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Monday, 19 September 2011
Page: 10477

Mr ROBB (Goldstein) (13:57): Outside the mining sector there is a crisis of confidence across Australian houses and businesses. In our two-track economy many sectors are effectively in recession. It has become imperative that their costs be cut if jobs and businesses are to survive, yet an ignorant, spendthrift Gillard government continues to borrow and grow government debt, which is now above $200 billion. It is a government incapable of living within its means. The Gillard government has forced our interest rates higher than they should be by spending far too much. In turn, this excessive borrowing and spending has pushed our currency higher than it otherwise would be, and finance for small- and medium-sized businesses is still hard to get and very expensive.

The Director of Deloitte Access Economics, Chris Richardson, said that the rule of thumb is that you have to cut by about $13 billion a year to achieve a one per cent reduction in interest rates which might in turn make a cent or two difference to the level of the Australian dollar. There is a case for the Reserve Bank to lower interest rates and see a lower exchange rate to cut industry costs and to force a complacent Gillard government to do more to rein in debt. At the moment the economic heavy lifting is being left to the blunt instrument of interest rates. This heavy lifting must be shared by fiscal policy, allowing room for the Reserve Bank to bring interest rates down with the flow-on effect on our currency. (Time expired)