John Gilroy (Labour)

I welcome the Minister of State to the Chamber. Senator Barrett's Bill is a good one and it is timely also to open up a debate on wider economic strategy. Nobody could be against transparency of action on the part of Government in respect of budgetary decisions. If Senator Barrett achieves anything today, he should be commended on bringing the Bill to the House in the first place. That is the type of thing this House ought to be doing and was established to do. Senator Barrett has clearly put much preparation and thought into his Private Members' Bill. He is a renowned economist and we should listen carefully to what he has to say.

I support the notion of incorporating a fiscal rule into the law of a country. That is all the more important when we see the outmoded method of producing budgets on an annual basis instead of having regard to the multi-year cycle. The system we operate at the moment encourages short termism, reduces certainty and makes it more difficult to plan on a multi-year basis. If we were to incorporate Senator Barrett's proposal into law, it would encourage the relevant Ministers to take more than ordinary care in the preparation of budgets. The Bill would not place too restrictive a constraint on the Minister as Senator Barrett has taken care to ensure that the requirement to provide a fiscal statement would apply only in well-defined circumstances.

Credibility, transparency and accountability are, and should be, features of all modern monetary policy. Rules which are designed properly allow us to respond to downturns in economic activity and alert us to the dangers of such negative events developing. If we had a set of robust fiscal rules in the past decade we might not find ourselves staring into the current economic abyss that we now face.