Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of recent lending finance data? What does this indicate for the Australian economic situation?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Deakin for his question. I can tell him that the Australian Bureau of Statistics has today released lending finance data for December. It shows that housing finance rose 1.1 per cent in December and is up eight per cent through the year; that personal finance fell in December and is up 4.4 per cent through the year; and that commercial finance, which also fell in December, is more or less steady for the course of the year. All of that points to the fact that the growth in credit is slowing. I think that is probably consistent with the fact that inflationary pressures have dropped somewhat.

As I said to the House yesterday, in the first half of last year the underlying rate of inflation was about 0.8 per cent for the quarter and it has now gone down a notch to 0.5 per cent. That is good news for stable inflation expectations. That is the kind of outcome which the government has been looking for. Notwithstanding that, all of the business surveys show that business conditions have strengthened in the early part of this year and businesses are looking forward to a stronger year in 2007 than they had in 2006.

What picture does this give of the Australian economic situation? It gives this picture: that notwithstanding a very severe drought—a drought which has caused production to fall by about 20 per cent in the rural sector—the Australian economy continues to grow. It continues to grow in a low inflationary environment, and it produces jobs. The unemployment rate is at the lowest level we have seen in 31 years.

There have been many challenges to this economy over the last 10 years. We had the Asian financial crisis, a US recession, September 11, war in Iraq and Afghanistan, terrorist attacks in Bali, and we have had a one-in-a-hundred-year drought. But the Australian economy has grown continuously right throughout that period. One of the reasons it has grown continuously throughout that period is that the government attended to the key fundamentals of economic management in this country: balancing our budget; repaying $96 billion of Labor debt; funding our superannuation liabilities; broadening the indirect tax base; cutting the company tax rate; halving the capital gains tax rate; cutting income taxes in 2000, 2003, 2004, 2005 and 2006; and making sure that we had an independent central bank with an inflation target. All of that work is producing these results.

The Labor Party would have you believe that it is in favour of the results; it just opposed all the work that was required to get there. Australians know this: you do not get the results without putting in the effort. The Australian Labor Party cannot come along after 10 years of opposing the effort and try to claim ownership of the results.

On the weekend the Leader of the Opposition made out that he supports all of the economic policy of this government. We take that as a compliment. But I say to the people of Australia: come to the originators, not the imitators. Come to the originators who actually had the foresight to put all of these policies in place. It was the foresight and the work that got us to where we are and it is the work of today which will get us to where we want to be tomorrow.