Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today to make some comments with regard to the government's proposition that it increases the debt ceiling by $200 billion. In considering the debate that has gone on today you cannot help but think that the Prime Minister and the Treasurer have been engaged in extreme makeovers when it comes to their attitude to the debt ceiling. I just remind the Senate what the Prime Minister Mr Abbott had to say when he was in opposition and the Labor government of the day tried to increase the debt ceiling by $50 billion at that time. Tony Abbott said:

The Government should be forced to specifically justify this, not to just sweep it under the carpet and allow it to go through in the appropriations because by convention the Opposition doesn’t oppose the appropriations. I think we do need to take a very, very seriously critical look at this question of the debt ceiling. I’m not saying that, having looked at it critically, we would necessarily oppose it, but the Government has to justify this. Our money, our future, is too important to be mortgaged like this without the Government giving us the strongest possible arguments for it, because every dollar that they borrow has got to be repaid.

That was the Prime Minister in opposition, wanting a very critical look at exactly what the government intended to do with that money in the increase in the debt ceiling, and that is exactly what the Greens, and indeed the Labor Party, are now asking of the government: justify this. It is a critical question of the debt ceiling: justify the extent of the increase in the debt ceiling.

I note that Minister Cormann visited the Tea Party when he was on his study tour in the US and he actually visited the people who ran the strategy to try to completely destroy President Obama's strategy in terms of the economy there. I was most amused to note that if you go back and look at Senator Cormann's report on his study trip to the US, he learned a lot from the Tea Party. The government know exactly what they are doing, but this extreme makeover really warrants some consideration.

In 2011, Andrew Robb, a member of parliament, said:

The only reason the government needs to lift the debt ceiling again is because of its own incompetence.

Then he went on to say that Labor only needed to raise the debt limit 'in order to fund its reckless spending and waste'. Mr Hockey said last year that government debt is about 'borrowing taxes from future generations that have to pay the principal and interest on those borrowings' and that the increase in the debt limit to its current limit was simply because of Labor’s 'legacy of waste and reckless spending'. That is what he had said about the budget in 2012. Then Mr Hockey went on to say that government borrowing 'crowds out' the private sector and that debt is 'placing upward pressure on interest rates domestically and has an effect internationally, making it more difficult for enterprise'. He said that in 2011, and he went on, getting stuck into the Labor government of the day, saying that in terms of borrowing from offshore that that would be a disaster as well, according to him.

Now that we have Prime Minister Abbott in power we have an entirely different scenario. Instead of the critical look that Prime Minister Abbott was demanding in terms of what the government intended to do, he now is saying, 'Just give us the $200 billion so we can just have it there and it will save us having to come back to the parliament to ask for an additional rise on the debt ceiling later.'

The Greens are prepared to extend to the government support for raising the debt ceiling by $100 billion, and the Labor Party have said that they will do that. That is in the context that before the election Treasury independently released its pre-election fiscal outlook that stated that by 30 June next year debt would reach $290 billion and projected that it would reach $350 billion in 2015-16 and $370 billion in 2016-17. Therefore, if we are talking about peak debt of $370 billion in 2016-17 then there is no rush to get it to $500 billion or no justification for doing so in that time frame. If Treasury's pre-election fiscal outlook is to be believed then there is no rush to go beyond the $400 billion that the Greens and Labor have said they are prepared to agree to. That will allow for the December date to come and go with no crisis at all and it will allow the government to come back and say what it needs in excess of that and, if indeed it does, what justification there is for actually doing that.

The government to date have made no case to go beyond the $400 billion except to say that they would like to have that debt ceiling in place. The question remains: why? It is no use offering secret briefings. The people of Australia want up-front information and deserve up-front information. Next week there is the estimates process and the secretary of Treasury and others will be there and can make the case at that point, but at this point there is nothing in the public arena to suggest that there needs to be an increase in the debt ceiling beyond $400 billion. I cannot see why the government expects the parliament and the people of Australia to take the government's word that this is the money that we need, especially as we are seeing the government at the same time saying to Australians, as Joe Hockey had previously done, that this is all about management of finances and the like in the same week the government is saying it wants to abolish the mining tax, for example, and give up on the opportunity to raise billions of dollars from the mining corporations that are making megaprofits in Australia as we speak, let alone go after some of the other extremely profitable institutions like the big banks, which continue to make extreme profits. That is because in the case of the big four we give them even greater advantage because of the parliament and the people of Australia standing behind them.

It is time that we recognise that the trouble for the Prime Minister and the Treasurer is that they are hoisted with their own petard. They made such an issue and exaggerated claims when in opposition about the state of the finances and what the Labor Party were doing. Now they are in government nobody believes them, because they went out with such extreme claims and behaved in such an irresponsible manner when they were in opposition. They made claims and statements about demanding scrutiny. Well, this parliament is asking the same of them—asking for scrutiny of the $500 billion figure.

On that basis the Greens will be supporting Labor's foreshadowed amendment to increase the debt ceiling by $100 billion. You cannot accuse people who are prepared to increase the debt ceiling by $100 billion of running any kind of interference. That is a completely wrong assertion. I think it is important to acknowledge the politics of what is going on in terms of next year's budget. The coalition know full well that they cannot deliver on the election promises they made to the Australian people and they are now searching for an excuse so that they can blame anyone other than themselves for the mess they are going to find themselves in at budget time next year, trying to justify to the Australian people what they are doing and no doubt the axe that they are going to take to many Public Service jobs as a result of this Commission of Audit. The Greens said throughout the election that the Commission of Audit was just a disguise and behind it there will be massive job cuts in the Public Service, and that will be coming.

The Greens do not take any responsibility for the fact that the Liberals have got themselves into a mess and are going to have to wear the budget that they bring down next year. The Australian people have every right to hold them to account for whatever budget they bring down. We are prepared to extend the debt ceiling by $100 billion until such time as the government provides evidence that the peak debt is going to exceed the $400 billion that is being offered by way of this parliamentary debate. If the government provides that information, it will be considered no doubt by the parliament. But to date the only figures we have got are in the pre-election fiscal outlook, with $370 billion peak debt in 2016-17, and the extra $100 billion will cover that.