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Wednesday, 9 February 2005
Page: 114

Senator McGAURAN (4:59 PM) —I join my colleagues on this side of the house to debate the matter of public importance we have before us, brought to us by the Labor senator Senator Nick Sherry. I and my colleagues on this side—indeed, all members of the government—welcome the Labor Party putting forward a debate on the economic situation for once. We have been waiting since the last election and even prior to the last election, if not for our whole term in government, for a serious debate on the economics of this country. We thought we might see it today with Senator Sherry, probably the only credible member that Labor have. They have wheeled him out to debate the situation in regard to the current account deficit and foreign debt.

Frankly, Senator Sherry, their only credible finance representative, has failed them tragically. In their first foray into an economic debate since the election, having understood that this is where their next three years should be focused, Senator Sherry, the only credible financial spokesman they have, has failed them. He has not progressed their economic credibility one iota today. But they have three years. They will wheel Senator Sherry out again sometime for an economic debate, and he will have another opportunity to perhaps inch the Labor Party toward some public credibility with respect to economic matters. Today has been a big disappointment.

Senator Sherry has simply chosen to present a doom and gloom situation in regard to the economy, when not just everyone in this chamber and every economic commentator but everyone in the public knows that that is not the situation of the Australian economy. The Australian economy is sound. It is strong and it is growing. The fundamentals are right, and they are in place. We need only go through the main statistics that affect every household, every business, small and large, and every export business in this country. Interest rates, for example, are the lowest they have been for decades. Home mortgages are around seven per cent. The inflation rate is within the bounds of the Reserve Bank requirements. It is 2.6 per cent. In fact, it is really only two per cent if you take away the spike that the higher oil prices have created in the last six to 12 months. So the inflation rate is tight and within the bounds of the two to three per cent set by the Reserve Bank.

The unemployment rate is the lowest it has been for decades. It is at a historic low of 5.1 per cent. Equally, consumer confidence is as high as it has been for decades. As reported in just the last day or two, business confidence is as high as it has been at any time over the past few years. It is showing no signs of declining. Don’t you think, Senator Lundy and Senator Sherry, that the business survey would be one of the first indicators that there was some sort of doom and gloom or approaching downturn in the Australian economy? None of those key statistics point to any downturn, let alone the doom and gloom and ruin of the picture you try to paint. We are not even looking at a downturn. We are quite confident, and we are backed up by the OECD.

I am afraid I am going to run out of time. I have only four more minutes to build a case against you, Senator Lundy, to show you just how solid this economy is and just how wrong you are in your presentation, whether deliberately or not. It does not matter: we are on air, and people are listening to the Labor Party’s view of the economy and, with their own basic understanding of economics, they will simply never agree with you until you come in here and present the facts properly.

The OECD report has given support to the Australian economy. The OECD predicted a continuation of Australia’s strong growth, low inflation and low unemployment—key economic indicators—although it is true to say that they have signalled that we need to maintain our reform agenda. So we wait. When we introduce further reforms into this parliament—albeit that we do not need your numbers after 1 July—

Senator Lundy interjecting—

Senator McGAURAN —we will wait to see whether you support us or not and whether you support us in industrial relations reform and many other areas when we introduce those reforms. We will be introducing and voting on them well before 1 July, Senator Lundy, so we will see your true colours in regard to reform and maintaining that growth in the strength of the economy.

Much has been made of the current account deficit. We are confident that we can meet the concerns about the current account deficit. Senator Sherry asked the federal government to note the increase in the current account deficit. We do note the increase in the current account deficit, but there are reasons—pretty clear and good reasons—that we have the current account deficit situation that we have at the moment. As I said, we have a very strong economy. That success is what has led to the current account deficit. We are probably a victim of our own success. The Australian domestic economy is growing. It has great demand and is sucking in the imports. It is not in sync with the rest of the world, which is not growing at the same rate as Australia, and so our exports are not getting out there.

I say to Senator Lundy and those opposite: overlaying that has been, for the last two years at least, a lingering, patchy drought that Australia is yet to come out of. Of course, that has had an effect on a major exporter, the rural sector, in all areas—in the beef industry, in the dairy industry, in wool, in sheep and in wheat. That drought has touched every sector and it is still lingering in parts of Australia. Of course that has affected our exports and the current account. Added to that, we have had a high Australian dollar—higher than the rural industries would want. The rural industry spokespeople want the lowest possible Australian dollar, as all exporters do. The exporters see a dollar in the high 70s and breaking into the 80s as higher than they would like in order to maintain their competitiveness. (Time expired)

The ACTING DEPUTY PRESIDENT (Senator Kirk)—Order! The discussion on the matter of public importance is concluded.