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

I thank Senator Edwards for that question. Earlier today the Treasurer released a very important report for the future of our nation. What this report shows are the challenges that our nation faces in the decades ahead. It shows the opportunities we have in front of us, as long as we get our policy settings right.

Of course, what it shows is the important need for our plan to strengthen the economy, to create more jobs and to ensure that government funding for health, for families, for pensioners, for medical benefits, for pharmaceutical benefits, for state schools and for hospitals is put on a sustainable foundation for the future. What it shows is the unsustainable spending growth trajectory that we were on as a result of the decisions of the previous government, but it also shows the progress that we have made so far as a parliament in putting ourselves on a stronger foundation for the future.

It does show that there is still a lot of work to be done. But if you look at the trajectory that we were on, it was a trajectory taking government spending as a share of GDP to an unprecedented 37 per cent. To put that into context: the highest level of government receipts ever in the history of Australia was 26.2 per cent back in 1986. So what it clearly shows is that the spending growth trajectory that we were on was unaffordable.

Some people on the Labor side might say, 'Well, just chase it up with more new taxes. Let's just go up to 37 per cent of tax revenue as a share of GDP.' We know what that would do: it would kill the economy, it would hurt investment in Australia and it would make us completely uncompetitive. It would cost jobs and it would be exactly the wrong way to do it. This is, of course, why we are working to make government spending in Australia sustainable again, to make sure that we can live within our means and to make sure that we can strengthen economic growth, improve opportunity and protect our living standards into the future, rather than pursuing the trajectory we were on. (Time expired)