Senator McGAURAN —My question is to the Assistant Treasurer, Senator Kemp. I refer to last Friday's cut in official interest rates by the Reserve Bank, which means that interest rates have now fallen a full two percentage points in 14 months since the coalition have been in government. We have heard Senator Hill espouse its benefits but, from the Assistant Treasurer's perspective, how did the government's responsible and prudent economic management help create the conditions for an interest rate cut? What is the government's view on the failure, thus far, of the big four banks to pass on the full cut in official rates?

Senator KEMP —Thank you for your question, Senator. It is clear that, once again, you are focusing on the main game—issues of concern to families and to business. These are the sorts of questions that we never get from the opposition.

The government's budget received a resounding endorsement on Friday, with a further cut in official interest rates.

Senator Sherry —What did the banks do?

Senator KEMP —I am coming to that, Senator; just contain yourself. As was mentioned by my colleague, Senator Hill, the Reserve Bank announced on Friday, for the fourth time since the election, a fall of two percentage points. Of course, the government welcomes the cut in official interest rates which, I assume, the Labor Party welcomes.

Senator Bob Collins —We do.

Senator KEMP —Good to hear. It does promise help to long-suffering families who struggled under the very high interest rates burden that the Labor Party imposed on them.

Senator Sherry —Madam President, I rise on a point of order, which relates to repetition. This is exactly the same as Senator Hill's answer. He should be sat down. It is exactly the same answer: same wording but with a much poorer delivery, I might say.

The PRESIDENT —Order! There is no point of order. He is answering a different question.

Senator KEMP —It is quite clear, as one of my colleagues said, that the Labor Party really do not like good news. This budget strategy is conducive to low interest rates. In just three years the government is turning around Labor's $10.3 billion deficit, which they left the government, into a $1.6 billion surplus. This is a turnaround of some $12 billion—a major achievement of this government. While other factors do help determine interest rates, including wages, the fact remains that the budget strategy is very important in this regard.

The big four banks are now offering home loan rates of 8.2 per cent, which represents an interest saving on a loan of $100,000 of some $275 a month compared to when we came into office. This represents a benefit of around $70 a week. The government is concerned that the big banks have not passed on the official interest rate cut fully to lower home loan rates. Official interest rates are done for the benefit, we hope, of consumers—not for the benefit of banks. The government believes that the battlers deserve to have their reward quickly and fully.

The ACCC has written to the banks asking them to explain their actions in only passing on 0.35 per cent of the rate cut. It is, of course, up to the ACCC to determine if any breaches of the Trade Practices Act have occurred.

The government is putting in place a low inflationary, low interest rate, strong growth environment which delivers sustained reductions in unemployment. In contrast, what is the Labor Party offering? The Labor Party has consistently opposed the government's policies to eliminate the huge deficit that was left to us by the Labor Party. The Labor Party has a strong record of big deficits, big taxes and high interest rates. That is not the government's policy; that is the policy of the Labor Party.