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Thursday, 30 May 1996
Page: 1448

Senator KERNOT (Leader of the Australian Democrats)(3.23 p.m.) —I had to do that yesterday. It is interesting that the government seems to be in some kind of damage control mode today. Why that is so is made very obvious by headlines such as `Growth fills $8b Budget "black hole"', by the heading in the Melbourne Age `Oh, come on Mr Costello' and by the editorial in the Sydney Morning Herald headed `A shrinking black hole'.

Senator Ferguson interjecting

Senator KERNOT —Just like you are, Senator Ferguson, all the time. The point I want to make and have made consistently is that it is dishonest to say this $8 billion is some fixed amount which, for rigid ideological reasons, you cannot move from. Yesterday's figures blew that out of the water. Yesterday's figures showed the economy is in such a state that you now have a choice. That is the problem: you now have to choose whether you will show a little bit of compassion and a little bit of re-prioritising in your approach to the budget in August. That is now the difficulty for you. Michelle Grattan said in today's Age :

Peter Costello tried to argue the impossible about yesterday's national accounts. He insisted the higher growth figure didn't make any difference to the size of the $8 billion "black hole".

This does stretch belief.

I agree with her. Going back to the reliance on forecasting: it is really interesting to look at who got it wrong. We have said all along how imprecise this is. Who got it wrong? Most of the banks got it wrong. Who got it wrong? Your friends Access Economics, who forecasted a $12 billion deficit. What did they say yesterday? They said, `Woops, sorry. We are now looking at something like $7 billion.'

The point I am making is that it is people's lives and jobs that are hanging on imprecise forecasting. John Howard said in question time in the House of Representatives just a little while ago—and I am not quoting him—

Senator Crane —No, Mr Howard.

Senator KERNOT —Sorry, the Prime Minister; I beg your pardon. Mr Howard, the Prime Minister, argued that it is somehow inappropriate to rely on previous growth when you are building up a black hole but not when black holes are disappearing. That is not fair and it is not true.

I agree with the coalition on this point: some deficit reduction is necessary. We did have unfunded tax cuts. We did have an unfunded Working Nation package. But I tell you what—it sure ain't $8 billion that you have to find.

Question resolved in the affirmative.