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Wednesday, 9 May 2012
Page: 4307

Budget


Mr HOCKEY (North Sydney) (14:06): My question is to the Treasurer. Can the Treasurer explain why there was no mention in the budget speech last night of the government seeking to increase the nation's credit card limit from $250 billion to a record $300 billion?

Government members: It's not a credit card!

The DEPUTY SPEAKER ( Ms AE Burke ): Order! People are not assisting the Treasurer to be heard. The Treasurer has the call.



Mr SWAN (LilleyDeputy Prime Minister and Treasurer) (14:06): This is a question that I take very seriously, because the government takes its $250 billion debt cap very seriously.

Honourable members interjecting

The DEPUTY SPEAKER: Order! I will not tolerate excessive noise while question time is underway. The Treasurer has the call.

Mr SWAN: Thank you, Madam Deputy Speaker. The budget papers show that Commonwealth securities on issue are under the existing limit at the end of each year. That is the fact. I know it is an uncomfortable fact and I know it is going to stand in the way of a massive scare campaign that those opposite want to run. I know they will go to any lengths to talk down our economy and to run it down in terms of its international reputation. But those are the facts. We have had a request from the Office of Financial Management to put a buffer in because we do have a challenge when it comes—

Honourable members interjecting

The DEPUTY SPEAKER: Order! I will, if pushed, issue a general warning and there will be very few people left in the chamber. The Treasurer has the call.

Mr SWAN: We have been advised by the Office of Financial Management that we should have a buffer, notwithstanding the fact that at the end of each year we are within that cap. I know those opposite do not understand a lot about financial markets, so we will just run through a couple of the facts. First and foremost, in terms of Commonwealth revenues, they tend to come in in lumps and they tend to come in particularly towards the end of the year. What actually happens is that expenditure is evenly spread across the year. So we have an in-year financing challenge which is made worse by the fact that we have maturing bond lines and as they are maturing we are issuing new ones. That can mean we do go over the cap on a temporary basis but we stay within it at the end of the year. The point that the OFM has made is this, and I will quote from their memo: 'To manage these fluctuations in an efficient and effective manner it is critical that the debt management operations of the AOFM are not affected by short-term borrowing constraints such as a debt cap or a similar mechanism.' We reported in full in the budget papers what we were intending to do and why we were intending to do it. It is very sensible for Australia and I think that those opposite should just pause for a minute and not play politics with this issue.






Mr HOCKEY (North Sydney) (14:09): Madam Deputy Speaker, I ask a supplementary question. Treasurer, what is the dollar figure that gross debt will peak at and in what year will it peak?

The DEPUTY SPEAKER: Order! If the member for North Sydney wants to see out question time, he can stop pushing it. The Leader of the House has the call.

Mr Albanese: Thank you, Madam Deputy Speaker. I raise a point of order that the supplementary question must arise directly from the original question asked.

The DEPUTY SPEAKER: My understanding would be that the supplementary is in order. I will call the Treasurer.





Mr SWAN (LilleyDeputy Prime Minister and Treasurer) (14:10): I am very happy to answer the question, Madam Deputy Speaker, delighted. I will go through the percentages and I will go through the values and then I will go through gross debt,—

Mr Hockey interjecting

The DEPUTY SPEAKER: Order! The member for North Sydney is warned.

Mr SWAN: and I am more than happy to run through all of the tables. They are all there in the budget papers. I know those opposite are pretending they have never seen them before so we will just go through net debt, which peaks as a percentage of GDP at 9.6, runs through to 2015 at 7.3 in terms of the figure itself of 142 in 2011-12, and goes through 131. In terms of gross debt, 18 per cent of GDP, 265.8 in 2011-12, goes through to 281.3, which is the figure the member was looking for, and comes down over the next decade.

Honourable members interjecting

The DEPUTY SPEAKER: Order! The member for La Trobe has the call and will be heard in silence.