Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Di Natale for that question. What this government is doing is fixing the budget mess left behind by the Labor-Greens government. When we came into government in September last year, we inherited an economy growing below trend, which had rising unemployment, low consumer confidence and business investment that had plateaued. The budget was an absolute mess, with a spending growth trajectory that was unsustainable. Labor's carbon tax, mining tax and massive additional red tape had reduced the level of economic growth, which had flow-on implications for the revenue raised by government. We are fixing that.

The Labor and Green reckless approach to government spending put us on a spending growth trajectory that was going to take spending, as a share of GDP, to 26.5 per cent—up from 23.1 per cent in the last year of the Howard government. That is at a time when we are raising less than 22 per cent, as a share of GDP, in tax revenue, with a long-term average of about 23.7 per cent. You do not have to be Einstein to know that you cannot balance your budget by continuing to spend at the levels the previous government wants to spend at.

There is no easy way to cut and reduce an unsustainable, unaffordable spending growth trajectory, but we cannot keep spending money we have not got and we continue to borrow from our children and grandchildren in order to fund our lifestyle today. We are saying that it is not appropriate for us to continue to borrow in order to fund consumption today. We think that we owe it to our children and grandchildren to protect our living standards, to build prosperity and to build opportunity for the future so that we leave to them a country that is in at least the same position, if not a better position, as the country we inherited from our forefathers.