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Monday, 30 May 1994
Page: 819

Senator ALSTON —I direct my question to the Minister representing the Treasurer. I refer to last Friday's stinging criticism by ANZ bank group chief executive Don Mercer that the present budgetary settings and forecasts put Australia back on the path of boom and bust, and that the recent budget could be best described as too little, too late. Is the minister also aware of the recent statement by leading investment bank Salomon Brothers that the budget's reliance on higher growth to reduce the deficit is `inherently risky'? In view of these devastating indictments of Labor's failed economic policies, apart from vilifying its many critics, what action does the government propose to take to get the country back on track and convince business that it has not simply given up on meaningful policy reform?

Senator COOK —In the economic area there are always prophets and forecasters who are prepared to say that things should be better or to criticise some element of government policy. If one looks, though, at the projections for the Australian economy and at the settings of the Australian budget, one can see immediately that, overwhelmingly, the response to the budget by the Australian business community has been positive and that this economy—a developed economy in terms of OECD economies, or, if one likes, peer economies to the Australian economy—is one of the best performed economies in the OECD world.

  We do have a growth forecast of 4 1/2 per cent in this budget. That is generally acknowledged as being an achievable growth forecast. We do have a range of settings which underlie continual micro-economic reform and improvement. We do have a range of settings—

Senator Alston —But you have given up on it.

Senator COOK —We have not given up on it. As Senator Alston would know, if he paused to allow his brain to intercede with his mouth, the Hilmer reforms on competition policy, at the initiative of this government and adopted by the state premiers, bring on the next generation of micro-economic reform in this country and start to share the burden of micro-economic reform between the federal and state layers of government.

  I acknowledge that there are some critics. I do not see that that is unusual. There are a lot of those who praise and support the government initiatives, too. Balancing that, we are confident that the economic settings we have in place are the appropriate ones and that the Australian people can look forward to improved economic conditions, a greater improvement in employment and, with the white paper initiatives checking in to ensure that the jobs compact starts to bite and get people back to work, a better scenario overall for those who are unemployed.

Senator ALSTON —Mr President, I ask a supplementary question. As the minister apparently prefers simply to ignore the loudest warnings from the private sector, does he similarly dismiss warnings by the Governor of the Reserve Bank that interest rates are on the way up? What sort of a future, if any, does this present to ordinary Australians stuck on declining real wages, rising levels of debt, stagnant levels of high unemployment and now the prospect of rising interest rates?

Senator COOK —Now one sees the purpose of this broad-ranging question—to try to work in a reference to the comments made by Bernie Fraser recently about interest rates. As I understand what Bernie Fraser, the Governor of the Reserve Bank, said, there was nothing inconsistent in what he said with what almost everyone else has been saying, and that is not the context that Senator Alston proposed to put those terms in—the gloom and doom scenario—but rather the context that anyone looking intelligently and objectively at the situation will see that it is anticipated that interest rates may rise some time, and we would expect that as the economy gets closer to its capacity constraints and so forth. That is what this government has said as well. To then imagine that a prudent comment objectively delivered is to be distorted into some reference for doom in the economy is, of course, a parody of economic responsibility from the opposition. (Time expired)