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Thursday, 30 May 1996
Page: 1447

Senator WATSON(3.19 p.m.) —The so-called $8 billion black hole was a calculation by Treasury at a point in time. Under prudent financial management every Australian would expect an improvement in Australia's financial position over time. It is very interesting that this confidence is beginning to return to Australia under the new government. Apparently this is a confidence that the Labor Party is somewhat embarrassed about. The nature of the questioning in recent days does suggest this.

It is interesting to look at a number of favourable statistics and trends. One degree of confidence that particularly overseas investors have in Australia is perhaps reflected in some of the exchange rate figures. For example, the strengthening in the value of the Australian dollar in relation to the American dollar, indicates a high degree of strengthening and confidence in Australia by people overseas. This is something that has occurred in the period since the coalition came to power. It is not a figure that is three, six or eight months old; it is something that has happened since the coalition came to power.

The tragedy for the Australian taxpayer is that the previous Minister for Finance failed to indicate the full extent of the deficit. In proper fashion, on coming to government, the first thing the coalition had to do was to audit the books to see the true extent of that deficit and to take appropriate corrective measures to bring the future budgets back into balance for fiscal rectitude and to protect inflation from getting out of control. That was an entirely responsible action by this new government.

The new government has a great responsibility in turning around what has been referred to as the chronic deficiency in domestic savings. A major way of doing this is to return the budget from chronic deficit to surplus. This single act will have a tremendous impact in improving the savings level in Australia. For example, the previous government took credit for every ray of sunshine, in terms of income, and then spent the proceeds almost immediately.

A financially correct approach is to accumulate each of these gains progressively until a surplus is achieved. Over time, with prudent financial management, this responsible National-Liberal Party coalition will return the economy to surplus, improve the level of savings and make secure the retirement incomes of all those Australians including those who now have over $240 billion for future superannuation.

The thrust of the questioning unfortunately appears to indicate that every bit of good news in terms of extra income should be spent at the earliest possible opportunity as was the past practice, rather than saved to reduce the deficit. I certainly hope that in the coming months we will see a more responsible attitude taken by members of the Australian Labor Party currently sitting opposite as the $8 billion black hole is diminished and a budget surplus is achieved..

Senator Chamarette —Madam Deputy President, I raise a point of order. I was wondering whether Senator Watson was taking note of an actual answer or Senator Cook's speech to take note or whether he was trying to improve upon Senator Short's answer.

The DEPUTY PRESIDENT —Senator Watson was speaking on the motion moved by Senator Sherry. I call Senator Kernot.

Senator Crane —You will have to go home, Bob.

Senator Bob Collins —I will have to do it on the adjournment.