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Tuesday, 22 June 1999
Page: 6986


Mr GEORGIOU —My question is addressed to the Treasurer. Can the Treasurer inform the House of progress made in repaying debt accrued under the former Labor government? Is he aware of any recent events that will reduce the level of Commonwealth debt?


Mr COSTELLO (Treasurer) —I thank the honourable member for Kooyong for his question. As is probably pretty well known in Australia now, in its last five years of government, the Australian Labor Party took Commonwealth net debt from $16 billion to $96 billion. They ran up $80 billion of debt in five years. If the Commonwealth were to produce a surplus of about $3 billion, as it will this year, it would take us 30 years to undo the damage that Labor did in five. You would have to run a budget surplus of $3 billion for 30 years to actually undo the damage that was done by the Australian Labor Party in their last five years of office. In the last two years of office, Labor ran up $25 billion worth of debt under the stewardship of the then Minister for Finance, Mr Kim Beazley.

The great thing about having the budget in surplus is that we are not running up debt. It means that, in relation to the government's privatisation program, every single dollar that is received from privatisation now goes to retire debt. Every single dollar of the privatisation will be going into retiring and putting to bed Labor's debt. When the Labor Party was in office, you will recall that it supported privatisation. I have here a good quote from none other than the then Minister for Finance to the National Press Club on 24 August 1994. He said:

The primary objective driving the privatisation program is to make Australia an efficient, internationally competitive economy . . .


Government member —Who said that?


Mr COSTELLO —That was the then Minister for Finance of the Commonwealth of Australia in August 1994. Mr Speaker, you will not often find me quoting him, but I will quote this. He went on to say:

Of course another benefit of privatisation is that it contributes to the Government budget, helping to reduce debt and providing funds for Government programs.

There will be backbenchers in the Labor Party who will think that the Labor Party always opposed privatisation. Not so. The Labor Party was a great supporter of privatisation when it was in office. The Labor Party was in favour of privatising Qantas, Australian Airlines and the Commonwealth Bank. The Labor Party became absolutely irresponsible only when it went into opposition. But there is one thing that the Labor Party never did. The Labor Party never used privatisation to retire debt. I want to give the House one example. In July 1995, the Qantas public share offer, a Labor Party privatisation, raised $1.4 billion. Do you know how much of that it used to reduce debt? Not one single dollar, not one single cent. The then finance minister received $1.4 billion for the sale of Qantas, which he spent in its entirety in the year of receipt, and then went and borrowed another $10 billion to finance his deficit. He took $1.4 billion, spent the entire proceeds and then borrowed $10,000 million extra to run his budget in the 1995-96 year. The then finance minister was the Leader of the Opposition, Mr Kim Beazley.

You have all sorts of nostrums coming out of the Labor Party now. We always used to turn our backs when we were embarrassed by our record too, and that is precisely what he is doing now. This is the man who supported privatisation, used the proceeds, ran up debt and now wants to lecture the government on surpluses. The frontbench wants to complain about the diesel excise coming back to only 20c. The frontbenchers want to complain that the states are getting a growth tax. The member for Batman wants to go back to the working-class roots and get away from the chardonnay drinkers of the Labor Party. He ought to talk to the member for Kingston. The member for Kingston does not drink chardonnay; he makes chardonnay. He is a winemaker. These are the working-class roots of the Labor Party now—making the chardonnay for the party dos. Old Chifley would have been proud of the vignerons that now make up the frontbench of the Australian Labor Party. Wonderful people but never consistent!