Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

Madam Acting Deputy President, I was chided yesterday by a coalition acting deputy president for making interjections, saying that speakers should be heard in silence. I wonder if the same courtesy could be provided to me today?

Coming back to the pre-election budget statement: that is a complete update done by Australia's public servants about the state of the budget. That is the document which is still the most recent budget update. In that, what they told us was that net debt—I am talking about net debt at the moment—will peak in 2014-15, and gross debt—in this case the Commonwealth securities on issue—will increase to $370 billion in the financial year 2016-17. That is the context in which we are having this discussion.

Since that time, obviously, we have had the election—a new government has been elected, a government that has talked long and hard about their commitment to debt reduction. And what have we seen since the election? We have actually seen decisions taken that blow out the deficit: decisions to wind back tax changes, for example—tax changes that lessen the capacity of corporations to minimise their tax. We have seen a decision to provide the Reserve Bank with, I think, nearly $9 billion. We have seen decisions taken that increase the deficit and increase debt. We have also seen the government musing about increasing debt for the purposes of investment in infrastructure. We have seen Mr Briggs, one of the junior ministers, talking about leveraging the government's balance sheet, which, of course, is code for being able to borrow more and invest in infrastructure.

Now, there may well be some reasonable arguments that the government would put to the Australian people and to the public about this issue. It may well be that they would say, 'Look, we think we should borrow more so we can invest more.' That is certainly what the musings are from Mr Hockey, Mr Briggs and, I suspect, Senator Sinodinos, who has arrived now, which flag higher levels of debt.

Then what the government has done is said, 'By the way, one of the first orders of business for this government to put on the Notice Paper is an increase in the debt cap—Australia's debt limit—to $500 billion, without explanation.' In fact, the only explanation they want to give is to blame the Labor Party. I think it is very important that we actually step through the political tactic here. The political tactic is: blow out the deficit, increase debt and then blame the Labor Party when they make massive cuts next year.

That is what it is: blow out the deficit, increase the debt cap, blame the Labor Party and then turn up next year and breach a whole bunch of election commitments, including cuts to health and education, after your Commission of Audit has reported. This is part of a political strategy. The sadness of it for Australians is that we have a government and a Treasurer who are prepared to use something as important as the debt cap for political purposes.

We will take, and are taking, a responsible approach to this issue. What we have said is simply this: we will give you an increase, sight unseen. Without seeing your budget figures, we will give you a $100 billion increase on what you are currently have. Sight unseen, we are prepared to do that because we understand the importance of being responsible. Again, I remind Australians, I remind people and I remind the chamber that as at the pre-election budget update the $370 billion was not reached until 2016-17. The opposition is now saying, 'We will give you $400 billion now in 2013. But before we give you some more, we think you should tell Australians why. We think you should tell Australians what the true state of your budget is.'

It is pretty reasonable. You ask for a $200 billion increase—a $200 billion increase!—in the debt cap without any documentation. It is the largest low-doc loan in history! So the Labor opposition is being responsible, we are being reasonable and we are saying, 'Well, you're the government of the day. We accept that the debt cap needs to be lifted; we accept that we need to approach this responsibly. Therefore, we will move an amendment to enable you to have a $100 billion increase. But before we go further—before you provide the largest debt cap ever in the nation's history and before you go to half a trillion dollars—we think you should provide a budget update that shows not only the Senate and the House of Representatives where your budget is but also the Australian people. And you should do that because that is the responsible approach.' That is the approach of a responsible government.

The sort of ultimatum we have seen from the Treasurer of the Commonwealth of Australia this week and on the front pages of some of the press today is the height of irresponsibility because what it is is a Treasurer who is prepared to use this debate entirely for political purposes. What it is is a Treasurer who sees the possibility or the opportunity in this debate to make a political point about the Labor Party and is prepared to issue an ultimatum threatening shutdown of government—which is a lie—for political purposes. It is the sort of threat or the sort of language you might see from a National Party senator or you might see from a junior, very ambitious—what are they called?—'modest member'. They don't appear to be very modest, I have to say, but that is probably a discussion for another time. It is not sort of thing you should see from the Treasurer of the Commonwealth of Australia—using an argument about the debt cap or the prospect of lifting the debt cap in such a blatantly political way. But that is what Mr Hockey is doing, and it is really quite extraordinary to see.

I will make a few comments about debt, and I will be interested to see if Senator Sinodinos repeats some of the drivel, frankly, that is coming from the government on debt. I will congratulate you, Senator Sinodinos, on representing the Treasurer in this place. I cannot recall a time when the Minister for Finance did not represent the Treasurer, so it says something very good about you, certainly by comparison. Yes, maybe it was a backhanded compliment! I want to make a point about debt because, again, the government is using this debate to try and rewrite history. The political contest is often a contest about narrative. It is a contest of stories. It is a contest not only of ideas but also of how we describe what is happening and how we see the world. It is often a contest of history, and this is an occasion on which it is a contest of history. Let us be really clear about what the government are doing. They are seeking to use this debate to suggest that the Labor government destroyed the economy and destroyed public finances.

Can I just put some facts on the table. Over the six years Labor was in government our economy grew by 14 per cent at a time most other advanced economies were either growing by much smaller numbers or not growing. My recollection is that if, for example, you look at the period between just prior to the global financial crisis and the time the Labor government lost office, we grew by about 14 per cent, I think the UK was still struggling to get back to its pre-GFC output levels and we saw Germany and the US certainly at levels of growth far below Australia's. So during the time we were in government our economy grew by 14 per cent, and nearly a million jobs were created. That is a standout performance by global standards. The reason we did that, the reason we engaged in the stimulus package that Nobel Laureate Joseph Stiglitz has said was the best designed stimulus package he has seen, is because we understood who a recession hits most, who it hits hardest. It hits those with least capacity to prevail, with fewest resources, and it hits our young people. You only need to go to many of the nations of Europe to see what sort of social dislocation and long-term disadvantage comes from that level of youth unemployment. We averted that here.

Our net debt position as a share of our economy remained low, peaking at a fraction, about one-eighth—I repeat, one-eighth—of the level that you see across most major advanced economies. Over the period of our government we moved up the economic rankings to become the world's 12th largest economy and we took a range of long-term savings to make room for the long-term investments that were made. I would refer those who are interested to the 10-year savings plan for both DisabilityCare and also the Better Schools Plan. In fact, at our final budget, Treasury's assessment of the effect of the long-term savings taken in that budget and previously improved the budget position by over $300 billion by around 2020. To decode that, what that means is we made a range of savings decisions to make room for important investments in the nation's social infrastructure. We made those savings and, as a result of those savings, the budget position was $300 billion better by 2020 over that period. That is not me saying that; it is actually the Treasury saying that—it is in the budget papers.

So what is the debate that the government are engaging in? What they want Australians to believe is that those facts are wrong. And they particularly want Australians to forget, or not be aware of, one very important fact: under our government we had a AAA credit rating from all three ratings agencies. That is something even Peter Costello never achieved. You do not get that if your public finances are not strong. Instead of those facts, what we have is a government who want to use this debt cap legislation as a political tool. They have an extraordinarily reasonable compromise on the table: a $100 billion increase that they can pass today. We have said to the government and also to the Australian Greens we are prepared to facilitate passage of the amended act today. So Joe Hockey can have a $100 billion increase today if he is prepared to be reasonable—a $100 billion increase to $400 billion. No need for ultimatums, Joe; no need for threats—you can have a $100 billion increase today. But he does not want to take it because he wants the political fight. And what does that tell you about the willingness of this government to put politics first and responsible economic management second?

We are prepared as a responsible opposition to provide a $100 billion increase today. We will vote for one today. The fight that the government wants to have is that they say, 'We want a $200 billion increase and we do not want to actually update our budget numbers to show you why before that,' in a context where we know from the departments of Treasury and finance that as at September the peak debt position subject to the cap would be $370 billion.

It may be that there is a very reasonable argument as to why Mr Hockey, the man who hates debt and deficit, wants a $500 billion debt cap, a half-a-trillion debt cap; but perhaps he could present it to the Australian people? In this debate, just as in the debate about asylum seekers and just as in the discussion about the repeal of the carbon legislation, there is a consistent theme: this is a government that does not want to be transparent; it wants to play politics rather than put information before the parliament and the Australian people. This is a government led by a man who promised Australians before the election that he would restore accountability and improve transparency. Those were Mr Abbott's words—'restore accountability and improve transparency'. Why don't we get a bit of that transparency and accountability when it comes to this legislation? Why don't we get a budget update that explains? If it is so appropriate, if it is so needed, if in fact $370 billion in three years time is now $500 billion next year or $400 billion next year, put your numbers out.

I think that the Australian people are actually entitled to have this information. The government should let the people into their trust. They should stop treating not only the parliament but also the community like mushrooms and keeping them in the dark in their blatant desire to make this a political issue. There are some things that should be the subject of great responsibility in this place. All legislation is important; we should take a responsible attitude to all legislation. You have to say that when it comes to public finances, when it comes to the budget, when it comes to the debt cap, these are very, very critical pieces of legislation and they require a serious approach. That is why we are taking a serious approach. But the government wants to take a political approach; they want to play politics with this issue. I simply remind them again that this chamber—and I understand the position of the Greens will be to support my amendment—can pass legislation today and return it to the House in time to have this bill made law and you will get sight unseen half of what you are asking for. It is not an unreasonable proposition and, if you fail to take it, we will all know why.