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

I thought I had been responding to questions as they were raised, Senator Joyce. Sure, some senators—on both sides, I would have to say—have engaged in what, at the suggestion of Senator Abetz, was a general debate and questioning. Senator Macdonald raised in the context of the world financial and economic crisis some perfectly reasonable, consistent and logical questions about Storm Financial and the impact that is having on people.

I can provide you with additional information in respect to the net debt position. I detailed the approach before lunch, and the approach of the government and Treasury is no different from that which occurred when you were in government. The net debt position will be $70 billion in financial year 2011-12. That is made up of debt and assets, and the income stream on the assets is $4.8 billion. The income stream on the debt is $7.5 billion. The net interest payment is $2.6 billion, rounded. There is no error, I might say, Senator Joyce. When you are dealing with billions, rounding to the nearest billion or 10th of a billion is appropriate. There is no error of $40 million—it is a rounding. It is the way that figures in the billions or tens of billions of dollars are rounded.

As I was saying, the income stream on the debt is $7.5 billion. The income stream on assets is $4.8 billion. They are netted out. Net debt and net interest payments were used by the former Treasurer. If you borrow $100 billion and invest $100 billion, that does yield a return. It is entirely appropriate to look at the net cost.

You raised an issue about the role of the states. I think we could have a very lengthy debate about the role of the states in our Federation—what is their responsibility and what is not their responsibility. I would make two points: firstly, it is certainly apparent to me that over the last 100-plus years of Federation—and it was certainly apparent to me over the almost 12 years when the Liberal-National Party was in government—there has been a general trend towards the Commonwealth assuming more and more responsibilities in this country, right across the board. That occurred under your former government in areas like health, education and industrial relations. A general trend has been there for 100 years.

This partly relates to the matters that are relevant to Storm Financial. The Commonwealth and I have had the responsibility of overseeing the COAG agreement to transfer the regulation and supervision of the remaining responsibilities of the states in financial services and the distribution of financial products to the Commonwealth. We reached agreement last year, and one of those areas includes margin lending. There are some others. So the general trend has been there and, as I say, we could have a lengthy debate about why that has occurred.

In the case of the financial services—I have given consumer credit as an example—it seems to me that in the modern world economy, and in the financial economy in particular, there is a compelling argument for nation-states and national governments to regulate and supervise their financial systems. Increasingly, I think it will become international. This is no criticism of any particular state of any political colour—Liberal, National Party or Labor. It is simply very difficult for states and territories in a modern financial services economy to regulate and supervise the financial sector. I just use that as an example, but it could be a very lengthy debate.

Senator Milne raised the issue of a bailout and whether any of the $6.2 billion would be used for that purpose. The answer is no. It will only go to new housing. There is $400 million for maintenance and $6 billion for new construction.

On the issue of the five-star rating for residential buildings and the question of it being two stars below the US standard, the government is working with the states and territories through our COAG process to examine and resolve improvements that can be made to the energy efficiency of commercial and residential buildings, firstly, including ensuring greater consistency in the application of building standards across all states and, secondly, an increase in energy efficiency requirements for new residential buildings to six stars. That is partly another issue that relates to the question that Senator Joyce asked about the roles and responsibilities of the states, and as questions are posed, as I have indicated, I will endeavour to inform the Senate.