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Monday, 1 June 1998
Page: 4365

Mr ENTSCH (8:27 PM) —First of all, in rising to speak on the Appropriation Bill (No.1) 1998-99, I would like to congratulate the Treasurer (Mr Costello) for delivering a budget that certainly gives all Australians the benefits of a very sound economic management and also delivers initiatives that will bring very significant benefits to regional Australia and, in particular, my electorate of Leichhardt. I can recall that it was not so long ago—about two and a half years—when we first came into government that we gave a commitment to the Australian people that we would be looking within our third year at delivering a budget in surplus and I would suggest that we have been able to fulfil that commitment in full.

The member for Isaacs (Mr Wilton) I note was suggesting, in looking at the 1998-99 budget, that we are in trouble economically. I would suggest to him that in March 1996 we were absolutely haemorrhaging. To suggest that Australia had to go into a deficit because the rest of the world was doing so and we had to follow suit is a bit like suggesting that we should be now tipping ourselves into the same economic position as Indonesia or South Korea. I think that is not really a good idea and certainly not an option that I would like to pursue for myself or, for that matter, my family or the country generally.

I think it is also important to acknowledge the significance of our $2.7 billion surplus. It is certainly good news for all Australians. There have been some on the other side and some of those that are pushing the more extreme social agenda—I include my friends from the Democrats in that—that are suggesting absolutely dismayed that we have made a profit. They are saying, `That $2.7 billion should go into some new-found social program.'

They do not realise that it is all about paying back some of the debt. Any of them that had any fundamental business principle would understand that at the end of the day if you accumulate a debt somewhere along the line you have to start to pay it back. To suggest that it is a dreadful thing to have a bit of a surplus and you should be spending on something overlooks the fact that you forget completely that you still have a hell of a lot of interest that is eating away at your capital. It is just sound business practice to reduce that debt as quickly as possible.

I suggest that this surplus will deliver certainty and confidence right across the board to families and Australian business. That is something that we should be all very comfortable with. When Labor left office in March 1996, there was a $96 billion debt, representing 20 per cent of our GDP. That is very significant. Our current forecasts, with sound economic management, suggests that we will be down to about 10 per cent of GDP. That is a manageable level, I suggest, by the year 2001 or 2002. If we have the mandate to continue on with the sale of the balance of Telstra, we will be looking at levels down to 1.5 per cent of GDP. They are levels that have not been enjoyed in this country for decades. It will certainly give us the opportunity to have a new era of prosperity for our kids. That is something that we all should be focusing on.

Another very significant issue is that we have pulled back this deficit without increasing taxes. This is very important. This is the first government that I am aware of that has, for a full term, not increased any taxes and dealt with these problems that we had when we came into government. Interest rates, as I said, are the lowest since 1970. Home loans interest rates are at 6.7 per cent. Our overdraft rates are at 7.7 per cent. They are very low. Inflation is the lowest since the 1960s and forecast to remain in that two to three per cent band in the foreseeable future. Certainly it is not the gloom and doom that has been suggested by the other side. It is a very positive and a very comfortable outlook. I suggest to you, given the problems in our northern neighbours, if we had not taken this action, we would have been really in serious problems.

The unemployment level is another good one. It is very interesting. It is at 7.9 per cent. It is interesting to note that when we came in in March for the first six months there was an increase. There was certainly an increase. When you look at the graphs after that six months, you find a consistent drop. They said we would never go below eight per cent again, but we have. We are down to 7.9 per cent. That is quite an achievement. That increase in the first six months, if you look at it, is all about those that were on the merry-go-round called Working Nation. They were coming off those programs. These were the ones that were training and retraining and retraining but there was nothing to put them into. As that program was winding up in that six months, those people were coming back on to the unemployment queues. Suddenly, good responsible policy started to click in and we have this good steady decline.

Certainly it is not as sharp as one would like to see it, but it is certainly very significant given that we were told, `You will never go below eight per cent.' That is absolutely commendable. We have created 280,000 new jobs since we have got in. I am sure we will continue to foster that sort of job growth with the economic policies that we are putting into place. Businesses and families can now plan with certainty. Interest rate cuts, given the more disposable income, are cutting years off their mortgage.

The budget has helped protect us, as I said, from the worst of the Asian crisis. Australia's growth economic forecast in spite of the Asian crisis is still predicted at about three per cent of GDP. That is the highest in the region. It was the lowest in the region.

Mr Sercombe —Lowest in Australia's history.

Mr ENTSCH —Adopting Labor's policy, we would be down there in the minuses. It is a great positive. I think it is also interesting to note the reaction of the press with regard to the budget. I could suggest to you that I read some of the comments from our lesser papers such as the Australian , the Sydney Morning Herald or the Age . But I will read something that is quite significant and that really knows all about these issues. It is called the Cairns Post —an excellent paper. In an editorial that they printed on 13 May it is stated:

Commendably, the Government resisted the inevitable pre-election temptation to make this Budget a heartily big-spending one aimed at buttering up the voters.

In resisting this temptation, Treasurer Peter Costello has made fiscal prudence an election issue by establishing clearly the Government's credentials as a responsible economic manager.

By turning a $10.3 billion Budget deficit inherited from the previous Labor government into an estimated $2.7 billion surplus in less than three years—

I did not say that there was a deficit; the Cairns Post has also admitted that there was a surplus. They got their information from Gareth Evans. Gareth Evans told them that. It is amazing. This is a third party endorsement of this, confirming it.

The Howard government has laid down the gauntlet in no uncertain terms to opposition leader Kim Beazley. The newspaper goes on to say a bit about Kim, but we do not need to dwell on that tonight. It continues:

All in all, Mr Costello has good reason to be pleased with his efforts last night

I say to the member for Bradford (Dr Nelson) that it is absolutely commendable. We should be very proud of it. We have to be pleased as well. Time does not permit me to go on with comments of the lesser newspapers. I will continue, if I can, to comment on specific programs. Road funding in our electorate will deliver $334 million to Queensland in additional funding; $11.06 million will be reinstated in the black spot program. We have done very well from the black spot program. There has been cooperation with my local man, Mr Tom Pyne, who is a life member of the Labor Party. We worked very well together. We have secured over one-sixth of the entire state's allocation of black spot funding. There has been the upgrading of the Cook Highway to numerous works around the city. There have been bikeways, roundabouts, the funding of Bloomfield Road. The funds provided have covered a very significant portion of that funding. Recently, we had another $400,000 go to Mareeba and Mount Molloy to do roads there. Infrastructure has been major.

We have had great initiatives with health and programs such as Meals on Wheels, which I am very actively involved in. I still go very regularly whenever time permits. They are getting money as well, which is desperately needed. This is keeping people at home. The money goes into multipurpose centres. This has been a major problem in our electorate because people have been forced to move these from these little communities into Cairns and places such as that. Of course, they break away from their community. Now they are able to provide something within their community. A good example of that is the Douglas Shire nursing home steering committee which looks like for the first time in six years getting themselves a new nursing home. I think it is fantastic. That is through our network.

I will save what else I have here for later. I will say in finishing that it is a great budget. As the Treasurer said, we are back in the black. We are back on track. We are well on our way to paying off Labor's legacy of debt. I take great pride in the expectation that we will continue to reduce that debt. We will pay our own way so that when our kids start to take over the reins of this wonderful country, they can focus on the future rather than be burdened by the excesses of their forefathers. With that, I commend this bill to the chamber.