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

None, Senator Cash—none at all. It is ‘magic pudding’ economics. My friend Joe Hockey talks about ‘casino’ economics, but this is really ‘magic pudding’ economics. This is ‘think of a big number and double it’ economics. This is ‘pluck a number out of the air’ economics. The average growth of the Australian economy over the last two decades, across good times and bad, taking into account periods of economic downturn and the golden years of the Howard and Costello stewardship of the economy, was three per cent. Now we are asked to stake the entire nation’s hopes, the government’s entire fiscal strategy, on an assumption that, emerging from the worst recession since the Great Depression—as Senator Conroy and other ministers repeatedly tell us—the annualised growth in the out years will be half again as high as the average growth in the good times. It is preposterous.

I mentioned the golden years when the stewardship of the Australian economy was in the hands of Mr Peter Costello during the Howard government. During those years, as you know, Mr Deputy President, it took a decade—it was in the 10th year of the Howard government—in a time of prosperity until that $96 billion of accumulated debt was at last paid off. Ninety-six billion dollars of debt was paid off in a time of prosperity. What chance is there, how long will it take, for $188 billion of debt—almost twice as much; in fact, almost exactly twice as much—to be paid off? Will it be 20 years, 30 years? The great fear I have is that it will never happen at all. The great fear I have is that we have a government in Australia today with no aversion to debt whatsoever. And we see this reflected in some of the remarks that the Treasurer and the Prime Minister make in talking about the state of the nation’s balance sheet. They say, ‘Well, that’s only going to be 10 per cent of GDP or six per cent of GDP or something, and that is a very manageable level compared to the United Kingdom, to the United States and to Japan.’ That is right. It is true. But the national balance sheet of Australia is immeasurably more favourable than the balance sheet of every other industrialised country in the world. There is, of course, a reason for that, the reason being—as we all know and cannot remind ourselves of it enough—that for more than a decade we had a government committed to retiring and eliminating public debt.

Nevertheless, the Rudd government, having been elected on false pretences, having been elected on pious, knowingly false, hypocritical promises about its hostility to reckless spending, has now decided that a level of public debt of several hundred billion dollars is tolerable because as a percentage of GDP it still stacks up relatively favourably against other industrialised nations. I very much fear we have ministers who have made the policy choice—unacknowledged, unadmitted by them, concealed in their rhetoric—that a permanent level of structural debt is acceptable for the Australian economy. What are the chances—if it took 10 years of a Liberal government committed to the elimination of debt, governing through times of prosperity, to pay off the last Labor debt, how long will it take an Australian government to pay off this much greater measure of debt? What are the odds that any government from my side of politics—because we know that no Labor government has ever paid off public debt; only Liberal governments have paid off public debt—at any time in the 21st century will be there for 20 consecutive years? It has only ever happened once before in Australian history. What are the odds that, if that happy event were to occur, it would be in times of prosperity sufficient to enable the revenues of the Commonwealth to retire the debt? What are the odds of that happy conjunction of events—a long-term Liberal government, prosperous times, prosperous terms of trade and a generation-long commitment to the repayment of an unheard-of level of debt? The chances are very slight indeed.

What is so alarming about the recklessness with which Mr Rudd and his ministers have piled up this debt is that it has happened so quickly. How can you reverse the financial position of the country from an inherited $22 billion public surplus 18 months ago—a $22 billion surplus on the public account—to a deficit in this year’s budget alone of $58 billion, not taking into account the other expenditure packages that we saw before Christmas and in the so-called second stimulus package? How do you reverse the public finances of a nation so fast? If you add all the additional expenditure commitments that have been made in the last 18 months and subtract from that the surplus of $22 billion that the Labor Party inherited from the last government, what you find is that this government has spent money, reversed the financial position of the country, at the rate of approximately a billion dollars a week. That is the extent to which Australia’s public finances have deteriorated—at a rate of almost a billion dollars a week every week for the last 18 months—at about $150 million a day. That has been the reversal of the public finances of this country under the stewardship of a Prime Minister who made it the centrepiece of his appeal to the nation, 18 months ago today, that this sort of reckless spending must stop.

It certainly must stop, but as long as we have Mr Kevin Rudd in the chair, as long as we have Mr Kevin Rudd in the Lodge, it will not stop and nobody believes that it will stop. That is why in the workplaces and shopping centres of this nation today people who are generally not very interested in economic policy or the budget position are worried. It is the talk of the country today that this government has got Australia so deeply into the red that nobody can look over the Everest of debt which in 18 short months this fraudulent government has accumulated and see a debt-free future. This government has destroyed the public finances of Australia.