Senator FERGUSON (2:19 PM) —My question is to the Assistant Treasurer, Senator Kemp. Minister, can you outline to the Senate the benefits of budget surpluses, debt reduction and responsible economic management? Minister, are you aware of any alternative views on the size of the budget surplus?

Senator KEMP (Assistant Treasurer) —Thank you, Senator Ferguson, for that very important question. The contribution of Senator Ferguson to debate in this chamber, particularly relating to the economy, is well known and it is appreciated. Last night, the Treasurer brought down a budget which was in surplus for the fifth year in a row. As a matter of history, in the Labor Party's last five budgets, they ran five deficits. In fact, statistics show that in this period they racked up some $80 billion in net government debt. By contrast, the Howard government surpluses have been directed towards paying off government debt.

I am pleased to record that, since coming to office, the Howard government will be paying off some $60 billion of Labor's $80 billion increase in net debt. The debt-to-GDP ratio has been reduced to around five per cent, compared with over 18 per cent when Labor left office.

Honourable senators interjecting—

The PRESIDENT —Order! The level of conversation in the chamber is too high. Senators should not be speaking across the chamber.

Senator KEMP —Most importantly, reducing debt has been of great tangible benefit to the Australian community. Firstly, by cutting debt and running surpluses, government policy has been able to keep the downward pressure on interest rates. An average family with a $100,000 home loan is now saving over $300 a month in reduced mortgage payments, due to the interest rate cuts which have occurred under the Howard government. Senator Hill quite rightly drew our attention to the fact that, at one stage during the former Labor government, home loan rates were in the order of 17 per cent and going north. This is in great contrast to the rates which are now being paid by home owners. Secondly, the government used to pay some $8 billion annually in interest on public debt. That was just about as much as was spent on services like hospitals and schools. Today, we pay $4 billion annually in interest on debt. This means more money can be devoted to targeted spending initiatives and tax cuts.

The Labor Party's response to the budget last night amounted to the claim that the government has somehow squandered the surplus. This was the substance of what Mr Crean could come up with. It is astonishing when you hear attacks on a budget which is in surplus. This government has returned surpluses for five years—contrast that with the pathetic performance of the previous government—and Mr Crean stands up and complains that we have squandered the surplus. In other words, it is the Labor Party view of Australian politics that it is their job to run up big budget deficits and rack up billions upon billions in debt. Apparently, it is our turn and our job to turn the deficit into a surplus and pay off the debt that they have run up. Labor are now complaining that we have not reduced the debt sufficiently fast. They want us to do more, apparently, so that they can start spending if by some mischance of fortune they get back into power. The Labor Party's approach to policy, particularly how they run the economy, is well known. The fact of the matter is that the Labor Party is a high taxing party, a high spending party and high deficit party. (Time expired)