 million. That’s a lot. And I’m not a big government advocate by any means. ... The State and Federal governments could both contribute and the cost would be spread over several years.

It must have been a very, very long lunch. And this is not the only profligate lunch that has been occurring recently. I understand that a number of members of the opposition were spotted having lunch at Timmy’s today while the Leader of the Opposition was actually giving his speech. The member for Indi, the member for Mackellar, the member for Hume, the member for Dickson—

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order going to relevance. The question was clearly about government spending.

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

The member for Cowper is the winner in a lottery. The minister will come back to the question and not give us dining notes of ‘Around Canberra today’.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I am not sure if the member for Wentworth was present at the lunch, Mr Speaker—

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

Order! The minister will get back to the question.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

He was certainly there in spirit, as the Prime Minister indicated. I have been critical of the National Party’s attitude to government spending in this place on odd occasions, but—

Opposition Members:

Opposition members interjecting—

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

It’s about government spending!

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. Both the standing orders and House of Representatives Practice are explicit: the minister should not be referring to party activities or party policies and if, in this case, the minister wants to continue down this path, we will feel free to ask questions about the Labor Party and its—

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

Order! The member for North Sydney knows that he went—

Honourable Members:

Honourable members interjecting—

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

Order! When both sides of the chamber come to order, I will give the minister the call.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Mr Speaker, I have been critical of the Leader of the National Party for his attitude to government spending in recent times, but I would have to say this in his defence: at least his monument, the Fishing Hall of Fame, was only going to cost the taxpayer $3 million. The member for Mayo’s monument, the one that he is proposing, is $300 million. His answer and the Liberal Party’s answer to all of those Australians who are out there suffering higher prices in groceries, higher rents or higher mortgage payments and who are worried about inflation is, ‘Let them eat cake.’ That is the position that the Liberal Party and the member for Mayo put in this bizarre spending proposal.

That is not the position of the government. We accept there is a serious challenge here for the Australian government to get inflation back into the Reserve Bank target band. We accept that there is a serious challenge for this government to get government spending down to a reasonable level, not at a 4½ per cent real terms increase per annum. And most particularly, we accept that it is critical that government spending is directed to investments that will build the economic capacity of this nation for the long term, for our children—the infrastructure and skills that will generate high levels of productivity, economic growth and wellbeing for future Australians.