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

My question is to the Minister for Finance, Senator Cormann. Would the minister please advise the Senate of what the OECD Economic outlook, released yesterday, says about Australia's economy?

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

I thank Senator Bernardi for that question. Overnight, indeed, the OECD released its Economic outlook publication on the world economy, a biannual publication. The OECD has forecast global growth for 2016 of 3.3 per cent, which is a bit less than previously forecast, picking up to 3.6 per cent in 2017. As a trading nation, what happens in the global economy matters to us, because we do not have direct control over it. What we do have direct control over, of course, is the policy choices we make here in Australia. The previous government, when we were facing global economic headwinds, decided to put more lead into our saddlebag, decided to make it harder for Australia to be successful economically and decided to spend more than we could afford given the economic outlook in front of us.

This government is focused on making sure we strengthen growth by being more competitive, by being more productive, by being more innovative and of course by making sure we are as resilient as possible in the face of inevitable future global economic shocks and are in the best possible position to take advantage of future global economic opportunities. The OECD in its report is providing a strong endorsement of our efforts, stating in its report—and maybe people on the Labor side should listen to this: 'The prospect of structural reforms such as in taxation adds to the upside risks'—that is, for Australia. They are talking about the government's focus on improving Australia's tax system, noting that a tax mix switch away from distorting income and transaction taxes 'would significantly improve the growth friendliness of Australia's tax system'. (Time expired)

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

Mr President, I ask a supplementary question. Would the minister please update the Senate on what the government is doing to further strengthen our economy to support growth, innovation and jobs?

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

The Australian government is totally focused on strengthening the economy, on strengthening economic growth and on strengthening employment growth by making sure we are as productive, as innovative, as competitive and as agile as possible. Over the last three years we have made significant progress by getting rid of Labor's lead out of our saddlebags, by getting rid of the mining tax and the carbon tax, by reducing red-tape costs to business, by reducing company tax of small business, by not proceeding with Labor's bank tax, by pursuing ambitious free trade agendas and by pursuing an ambitious infrastructure investment program. And now we are focused on making sure that we even further improve the growth friendliness of our tax system.

On this side of the parliament our instinct is always for lower, simpler, fairer taxes, because we understand that lower, simpler, fairer taxes will help strengthen growth, will help strengthen job creation— (Time expired)

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

Mr President, I ask a further supplementary question. Would the minister please inform the Senate of what future opportunities are being pursued by the government to drive future economic growth?

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

As I was saying, we are focusing on making sure that our tax system helps to support stronger growth, helps to support stronger employment growth and helps to ensure that people across Australia have the best possible opportunity to get ahead. Over the last two years we have pursued a whole series of very important reforms and started the important job of budget repair coming into government. Moving forward, one of the major priorities for this government is to put an innovation package together, with innovation being the absolute centrepiece of our future economic success, and there will be an announcement in the not-too-distant future in relation to this. Later this week the Prime Minister and I will be travelling to Europe, where we will be seeking to build further on our ambitious free trade agenda, talking to the European Union about opportunities to negotiate a free trade agreement between Australia and the European Union—something the Labor Party would surely support. (Time expired)

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. Has economic growth slowed under this finance minister?

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

Under this government and under this finance minister economic growth is stronger than it would have been if Labor had stayed in government. What people across Australia well understand—

Opposition Senators:

Opposition senators interjecting—

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

I know the Labor Party does not take this very seriously, but people across Australia understand that Australia, as a trading nation, has been facing some global economic headwinds. People across Australia well understand that we have had to deal, as a nation, with the biggest fall in our terms of trade in about 50 years. People across Australia well understand that the economy in Australia is going through an adjustment.

Opposition senators interjecting—

Labor can laugh at all of this, but the Australian economy is actually performing very well in the circumstances. We are going through the structural adjustment very well. There is a range of reasons for this, some of which relate to structural reforms pursued by the Hawke, Keating and Howard governments—the independent Reserve Bank, setting monetary policy, with a floating exchange rate. All of that helps us to adjust to what is happening in the global economy. There is the fact that we have taken Labor's lead out of our saddlebag; that we focus on reducing the cost of doing business in Australia; that we have got rid of bad Labor taxes, like the mining tax and the carbon tax; that we have decided not to go ahead with Labor's bad bank tax; that we have decided to reduce company tax for small business, encouraging small business to invest in their future economic success and employ more Australians; the fact that we have pursued an ambitious infrastructure investment program; the fact that we have pursued an ambitious free trade agenda; the fact that we are now looking further at how we can provide proper incentives for innovation and further improvements to our tax system to ensure it is as growth friendly as possible so that we can generate the best possible opportunity for people across Australia to get ahead. You should be congratulating the government for having taken Australia back from the abyss that Labor— (Time expired)

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President. I ask a supplementary question. I will try again. It is like the repeat button is being pressed. Has spending as a percentage of GDP increased under this finance minister?

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

Labor's chutzpah really is quite extraordinary. They make a complete mess of the budget, they put Australia on an unsustainable and unaffordable spending growth trajectory, and then they criticise this government because we are not fixing their problem fast enough. Labor locked in structural spending increases in legislation across a whole range of areas. Spending under this government is lower than it would have been under Labor, I can tell you that for certain.

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

Pause the clock. Senator Moore, on a point of order?

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, I raise a point of order on direct relevance. This was a really direct question. The minister has not even got close to it. Has spending as a percentage of GDP increased under this finance minister. We have not heard the words 'GDP' mentioned yet. Could we get an answer to the question?

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

I thought the minister's answer was creative, but I remind him of the question. He has 32 seconds left in which to answer.

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

Thank you very much, Mr President. Spending under this government is lower than it would have been under Labor. Look no further than the Intergenerational report, which showed that spending under Labor, as a share of GDP, was on track to be in excess of 30 per cent of GDP. We have reduced spending growth of 3.6 to 3.7 per cent above inflation to just 1.5 per cent above inflation. Labor is trying to have it both ways in this debate. They are trying to say that we are cutting too hard and that we are spending too much. People across Australia know that you do not know how to manage money and that we have to fix up your mess yet again. (Time expired)

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Has gross debt increased by more than $100 billion since this finance minister took office?

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

I am wondering whether Senator Lines actually knows what she has been asked to ask here in Senate question time. The truth is—

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

Order! Pause the clock. Senator Moore, on a point of order?

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, I raise a point of order on direct relevance. I know it is very early in the answer time, but the start did not give me any confidence that the minister was going to go anywhere near the answer.

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

Senator Moore, that is not a point of order because it is not confidence we are looking for. We are looking for answers. We have to be very fair to the minister. He had not even commenced, basically. Minister, you are in order.

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

Thank you very much, Mr President. Again, the chutzpah! At the time of the last election we had Labor locking Australia into a spending growth trajectory, particularly in the period beyond the published forward estimates, which we are working to bring back. Yet here they are saying that we are spending too much. Well, help us to pass some of the savings that you are blocking. Let me say to you, very slowly: over the forward estimates spending as a share of GDP is forecast to come down, over time, from 25.9 per cent to about 25.3 per cent at the end of the forward estimates. Government net debt is expected to peak next year before it comes down as a share of GDP. That is as a result of the efforts that we have made, not helped by the Labor Party. When we have been working to fix your mess, you have been boycotting us every step of the way.

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

Pause the clock. Senator Moore, on a point of order?

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, I raise a point of order on direct relevance. My confidence was not helped. There was a simple question. Can the minister actually say whether gross debt has increased by more than $100 billion since the finance minister took office? That was very direct, and we have not had an answer to that question yet.

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

I will remind the minister of the question. He has five seconds in which to answer.

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

Gross debt has increased by less than it would have under Labor and net debt, which is actually what matters, is expected to come down. (Time expired)