Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Joyce for that very appropriate question and note that as a professional accountant of course he has a very keen interest in good accounting. I am pleased that the coalition government, of which he is a member, have been able to deliver. It has been one of our strongest commitments to good accounting. When we came into office Labor had left us with a deficit of $10 billion per annum and there was $96 billion in accumulated debts. Since then we have had surpluses in eight out of 10 years and have now repaid every last cent of Labor’s debt. We have established the Future Fund, which will soon have some $50 billion under management.

A key aspect of our government’s economic management has been to ensure that every budget is appropriate for the prevailing economic circumstances. For the last three years, with a strong domestic economy and a commodity boom driving company profits and business investment, it has been appropriate to run budget surpluses of around one per cent of gross domestic product. We have already started work on preparing next year’s budget, to be delivered in May, and, with private investment activity still strong and unemployment at 30-year lows, it continues to remain appropriate that governments run strong surpluses. This financial year, 2006-07, we are on track to deliver a surplus of around $10 billion.

Regrettably, Labor state governments are undermining that fiscal performance by projecting combined deficits of $5 billion. Every state government other than WA forecasts a deficit in this financial year. The worst offenders are New South Wales, Victoria and Queensland, and we will all have to find extra money to pay for their lavish election promises. Federal Labor have already committed to a range of policies which would slash the surplus and, in concert with their colleagues at the state level, would drive the combined state and federal bottom line back down to an overall deficit. Federal Labor are committed to raiding the Future Fund by spending their annual earnings on pet projects and they have also pledged to raid the $2 billion Communications Fund, which would see a further rundown in the surplus. Those two promises alone could see the annual surplus run down by around $4 billion a year, almost halving the surplus—just with those two commitments. It is a particular paradox that Mr Rudd has come to the leadership criticising short-termism when his own policy is to raid the money we have set aside to meet future obligations in order for the Labor Party to pay for their election promises.

We also know that federal Labor are committed to a long list of new spending commitments. Every shadow minister comes out every day with a new commitment: childcare centres, broadband networks, a coast guard—they have still got the old coast guard—and $200 million set aside for something called ‘enterprise connect centres’. And of course their new deputy leader, Ms Gillard, is infamous as the shadow minister who went to the last election promising Medicare Gold, the most financially reckless policy ever put to the Australian people. Only last week Ms Gillard was proposing that the government—