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Thursday, 12 May 1994
Page: 750

Senator ZAKHAROV —My question is addressed to the Minister representing the Treasurer. Noting the figures released this morning showing further improvements in attacking unemployment, will achieving the government's white paper employment targets for the year 2000 be dependent on sustaining continued growth in business activity? Can the minister inform the Senate of the reaction from the business and finance sectors to the budget in achieving this end?

Senator COOK —In informing the Senate of the reactions of the business and finance sectors to the budget, I will quote from a transcript of the AM program this morning:

International credit rating agencies have dismissed claims that the first Budget from the federal Treasurer, Ralph Willis, isn't doing enough to reduce debt. Both Standard and Poors and Moody's, consider this Budget to be a reasonable document which doesn't alter their view of Australia's credit worthiness.

It also says:

. . . the government's deficit reduction plans are in keeping with its longer-term aim to cut debt to one per cent of GDP by 1996-97.

They are the international credit rating agencies. In the case of Standard and Poors they have also said that the budget is:

. . . in keeping with the Government's longer-term debt reduction strategy. . .

What was being said was that one could always complain but they saw no reason to do so in this budget. Moody's has said:

The budget is well within expectations and the numbers in the budget are quite comparable to their own.

That refers to the numbers calculated by Moody's, the credit rating agency. It is worth noting, although I do not put a great deal of store in market fluctuations, that the market has reacted well over the last day. In general, it can be said that financial and business sectors have endorsed our medium term deficit reduction strategy.

  Today, labour force figures came out which show that, seasonally adjusted, the unemployment rate has fallen from 10.3 per cent to 10.1 per cent. That is a positive sign, continuing on the back of other reductions in the level of unemployment in this country, that not only is employment growing but also, importantly, unemployment is being reduced.

  Although it is true that it made qualifications, the ACCI—the biggest business organisation, I guess—in its bottom line comment, in providing a caption on its response to the budget, said that the budget will do much to build on business confidence. The Housing Industry Association—which is not an organisation that I have regarded as much different from a Liberal Party front, I might say, certainly in its behaviour up to the last election—in relation to the budget said, `It is good news for the housing industry.' The Mining Industry Council said that the budget will do nothing to jeopardise the growth and expansion of the economy. So from a number of quite conservative organisations in the business area that are quick to criticise, there are lukewarm and warm endorsements of the budget.

Senator Kemp —Lukewarm!

Senator COOK —Lukewarm; but they are not cold. And they are not neutral. They are on our side of the fence. They are not on Senator Kemp's side of the fence. That is the important part in looking at their analyses. In addition to that, a number of leading private sector forecasters have also forecast what the growth in business investment might be. BT Australia is forecasting an increase in business investment for the coming budgetary year by 15.6 per cent. The National Australia Bank is predicting investment growth by 15 per cent; and CS First Boston by 14 per cent. The budget figure is 14.5 per cent. Put in the range of those predictions by reputable organisations, we can see that our prediction is a reasonable one in all of the circumstances.

  The debate on the budget now shifts to the opposition. There are some things that the opposition is now expected by the Australian people to do. One is to stop talking down the economy in Australia and to get behind the growth; rather than trying to dent confidence, support it. The second is to admit that it is wrong about its charges on taxes. The third is to say where the $10 billion worth of budgetary cuts that Alexander Downer forecast in March this year will come from. (Time expired)