Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to his announcement yesterday of a budget deficit. Prime Minister, can you advise the House how much of this new Labor debt will be used to bail out the failed New South Wales state Labor government this weekend?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I say to the honourable member who has just asked the question that again we are faced with some serious economic challenges in our country—for jobs and for families—and his interests, following the direction of his political masters, is simply again to engage in political point scoring. I think the people of Australia would want something more from their representatives than that sort of intervention.

This government, when it comes to the reform of the federation, believes that the responsible course of action is to invest in education, to invest in schools, to invest in TAFE and to invest in universities—to make sure that we have an education system designed for the 21st century. I would say, firstly, to those opposite that, had they bothered to deploy the proceeds of the mining boom over the previous half decade and more, they could have invested in the future productive capacity of the economy.

Opposition Members:

Opposition members interjecting—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I would the draw the attention of honourable members who howl their interjections to a report recently released by Access Economics, which said exactly the same thing. Secondly, they could have done something about the nation’s infrastructure. They could have done something about water infrastructure. They could have done something about broadband. They could have done something about the other needs in ports—

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order relating to relevance. The question asked was: why is the Prime Minister associating himself with the failed state of New South Wales?

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

The Prime Minister is responding to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

So rather than invest in the needs of communities across the country—for the future of education, for the future of infrastructure and, as the minister for small business just indicated, taking action to create a seamless national economy for the benefit of small business—they instead did nothing. They sat there and played politics in government, as they play politics in opposition.

The other part of the honourable member’s question goes to the question of a temporary deficit. I draw the honourable member’s attention to what actually constitutes the elements of a budget. Firstly, on the revenue side, the honourable member’s attention should be drawn to the fact that, because of the global financial crisis, $40 billion has been sliced off the government’s revenues—as has happened across much of the OECD. I would draw the honourable member’s attention, for example, to what is happening in other economies. The conservative government of the United States is running a 4.6 per cent of GDP deficit, the conservative government of France is running a 3.9 per cent of GDP deficit, the conservative government of Germany is running a 0.8 per cent of GDP deficit, the conservative government of Italy is running a 2.9 per cent of GDP deficit, the conservative government of Japan—

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

Mr Speaker—

Opposition Member:

An opposition member—We live in New South Wales.

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

I wasn’t sure whether the Manager of Opposition Business was deferring.

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

Mr Speaker, on a point of order which goes to relevance: the Prime Minister was asked about New South Wales, not China, not Germany, not the United Kingdom, not the United States—

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

The Manager of Opposition Business will resume his seat. The question had a preamble relating to yesterday’s statement.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The conservative government of Japan is running a deficit of 3.9 per cent of GDP. These are the facts about what is happening around the world as individual governments seek to respond to a global financial crisis—facts which those opposite find personally confronting because they are politically inconvenient. These are the inconvenient truths.

Secondly, when it comes to revenues those opposite need to accept the reality that $40 billion has been sliced off the government’s revenues across the forward estimates because of the global financial crisis. That has happened right across the developed world. Thirdly, on the question of outlays, what did this government do in its preparation for the last budget? Through the activity of the Minister for Finance and Deregulation and through the Expenditure Review Committee, it sliced $5 billion worth of excessive expenditures by way of a savings program which the Treasurer delivered in the context of the budget and which he announced in May of this year—$5 billion. On top of that, that has given us the capacity to bring in the stimulus package that we announced in October of $10.4 billion and, in addition to that, to make forward provision for the auto plan of $6.2 billion and to make forward provision for various other stimulus packages which I have already announced.

I would say this to those opposite, as they seek to provide a lecture on the question of fiscal probity: have those opposite bothered to cost those promises which they have stuck out there in the public domain—on ready-to-mix drinks, luxury car tax, crude oil excise condensate? Whatever the position may now be—

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: my question was in relation to why the federal government is bailing out the New South Wales state government, not in relation to Liberal Party policy.

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

I remind the Prime Minister that his response must be related to the matters in the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

And, in responding to the question, the honourable member asked a question about the matter of deficits and I am going to the question of how you construct a budget on the revenue side and on the expenditure side and, therefore, the proposals also being put opposite. Those opposite have said they support the Economic Security Strategy.

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, on a point of order on relevance: the Prime Minister was asked a question about New South Wales. If he wants to add to his answer concerning deficits, he may do so at the end of question time.

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

The difficulty of the precedents of this House is that the matter which was contained in the preamble in the run-up to other things that people might think are a specific question is open to response. The start of the question referred to the statement of the Prime Minister yesterday and referred to the mention of ‘deficit’ in that statement. In that regard, if the Prime Minister is relating his response to that aspect, based on the precedents of this House it is in order.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Therefore, when it comes to looking at the way in which you put together outlays, we have a capacity, as we have indicated, through the budget to provide stimulus. Those opposite in providing a lesson on fiscal probity need to answer these questions. Do they support the Economic Security Strategy? Their formal position is yes, I believe. Does anyone oppose the Economic Security Strategy over there? Therefore, let us give that a big tick because that is what they have said. The car plan I think they support. Does anyone oppose the car plan over there?

Opposition Members:

Opposition members interjecting—

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

The member for North Sydney will resume his seat until the House comes to order. My degree of tranquillity might be lowering and my capacity to remain here for the whole afternoon might be lessening, but I think that it would assist the House if it came to order.

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

Mr Speaker, a point of order that goes to relevance.

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

The Prime Minister will respond to the question in the context of comments that I have made in response to other points of order.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I refer again to the honourable member’s question as it related to the statement I made yesterday and its reference to the management of budgets. If those opposite support the three measures that I have just referred to—the third one, of course, is the local government infrastructure package—does anyone over there oppose the $300 million for local infrastructure? I do not think so. Therefore, they support those three sets of measures—

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

Mr Morrison interjecting

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

That is right, I am sorry, the member for Cook is an exception. So we support those three measures. If you put them all together, that is a reasonable amount of money. Then you go to their promises which they have been putting out all year—on ready-to-mix drinks, luxury car tax, crude oil excise condensate, Medicare levy surcharge, heavy vehicle road user charge, dental treatment offset, Commonwealth seniors health card, family trusts, and this is the inter-esting one: the 5c reduction in petrol excise. What status does that have these days? Not sure. There is also Investing in our Sch-ools, Lower Lakes and the increased rate of the single pension. Putting all those toge-ther, is it five, 10, 15, 20 billion—could be more?

Can I say to those opposite, if they are seriously putting forward an argument about fiscal rectitude, first of all put together what you have supported by way of government measures to stimulate the economy in terms of your formal press releases and the three that I have just mentioned you formally have. Secondly, put together the five, 10, 15, 20 billion dollars worth of outlays contained in the promises you have made to the Australian people and you end up with a very interesting set of fiscal circumstances indeed. I would say to the honourable member for Mitchell, as he put this question to the House on how budgets are put together, that he should have a long look at the fiscal probity which is contained in the promises being put out by the Liberal Party in opposition.

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

The Prime Minister will bring his answer to a conclusion.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

They played politics and spent like drunken sailors in government. They are playing politics and spending like drunken sailors in opposition as well.