Senator FIFIELD (Victoria) (3.13 p.m.)-It is always very interesting when senators opposite talk about pressures on households. They only ever talk about one side of the household budget. They talk about the expenditures in a household-which do have to be taken into account. What you never hear the Labor Party talk about is the income side of a household budget. You never hear how real wages have increased under this government. You never hear how household assets have increased under this government. When looking at a household budget, you have to look at both sides of the ledger: you have to look at the outgoings and you also have to look at the incomings.
In my remarks this afternoon I would particularly like to focus on interest rates, which Senator Lundy touched on. There are a range of factors that determine the interest rate environment. The government has within its power the ability to set a range of policies conducive to lower interest rates. One of the most significant of those is government borrowing and government debt.
When this government came to office, we-as most of us here know-inherited a $96 billion debt from Labor. This debt and the interest repayments required to support it were putting upward pressure on interest rates. That is a fact. When this government came to office, not only did we have a $96 billion debt but there was also a $12 billion budget deficit. This government determined to do something about that. We introduced a tough budget in 1996. It was not popular and it was not easy but it was necessary. We set about the task of balancing the budget and paying down Labor’s debt. We set about the task of creating an environment conducive to lower interest rates.
But guess what. Every single measure that this government introduced to pay down the debt, to balance the budget or to help take pressure off interest rates, Labor senators opposite opposed. Time and again they knocked back our measures. Fact: every program we put up, Labor knocked back. But, despite that opposition and despite the fact that for a majority of our time in government we have not had a majority in this chamber, we managed to balance the budget. We managed to pay down Labor’s debt without their help on one single day. In fact, the government is now a net saver, helping take pressure off interest rates.
In contrast, the collective of state and territory Labor governments is forecast to accrue something in the order of $70 billion of debt. These state Labor governments are putting upward pressure on interest rates. It does not matter whether it is a state Labor government that borrows or some other level of government that borrows; that puts pressure on interest rates. Federal Labor have the opportunity to do something to help relieve the pressure on householders. They have the opportunity to do something to take pressure off interest rates. They can talk to their state Labor colleagues and say: ‘Do something about releasing more land. Do something about stamp duty.’
Senators opposite need to learn something about the basics of economics. They need to learn about supply and demand.
Senator Parry-You haven’t got long enough to teach them.
Senator FIFIELD-Indeed. They need to learn that increasing the supply of something lowers the price. If you increase the supply of land, that will lower the price of houses. If you cut stamp duty, more money will remain in the pockets of householders, which means that they will be in a better position to afford their mortgages. That is something that they can do today. But they will not. We know from their track record that they will not. We know from local government amalgamations in Queensland that federal Labor dare not argue a case with state Labor governments.
If you are after independent verification as to the efficacy of our policies, you need look no further than the International Monetary Fund’s public information notice from today, which praises the Australian government’s monetary policies, fiscal policies and structural policies. They give us a huge tick. They commend our fiscal policies and monetary policies. If you want independent confirmation of the robustness of our policies and how they are helping Australian living standards, you need look no further than the IMF. You certainly should not look to the other side of this chamber. (Time expired)