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Tuesday, 4 June 2013
Page: 5238

Ms O'DWYER (Higgins) (18:17): I was so thrilled to hear that the Assistant Treasurer is such a strong supporter of female talent and women. I look forward to his contribution in the upcoming ALP preselection in the seat of Batman. I am sure he will have many comments to make about that.

But I digress. I will come back to the specific question I want answered. It relates to the debt ceiling. I refer to table 2 on page 9.7 of Budget Paper No. 1. Under 'Liabilities' it is estimated that government securities—government bonds and gross debt—will hit $321.1 billion in 2013-14 and will reach $370.3 billion in 2016-17. Given the government has a current debt ceiling of $300 billion—and clearly you expect to breach this limit—why was it that the minister and the government did not seek to increase the debt ceiling in this budget, as has been done previously. One can only speculate that it is perhaps to avoid a public debate about the issue and is perhaps a somewhat cynical strategy to leave the government's debt mess to others to clean up.

I also refer the Assistant Treasurer to the government's claims that the budget will return to surplus in 2015-16 and 2016-17. If this is the case, can the minister explain why the government's gross debt is expected to continue rising over this period? On bond issuance and gross debt, we all acknowledge the need to maintain a healthy government bond market. Given that the government initially set the gross debt ceiling at $75 billion, does the minister think, all things being equal, that that is around the ideal level of bond issuance?

Finally, on net debt, which is detailed on page 10.9 of Budget Paper No. 1, I note that in 2014-15 net debt is estimated at $191.5 billion. The following year, 2015-16, it marginally reduces to $191.1 billion. Despite this reduction, the annual interest repayments are increasing by $1.3 billion to $9.1 billion. Can you explain this dramatic increase? Does this not mean that you are expecting interest rates to rise notably over this period?

Turning to table 2 on page 75 of Budget Paper No. 2, in 2013 there is an item $463.9 million for expenditure, decisions taken but not yet announced. At what level are these decisions taken? What is the criteria for them? How is it going to be categorised? Or is it possible that the money is put aside to support decisions that have not yet been taken? The Secretary of the Department of Finance and Deregulation, Mr David Tune, said in Senate estimates last week he expects announcements with regard to these funds to be made before the end of the financial year. Can the minister confirm if that is right?

Finally, is it reasonable to assume these will be announcements made in an election campaign context? For example, is it possible that these funds are tagged grants or even modest infrastructure projects put forward by Labor members?