Mr REID —I address my question to the Prime Minister.

Mr Crean —Oh, he doesn't like the truth—

Mr SPEAKER —The honourable member for Bendigo will resume his seat. I invoke standing order 304A in respect of the member for Hotham.

Mr Crean —Oh, come on. Did I get a warning?

Mr SPEAKER —Yes, you did. You have been making so much noise, you did not hear it.

The honourable member for Hotham thereupon withdrew from the chamber.

Mr REID —As Australia moves towards the New Year, what is the outlook for the Australian economy?

Mrs Crosio interjecting—

Mr SPEAKER —The member for Prospect will join him. You are warned.

Mr REID —Is the business world becoming increasingly confident in its outlook for the future?

Mr HOWARD —In reply to the honourable member for Bendigo, as Australia moves towards the New Year the signs are unmistakable that the domestic economy is growing strongly. Despite the attempts of the Labor Party not only to stop the process of economic renewal but also to talk the Australian economy down, the signs are that domestic economic growth is gathering pace. The member for Bendigo asks me about the attitude of the business community. I draw the attention of those sitting opposite who would seek to talk down the Australian economy to the latest statement issued by the Australian Chamber of Commerce and Industry as a result of a survey that was carried out by that chamber, bearing in mind that the chamber is the most representative of all of the business organisations in Australia. This is what it had to say:

These results provide confirmation that the actions taken by the government to lower the deficit through cuts to expenditure are paying dividends. Rather than slowing activity, these structural shifts have improved our economic fundamentals and restored competitiveness. They have given the economy an underlying strength it has not had for many years.

One can say several things about the New Year. One can say that the economy domestically will continue to grow in 1998. One can also say that, if the Labor Party had retained office in 1996, the opposite would have been the case because the prescriptions the Labor Party implemented when they were in power—prescriptions by their obstruction—and that they urged upon us after the election would have produced an entirely different result, not only so far as economic growth is concerned but also so far as the level of confidence in the Australian business community is concerned.

Can I remind the House that GDP growth increased from an annualised rate of 2.5 per cent over the second half of 1996 to around four per cent over the first half of 1997. Investment expectations are consistent with the budget forecast of eight per cent. Retail trade rose by 3.1 per cent—that is real retail trade—in the September quarter and that was the largest quarterly increase since the series began. Company profits have risen by a strong 5.8 per cent in the September quarter to be nine per cent higher than a year ago. Trend building approvals grew by 11.3 per cent through the year and home loan interest rates of 6.7 per cent are at the lowest level since 1970, compared with the peak of 17 per cent in 1989 when the former government was in power.

Probably the greatest demonstration of the wisdom of the economic policies of my government and the ill wisdom of the alternative prescriptions urged by the Labor Party are the way in which the Australian economy has been able to withstand the impact of financial turbulence in our part of the world. I pose the rhetorical question to all members of this House: where would the Australian economy now be on the scale of vulnerability if the policies of those who sit opposite had been implemented and if we had not implemented our deficit cutting strategy, had not freed the labour market had not attended to micro-economic reform and had not privatised organisations like Telstra. The Australian economy would have been weaker and more vulnerable, and the Australian people would have been infinitely less confident than they are as we come towards the end of this year.