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Wednesday, 11 May 1994
Page: 641

Senator SHORT (3.23 p.m.) —I move:

  That the Senate take note of the answer given by the Minister for Foreign Affairs (Senator Gareth Evans), to a question without notice asked by Senator Short this day, relating to the budget deficit.

I asked the minister to explain why, during a period of projected four per cent plus annual growth, the Commonwealth needed to run up such a massive increase in its mortgage and Australia's mortgage, and therefore gamble away the future not only of this generation but more particularly of our children and grandchildren. I pointed out the fact that Commonwealth debt in the four years alone from 1991 to 1995 has risen from about $30 billion to approaching $100 billion.

  There are a few amazing things about Senator Evans's response to my question. The most amazing feature to me was that Senator Evans was totally unable to differentiate between a budget deficit and a Commonwealth debt. The two are fundamentally different. I must say that I am appalled that the Leader of the Government in this place is unable to distinguish between the two. Obviously, he has no idea about the massive debt burden which this government is running up, a debt which is mortgaging our national future and is part of the enormous and reckless gamble of Labor's budget.

  Let me quote again the increase in debt in the four years from 1991 to 1995. It is an increase of about $70 billion, rising from $30 billion to approximately $100 billion. That is due essentially—not entirely, but essentially—to the continuing budget deficits of this government. Over the last four years alone that budget deficit has been of the order of $50 billion, on top of which, on the government's own forecasts—even if its widely optimistic forecasts are achieved, which is unlikely in the extreme—the government will be racking up another $17 billion or so of budget deficit over the next three years.

  What the government is actually doing is continually racking up a huge increase in debt, mortgaging the future of our children, and at the same time racking up huge increases in taxation. As we have heard today, the government had the gall to say that there was no increase in taxation in this budget. That is absolute nonsense. The tax increase in this budget is going to be $9 billion in this year alone. Individuals' income tax is going up by $4.1 billion. Company income tax is going up by almost $1 billion. Other income tax, which is basically capital gains tax and the like, is going up by a further $2 billion. Sales tax and customs and excise are going up by another $2 billion. There are other taxes, fees and fines which are also going up, by more than $100 million. So the increases are huge. It is simply unacceptable for the government to say that it is other than that.

  The continuing increase in the debt, of course, also means a continuing increase in the interest bill to be paid on that debt. In the five years to 1994-95, the public debt interest bill totalled $44.1 billion. That is almost as much as we spend in this country on defence. It is almost as much as this government spends on education. That bill is going to continue to rise and rise unless this government starts getting its act together, starts getting its finances together, and starts acting in a responsible economic manner. It is a huge impost that is being imposed on the nation and on our future generations. It is an impost, quite frankly, that this nation simply cannot afford. This year alone the public debt interest bill is going to go up by 29 per cent—a staggeringly massive figure.

  Question resolved in the affirmative.