Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I remind her that she promised on at least 165 separate occasions to deliver a budget surplus in the current financial year. 'Failure is not an option,' she said, 'and we won't fail.' Given that the government is now forecasting a deficit of $19 billion for this year, how can Australians trust any of the commitments in last night's budget?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the Leader of the Opposition for his question. What you need to do as Prime Minister is deal with the facts, and the facts are, of course, that in our economy we have seen circumstances that have led to very large revenue write-downs—that is, less tax money coming into the government than was expected. That is as a result of the combination of the hangover from the global financial crisis and the high Australian dollar and its impact on the Australian economy, particularly on company profitability. If companies are less profitable then they are paying less tax. I think many Australians, from a common-sense point of view, know that to be the case.

To the Leader of the Opposition I say that what budgets are about is accepting the facts and then showing your choices—showing the choices that you stand by and believe in. What the government has done in this budget is continue our focus on jobs and growth. The Leader of the Opposition may be saying to the Australian community that somehow he could make a magic difference here, but in fact you need to wrestle in detail with budgets. So the Leader of the Opposition appears to be saying to the Australian community that what he would do instead of the government's strategy is cut to the bone, with all of the implications that would have for Australian families who would see healthcare services slashed, education slashed, family payments slashed, the aged-care pension slashed—and the list goes on. Indeed, today the Leader of the Opposition has been out confirming very loudly that he would not back the government's new investments into schools. That means that the Leader of the Opposition stands for taking half a million dollars, on average, out of every Australian school.

The Leader of the Opposition this morning was wandering around saying that this was a budget that had no hope in it. Well, to the Leader of the Opposition I say: go out of Parliament House and meet the families of people who are caring for people with disabilities, or people with disabilities themselves. Go and meet with them and ask what they think about this budget, delivering as it does on DisabilityCare fully funded for 10 years. Go and walk into a classroom and see what a combination of great teaching and new resources can do for a child's life, and tell them that there is no hope in this budget when this budget fully delivers on our school improvement agenda over 10 years. This is a budget for the Australian people, right for these economic circumstances, and I absolutely reject the Leader of the Opposition's strategy to cut to the bone.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House how this budget makes our economy stronger, our nation smarter and our society fairer?

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

I thank the member for his question, because the budget I announced last night does make our economy stronger, our nation smarter and our society fairer. That is because we on this side of the House have made a fundamental choice to support growth in jobs and a transitional period in our economy and to do it in the face of very significant tax revenue write-downs, because the alternative would be the one put forward by those opposite: big cuts to the bone in health and education. This is not something those on this side of the House will contemplate. We will support growth and jobs in our economy, and that is what we are doing with our budget. We are building on the resilience and strength of the Australian economy.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

It's six years of your failure.

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

The member for Cowan is warned.

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

Our economy is now 13 per cent larger than it was prior to the global financial crisis. Why is that so? Because of the policies we put in place to support demand in our economy in the face of the global financial crisis and the global recession. The consequence of that is that we did not go into recession like most other developed economies, and we are far stronger for it. We have created over 950,000 jobs in this country during our period in office. And, of course, we have a AAA credit rating from the three major global rating agencies, confirmed again last night by those rating agencies.

So this budget is all about a sustainable path to surplus, supporting jobs and growth and making the investments, particularly the smart investments which will drive productivity in our economy for the future—the investments the Prime Minister was talking about before. The investments in school improvement are absolutely critical not just to making sure that no child is left behind but also to lifting our productivity for the long term. Then, of course, there is the sustainable funding of DisabilityCare, a very big initiative from this government.

That is why I was so disappointed to see this morning that the shadow Treasurer said there was no hope in the budget. Tell that to the 460,000 people with permanent disabilities in this country: 'No hope in the budget.' Tell that to the people who are in employment: 'No hope in the budget.' What this actually shows is that those opposite do not have a clue as to what they are doing when it comes to economic policy.

On this side of the House we have a record of getting the big economic calls right. We are doing it again to support jobs and growth in our economy.

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 the fact that peak gross debt is not revealed in the budget papers and I remind him that the debt ceiling has been increased by Labor from zero to $75 billion, then $200 billion, then $250 billion and then $300 billion. Will the Treasurer tell the House, and the Australian people, what level peak gross debt will reach over the forward estimates?

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

What we have here from the shadow Treasurer is the fiscal fearmongering campaign writ large. What we have here is a situation where net debt peaks at 11.4 per cent in 2014—a very modest level of debt, particularly compared to other developed economies.

I have been asked by the shadow Treasurer about the debt cap. Well, the answer to that is it is not necessary to do anything about the debt cap at all but we will review it in the usual way and, if it were necessary, we would lift it.

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

I ask a supplementary question of the Treasurer. I did not ask him about net debt. What is the peak of gross debt under the forward estimates as a result of his budget and subject to the debt ceiling?

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

What I do know is that as public—

Honourable Members:

Honourable members interjecting—

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

Order!

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

What we have here from the opposition is that they want to quote the market value of the debt, not the face value of the debt. All of the material is contained in the budget papers.