Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank the senator for his question. As I have said before, the global economy is going through a very difficult time, and it is affecting Australia and every country in the world. The global credit crunch and the global oil price shock have buffeted confidence in share markets around the world. We should not be surprised that these global problems, together with 10 consecutive rate rises under the Liberal Party, are having an impact on our economy.

However, we need to put this into perspective. Though we confront the most difficult global circumstances in a quarter of a century, the fundamentals of our domestic economy remain strong. As many of these global challenges are beyond Australia’s control, we are focusing squarely on those things we can influence. We have built a strong $22 billion budget surplus, which acts as a buffer against economic uncertainty, gives us the capacity for future long-term investment and takes the pressure off the RBA on monetary policy. We have made room for the $55 billion Working Families Support Package, including $47 billion in tax cuts directed to working families, and we have laid the foundation for $40 billion worth of responsible investment in nation building and growth for our future.

Developing economies in our region continue to grow, and commodity prices are still at generational highs. We will not make the same mistake that the Liberals made—celebrating prosperity while failing to make the tough decisions needed to sustain it into the future. The previous government’s economic policy was driven by short-term politics rather than long-term national interest. In contrast, the Rudd government is steering our country through this period of international instability with responsible economic policies that ensure our economy emerges in strong shape.

With this in mind, I take this opportunity to inform the chamber that the Reserve Bank has just announced that it will be reducing the official cash rate by 25 basis points to seven per cent. This is a decision that working families deserve. They are still doing it tough, so any relief is welcome. We are seeing the economy responding to this. Families have waited a long time for this relief. This is the first time in seven years that families have had a rate cut. For the 740,000 first-time buyers who purchased their homes in the last seven years, this will be the first interest rate cut they have ever felt. Australian families had to endure 10 official interest rate rises in a row under the previous government. This has added— (Time expired)