Mr BEAZLEY (Leader of the Opposition) (2:34 PM) —My question is to the Prime Minister. I refer to his claim that he cannot keep his GST petrol promise because the budget cannot afford it. Isn't it true that your broken GST petrol promise and higher world oil prices have resulted in a fuel tax windfall to the government, a windfall you did not budget for? Why won't you recognise the pain of Australian motorists, truckers and farmers and give them some immediate relief?

Mr HOWARD (Prime Minister) —That was an entirely predictable and completely opportunistic question. It also entirely distorts both what I have said and what the government has done. What I have pointed out and what is unarguably the case is that the principal driver of high petrol prices is the world price of crude oil, and none other than the Victorian Labor Premier acknowledged that on Melbourne radio as recently as this morning when he said, `The price of oil around the world has gone to over $US30 a barrel and there's really nothing much Australia can do about that.'

Of course it would be possible for the government to embrace a discretionary reduction in the level of fuel excise. To make any sizeable impact on the price of petrol I imagine the average Australian consumer would want to see the price come down by at least 5c a litre. That would cost $1.7 billion a year. I notice that the Leader of the Opposition has committed the opposition party to a freezing of future indexation increases.

Mr Crean —That's not right.

Mr Beazley —That's not true.

Mr HOWARD —Oh, that is not right? Oh, that is not true. Well, I will be very pleased to hear from the Leader of the Opposition. So you are saying that that is not true.

Mr SPEAKER —The Prime Minister will respond to the question.

Mr HOWARD — So, in other words, you do not have an alternative policy.

Mr SPEAKER —The Prime Minister will address his remarks through the chair.

Mr Beazley —On indulgence, Mr Speaker: the Prime Minister is completely incorrect. We said you take the GST price spike out. That is what we said.

Mr SPEAKER —No. The Leader of the Opposition will resume his seat.

Mr HOWARD —I will be very interested to hear what the alternative policy of the Australian Labor Party is. The reality is that the world price of oil has trebled over the last 18 months and, as a result, the price of petrol in Australia has risen. That is not the result of the GST; it is the result of a rise in the world price of oil. If you go around the world, you will find the prices paid for petrol in other parts of the world are also high. For example, in the United Kingdom, which is often a role model for the present Labor opposition, because it is led by the soul mate of the Leader of the Opposition, the price of petrol is approximating $2.30 a litre. The taxation take in the United Kingdom approximates 75 per cent of the price of a litre of petrol at the bowser.

I want to make it clear to the consumers of Australia that we understand their unhappiness at the high price of petrol. To reduce the price of petrol by a discretionary cut in excise to have any impact at all would take about $1.5 billion to $2 billion out of the budget deficit. In the present climate of international levels of interest rates and our concern about domestic interest rates, we see no merit at all in running the budget surplus down by the order of $1.5 billion to $2 billion. It is incumbent on both sides of politics in Australia, if they argue for measures which are going to involve a cost to the budget, to detail the cost of those measures and to justify a running down of the surplus in current circumstances.

There has been an improved budget outcome in relation to the just completed financial year, but it is altogether too early to responsibly make judgments about what the budget outcome will be this year. It is the height of economic irresponsibility to make judgments on the basis of only three months of a 12-month financial year period yet commit yourself to additional expenditure or to forgone revenue that covers not only the whole of the financial year but years into the future. It is easy to embrace opportunistic calls for reductions in the budget surplus and reductions in budget revenue. In the long run, the best thing that the government can do for the people of Australia is to continue to manage the Australian economy with care, skill and the accomplishment and levels of success that have been apparent over the last 4½ years. It remains a source of very great pride to this government, to me as Prime Minister and to the Treasurer that over the last 4½ years we have reduced the government debt to GDP ratio of this country to probably the lowest level of any industrialised country in the world. In other words, we have used any windfall that may have come in in the last financial year to reduce the debt that you ran up when you were in government. Indeed, if you had not left us with $96 billion of debt, we may have been able to do a lot more with the revenue that we now have.