Mr HAWKER —My question is addressed to the Treasurer. Is the Treasurer aware of any independent assessments of the Australian economy and the government's economic management? What is the Treasurer's response to these reports?

Mr COSTELLO (Treasurer) —I thank the honourable member for Wannon for his question. The honourable member will no doubt be aware that last week the government released for the first time a public information notice put out by the International Monetary Fund with an assessment in relation to Australia's economy.

The executive directors of the International Monetary Fund in that assessment commended the authorities in Australia for implementing sound macro-economic policies and structural reforms. The IMF said that they had built the foundation for Australia's impressive record of strong growth and low inflation. They noted that fiscal consolidation and inflation targeting framework had contributed to a fall in long-term interest rates.

I say on behalf of this side of the House that we believe, for the sake of young home buyers and young families, low interest rates and lower mortgage charges are a great thing. They are giving young people a start in life which they could never get under the Beazley-Keating interest rates of 17 per cent, which they had in the 1980s. The IMF also said:

Moreover, the adoption of the Charter of Budget Honesty, which sets a high standard for fiscal transparency and accountability, was welcomed by Directors.

These are the big reforms in the Australian economy: filling in Beazley's $10.3 billion deficit, targeting inflation, getting interest rates down, introducing a charter of budget honesty, ensuring that we have world class financial regulation which, the IMF said in its report `would put Australia's prudential regime at the forefront of international practice'.

I also report to the House that the International Monetary Fund warmly commended the Australian authorities for its proposals to change Australia's taxation system. The report said this:

Directors strongly endorsed the proposed tax reform package. The introduction of a broad-based tax on goods and services would enhance efficiency, while protecting the revenue base from continued erosion.

I say to the Socialist Left members of the ALP, those who really think about the provision of social services: you have an interest in ensuring that the revenue base does not erode. Those people who are serious about social services in this country are serious about tax reform. That is one of the reasons why this government is serious about tax reform. As the IMF noted:

The accompanying reduction in effective marginal income tax rates would improve the incentives for saving and employment.

Let me make it clear, let me make it stark. This side of the House believes that average income earners should pay no more than 30 per cent in income tax. This side of the House wants to reduce income taxes for middle income earners. The Labor side of the parliament thinks your average income earner should be paying 48½c on every dollar that they earn. Labor's great contribution to the tax debate in the course of the last campaign was to say that what Australia needed was a wholesale sales tax and a capital gains tax on pre-1985 assets. Their capital gains tax on pre-1985 assets lasted two weeks after the conclusion of the campaign. They went for 3½ years with no tax policy, they adopted one and they dumped it two weeks after the election. It did not even last for more than two weeks and now they say that what Australia needs is a wholesale sales tax—a whole sale sales tax like Ghana, the Solomon Islands and Swaziland. That is modern ALP thinking from a party which is caught in reaction.