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

My question is to the Treasurer. Will the Treasurer outline for the House the importance of returning the budget to surplus and supporting a stable and competitive banking system? How has this approach been received and what is the government's response?

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

I thank the member for Moreton for his question because we on this side of the House welcomed the passage through the House last night of the appropriation bills. These bills will deliver on our commitment to bring the budget back in the black and will ensure that we see more Australians in work than ever before. There is nothing that we on this side of the House are prouder of than the fact that so many Australians are in work. Over the past year we have had a very strong job creation record and we are expecting the creation of a further half a million jobs over the next couple of years.

Returning the budget to surplus is vital so that we do not compound the price pressures which will come with the investment boom. We must bring our budget back to surplus so we can have strong, sustainable growth for the long term. You cannot return the budget to surplus unless you constrain spending growth and put in place savings, which is why we have restricted real spending growth to one per cent on average. That compares to 3.7 per cent under those opposite at the height of mining boom mark 1. I was somewhat surprised to see a couple of days ago the shadow Treasurer attack the spending spree that the previous government went on at the height of mining boom mark 1 because that was a spending spree which put pressure on inflation and saw interest rates go up 10 times in a row. There is a stark contrast between the approach of those previously in government and what we are doing. We are putting in place very substantial savings. In this budget, there is $22 billion worth of savings. That is absolutely essential to strong economic management and maintaining strong growth, particularly job creation growth.

The record of the government here was recognised by the Reserve Bank in their minutes published a couple of days ago where they made the point that fiscal policy will deliver a significant contraction of demand over the next couple of years. But this can only be done if our savings pass the parliament. Those opposite are currently blocking something like $6 billion worth of savings, having already opposed in this House something like $7 billion worth of savings, including one measure to do with alternative fuels which was a measure of the previous government. The fact is that you cannot keep saying that you support a return to surplus while trying to block the savings which will actually deliver the surplus. What they would be doing with this approach if they were in power is delivering deficits right across the forward estimates. They are still trying to wreck the surplus and all of the consequences of that for jobs.

All of the stunts and all of the three-word slogans are not a substitute for an economic policy. We on this side of the House have a strong economic policy which supports strong job growth. For those on that side of the House, when it comes to economic policy, the cupboard is simply bare. We find this is the case when it comes to the reform of our banking sector. This government is committed to a stable and competitive banking sector, which is why we were absolutely stunned by the effort of the shadow Treasurer and those opposite to bring back mortgage exit fees. They claim to be concerned about the cost of living, but in their attempt to bring back unfair mortgage exit fees they are pushing up the cost of living for thousands of Australians. This measure is terribly important to get rid of unfair mortgage exit fees. In the Senate they were trying to also— (Time expired)