❓ The Treasurer responds to the Leader of the Opposition's comments on the future fund, arguing that spending the fund's capital on infrastructure would increase state debt. The Treasurer criticises the opposition's stance as inconsistent and fiscally irresponsible.
AnsweredQoN 257Legislative Assembly
QuestionView source ↗
STATE
FUTURE FUND — LEADER OF THE OPPOSITION'S COMMENTS
257. Mr J.M. FRANCIS to the Treasurer:
The Leader of the Opposition today made some comments about
the future fund and its relationship with debt, and he also suggested that the
government should spend that money on infrastructure. Could the Treasurer
please inform the house how state debt would be impacted if the seed capital of
the future fund was spent on alternative projects?
FUTURE FUND — LEADER OF THE OPPOSITION'S COMMENTS
257. Mr J.M. FRANCIS to the Treasurer:
The Leader of the Opposition today made some comments about
the future fund and its relationship with debt, and he also suggested that the
government should spend that money on infrastructure. Could the Treasurer
please inform the house how state debt would be impacted if the seed capital of
the future fund was spent on alternative projects?
AnswerView source ↗
I thank the member. I listened intently to the Leader of the
Opposition's address-in-reply to the budget, and of course in that
address-in-reply he nominated his position on the future fund, which will
obviously become a central point of debate in the second half of this year and
indeed leading into the 2013 election. The opposition leader's position
is that he supports the future fund in principle, but just not now. Therefore,
he is supporting a possible future future fund! And what decisiveness, Leader
of the Opposition! I bet opposition members are all glad they chose him after
seeing such rabid leadership from the front. Two reasons that have been
nominated for why only a possible future fund might be supported are firstly, a
concern about debt, and secondly, the proposition that the Labor opposition
wants that $1.1 billion in seed capital spent on other things now. I think it
is a very important point. This is the thing about debt: if someone is
concerned about debt, which the Leader of the Opposition most clearly is, if
instead of leaving $1.1 billion in an account in 2015–16, that $1.1 billion
is spent in 2015–16, what happens? Debt is increased by $1.1 billion.
The Leader of the Opposition just does not get it. The future fund sits as an
asset unspent against debt. The way it operates, in a debt sense, is like a
cash offset account. The proposition that the Labor opposition is concerned
about debt, but that we should spend the money now, means that if $1.1 billion
is spent now rather than being saved, it would truly be the worst debt
reduction strategy ever. It would increase net debt by $1.1 billion
straightaway. The Labor Party is the only political party in history that
thinks that debt is decreased by spending $1.1 billion and not saving it. It is
just absolutely bizarre. If someone had a mortgage and $100 000 in a cash
offset account, the Leader of the Opposition would advise him to decrease his
debt by spending all $100 000 of his cash offset today. It is absolutely
bizarre.
The second concern we heard is that we should spend the money
now and increase net debt by $1.1 billion, because we are not spending enough
money on infrastructure. Particularly nominated were things like roads, police
stations, hospitals and schools. Immediately after the Leader of the Opposition's
speech we had the shadow Treasurer who at some length bemoaned the fact that 30
per cent of the debt—the borrowings—is being carried in the
general government sector. It is funny. Main Roads is general government, WA
Police is general government, Health is general government and Education is
general government. Here is how it works: if we want to build more roads,
police stations, hospitals and schools, we have to borrow the money and it sits
in the general government sector.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.C. PORTER : It
is quite basic stuff.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I formally call you to order for the third time
today. While I am on my feet I will add to the list. Member for Warnbro, I
formally call you to order for the third time today. Member for Albany, I
formally call you to order for the second time today. Leader of the Opposition,
I formally call you to order for the first time today.
Mr C.C. PORTER :
Who is in the brains trust opposite that says, ''Let's shift the
debate about infrastructure. Let's say the government is not spending enough
money on infrastructure, but let's also say that there is too much debt''?
To build infrastructure, guess what? Money has to be borrowed. The criticism of
this government is that it is not spending enough money on infrastructure. On
the pie graph I am holding, can members opposite see the tiny little circle?
Several members interjected.
Mr C.C. PORTER :
Can members see it? That tiny little circle was the average spend on
infrastructure under the previous Labor government. The great big circle —
Several members interjected.
Mr C.C. PORTER :
Can members see the little circle? It is on that side. The big circle
represents what this government will be doing in infrastructure next year. The
Leader of the Opposition says, ''Get debt down by taking $1.1 billion worth
of savings and spending it.'' Then he says we are not spending enough
money on infrastructure and that we need to spend more on hospitals, education,
roads and housing. Since we have come to government, the capital spend for
health has increased by 226 per cent; the capital spend for education has
increased by 84 per cent; transport and roads 24 per cent; and housing,
specifically mentioned today by the Leader of the Opposition, 58 per cent. So
go back and have a chat to the brains trust, work out what a sensible position
is and then we will discuss it.
Point of Order
Mr R.F. JOHNSON : Mr Speaker, I
draw your attention to the member for Cockburn and the member for Collie–Preston
who are reading a newspaper in the chamber.
The SPEAKER : Leader of the House,
I had made that observation myself. I was under the impression that perhaps the
members were looking at some information as opposed to simply reading.
Several members interjected.
The
SPEAKER : Members! I do not know whether the paper is The West Australian ; I do not know what the paper is. But it is a
good message to all members in this place, particularly in question time, that
the document should be relevant to a question related to it.
Opposition's address-in-reply to the budget, and of course in that
address-in-reply he nominated his position on the future fund, which will
obviously become a central point of debate in the second half of this year and
indeed leading into the 2013 election. The opposition leader's position
is that he supports the future fund in principle, but just not now. Therefore,
he is supporting a possible future future fund! And what decisiveness, Leader
of the Opposition! I bet opposition members are all glad they chose him after
seeing such rabid leadership from the front. Two reasons that have been
nominated for why only a possible future fund might be supported are firstly, a
concern about debt, and secondly, the proposition that the Labor opposition
wants that $1.1 billion in seed capital spent on other things now. I think it
is a very important point. This is the thing about debt: if someone is
concerned about debt, which the Leader of the Opposition most clearly is, if
instead of leaving $1.1 billion in an account in 2015–16, that $1.1 billion
is spent in 2015–16, what happens? Debt is increased by $1.1 billion.
The Leader of the Opposition just does not get it. The future fund sits as an
asset unspent against debt. The way it operates, in a debt sense, is like a
cash offset account. The proposition that the Labor opposition is concerned
about debt, but that we should spend the money now, means that if $1.1 billion
is spent now rather than being saved, it would truly be the worst debt
reduction strategy ever. It would increase net debt by $1.1 billion
straightaway. The Labor Party is the only political party in history that
thinks that debt is decreased by spending $1.1 billion and not saving it. It is
just absolutely bizarre. If someone had a mortgage and $100 000 in a cash
offset account, the Leader of the Opposition would advise him to decrease his
debt by spending all $100 000 of his cash offset today. It is absolutely
bizarre.
The second concern we heard is that we should spend the money
now and increase net debt by $1.1 billion, because we are not spending enough
money on infrastructure. Particularly nominated were things like roads, police
stations, hospitals and schools. Immediately after the Leader of the Opposition's
speech we had the shadow Treasurer who at some length bemoaned the fact that 30
per cent of the debt—the borrowings—is being carried in the
general government sector. It is funny. Main Roads is general government, WA
Police is general government, Health is general government and Education is
general government. Here is how it works: if we want to build more roads,
police stations, hospitals and schools, we have to borrow the money and it sits
in the general government sector.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.C. PORTER : It
is quite basic stuff.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I formally call you to order for the third time
today. While I am on my feet I will add to the list. Member for Warnbro, I
formally call you to order for the third time today. Member for Albany, I
formally call you to order for the second time today. Leader of the Opposition,
I formally call you to order for the first time today.
Mr C.C. PORTER :
Who is in the brains trust opposite that says, ''Let's shift the
debate about infrastructure. Let's say the government is not spending enough
money on infrastructure, but let's also say that there is too much debt''?
To build infrastructure, guess what? Money has to be borrowed. The criticism of
this government is that it is not spending enough money on infrastructure. On
the pie graph I am holding, can members opposite see the tiny little circle?
Several members interjected.
Mr C.C. PORTER :
Can members see it? That tiny little circle was the average spend on
infrastructure under the previous Labor government. The great big circle —
Several members interjected.
Mr C.C. PORTER :
Can members see the little circle? It is on that side. The big circle
represents what this government will be doing in infrastructure next year. The
Leader of the Opposition says, ''Get debt down by taking $1.1 billion worth
of savings and spending it.'' Then he says we are not spending enough
money on infrastructure and that we need to spend more on hospitals, education,
roads and housing. Since we have come to government, the capital spend for
health has increased by 226 per cent; the capital spend for education has
increased by 84 per cent; transport and roads 24 per cent; and housing,
specifically mentioned today by the Leader of the Opposition, 58 per cent. So
go back and have a chat to the brains trust, work out what a sensible position
is and then we will discuss it.
Point of Order
Mr R.F. JOHNSON : Mr Speaker, I
draw your attention to the member for Cockburn and the member for Collie–Preston
who are reading a newspaper in the chamber.
The SPEAKER : Leader of the House,
I had made that observation myself. I was under the impression that perhaps the
members were looking at some information as opposed to simply reading.
Several members interjected.
The
SPEAKER : Members! I do not know whether the paper is The West Australian ; I do not know what the paper is. But it is a
good message to all members in this place, particularly in question time, that
the document should be relevant to a question related to it.
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