Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I join with my Senate colleagues in congratulating you on your election to the office you hold. My question is to the Minister for Finance and Minister representing the Treasurer. Can the minister explain to the Senate why it is so important to repair the budget?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Edwards for that very important question. It is important for us to repair the budget if we want to protect our living standards now and into the future. When we came to government in September, we inherited an economy growing below trend. We inherited a situation where there was rising unemployment, low consumer confidence and a budget in very bad shape. We inherited a spending growth trajectory which was unsustainable.

Opposition Senators:

Opposition senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Pause the clock. We will not continue until there is more quiet on my left.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As Senator Dio Wang from the Palmer United Party would well know, given his background in the resources industry, the previous government had the benefit of the highest terms of trade in 140 years for most of their period in government. They were able to benefit from record high commodity prices. Even at their lowest, the terms of trade were still 15 per cent higher than at the best time under the previous coalition government. Instead of using that opportunity to build a stronger and more prosperous economy, instead of using that opportunity to put money away for a rainy day, what did the Labor Party do? The Labor Party delivered $191 billion in cumulative deficits in their first five budgets, they left another $123 billion in projected deficits in the last budget, they left us with government debt heading for $667 billion within the decade and rising beyond that, and they left us with a situation where we now have to borrow $1 billion a month just in order to pay the interest on the debt that they accumulated. What is this government doing? This government is making the decisions that need to be made in order to ensure that this generation of Australians lives within its means and leaves the country for future generations in at least as good a shape as, if not better than, we found it. If we are to protect our living standards, if we are to provide opportunities for prosperity in the future, there is no alternative than to pass the budget. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister inform the Senate how failure to repair the budget will impact on our living standards and our economic opportunities?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

That is a very good question. The Labor Party wants to force us to continue to borrow from our children and grandchildren to fund our living standards today. Running deficits to fund consumption is a bit like putting some of your groceries on your credit card and not paying off your credit card, just running it up.

Opposition Senators:

Opposition senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

We will not continue unless there is silence. Senator Conroy, for your information you are one of the loudest contributors. You have a question further down the list. We might not get to you if this continues.

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

You'll take away our third question for the whole hour?

Stephen Parry (President) Share this | Link to this | Hansard source

No, I am not doing anything; it is you holding up question time. We will not commence until there is silence on both sides of the chamber—and that includes you, Senator Heffernan.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Running deficits to fund recurrent expenditure is like a household borrowing money to pay for groceries. That is what the previous government did, and if we do not get this situation under control then our children and grandchildren will have to pay the cost for our living standards today, with interest. That will force them either to pay higher taxes or to accept lower services down the track—there is no way around it. The money that is being spent by government today will have to be paid back eventually. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister inform the Senate whether there is any scope at all to defer efforts to repair the budget?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Not if we care about the future opportunities for our children and grandchildren. If we care about the future opportunities for our children and grandchildren, then we cannot keep kicking the can down the road. If we keep kicking the can down the road we will be forcing our children and grandchildren to be on the receiving end of even tougher decisions. People in the Senate might think that the measures in the budget this year are tough measures, and I accept that they are, but if we do not make those tough decisions today as a country, the decisions will only become harder down the track. If we continue to defer the necessary decisions today, if we continue to resist the necessary savings to ensure that we live within our means, then it will be our children and grandchildren who will pay the price and it will be Labor that will stand judged for having prevented the government in 2014 from addressing the mess that the Labor Party left behind.