Senator GEORGE CAMPBELL —My question is to Senator Hill, the Minister representing the Minister for Trade. How does the Howard government explain why, since taking office in 1996, net foreign debt has increased from $192 billion to $242 billion—an increase of $50 billion, or 26 per cent? How does the government justify highlighting foreign debt as a major national issue in the 1996 campaign, then sitting on its hands in government and simply letting the problem grow? Hasn't the Howard government absolutely failed in its commitment to reduce foreign debt, and isn't it a fact that the government has no strategy whatsoever to reduce the $12,500 worth of debt that now hangs over the head of every Australian?

Senator HILL (Environment and Heritage) —I think Senator Campbell is sitting in the wrong seat, because that question was asked at the end of the last session by Senator Cook. So perhaps this is a pre-emptive strike on the first day back—the new shadow minister for trade. Perhaps it is not such a bad idea because, when you look along that frontbench, Madam President—Senator Cook, Senator Bolkus, Senator Schacht—they are part of the failed old guard, and it is about time, in an ALP with no new ideas, that somebody else is given a chance. The ministers of the previously failed Hawke and Keating governments should stand aside and let the new blood have a chance.

The PRESIDENT —Senator Hill—

Senator HILL —Senator Campbell has sent a message. Senator Campbell has said that he wants to have a go.

Senator Faulkner —Madam President, I raise a point of order. My point of order is this: I just wondered if you felt it was significant that Senator Hill was not answering the question about foreign debt that was asked by Senator Campbell.

The PRESIDENT —I was just drawing his attention to it when he switched to Senator Campbell, and I hope that he will stay on Senator Campbell.

Senator HILL —What I will do for Senator Campbell is give the answer that I gave to Senator Cook at the end of the last session. He could find that answer by reading the Hansard but, having taken the opportunity to present himself as an alternative trade spokesman, he now deserves an answer. The answer, unfortunately, Senator Campbell—and you may not know it, but it might help you—is that there has been a serious economic decline in Australia's markets within the region. Senator Campbell might have missed the fact that there has been an economic crisis within the Asian region. So, whilst the Australian economy has remained strong, our markets have become weak, and that has had the consequence of a deteriorating trade deficit position—something that is beyond the competence of Australia to solve on its own initiative.

In other words, what we should do in such circumstances is ensure that the domestic economy remains sound, that the fundamentals are sound—that is, lower interest rates, keeping taxation down, keeping inflation down, and the like—so that Australian business then has the best opportunity to take full advantage of recovery when it occurs. That recovery is starting to occur, and the benefits will flow in due course in terms of the international debt figure. The contrast is that the economy can fundamentally sustain that debt figure now because the Howard government got the fundamentals right. That is a contrast with the alarming debt figures that occurred under the previous Labor governments that led from time to time to economic crises within Australia itself.

Senator Campbell should be aware that the Australian economy now has the capacity to sustain this international position, which is beyond its capacity to mend at the moment, because the Howard government got the fundamentals right. We will continue to get those fundamentals right, and the benefit in the international and trade accounts will be evident in due course.

Senator GEORGE CAMPBELL —Madam President, I ask a supplementary question. Minister, what targets has the government set to reduce foreign debt? By how much will it be reduced and over what time period does the government expect to reach these targets?

Senator HILL (Environment and Heritage) —This has not been a government of targets. Again, you see, it was the Hawke and the Keating governments that constantly kept setting targets that they were unable to achieve. So what then happened was that targets got changed. In other words, a target in itself does not achieve a better outcome at all. Senator Campbell should be aware that, if you get the fundamentals right, you have got the best chance of achieving a good economic outcome. And if there has ever been a government that can demonstrate proudly and confidently a good economic outcome, it is the Howard government. So do not worry about targets; get the fundamentals right and the benefits will flow.