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

My question is to the Treasurer. I remind the Treasurer that he forecast for this year a budget surplus of $1.5 billion—but he abandoned that promise in December. I refer the Treasurer to the government's January Monthly Financial Statements, released at 5 pm last Friday, which show the current government deficit so far this year to be $26.8 billion. Treasurer, will you now come clean with the Australian people and tell us what the deficit is going to be?

Opposition Members:

Opposition members interjecting—

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

Order! If people are interested in hearing, they need to listen. The Treasurer has the call.

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

As I think I indicated in the House last week, we will be updating all of our budget forecasts in the normal way, and we will do that in the May budget. But I do want to make a couple of points about the budget and about economic growth.

I want to make some points about jobs, because we on this side of the House make no apology for putting jobs and growth first. And of course, this is a matter of choice. Back during the global financial crisis, as a matter of choice, we chose growth and jobs. Those opposite would have left it all to chance, if they had been in power, and we would have seen a recession in Australia. As a consequence of the choice that this government made, there are 900,000 additional jobs in Australia today—as a result of our government making that choice to support jobs and growth. And just as we did back during the global financial crisis, we made a choice again at the end of last year—in the face of very big revenue write-downs which are flowing through our economy from a range of unique circumstances, which have been chronicled—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Madam Speaker, I rise on a point of order. The Treasurer was asked a very straightforward question about what the deficit will be this financial year and he has not even made an attempt to answer that question. I would ask—

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

The Manager of Opposition Business will resume his seat. The Treasurer has the call.

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

The fact is that the financial statements which were published last Friday show that there has been a whack to revenues of around $6 billion in the first seven months of this year. Those opposite want to put their heads in the sand and pretend that nothing has changed. What changed at the end of last year was something very fundamental in our economy: we saw that the terms of trade went down and the dollar stayed up, and the consequence to our economy of that change is a huge whack to government revenues. It is unprecedented in our history to have a situation where the terms of trade go down and the dollar stays up. What that has done is put an enormous squeeze on profits and on incomes right across our economy. In the face of that we have opted to support jobs and growth. But those opposite would make a different choice—just like they did during the global financial crisis. The choice they took then was for recession; the choice we take now is for growth and jobs. The approach that they would follow is the approach we have seen overseas—we have seen it in Europe: slash and burn, cut jobs when revenue goes down, and debt goes higher and deficits go higher. We reject that approach. This is the approach of those opposite; it is the approach of the IPA, their favourite think tank—the IPA is in bed with them because they have a program to slash jobs and growth in our economy. We on this side of the House stand proudly behind jobs.

Mr Pyne interjecting—

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

The Manager for Opposition Business is warned.

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

My supplementary question is to the Treasurer. I refer the Treasurer to a Bank of America Merrill Lynch report released today which identified that revenue in fact had not fallen on last year but is 7.7 per cent higher than last year and, given that, it also predicts a deficit of over $20 billion this year, and debt to go to $294 billion. Why doesn't the Treasurer come clean with the Australian people? (Time expired)

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

There are two points I will make about that report. First and foremost, it does put in place the revenue write-downs that we have experienced and the consequence for our budget over the forward estimates. There is no doubt that the challenge in the Australian budget is weaker revenues. The challenge in the Australian budget is not, as those opposite claim and as is mentioned in this report, that somehow we are spending too much. I absolutely reject that. It flies in the face of all of the available facts. Let us just go through them: real spending growth averages 1.1 per cent a year over the forward estimates of our budget—

Mr Hockey interjecting—

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

Order! The member for North Sydney!

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

compared to 3.6 per cent in the last four years of the Howard government. We are keeping spending at 23.8 per cent of GDP, and below 24 per cent across the forward estimates. The challenge in our budget is with the revenue write-downs. We have a very clear indication of what those opposite are saying and what they are putting to the Australian people: in the face of these revenue write-downs, they would slash spending in health and education. What that would do is push up unemployment, push up deficit and push up debt. There is a very clear contrast here. Everyone on this side of the House is for jobs; those on that side of the House want to slash and burn.