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Monday, 30 March 1987
Page: 1676

Mr COBB —My question is directed to the Prime Minister. Is it a fact that since the last Federal election in December 1984, savings bank home loan interest rates have risen from 11.5 per cent to a record 15.5 per cent or higher, Bankcard interest rates have risen from 18 per cent to a record 22.5 per cent, prime interest rates for large businesses have risen from 13.5 per cent to 18.25 per cent, and small overdraft rates have risen from 14.5 per cent to a record 20.5 per cent? What effect has this record high interest rate structure had on Australian families, businesses and farmers?

Mr HAWKE —The repetition of this type of question at the end of Question Time shows-

Mr Tim Fischer —Very damaging.

Mr HAWKE —It is very damaging; we feel deeply wounded. For the benefit of this honourable member I will try to explain to him-I hope he is capable of understanding-the economic circumstances within which these movements have taken place. If the honourable member insists on asking this question after the previous exposition I have given, it is necessary to ask him to understand, if he can, what has happened within Australia as a result of decisions taken outside this country in regard to the prices that people pay for the commodities that we sell. If he does not understand this--

Mr Tuckey —I rise on a point of order. On the matter of relevancy, the questioner asked about the impact on Australian people, not for a mob of excuses and blaming the foreigners.

Madam SPEAKER —Order! The Prime Minister is answering the question.

Mr N.A. Brown —Blame the foreigners.

Mr HAWKE —An indication of the depth and quality of economic understanding and political responsibility of this Deputy Leader of the Liberal Party of Australia is his intervention: `Blame the foreigners'. That is about the level of competence and relevance one would expect from this fellow here. It is not a question of blaming the foreigners; it is simply a case of pointing to the facts. Those opposite will one day be prepared to accept that the actions of those people overseas-they can blame them or not blame them; it is irrelevant to the fact here-have wiped more than $6 billion off our national income. The Government in those circumstances has had the responsibility of conducting all elements of economic policy in a way which is calculated to protect this country. Unfortunately one element of economic policy-monetary policy-has had to be conducted in a way which necessarily had interest rates in this country at the levels to which the honourable member refers.

The honourable gentleman seems to believe that there is some perverted reason which would lead us to have interest rates in this country higher than is necessary. He seems to believe that we got some sort of perverted political pleasure out of having interest rates higher than is necessary. There is no government, including any government that in 20 years time might be formed from the other side of the House, which for one day would have interest rates higher than necessary. It has been necessary, when we have lost that amount of our national income, to protect the economy, to have a tight monetary policy. That is what has happened--

Mr Cobb —Madam Speaker, I raise a point of order. I clearly asked the Prime Minister what the impact was. I have heard nothing about the impact yet. All I have heard is about the causes. Madam Speaker, I ask you to rule that the Prime Minister be relevant under standing order 145.

Madam SPEAKER —Order! The honourable member will resume his seat.

Mr HAWKE —I am obviously perfectly entitled to explain the reasons for the high level of interest rates because implicit in the honourable gentleman's question is that this Government probably does not know what the impact of these policies is. I have already indicated in answer to a previous question from the honourable member for Mayo that we are aware of the fact that it has had an adverse impact upon the living standards of this country. If the honourable member has not got the level of economic understanding to know that the loss of $6 billion is going to impact, there is no chance for him at all. I ask the honourable member whether he thinks we can just say: `Oh, here is a magic wand. The $6 billion has not happened. Here it comes and we get it back'. The poor, uninformed idiot. Does the honourable member not understand-

Madam SPEAKER —Order! The Prime Minister will withdraw that comment.

Mr HAWKE —I will withdraw the final word. He is a poor, uninformed fellow. It is a fact-do you not understand, dear chap?-that if $6 billion goes out of the country people within the country will be affected by it. It will mean a drop in standards. That is the fact. What we are doing is ensuring that we will bring about the conditions in which there can be a fall in interest rates. The honourable member may have noticed that in the last couple of weeks there has been a move downwards in interest rates. That has not happened by accident; it is the beginning of the evidence of the impact of the economic policies being followed by this Government and gives substance to what the Treasurer and I have been saying-that because of the application of rigid fiscal, monetary, wages and industry policies we will see through 1987 a gradual reduction in interest rates. That is the fact. Current conditions have been brought about by factors beyond our control. We will have the relevant economic policies.

May I ask: What do those opposite think would be the impact on interest policies if the Leader of the Opposition had his $16 billion credibility gap? We would have interest rates at 50 per cent. That is why the Leader of the Opposition will never have the chance of being in a position to implement his policies. The very people the Leader of the Opposition talks about see through him and the rest of the members of the Opposition when they try to peddle their voodoo economics around this country. The members of the Opposition are a pack of frauds, obvious frauds, and will be seen as frauds.

Mr Downer —I raise a point of order. Madam Speaker, I think you would agree that an expression such as `pack of frauds' brings this House into disrepute. The Australian public has had enough of that sort of language from the other side of the House.

Madam SPEAKER —Order! The Prime Minister will withdraw.

Mr HAWKE —I withdraw `pack of frauds'. I will allow the facts to speak for themselves.