Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Sherry, the Minister for Superannuation and Corporate Law. Can the minister please update the Senate on the steps the government are taking to govern as economic and fiscal conservatives and the importance they place on putting downward pressure on interest rates?

Opposition Senators:

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! When we have order, Senator Crossin will continue to ask the question. She is entitled to be heard.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Thanks, Mr President. Perhaps, for those listening, I will repeat the question to Senator Sherry: can the minister please update the Senate on the steps the government are taking to govern as economic and fiscal conservatives and the importance they place on putting downward pressure on interest rates?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Rather fiscal conservatives than fiscal vandals, as we have in the current Liberal opposition, who want to reduce the budget surplus by a massive $6.2 billion over the next four years of the forward estimates.

Opposition Senators:

Opposition senators interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

A lot of screams and shouts are coming from the Liberal opposition, and they are living up to their well-deserved reputation as fiscal vandals. During the last election campaign the Labor Party, when in opposition, gave a rock-solid commitment to the Australian people: we would govern as economic and fiscal conservatives and in an economically responsible manner. That is what we have delivered.

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! Senator Sherry, resume your seat. Some people are trying to settle a football competition. That is disorderly when question time is on. You can transact that business afterwards.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

As a Geelong supporter, I think people should settle that in a few weeks when Geelong wins the grand final! But back to much more serious business: we have delivered a budget surplus of $22 billion at the same time as we have delivered a Working Families Support Package worth over $50 billion, including $47 billion in tax cuts. Why have we taken this approach? Certainly the Labor government knows—I am not sure that those in the Liberal opposition know—that this is a time of global economic uncertainty as a consequence of the fallout—the financial crisis—from the subprime housing crisis in the United States. I say through you, Mr President, that I do not believe that the Liberal opposition understand the implications of this. So we have determined to deliver a significant surplus—a record surplus—of over $22 billion to provide a buffer against global turmoil, to ensure the Reserve Bank has room to move in lowering interest rates and also to finance critical nation-building investments for the future that were well outlined by our leader, Senator Evans, earlier. A large part of the surplus, which the Liberal opposition is intent on wrecking, will be going into those critical nation-building projects in infrastructure, health and housing. So this is why this Labor government is taking a fiscally conservative approach in the current circumstances.

We gave a commitment to govern in an economically responsible way, and the No. 1 reason we are governing in this way is to put downward pressure on interest rates and inflation. This is the Labor government playing its part to take the pressure off inflation and to ensure that the Reserve Bank has the capacity to reassess monetary policy and to reduce interest rates.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

With a $76 billion splurge.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

And jobs.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

The Liberal opposition may not want to know about this, but Australian families have been hurting as a consequence of rising interest rates over the last seven years. For more than seven years we have had increases in interest rates, 10 of them under the previous Liberal government. A quarter of a per cent interest rate rise or drop means the average Australian family, with an average home loan—if the interest rates drop, as they have today by 0.25 per cent or a quarter of a per cent—can gain an average of $40 a month. Forty dollars a month is the gain as a consequence of today’s announcement by the Reserve Bank. Those opposite, the Liberal Party, when in government were fiscally irresponsible and reckless in their approach to budget and spending. This added to inflation, which they ignored for years, and to the pressure on the increase in interest rates that we saw when they were in government. (Time expired)

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question in light of Senator Sherry’s response. Could the minister please outline to the Senate, in light of the interest rate cuts announced today, how the budget fights inflation whilst also supporting working families?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

As I have indicated, this strong budget surplus of $22 billion—which those opposite, the Liberal opposition, intend to try and wreck through their fiscal vandalism by reducing that surplus by over $6 billion—is very necessary to put downward pressure on inflation and interest rates, and we have seen a reduction in official rates today of 0.25 per cent. What we do need to remember is that today’s announcement by the independent Reserve Bank is very important and provides welcome relief to families struggling to pay their mortgage payments. The alternative course is the position taken by the ‘acting’ Leader of the Opposition, Mr Nelson, who yesterday screamed at the bank by arguing that he would direct the Reserve Bank to cut official interest rates by 50 basis points. But a journalist went on and asked him: ‘You’re the alternative Prime Minister. If you are Prime Minister, does that mean you will tell the Reserve Bank that you expect—’ (Time expired)

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Time!

John Hogg (President) Share this | Link to this | Hansard source

I do not need assistance, thank you.