Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Conroy. When will the government deliver a budget surplus?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank Senator Abetz. The government will do everything possible in these difficult global conditions to support both growth and the surplus. As global conditions deteriorate, that task will become tougher and tougher. As I noted yesterday, already a number of developed economies, including the US, the UK, Japan, France, Italy and Germany, have forecast a deficit and negative growth for 2009. And the OECD’s latest economic outlook report provides yet another sobering assessment of the difficult global conditions that we face and the impacts the global financial crisis is having on advanced economies everywhere.

If global conditions continue to worsen, there will be a further slowing of growth and a further impact on budget revenues. If that slowing occurs, we have said it would be the responsible thing to draw down further on the surplus and, if necessary, use a temporary deficit to invest in the economy. Any such action would be temporary and consistent with the budget discipline of maintaining a surplus across the economic cycle. This cycle takes into account times when the economy is strong and times when it is confronting serious challenges like those we are now facing in the global economy. The length of the cycle will depend on the types of shocks that are buffeting the economy. (Time expired)

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question actually was: when will the government deliver a budget surplus? By that answer, I dare say he does not know. But, Mr President, I have a supplementary question following on from the answer. When the government talks about going into temporary deficit, for how many years does it expect its temporary deficit to last?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Our position is to support growth and jobs. Failing to act if needed would be irresponsible and would sacrifice growth and jobs. There is not a single credible economist in this country who does not share that view—not one credible economist. As we have said, in the current circumstances it is not necessary. Our current forecasts are for modest growth and modest surpluses. But it would be irresponsible to rule it out, given the dimensions of the global crisis. We will continue to take whatever action is necessary to strengthen growth and limit the impact of the global recession on jobs. (Time expired)

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that growth is forecast at a modest two per cent, the cash rate is at 5.25 per cent and the stimulus package is yet to be delivered, why has the government thrown in the towel and gone into deficit?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Perhaps I could just repeat something I said in my earlier answer, because Senator Abetz appeared not to hear. In the current circumstances our current forecasts are for modest growth and modest surpluses. That is our forecast. Those opposite apparently want to put themselves against every credible economist in the country on the issue of budget policy. Let me read what just a few experts have said on this issue. The Reserve Bank Governor, Glenn Stevens, said:

If we see governments at state level or federal level pull back from worthwhile things because of the budget balance deteriorating, which it is going to do in this environment, that is not stabilising. That is potentially destabilising.

Westpac chief economist Bill Evans said:

We have already seen a very laudable $10 billion—

(Time expired)