Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

Well, I have heard everything! If nothing is the responsibility of this government then for some reason they will claim credit for everything. The conceit on the part of this government—claiming credit, as we have heard from previous speakers, for the resilience of the Australian economy over the last three or four years! The conceit to say that all the small business people who worked harder and all the people that took reduced hours contributed nothing! The conceit of this government to think that it controls the economy and that the success of the economy belongs solely to it is unbounded. e know this from the last 70 years of economics. While I am a big fan of the writer that wrote about the 'fatal conceit', the point is that this government only claims credit for those things it wishes to. It seeks to avoid responsibility and makes excuses for those issues it wants to avoid. It says we should compare Australia's debt to that of other nations. I have never heard a successful defence when a bank comes to repossess a house or business being based on, 'My neighbour owes more.'

It is ridiculous to compare the success of the Australian economy and the massive run-up in debt that we have experienced over the last three years with what is happening in other parts of the world because, quite frankly, they are profoundly mismanaged. Unlike those governments in other parts of the world, this government did not inherit a mismanaged economy. It inherited the most sound finances of any government in the Western world.

What the government does not want to tell you is that, while the average debt in Australia is lower than some of our competitors, if we look at other countries we have had the third fastest run-up of public debt in the OECD over the last five years. You have got the bronze medal there. I suppose you are going for gold very soon if we keep up this record of 20 per cent explosions over six months in budget deficits. In one year this government has run up half the debt that was repaid by 10 years of the previous government. That is $50 billion of debt in one year—up by $10 billion in six months. The children of Australia are never going to see a debt-free Commonwealth if this government stays in office. I fear for the work that will have to be undertaken, the difficult decisions and the sacrifices that will have to be made, if this government stays in office much longer. It has run up $50 billion—half of the previous debt of the Commonwealth that was repaid in a decade.

At its core is a profound misunderstanding of the Australian economy. Yes, the Australian Commonwealth does not have as much debt as some other nations. If we look at net public sector debt around Australia and the behaviour of our state governments, we have a fairly significant debt level in Australia. All this, due to the terms of the Loan Council provisions in the Constitution, is effectively guaranteed by Australian taxpayers. Let us not just look at the Commonwealth balance sheet; let us look at what is happening in the states to see what Australian taxpayers are really up for.

While we have had historically low public debt in Australia since the coalition paid it back, we have incredibly high private debt. Our private banks are dependent upon levels of funding on a regular basis from overseas that, quite frankly, their competitors in the private sector banking systems of other countries are not dependent on. You do not need to be an economist to know that the only reason our four big banks could continue to access the funds they needed for functioning during the credit-squeeze phase of the global financial crisis was that, even though their debt position was safe, the Australian financial system was regarded as strong—that there was indeed a strong net financial position for the Commonwealth of Australia. You cannot have a situation where both of your private banks are dependent on massive borrowings from overseas. You cannot have a situation where you are a capital-importing country having regular levels of foreign investment from overseas and at the same time are continuing to run up Commonwealth debt.

This budget is going to sink without trace. This government looks at the next three years and says it is not increasing spending. It is like an alcoholic saying 'I am not having a drink today' after a three-day binge, because in the last few years spending has increased by more than 15 per cent, in real terms. This government will stand condemned for its mismanagement and run-up of debt in Australia.

Question agreed to.