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Monday, 16 September 1985
Page: 541

Senator COLLARD —My question is directed to the Minister for Finance. I refer the Minister to the forecast by the Westpac Banking Corporation that the monetary policy being pursued by the Reserve Bank of Australia will keep interest rates high well into next year. Does the Minister accept that a critical part of the Government's current economic policy depends on the maintenance of high interest rates?

Senator WALSH —Westpac has forecast high interest rates until the end of this financial year. Last week or the week before Syntec Economic Services Pty Ltd forecast that interest rates would fall before the end of this calendar year. That demonstrates that opinion is quite divided between the various private groups which consider themselves to have some expertise in this matter. Of course, one thing we do know is that interest rates are nowhere near the levels which prevailed in the disastrous dying months of the previous Government when Mr Howard was Treasurer and when in April 1982 interest rates on 90-day commercial bills hit 22 1/2 per cent and on two-year and 15-year Commonwealth loans hit 16 1/2 per cent. So far as I know, neither Syntec nor Westpac, nor anybody else, has forecast that interest rates will go to the catastrophic levels they reached when Mr Howard was Treasurer and at the end of the five years of Mr Howard's treasurership.