Dean Smith (WA, Liberal Party) Share this | Hansard source

I would like to begin by congratulating Senator Hanson and her One Nation colleagues for bringing to the Senate's attention a very important issue. Of course, when we talk about debt ceilings and their suitability or otherwise, what we are really talking about is whether or not the excessive levels of government expenditure can continue to be supported by the Australian taxpayer into the future. I, like other coalition colleagues and I am sure colleagues from the One Nation Party, absolutely agree that this level of expenditure—not of our money but of taxpayers' money—can simply not be sustained into the future. If we agree on that, the conversation necessarily becomes one about the sorts of constraints that we can put on government to ensure that government expenditure over time is reduced, that the burden is removed from Australian taxpayers and their families, and the economy is allowed to flourish as a result of that.

I am big enough to be able to say that I was disappointed when the coalition government decided to remove the debt ceiling. I am certainly one of those people in the camp who believes that debt ceilings are necessary and important institutional mechanisms that help constrain the size of government and, in the process, take the pressure off Australian taxpayers and their families. Unfortunately, we do not live in an ideal world, nor do we live in a policy vacuum. The government at the time was forced to confront some very serious issues around government expenditure that had been left to it—no surprises—by the Labor opposition. That is not an excuse, because I would hope that one day we would absolutely get to the place where we can again restore debt ceilings because I think they are important institutional mechanisms to give people a degree of confidence to make sure that public monies are being spent as wisely as possible.

On top of that, of course, I am one of those Liberals that believes we should be reducing the size of government. There is much that government is doing in this country that is detrimental to the prosperity and livelihoods of ordinary Australians. Australians are very able to get off their backsides to build businesses and to raise their families; they do not need government and the size of government constantly in their way and constantly in their lives. So I am aspirational that we will be able to get back to that particular point in time.

If I could diverge for just one moment, I would like to see us restore the integrity of our constitutional document and to restore the integrity of section 51 either by taking away from the federal government certain activities it currently does or by actively saying to state governments, 'This is your responsibility.' In the federation reform white paper that had been advanced by the former coalition Prime Minister, Mr Abbott, there was a key word in that document that I am sure senators who think like we do were drawn to. That word was 'subsidiarity', meaning that decisions should be made as close as possible to the people they affect and the funding decisions that are attached to those should be sourced closely to the people that actually benefit from those decisions. I came to this place five years ago, strongly committed to the original compact our forefathers designed—what great brilliance they were able to demonstrate in the late 1890s! I come to this place saying that the people of Western Australia, the people of South Australia and the people of Queensland can be trusted to make decisions for themselves that are in their own best interests. The Commonwealth can focus on those traditional areas of responsibility. But I digress.

I would like to just put in context the dilemma the coalition government finds itself in and the constructive work it is doing to deliver a better budget outcome not just for the government but for every Australian. Then, if my time allows, I want to briefly reflect on the critical issue of wages growth—more particularly, the lack of wages growth in our country and the real dilemma that presents for ordinary families.

In May of this year, following the federal budget, the Treasurer, Scott Morrison, was able to detail for the Australian community exactly the size of the challenge the government still faces, even though it was elected in 2013, to return the government's finances and indeed the finances of the Australian population to a much better and reliable format. In his contribution he talked particularly about the importance of Australia living within its means. The Treasurer said:

Since 2008, when the Rudd Government put Australia back into deficit, more than 75 per cent of our gross debt, or around $370 billion, has been raised to pay for everyday expenditure in welfare, health and education.

From 2018-19, ten years after Labor put us on that track, we are getting off it and will no longer be putting every day expenses on the credit card. That is what living within your means is all about.

Under Labor they accumulated deficits of just under $240 billion in six years or 16.9 per cent of GDP. Under the Coalition, over six years from our first budget in 2014-15, our deficits are $70 billion or around 30 per cent less.

What that means is, we are working towards a better budget outcome—not yet achieved, but making progress. The Treasurer went on to say:

The other key difference is Labor inherited the Liberal gift of a structural surplus and we inherited the Labor curse of baked in spending and a structural deficit.

Net debt is projected to peak in 2018-19 at $375 billion or 19.8 per cent of GDP, before declining to 8.5 per cent of GDP over the medium term. The increase in gross debt reflects the Government's borrowing to support infrastructure and defence capability and borrowing over the medium term to avoid drawing down on the Future Fund to pay for unfunded superannuation liabilities—

Of course we know—

that will save a century of taxpayers from having to meet these costs.

The Treasurer went on to say:

Under the Coalition we have cut the growth in our Gross Debt by two thirds—from over 34 per cent under Labor to less than ten percent in this budget.

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