Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 26 February 1987
Page: 798

Mr HOWARD —My question is addressed to the Prime Minister. I refer the Prime Minister to the document tabled in the Senate yesterday by Senator Susan Ryan regarding interest rates which stated:

Accordingly, it appears unlikely that reductions in housing loan interest rates will occur until the first half of 1988 at the earliest.

How does the Prime Minister explain the conflict between this official departmental advice and his own statements to this Parliament only eight days ago that interest rate reductions will occur later this year?

Mr HAWKE —Madam Speaker, this question is not entirely unexpected. The document to which the Leader of the Opposition referred, which was tabled in the Senate yesterday, was not an accurate statement of government policy.

Mr Connolly —Why was it given to a Minister?

Mr HAWKE —Just contain yourself, my friend-you will be more than satisfied. It was a mistake that a background briefing paper, expressing an opinion of a section within a non-economic forecasting department, should have been allowed to give a wrong impression--

Opposition members interjecting-

Madam SPEAKER —Order! Honourable members on my left will come to order.

Mr HAWKE —Madam Speaker, I notice that the giggleometer is running high today but that is no substitute for a consideration of the facts. I repeat: It was a mistake that that background briefing paper from a section within a non-economic forecasting department should have been allowed to give a wrong impression of government policy.

This is the statement of government position: We remain cautiously optimistic on the economic outlook, including prospects for falls in the general level of interest rates in 1987. I am confident, as I have said before, because the Government's policies of fiscal and wages restraint will enable us to rely progressively less on monetary policy, resulting in lower interest rates in the period that I am talking about.

I note that the Housing and Construction document was in fact prepared before the Government's May statement intention was announced; and so it does not fully reflect the Government's fiscal policy stance, nor does it fully reflect the recent improvement in sentiment in financial markets. As I have often said in this place, the timing of this decline in interest rates depends on many factors, including international financial conditions and commodity price trends, both of which factors are manifestly and unarguably outside our control. Of course, the rate of improvement of the current account deficit is also important.

I would add-and I believe that the Leader of the Opposition would agree with me-that another relevant factor will also be the borrowings of the States which, as I and the Treasurer have made clear, will be addressed at the next Premiers' Conference.

Should there be any doubt, let me repeat that this Government is not in the business of artificially reducing interest rates. I do not want to spend any more time in labouring this obvious point, but it is significant in this context once again to make the obvious contrast between the firmness, the cohesion and the comprehensiveness of our macroeconomic policies and the irresponsibility being consistently exhibited by the Opposition. When we came to office in 1983 we inherited a Budget deficit of 5 per cent of gross domestic product under its policies compared with 1.4 per cent under our policies in 1986-87. That is what we have done in fact in the area of responsible deficit management. Of course, I contrast the responsibility of our wages policy with the total irresponsibility of the Opposition in this area.

In conclusion, I repeat that I regret that in fact a background document expressing an opinion was used. Let me make it clear, by interpolation, that this Government does not say that a public servant does not have the right to express an opinion. Of course public servants have. But I suppose that the Leader of the Opposition would also concede, for instance, the right of the honourable member for Boothby to express an opinion, and the honourable member for Boothby has rightly described the concoction of policies of the Leader of the Opposition as snake oil proposals.

Mr Goodluck —Will the Prime Minister table the paper from which he quoted?

Mr HAWKE —The answer is no.