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Wednesday, 13 November 2002
Page: 6220


Senator COOK (2:12 PM) —My question is to the Minister for Revenue and Assistant Treasurer, Senator Coonan. Can the minister confirm that she advised the Senate in writing on 20 March this year that a list of relevant files from the Treasurer's portfolio agencies, for the six months ending 31 December, had been placed on departmental or agency web sites, as required by Senate standing orders? Can the minister therefore explain why all AOFM files before 2002, including those relating to the period when AOFM lost billions of dollars of taxpayers' money through the mismanagement of foreign currency risk, have disappeared from the AOFM web site?


Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Cook for his question. I will check what may have appeared in writing or what the issue is to which Senator Cook refers, because obviously I do not recall the detail of what files may have been referred to, nor precisely the written answers. But the assumption that Senator Cook has made in his question, that millions of dollars have been lost in this matter that has been raging for some time— the foreign exchange losses—is, firstly, not correct. It is not precisely my portfolio area, but I really do not know how many times Labor need to have the issue of foreign exchange arrangements explained to them. We on this side of the chamber have tried on many occasions to do this, but it should not surprise senators that the Labor Party appears to have no idea at all about a policy of their own making. That is the whole point about this issue. I am happy to go through it again. Why was the policy of foreign currency swaps entered into by Labor? Can anybody remember why? As we all know, the policy was initiated by the Labor Party as a device, a technique, for managing Labor's mounting debt, which peaked at $96 billion in 1996-97.

The policy was also conducted, of course, on the expectation that the United States dollar debt would result in lower borrowing costs, to take advantage of the lower US interest rates compared to the high interest rates that Australia had under the Labor government—that is, it was a policy born of the chronic failings of the Labor government's economic management. The Labor Party are masters of rubbery figures and we have seen in this whole issue the most extraordinary and desperate attempts to try to blame this government for a problem of their own creation.

What did the coalition government do? It is worth recounting that we began repaying Labor's debt, in 1997-98 reducing exposure and helping to reduce the interest rate differentials. Labor's net debt has now been reduced to $36 billion, which is an extraordinary effort. No swaps to increase US exposure were entered into after February 1999 and the policy was suspended in December 2000. From September 2001, the stock has been run down in accordance with a pre-agreed timetable between AOFM, the Treasury and the RBA, with the aim of eliminating foreign currency swaps altogether. As has been said ad nauseam, the last cross-currency swap matures in 2008. This is starting to be a bit of a tired issue. I do not know how many times we can run through the fact that this was a debt of Labor's making, a problem of Labor's making, which this government fronted up to and has fixed.


Senator COOK —Mr President, I ask a supplementary question. Is the minister aware, since she does not recall what was called for, that the order for the production of documents that was tabled in the Senate on 11 March 2002 related to the production of many of the same AOFM files now missing from the web site? If the minister does not recall, will the government now comply with that order and produce the documents, and will the government restore the missing AOFM files to the web site in compliance with the Senate standing orders? On a final point, Labor may have introduced currency swaps, but you lost billions of dollars when you managed them. Will you now admit that fact?


Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Cook for the supplementary question. I obviously have an obligation to check to see what documents were called for production and whether or not there is anything further that can be done. So far as I know, there has been complete compliance with the order for production but, as I have said, I cannot recall in my head every document that might have been called for in an order. As far as the second part of Senator Cook's supplementary question is concerned, the issue simply does not arise, because the source of this whole problem is undeniably and indisputably the Labor government's problem, and this government has fronted up and fixed it.