Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Fifield, the Minister representing the Minister for Finance. Under the Turnbull government gross debt has increased to a record half-a-trillion dollars, net debt has doubled and net debt as a proportion of the economy is growing more rapidly than almost every other advanced economy. Can the minister confirm that under the Turnbull government net debt is twice as much as it was when the Liberal-National government was elected on a platform of reducing debt?

Mitch Fifield (Victoria, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

Thank you, Senator Keneally. Can I remind colleagues that, in 2013, when we formed office, we inherited a weakening economy, rising unemployment and a rapidly deteriorating economy. The budget bottom line at that time was deteriorating by billions of dollars each and every week. I'm very pleased to report for all colleagues that the growth outlook today is stronger and employment growth is good. Again, let me hark back a little. Under Labor we were on a spending growth trajectory of four per cent above inflation, on average, year on year. The very good news for the Australian people is that this government has more than halved that. Spending growth, according to the last budget and the last half-yearly update, is 1.9 per cent. Spending as a share of GDP when we came in to government was headed to 26.5 per cent within the decade, and rising. Now, that is below 25 per cent according to the last budget.

But the fact that seems to elude those opposite is that, when you inherit a budget position which is in deficit, when you inherit significant debt and when you have spending locked in that manifests itself in the out years, you will see an increase in debt. And, obviously, as long as there are budget deficits and a government is borrowing, debt will increase. That is significantly a function of what we inherited from those opposite.

Honourable Senators:

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! I realise everyone is happy to be back but I ask that there be silence in the chamber. Senator Keneally, a supplementary question.

Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

In an article in this morning's Age entitled 'Costello savages budget strategy', former Treasurer Peter Costello says in relation to the Turnbull government's fiscal strategy:

It means that future generations will be paying interest on the debt that's been run up on their behalf over the last decade, and they will probably be paying for the rest of their lives.

Is former Treasurer Peter Costello correct?

Mitch Fifield (Victoria, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

I know I speak on behalf of all my colleagues on this side when I say that we are incredibly fond of former Treasurer Costello. I happened to work for him for the best part of eight years. Let me tell you something: he never once said over those eight years, 'You should listen to the Australian Labor Party on economic policy.' Not once. Interestingly, in the 14-plus years since he has been Treasurer, he has never offered to the community the view that we should listen to the approach of the Australian Labor Party.

The point that Mr Costello was making is one that we agree with, and that is: Labor governments increase debt. Labor governments lock in for the long term unsustainable spending and force coalition governments to bring the budget back into balance, which we will do.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Keneally, a final supplementary question.

Kristina Keneally (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I'm fond of Senator Fifield, but I don't think he is correct. I'd like to hear him say whether he thinks former Treasurer Costello is correct, so I again refer to the former Treasurer, who says in relation to the Turnbull government's fiscal strategy, 'You are putting a burden on future generations.' Is the former Treasurer correct, and how is it fair to force future generations to pay for the Turnbull government's $80 billion handout to big business?

Senator Scullion interjecting—

Senator Wong interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Scullion and Senator Wong, please lead by example from the front bench.

Mitch Fifield (Victoria, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

You could be forgiven, from listening to Senator Keneally's question, for believing that the Australian Labor Party bequeathed to this government in 2013 a position of no net debt. No, that is what the coalition bequeathed to the Australian Labor Party in 2007. The Australian Labor Party bequeathed to the Australian people and this government a position of high government debt and a budget that was in deficit. We have set about systematically repairing the budget. You will find out tonight what the updated forecasts are.

But Mr Costello is making two key points. One is: it always falls to a coalition government to pay off what Labor leave. That's the first point. The second point is: don't listen to what Labor say; look at what they did.