Senator CALVERT —My question is to the Assistant Treasurer, Senator Kemp. Will the Assistant Treasurer advise the Senate on how Australia's economic strength has been described by leading independent commentators? What are the economic policies that have led to this performance?

Senator KEMP (Assistant Treasurer) —Thank you to Senator Calvert, the very popular and efficient Government Whip in this Senate and, I might say, a senator who has always showed a great interest in the main game of politics. Senator Calvert is, as usual, dead right. Australia's economy has been praised by many independent commentators of late. For example, Professor Paul Krugman, a professor in economics at MIT, described our economy as the `miracle economy'. He went on to say that he would like to see `more Australias around the world' because Australia's internal strength and its appropriate policy mix meant that its appearance of vulnerability `did not result in any crisis at all'. This is entirely true and is the result of sound management of the economy by this government. Another commentator, Professor Ross Garnaut, who would be well known to many senators, also praised our economic performance, stating:

The third era is the one that I believe we may now be entering because we are enjoying at the present time levels of economic stability and economic predictability, the like of which I haven't experienced at any time over the last 30 years.

Not surprisingly, I happen to agree with him. The economic conditions Australia is now experiencing are unprecedented. Indeed, it is very clear that Australia is entering a third era of sustained economic growth. We have low inflation, low home mortgage rates and falling unemployment. The Governor of the Reserve Bank also expects the employment situation and business investment to pick up. About inflation, he said:

If our inflation forecast is at or in the bag, then there isn't a prima facie indication for adjustment to Australian monetary policy.

Along with the Reserve Bank Governor's opinion is the Westpac-Melbourne Institute consumer survey, showing consumer sentiment as `remarkably resilient'—in fact, now 18 per cent above levels of a year ago and 11.5 per cent above the first six months of 1998. A majority of consumers now see their finances to be in better shape than a year ago and are also more optimistic about finances over the next 12 months. Let me quote briefly from the survey:

The consolidation of strong consumer sentiment indicates that the recent surge in consumer spending can be sustained further into 1999.

Last week Citibank released a press release headed `Home loans go through the roof again', so it is not just the government and independent commentators trumpeting the success of the Australian economy; Australians are voting with their feet. Hence the high levels of domestic consumption. And voting with his feet is one of Mr Kim Beazley's senior advisers, Mr David Epstein, who is leaving the politically redundant Labor Party to head an organisation that welcomes this government's fiscal rectitude and is urging this government to do what it promised and introduce a broad based consumption tax.