Senator CHAPMAN —I direct my question to the Assistant Treasurer. Minister, in advance of tonight's budget, can you remind the Senate of the economic problems confronting Australia when the Liberal and National parties won office just over a year ago? What steps has the new Liberal and National Party government taken to put Australia firmly back on the path to greater economic prosperity?

Senator KEMP —Thank you, Madam President, and thank you, Senator Chapman, for the question that you have asked. It is an important question and provides some perspective on the debates which will flow over the next couple of days. It is true that Labor left office with Australia facing substantial economic and fiscal problems, the most obvious of which—

Senator Conroy interjecting—

Senator KEMP —And we are not blaming you for that, Senator, as you were not here, but we blame all these failed ministers on the front bench. Labor left office with a $10 billion underlying budget deficit. In fact, in their last five years in office Labor racked up deficits of some $70 billion in total. Under Labor, of course, Australia suffered the worst recession since the 1930s. What was it that Paul Keating said? It was the recession that, according to him, we had to have. Unemployment under that recession rose to some 11 per cent. Labor could not find a solution to unemployment despite its 13 years in office.

Of course, under Labor, mortgage rates for the average family at one stage reached a staggering 17 per cent, and rates for small business were even higher. Of course, it is well known that, when Labor left office, the current account deficit was out of control. Under Labor, the current account deficit reached six per cent of GDP—the highest of any industrialised country. You would think that there would be some hint of apology from this front bench, from the people who in fact presided over this dreadful record.

Labor let government outlays get out of hand. Between 1989-90 and 1995-96 annual outlays went up from $89 billion to a whopping $132 billion. Of course, it is well known that Labor kept putting taxes up and up and up.

The coalition is proud of the efforts it is taking to right Labor's wrongs and to put Australia on the path to greater prosperity and greater security. The job clearly is not complete. We do not pretend, and we have never pretended, that it will be easy to turn around a ship that has been travelling in the wrong direction for 13 years. We have never pretended it is easy. But we are making good progress. We are tackling very effectively Labor's unsustainable budget deficits and we are reducing the debt which our children will have to repay.

We are taking the pressure off interest rates. Official interest rates have fallen three times since the election, and some home loan rates are at their lowest since the 1960s. We are helping one million Australian families with our family tax initiative. We are helping to create a better environment for small business and job creation by, among other things, providing tax relief, including through cuts in the provisional tax uplift factor; capital gains rollover relief and reduced FBT costs; cutting red tape on small business and abolishing Labor's job-destroying unfair dismissal laws—although I notice that Labor today, again, in a press statement opposed the government's change in this area. That is a great pity and a great tragedy for small business. Of course—(Time expired)