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

I thank Senator Ronaldson for that question. It is well known that the financial position of the Australian government is the envy of the developed world. We are one of very few countries that has its budget in surplus as well as completely eliminating all government debt. And as senators know, 11 years ago, when our opponents were in power, the budget was in deficit to the tune of $10 billion annually—just about two per cent of GDP then—and the government was $96 billion in debt.

Yesterday we saw the opposition leader and shadow Treasurer give a joint press conference in which they were at pains to tell us there was no difference between the coalition and the Labor Party on fiscal policy. Of course, this is the latest instalment of the ‘me too’ Howard-lite strategy that we see from Mr Rudd. It is absolutely implausible to argue that there is no difference between the major parties on fiscal policy when one party spent its time in office running up deficits and racking up debt while the other has spent its 11 years in office running surpluses and completely eliminating that debt. The implausibility is compounded by the fact that federal Labor has spent most of its time in opposition opposing our efforts to reduce the deficit and get rid of the debt and state Labor governments are now busy racking up some $70 billion in additional debt.

The credibility of Labor’s claim to be just like us on fiscal policy is further undermined by their response to the Reserve Bank’s decision on interest rates. According to Labor this represents a major policy failure by the government and, therefore, by implication, would not have happened under Labor. But, of course, how on earth could that be the case if Labor’s approach to fiscal policy and monetary policy is exactly the same as the government’s, which is what they tell us? Both yesterday and this morning, Mr Swan informed us that Labor would avoid interest rate rises by spending even more money on skills and infrastructure. In other words, apparently Labor’s fiscal policy is not the same as the government’s, which is what they said yesterday; Labor actually stands for more spending.

Given that the government already spend $17 billion a year on education and training and $4½ billion on transport and communications infrastructure, we can only assume that the Labor Party plans a very big increase in these spending levels, although we have no idea how much that is going to be or how it would be paid for. And, of course, all of this new spending that Labor is talking about would be on top of the $43 billion that the GST provides to the states to spend on all their priorities, including, most importantly, infrastructure.

The ALP finance spokesman, Mr Tanner, yesterday implied that Labor’s new spending commitments were all going to be funded from reducing MPs’ printing allowances—I hope that has got the support of caucus—and taking DLOs away from ministerial offices. That is terrific. There are very serious credibility issues surrounding Labor’s approach to the Commonwealth budget, and that is further undermined by Labor’s failure to commit to complying with the Charter of Budget Honesty by submitting its policies to Treasury and Finance for costing during the election campaign.

Mr Tanner told the Press Club yesterday that the opposition still could not make up its mind whether it is going to comply with the charter. But the Labor Party has never properly complied with the charter. In 1998, 2001 and 2004 Labor submitted only a fraction of its policies—mostly too late—to be costed by Finance and Treasury before polling day. So if Mr Swan and Mr Rudd want to claim that their fiscal policy is just the same as ours then they need to establish the true cost of all their policies by complying with the charter in the upcoming federal election. Their failure to commit to this completely destroys the facade of their fiscal credibility.