13th Oct 2016, 12:35 PM – Senate Motions - Infrastructure - Distinguish between 'good' debt & 'bad' debt

The majority voted in favour of a motion introduced by Tasmanian Senator Peter Whish-Wilson (Greens), which means it succeeded. Motions like these don't make any legal changes on their own, but they are politically influential since they represent the will of the Senate.

Motion text

That the Senate—

(a) notes:

(i) the Organisation for Economic Co-operation and Development (OECD) September 2016 Interim Economic Outlook which states that all countries have room to restructure their spending and tax policies by increasing infrastructure spending and using fiscal measures to support structural reforms,

(ii) the International Monetary Fund (IMF) April 2016 World Economic Outlook which states that infrastructure investment is needed across a range of countries and that countries with fiscal space should not wait to take advantage of low interest rates, and

(iii) the August 2016 and final speech of the former Reserve Bank Governor, Mr Glenn Stevens, in which he drew a distinction between borrowing to invest in the right investment assets – long-lived assets that yield an economic return – as opposed to borrowing to pay pensions, welfare and routine government expenses; and

(b) calls on the Government to:

(i) distinguish between 'good' debt used to fund investment in transformative and productivity enhancing infrastructure, and 'bad' debt used to fund recurrent spending, and

(ii) from the next budget update onwards, distinguish between borrowing for recurrent purposes from borrowing for capital, and increase borrowing to invest in public infrastructure that would help provide a more sustainable economic future and create jobs.