Mr LATHAM (Leader of the Opposition) (3:04 PM) —Sometimes when governments are re-elected they use their mandate wisely. They stick to the script and they tend to concentrate on the commitments they actually gave to the Australian people. The re-elected Howard government is not one of those administrations. It has been all over the shop since 9 October. If you were to ask the Australian people the reason why the government was re-elected they would point to interest rates and in particular the government's scare campaign and negative television advertising on interest rates.

But if you also were to ask the Australian people about the thing the government has been talking about since 9 October—what the government's one big issue to put on the public agenda has been, what one big issue the government has presented in the media day after day—the Australian people would say `abortion'. They would ask this question: why is the government talking about that issue when it was not even mentioned in the election campaign? This has caused a great deal of public confusion.

It is hard to see how, in the circumstances, the member for Warringah can stay on in the health portfolio. This is a minister who has said that this is a huge matter of health policy principle for him. He wants to dramatically reduce the number of terminations in Australia and of course, as the Minister for Health and Ageing, under the laws of the Commonwealth he has some power to do so. But apparently we are told by the Prime Minister that he is not going to act on this big matter of public policy principle. In normal circumstances a minister so frustrated, so unable to act, so denied his big point of principle would resign under Westminster traditions.

The Commonwealth minister for health has power over the Medicare rebating of these procedures, the funding under the safety net that he boasts about and claims to have established, the funding through the private health insurance rebate and federal funding of state hospitals. He has four clear areas of power and four clear funding responsibilities. This is much more than the private view of an individual member; it is much more than the private view of an individual citizen. It is the view of health minister in the re-elected Howard government.

This is a matter that was never raised in the election campaign and a matter that has confused the Australian people. How can a government that claims a mandate on economic management—a government that presented all those advertisements about interest rates in the campaign—talk about an issue like abortion day after day for the five weeks following the election? It is a matter that has divided and confused the Australian people. It has also demonstrated how this government is mishandling its election mandate. It is not taking the Australian people seriously. If it respected the judgment of the Australian people and wanted to act on that the government would have been talking day after day for five weeks about how it was going to hold down interest rates, how it was going to rein in spending and how it was going to take a different fiscal stance to its reckless spending spree during the election campaign.

This is a minister for health who was embarrassed earlier in the week by the nature of the cabinet discussion and the Prime Minister's ruling. We on this side of the House expect that the matter will come back. This is just a holding pattern developed by the Prime Minister and the cabinet. We are expecting that next year, possibly—with the change in numbers and the government majority in the Senate—the matter will return.

But we cannot see how the Minister for Health and Ageing can hold his position, nor can we see how the minister's stance on abortion can be justified on constitutional or factual grounds. He wants to restrict access determinations while at the same time restricting access to contraceptives and the morning-after pill. So one thing is certain: this is not health policy. This is not a health minister who can reasonably stay in the portfolio. Even though the government was re-elected on economic issues, Minister Abbott seems to think it has a mandate for intolerance—a mandate for things that were not even mentioned in the election campaign. Flush with the triumphalism of an election victory, we are now seeing the real face of political conservatism in this country, and it is narrow, mean-spirited and divisive. It is confusing the Australian people. It is confusing an electorate that the government says voted on interest rates and economic management but which has heard very little about those issues in the five weeks since.

The public is watching the government mishandle its election mandate. The government was elected on interest rates, but it has been talking about anything but in the five weeks since. Of course, you have to look at it politically. It is talking about other issues with good reason from its point of view. Last night, the Governor of the Reserve Bank blew the whistle. He outlined how interest rates are likely to rise in the next 12 to 18 months. He said, `We've said it is more likely that they will go up, and that is our honest answer.' That is the honest answer from the Governor of the Reserve Bank that this government—the re-elected Howard government—is determined to avoid. The government promised the Australian people that no-one would be hurt by interest rate rises over the next three years. That was the take out of the electorate from all those advertisements—that no home buyer, small business or economic interest in this country would be hurt over the next three years by rises in interest rates. Now we have the Governor of the Reserve Bank confirming that they are likely to go up over the next 12 to 18 months. He also expressed very serious concern about an area of government policy neglect—unsustainable lending practices in this country. That is something the Treasurer could have acted on. It is something the Treasurer could have identified as an issue in the campaign and something he could have been doing something about in recent years.

This is indeed a bell ringer for those Australians who were swayed by the Liberal's negative advertising—that bombardment of advertisements on interest rates. The reality is now setting in. The reality that the government will not talk about—the reality that it has been trying to avoid by talking about other issues over the last five weeks—is setting in: rates are likely to go up and there are concerns in the Reserve Bank about the unsustainability of lending practices in the financial sector in this country. There are also concerns that we have seen on the public agenda, in official reports and in economic analysis. Concerns have been expressed over the government's reckless spending spree since the beginning of May last year—its $66 billion spending spree, including the $11 billion of new commitments in the election campaign and the $6 billion of spending on one infamous afternoon in Brisbane. On one afternoon in Brisbane the $6 billion man racked up reckless spending commitments, putting upward pressure on interest rates, contrary to the government's promises to the Australian people.

They were pinged on this. This was identified by the IMF in its recent report. It expressed the concern that the new package unveiled in the 2004 budget—that is, the $55 billion spending spree—could pose some risk to the medium-term outlook for interest rates. It said:

That is what it said about $55 billion of reckless spending. Imagine what it would have to say about $66 billion. Imagine what the IMF would have to say about the government leader who spent $6 billion in just one afternoon at his infamous campaign launch in Brisbane. The IMF would double its concerns. It would multiply its concerns about the upward pressure on interest rates that comes out of the spending that we have seen from this government since the beginning of May.

We know it is reckless, because after every election campaign the Treasurer is always fairly keen on the rewriting of history. This time he had Pamela Williams from the Australian Financial Review following him around the footpaths, byways and backstreets of various campaign locations. She gave this account on the morning of 13 October about what really happened with the reckless spending spree:

He took the full menu. He said: `I'll have the whole menu plus one more wafer—one more wafer that I will put out there to break the bank, and then I will continue in this reckless spending spree.' Pamela Williams went on:

So he started by biting his tongue and ended by pulling his teeth out. He had a rotten campaign and on the morning of 13 October, with Pamela Williams faithfully following him around the campaign trail, had to correct the record to distance himself from this fiscal irresponsibility.

So on the morning of 13 October the Treasurer was trying to distance himself from the reckless spending of the Prime Minister. Was it more than coincidence that that night he went on the 7.30 Report with Kerry O'Brien to put further distance between himself and the reckless spending spree? Not content with distancing himself from the Prime Minister and saying: `If you are looking to blame someone for the recklessness of the spending spree, look for the bloke who took the four main courses and the three desserts plus the wafer. Blame him, not me as the Treasurer,' he decided to put distance between himself and his own department. He said:

It is unprecedented in the history of the Commonwealth for a Treasurer to distance himself not only from the Prime Minister but from his own department. That is the measure of the recklessness and irresponsibility of this spending spree that is putting upward pressure on interest rates. The Treasurer wants no responsibility for it. He wants us to blame the Prime Minister and his own department. But, in terms of the much touted Charter of Budget Honesty, we are going to blame the Treasurer, because the whole purpose of the Charter of Budget Honesty was to tell the Australian people what he thought about the state of the books before the election.

It is shameful indeed for the Treasurer to have thought that those pre-election forecasts were optimistic—that is, that Australia would have a lower rate of economic growth—and to go out and campaign on the basis of those forecasts and allow the spending to proceed, not to pull up the Prime Minister in the campaign and not to make these matters known publicly. The Treasurer has turned his own Charter of Budget Honesty into a total joke. Who could ever believe him in the future? A Treasurer who thought the forecasts of his own department were too optimistic and that growth would be lower but who said nothing about it in the campaign. It took him four days after the election to say to the Australian people, `Those forecasts are too optimistic; growth will be lower and the budget will be tighter.' He was starting to walk away from the Prime Minister's reckless promises. He might have been biting his tongue and he might have been pulling out his teeth, but at the end of the day he blew the whistle. He had enough in him to blow the whistle on the Prime Minister at the start of the campaign and then after it. At the start of the campaign he said that anyone who runs down the budget surplus would be putting pressure on interest rates—that is what the Prime Minister did—and he made sure, in the morning and the night four days after election day, that the Prime Minister was tagged with that particular responsibility.

It is a government that is mishandling its mandate. It won on the question of interest rates and the scare campaign, but now it is only talking about abortion. On the issue of interest rates themselves, the Reserve Bank says that they are likely to go up over the next 12 to 18 months. The IMF has expressed its concern about the extent of the spending; add $11 billion to that concern. The Treasurer said, of course, that reckless spending would put upward pressure on interest rates; he said that at the start of the campaign. The Prime Minister then grabbed the whole menu, and the Treasurer of course is nailing him for that, after the election, backing away from their spending commitments.

So this is a fraud on the Australian people on several fronts: a government that did not tell the truth about the state of the books and what it regarded as the true economic forecasts, saying that the Treasury material was too optimistic; a Treasurer who knew there was reckless spending but only did something about it four days after the election; and now the news overnight from the Governor of the Reserve Bank that the rates are likely to increase. So all those Australians who thought they would not be hurt by increases in interest rates need to think again about the Howard government and its duplicity.

We all know from the record level of household debt in this country that a very small increase in interest rates—just 25 basis points—can have a severe impact on the household budget. Households in this country are highly leveraged—they are at a record level of debt—and they know that with rising interest rates they would be severely hurt. They also know that the Howard government has failed them on the issue of financial support and household savings. We have seen record levels of dissaving in the household sector in this country. For nine consecutive quarters the ratio of household savings has been negative. The Australian people are asking themselves: `Why didn't the government explain these things before election day? Why didn't they tell the truth about what they thought were the accurate forecasts? Why didn't the Treasurer tell the truth about the recklessness of the spending?' At the end of the day, looking at the size of the mortgage and the size of the debt, they are saying, `If interest rates are so low, how come it's so hard to buy your own home?' We now find out from the Governor of the Reserve Bank that that task will become harder in the weeks, the months and the years ahead.

As we in the Labor Party said in the campaign, we want to be more financially responsible in government. It is true. We put forward a platform of larger surpluses—$3 billion over the forward estimates—and we put forward bigger savings. Now we recognise, with the election result, that we have to work harder to win the trust and support of the Australian people on economic management. We reassure and repeat that we will not run budget deficits, we will not increase the size of the federal bureaucracy and we will not have a long list of spending commitments. We will only promise the things that we can implement—the promises we can keep—and we will not do anything to put upward pressure on interest rates. We will work hard on that task. We will work hard on the economic agenda to build productivity, competition and growth for the future. But I give the House this one guarantee: we will not mislead the Australian people. In fact, we will hold this government to account for its fraud, its duplicity and its failure to tell the truth during the election campaign. We will let the Australian people know that this is a government that has mishandled its election mandate right from one day one. (Time expired)