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Wednesday, 20 August 1980
Page: 486

Mr HAYDEN (OXLEY, QUEENSLAND) - I ask the Treasurer: Is it a fact that, on average, the rate of growth in the money supply of 10 per cent as against the nominal gross domestic product growth of 14 per cent for this financial year represents a substantial contraction in the money supply as against community needs? Coupled with the fact that the Government expects the private external account to add appreciably to domestic liquidity this year, as appears on page 61 in Statement No. 2 of Budget Paper No. 1, does this mean that there is no room in the Government's strategy for interest rate reductions in the near future? Can the Treasurer guarantee that there will be no increases in interest rates? Further, will he state when relief from the burden of high interest rates for home buyers and small businesses can be expected?

Mr HOWARD - The Leader of the Opposition knows quite well that I will not give any guarantees about the future level of interest rates. The Leader of the Opposition also knows quite well that the greatest contribution any government can make to the cause of keeping down interest rates is to reduce its own avaricious demands on the capital markets of this country. Everybody on this side of the House, and I suspect a growing number on the other side, will recognise that the alternative economic strategy of the man who is now the Leader of the Opposition would mean a much higher Commonwealth Budget deficit and therefore, unavoidably, much higher interest rates for everybody.

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