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Wednesday, 9 May 2012
Page: 2943

Budget

Senator SINODINOS (New South Wales) (14:57): My question is to the Minister representing the Treasurer, Senator Wong. I refer the minister to the election at the weekend of new governments in France and possibly in Greece. How confident is the government of delivering four years of budget surpluses, given that these new governments are less likely or appear less inclined to undertake the structural reforms needed in order to improve their economic performance and the implications of that lack of performance for financial markets and capital markets in Europe and around the world?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:57): That was a very good question and I invite Senator Joyce to talk to Senator Sinodinos before he asks his next question.

Senator Ian Macdonald: Why do we always have to have the commentary?

Senator WONG: You can't take it, can you? You dish it out all the time. I would say to Senator Sinodinos that he is right to raise the concern about the ongoing economic instability in Europe. Those are matters about which the government has been very concerned. As the senator would know, those are matters which drove some of the results we saw, particularly in the December quarter of last year, where we saw global instability, which obviously had an effect not only on the economies of Europe but on the Australian economy.

In answer to an earlier question from Senator Cormann, when I was asked about economic forecasts, I made the point that forecasts in the budget are broadly in line with those of market economists and other institutions such as the International Monetary Fund. So I do not think it is correct to say that the projected GDP figures are overly ambitious. What I would say is that the government's figures are probably even more conservative when it comes to growth in Europe. The senator has probably had a look at it, but there is quite a good discussion in the budget papers about the various contributors to global growth. The senator would be aware that the growth of Australia's major trading partners continues to track our forecast to be above average global growth, which is obviously a very good thing for the Australian economy.

Senator SINODINOS (New South Wales) (14:59): Mr President, I ask a supplementary question. Given that the economic and financial modelling in the budget papers was finalised before some of these events occurred—they occurred very recently—at what stage would the government be prepared to provide the parliament with revised figures to reflect the implications of this ongoing situation?

Senator WONG (South Australia—Minister for Finance and Deregulation) (15:00): I am standing next to the Minister for Foreign Affairs, so I shall be very careful about what I say, but I am sure that the senator is not suggesting that every time there is an election in any economy in Europe the government should revise its economic forecasts. And I am sure, as a former officer of the Treasury and as a former senior adviser, he would know that governments update their forecasts in the usual way, and the next forecast, absent the government making a decision to make any other economic statement, would be in the mid-year outlook. But I again say our forecasts are broadly in line with those of the RBA, market economists and the IMF, with this note—that we are in fact more conservative about the position in Europe.

Senator SINODINOS (New South Wales) (15:01): Mr President, I ask a further supplementary question. Can the minister confirm when the economic forecasts in the budget were finalised?

Senator WONG (South Australia—Minister for Finance and Deregulation) (15:01): As the senator would know, the economic forecasts are conducted at various intervals in the lead-up to the budget process. I will check the actual date. I think the Treasurer has made some public comment about that, but I will ascertain whether or not I can provide you with a precise date.

Senator Chris Evans: I ask that further questions be placed on the Notice Paper.