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Tuesday, 24 March 1987
Page: 1359


Mr SNOW —I ask: Can the Prime Minister inform the House of the likely effects of conti-nued fiscal restraint on the interest rate regime?


Mr HAWKE —I thank the honourable member for Eden-Monaro for his question. The House will recall that on a number of occasions I have reminded the House that in our four years in government we have reduced the Budget deficit as a proportion of gross domestic product from the 5 per cent that we inherited to 11/2 per cent this financial year. A further reduction in this ratio, which will occur as a result of both the May statement and the August Budget, we believe will help to create the conditions for a fall in the interest rate regime over the course of this year as the current account improves and as general financial market conditions permit. I remind the honourable member that this year's deficit of around $3.5 billion is tiny, is minuscule, compared with the huge deficit promised by the Leader of the Opposition. I understand, and I have no doubt that the honourable member will recall this, that the Leader of the Opposition whipped himself into a frenzy of indignation yesterday, claiming in a personal explanation that I had misrepresented him in referring to his $16 billion credibility gap. For the benefit of honourable members, and most parti-cularly for the honourable member for Bennelong, I take this opportunity to detail briefly how the $16 billion credibility gap has been wrapped up by the Leader of the Opposition and his colleagues. Let me just quickly go through them, Madam Speaker.


Mr Spender —I rise on a point of order. Madam Speaker, I remind you that on 9 September 1981 when Mr Anthony was answering a question in this House, you intervened and said this:

I raise a point of order, Mr Speaker. I draw your attention to the Hansard of 27 August. You ruled:

The Minister will answer the question and not engage in irrelevancies such as contrasting the Government and the Labor Party.

That is precisely what the Prime Minister is seeking to do here. The Speaker replied:

I think it was a very sound decision. I ask the right honourable gentleman to draw his answer to a conclusion.


Madam SPEAKER —Order! Would the honourable member now resume his seat.


Mr Spender —If it was good enough, Madam Speaker, for you to make the point of order when you were in opposition, it should apply here.


Madam SPEAKER —The Prime Minister has just started on his answer. The honourable member will resume his seat.


Mr Uren —I rise on a point of order. The honourable member for North Sydney consistently interrupts the Prime Minister. Madam Speaker, I draw to your attention the tradition of this Parliament that both the Prime Minister and the Leader of the Opposition have certain privileges and have been given leniency by all the Speakers through the times that I have been here.


Madam SPEAKER —Order! There is no point of order. The Chair has constantly given a certain latitude to the Prime Minister, the Leader of the Opposition and the Leader of the National Party, and will continue to do so.


Mr HAWKE —One can understand the concern, but I simply want to recite the facts. I was saying that I would detail briefly how the $16 billion credibility gap has been racked up by the Leader of the Opposition and his colleagues. Firstly, the reversal of our 1985 tax reforms, such as the fringe benefits tax--


Mr Spender —Madam Speaker, I repeat the point of order which I made and on which I do not believe you made a ruling.


Madam SPEAKER —I point out to the honourable member for North Sydney that I find the Prime Minister in order at this stage.


Mr Spender —And relevant?


Madam SPEAKER —The honourable member will resume his seat.


Mr HAWKE —Firstly, the reversal of Labor's 1985 tax reforms such as the fringe benefits tax, the non-deductibility of businessmen's free lunches, negative gearing and the capital gains tax amounts to $1,345m. Further unrepudiated tax promises, including income splitting, child care rebates, removal of lump sum superannuation tax, repeal of wine tax and the abolition of fuel excise indexation amount to $3,840m. The cost of revenue of a 12-month wage freeze will be $500m. Reduction in personal and company tax rates will account for $8,870m, the repeal of the assets test for $160m and the removal of the existing Budget deficit for $3,500m. If we offset the tax promises by broadening the indirect tax base now that the consumption tax is dead we get a maximum amount of $2,000m. Therefrom we get the John Howard credibility gap of $16,215m. So that the Leader of the Opposition might respond in a media statement, which he has refused to do to date in spite of repeated pleas by my colleague, the Treasurer, I seek leave to table a detailed list of these commitments.


Madam SPEAKER —The Prime Minister does not need leave.


Mr HAWKE —I do that so the Leader of the Opposition may repudiate them.