House debates

Thursday, 26 June 2008

Questions without Notice

Economy

2:39 pm

Photo of Malcolm TurnbullMalcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | | Hansard source

My question is addressed to the Prime Minister. When will the Prime Minister stop watching consumer and small business confidence collapse and when he is going to do something about it?

Photo of Kevin RuddKevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | | Hansard source

I would have thought that as shadow Treasurer the member for Wentworth would have reached a conclusion about the intersection of 10 interest rate rises in a row with the cumulative confidence of the business community, because what those interest rate rises add up to is a huge additional cost to the operation of a business. They also affect, of course, consumers—those who buy the goods and services produced by businesses—and, as a result, that washes through in terms of the impact on the economy.

The second factor I would draw to the honourable member’s attention—and I would draw his attention to the impacts outlined in parallel business confidence surveys in many OECD countries at present—is the wash-through effect of the global financial crisis and the global oil crisis: the third great global oil shock in 30 years, the biggest global oil shock in 30 years. We had interest rate rises, 10 in a row under the previous government—having promised us that interest rates would be kept at?

Government Members:

Record lows!

Photo of Kevin RuddKevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | | Hansard source

Were they kept at record lows?

Government Members:

No!

Opposition Members:

Yes!

Photo of Kevin RuddKevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | | Hansard source

Did I hear someone opposite say yes? Name them! Was that Joe?

Photo of Joe HockeyJoe Hockey (North Sydney, Liberal Party, Shadow Minister for Health and Ageing) Share this | | Hansard source

Mr Hockey interjecting

Photo of Kevin RuddKevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | | Hansard source

I have a question for the member for North Sydney, which is: if they were going to be kept at record lows, and that undertaking was given at the end of 2004, what was it that happened in 2005, 2006 and 2007?

Government Members:

They went up!

Photo of Kevin RuddKevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | | Hansard source

Maybe it was a mirage, all of those interest rate rises in a row. I would say to the member for Wentworth, as he plots and schemes over the break in his preparation to take over the Liberal leadership, that, on the basic question of what impacts on confidence: there is the impact of a succession of interest rate rises, the impact of the global economy on the basis of what is happening with global financial markets still and, on top of that, the impact we have seen of global oil prices.

Our alternative is responsible economic management, which is why we have brought about a $22 billion surplus on which a Liberal Party raid is being conducted at the moment in the Senate, on this last day that the Senate sits—a $22 billion raid on the surplus. If there is one sure-fire way to put upward pressure on inflation, upward pressure on interest rates and, as a consequence, affect confidence in the real economy, it is to pursue such a policy of continued economic irresponsibility. I would have thought the member for Wentworth would be aware of those basic facts. Perhaps his energies have been directed in another direction in recent weeks and days.