Senate debates

Wednesday, 8 November 2006

Questions without Notice

Interest Rates

2:36 pm

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | | Hansard source

My question is to Senator Minchin, the Minister for Finance and Administration and the Minister representing the Treasurer. Does the minister recall saying in May 2005: ‘There have been no further interest rate increases, because of the tremendous record of economic management of this government’? Can the minister advise the Senate whether this is the same economic management that has delivered eight successive interest rate increases? Is this the same tremendous economic management that has delivered today’s interest rate increase, which will mean almost an additional $50 to the monthly repayment on a $300,000 mortgage and an additional $380 a month since interest rates started to rise in 2002? Can the minister explain to Australian families why he regards eight successive interest rate rises as ‘tremendous economic management’?

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

We are very happy to compare our record on economic management with the record of the Labor Party. At the next federal election, the Australian people will have to make another judgement on which party is most likely to manage this economy well and maintain the prosperity which this country has enjoyed increasingly over the last 10 years. As I said today, NATSEM, through Professor Ann Harding, has established that, over the course of the last decade, while we have been in office, Australian families have seen real after-tax incomes rise by 25 per cent. We have an economic management team that has produced an outcome where the government has paid off $96 billion in debt. We have turned a $10 billion deficit into a $10 billion surplus. We have unemployment at a 30-year low. We have inflation at half the rate, on average, that it was under the former Labor government. We are very happy to compare our record on economic management with that of the party opposite any time they like.

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | | Hansard source

Mr President, I ask a supplementary question. I again refer the minister to his May 2005 statement, and I ask him why it is that the Howard government is happy to claim responsibility for interest rates when they do not go up but runs away from any responsibility when interest rates rise. Hasn’t this latest interest rate rise been signed, sealed and delivered by the Howard government’s failure to manage inflation?

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

I refer Senator Wong to the Reserve Bank statement, where they make the point that a strong world economy, significant demand for commodities, the high level of commodity prices from which Australia is benefiting and domestic demand being very strong are signs of a very strong economy. If you want to maintain a strong economy and maintain prosperity, from time to time it is important to put your foot on the brake, to touch the brakes, to ensure that the economy does remain on track to continue to deliver the real wage increases that we have delivered for Australian people against a low inflation and low unemployment environment.