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Thursday, 12 May 2011
Page: 3857

Fiscal Policy


Ms ROWLAND (Greenway) (14:32): My question is to the Treasurer. Will the Treasurer outline to the House the importance of responsible fiscal policy. How has this approach been received and what are the consequences of not taking fiscal policy seriously?


Mr SWAN (LilleyDeputy Prime Minister and Treasurer) (14:32): I thank the member for this very important question. The government is very serious about bringing our budget back to surplus in 2012-13, on time and as promised. This will be the quickest return to surplus that we have seen since these figures have been recorded. Of course, that involves the government taking some difficult decisions—something like $22 billion worth of savings in this budget. It means that there is very tight spending restraint—increasing spending by only one per cent a year over five years, compared to those opposite, who were increasing spending by something like 3.7 per cent a year over five years. So we will get the budget back to surplus as planned, and we are going to do that because we do not want to compound the price pressures in the economy which will flow from this very, very big investment pipeline.

These facts have been noted by many commentators. Mr Davies, the economist from RBS, says:

This is substantial turnaround and would be one of the biggest improvements in the Budget balance in the post-WW2 period.

All of this is ignored by those opposite. They do not need to have any facts when they are analysing or critiquing public policy. They just go out there on mindless rants all the time—nothing positive to contribute to the debate.

We have seen some commitments from the shadow Treasurer. The shadow Treasurer claimed during last week that he could bring the budget back to surplus next year. So we have done a bit of work on their commitments. We have had a good look at the starting point. We have seen what they have been saying about our savings. We have seen what they have been saying even about this budget. So we have had a comprehensive piece of work done as to where the budget bottom line actually is. That work was released by the Minister for Finance and Deregulation this morning and it shows that, if they were in government, on their current commitments they would be in the red to the tune of $20 billion in 2011-12 and again in the red, to the tune of $4.4 billion, in 2012-13.

We have been listening to what they have had to say about the budget, and it has all been a bit confusing. One minute they are saying there should be more savings; the next minute they are saying there should be less. One minute they are saying the budget is too tough; the next minute it is not tough enough. They are in an absurd mess. They say they want to have less savings and more spending, and they then say they can come back to surplus even earlier. None of this adds up.

Today is D-day for the Leader of the Opposition to demonstrate how he could bring a budget back to surplus or whether he is going to set out to wreck this surplus and compound price pressures in the Australian economy. If he did that, the Australian people would be the losers from that. What we should expect to see is a fully costed plan tonight. If he does not deliver a fully costed plan tonight, we will see what a risk he is to the economy and just how reckless those opposite are.