Senator KNOWLES (2:12 PM) —My question is to the Assistant Treasurer, Senator Kemp. Will the Assistant Treasurer inform the Senate of evidence of the continuing strength of the Australian economy under the responsible economic management of the Howard government?

Senator KEMP (Assistant Treasurer) —I thank Senator Knowles, the distinguished senator from Western Australia, and I might say it is very nice to have you there, very nice indeed. It was a very good question, as we always expect from Senator Knowles. Clearly Australia is one of the world's best performing economies. I say that for a number of reasons. There are a number of factors which clearly underline the current strength of the Australian economy. Last week saw the January employment figures, and the unemployment figures for the month fell by 0.2 per cent to 6.8 per cent. Another feature I can point to is that almost 600,000 jobs have been created since March 1996.

Senator Sherry —What about interest rates in general?

Senator KEMP —Clearly Senator Sherry does not like this very much, but let me point out that it is worth comparing the current unemployment rate of 6.8 per cent with the Labor high of 11.2 per cent in December 1992. It is to the undying shame of the Labor Party that their performance on that vitally significant front was so lamentable. Another factor that I would draw your attention to, Madam President, is the latest figures on consumer prices. This confirmed that Australia has continuing low inflation. The December quarter rise of just 0.6 per cent in the CPI meant that the result for the year to December was just 1.8 per cent.

This contrasts with the average figure over the long period of Labor government of five per cent per annum, which you would have to say sustains the point that the Labor Party is a high inflation party. Senator Sherry was worried about interest rates. I have some information for Senator Sherry. He is now talking to someone; he has lost interest. Despite the recent rise in interest rates, Australian families are still receiving benefits from dramatically lower levels of interest rates than they experienced under the former government. Currently, the variable home loan rate charged by the four major banks is in the order of 7.3 per cent. This compares with a peak of around 17 per cent under the Labor government in the period June 1989 to March 1990. That is an absolutely appalling figure, again to the undying shame of the Labor Party. Like families, people in business have also received benefits from these lower rates.

Another point which is worth drawing to the attention of the Senate is that those in work are also benefiting from rises in real wages. As Senator George Campbell so often reminds us, real wages often fell during the period of the former government. Again, it is a source of pride to this government that we have been able to deliver, through our reforms and through the higher productivity growth in the economy, rising real wages. The ongoing strength of the Australian economy is underlined by the government forecast that growth will remain at 3.5 per cent in the year 1999-2000, although some other economists are forecasting higher growth. (Time expired)