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Thursday, 5 February 2009
Page: 606

Ms JULIE BISHOP (4:09 PM) —My question is to the Treasurer. I refer the Treasurer to the government’s plans for a Commonwealth debt of $200 billion and ask him, in his capacity as chairman of the Australian Loan Council, how much additional debt will state governments need over the next four years?

Mr SWAN (Treasurer) —I thank the shadow Treasurer for her question. It is the case that Australian state governments do borrow on financial markets and, most particularly and most importantly, they borrow to finance critical economic infrastructure. They have been doing that for some time because it builds the nation, it creates jobs and it expands our productive capacity. So the states are borrowing. I could not give you the figure that they have out there at the moment, or what the total amount of state government borrowings is, but they do that and they do it with the approval of the Australian Loan Council. If the member wants to know what the total amount of state government borrowings stands at today, I could not give her that final figure, but I would be more than happy to supply it to her after question time. I am quite happy to supply that. But I would make a more general point about debt, and this is very important because—

Mr Robb —This is unbelievable!

Mr SWAN —What is?

The SPEAKER —Order! The Treasurer has the call. The interjectors will stop interjecting.

Mr SWAN —The state governments borrow different amounts at different periods of time. That is what they do.

Opposition members interjecting—

The SPEAKER —Order! The question has been asked; the Treasurer is responding.

Mr SWAN —I would like to make this point, because those opposite have now admitted that they would borrow to make up for the gap in government revenues which has been caused by the global financial crisis. We are going to borrow to do that. Governments in the past have borrowed to do that. The federal government has a AAA credit rating. We have a very sound balance sheet, and net debt in this country is very low by international standards. It is very low, and that is a good thing, and it is one of the things that gives us the capacity to respond to the global financial crisis. Net debt, as the shadow Treasurer would see in the papers that we have published this week, is expected to be about five per cent of GDP at the end of the forward estimates. That compares to 45 per cent across the OECD. So we have a strong balance sheet, a strong capacity to borrow to support jobs and economic growth in this country, and that is the responsible thing to do.

The states do the same, and they did the same under your government, the Howard government. They borrowed for critical economic infrastructure. It was ticked off by the Loan Council, just as it is ticked off by this government.

Ms Julie Bishop —Mr Speaker, I rise on a point of order. As the Treasurer has confirmed that the Commonwealth will be borrowing in excess of $200 billion and he has said during his answer that he would come back with the answer to the question of how much the state governments will borrow over the next four years, I ask that he provide that information before the end of question time today.

The SPEAKER —Order! There is no provision for the chair or anybody to demand that. The point has been made.