Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I thank Senator Sinodinos for his words and also for his question which, unlike one of the ones earlier, I can actually understand. The senator refers to the US Congress decisions. It is true that that is one of the issues on the global economy's horizon which has caused uncertainty and volatility. As the senator would know, as the US last year headed towards the so-called fiscal cliff, that certainly created some concern and uncertainty in global markets. Obviously, there are still a lot of matters on the fiscal front that the US needs to resolve in terms of their medium-term fiscal settings, and the debt cap issue is not yet resolved. The senator is right to ask the question which has at its heart: what is the right thing for the Australian economy to ensure its resilience at a time of global uncertainty? The government took a decision in December, faced with very substantial revenue downgrades, that it would not be in the interests of jobs and growth for us to continue to cut spending to offset revenue downgrades. We have done so. We have done that in the past. If you look at our last budgets and the mid-year review you will see that the government has not only offset all new expenditure from policy decision since mid-2009; we have also taken savings to deal with revenue reductions. Those reductions in revenue are across all—particularly all profit based—revenue heads. The government took the decision it did because we do have, front and centre, Australian jobs and growth in the economy in our minds, and the resilience of the economy, we believe, required the government to take the approach that the Treasurer announced, which is that we would not continue to cut expenditure to reflect revenue downgrades because that would affect jobs. (Time expired)