Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Sherry. Will the minister confirm that $40 billion of the total massive spending stimulus since the 2008 budget is unspent and not due to be rolled out until after 1 July next year?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Thank you for the question. The stimulus is divided into three categories—that is, short, medium and long term. We have already seen a significant proportion of what I describe as the short-term stimulus—namely, the cash payments. As I understand it, they peaked in the June quarter. In the September quarter we will see further cash payments in a variety of forms. In the medium to longer term, our stimulus provides for important investments in infrastructure areas such as ports, roads and broadband and other important economic investments. That is the nature of the stimulus in the short to medium term. It is designed to phase down those cash payments. That is an important part of the stimulus.

As to the exact dollar proportion of the stimulus spent as at today, I do not have that figure in front of me, Senator Coonan. I am not aware of whether your claimed figure of, I think, $42 billion is correct, so I am more than happy to take that on notice and come back to you with a precise answer. There will obviously be an opportunity, I think next Monday, to question Dr Henry about the stimulus package. (Time expired)

Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Given that the Reserve Bank governor has recently signalled that interest rates will not remain at current levels, with some economists predicting that a rise could be as early as November, will the minister now guarantee that this excessive Labor government spending will not fuel rising interest rates?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

What I will indicate is that I do not accept the assertion of a link between government debt and interest rates. I do not accept that assertion. We know that interest rates are at record lows. They are at a 50-year low, which is the lowest since March 1960. We know that the cash rate is three per cent and that official interest rates have been cut by 4.25 per cent since August 2008. The average standard variable mortgage rate is 5.78 per cent. Why are interest rates so low? The reason is that they are at emergency levels.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

So why are they going to go up? That is the question.

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I am getting to that, Senator Coonan. They are at emergency levels because of the world financial and economic crisis. Interest rates will go up, but not for the reasons that you claim. (Time expired)

Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I note that the minister was not able to provide any guarantee about rising interest rates. With $40 billion of the total stimulus not due to be spent until 1 July next year, the government’s stubborn refusal to acknowledge that the economic emergency is receding and the disturbing reality that no federal Labor government has ever managed to have an operating surplus on leaving office, is it not inevitable that the Rudd Labor government will be responsible for rising interest rates, rising taxes and crippling debt as a legacy of their economic mismanagement?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Even the former Liberal government left us with $58 billion in gross debt.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

How much net debt?

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Senator Minchin knows the truth. Even the former Liberal government left $58 billion in gross government debt. Through you, Mr President, the reason that Senator Minchin says, ‘How about net debt?’ is that the Liberal opposition does not use net government debt to illustrate the current level of debt. It uses gross government debt. Therefore, I think it is perfectly reasonable for me to highlight the fact that the Liberal party left us with $58 billion in gross debt.

Opposition Senators:

Opposition senators interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

You use gross debt; I will use gross debt. We are as one on the gross debt front. You left us with $58 billion. (Time expired)