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Wednesday, 17 June 2009
Page: 6312


Mr HOCKEY (2:12 PM) —My question is to the Treasurer. Given that the Prime Minister informed the House that his government’s borrowings would reach $315 billion, and given that recent state government budgets have revealed that total state government borrowings will reach at least $160 billion over the next three years, will the Treasurer now confirm that total Australian sovereign borrowing will rise to $475 billion or $21,800 for every man, woman and child in Australia?


Mr SWAN (Treasurer) —There we go: more opportunistic scare campaigns from those opposite—absolutely opportunistic scare campaigns with little basis in fact. He knows very well that the net debt of state governments is entirely manageable. He knows that—he has seen the figures—but he will come into this House and say and do anything to make a political point and he will distort any figure. This morning the whistle has been blown on the shadow treasurer, the member for North Sydney. This morning in the Sydney Morning Herald I think his approach was summed up appropriately by Ross Gittins. This was his conclusion:

If the Opposition persists with such destructive and dishonest arguments it risks the public concluding it’s willing to wreck the economy it seeks to govern.

That is the conclusion of the scare campaign that is being run by those opposite over a long period of time. Let us go through the argument. This is what Ross Gittins had to say this morning in the Sydney Morning Herald:

In seeking to capitalise on the Commonwealth’s rate rise, Joe Hockey went beyond the pale … In his anxiety to score a point … Hockey was willing to reinforce the mistaken and damaging notion that interest rates are on the way up. And to convey the impression that this minor rise is just the first of many, Hockey was willing to bamboozle the public with a patently false economic argument.

He went on to say this, and the member for North Sydney should listen very closely to it:

His argument about the effect of government borrowing on interest rates is simply wrong.

He went on to say:

If we lived in an economy cut off from the rest of the world, where the only money available to be borrowed was our own savings, then borrowing by governments would indeed put upward pressure on the interest rates you and I pay.

He went on to say:

But for at least the past 25 years, we’ve lived in a world of deregulated and globalised financial markets, in which our banks and big companies can and do borrow heavily overseas. In that vast, global market, our Government’s borrowings are a flea bite …

That is what he said. Then he went on to say:

If the Opposition persists with such destructive and dishonest arguments it risks the public concluding it’s willing to wreck the economy …


Mr Hockey —Mr Speaker, I rise on a point of order. If the Treasurer wants to quote extensively from the Sydney Morning Herald, I seek leave to table the Economist.


The SPEAKER —That is not a point of order. The member for North Sydney will resume his seat.