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Monday, 22 September 2008
Page: 8068


Mr RAGUSE (2:26 PM) —My question is to the Assistant Treasurer. Will the minister outline to the House the importance of maintaining a strong budget surplus and why this is critical to Australia’s ability to withstand the global financial crisis? Are there any threats to the budget surplus?


Mr BOWEN (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer) —As the Prime Minister and Treasurer have said, Australia is better placed than most countries to withstand the current financial turmoil. There are a number of reasons for this—our well-respected prudential regulation system and the growth in our terms of trade being important parts. It is also very important that we keep our strong budget surplus. Countries without a strong budget surplus are more limited in their response to the current turmoil.

I am also asked about threats to the current budget surplus. The newly-minted Leader of the Opposition and the Liberals in the Senate remain the biggest threats to that surplus. The Leader of the Opposition, in his first breath in his new role, proved that he was just as economically irresponsible as his predecessor. He indicated that he will continue to block the government’s budget measures in the Senate and therefore reduce the surplus that is so important to our economic stability. He does this even though he acknowledges that the figures involved are significant. Yesterday, talking to Laurie Oakes, the Leader of the Opposition said:

… it’s a huge amount of money …

        …         …         …

$6 billion is a gigantic amount of money in anyone’s terms …

That is what the Leader of the Opposition said on Sunday. But on Friday he said, ‘It’s a very small amount of money.’ It was in the interview yesterday that he also said that his raid on the budget surplus was only a small amount because it was less than one per cent of the total budget. He was disagreeing with himself in the same interview. It is just like the old days, when the member for Bradfield occupied that chair. In the finest tradition of recent leaders of the opposition, he could not even agree with himself in the same interview. He threatens the budget surplus even though he recognised on Sunday that the amount of money involved is substantial—but on Friday it was small.

Not only does the Leader of the Opposition continue to threaten our savings measures in the Senate; he also continues the policy of unfunded spending—billions of dollars of unfunded spending. We know that he believes a big chunk of that unfunded spending—the reduction in the petrol excise—is bad policy. We know that he thinks it is bad public policy and yet he continues it. He is hardly what you would call a conviction politician. We knew that he disagreed with the member for Bradfield; now we know he disagrees with himself.

The Leader of the Opposition has thrown out all economic credibility. This is what he said to Laurie Oakes, trying to defend his policy:

… whether the petrol excise is 38 cents or 33 cents or 28 cents, it’s simply a question of measuring up the budgetary consequences. You lower the excise, you just reduce government revenues.

Wouldn’t Goldman Sachs be proud of the member for Wentworth! He has worked out that if you cut tax you reduce government revenue. But what he did not say is that when you cut government revenue you either cut the budget surplus or cut services. Who would have thought Malcolm Turnbull’s Liberal Party would make the Australian Greens look economically responsible!


The SPEAKER —Order! The minister will refer to members by their titles.


Mr BOWEN —The Leader of the Opposition has made economic irresponsibility the hallmark of his first week as Leader of the Opposition. The new occupant of that office is ‘Brendan Nelson lite’.


Mr Hockey —Mr Speaker—


The SPEAKER —I remind members that they should refer to members by their titles.