Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and the Minister representing the Treasurer, Senator Cormann. Can the minister please advise the Senate of support by senior economic commentators for the need to repair the budget?

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

I thank Senator Bernardi for that question. Yesterday I was able to remind the Senate that former Treasurer Swan was a great believer when it came to surplus budgets. He was never quite able to get there, but at least he understood the importance. He understood how important it was for people sitting around the kitchen table. Even after he aspired to deliver a surplus what we got was $191 billion in deficits in his first five budgets, another $123 billion in projected deficits in his last budget and a spending growth trajectory that was going to take us to government debt of $667 billion.

The spending growth trajectory that Labor put Australia on is really the biggest concern that we are facing right now as a government because if you continue to grow spending at an unsustainable rate eventually you reach a day of reckoning. I have got another quote here for the Senate which senators might find informative. They might find that it will help them in their considerations on how to deal with budget measures. This is from a recent speech by Glenn Stevens, the Governor of the Reserve Bank of Australia:

… the fact that the real issues with public finances are medium-term ones is not a reason to put off taking decisions to address them. On the contrary, as experience in so many other countries demonstrates, by the time these sorts of problems have gone from being out on the horizon to on our doorstep, they have usually become a lot more difficult to tackle. Early, measured actions that have effects that build up over time are a much better approach than the much tougher response that might be required if decisions were delayed.

That is what we are saying. If we do not pass the budget that was delivered two months ago, you might think the measures in the budget are tough now, but they will only become tougher in the future if we do not make these decisions today. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I thank the minister and ask him to advise the Senate why it is so important to combine budget repair with economic reforms that strengthen Australia's economic competitiveness.

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

That is another very good question from Senator Bernardi. When we were elected to government in September we inherited an economy growing below trend, we inherited rising unemployment, we inherited low consumer confidence, we inherited business investment which had plateaued, we inherited a debt and deficit disaster and we inherited a spending growth trajectory which was unsustainable. We must turn that situation around because, if we want to protect our living standards, if we want to build opportunity and prosperity for the future and if we want to grow a stronger economy, we have to get rid of the carbon tax and the mining tax and we have to get our budget under control. Why do we need to get our budget under control? This is a very important point for people to consider. Do you think that any parent around Australia would want to put their hand into their children's pocket to pay their credit card for them? Do you think that any parent in Australia would ask their children to pay off their credit card bill? Of course they would not. And neither should the Australian government. We should not be expecting our children and grandchildren to pay our bills. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I ask the minister if he is aware of any alternative plans to repair the budget and build a stronger, more prosperous economy.

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

There is a lot of politics from the Labor Party, but there is no alternative plan, Senator Bernardi. The Labor Party in government created the mess that this government now has to deal with. We are taking responsibility to deal with the debt and deficit disaster that we have inherited. At least Wayne Swan believed in a surplus. At least he wanted to get there. But now, under Mr Shorten and Mr Bowen, the Labor Party has given up on the national interest. They have given up on the important decisions that need to be made in order to strengthen our country for the future, in order to make sure that we stop borrowing from our children and grandchildren to fund our lifestyle today. I would ask you: would any of you expect your children to pay off your credit card? Would you continue to run a big chunk of your grocery bills on your credit card, take a second credit card to pay the interest and then ask your children and grandchildren to pay your bill? I suspect you will not, and neither should the Australian government.