Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. What will be the economic consequences of blocking key budget measures?

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

I thank the member for Hindmarsh for his question. The government’s budget charts a course for long-term sustainable growth for the Australian economy. We are, as the Treasurer has outlined, working our way through very difficult international circumstances, and we are dealing with mistakes of the past, both domestically and internationally. The government’s sights are set very firmly and very clearly on Australia’s long-term economic interests. We are absolutely committed to laying the foundations for long-term sustainable growth for Australia’s future.

It is unsustainable to run government spending at a rate of five per cent real increase at a time when there is a mining boom and when gross domestic product is growing in the vicinity of four per cent. It is unsustainable to have four budgets in a row with no savings put forward in them. It is unsustainable to waste huge sums of taxpayers’ money on politically driven grants programs. It is unsustainable to fail to tackle the major infrastructure problems that the Australian economy is faced with and to fail to take initiatives with respect to our congested cities and our overcrowded hospitals. It is unsustainable to allow our universities and our research institutions to wither on the vine. It is unsustainable to allow Australia to languish at 17th in the world in terms of access to broadband and, most particularly, it is unsustainable to ignore the threat of climate change.

The budget is the first step by the government in dealing with these major long-term challenges facing Australia and moving to a sustainable, long-term growth path. It is a package, because we have to have, as well as the initiatives to deal with these long-term economic challenges, a strong surplus that puts downward pressure on inflation and interest rates. We have to do both in this budget. Unfortunately, the opposition have chosen to play short-term, populist politics with this package. They are endeavouring to pick the package apart and to blow holes in the government’s surplus. This will have the effect of undermining the government’s efforts to put downward pressure on interest rates and it will also have the longer term effect of undermining the ability of the government to address these long-term economic challenges facing the Australian nation.

There are a lot of strengths in the Australian economy, as the Treasurer has just indicated—particularly in comparison with many other economies around the world that are suffering from the same adverse international pressures that the Australian economy is suffering from. We are benefiting from a once-in-a-generation resources boom, but there are serious long-term challenges that we have to face in this nation, and that is what the Rudd government’s first budget is directed at tackling. Our export performance outside the mining sector has languished for the last seven or eight years. We still have a very high current account deficit. We have levels of skills and education that are below those of comparable countries. We have major cities creaking at the seams due to inadequate infrastructure. We need to further increase our workforce participation rates in order to meet the challenges of the ageing of the population and we need to lift our savings performance. These are all key, long-term things that we have to do to improve the performance of the Australian economy, and it is these objectives to which the settings of the budget for 2008 are directed.

The government is committed to tackling these long-term challenges. I would call on the opposition to abandon its short-term sniping and mindless populist politics and engage in the debate about the long-term future of the Australian economy and the underlying structural factors that will deliver prosperity and security for our children and their children—because they are the issues that we all in this parliament, on both sides of the chamber, ultimately have responsibility for. They are the things that our budget is directed at addressing. I would urge the opposition to pass the budget and engage in a serious and constructive debate about these fundamentally important issues for the future of Australia.