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Thursday, 23 June 1994
Page: 1947

Senator MINCHIN —My question is directed to the Leader of the Government in the Senate. I refer the minister to the report in today's Australian Financial Review headed `Australia's performance is one of the worst' which shows, in effect, that Australia's real interest rates are already among the highest in the world. Is this not a reflection of this government's mismanagement of the economy and its boom-bust approach to fiscal and monetary policy? Is the government now prepared to accept the need to revise its budgetary settings to avoid further interest rate rises which will only hurt home owners and businesses?

Senator GARETH EVANS —Mr Deputy President, it is, of course, the case that Australian interest rates have been coming off a comparatively high base as against the rest of the world. That has been frankly acknowledged by the Treasurer and the Prime Minister. That makes all the more surprising the current passion in some sectors of the bond market to push those rates up higher in a domestic environment where—as we keep on saying and as I have been saying all week—the fundamentals simply do not justify that.

  As to our responding in a boom-bust cyclical way, of course that is not the case. We have broken the back of all the major problems that have traditionally plagued the Australian economy—particularly those cyclical boom-bust ones—by the fight that we embarked on throughout the 1980s. At the same time that we were changing the micro-economic environment, we systematically reduced the underlying structural deficit of the budget and put ourselves in a position where we could get budgetary outcomes—notwithstanding the recessionary impact of extra outlays that obviously threw that off course for some little time—in the medium term which will be better and more responsible and more soundly based than any other comparable economy.

  I gave the figures yesterday about where we will be in 1996-97 as a result of our medium-term fiscal deficit strategy by comparison with where the United States, Canada, Britain and all the other traditional mainstream developed OECD economies will be. We are perfectly well positioned to take advantage of all the known characteristics of the Australian economy, the regional economy and the world economy over the next few years to produce that result without any further fiscal change.

  Mr Deputy President, compare that with the kind of fiscal irresponsibility that is coming out of every orifice and every pore of the opposition's major spokespersons. The opposition has committed itself to $8 billion worth of deficit in the years ahead. It has committed itself through Mr Downer's commitments on indirect taxes and their impact on exporters. It has committed itself through the commitments by Mr Downer and Mr Costello in the area of capital gains and FBT. It has committed itself in the area of extra tax incentives for savings. It has committed itself in the area of health through Mrs Bishop. It has committed itself in the area of Aboriginal health and services—

Senator Kemp —Mr Deputy President, I raise a point of order. On the issue of relevance—

  Government senators—Ha, ha!

Senator Kemp —I know that is funny for you—relevance—but we actually ask questions and we expect answers to them.

The DEPUTY PRESIDENT —Order! Senator Kemp, could you address your point of order to me and not to the government.

Senator Kemp —The point I am making is that the question was quite specifically about the interest rate rises and the high level of interest rates in this country. I put it to you that Evans should either answer the question or be sat down.

The DEPUTY PRESIDENT —Order! Senator Kemp, you are referring to Senator Evans, I take it? There is no point of order. Senator Evans is directing his answer to the question that has been put to him.

Senator GARETH EVANS —I can understand Senator Kemp getting excited. There are 28 Bugs Bunnies on the front page of the Age Green Guide this morning and it is all obviously too much for him. He has been overcome by it. I am being lectured on the subject of fiscal irresponsibility by an opposition whose spokespersons, one after another, in the last few weeks have committed themselves in all the ways I have indicated, plus through spending on regional infrastructure of some $3 billion, plus through spending on defence by Mr Reith, plus through some more spending on aid by Mr Peacock, plus through some more spending on compensation for income splitting by Mr Abbott, Senator Minchin and Mr Howard—I think he has not resiled; I am delighted to see him here today. Those opposite have created a hole of some $8 billion in their own fiscal projections.

Senator Hill —Mr Deputy President, I rise on a point of order of relevance. The question was: does the minister agree that real interest rates in Australia are amongst the highest in the world? I think he has said he does agree with that. Then he was asked: is the government prepared to revise its budgetary settings to avoid further interest rate rises? Why is he not prepared to answer that question, which is what the small business people in Australia are wanting to know about and what new home owners are asking? That is what he was asked and that is what he should be answering.

Senator Alston —Mr Deputy President, I rise on the same point of order. This raises a very important issue.

Senator Faulkner —You are shooting for 17.

Senator Alston —Just a minute, sport. Mr Deputy President, as I understand it, Senator Evans in particular, but other ministers as well, have consistently argued that it is within the standing orders to reflect on the credibility of the questioner and that that somehow constitutes relevance. That seems to be precisely what the minister is attempting to do now. I seek a ruling from you that in fact that is not relevant and that if necessary the matter ought to be further considered so that we can have it cleared up once and for all.

Senator Gareth Evans —Mr Deputy President, I rise on the same point of order. If the point that is being made in the very explicit terms of the question itself is that the government's fiscal policy is putting interest rates under further pressure, then it is perfectly reasonable for the government in reply not only to point to our own economic responsibility and fiscal and monetary management but also to make the point that the kind of economic vandalism of the opposition's fiscal policy would put interest rates and the Governor of the Reserve Bank under infinitely more pressure. If that is not a reasonable point to make under those circumstances, I do not know what is.

Senator Cook —Mr Deputy President, I rise on the same point of order. I would think that if one took an extract of the number of points of order and how many of them were related to the so-called point of order of relevance, the point of order of relevance would lead the pack by a large margin. Issues of relevance have been ruled on consistently almost every question time for the last six or eight months. What we are witnessing in this chamber is points of order being called on relevance which the callers of those points of order know are vacuous, have no content and are used simply to disrupt the proceedings of this chamber.

  Mr Deputy President, it is appropriate for you, might I suggest, to sit down people who call points of order simply to disrupt the smooth flowing of this chamber. We have had a couple of examples of that this morning. It is simply an attempt to disrupt and create the type of behaviour we are now witnessing from the opposition, which is unruly and disruptive, and goes to the ability of the chair to control this chamber. I suggest that you should dismiss not only this point of order but also subsequent points of order on this ground.

The DEPUTY PRESIDENT —I will take the last point first. Senator Cook, in the event that points of order are taken on the basis of a debating point, they will be ruled disorderly by me as long as I am in this chair. In respect of Senator Alston's matter, I will not judge the virtue of questions or answers. They are either in order or out of order, and I will not reflect upon either the answer or the question. In respect of Senator Evans's response, he was certainly, in my view, in order with respect to relevance, but if any minister trespasses on opposition policies, past, present or in anticipation of the future, the answer will be ruled to be out of order.

Senator Robert Ray —Mr Deputy President, I raise a point of order.

The DEPUTY PRESIDENT —Senator Ray, I have ruled on that matter. If you want to raise a point of order in the future, you are welcome to do so.

Senator Robert Ray —I wanted to raise that latter point. I did not disagree with any part of your ruling. When you say that no minister can canvass whether the government would adopt an opposition policy.

The DEPUTY PRESIDENT —I said `opposition', Senator Ray.

Senator Robert Ray —Yes, whether the government would adopt an opposition policy. That has always been ruled in order by all your predecessors.

The DEPUTY PRESIDENT —Senator Ray, I have been generous in allowing you to, as I take it, canvass my ruling. I did not say `the government'; I said `opposition'. What the government might do in respect of opposition policy is in order. I will not allow the government to trespass into what might be opposition policy. That is a ruling that has been made by previous presidents on countless numbers of occasions. That will be my circumstance as long as I have the privilege of chairing question time.

Senator Alston —Mr Deputy President, I raise a point of order. I welcome your ruling but a problem arises in that what you have just said about questioning the questioner would seem to be somewhat in conflict with the ruling of the President. I ask that you obtain independent advice on that matter or have the matter referred so that the Senate itself can make a sensible judgment on the issue.

The DEPUTY PRESIDENT —I am only too happy to refer that matter to the procedure committee.

Senator MINCHIN —Mr Deputy President, I ask a supplementary question. Last night Mr Keating pledged on Lateline that he would not let interest rates rise. This is the same Prime Minister who promised Australians that we would not have a recession—and we had the worst recession in 60 years. He promised before the last election that there would be no tax increases and he broke that promise too. Why on earth should Australians now believe Mr Keating when he says `interest rates won't rise'?

Senator GARETH EVANS —The reason it should be believed, of course, is that we have in Australia the best conjuncture of economic fundamentals that we have had for years. We have inflation rates reduced well below two per cent. We have got growth rates up above five per cent. We have got a consumer confidence and a business profitability and confidence climate that has been unexcelled for decades. We have a micro-economy which is pounding along with a reform process that is further advanced than has ever been the case previously in this country. We have a trading environment which is going gangbusters as a result of the growth rates in our region and the reconstruction of the Australian economy to respond effectively to that. We have an industrial relations climate which is more cooperative than it has been for decades and an environment where there is no wage push pressure on inflation at all. We have every single fundamental in this economy pointing in the right directions, with levels of quantitative response which give enormous grounds for encouragement and optimism in the future. There is no ground whatsoever for any change in interest rate policy. (Time expired)