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Tuesday, 28 April 1987
Page: 1867

Senator SHORT —I ask the Minister for Fiance: Is it a fact that government spending in the first nine months of 1986-87 has increased by 9.5 per cent compared with the 6.9 per cent estimated in the 1986 Budget as the increase for 1986-87 as a whole? By how much does the Minister now expect the full year expenditure out-turn and Budget deficit to exceed the Budget estimates? Does the Minister agree that these overruns will force interest rates and inflation, already at record high levels relative to the rest of the world, to levels even higher than they would otherwise be? If not, why not?

Senator WALSH —I would have thought that there would have been enough residual knowledge from Senator Short's experience in the Treasury, even though it was many years ago, for him to understand that levels of expenditure in any particular month do not provide any reliable formula for what they might be at the end of a financial year. Nor does the level of expenditure or the size of the deficit in the first nine months of a financial year, even compared with the same period in the previous year, provide a very reliable guide. I would have thought that Senator Short would understand that although, given the matter that I am about to raise, perhaps it is less surprising that he does not.

Senator Short asked what the final deficit outcome would be. Even a week before the end of a financial year that cannot be predicted with any precision. However, it has been freely acknowledged in the monthly statements of financial transactions that outlays are likely to be somewhat higher than forecast at Budget time, principally because of higher public debt interest payments, and also that the deficit might be somewhat higher. I have an expectation about how it might turn out; but, as I have said, that is within a fairly significant speculative range.

One thing that I can say with certainty is that, if Senator Short thinks that the nation's finances and Budget are in a mess now, they would be in a vastly greater mess if he had anything to do with them. I was astounded to find that he put out a Press statement last Sunday, 26 April-thinking, I suppose, that that would be his first opportunity to get his name in the newspapers as shadow Finance Minister-which contained this extraordinary sentence:

The cost of the Hawke Government's interest bill is now $66.50 per week for every Australian.

There are 16 million Australians-if not slightly more. If they were paying $66.50 per week in interest on Commonwealth Government debt, that would be $1,068m per week, or slightly more than $55 billion per year. Some fairly simple arithmetic shows that Senator Short is asserting that interest payments on public debt by the Commonwealth Government are in excess of $55 billion per year. To put that in some sort of context, that is somewhat more than two-thirds of total Commonwealth Government outlays and about seven times the actual figure. I can understand now why the honourable senator got out of the Treasury; there was not much future in the Treasury for someone as innumerate as Senator Short.

On two occasions during the past year or so I have given the Press the three qualifications that I believe to be mandatory for a Finance Minister. The first is to be numerate, the second is to have no unfulfilled personal political ambitions, and the third is to have a thick hide. Well, Senator Short has a thick hide, but he is certainly not numerate and I doubt whether he has not any unfulfilled personal political ambitions.