Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

Okay, you did hear. That is even worse, because you would have heard the contributions from Senator Abetz and Senator Boyce, which were extremely general in nature. Some questions have been posed and I am responding to those questions as I receive answers, which is appropriate. Senator Coonan has raised an issue, and Senator Joyce asked the same question at the finance and public administration committee hearing. Senator Joyce’s and Senator Coonan’s questions went to the same issue: could the calculation of how the $2.66 billion was reached be tabled? It was not tabled at the hearing, but I can now give the answer. The estimated interest receipts to government in 2011-12 are $4.8 billion. The estimated interest payments in 2011-12 are some $7.5 billion. The estimated net interest payments in 2011-12—obviously, I am sure—equal estimated interest payments less estimated interest receipts. For example, $7.5 billion minus $4.8 billion is $2.66 billion, and the slight discrepancy is due to rounding.

Related to that, Senator Bob Brown asked at the committee hearing, with respect to the bond market:

… what the cost will be of raising the $125 billion … on the bond market?

He also asked: ‘What impact will the need to repay this debt through tax raising have on economic growth in the future?’ The cost of raising funds in the bond market depends on market conditions. Currently, the average interest rate applied by the government on new borrowings is around four per cent. As the economy recovers and grows above trend, the government will take action to return the budget to surplus by (a) allowing the level of tax receipts to recover naturally as the economy improves, while maintaining the government’s commitment to keep taxation as a share of GDP below the 2007-08 level on average, and (b) holding the level of real spending growth to two per cent a year until the budget returns to surplus. As soon as the budget returns to surplus, the government has said it will draw upon the surplus to pay down debt as rapidly as economic conditions permit.

Finally, I have an answer to an issue raised by Senator Milne. Some answers I have already given, but I have a further answer to another question she raised. She asked: ‘Will the states be involved in the tendering process for the insulation program?’ The answer is no. At the COAG meeting the states agreed to maintain existing energy efficiency funding levels and redirect state funding for other energy efficiency programs, such as insulation programs, to home energy advice programs. I know that the Prime Minister made it very clear at the recent meeting with the states and has made it very clear publicly that states attempting to shift existing planned expenditure, current expenditure, and redirect funding will not be tolerated. There is a process being put in place to ensure that does not happen.

Whilst I am on the states, there is a Liberal state government in Western Australia. I seem to recall that the new Liberal government of WA has actually endorsed this decisive package to stimulate the economy and jobs.