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Wednesday, 13 May 1987
Page: 3081

Mr COBB —I direct my question to the Prime Minister. Is it a fact that when the Prime Minister's Government came to power in 1983, Australia's gross overseas debt was about $30 billion? Is it also a fact that at the end of 1986, Australia's gross overseas debt had risen to about $105 billion, a three-fold to four-fold increase? What Government policies have caused that debt-which took 83 years since Federation to reach the high level of $30 billion-to be more than tripled in a very short period of just three and a half years? Do the reasons include excess government spending and borrowing domestically, so forcing local private sector borrowers to source funds off-shore? Finally, will the Government play its part by at least cutting out the hundreds of indefensibly silly grants, such as $3,100 to study the ritual significance of bark cloth in Fiji, $5,750 to study the songs and dances of the Chinese New Year and $88,000 as a community employment program grant for two Aboriginal women on the Gold Coast to learn the total concept of breastfeeding?

Mr HAWKE —I believe that the question which has just been addressed to me is indicative of the quality of economic analysis on the other side of the House. It is nothing short of pathetic. It is little wonder that the honourable member for Goldstein had some salutary words to direct to the Leader of the Opposition this morning on AM. He was asked about the polls-`I do not want to go to the polls because I do not like to talk about them.--.'

Mr Tuckey —Madam Speaker, I take a point of order. On the point of relevance, before the Prime Minister manages to convert the national debt into some response on polling, might you instruct him, Madam Speaker, to be relevant and to explain to Australians why he has got the country into the state it is in?

Madam SPEAKER —I point out to the House that the question was fairly broadly framed.

Mr HAWKE —The honourable member for Goldstein directed himself to where the question of credibility is an issue. He was not saying-this is a bloke on the Opposition side-that the Government had to establish its credibility in matters economic. He homed right in, when talking about credibility, to where that issue lies. He said that it lies right with the Leader of the Opposition. He was asked about the polls and why we were a country mile ahead of the Opposition. He was asked:

. . . how does John Howard win back support?

He answered:

I think the most important thing is to make a credible response to tonight's mini-Budget.

That is the important thing he said. He was not questioning the Government's credibility. He was saying that the Leader of the Opposition has to establish his credibility. He was asked:

That's a big test for John Howard?

His reply was:

It's a very big test for him and for the Opposition.

Mr Connolly —I take a point of order, Madam Speaker. Whatever your limitations may be under Standing Orders, the fact remains that the honourable gentleman is not being in any sense relevant to the question, which is: Why is Australia's national debt at the level it is in such a short time under his Government?

Madam SPEAKER —Order! The honourable member will resume his seat. The Chair is listening carefully to the Prime Minister.

Mr HAWKE —I will come to the question of credibility on external debt. As far as credibility on the Opposition's side of the House is concerned, the honourable member for Goldstein said of John Howard:

It's a very big test for him and for the Opposition.

The test is not of our credibility. The test, tomorrow night, is of the Opposition's credibility on matters economic.

Mr Cadman —I take a point of order, Madam Speaker, again on the question of relevance. The Prime Minister was asked about government waste and about what he had done in regard to the deficit. He has said nothing.

Madam SPEAKER —I call the Prime Minister.

Mr HAWKE —The honourable member for Goldstein said:

We have to have a position which is economically credible, at the same time socially acceptable.

With that background I come to the question of this Government's credibility in the area the honourable member for Parkes talked about. I do so against a background where not only more than half the members of the Opposition say that the Opposition is lacking in credibility but also the officials of the Liberal Party and the people of Australia are saying so.

Let us consider the question of credibility in regard to the external debt. The first point I make is that, according to the statistics that have just been released, over the December quarter of 1986 Australia's net foreign debt fell by $1.5 billion. I know that the Opposition does not like that. This transient Leader of the Opposition, when he was writing his country down, liked the fact that Australia's external debt was rising. He liked all the bad economic signs that had been forced upon this country. Honourable members will recall his memorable phrase: `The times will suit me'. That was a clear statement by the Leader of the Opposition that what he wanted, and what the miserable, motley collection of people behind him wanted, was a situation where Australia's interests were going down and our external debt was going up. He thought that in those circumstances he would get some benefit. It was in those circumstances that the Leader of the Opposition made the quite remarkable statement, which he will be haunted by, that he was the messiah of conservative politics in this country. Do honourable members not remember what he said? He said: `I am the messiah of conservative politics in this country'. He was the messiah in a situation where he thought Australia's position was going down. He does not like and the rest of the Opposition does not like, the fact that, as a result of the continued and persistent application of relevant economic policies, we are turning the situation around. As I said, over the December quarter Australia's net foreign debt fell by $1.5 billion.

The Government welcomes the December quarter outcome but we recognise-as Opposition members would if they applied a few hours to thinking about economic matters, instead of fighting one another as they do every minute of the day-that the present situation cannot be turned around overnight. They would also realise that a very significant part of the increase in Australia's external debt was a result of the significant devaluation that occurred. They would understand that. The policies of this Government are aimed at the correction of the external imbalance and the stabilisation of our external debt over the medium term. I remind the honourable gentleman who asked the question, and the rest of those opposite, who never spend a moment thinking about rational economic analysis-instead, they think about how they are going to get rid of this leader or that leader, how they are going to promote the honourable member for Kooyong and how they are going to promote the honourable member for Goldstein-that if they stopped and thought about matters economic they would realise that we are addressing the problem. I remind honourable members opposite about the policies we are following that are relevant to it. We are following a firm--

Mr Tim Fischer —I take a point of order, Madam Speaker. I draw your attention to the precedent you created on 12 February 1986 when you ruled, in similar circumstances:

The Prime Minister will finish his answer.

Madam Speaker, I draw your attention to the length of time the Prime Minister has taken to answer the question and I ask you to apply the same ruling.

Madam SPEAKER —The honourable member does not have a point of order. I call the Prime Minister.

Mr HAWKE —In regard to the honourable member's question, I am pointing out what the Government is doing in terms of responsible and relevant economic policy to remedy the problem in the external debt area that has arisen for this country through no fault of this Government. These are the things we are doing: We are following a firm monetary policy of reduced Budget deficits and very considerable wage restraint, all of which has been directed to the objective of dampening domestic demand. This country could not afford to sustain the level of imports after having $9 billion slashed off the nation's economic capacity. So we have had the relevant monetary policy, the relevant fiscal policy and the relevant wages policy to reduce the level of domestic demand.

In the more fundamental sense of industry restructuring, we have gone about the process of a gradual reduction of industry protection. I contrast that with the pathetic performance of the mob opposite when they were in government. If there was one section of the conservative forces in this country which had the opportunity to do something and which should have done something to dismantle gradually the level of protection it was cockies corner; it was the National Party. But what did the National Party members do? They sat there, quiescently with the Liberals, and did nothing about reducing the levels of protection in this country. As the Treasurer has frequently said, they acquiesced in an overvalued exchange rate which made Australian industry grossly uncompetitive. But this Government has had the guts and the economic wisdom gradually to lower the levels of protection of Australian industry and to float the exchange rate so that we got an exchange level in this country which would give the opportunity to Australian industry to become competitive.

If honourable members opposite are really concerned about Australia's competitive position, I point out that in order to be able to attack the fundamentals of our external position, those are the things that have to be done. We have done them, and at no stage in seven years did honourable members opposite have the courage, the wit or the wisdom to attack those fundamentals. We will continue to do it. The continuing recognition of the Australian people is that, in looking to a government or a party to rectify these fundamentals, it is to this side of the House that they look, and not over there.

Mr Donald Cameron —I rise on a point of order, Madam Speaker. Three points of order were taken on the question of relevance in relation to the answer just completed, and in the third minute the Prime Minister said: `Now I come to the question'. I ask you, Madam Speaker, how long you are prepared to accept matters that are not relevant before bringing the Prime Minister to order-when he confessed after the third minute that he was then coming to the question.

Madam SPEAKER —Order! The Prime Minister has answered the question, and we shall proceed.