Dick Adams (Lyons, 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 importance of fiscal policy in responding to the challenging global economic circumstances? Are there any threats to the government’s fiscal policy settings?

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

The government is committed to long-term sustainable growth in the Australian economy. The primary mechanism for delivering that growth is responsible economic management. That means, in the current economic circumstances, a very substantial budget surplus; reining in government spending, which was running at over five per cent real growth when we took office, and getting it down to one per cent; reducing tax as a proportion of GDP over the forward estimates; and setting aside very substantial sums from the surplus to invest in the three major infrastructure funds, which will invest in big, long-term nation-building infrastructure such as the national broadband network. The budget strategy is absolutely central to responsible economic management.

Unfortunately, the opposition has been acting in a grossly irresponsible way in its approach to dealing with the budget legislation in the Senate—blocking measures in the Senate at every opportunity and threatening to blow a huge hole worth billions of dollars in the budget surplus. When the Leader of the Opposition was shadow Treasurer he tried to distance himself from the irresponsible populist approach taken by the former Leader of the Opposition, the member for Bradfield. He tried to portray himself as the responsible, calm person and the responsible economic manager. Unfortunately, in his first week in office, if anything, I would have to say that the new Leader of the Opposition has been even worse than the member for Bradfield was on the responsible economic management front. He has continued the blocking tactics in the Senate and he has recommitted to the member for Bradfield’s huge unfunded spending promises. And since the current Leader of the Opposition took over, we see a pattern of deliberate undermining of confidence in the Australian economy by doing things such as raising questions in this place, with not a skerrick of evidence, about the health of the finances of Medibank Private and other private health insurance organisations; by doing things like suggesting that the government should invest in toxic subprime mortgages such as the United States has been forced to do—even though the Australian economy does not have anything like the same problem; and by doing things like contradicting the Reserve Bank governor’s assessment of the differences between the circumstances in Australia and in the United States.

It is notable that the stand-alone investment banking model appears to be dying, and perhaps it is about time the ‘merchant of Venice’, the investment banker representing the opposition, actually reviewed his model for approaching economic management, because he has been grossly irresponsible over the first week—even more irresponsible than the member for Bradfield. I doubt whether the new shadow Treasurer is going to be able to offer any great assistance in the role that the former shadow Treasurer played because she does not even know what the Reserve Bank official interest rate is. When asked on radio she said: ‘I am just trying to think. I will have to go and check that one out.’ To be fair, she did get closer than Barnaby Joyce. She did better than the National Party. You know you are in trouble if you are even less accurate than the National Party on economic matters. But I doubt whether we are going to get much assistance from the new shadow Treasurer.

I am feeling nostalgic for the member for Bradfield already! I know that that is a terrible thing to admit, but I am feeling nostalgic. He may have been an irresponsible populist but he knew a good statistic when he saw one. In fact, he knew several thousand personally and intimately. I’ll tell you what: he would know what the Reserve Bank cash rate is. He would definitely know. In fact, I am prepared to bet that he would know what the cash rate is in Uzbekistan as well—and probably the bond rate and the growth rate and various other things. He did not have much else other than this supply of endless statistics, but he did know one thing well.

A word of advice to the opposition: irresponsible economic populism does not pay. Tearing down the budget surplus, making huge unfunded promises and undermining confidence in the Australian economy and in investment decisions in Australia may score you a few cheap points now but you will get a very different response from the Australian people when they think long and hard about whether you are qualified to manage the Australian economy in turbulent times over the next couple of years.