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Tuesday, 20 September 1994
Page: 980


Senator MICHAEL BAUME —I give notice that, on the next day of sitting, I shall move:

  That the Senate—

  (a)notes:

    (i)the letter to the editor in the Australian Financial Review of 16 September 1994 from Mr Andrew Baume pointing out that the bank bill futures market is the most accurate indicator of future interest rate moves and that, because of the absence of fiscal responsibility by this Government, monetary policy has become such an important tool of economic management,

    (ii)the forecast of the Minister for Foreign Affairs (Senator Gareth Evans) in Senate question time on 20 September 1994 that any rises in interest rates that may take place over the next 18 months would only be small,

    (iii)that, on the contrary, the 90 day bank bill futures market, which reflects the market place cost of money in 18 months time, shows interest rates rising by about four percentage points from the beginning of September 1994 to around 10 per cent, indicating housing interest rates of around 11 per cent or even more by then,

    (iv)that at the beginning of September 1994, the 90 day rate was only 5.75 per cent, but that now the futures rate has blown out to 9.56 per cent by December 1995, 9.85 per cent by March 1996 and 10.05 per cent by June 1996, and

    (v)that such rises cannot properly be described as small, even by Senator Gareth Evans; and

  (b)calls on the Government to take long overdue appropriate fiscal action to remove this ridiculous and unnecessary pressure on interest rates which will destroy the prospects of sustained economic recovery and ensure the continuation of deliberately and disgracefully high levels of unemployment to the turn of the century.