Senator EGGLESTON (2:06 PM) —My question is to the Minister for Revenue and Assistant Treasurer, Senator Coonan. Will the minister advise the Senate of how the government's strong economic management is improving the wealth of Australian families. Is the minister aware of any alternative policies?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Eggleston for his question and his longstanding interest in improving the economic lot of Australian families. As many senators know, yesterday the Financial Planning Association released a report by the National Centre for Social and Economic Modelling looking into the levels, patterns and trends in Australian household saving. The study pointed out that the average wealth of Australian households had increased by 41 per cent in the past nine years and that this translated into an average annual increase in real terms of 3.9 per cent. But the key point is that this steady increase in wealth was accompanied by a relative shift towards greater household savings being held in shares, the family home and superannuation.

It is not hard to see why the shift has occurred under the Howard government. When you have the Labor Party in power, Australians are understandably nervous about shifting their hard-earned savings away from security of cash deposits and into other assets. The FPA suggested that the dramatic growth of shares was due to its increased acceptance as a form of investment by the general public, and it is no accident that this has occurred under a coalition government. Our strong and sound economic record has given Australians the sense of confidence they needed to directly enter the stock market. A strongly growing economy with high productivity and growing profits has directly encouraged participation in the market but, importantly, it has also given Australians the confidence to direct more of their savings into superannuation to capture the benefits of the strong growth in the markets.

I am asked about some alternative policies. We know that Labor's economic legacy damaged the confidence and hip pockets of Australians. The savage recession, high interest rates, high unemployment and gaping hole in the budget all contributed to a negative outlook. This undoubtedly curtailed the ability and the incentives for hardworking Australians to try to build their wealth. The shift away from cash into increased equity in the family home and rental properties was also an important development in helping Australians to build their wealth. Again, this is a classic example of how a strongly growing economy with low and steady interest rates can assist families in building a better and more secure future.

When a government manages the economy well and delivers low interest rates, high employment growth and strong growth in real wages, it is no surprise that families will want to enter into the market or will boost their presence in the housing market. The government's recent help on this front through the introduction of the First Home Owners Scheme was a particularly successful initiative. We should remember, of course, that mortgage interest rates peaked at 17 per cent under Labor, compared with their current level of around 6.5 per cent. This has a huge impact on family budgets. A family with a $100,000 mortgage is currently saving $10,450 a year in mortgage costs as a result of the falling interest rates. Benefits like this do not flow to Australians by chance. They are the result of sustained hard work by government. They require a strong and single-minded commitment to deliver policies which ensure the viability and sustainability of growth over a longer term.

This government's record stands in very stark contrast to that of Labor. Why would wealth increase when you have a Labor government chronically committed to deficits? Can anyone really imagine a sustained increase in family wealth when a federal government is sitting on a $10 billion hole in its finances? Why would you risk investing in these circumstances? Unfortunately, Labor's legacy has meant this government has had to work doubly hard to repair the damage created. (Time expired)