Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is directed to Senator Minchin, the Minister for Finance and Administration. I refer the minister to the fact that this year the $10 billion water plan, the $587 million Northern Territory intervention and the $45 million Mersey hospital takeover have all been announced before being costed by Treasury and Finance. I also refer the minister to the Treasurer’s concerns about the Prime Minister’s record election year spend in 2004. Mr Costello said:

I have to foot the bill and that worries me ... I do worry about the sustainability of all these things.

Given that the Prime Minister is again making uncosted announcements in the lead-up to the 2007 election, can the minister indicate whether he shares the Treasurer’s concerns? What is the minister doing to prevent the Prime Minister from another irresponsible election year spending spree in a desperate bid to cling to power?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

It is interesting that the Labor Party is supportive of all these initiatives—with the exception of Mersey, where we have no idea what their position is. They support the $10 billion investment in the Murray-Darling Basin Commission over the next 10 years. They support, I gather, our Northern Territory intervention. Now they are apparently quibbling about the cost of the Northern Territory intervention. It is the case that, once we sent survey teams on to the ground and realised the extent to which assistance was going to be needed to ensure that we do deliver and that we protect children in the Northern Territory from child abuse, we realised that it was going to be a $587 million program in the course of this financial year. The great thing is that, as a result of the very hard work which the government have put in over 11 years to restore the Commonwealth finances from the shambles that we inherited, the Commonwealth budget is in a position where it can meet these sorts of expenditures—which, as I noted, the Labor Party does support.

As to the reference to the Treasurer’s remarks, as I said on Meet the Press, it is the job of the Treasurer and the finance minister to worry about the future sustainability of all Commonwealth government programs. That is why we are there. It is our job to continue to remind all our colleagues that we have to ensure the sustainability of Commonwealth finances going forward. That is why it is our government that introduced the Intergenerational report, which has the 40- to 50-year forecast of what will happen to the Commonwealth finances as a result of demographic ageing. We are the ones who have gone out of our way to point out to the Australian people, and indeed to the opposition, the risks to the Commonwealth budget that are inherent in demographic ageing and the sorts of measures which are required now to ensure that sustainability.

Those measures go to things like welfare to work reform. They go to things like increasing the productivity of this country through industrial relations reform. The Labor Party are saying, ‘We are worrying about Commonwealth finances.’ The worst thing you can possibly do to the sustainability of Commonwealth finances is to destroy the productivity-improving industrial relations changes which we have brought in. If the Labor Party get into office and take this country back to the pre-Keating era in industrial relations—which the ACTU will ensure that they do—then the productivity of this country will suffer enormously and the capacity of this country to generate revenues to meet the burdens that we face in health and aged care will be put seriously at risk.

We are very proud of our fiscal record. This government has demonstrated the greatest fiscal restraint of any government for at least the last 30 years. The average increase in real spending under our government is lower than any of the previous three governments. We do exercise fiscal restraint. We have been attacked by the Labor Party for most of the 11 years that we have been exercising that restraint. After every budget, the Labor Party shadow spokesmen in every single area all come out and complain that we have not spent enough. No matter what we spend, no matter what our new programs are, Labor comes out and says, ‘You haven’t spent enough.’ Do not give us a lecture about fiscal prudence.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I note that the minister did not respond to the point in the question that these announcements were made before the policies were costed. So I ask the minister: why is it that his department is really unnecessary in doing any costings on these policies? What savings could be made as a result of them not being necessary? Further, can the minister confirm that economic commentators are right to say that the Prime Minister’s desperate election year spending is putting significant pressure on interest rates? Why is the Prime Minister putting the mortgages of working families in jeopardy with what is clearly going to be a significant and substantial election spending spree in the next few months?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Mr President, I do not think Senator Forshaw, with great respect, understands anything about economics. The point of running surpluses is to ensure that we minimise the pressure on inflation and interest rates. They have been attacking us for running substantial surpluses. The reason we run substantial surpluses when times are good is that it is prudent to run substantial surpluses and make sure that Commonwealth—

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I rise on a point of order. I do not think the minister understands a straightforward question. The question was about costings by the department of finance and costings by Treasury, and I would ask you to direct him to answer the question and not try to lecture us about the failings of his own department and his own government.

Paul Calvert (President) Share this | Link to this | Hansard source

Senator Forshaw, you have made your point. The minister has 38 seconds to complete his answer.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

On the point of order, the first 20 seconds of the question were about costings and the last 40 seconds of the question were an attack on the government in relation to our budgets and putting pressure on interest rates. If I choose to answer the last two-thirds of his question, I am entitled to do so. If I may return to the answer I am happy to do so.

Paul Calvert (President) Share this | Link to this | Hansard source

There is no point of order. Senator Minchin, return to the question.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Having dealt with the last 40 seconds of the question, in terms of the first 20 seconds it is appropriate for prime ministers to announce policy positions of the government with indicative costings subject to subsequent ratification and examination by the costings departments. In relation to the Murray-Darling the Prime Minister announced an envelope of $10 billion, and now, as a result of that announcement, we are detailing costings of the individual programs within the ceiling of $10 billion. The $10 billion will not be exceeded. In relation to the Indigenous intervention, of course we are costing that program. (Time expired)