Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Employment (Senator Abetz) to a question without notice asked by Senator Dastyari today relating to government debt.

The front page of the Australian Financial Review this morning tells it all. The splash headline of the country's main business newspaper is 'Abbott loses the plot on debt', and the subheadings read, 'PM says 60pc of GDP a "pretty good result"; 'Economists lose hope in budget'; and 'Business urges coalition not to give up'. So there you have it: the verdict on the Abbott government's economic credibility in the crisp and concise language of the headline writer—the verdict to which Australia's business executives woke up this morning; the verdict being read by investors and financial markets. Mr Abbott's deceit on the budget and debt has caught up with him and his incompetence is exposed. It has been exposed. This Prime Minister's last shred of economic credibility has evaporated.

We all remember that, before the last election, Mr Abbott talked down the Australian economy and he ran a scare campaign about government debt. We all remember it: Australia was in a 'budget emergency'—do you remember that?—and a 'debt and deficit crisis'. He compared Australia to Greece. The truth is that Labor left Australia with one of the lowest levels of government debt of any advanced economy. The Pre-election Economic and Fiscal Outlook, prepared by Treasury and Finance, showed net debt peaking at 13 per cent of GDP in 2014-15. IMF figures showed that, out of the world's 26 advanced economies, we had the sixth lowest level of government net debt in 2013-14. Yet before the election Mr Abbott told the public that debt peaking at 13 per cent of GDP was a 'budget emergency'.

What did he say yesterday? He said that net debt under his government policy settings will climb to 60 per cent of GDP—some $960 billion in today's money—and Mr Abbott said that this would be a 'pretty good result'. So net debt at 13 per cent of GDP under Labor is a 'budget emergency' but net debt at 60 per cent of GDP under the Liberals is a 'pretty good result'! No wonder the Financial Review says 'Mr Abbott has lost the plot'. But the trouble is that this Prime Minister is taking the wider economy down with him. This selfish and irrational Prime Minister is taking the wider economy down with him. Since the Abbott government handed down its budget, we have seen business confidence plunge, consumer confidence taking a hit, the slowing of growth, and unemployment rising to its highest level in more than a decade.

But Mr Abbott is not only trashing the economy; he is trashing the credibility of his ministers—like the Minister for Finance, Senator Cormann. Let's recall: under the Labor government we had lower spending as a share of GDP than this government; lower taxes as a share of GDP than this government; and we left Australia with one of the lowest levels of government debt of any advanced economy. By contrast, Senator Cormann, as Mr Abbott's finance minister, is budgeting to increase spending, increase taxes and increase net debt. This finance minister likes to posture like an anti-debt vigilante, but he is actually taking Australia on a path to net debt of nearly a trillion dollars in today's money. Senator Cormann pretends that he is the 'Terminator' but the reality is he is the 'Debt-o-nator'. He is presiding over an explosion in government debt—an explosion which this Prime Minister says will be a 'pretty good result'.

Australia cannot afford to be governed by a finance minister who has blown out the budget deficit, a Treasurer who thinks it is okay to hike petrol taxes because 'poor people don't drive cars' and a Prime Minister who has deceived the Australian public and lost the plot on the economy.

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

While Senator Wong is still in the chamber, I was wondering whether she could qualify, with the term 'detonator', whether there was a 'b' before the 't'. Perhaps, if you would like to write it down, Senator Wong, you will see the humour.

On a much more serious note—

Honourable Senators:

Honourable senators interjecting—

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

One thing that never ceases to amaze me when we have this particular debate about debt is that I am not quite sure what the opposition want. On one hand, when we come into this place and try and put in some tough measures to try and restore the budget, they throw a whole heap of mud at us and say, 'You can't do that; you're being too tough in the budget'. Now, when the Prime Minister has acknowledged that a softer approach will occur at the next budget, we are being attacked because we are supposedly being too soft. I am not quite sure what the opposition wants us to do.

Senator Wong rose a moment ago and spoke about the debt situation. I congratulate Senator Wong. She is about to become a parent again in a few weeks time. I know that, as a parent, I am certainly not going to spend and build a debt that I am going to make my children pay. The one thing that responsible parents do, just like responsible governments should do, is live within their means. To stand in here and suggest that it is responsible to continue on building and increasing the level of debt this country so that our children and their children have to continue to pay it off seems a little bit odd, because I am sure that nobody in this place who is a parent would do that to their children. Therefore, I do not believe that any government should be doing it to their people.

We talk about the debt to GDP ratio and the comment that the debt to GDP ratio in Australia, at the moment, is probably not as high as it is in some of the countries that we trade with. One of the things that we have to remember is that the rate at which our deficit is increasing is much, much higher than the rate for the majority of countries that we do business with. Whilst things may be okay at the moment, if you have the fastest rising deficit, it does not take a rocket scientist to realise that in a minute we will have a debt to GDP ratio problem. We also need to remember the fact that Australia is an extraordinarily trade-exposed nation. It is a country that relies extraordinarily on exports. So therefore we are not in the same position as many of our trading partners overseas, or the countries which we benchmark ourselves against in this particular space. I think we just need to be very careful that we compare apples with apples.

Unlike those opposite when they came into government in 2007, we came into government with a massive debt. They came in with a surplus. They had money to spend, and so they did. They spent it; they certainly spent it. We came to government with a massive debt and an increasing deficit. We thought that a very sensible thing for all responsible governments is to do something about our debt.

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

There's no cause for alarm with a 60 per cent debt ratio.

Anne Ruston (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Conroy, I do not know whether you bothered to listen to what I was saying. Our deficit is increasing at a rate far faster than in most other countries around the world.

We have a plan. The coalition have a plan for the economic future of this country. The plan is that we want to deliver jobs. We heard today in question time that the Victorian Labor government is prepared to waste in excess of $1 billion not to build a road.

Senator Conroy interjecting—

If that is sensible economic practice, Senator Conroy, I am afraid that I missed the economics lesson that you must have gone to when you were at school. All that the irresponsible behaviour in this space is going to do is push the issue to the next generation.

In the Intergenerational report that has just come down, we were given three quite clear scenarios. One was where the budget position was going under those opposite. It was going to end up with a Greece type outcome. That is something I do not think any of us would want for our country or our children. Another was that we could end up with a budget position which was what was proposed under last year's budget— (Time expired)

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

I also rise to take note of the answers given by the Leader of the Government in the Senate. I do not always agree with the front page of The Australian Financial Review, but today their front page could not have been more accurate when it said, as Senator Wong has shown, 'Abbott loses the plot on debt'. I could not believe it; I texted the journalist and said, 'Are you quoting him directly? Where did he say this?' And he said, 'In a press conference'. So I went and got the transcript, because I could not believe it. He was asked:

… you've resurrected this line that we're heading towards Mediterranean style levels of debt. You mentioned Greece again today …

And he says:

Andrew, there's no cause for alarm under this Government …

Then he goes on to say:

… a ratio of debt to GDP at about 50 or 60 per cent—

which we are going to achieve over time—

is a pretty good result looking around the world …

He says that a 60 per cent ratio of debt to GDP is a pretty good effort compared to the rest of the world!

We only left him with 13 per cent and that was a national emergency. Now he says 60 per cent is fine. Just look at what he has been saying, look at what the government and the previous opposition have been saying over time.

This Prime Minister has been saying Australia is going down the road of Greece, but now he is happy to grow Australia's net debt from 15 per cent to 60 per cent. That is not a bad effort! He said just yesterday, 'Well, yes, under the former Labor government, we were heading to a Greek style economic future.' And yesterday, he told Neil Mitchell on 3AW, 'We're getting down to Greek levels of debt and deficit as a result of Labor's policies.' What an absolute joke this Prime Minister is becoming. I have to tell you, if this is Mr Tony Abbott unplugged then please bring back Peta Credlin because she is vital to the survival of this man. What a joke this man is becoming.

Labor left the coalition with a AAA credit rating and a debt to GDP ratio of 13 per cent, and apparently we were taking us down the path to Greece. No wonder The Australian Financial Review says he has lost the plot. We can see why the Prime Minister's chief of staff has been so critical over the last few years in keeping Mr Tony Abbott in check. Come back, all is forgiven, Peta Credlin. She is desperately getting a government jet to fly to Fiji to get her back in the country! Even Senator Arthur Sinodinos is paying to bring her back early because they just cannot afford to allow this sort of incompetence from the Prime Minister to keep running along!

Due to the hypocritical rhetoric the Prime Minister and the Treasurer have been parading around this country, this government has driven unemployment up. It has business confidence down.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Absolute nonsense.

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

I will take that interjection from Senator Abetz, who, as Leader of the Government in the Senate, obviously supports that 60 per cent debt is okay. That is what the Prime Minister said. I am assuming you are supporting him, Senator Abetz? You support him.

You have driven unemployment up. It has gone up since you came to power. You have driven the car industry out of this country. You are trying to give submarine jobs in this country to Japan. Your National Security Committee sat there and every single one of them around the table said 'yes' to the Japan deal. That is what happened. Then you misled Senator Ruston, Senator Edwards and Senator Fawcett. You pretended to them that you were going to look after South Australia. You have absolutely misled them because your National Security Committee did a deal with Japan. You know you cannot deny it because it is true. You cannot deny it.

You have driven unemployment up in this country. You have driven business confidence through the floor. No consumer will spend money. You know what the best way to get GDP growing is? It is by having a responsible budget. (Time expired)

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

It gives me great pleasure to contribute to this debate. Shadow minister Wong, Leader of the Opposition in the Senate, cites the front page of The Financial Review, whilst her and her colleagues were very quiet when we quoted that very paper in another question in question time today. They were silent and were turning their backs and only focused on some aspects of The Financial Review. But as Senator Wong went through her government's record, it is not a record she should be proud of. When you are comparing yourself to economies in the global context—'We're better than Greece', 'We're better than Spain'—you know what? That is like claiming the cup when the only people you are racing against are toddlers. It is absolutely ridiculous.

Senator Polley interjecting—

The reality is when you are paying $1 billion a month in interest, Senator Polley, that is three Adelaide hospitals every year—paid in full, every year. Three billion dollars in interest is a new Adelaide hospital every three months.

This government is committed to a sustainable return to surplus. Last week, we had the release of the Intergenerational report by the Treasurer which outlined the very significant challenges for our nation going forward. You know what? There are swings and roundabouts in this game we are all in. If the opposition are serious about leadership, if they seriously had a backbone, if they seriously had an iota of credibility to contribute to this debate and to the challenges that face us all as a nation going forward, they would be taking on board the issues raised in the Intergenerational report and thinking, 'How do we actually assist the government in getting back to a sustainable, credible path to surplus?'

We do not know who is actually going to be in charge of the budget as the ageing population tsunami is coming towards us. How are we going to ensure that millions of Australians approach retirement in a way that can guarantee a way of life that they have known so well? We are absolutely committed to building the strong foundation that we laid last year and having a prudent, frugal and responsible budget, in direct contrast to those opposite in their time in government.

Our economic plan is already underway, and Senator Ruston did make reference to some of the principles of that plan. We are actually targeting two million new jobs over the next decade. We are absolutely focused on getting more Australians, young and old, into the workforce in a sustainable way. That means growing financial security not only at a local level and a regional level but at a national level to ensure a strong economy. We have done that through the free trade agreements that we have negotiated. We have been building infrastructure. We heard questions today from those opposite complaining about building essential infrastructure. That is going to not only provide jobs in construction but contribute to jobs in the regions. For instance, as we get our fabulous green produce to the docks in Melbourne, we needs those roads. We need those roads. It is something you need to get on board with.

We are going to be focusing on growing jobs for older Australians through our various strategies and incentives that will encourage employers to put on those long-term unemployed who need that extra bit of assistance to get back into the workforce. We know that having a job is the very best form of welfare. We know that Australians want to be in full-time employment not because they like to make a lot of money but so that they can care for those they love, so they can provide a roof over their heads. That is why we have also committed to a comprehensive family package. We want a more productive economy not only for our nation's future but also so we as parents and citizens can care for those we love. That is why our families package will be focused on getting more women back into the workforce by ensuring our child care is sustainable.

We have abolished the carbon tax and the mining tax. That has put real money back into people's pockets but, more importantly, has allowed businesses to flourish and employ more people because they are not being constrained by that job-destroying tax. Labor turned nearly $50 billion in the bank into a projected net debt well over $200 billion, the fastest deterioration in debt in dollar terms as a share of GDP in modern Australian history. Labor's debt is already costing— (Time expired)

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I am gobsmacked. From a government that has promised us stable and somewhat dull government, they come up with this clanger. It is unbelievable. Let me reiterate. Mr Abbott has spent the last three years while in opposition and government talking about a so-called budget emergency. I will say it again for everybody out there: a budget emergency. He has been spreading fear about the Australian economy which has been driving down business and consumer confidence. His whole tactic has been to trash the economy. When the debt was 13 per cent of GDP, Mr Abbott called it disaster, but yesterday Mr Abbott said a ratio of debt to GDP at about 50 to 60 per cent is a pretty good result when you look around the world. Wake up and smell the roses. It must have been a bad hair day for Mr Abbott when he looked at that.

How this is possible is a complete mystery to me when you look at the position this government has put itself in. Net government debt is now 35 per cent higher than in January 2014, but according to Mr Abbott the budget emergency is now over as the government has got the budget situation from out of control to manageable. This is from a man who was running around the country before the election and since saying that this is a budget emergency, which is the reason he ground an unfair budget in. The reason we copped a bad budget was the budget emergency which has now evaporated.

Let's remind ourselves of what Mr Abbott said previously:

What we're not prepared to do though is sell out the fundamentals and the fundamentals are that we have absolutely got to get this budget crisis back under control. I mean, Labor left us with a debt and deficit disaster.

This government has taken one step more and found a 50 to 60 per cent debt-to-GDP ratio manageable somehow—quite an extraordinary circumstance.

I think the editorial in the SMH really sums it up when it says:

This "being in government" business is proving to be all too hard for Prime Minister Tony Abbott and his ministers.

Too hard to frame a fair budget.

…   …   …

Too hard to be civil and constructive on policy options. Too hard to explain to voters the need for reform. Too hard to find a consistent message.

And way too hard to provide the sort of "stable, no surprises" government Mr Abbott promised just 18 months ago.

Who would believe 18 months ago that he made such a promise?

The Herald said then that voters would get to judge Mr Abbott on trust and stability "in three years or, should he prove unable to manage a democratic parliament, much sooner".

…   …   …

Indeed, being in government has turned out to be so hard that some ministers and others in his inner circle even considered plans to commit hara kiri through a double dissolution election.

What a shambles.

Finance Minister Mathias Cormann said on Thursday: "The important thing is to keep heading in the right direction."

Tell us what that direction is because we do not know, the public do not know and the commentators do not know. If you can find a direction in all of the dropped pie, let us know; we might be able to at least discern your position. That is what your government looks like. It looks like a dropped pie: completely shambolic, completely rudderless and directionless and one which does not have any consistent message.

Are we now going to drop the budget crisis message and move to a dull and boring government? Let me tell you, from a person who understands a bit of dullness; you guys are not dull! It is an extraordinary circumstance that you have now laid out. The message is quite clear though. One, we have to hide Mr Hockey. Don't let him out! We have to hide Mr Hockey, and Mr Abbott is going to take the lead. Nobody has told Ms Credlin this, because it would not be one— (Time expired)

Question agreed to.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Indigenous Affairs (Senator Scullion) to a question without notice asked by Senator Siewert today relating to the Indigenous Advancement Strategy.

I rise to speak on the motion to take note of answers from the Minister for Indigenous Affairs, Senator Scullion. In answer to my first question, about the continued funding of youth services, the minister tried to bat off the question by saying he had spoken to them. As I understand it, he has spoken to one of the organisations involved, or the department has spoken to one of the organisations, the other maybe not. The important thing here is that as far as we are aware they still have not seen any contracts, they still do not know how much funding they will get.

Senator McKenzie interjecting—

The minister was not clear at all. The whole time with the Indigenous Advancement Strategy he has been giving glib answers. Given the mess that has occurred around the Indigenous Advancement Strategy, I can tell him that organisations are not comfortable with the fact that they may or may not get funding. In this case, organisations do not know how much funding they will be getting, they have not seen the contracts, they do not know whether the funding is for 2014-15 and that is it, or whether there are no increases in funding because they are based on 2014-15 funding levels with no indexation—effectively a cut. Using the same strategy, the government tries to slip away from the argument about changing indexation for the age pension and hoodwink people into thinking it is not being cut. This amounts to cuts in funding services, and those sorts of issues are very much in the minds of organisations currently in this funding mess.

The minister has not tabled a document yet about who has received funding and for how much and, very importantly, we still do not know which organisations have not received funding. The minister himself does not know who has not received funding. He says there are under about 12 so far that they have found have not received funding. This was supposed to be a rigorous program that was going through rigorous assessment, and yet organisations that provide what should be considered essential services in communities, like youth services, somehow slipped through the net. In fact, in the minister's own state they have slipped through the net, when I am sure that the department and the minister know how important those youth services are.

One of the questions I asked was about those programs that have missed out through an oversight. The minister said they are still going through looking for those, and that they have until June. Those organisations employ people. They have a responsibility to let their staff know whether they are going to have a job or not, and they also need a satisfactory time to let them go. Very soon those organisations will be starting to have to tell their staff, because they are required to do due diligence, that they may not have a job into the future. No it is not right and it is not fair that the minister thinks he has till June to find other organisations and to fill the gaps. Those gaps are there because this process has not worked effectively and because of the rushed way things have been done and the way that all the programs come together. He thinks he has till June to fill those gaps but he does not. Organisations will have to start letting their staff go in the not too distant future, and staff will be looking for other jobs—they will be thinking they do not know about the security of their position, and they will be going. The minister and the government talk repeatedly about providing good jobs for Aboriginal people. These services provide jobs for a large number of Aboriginal people, and there is a great deal of uncertainty about their future.

Another funding program for which organisations still do not know whether there will be another funding round is Stronger Communities for Children. The tenders closed in July last year but the results still are not known. These organisations do not know what is the status of the rollout of stage 2 of Stronger Communities for Children. There has been a very long day and we do not know if they are going to continue to be funded. Again, that program is regarded as a successful program and they do not know the future of the program. This process is a mess, which is why I have moved a motion to refer this issue to the Finance and Public Administration Committee. I am very pleased that the Senate supported that motion so we can find out just what is going on. (Time expired)

Question agreed to.