Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Hansard source

I thank Senator Macdonald for his questions, because they give me an opportunity to remind the chamber that, yes, when we left government—a government of which he was an effective and important member in the various roles that he played—there was no net debt. There was a Future Fund. There was a fund to look after health capital. There was a fund for education infrastructure. These were funds which had been built up over the years. Everybody talks about the so-called profligacy of the Howard government, particularly the last part of it, but we actually left the place with no net debt. The reason we have a $300 billion limit that we will be bumping up against this month, on 12 December, is the build-up of debt over the last six years.

As I sought to explain earlier, the government had plenty of opportunity during that period to bring debt under control, and the whole reason we have had this debate about limits three or four times now in this parliament is that they sought to make a political point by creating a limit and then they went and breached the limit three or four times. Then they are surprised that there is a debate about their intentions. People say: 'Hang on. You're saying you want a surplus by such a date, but your action is that you keep coming back to raise the limit.' It is important that we get away from just debating limits and talk about the substance of budgetary issues.

I am glad you raised issues in relation to Queensland, Senator Macdonald, because I do not resile from anything I said before about the support that we want to provide to Queensland—including infrastructure support, because that is going to be one of the growth areas of the country. You mentioned issues around the live cattle trade. My portfolio and others are looking at aspects of that. There are issues around insurance in North Queensland that we have discussed. There are a whole series of issues we need to tackle so that the growth and prosperity of these areas where we have such a comparative advantage can be reinforced.

We are not looking to do that through increased debt necessarily. My point is: let us talk about the substance of policy and about the priorities and choices that governments have to make. What the Greens have suggested in this debate is that we have greater transparency and by all means debate what spending is being used for and what debt is being used for. But you are right, Senator Macdonald: we are in this situation because we are bumping up against a $300 billion limit. We were advised when we came to government that, all other things being equal, when there was a certain deterioration in the economic parameters, we would be facing $400 billion to $500 billion of debt over the forward estimates.

The Treasurer made the decision that he would only come back to the parliament once to get approval for a limit, which is not a target. It is not about saying, 'The credit card is now $500 billion, let's go out and spend that.' That seemed to be the practice in this place for six years, but it is not the practice now. The MYEFO will set out what has happened to the budget since we came to office, what we inherited and the measures we have taken to date. It will lay out the problem, and the budget will have more of the solution.

The Mid-Year Economic and Fiscal Outlook has had to take account of the September quarter national accounts. That is another reason why we have spent the period since last Wednesday updating the forecast and the parameters which are in it. It will all be laid out. Modest Mouse would be very happy with what we are about to put out. From the description provided by Senator Pratt, particularly at the end, Modest Mouse sounded like a member of the Labor Party.