Ms JULIE BISHOP (2:31 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House of the results and significance of Standard and Poor's recent review of Australia's sovereign credit rating? What has been the reaction to this review?

Mr COSTELLO (Treasurer) —I thank the honourable member for Curtin for her question. I can inform the House that over the last 17 years—or really over the last 20 years, I suppose I could say, since the election of the Hawke-Keating government in 1983—there have been four movements in Australia's international credit rating. Australia was first downgraded in 1986, by both Moody's and Standard and Poor's. That was the first downgrading of our credit rating. The second movement of our credit rating came in 1989, under the Hawke-Keating government, when we were downgraded again. The third movement came in 2002 where, after five years of sustained economic effort, Moody's upgraded Australia two places and restored our AAA rating. The fourth movement came during the period that the House was up, when Standard and Poor's, in the fourth movement in 20 years, restored Australia's AAA credit rating on foreign currency bonds and made Australia part of that pack of nations which is in the first row of the world again. That is something we lost under Hawke and Keating and something we recovered under a coalition government.

Standard and Poor's said this when it upgraded Australia:

With respect to the private sector, Standard and Poor's says that Australia's reliance on foreign savings is:

So one of the things I have been intrigued by in all these questions about foreign debt is the fact that we have not had any mention of Australia's credit upgrading by Standard and Poor's. It may well be that the Leader of the Opposition is right and Standard and Poor's is wrong. But those of us who know the economic credentials of the Leader of the Opposition and compare them to Standard and Poor's will not think it is a close-run thing.

Standard and Poor's is an independent agency that rates the governments of the world. It is not controlled by this government, and the fact that it upgraded Australia as a result of the strong fiscal position, thoroughly reversing the downgrading of Australia under the Hawke and Keating governments, is an independent indicator of what the Prime Minister said—that under Hawke and Keating Australia fell in the league tables and under this government we have recovered. That is why Australians can hold their heads high again—because, along with France, Germany, the United States and the United Kingdom, Australia now has its AAA rating back.

I should say, in explanation to the House, that Australia never lost its AAA rating on domestic bonds; it was on foreign currency bonds—that is, bonds which are issued in foreign currency or fall due in foreign currency. That was because of balance of payments concerns, which began with the banana republic and were worsened under Labor in 1989. It has been a long road back, but after those downgradings in 1986 and 1989 Australia stands tall again, and a coalition government was pleased to undo the last damage of the Hawke-Keating years.

The Prime Minister has also made the valid point, I think, that there were good things that Hawke and Keating did. They did do some good things, and I have always said that: they floated the dollar; they let foreign banks in—and that led to this new banking system, which some of the troglodytes of the Australian Labor Party now attack; and they began the reduction of tariffs, which this government has continued. They did some good things. We have always given credit where credit was due. But let me tell you what they did not do. They ran up $80 billion of government debt in their last five years and they could not get it down. Let us see what else they could not do: they could not get an interest rate below 10½ per cent; they could not get 1.2 million jobs; they could not reform the taxation system because, although the then Treasurer believed it had to be done in the interests of Australia, they could not get it through the union veto.

Mr Crean —Rubbish!

Mr COSTELLO —`Rubbish,' he says. They could get it through the union veto, could they? They were just going to do GST in the 14th or 15th year? He is rewriting history now, saying that it is rubbish that Labor refused to introduce a GST because of a union veto—that is rubbish!

This brings me to the Leader of the Opposition because, in all those changes where Labor did good things supported by the coalition, not all the members of the Labor Party supported them. I have told the House before about this, and I cannot get over it. I have been reading a portrait of Paul Keating by Don Watson. Let me remind the House of where everybody was during those reforms. Don Watson said:

If we go back to what was actually happening there, the opposition was cooperating. Who was in opposition to the few good things that the Labor Party did? That group of Creanites, now rapidly dwindling; they are the few people that can take no credit for the changes of those days. When the Creanites got control of the Labor Party, it was the end of economic policy as we now know it. What is the evidence? Objections to PBS increases, which the Keating government put in place and demanded be increased. Objections to welfare reform, when we used to have the member for Werriwa demanding it, claiming it, wanting it to be done and saying we were using it to hide the unemployment rate. This is a Creanite opposition that has decided, in the week when Australia's credit upgrading was finally regranted and when we put to bed the bad things of the Keating government, to come out and remind us that they are still here, for better or for worse—and much more for worse.