George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Hansard source

On 6 May 2007, the then Treasurer, the member for Higgins, Mr Peter Costello, stood up in the House of Representatives to deliver the 2007-08 budget—what would turn out to be the last budget of the Howard government. Mr Costello delivered a budget which, for the 10th consecutive year, was in surplus. In the previous 12 years, Mr Costello, as Treasurer, had paid down the $96 billion of debt with which the previous government had been saddled by its Labor predecessor. If you look at the fiscal projections which formed part of the last Costello budget, they paint a magnificent picture of the state of the Australian economy then.

In budget statement No. 1, Fiscal strategy and budget priorities, we learn that the budget surplus for 2007-08 was projected to be $10.6 billion in the black. But, if you look at the projections in the out years, you will see that the state of the Australian economy at the time of the last Costello budget projecting into the future was that in the following year, 2008-09, the year we are now in, the budget would have been in surplus to the tune of $12.7 billion. A year beyond that, in 2009-10, the budget would have been in surplus to the tune of $13.8 billion. That was the healthy, robust, solid, solvent state of the Australian economy at the time of the Liberal Party’s last budget.

As it turned out, those budget projections were wrong, but they were wrong because they underestimated the robust health of the Australian economy in that last golden year of the Howard government, when the economic circumstances of this country were such as filled individuals, households and businesses with confidence. When it came to the time of the election on 24 November 2007—only six months after Mr Costello’s last budget—the state of the economy was so healthy that the budget surplus which the incoming Rudd government inherited had been revised upwards to $21 billion. That does not include the amount of money that had been set aside prudently in capital funds such as the Future Fund and the Higher Education Endowment Fund to make provision to relieve the debt burden from the backs of future generations—from the backs of your children and my children, Mr Acting Deputy President. Australia was $21 billion in the black—not even taking into account the Future Fund and the Higher Education Endowment Fund—and that is what the Labor Party inherited from us. Twelve and a half years earlier, we had inherited $96 billion in the red from them.

Mr Acting Deputy President, you might think that a government newly in power—even a Labor government—led by a Prime Minister who announced boldly during the election campaign in a slick television commercial that he wore the badge of an economic conservative with pride, which inherited a $21 billion surplus in a growing economy would at least have a few years before it would destroy the country’s fiscal position. We know that sooner or later Labor governments always destroy the country’s fiscal position.