Senator WATSON (2:15 PM) —My question is directed to Senator Minchin, representing the Treasurer. Will the minister inform the Senate of any recent indications of Australia's economic performance and could he outline the benefits flowing from the government's strong management? Is the minister aware of any alternative approaches to economic policy?

Senator MINCHIN (Minister for Finance and Administration) —I thank Senator Watson for that very appropriate question. As senators know, the Treasurer tonight will in the other place bring down the Howard government's eighth budget. I am pleased that the Senate will be spared the pain of having to listen to me read it in this place simultaneously—a historic moment. The budget that the Treasurer will bring down is against the backdrop of an Australian economy which continues to show extraordinary resilience in the face of domestic and international shocks. After all, we have experienced the worst drought in a century, weak global demand and uncertainty arising from the recent conflict in Iraq, and we have had a period of quite high oil prices.

To illustrate the extent of the challenge presented by the drought, I remind you that in the December quarter agricultural production fell by no less than 14 per cent—or 24 per cent over the year to December—grain exports were down 31 per cent and employment in the farm sector was down nearly 20,000 people. So the drought has been very severe and very harsh. It has impacted on the March quarter CPI, and oil prices have also impacted on that CPI. Despite these challenges, our economic performance remains remarkably strong. Our GDP growth really is the highest in the developed world. We have low interest rates, low inflation, strong investment and unemployment falling. The IMF, the OECD and the Economist magazine all confirm the extraordinary and resilient growth in the Australian economy. They are all forecasting for the calendar year 2003 growth of around three per cent plus, which, as I say, will be the strongest in the developed world.

These results do not come about simply by accident. What is most particular about the Australian economy is our resilience to these shocks, and that is a result of the difficult but principled economic reform initiated by the former Labor government and continued by the Howard government. In our period we have of course finished the business. We have had workplace relations reform, tax reform and bringing the budget back into surplus and repaying debt. We have cut company tax. We have cut capital gains tax. We have cut personal income taxes and had the most drastic reform to Commonwealth-state financial relations in a generation. But, of course, that record of very responsible and very disciplined economic management can only come about if you have a long-term strategic plan for the economy and it is a part of a coherent, consistent and proactive reform agenda. I have to say that the Labor Party in opposition—the alternative government, we are told—shows all the signs of continuing what has been for seven years an inconsistent, incoherent and reactive agenda in opposition.

Just in the up period we have had the opposition leader running around launching a new truck every week—the new truck policy. And he calls simultaneously for both more spending and lower taxes—the old Labor con trick. We had the shadow Treasurer putting out press releases saying that Australians will in fact accept higher taxes—which I say, if Labor ever gets back, they will no doubt get. The member for Lilley proposes tax credits. The member for Brand wants a whole new Commonwealth department to look after homeland security. So we seem to have as many policies and conflicting policies coming from the Labor Party as we do leadership aspirants. We do not know yet but we all await Mr Crean's great speech on Thursday night, in which he might explain to us how he is going to simultaneously cut taxes, increase spending and deliver surpluses. But all we have heard are conflicting Labor policies from all their leadership aspirants—no coherence whatsoever.