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Wednesday, 11 May 1994
Page: 625


Senator SHORT —After that incredible answer in which the minister refused to acknowledge that the tax hike in this budget alone is $9 billion, let me try the Leader of the Government in the Senate on another question. I refer the minister to the budget's projections on Commonwealth debt, which reveal that between 1991 and 1995 Commonwealth debt will have almost tripled—from just over $30,000 million to almost $100,000 million. Will the minister explain why, during a period of projected four per cent plus annual growth, the Commonwealth needs to continue to run up such a massive mortgage and gamble away the future of all Australians?


Senator GARETH EVANS —Obviously the increase in Commonwealth debts is a function of the high deficits that we have been living through in recent years as a result of the recession, as a result of the budget imbalances that flow from that—the higher unemployment payments and everything else. Tell us something new. That is absolutely no news at all.

  Commonwealth debt, however, needs to be brought back, and it will be brought back as a result of the deficit reduction strategy. That is what it is all about: getting back to one per cent or less of GDP by 1996-97. It is a deficit reduction strategy which has been applauded by the OECD and by other economic commentators right around the world as one of the most far-sighted, thoughtful and effective such strategies that exist anywhere else.

  Canada is often cited as a model for comparison for this and other matters. By that period, after its particular deficit reduction strategy, Canadian fiscal deficits will still be running at the order of three per cent of GDP. We will be down under one per cent on the highly credible figures that those opposite have seen. If we had sought to move any faster on that particular deficit reduction strategy, if we had sought to drag down that debt a little more than would otherwise be the case, there would have been other obvious consequences for the budget.

  There would have been an inability to expend the kind of money that we wanted to spend and that the community wants us to spend on all the particular issues—the job compact, Aboriginal health, housing, the homeless, breast cancer—that do feature in our budgetary strategy and feature in the demands and the claims of every one of the opposition's shadow ministers who has opened his mouth on this particular subject. Those opposite talk about a faster deficit reduction strategy. Their shadow Treasurer, Mr Downer, talks about a $3 billion deficit reduction that should have been accomplished this year in order to meet these sorts of targets—


Senator Kemp —Mr President, I rise on a point of order. On the question of relevance—


Senator Robert Ray —Make it a real one, Elmer.


Senator Kemp —No wonder Keating will not speak to you, Ray.


The PRESIDENT —Order! Senator Kemp, make your point of order.


Senator Kemp —Well, he made a comment. The question was quite a specific one, Mr President. Senator Evans was asked why it is that Commonwealth debt will triple from $30 billion to $100 billion. I ask him to address that question.


The PRESIDENT —What is your point of order?


Senator Kemp —Relevance; the minister is debating the point.


The PRESIDENT —There is no point of order.


Senator GARETH EVANS —The only way one can dramatically reduce Commonwealth debt is by dramatically reducing the deficit at a much faster rate than that which we are proposing to do and that which has been acknowledged universally as responsible. Those on the other side of politics talk about reducing the debt through reducing the deficit faster by taking $3 billion, for example, off this year's budget, yet at the same time every one of the shadow ministers who opens his mouth, including those in the leadership, wants to spend more money on particular subject areas. Hewson talks about increasing Aboriginal health funding; Anderson talks about increasing funding for regional areas; Mr McLachlan bemoans that only $262 million will be spent on regional development; and Senator Tambling—although he is not here at the moment, and I can understand why—wants to spend more on employment—


Senator Short —Mr President, I take a point of order. Can I ask under what guise the Leader of the Government is speaking? Is he responding to a point of order? If so, it seems to me he is not responding to Senator Kemp's point of order.


The PRESIDENT —I said there was no point of order. I asked him to continue.


Senator Short —Well, sit him down. I have a supplementary question.


The PRESIDENT —He has not finished his answer.


Senator Short —His time has expired.


The PRESIDENT —The minister's time has expired.


Senator SHORT —Mr President, I ask a supplementary question. I thank Senator Kemp for drawing the attention of the Senate to Senator Evans's complete failure to answer my question. Will the minister therefore inform the Senate when, and at what dollar level, the Commonwealth's massively and rapidly rising debt burden under this gambling Labor government will actually begin even to stabilise?


Senator GARETH EVANS —The budget papers reveal—if Senator Short is smart enough to be able to find it; he obviously has not been—that public debt interest as a proportion of budget outlays is estimated to increase from 5.7 per cent in 1993-94 to seven per cent in 1994-95, and peak thereafter at 7.5 per cent in 1996-97 before falling in the out years. We do expect the watershed year, in that respect, to be 1996-97. The reasons for the debt—


Senator Short —Mr President, I raise a point of order. The minister is quoting a set of figures that bear no relationship to the question that I asked. I ask, on the grounds of relevance, that he address the question I put to him.


The PRESIDENT —There is no point of order.


Senator GARETH EVANS —Senator Short sought information. We give him information, and he does not like it. We give him rhetoric, and he does not like that, either. We give him a political answer, and he does not like that. We give him a substantive answer, and he does not like that. Senator Short is not capable of being satisfied by anything and, frankly, I do not care.