Senator FARRELL (2:08 PM) —My question is to the Assistant Treasurer, Senator Sherry. In light of the Rudd government’s disciplined budget, including a substantial fiscal consolidation, can the Assistant Treasurer detail the challenges faced by the government—

Opposition senators interjecting—

The PRESIDENT —Order! Senator Farrell, resume your seat. Interjections are disorderly; I remind senators of that.

Senator FARRELL —Can the Assistant Treasurer detail the challenges faced by the government in delivering this responsible document? Why is it important that future budgets be framed within the government’s strict fiscal discipline rules?

Senator SHERRY (Assistant Treasurer) —Thank you, Senator Farrell, for that very important question. The government has delivered a highly responsible budget. It delivers the right outcomes for the current economic times. The government has stuck by very, very strict fiscal rules to get the budget back in the black as soon as possible after the global financial and economic crisis—and it has worked. We are back in surplus three years ahead of schedule, three years ahead of any other advanced economy in the world.

Let us look at net debt. Net debt will be halved. It is projected to peak at just 6.1 per cent of gross domestic product. Compare that to other advanced economies, where net debt is projected to peak at 93 per cent on average. Net debt in the rest of the advanced world is projected to peak at 15 times, on average, Australian net debt. The budget delivers the fastest fiscal consolidation since the 1960s. We have lower unemployment, higher economic growth and the lowest debt of any major advanced economy. In fact, many major advanced economies have no date at all as to when they will emerge from deficit. We brought this about by discipline. We have not allowed tax as a proportion of the total economy to go above the level we inherited from the previous government. Tax as a percentage of GDP is lower than that which we inherited from the former government. We have not allowed spending growth to go beyond a two per cent real increase until such time as the budget returns to surplus. We are not spending any of the revenue increase as a result of our stronger economy, which avoided a recession—unlike most of the other advanced economies—but we are allowing it to help drive the budget back into surplus early, and we have offset new spending by saving. We have delivered on the forward estimates aggregate savings— (Time expired)

Senator FARRELL —Mr President, I ask a supplementary question. Is the Assistant Treasurer aware of any alternative fiscal policies to manage the budget during these challenging times? Are those alternatives realistic? How do they compare with the government’s fiscally disciplined and economically responsible approach?

Senator SHERRY (Assistant Treasurer) —Mr Hockey, the shadow Treasurer, said a week and a half ago that this budget should come back into surplus three or four years early. We have delivered. What we have had from those opposite are lots of claims that they will oppose various revenue measures. You have set the bar; you have got to deliver. You have got to deliver a faster surplus, having decided to oppose some of our revenue measures and having decided to oppose some of our expenditure cuts. That is your challenge: how you are going to deliver a faster surplus having laid claim to the idea that you can actually produce a better surplus when you oppose revenue measures and expenditure cuts. There are lots of glib ideas from those opposite. Let us start seeing detailed policy which delivers a lower budget deficit. (Time expired)

Senator FARRELL —Mr President, I ask a further supplementary question. Without the fiscal discipline of the type shown in the Rudd government’s responsible budget, is there any risk to Australia’s future economic growth?

Senator SHERRY (Assistant Treasurer) —As I have said, this is a very responsible budget, aptly presented, I think, as a no-frills budget. It brings the budget back into surplus three years earlier. The challenge for Mr Hockey tonight and for those opposite is: you have to take up the challenge of producing an earlier budget surplus—as you claim you will do—and, at the same time, indicate those revenue measures that you do not want to support and those expenditure cuts that you do not want to support. What we have seen for the last 2½ years, particularly under the current Leader of the Opposition, Mr Abbott, is that you oppose revenue measures and oppose expenditure cuts and expect us to believe you can deliver a lower budget surplus. That will be the challenge tonight. With all those measures you have said you will oppose, how are you going to produce a lower budget deficit? (Time expired)