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Thursday, 6 September 1984
Page: 528

Senator GRIMES (Minister for Social Security)(10.18) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

The purpose of the Bill is to make provision for the financing of the prospective 1984-85 Budget deficit.

In the Budget Speech the Treasurer announced that the Budget deficit in prospect for 1984-85 is estimated to be some $6.745 billion. This gives rise to a prospective deficit in the Consolidated Revenue Fund of about the same magnitude.

As expenditure from the Consolidated Revenue Fund cannot legally exceed the moneys available to it, there is a need to seek authority to finance certain expenditures from borrowings to the extent that amounts appropriated by the Parliament for expenditure from that fund exceed estimated revenues.

Successive governments have, for many years, introduced legislation in the form of a Loan Bill to authorise payments-or to reimburse the Consolidated Revenue Fund-from the Loan Fund to meet defence and certain non-defence expenditures.

Under existing standing authorities some $2.7 billion of expenditure can be charged to loan fund leaving a shortfall of some $4.045 billion for which separate funding authority is required. This Bill seeks authority to borrow moneys accordingly.

I should make it clear, however, that the Bill does not authorise defence or other expenditures additional to those otherwise authorised by Parliament.

The amount of borrowings that may be undertaken pursuant to the proposed legislation is, in the case of defence expenditure, the amount for which appropriation is sought for defence purposes in the Appropriation Bill (No. 1) 1984-85-some $5.57 billion-and any moneys for defence purposes that may be approved in subsequent Appropriation Acts during 1984-85. The effective limit is likely to be significantly less than these amounts as defence expenditures cannot be charged to Loan Fund until the legislation is enacted.

The legal limit for borrowing for non-defence purposes is determined by the level of borrowing authority approved by the Loan Council. Together, it is estimated that these limits will be sufficient to enable the financing of the Budget deficit.

I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.