Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I can confirm what the Reserve Bank said about the causes of the latest rise in interest rates. The Reserve Bank said:

The world economy has grown strongly in 2006 and is generally expected to grow at an above-average pace … The global expansion has contributed to high levels of commodity prices … Domestic demand has been expanding at a relatively strong pace …

I look through all this and I cannot find any reference to the size of Australia’s foreign debt. There is absolutely no statement with a reference to the foreign debt of Australia having had any impact on the rise in interest rates yesterday. So I dismiss that assertion.

I am interested that the Labor Party wants to spend its time researching what I said when we were in opposition from 1993 to 1996, when I regrettably had to sit on that side of the chamber and ask questions of government ministers, who could not answer them at that stage, of course. The great difference between this government and your government is that your government, the Labor government, ran massive budget deficits at the same time as this country was running a foreign debt. The problem for the United States, which we have been honest enough to point out, is the combination of significant current account deficits and significant budget deficits. It is that combination which threatens an economy and threatens to put pressure on interest rates—