Kimberley Kitching (Victoria, Australian Labor Party) Share this | Hansard source

I rise to speak about the need to introduce a debt ceiling on how much the Australian government can borrow. Before I do that I want to hark back to those distant days of good financial management by a federal government. Let's look at where the debt ceiling came from. It came about under the Rudd Labor government. Who abolished it? Smoking Joe Hockey, former Treasurer of Australia, abolished it in a 2013 deal done with the Greens political party. A little history: in 2013 a Labor government set a ceiling on the amount that the Australian government could borrow, and that ceiling was $75 billion. In November 2013, then Treasurer Hockey requested parliament's approval for an increase in the debt limit to $500 billion, saying that the limit would be exhausted by mid-December 2013, a month later. With the support of the Australian Greens, the Abbot government repealed the debt ceiling over the opposition of the Australian Labor Party.

Let's fast forward from those halcyon days of a Labor government making good and responsible economic choices for Australia. Let's move forward to May of this year, to budget night. What do we find? We find the member for Cook in the other place describing his budget as 'making the right choices for Australians who are working hard to secure better days ahead'. Better days ahead? How is that possible with the dysfunction of this current government?

Let's take a closer look at that dysfunction. After all, it is not only Senator Paterson, my fellow senator, who is from Victoria, sometimes referred to as the Massachusetts of the south and also known for the many sound economic managers it has produced at both state and federal levels of government. I refer, of course, to former Premier Brumby, also a state Treasurer of great renown, and my former boss, former Treasurer John Lenders, a very safe pair of hands of the Victorian economy. But I digress. Let us go back to Senator Paterson, who in his maiden speech in March last year called for parliament to reimpose a debt ceiling. With gross debt exceeding $400 billion, the government should have to seek permission from the parliament to increase it, Senator Paterson said. And now where are we? The debt ceiling increased last month to $600 billion. The debt figure hit $490 billion on 5 May, according to the Australian Office of Financial Management, so in the nick of time, a few days later, the debt ceiling was raised—but wait; there is more. In the budget papers, gross debt is predicted to blow out until it hits $725 billion in 2027-28. That is a 48 per cent increase in debt.

But the dysfunction does not even stop there. The Minister for Finance did not even want to admit the figure when interviewed the night after the budget. He was asked six times on Andrew Bolt's program what the gross debt numbers are and, like Peter, who denied Jesus thrice, the finance minister doubled down on that and, while given six opportunities to answer the question, finally left his interviewer saying, 'I won't push it.' Of course, the gap between the Treasurer and the Minister for Finance in their enthusiasm for increasing debt has been put to me by a member of the coalition—politely, I have to say—as being 'significant'. But let's go to the transcript.

Andrew Bolt: Why is peak gross debt a secret? Why can't you tell us how much the debt will go to? I mean, this is very important. You were the guy that was very strong on debt and deficit, I would like to know what the figure is.

Senator Cormann: What I am telling you is that the debt number that actually matters is Government net debt and it will peak at $375 billion in 2018-19. It will peak at 29.8 per cent as a share of GDP.

Andrew Bolt: I got that. I am just asking that the debt ceiling is $600 billion, when will you go above that? You are the ones that talked about the debt ceiling yesterday. I want to know is it going to be broken?

Senator Cormann: Actually I have not talked about the debt ceiling. The Treasurer has made a decision to ensure that the operations of Government can continue in an orderly fashion and he has made an administrative decision which is on the public record …

Of course, the finance minister would be nervous. Look what happened in his home state of Western Australia. His Liberal Party state branch drove the economy of that great and proud state of Western Australia off a cliff. The result? In their state election earlier this year, the Liberal government were soundly routed and rightly removed from office.

Let's go back to where we started. Let's go back to the Treasurer. Where is Sco-Mo, perhaps more properly and formally referred to as—