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Wednesday, 18 February 1987
Page: 243

Mr HICKS —My question is directed to the Prime Minister. Is it a fact that since 1984 savings bank home loan rates have risen from 11.5 per cent to a record 15.5 per cent; Bankcard interest rates, from 18 per cent to a record 22.5 per cent; prime interest rates for large business, from 13.5 per cent to 18.25 per cent; and small overdraft rates, from 14.5 per cent to 20.5 per cent? What is the Prime Minister's excuse to Australian families, small businesses and farmers who have been the victims of this Government's record high interest rate policies?

Mr HAWKE —I do not give an excuse; I give a reason. The fact is that the present stance on interest rates and monetary policy is, as I said to this House yesterday, an inevitable feature of the adjustment to Australia's current account difficulties. I just wonder whether the honourable member for Riverina-Darling is really trying to say to this House that this Government has some control over what happens to prices in the international markets. Does he say that the dramatic decline in the terms of trade of this country has got something to do with Australia, that he or anyone else in this country can determine the prices that we get for our products? It had nothing to do with Australia that $6 billion was wiped off the national income of this country. As distinct from the pie in the sky sorts of things that pass for policy on his side of this place, we have put into place the appropriate macroeconomic policies to deal with that situation.

The simple fact is that if we had not followed the policies that we have, if we had not asked monetary policy to carry some of the necessary burden, there would have been a total loss of the exchange rate and, in those circumstances, interest rates would have gone uncontrollably through the roof. I remind the House that under this Government's policies, and even with the burden imposed upon us in the conduct of macroeconomic policy and in the light of those external circumstances, interest rates under this Government still have not reached the peak that they did under our predecessors. There was a higher level of interest rates under the previous Government than there has, at any point, been under the Hawke Labor Government. That the previous Government achieved without any of these external constraints and burdens imposed upon it.

It passes the imagination that in this circumstance we should have these people talking about the impact upon families in this country. It seems to me that when we talk about families we ought to understand that Australian families do not exist on some conceptual island, lost in the Opposition's emotional rhetoric, and that families in this country are affected by what is done for them in regard to a whole range of issues which affect their well-being.

I remind the House of the sorts of things that this Government has done. In this area of welfare payments we have increased family income supplements and additional pensioner benefits by a sum of 70 per cent. In the area of employment we have significantly reduced the unemployment rate, as the Minister for Employment and Industrial Relations has said, and we have created over three-quarters of a million new jobs. The House knows what our record in housing is, compared with what was done before. In the area of education, the fact is that under this Government there has been a 4 1/2 per cent real increase in funding. It is a significantly better performance than was ever achieved under our predecessors. We have created 37,000 new places in tertiary institutions. In the area of tax reform our policies have been for the family to get a more equitable distribution of the tax burden in this country. In the area of health, where there were previously two million people who suffered through having no cover at all, they are now covered. When the House talks about the welfare of Australian families, the record of this Government puts into the shade the pathetic performance of the Opposition when it was in government for 7 1/2 years.

It would be easy for the Treasurer and for me to get up and say: `We will reduce interest rates tomorrow'. If we said that we would reduce interest rates tomorrow those opposite would immediately know-certainly as the Leader of the Opposition knows but has lost the courage to say-that we would lose the exchange rate and inevitably we would lose interest rates in this country. The singularly unfortunate feature of Australian political life is that the Leader of the Opposition knows the truth but he has lost the capacity to speak it.