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Wednesday, 8 February 2017
Page: 298

Economy


Senator LEYONHJELM (New South Wales) (14:36): My question is to the Minister for Finance, Senator Cormann. In 2009, you referred to the 'socialism we had to have' under Gough Whitlam, who thought he could 'spend his way out of trouble' and 'went to great lengths to borrow more and more money'. I agree. After three years, Whitlam left Australia with a deficit of $1½ billion, government spending at 24 per cent of GDP and tax receipts at 20 per cent. Your government, after three years, has left Australia with a deficit of $37 billion, government spending at 25 per cent of GDP and tax receipts at 22 per cent. Whitlam left no debt. Net debt is now $317 billion. Are you more socialist than Whitlam?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:37): I thank Senator Leyonhjelm for that question. The short answer to that question is, of course, 'no'. I refer Senator Leyonhjelm and the Senate to the most recent Budget Paper No. 1 and the very helpful time series on page 10-5 and 10-6 which starts in the year of my birth, 1970, and covers 50 years all the way to 2020. What you will see is that before Gough Whitlam got into government spending as a share of GDP was 19 per cent, and it increased by a massive five per cent as a share of GDP in three short years. In fact, in the last few years of the three-year term of the Gough Whitlam government spending increased above inflation by 19.9 per cent and by 15.7 per cent, respectively. That is unprecedented in that 50-year period that is published in this budget paper.

The only other double-digit increase in spending above inflation that we have experienced in that whole time happened under—you guessed it: the first budget of the Rudd Labor government in 2008-09 when spending increased by 12.7 per cent above inflation and 17 per cent over two years. It took spending back to 25 per cent of the share of GDP. Not to be outdone, the Gillard government locked in further spending increases in legislation. But they were more sneaky; they did it outside the published forward estimates, so it was not obvious in the forward estimates documents. So, when we came into government, spending as a share of GDP was on track to 26.5 per cent by 2023-24 and, indeed, in excess of 30 per cent, according to the intergenerational report, over time. We have brought that back down to 25 per cent. We have got spending growth under control. That has involved some difficult decisions. But, of course, we know that the Labor Party in the lead-up to the last election promised spending that would have worsened the deficit by $16.5 billion.

The PRESIDENT: Senator Leyonhjelm, a supplementary question.