Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer and Acting Prime Minister. Treasurer, by how much will the recent rise in interest rates increase interest payments on Australia’s $500 billion foreign debt?

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

That would depend on whether the financial institutions which have borrowed it—Westpac, CBA and ANZ, principally, and National Australia Bank—have entered into fixed or variable borrowings. But let me ask you this: by how much will it increase the government’s interest payments? Zero—not a single dollar. Why? Because the government does not pay interest any more.

When this government was elected, the Australian government had $96 billion of Labor Party debt. It was costing us $8.4 billion to service Australian Labor Party debt. Because of the economic management of the last 10 years, in net terms we have now wiped out Labor Party debt. We have reduced our interest payments by $8 billion. That means that the Australian government has now freed itself from the economic waste and recklessness—

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order on relevance. We asked by how much the interest bill will increase—

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

The answer is: the interest bill has not increased for the Australian government because we have freed it from Labor Party debt.