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

I understand, and I know that this issue was canvassed by you at the finance and admin committee. I have just been looking at the debate that occurred there. I would agree with Dr Henry’s response on this point. I note that when this matter was raised he indicated that the way most economists think about the deficit question is to think about public debt dynamics. We have had since the mid-1980s in this country a concentration on the level of public sector debt—I would suggest as in no other country on earth. And, as you know, Australia today has negative net debt. He drew your attention and that of other committee members to chart 4.2 on page 46 of the document, which looked at the net debt position of select countries. I added to that in detail earlier in response to a question. Dr Henry observed that the net debt was minus 1.5 per cent of gross domestic product in 2008. You can see in the document by how much that is projected to grow over the three-year period from 2008 to 2010. It is then, corrected, minus 1.3.

So as much material as Treasury have currently available on this issue, and their analysis—and as I said earlier I have great respect for the analysis of Treasury as I have spent many years in opposition questioning them on these issues—mean that they have provided the very best that they could in the Updated Economic and Fiscal Outlook and I believe that the response of Dr Henry on this point was correct.