Coalition refuses to pass debt burden on to next generation

The Australian economy has suffered from six years of failed Labor fiscal policy, and we need strong leadership to repair the damage done by Labor in government. We hear the rank hypocrisy of Labor members opposite, who complain about this government taking the necessary actions that they were too weak and too incompetent to take. We saw not only the debt and deficit mess but also the chaos of two prime ministers—the tag team prime ministership—three deputy prime ministers, five ministers for regional development, six ministers for small business and nine ministers for education. They were an embarrassment in office but at least they are consistent, because they are still an embarrassment in opposition.

Let us take a look at the legacy of those years of Labor economic failure. We saw five years of cumulative Labor deficits of $191 billion—and uncontrolled spending that has seen gross debt blow out to $360 billion and net debt passing $200 billion. This debt, left to the government by Labor, is costing us $12 billion in interest each and every year. That is $1 billion a month in interest, or $33 million a day, or $1.4 million an hour. This year’s $12 billion debt interest bill is equivalent to around half of Australia’s defence budget. It really makes you wonder where the nation was heading under Labor.

Had Australia been forced to endure another Labor government after the September election, we were heading for even bigger deficits—a projected $123 billion in the next four years—and big increases in debt, to $667 billion of gross debt. And that is without the further spending that Labor announced and would have engaged in. A prime example of Labor creating a financial mess and then pretending to be ostriches hiding their heads in the sand was the former member for Lilley’s response when asked about Labor’s obscene debt trajectory. His response—it’s a classic: ‘That will be someone else’s problem.’ And don’t we hear a continuation of it. What a Labor legend—create a financial mess and then hide your head in the sand!

The debt we have to pay and the interest is due to additional borrowings. It is a prime example, as we know, of paying off your mortgage with your credit card. If debts were allowed to spiral out of control to the levels predicted under more Labor governments, it would take generation after generation to pay back, leaving our children and grandchildren to pay back the current Labor legacy. What we have heard today is typical of them hiding their head in the sand. The West Australian editorial today says: ‘We can’t wish away a looming budget crisis.’ But that is what those on the opposite side would have us do. The article went on to say:

The solution must involve reining in spending and putting in place structures that can ensure the sustainability of the Budget. The problem can’t be wished away. There needs to be policy changes and there needs to be hard decisions.

We in this place know that that is something that Labor is incapable of—hard decisions.

There has been discussion about the debt left by the Keating government in 1996, which the Howard government had to repay. That $97 billion debt was looking like being an intergenerational transfer of debt to our children. We had to fix it then, and here we are, after just six years of a Labor government, having to do it all again. But the Australian people know that we are up for the job, because we have done it before. We have done it before and we will do it again. That is one thing that the Australian people can be confident of. We are capable of tough decisions and we will make the tough decisions. We are certainly capable of making the tough decisions to fix the mess that Labor has left us with.

The National Commission of Audit identified that, if left unchecked, government expenditure would explode from $409 billion this year to $700 billion within a decade. The figures are quite frightening. If anybody here inherited a private business with this set of books, what on earth would you do? You would have no choice but to take action—and the coalition is doing just that in government. We are reducing the deficits projected through to 2017-18 by $43.8 billion—something those opposite are definitely not capable of doing. We are reducing gross debt from the predicted Labor outcome of $667 billion by nearly $300 billion. We refuse to simply pass the debt burden onto the next generation, as Labor is so willing to do.