Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Following recent state budgets, state and territory debts will increase from $35 billion in 2007-08 to $112 billion in 2011-12. Minister, how will watching state governments going into debt to pay for recurrent expenditures not push up inflation and therefore not push up interest rates?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

It is interesting that after we just heard the minister for infrastructure outline the amazing change of position on the part of the opposition after the election compared with their position on climate change prior to the election we are seeing something similar from the opposition with regard to the role of state governments in the nation’s economy. It is not that long ago that the member for Higgins was up here at this dispatch box as Treasurer lecturing the states for their failure to invest in infrastructure.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise in a point of order. Is any member of the government going to answer a question that is asked, when it comes to relevance?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member will resume his seat. A point of order is not an invitation for just making comments off the top of one’s head. The minister is responding to the question.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

It is not that long ago that the member for Higgins was standing at this dispatch box lecturing the states about their alleged failure to invest in infrastructure. What has happened in the ensuing time, of course, is that the states have made provision for substantial increases in their investment in infrastructure.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr Dutton interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Dickson has asked his question.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I would point out finally that the state budgets are in recurrent operating surpluses. We do not have any concerns about the operational positions of the states and the state budgets.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr Dutton interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Dickson has asked his question.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

They are investing in the infrastructure, something that the former government failed to do for 12 years.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

What about the inflationary pressure?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

If you would like an observation about the inflationary significance of these issues—

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

Mr Dutton interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Dickson is warned!

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

If you would like some assistance on the question of the significance of these matters with respect to inflation, I would draw your attention to the fact that the Reserve Bank, over a period of three or four years, on no less than 20 occasions warned the former Howard government about the inadequate investment in infrastructure in Australia. It warned the former government that it was failing to provide for appropriate investment in infrastructure, thereby leading to serious capacity constraints, and with substantial increases in money coming into the Australian economy as a result of the mining boom this was generating serious, substantial inflationary pressures. Investing in infrastructure, whether it be by state governments or the national government, is crucial to the long-term economic future of this country. I applaud the state governments for picking up their responsibilities. This government is also picking up its responsibilities in investing in infrastructure after 12 years of complete neglect.