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

I move:

That the Senate take note of the answer given by the Minister for Employment (Senator Abetz) to a question without notice asked by Senator Dastyari today relating to government debt.

The front page of the Australian Financial Review this morning tells it all. The splash headline of the country's main business newspaper is 'Abbott loses the plot on debt', and the subheadings read, 'PM says 60pc of GDP a "pretty good result"; 'Economists lose hope in budget'; and 'Business urges coalition not to give up'. So there you have it: the verdict on the Abbott government's economic credibility in the crisp and concise language of the headline writer—the verdict to which Australia's business executives woke up this morning; the verdict being read by investors and financial markets. Mr Abbott's deceit on the budget and debt has caught up with him and his incompetence is exposed. It has been exposed. This Prime Minister's last shred of economic credibility has evaporated.

We all remember that, before the last election, Mr Abbott talked down the Australian economy and he ran a scare campaign about government debt. We all remember it: Australia was in a 'budget emergency'—do you remember that?—and a 'debt and deficit crisis'. He compared Australia to Greece. The truth is that Labor left Australia with one of the lowest levels of government debt of any advanced economy. The Pre-election Economic and Fiscal Outlook, prepared by Treasury and Finance, showed net debt peaking at 13 per cent of GDP in 2014-15. IMF figures showed that, out of the world's 26 advanced economies, we had the sixth lowest level of government net debt in 2013-14. Yet before the election Mr Abbott told the public that debt peaking at 13 per cent of GDP was a 'budget emergency'.

What did he say yesterday? He said that net debt under his government policy settings will climb to 60 per cent of GDP—some $960 billion in today's money—and Mr Abbott said that this would be a 'pretty good result'. So net debt at 13 per cent of GDP under Labor is a 'budget emergency' but net debt at 60 per cent of GDP under the Liberals is a 'pretty good result'! No wonder the Financial Review says 'Mr Abbott has lost the plot'. But the trouble is that this Prime Minister is taking the wider economy down with him. This selfish and irrational Prime Minister is taking the wider economy down with him. Since the Abbott government handed down its budget, we have seen business confidence plunge, consumer confidence taking a hit, the slowing of growth, and unemployment rising to its highest level in more than a decade.

But Mr Abbott is not only trashing the economy; he is trashing the credibility of his ministers—like the Minister for Finance, Senator Cormann. Let's recall: under the Labor government we had lower spending as a share of GDP than this government; lower taxes as a share of GDP than this government; and we left Australia with one of the lowest levels of government debt of any advanced economy. By contrast, Senator Cormann, as Mr Abbott's finance minister, is budgeting to increase spending, increase taxes and increase net debt. This finance minister likes to posture like an anti-debt vigilante, but he is actually taking Australia on a path to net debt of nearly a trillion dollars in today's money. Senator Cormann pretends that he is the 'Terminator' but the reality is he is the 'Debt-o-nator'. He is presiding over an explosion in government debt—an explosion which this Prime Minister says will be a 'pretty good result'.

Australia cannot afford to be governed by a finance minister who has blown out the budget deficit, a Treasurer who thinks it is okay to hike petrol taxes because 'poor people don't drive cars' and a Prime Minister who has deceived the Australian public and lost the plot on the economy.