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Wednesday, 9 May 2007
Page: 64

Senator CARR (2:22 PM) —My question without notice is to Senator Minchin, the Minister representing the Treasurer. Can the minister confirm that over the last 11 years government investment in education has fallen from two per cent of GDP in 1995-96 to 1.6 per cent of GDP? Can the minister explain how this can be a budget about the future if investment in education has fallen so dramatically over the life of the Howard government? Isn’t the education package announced in the budget just a cynical attempt to deflect attention from earlier cuts by this government and its failure to invest in education over the last 11 years?

Senator MINCHIN (Minister for Finance and Administration) —We thank the opposition for drawing attention to our substantial and magnificent investment in education in this budget. I begin by reminding Senator Carr of what I said in my earlier answer and that is that we inherited the most extraordinary situation one could possibly imagine: that as a result of their 13 years in office, when we came into government, the financial accounts showed more being spent on interest payments to those lending money to the government than on education. What a travesty! What a record! How can he possibly stand up in here and criticise this government when what they left us with was a situation where less was being spent on education in this country by the federal government than was being spent on interest payments on the debts that they were racking up. We have turned that around.

In our budget now, you have spending of $17 or $18 billion on education and nothing on interest payments. That is the turnaround that we have been able to achieve without a shred of help from the opposition. It is a magnificent achievement on our part, to virtually double education spending under this government, and now, because we have eliminated debt and we are generating surpluses, we can do something that has never been achieved in this country before and put aside in perpetuity $5 billion. This is apparently only a drop in the ocean, according to Mr Rudd. Five billion dollars into the Higher Education Endowment Fund in perpetuity is something the universities are over the moon about. It is something they never expected from any federal government: a $5 billion endowment fund to ensure that our higher education sector has the resources and the facilities available to it in perpetuity. In one stroke we are doubling the amount available currently to universities in their endowment funds, and on top of that, introducing a $3.5 billion investment program over the next four years in education, half of which is going to the universities, the other half to schools—the responsibility of the states, where they are failing miserably and have to be propped up by us. This also ensures that we have a flow of apprentices and that we support apprentices and the trades. It is a very proud moment for the coalition government in terms of what we have been able to achieve in education.

Senator CARR —Mr President, I ask a supplementary question. In terms of priorities, is it not true that even after the initiatives announced in the budget, education spending is projected to remain at 1.6 per cent of GDP over the four years to 2011-12 and will actually fall as a percentage of the total government expenditure? I ask again: in terms of priorities, how can this be a budget about the future if government spending on public research as a percentage of GNP has fallen from 0.4 per cent to 0.29 per cent from 1996 to 2007?

Senator MINCHIN (Minister for Finance and Administration) —Senator Carr keeps forgetting that we inherited the situation where the federal government was running annual deficits of $10 billion—that was in 1996 dollar terms—and paying $8.5 billion in interest. We had to take very dramatic steps to cure that situation, to correct the budget deficits and to get the budget back into balance and into surplus. Through all of that and despite having to introduce significant measures to bring the budget back under control, we have been able to maintain the investment in education, which means by definition that, if the economy is growing at 2½ to 3 per cent in real terms and you are maintaining the level of spending to GDP that you have on education, you are increasing investment in education by that 2½ to 3 per cent in real terms every year. That is a magnificent achievement, only made possible because we have eliminated Labor’s debt and got rid of their deficits.