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Wednesday, 6 June 2001
Page: 27393

Mr CREAN (2:09 PM) —My question is to the Treasurer. I ask: don't today's growth figures show that in the nine months since your GST was introduced the economy grew by just—

Honourable members interjecting

Mr SPEAKER —The Deputy Leader of the Opposition is entitled to ask his question and to be heard in silence.

Mr CREAN —I will start again, Mr Speaker. Don't today's growth figures show that in the nine months since your GST was introduced the economy grew by just 0.9 per cent, more than halving the growth the nation was getting prior to the GST? And don't these figures also show the lowest household savings rate on record, at just 70c in every $100, confirming that your GST has squeezed struggling Australian families?

Mr COSTELLO (Treasurer) —I thank the honourable member for his question, but there is no need for him to look so despondent that growth is so strong. It is actually good news for Australia. To take it as bad news in the way in which you have asked your question does not show an affinity with the Australian public that wants to see strong growth in its economy. You asked me about the effect of tax changes on spending—

Mr SPEAKER —The same courtesy as I expect to be extended to the Deputy Leader of the Opposition I expect him to reciprocate.

Mr COSTELLO —I am asked about the effect of tax changes in relation to spending. I remind the honourable member that household consumption grew by 2.2 per cent. Not only did it grow by 2.2 per cent but it was the strongest since September of 1994. So, if tax changes were dampening consumption, why would it be the strongest since 1994? One of the reasons why it could be the strongest since 1994 is that every Australian income taxpayer has had an income tax cut, the largest income tax cut in Australian history, and now people have more money to spend—money working its way out into the Australian economy. Let me give you another fact. The growth in consumption was underpinned by strong services growth—the strongest growth in services for 25 years. You would have thought that the tax changes would have been dampening in relation to services, but, as I said at a press conference earlier, the fact that every Australian has had an income tax cut means that they have more money in their pockets to now spend.

This is the government that has had the courage to do the big changes which will set Australia up for decades. We have been opposed every step of the way by an opposition that now wants to keep the changes that we put in place, by an opposition which has been weak, directionless and opportunistic, and it follows its leader in that regard.