Mr CHARLES (2:15 PM) —Would the Treasurer please advise the House how responsible budget policy has enabled the government to reduce Labor's legacy of debt and redirect spending to priority community services?
Mr COSTELLO (Treasurer) —The budget is in surplus in the next financial year, with a budgeted forecast cash surplus of $1.5 billion, the fifth consecutive surplus, the largest run of surplus budgets since before the Whitlam government. We are undoing the damage that was done by the Whitlam government—I think now generally acknowledged as Australia's worst economic managers—and we are now going back to record some budget outcomes that we had not seen since the 1960s.
As this House well knows, in its last five budgets the Labor Party accumulated $80 billion worth of debt. Let me just put this in context as to how you accumulate debt. The first thing you do is you run a deficit—that is, you spend more than your revenues. Then the Labor Party sold assets. But that still was not enough to cover the deficit. Then they went out, after selling assets, and borrowed on financial markets $80 billion. They expended the whole of the proceeds of their asset sales—back in the days when you were pro privatisation, Old Tiger—of the privatisation but still could not balance the budget and still went to the financial markets and borrowed $80 billion.
One of the proudest achievements of this government is that, by the end of the forecast financial year, we will have repaid $60 billion of Labor's $80 billion debt. That produces for the budget an interest saving of $4 billion a year, and that $4 billion can now be reinvested in tax reductions, it can be reinvested in the health system, it can be reinvested in building a better defence for Australia, it can be reinvested in strengthening our borders against plant and animal disease and it can be reinvested for pensioners and older Australians. Because this government did the work, we can now reinvest for the future. But I want to say this: having paid off $60 billion of Labor's $80 billion debt, we are only three-quarters of the way there. There is still more work to be done, and this government intends to do it, to deliver good outcomes for the Australian people.