Senate Economics Legislation Committee, , 6:40:44 to 6:45:37
Discussion on government spending as a share of the economy, real spending growth, and structural pressures from the NDIS, health, aged care, and defense interest costs.
Topics: Government spending, Health, Social services
Speakers: Hon Katy Gallagher, Senator Andrew Bragg, Damien White
Who's you want to do the fiscal question? Yeah. Okay. So what was the government spending its share of the economy in 25-26 as final budget outcome?
Damien White, Deputy Secretary Fiscal Group, Senator. I will find it was 26.9%, Senator.
Okay. And so when was it the last time outside of a pandemic that government spending has been so high?
There's historical tables in the in the budget papers. So we went through this all last night in finance.
Uh-huh.
Yeah.
So what's the answer? You don't know?
It's 1986-7, Senator.
So spending the highest has been since 86%.
Yes.
Thank you. What was the real spending growth outcome for 25-26?
4.2%.
4.3. 4.3, Senator.
Yeah. And how does that relate to the real economic growth return for the year?
I don't know what real economic growth through the year to June was, Senator, off the top of my head. In the FBO, it says real GDP grew by 2.4, Senator.
Okay. So real spending growth or real spending government growth.
It's averaged 2% over the last four years. So we're dealing with some particular pressures in that year, which we are continuing to deal with. For example, if you compare it to those years, you know, in the last 20 years or so, disability spending now accounts for two to two per cent of GDP. It wasn't the case back then. Health is almost an extra one per cent. Age care almost an extra one per cent. Defence is there as well. Like the structural pressures on the budget are very significant. And in fact, you are promising to spend more than us. So I find the criticism of our spending stunning when you are out there promising to spend more and have greater pressure on the budget, whilst we are trying to rein in spending and make sensible and modest reforms, including reforms that you are currently opposing in the Senate to allow that to happen.
Thanks for your political speeches.
Well, yes, but there is also like engage rationally on the issues facing the budget as well, which you know don't often get a lot of air time. Everyone says cut spending. People are a lot less able to come forward with the question.
You didn't mention you didn't mention the interest cost. How much is the interest cost this year?
Well, they are significant too, but you'll be pleased to know that uh because of our responsible approach to budgeting, we will be spending $70 billion less on interest than would have been the case if we hadn't taken the approach that we have.
Your projections are your alternative projections are laughable. You wanted to spend even more in the pandemic.
We can go back to pandemic times if you'd like, Senator Bragg.
Well, what's the answer? How much do you spend? How much are you spending on interest payment system?
I am I am responsible for well, they're all outlined in the budget paper. I don't know why you're finding it unable. That that information is is shared in the budget, published there for everyone to see. What I am saying is because we've delivered two surpluses significantly reduced the size of the deficits going forward because of the decisions we've made, that those costs, which are substantial and growing, as the Treasurer has talked about today, are much less than they would have been because of the decisions that we have taken. And yes, they are another issue that we have to manage because when you were in government, you doubled the debt before the pandemic. I mean, that is the reality that you guys refuse to engage with. Is your record in government when it came to uh managing the budget was terrible? And it was terrible before the pandemic, which is when you accrued most of the debt that we are now having to manage and work out um you know decisions that reduce the pressure on that side of the.