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Tuesday, 19 February 2002
Page: 419

Mr BAIRD (2:26 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House how international forecasters view the Australian economy? Would the Treasurer also advise the House of the views of local economic commentators?

Mr COSTELLO (Treasurer) —I thank the honourable member for Cook for his question and for his interest in the Australian and international economic situation, which impacts so very directly on the lives of all Australians. I know the home buyers in the electorate of Cook have a great interest in interest rates and the direction in which the economy is heading. The member for Cook will know that through the last year the United States economy went into recession, as did Japan, Singapore, Taiwan and most of Asia. But the Australian economy appears to have survived the largest international downturn in the last 30 years.

I think both sides of the House will say that is a good thing for Australia: that we have managed to keep our economy growing and strong through an international downturn. You can think back to just 1990, when the international situation was not nearly as severe and yet Australia was in deep recession with 17 per cent interest rates at that time and a haemorrhaging budget. How much worse would it have been in this international downturn if the government had not strengthened the Australian economy?

According to the Economist magazine in its survey of 15 industrialised countries for growth rates in 2002, Australia is forecast on average—an average of all of the forecasters surveyed—to have a growth rate of 3.3 per cent. Not only is it the highest growth rate of the 15 developed nations in the world that are carried in the Economist but it is the highest by a substantial amount. There is no other economy surveyed where the average is above two per cent, and yet Australia is forecast at an average of 3.3 per cent. So Australia is not just leading the world but leading the world by a very substantial margin, and doing it at a time when the international economy is probably the weakest it has been in three decades.

Standard and Poors attributed this resilience in the Australian economy to structural reforms, low fiscal debt, stable inflation and conservative macro-economic management. As Standard and Poors have recognised, the government's economic management throughout the course of the last couple of years has managed to insulate Australia against the great challenge we have had from overseas. Standard and Poors praised Australia's fiscal flexibility, underpinned by low public debt.

If you wanted one difference between Labor Party economic management and Liberal-National Party economic management it can be illustrated in this way: in its last five budgets the Australian Labor Party ran up cumulated debt of $80 billion. After turning around the budget, this government has now repaid $56 billion of that $80 billion. That is why Standard and Poors can talk about low public debt.

Mr Tanner —How did you do it? You sold everything.

Mr COSTELLO —The Socialist Left member for Melbourne talks about privatisation. What, like the Commonwealth Bank? Like Qantas? Like Australian Airlines? Every now and again the Socialist Left member, as he hovers around the Macquarie Bank, likes to prove he is a modern socialist in favour of privatisation.

Let me tell you what the Labor Party's privatisation policy was about: they ran a deficit, they sold off assets and they were still in the red and borrowed $80 billion. It is absolutely extraordinary. We would like to see a modern socialist in the member for Melbourne's modern mantra. We would like to see him go back into all of those merchant banks and tell them how he really is in favour of foreign ownership, how he really is in favour of Telstra privatisation and how he is really going to become a very model of a modern socialist. The member for Melbourne: the very, very model of a modern socialist Melbourne. That is what we would like to see because we might actually get some thinking out of the Australian Labor Party.

We welcome back the member for Werriwa. It is good to see him back on the front bench. He is another modern socialist. When he left the back bench of the Labor Party and came down the front he raised the average IQ of both the backbench and the frontbench of the Australian Labor Party. Now he engages in a new experiment: is it possible to be a thinker on the front bench of the Australian Labor Party? We wait with interest.