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Opposition fiscal policy

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In the interview in the Australian newspaper this morning, the Shadow Treasurer, Mr Peacock, has finally revealed that the Opposition's policy on the Budget is to make no change from that of the Government.

Mr Peacock is reported as saying that it will be the Opposition's objective to have a sufficient Budget surplus, after tax cuts, to offset all Commonwealth and State borrowing.

In other words, Mr Peacock is committing the Opposition to achieving a zero Public Sector Borrowing Requirement.

That is, of course, exactly what the present Government has achieved in the current financial year, and what I committed the Government to again achieving in 1989-90 in my address a week-and-a-half ago to the Victorian Economic Society.

The significance of Mr Peacock's revelation cannot be overstated.

It is the first substantative thing he has said on the Opposition's fiscal policy since his Post-Budget address to the National Press Club in September last year.

In assessing the import of Mr Peacock's statement it needs to be understood that the public sector borrowing requirement is the 'bottom-line' of the Government's Budget policy.

It measures the total amount of money all levels of Government, Federal, State and Local, borrow in any given year.

Central to the Hawke Government's economic strategy has been that we have cut the PSBR from 7 per cent of the size of the economy (GDP) in 1983-84 to zero in 1988-89.


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J Less Government borrowing means that interest rates are lower than they might otherwise have been, and equally important, it means spare cash is available to the private sector to invest in new export and import competing industries.

In other words, cutting Government borrowing to zero is an integral part of our strategy to correct Australia's balance of payments problem.

But what Mr Peacock's statement today shows is that all the huffing and puffing of the last month from the Opposition about tightening fiscal policy has been a sham.

The 'bottom-line' is that Mr Peacock is now saving that the Opposition's fiscal policy would be exactly the same as Labor.

He is not proposing any alternative at all.

This is an extraordinary admission, given that Mr Peacock and other Opposition economic spokesmen have in the past month or so sought to convey the impression that they would adopt an even tighter fiscal policy than that implemented by the Government.

Only last Tuesday, while censuring the Prime Minister over economic policy - possibly the most serious motion an Opposition could bring before the House - the Shadow Treasurer said that "the Government has given up on fiscal policy - it will not act on this, but we will".

Today's interview reveals that statement to be a complete fraud.

The Opposition has had 20 months to come up with an alternative economic policy, and has missed numerous self-imposed deadlines on doing so.

Now, finally we have it; an endorsement of the Government's position.

Mr Howard should today insist that his Shadow Treasurer sit down and face the media at a proper press conference and explain what the Opposition's policy is.

For too long Mr Peacock has skated by on conveniently brief doorstops, or has found pressing business outside Canberra on key economic news days.

No reasonable person could deny that both the Prime Minister and I make ourselves available for media scrutiny when the news is both good or bad.

The Shadow Treasurer apparently believes that he should not be subject to similar scrutiny.