Ms KING (4:26 PM) —Children all over my electorate know the fairy story of the emperor who had no clothes. In the Hans Christian Andersen tale, The Emperor's New Clothes, the emperor is sold a set of clothes by a scoundrel who tells him his new suit is invisible to fools. Because no-one wants to be thought a fool, the clothes are lavishly praised. The emperor travels the streets naked until a child exposes the truth: that the emperor is wearing no clothes. The fairytale has come to life today thanks to the member for Fisher. It was with some sense of disbelief that I listened to his speech today, lavishing praise on the economic credentials of this government. Let me say what those on this side of the House know: the emperor has no clothes; the government has no economic credentials. This is understood by not only the Australian Labor Party but also the vast majority of the Australian electorate.

One of the most pressing issues for my electorate is the upward pressure on interest rates. Ordinary families and small business operators across my electorate know that rising interest rates mean tough times ahead. Importantly, they know that the government's own economic mismanagement led to the recent jump in interest rates, and they fear what is yet to come. Last October, in the shadow of the federal election campaign, the Prime Minister told an ACOSS conference in Melbourne:

On this point at least the Prime Minister was spot-on. Not only did he deliver a budget deficit in 2001-02; he has delivered higher interest rates as well.

The people of Ballarat are worried about the future. They are worried about a Prime Minister who has broken his election promise, delivered a budget in deficit and placed upward pressure on interest rates. At a time of unprecedented household and credit card debt, this is an ominous sign for Australian families, who have been forced to borrow increasing sums of money to finance the Australian dream of owning their own home. Household debt is up nearly 90 per cent, with Australians now owing more than they earn and with the interest rate burden at a decade high. Credit card debt has risen by nearly 180 per cent under this government. The people in my electorate are rightly worried about a man who has no vision for the nation beyond his 64th birthday. They are worried about a government which will not talk about employment, just punishment for those looking for a job. If your name is John Olsen, she'll be right; if you are John Smith from Sebastopol, Victoria, do not look to this government for assistance.

Of course, it is not just the Prime Minister who has the people of Ballarat worried; they are also worried about the Treasurer—the great pretender—who has taken his eye off the ball once too often and set the economy adrift. We now know that this Treasurer is the highest taxing Treasurer in our history. But what we also know is that he has turned a decade of growth into a budget deficit and, by his own words, put upward pressure on interest rates. In 2001 Max Walsh argued:

He went on to note:

How right he was.

The DEPUTY SPEAKER (Hon. I.R. Causley)—I remind the member for Ballarat of the need to address people by seats and not names.

Ms KING —By its own measures the government budget has failed miserably. The Treasurer's budget deficit is, by the Prime Minister's own admission, a key factor pushing interest rates higher. The Treasurer has been blowing his own trumpet on interest rates—it has been part of his job application. The Treasurer is all too ready to hit the airwaves and tell us it is his doing when interest rates are low, but where is he when they start to rise? The Treasurer cannot have it both ways. If he wants to claim the credit for low rates then he has to take responsibility for the rise.

Millions of Australians manage their household budgets better than this government manages the Australian economy, and yet it is the most vulnerable in our community who are being asked to foot the bill. Having blown billions on foreign currency swaps and taxpayer funded advertising—at the same time the economy was growing by up to four per cent—the government wants the poor to fund its incompetence. That is why it has sought to slug pensioners and families millions of dollars to claw back money through the Pharmaceutical Benefits Scheme, and wants to force the disabled onto the dole queue. It is the sort of mismanagement that would not be tolerated at most roadside flower stalls and it should not be tolerated by government.

Before the election we were told the budget would be in surplus to the tune of half a billion dollars. But we now know that the deficit for the current year is $1.2 billion. That is a turnaround of $1.7 billion in a year. By the Treasurer's own accrual method the deficit is $3 billion. The GST was to be the great saviour of the Australian economy, but it has not proven to be the case. Instead, the tax burden on ordinary Australians is greater now than ever before. The much heralded income tax cuts delivered when the GST was introduced have now been wiped out. The small one-off savings have been absorbed and the people in my electorate are struggling under the weight of the highest taxing government in Australian history. We now all know this Treasurer is the highest taxing Treasurer we have had since Federation. The Treasurer is getting more money out of the pockets of ordinary Australians than ever before.

So what has the Treasurer done with surplus? He has wasted it on a desperate pre-election splurge. He has wasted it through the abuse of government advertising in the election campaign, and he has gambled it away. First, let us take the `big spending' Treasurer. The deficit and the subsequent pressure on interest rates is entirely the Treasurer's doing. It is not the fault of the Australian economic climate, but rather an explosion of spending. From the 1998 Federation Fund to the 2001 Pacific solution, the government has blown the surplus in a desperate attempt to buy votes.

Second, let us take the `adman' Treasurer. In the lead-up to the federal election campaign the government spent about $20 million a month in a desperate attempt to put some gloss on its tarnished image. Every week there was new ad. We had the health insurance campaign, which I have to admit I thought was an ad for umbrellas. These ads tried to tell us that private health insurance was now cheaper and there were no gaps in cover. Well, I would like to see that.

Then we had the campaign, which I think had something to do with agriculture—there were green boxes in fields. I may be wrong but I am pretty sure that program was underspent and then got a cut in the budget. And some of us in regional areas were even treated to the sight of the Prime Minister at 11 o'clock each night, flag in the background, wrinkle on the brow, extolling his virtues. It was great. Who needed Horlick's to get to sleep!

Finally let us take the `highroller' Treasurer. We now know about the Treasurer's massive foreign currency losses of many billions, because he could not, or would not, pay attention to his own portfolio. Like a tourist in a Las Vegas casino for the first time, he has blown huge sums of money. The difference between the Treasurer and other Australians is that when we lose a few dollars on the races or at the casino we bear the consequences. Ordinary Australians cannot pass the buck as the Treasurer did in the budget.

So here you have it—the big spender, the adman, the highroller, trying to tell us he is a sound economic manager. The emperor has no clothes. We all remember the Treasurer's famed debt truck trundling around the country when he was no more than a solicitor shoehorned into a pinstriped suit and placed in a safe seat by his political benefactors. When he was doing his pre-1996 election stunt at RSL halls around the country, Australia's foreign debt stood at $180 billion. Under his economic stewardship, this debt has ballooned to $332 billion, a growth rate bettered only by household debt which has more than doubled since he took office. Shadow Treasurer Costello's 1995 debt truck has now turned into a convoy of B-doubles.

Rodney Adler recently got a 20-year ban for his failure to understand his financial obligations. Unfortunately, the Treasurer's incompetence has not yet been called to account. We have had to endure the Treasurer for seven years, and enough is enough. We cannot afford to keep him as Treasurer, much less as Prime Minister.