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Tuesday, 28 April 1987
Page: 1869

Senator MAGUIRE —My question, which is also on the subject of public debt interest, is also directed to the Minister for Finance. With reference to grossly inflated Opposition claims about public debt interest, can the Minister confirm that a substantial part of the public debt interest paid through the Commonwealth's Budget is in fact interest in respect of State government debt, including the debts incurred by conservative governments in Queensland and Tasmania? Can the Minister say whether this State government interest paid through the Commonwealth Budget is currently in the vicinity of $2,000m every year?

Senator WALSH —It is true, as Senator Maguire said, that a substantial proportion-I do not know whether what he said is correct but a figure of about $2 billion sounds right to me-of the public debt interest that is paid by the Commonwealth, which of course is nothing like the $55 billion that Senator Short says it is, is in fact interest on previous Commonwealth borrowings which have then been passed on to the States in the form of capital grants. I suppose one could add to that, if one wished, concessional finance provided to the States. But yes, it is as Senator Maguire says it is, and I believe the figure is in the vicinity of the $2 billion that he mentioned.