Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Minister, I refer you to commentary in the 2011-12 budget papers which stated:

To maintain a liquid and efficient bond market that supports the three- and ten-year futures market and the requirements of the new global bank liquidity standards, the panel agreed that the CGS market should be maintained around its current size—that is, around 12 to 14 per cent of GDP over time.

Minister, what rationale does the government have to maintain the market at 12 to 14 per cent of GDP when at the end of the Howard government there was a viable CGS market with gross Commonwealth debt at six per cent of GDP?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the senator for the question. It is probably a question to me as the Minister representing the Treasurer rather than as the minister for finance, but that is fine.

Senator Abetz interjecting—

I was just being courteous, Senator. It is the case the government did make reference to that in the 2011-12 budget. I notice that my counterpart, Mr Robb, has now declared that we do not need a CGS market.

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Senator Wong, resume your seat. Order! Senator Wong is entitled to be heard in silence. Senator Wong, continue.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Thank you, Mr President. I notice that my counterpart, Mr Robb, appears to be suggesting that it is now coalition policy to end the government bond market. Now I notice Senator Sinodinos is shaking his head.

Opposition senators interjecting—

Maybe you should tell Mr Robb that.

Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Mr President, on a point of order: the minister is not addressing my question. In any case that is not the opposition's policy.

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Thank you, Mr President. I am very pleased that he has given up Mr Robb so easily, and may I say he is right to do so. They were very silly comments. Mr President, I think the best thing is to refer the senator to a response to Mr Robb's comments by the Treasurer which I think was published in Business Spectator today, and if he cannot find it I am sure we can provide him with a reference.

Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Mr President, I have a supplementary question. Can the minister, on behalf of the Treasurer, whom she represents in this place, provide a guarantee that both gross and net Commonwealth debt levels will not rise above the levels articulated in the government's Mid-Year Economic and Fiscal Outlook?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Net debt returning to zero by 2021 and peak net debt are very clear in the budget update. I deliberately referenced that date for this reason. If a number of the savings measures that were opposed by the opposition had not been taken, net debt would still be some $250 billion by 2020-21. That is the reality. That includes, for example, the private health insurance rebate and various other measures that the opposition have opposed, so if they want to talk about net debt they need to be aware their policy settings would actually lead to net debt not returning to zero and continuing to be high out to the end of the decade.

Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Mr President, I have a second supplementary question. Minister, hasn't the growth in the Commonwealth debt level since the global financial crisis reduced the amount of capital available to small businesses via the banking and broader financial system, therefore making finance harder to obtain and increasing their cost of capital? Why are you making it harder for small business?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I know that Senator Sinodinos got this question late but, seriously, from a party which is opposed to tax cuts for small business and would repeal tax breaks which we have put in place for small business, I think it is pretty galling and insincere for the senator to be saying: what has the government got against small business? I think you should look in the mirror, Senator.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.