Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is the Treasurer. Does the Treasurer stand by his guarantee to this House on 21 May that total Commonwealth government debt, subject to the debt limit, will not exceed $250 billion at the end of this financial year?

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

I do thank the shadow Treasurer for that question. I think it is the case that we have seen in the national accounts that the Australian economy is robust and that the Australian economy is resilient. It is also the case that we have seen a very unique set of circumstances emerge—particularly on the revenue side of our budget. This unique set of circumstances is driven by a combination of events that we have not seen in the economic history of our country: on one hand, a declining terms of trade, and on the other hand, a very high dollar. The consequence of that has been that there is a challenge to our revenue. At the end of last year, I very clearly made the point to the Australia people that this government's priority would always be to support growth and to support jobs.

I made that point at the end of last year very deliberately, because it would have been deeply irresponsible of this government to cut harder, to cut back on jobs and growth, in the face of what was a very significant revenue downturn. That was the consequence of a set of events in our economy that we have not seen ever before. We have now seen nominal GDP growth go below real GDP growth for three quarters in a row. The point that I want to make is this: this government will always put jobs and growth first.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Speaker, I raise a point of order. It goes to relevance. It was a straight question. Does he stand by his guarantee that the debt will not exceed $250 billion?

Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

The Treasurer has the call and will refer to the question before the chair.

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

Certainly. It brings me to the point that we will always support our economy when there is a threat to jobs and growth. Last year in the budget, what I outlined was the forecast for a whole range of indicators—such as growth and debt. I made the point very clearly then and outlined that we would bring these figures in within the debt cap that I outlined in last year's budget—and that remains. But there is a very clear choice here, because those opposite want to spread fear about debt. There is no doubt about that when we as a country have done so much better than just about every other developed economy in the world, because our priority was to support jobs and growth in our economy. We were opposed every step of the way by those opposite. If they would have had their way back during the global financial crisis, deficits would have been higher and so too would have been debt. Now, we are challenged again. The proposition that they are putting to the people of Australia is that, in the face of a revenue slowdown that we have seen, they would cut harder and hit jobs and growth.

Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

The Treasurer will return to the question.

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

We will always support jobs and growth within the context of our medium-term fiscal strategy.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Speaker, I ask a supplementary question to the Treasurer. Now that the debt currently sits at $263 billion, well above the $250 billion limit, can the Treasurer advise the House how much the government's debt will be at the end of this financial year?

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

There are a couple of points that I could make about this. They were made in the House last year. My first point is this—

Opposition Members:

Opposition members interjecting—

Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

Order! If individuals wish to hear the answer, perhaps they will show some courtesy by observing the standing orders and listening in silence.

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

The point I made last year, when we had this debt-fear campaign being run by those opposite, is that the debt that we have in this country is one-tenth of that of other major developed economies. The responsible thing to do in the circumstances in which we have found ourselves, during the five-year period in which we have had the most turbulence we have ever seen in the global economy since the Great Depression, is to run a responsible fiscal policy—a responsible fiscal policy which supports jobs and growth and which puts it in the framework of a medium-term fiscal strategy that is a commitment on surpluses on average and across the cycle—and that commitment remains.

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

My question is to the Treasurer. Will the Treasurer update the House on the latest national accounts? What do these figures say about the resilience of the Australian economy?

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

I thank the member for Moreton for that very important question. Last week we had the national accounts, and our economy grew by 0.6 per cent in the December quarter—3.1 per cent through the year. This occurred at a time when the shadow Treasurer said that the economy was flatlining, and, of course, the Leader of the Opposition claimed that the economy was yet to grow. The fact is that this is a great result for Australia, whichever way you look at it. But those opposite want to continuously talk our economy down. The fact is that more than half of the advanced economies around the world did not grow during that quarter, and we grew faster than every other developed economy bar one. This gets us to the point where our economy is 13 per cent larger now than it was prior to the global financial crisis. We know that not everybody is immune from these conditions in the global economy and there are sectors and families in our economy that are doing it tough. As I was saying before, we can see this in the unusual combination of events that are playing out in our economy: dramatically declining terms of trade on the one hand and a dollar which is staying stubbornly high. What that is doing is putting a squeeze on profits and income right across our economy.

The shadow Treasurer wants everybody to believe that that is not happening, that, just as there was not a global financial crisis, these events are not playing out in our economy right now. But the fact is that they are having a dramatic impact on government revenues. Government revenues are down $6 billion since MYEFO. That will have an impact on this year and years beyond—of that there is no doubt. When the global economy takes an axe to revenues, the commitment of this government is not to take an axe to jobs and growth. That is the proposition that has been put by those opposite. In the face of all this, they are saying, 'Take an axe to jobs and growth.' We on this side of the parliament would never, ever do that, because we are committed to jobs and growth and supporting Australian families in jobs.

The Leader of the Opposition raised the question before of the cost of living. If you do not have a job, you cannot handle the cost of living. If the opposition had had their way during the global financial crisis, hundreds of thousands of Australians would be without jobs. Our policies during the global financial crisis supported growth and jobs, particularly for people in Western Sydney. We put Australian workers first. Those opposite always put them last.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. I refer the Treasurer to his statement on 5AA in Adelaide on 9 May that he would pay off the debt by 'the end of the decade'. Does the Treasurer stand by that statement?

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

I thank the shadow Treasurer for that question. As I said before, we are putting in place our medium-term fiscal strategy and committed to surpluses, on average, over the economic cycle. That is the responsible thing to do. If the shadow Treasurer wants me to bring down the forecast for the May budget today, that simply cannot be done and he absolutely knows it. But what we on this side will give is a commitment to support jobs and growth. What we are seeing here very clearly today is a determination from those opposite to take an axe to our economy and to slash and burn, particularly across jobs, health and education. You get no clearer commitment to that than what the shadow Treasurer said in Western Sydney last week.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Madam Speaker, I rise on a point of order that goes to relevance. It was a very simple, straightforward question. Does the Treasurer stand by his commitment to pay off the debt? What, a $30 billion surplus every year?

Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

The member for North Sydney will resume his seat and not abuse points of order. The Treasurer has the call.

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

The government makes no apology for putting jobs and growth first in the context of a medium-term fiscal strategy committed to surplus, on average, across the economic cycle.