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Wednesday, 29 May 1996
Page: 1307

Senator HILL (Minister for the Environment)(3.12 p.m.) —I am pleased to contribute briefly to this debate. I do find it astonishing that Senator Sherry feigns anger here and now after questions, yet the matter was of so little consequence to the Labor Party, apparently, that he relied on Senator Kernot of the Australian Democrats to ask the question for him. I know questions get shared out at the broad caucus meetings, but I would have thought, if the Labor Party were interested in this subject, they would have at least asked their own question.

The second point is that Senator Sherry, in fact, is demonstrating that the Australian Labor Party has learnt nothing from its economic mistakes of the past. The legacy that the Australian Labor Party has left us with is one of continuing budget deficits and their consequences—and that is what it seems to be advocating again. Just because we get one better figure—and we all accept that these figures jump around a bit—he wants this new government to abandon its policies of reducing public expenditure and go back to the Labor Party's recipe of hoping that it will all work out. And if it does not work out, you just borrow more. And, if that does not work out, you tax more. They are the recipes that have got this country into the awful mess that it is in.

Labor's record for the last three years has come about despite 19 successive quarters of growth—and what benefit have the community got from that? Despite 19 successive quarters of growth, if you look at the last three years you will find total budget deficits under Labor in excess of $40 billion. So it had the opportunity for growth, and it squandered that growth.

Now what should we be doing? Senator Sherry is suggesting, of course, we should not be looking at the expenditure side. We should go back to the course of action of the previous government. But his advocacy is extremely out of touch with that of other economic commentators. I remind him simply—

Senator Sherry —You conned the Australian people.

Senator HILL —Before I get to the economic commentators, Senator Sherry, I will tell you of the part in the national accounts that should have concerned you most today—and we are pleased to see hopeful signs for increased growth because that can give us a greater chance of more jobs, which is what we want and you abandoned. But this is the part of the national accounts that should have concerned you most today:

. . . the December quarter national accounts contained significant downward revisions to the household savings ratio in recent years. Data for the March quarter suggests a further fall in the household savings ratio from 1.4 per cent in the December quarter to 0.1 per cent in the March quarter following sharp declines over recent years.

This is the problem: both at the public and personal level we are not building on the growth of recent years and establishing a savings base from which this country can be economically competitive. That is why we have got these awful current account figures; that is why we get continuing pressure on interest rates; and that is why it is so difficult for Australian business to compete, to grow and to employ.

As I said, you only need to look at the advice of commentators such as the Governor of the Reserve Bank. What did he say recently about any increase in growth occurring? He said:

Any dividend from faster growth should go straight back to improving the budget's bottom line, not to reducing the fiscal consolidation task. Next year will mark the sixth year of economic recovery in terms of the economic cycle. We should already be in underlying surplus and, in terms of our large current account deficit and low private savings, a sustainable surplus at that.

Of course, what he is reciting is the failure of Labor's economic policies, but Senator Sherry comes in here after question time to say that we should go down that same path: that path that gave us $180 billion of debt in this country, that path that has given us forecast budget deficits of $8,000 million, that path that has given us about the highest real interest rates in the developed world, that path that has shown our country becoming less and less competitive as the years go by.

The latest statistics that have come out in only the last few days in the 1996 World Competitiveness Report show Australia's ranking down from 21st position to 16th position in the last year. (Time expired)