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Wednesday, 7 March 2001
Page: 25267

Mr BEAZLEY (Leader of the Opposition) (2:00 PM) —My question is to the Prime Minister. Has the Prime Minister seen today's GDP figures, which show growth going backwards by 0.6 per cent in the December quarter? This is, after six months of the GST, an annual growth halving from 4.2 per cent to 2.1 per cent. Prime Minister, will you now finally admit that your claims that the GST would be good for the economy were completely wrong and that it is now swinging like a wrecking ball through the Australian economy?

Mr HOWARD (Prime Minister) —I have seen today's figures. Those figures are disappointing. Those figures, of course, are for one quarter, and a setback in one quarter does not in any way destroy the strength, the growth and the progress of the last five years. It does not destroy in any way the fact that this government has repaid $50 billion of debt that we inherited from you, it does not alter the fact that the government debt position of this country is probably stronger than it has been at any time since World War II, and it does not alter the position that we have about as low a government debt to GDP ratio as it is prudent to have. The Leader of the Opposition asked me a question about the impact of the tax package on the Australian economy. I am grateful that the Leader of the Opposition has asked that question. It allows me to remind the House—

Mr Beazley —I rise on a point of order on relevance. I did not ask the Prime Minister about the impact of the tax package.

Mr SPEAKER —The Leader of the Opposition has a point of order?

Mr Beazley —I asked about the impact of the GST.

Mr SPEAKER —There is no point of order.

Mr HOWARD —I find it very interesting that the Leader of the Opposition seeks in some way to sever the tax cuts from the GST. It was an exercise in semantics that the shadow minister for finance was not prepared to adopt when he addressed AMP representatives on 1 May last year and said:

With economic growth at around 4 percent, an annual fiscal stimulus of around $6 billion over three years from the GST package (variously estimated to be equivalent to between 0.25 and 0.5 per cent of GDP) is not appropriate at this stage of the cycle ...

Not to be outdone, the Leader of the Opposition himself said in February last year:

... the net fiscal stimulus in this tax package of more than $6 billion in the first year alone, and around $20 billion over three years, runs the risk of fuelling consumption and overheating the economy.

Typical of a man who would seek to walk both sides of the street on every issue, what the Leader of the Opposition has sought to do is, on the one hand, when he thought it suited his political convenience, argue that the tax package was overheating the economy and now argue, because of his own political opportunism, something that is the opposite. That is exactly what he does. You cannot have it both ways. You cannot last year say that the tax package would overheat the economy and now turn around and ask us to accept that the tax package has in fact mugged the economy. The reality is that this quarter's negative figure, which I said at the beginning is a disappointment, does not in any way alter the fact that, over the last five years, the policies of this government—

Mr Beazley —This is your fault.

Mr SPEAKER —The Leader of the Opposition has asked his question. The Prime Minister will be heard in silence.

Mr HOWARD —The policies of this government have delivered a stronger Australian economy. This government has had the courage—

Mr Beazley —It's all your fault.

Mr SPEAKER —The Prime Minister will resume his seat. I have called on the Leader of the Opposition to at least exercise the courtesy of hearing the reply to his question in silence.

Mr HOWARD —Today's figures, as the Treasurer indicated at his press conference, are the product of a number of developments in the economy, including some of the transitional impacts of the introduction of the new taxation system. There has been a significant downturn in the housing industry, and that has certainly contributed to the downturn in economic activity. The welcome news in that particular department is that over the past two months there have been signs that the downturn has finished, and there are some very tentative signs of recovery. One of the things that will build upon those tentative signs of recovery is the announcement today by the Reserve Bank that there has been a further reduction of a quarter of a per cent in official interest rates. One of the reasons why I make the claim, without any fear of contradiction, that the last five years have delivered a stronger and better Australia is that average housing mortgages now attract a monthly repayment of $267 less than they did when the Leader of the Opposition ceased to be the finance minister of this country. Everyone remembers that a hallmark of the last time the Leader of the Opposition was a member of a government in this country was that we had 11 per cent unemployment, we had 17 per cent interest rates and we had a government debt of $85 billion. I repeat that today's figures are a disappointment—undeniably a disappointment—but a setback in one quarter does not destroy the additional strength, the additional progress and the underlying flexibility that has been delivered to this economy by the policies of the government over the last five years.