David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the House:

(1)

notes:

(a)

the recent increases in interest rates;

(b)

the impact that rising interest rates are having on families, particularly in western Sydney; and

(c)

the Reserve Bank of Australia’s warnings in its latest Statement on Monetary Policy of the risks to the Australian economy of continued inflation; and

(2)

supports the Government’s five-point plan to fight inflation.

I rise to give some public recognition in this House of the pain and the suffering that many working families throughout this country are now feeling as a result of recent increases in interest rates. As members of the House would be aware, at its February meeting the Reserve Bank took the decision to increase the official cash rate by 0.25 per cent, which took the cash rate to seven per cent. This, of course, represents the 11th consecutive increase in interest rates.

Most disturbing about this decision was one of the comments of the Reserve Bank which was described in the minutes that they have released recording the events of that meeting. I must take this opportunity to acknowledge that this is the first time that the minutes of the Reserve Bank’s meeting have been published in this way, which I think is a significant move towards making those decisions, which impact on so many individuals and families throughout our community, much more transparent. In those minutes, of most concern to the working families of my electorate would be the comment that reads:

The debate focused on whether the change in the cash rate should be 25 or 50 basis points.

Apart from the increase that we have recently seen of 25 basis points, what we now have knowledge of is that the Reserve Bank were actively considering increasing the official cash rate by 50 basis points. I might begin by saying I am glad that they did not do that, but I think there is also a very stern warning to us all, and particularly to many of the families in my electorate, of what that may indicate in terms of what the future position of the bank may be.

The key issue that is driving the continued increase in interest rates is inflation. There is no question about that. If you look at both the minutes and the RBA’s statement on monetary policy, it is clear that underlying inflation is now running well and truly outside of the Reserve Bank’s preferred band of between two and three per cent. In fact, it is now running at a rate of about 3.6 per cent. In underlying terms, this reflects the high-inflation legacy that has been left by the former Howard government.

I wish to reflect upon some of the detail of how these interest rate increases have been affecting people in my electorate, the electorate of Lindsay. I wish to make the specific point that, whilst mortgage holders right around this country have been impacted by these increases in interest rates, in particular places such as Western Sydney and the electorate of Lindsay have been more adversely affected by those increases than many others. This is a fact that the Reserve Bank itself acknowledged in its financial stability review back in March 2007. On that occasion the bank reflected on the fact that the overall picture for the nation was looking good but went on to say:

Areas of western Sydney, in particular, look to have been adversely affected by the fall in residential property prices, with a disproportionate number of households in this area taking out loans with high loan-to-valuation and debt-servicing ratios near the peak of the house price boom. Partly reflecting this, the arrears rate and the number of personal administrations has increased by more in New South Wales than in the other states …

That was true when the Reserve Bank issued that statement back in March 2007 and it remains the case. The other point of considerable concern emerging from the minutes of the bank’s last meeting goes to the following quote. The bank said in its recent statement:

… the risk of inflation remaining uncomfortably high for some time is considerable. Absent a further shift in economic risks to the downside, therefore, monetary policy is likely to need to be tighter in the period ahead.

The impact of this on working families in my electorate has been extreme. Throughout the course of the election campaign—from July, shortly after I first became preselected as a candidate, right through to the election itself—I doorknocked some 23,000 households in my electorate. There were a number of issues of concern to people, and principally their concerns about Work Choices were expressed to me in the course of the discussions that ensued. But one of the other significant issues was the impact of interest rates, in particular the impact of interest rates against the background of the increasing cost of living. In an outer suburban electorate such as Lindsay, many working families rely upon several motor vehicles in order to go about their business each day, so the high cost of petrol has had a particularly severe impact on the household budget. In addition to that, with an electorate of a fairly low median age in terms of our population, we have a number of young families that have their children in child care, and the increases that we have seen in the cost of child care have been dramatic and well and truly above the overall rate of inflation across the rest of the economy. And of course members of this place are well aware of the increase that we have experienced in the price of groceries over that period as well.

All of this builds to form a picture of many families that are under mortgage stress and also rental stress. I just acknowledge the fact that, in 2006, 33.5 per cent of the households in my electorate of Lindsay were suffering mortgage stress. That is an increase from 19.5 per cent back in 2001, which accounts for a 111.8 per cent increase. That gives you some indication of the extent to which the pressures on working families in my electorate have increased considerably over that period. This was a fact that seemed to be lost on members of the former government. The former member for Bennelong—and I acknowledge the presence of the current member for Bennelong in the chamber—as we all recall, said that working families in Australia had never been better off. This is one of those sentiments for which I was not able to find one supporter throughout my electorate in the course of my campaign between when I was preselected and November 2007. So it is further evidence of how out of touch the former member for Bennelong, the former Prime Minister, was. But it was also symptomatic of the views more broadly throughout the then government.

This is just further evidence of the high-inflation legacy that has been left behind. That legacy is built on two pillars. It is built on the first pillar, which is complacency. The second pillar is denial. In the first instance, we see that the complacency is best given expression in the words of the member for Higgins, the former Treasurer, who said, as far back as 28 July 1999, there is ‘no life left in the inflation dragon’. Well, it seemed to have puffed a few more breaths and has now become a fighting force that this nation needs to contend with. More recently, on 26 July 2007, the member for Higgins said they had inflation now ‘right where we want it’. I am not exactly sure where that is but it is certainly not within the Reserve Bank of Australia’s preferred band of two to three per cent.

On the issue of denial: the denial upon which this government’s inflation legacy is built continues in the words of the member for Wentworth, who said:

Wayne Swan is trying to create a myth, a fairytale about economic history.

Then there was this, and I read from a report in the Australian Financial Review on 9 February this year:

Asked if inflation was out of the target band, Mr Turnbull on Friday said it was not.

So much for ‘fairytale’! The story that I tell today is not a fairytale; it is the nightmare that residents of my electorate, working families, are living with. Let’s not look to the words of the member for Wentworth, let’s not look to the words of the member for Higgins. Let’s look to the words of a respected economist, Mr Barry Hughes, as reported in the Australian a few days ago. He said:

They—

referring to the Rudd Labor government—

have been dealt a much tougher hand than either—

John—

Howard or—

Bob—

Hawke got in 1983.

We have a five-point plan to tackle inflation. We also have a plan to make switching banks more of an option. (Time expired)

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Is the motion seconded?

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I second the motion and reserve my right to speak.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I begin by saying that the member for Moncrieff was very keen to make a contribution to this debate today but of course he is unable to because his status in this place remains unresolved. I think this a very sad day because what we have seen has been, astonishingly, the Speaker arbitrarily deciding on whether a member needs to leave this chamber or not. I wonder whether that is precedented in the history of Federation.

Government Members:

Government members interjecting—

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Members opposite are interjecting. I would be very happy for them to make a contribution on that as to whether the Speaker—

Honourable Members:

Honourable members interjecting—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Does the member for Lyons have a point of order?

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

My—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Do you have a point of order?

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, my point of order is whether this member is speaking to the motion before the chair.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Sorry, I could not hear your point of order. You have the call.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. I am asking what this member is addressing—what motion is before the chair and whether this member is addressing the motion that is before the chair.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I thank the member for Lyons. I call the member for Stirling and remind him of the motion before the chair.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I thank you, Mr Deputy Speaker, and at your command I will move on directly to the motion. I say this to the member for Lindsay. While I congratulate him on his election to this place, it must be terribly disappointing for him and, I think, also his constituents that he has brought on a private members’ business motion yet his colleagues—the Treasurer, the finance minister, the Assistant Treasurer—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Does the Government Whip have a point of order?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Yes, Mr Deputy Speaker, I very definitely have a point of order.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

And that is?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

My point of order is that the speaker is actually flouting your ruling. He is not coming to the point. There is no relevance. He is not being relevant.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

There is no point of order. I call the honourable member for Stirling—and I am listening to him, although he has only resumed speaking for the last 15 seconds.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I was saying that it is very disappointing for the new member for Lindsay to bring this private members’ motion before the House and for his colleagues or his constituents not to even give him the courtesy of listening to what he has to say.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of relevance, once again. He is not speaking to the motion.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

There is no point of order, and I will deal with the member for Shortland if she continues to disrupt on frivolous points of order. I call the member for Stirling.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The government have a fundamentally inconsistent approach to managing the economy. You see government members coming into this chamber and talking down the strength of the Australian economy. What they are fundamentally trying to deny is the fact that, as an incoming government, the Rudd Labor government have inherited the strongest economic position of any government in the history of this country. They have a strategy to talk down the Australian economy.

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

Mr Shorten interjecting

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

In a fast-growing economy—and I am sure the member for Maribyrnong would be aware of this—in a very tight labour market you have challenges associated with managing that economy. When you are approaching the challenge, the last thing the government want to do is run around like Chicken Little saying how terrible the problem is and talking up the problem. This is what we have had from the Prime Minister, the Treasurer and the Minister for Finance and Deregulation and, extraordinarily, we have also had it from the Minister for Foreign Affairs when making a speech in New York to potential investors in Australia.

I obtained an article from the ABC website. Michael Blythe, Chief Economist for the Commonwealth Bank of Australia, gave evidence to the Committee for Economic Development of Australia. He contributed to a forum they had the other day and, importantly, he said:

We’re maybe a little bit too pessimistic on the inflation story for Australia.

He went on to say:

… it’s important not to talk down the economy.

I think that is a very important point. Yes, we have a fast-growing economy, we have a very tight labour market and that presents challenges. That is what the government have been elected to address. When they are addressing this challenge it is vitally important they do not make it worse, which is what they are doing at the moment.

I would like to place some facts on the record because we do have a lot of disinformation on the current state of the Australian economy. The member for Lindsay was talking about inflation in the recent December quarter. One way to assess the strength of the Australian economy is to compare us with our competitors, particularly the OECD countries. With respect to inflation in the December quarter, Australia was at the lower end compared to its trading partners. By the way, contrary to what the member for Lindsay was saying, inflation remains within the target rate that was established by the RBA, which is two to three per cent.

The reality is that, compared to our trading partners, inflation in Australia is particularly low. The weighted average within the OECD is 3.3 per cent. Importantly, it is very low and we need to remember that Australia is growing faster than most of the other countries within the OECD. If we look at the record, we see Australia is growing faster than our competitors, yet inflation remains lower. The other very important point to make is that the unemployment rate remains vastly lower than that of our economic competitors.

Our inflation rate is lower, our employment rate is lower and our growth rates are higher. The reality is that the incoming government have inherited a stronger economy than any incoming government in the history of Australia. They should not perpetuate this myth that they have not inherited the most amazing economic state, an economy that was called the ‘wonder down under’ by the Economist. They should acknowledge that fact and not run around the country talking down the economy.

I want to move quickly to the five-point plan which has been put forward by the Prime Minister. You always have to look at what the government do and not what they say. The Prime Minister will often make a speech, and he has a habit of just stating the obvious and trying to put it forward as something that is incredibly profound. He came along to Perth on 21 January and, in a speech where he announced his five-point plan to fight inflation, he commenced by saying:

The future of the national economy is core business for the new Government of Australia.

I would have thought that was a statement of the obvious. When he goes on to list his five-point plan, again, what we see is a collection of cliches and statements of the obvious. He said the government would be committed to fiscal restraint. That is not bad, because this government has inherited a zero net position, as opposed to when the Howard government came in and we inherited $96 billion of Labor debt. That is real fiscal restraint: paying off Australia’s debt. The Prime Minister then referred to private demand and saving for the future. That is very admirable but, again, there is no detail about how he intends to actually encourage private savings. Point 3 of his five-point plan is headed ‘Tackling chronic skills shortages’. This is an important point. It seems to be one of the government’s main attack points on the opposition at the moment. In Australia we have an incredibly low rate of unemployment and that, obviously, puts pressure on employers who wish to find skilled employees.

Point 4 of the five-point plan to fight inflation is headed ‘National leadership to tackle infrastructure bottlenecks’. Again, that is a very noble sentiment, but there is no level of detail. The Minister for Infrastructure, Transport, Regional Development and Local Government seems to think he will get his hands on all this superannuation money to do it but, again, he never actually explains the mechanism through which he might do that. In the time I have remaining to me, can I say that the Rudd Labor government have inherited the best economic position of any preceding government. Instead of running around like Chicken Littles talking down the Australian economy and destroying business confidence, what they should be doing is managing the challenges of the economy, as the previous government did.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Speak about the economy!

Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Lyons!

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, with your protection, I will continue. This is a government that have inherited a fast-growing economy. They have inherited extremely low unemployment and, instead of complaining about doing their job, they should get on and do it. (Time expired)

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

I congratulate the member for Lindsay for bringing this motion on interest rates before the House. It is one of the most important motions we could debate in this chamber because inflation, interest rates and the threat that they pose to working families are the greatest challenges that confront this government at this time. It is with deep concern that I hear from the member for Stirling that he still thinks Australians have never been better off. The fact is that inflation is the great menace.

Opposition Members:

Opposition members interjecting—

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

I can hear cries coming from the other side of the chamber, but I am more concerned about the cries of working families in places like Western Sydney and cries from working families in my electorate. Inflation is the great menace that confronts us. It erodes savings and productivity, destroys businesses and communities and hurts working families. Last year, the member for North Sydney said on the record that inflation is:

...the curse, the evil that cuts to the core; inflation is like a cancer on the economy ...

I agree; I think that is right. The problem is that the former government did nothing about it. They allowed it to gather momentum. It did not just pop up on 25 November last year. This is something that has been brewing, causing problems and hurting working families for the last two years or more. The problem is that all of the 20 warnings from the Reserve Bank were ignored.

The member for Higgins is often accused by others of lying back in his hammock, doing nothing about inflation, but we learn by reading the Howard biography that he was trying his best, doing his hardest and trying to rein in the spending spree of the former Prime Minister. But he tried in vain. He failed and the working families of Australia are paying for the price of that failure. Inflation is now at 3.6 per cent. That is the highest level in 16 years and there is the threat that it will go even higher. We learnt this week from the Assistant Governor of the Reserve Bank, Malcolm Edey, when he spoke at a CEDA conference, that it could reach closer to four per cent next month. That is what we inherited: the highest inflation in 16 years, the second highest in the developed world and the threat of it going even higher if we do not act. I am not saying it is the highest inflation in the world—not by a long shot. It was reported yesterday that Zimbabwe’s inflation has gone to 100,000 per cent. I do not think anyone here is about to say that is a precedent or template that we should aspire to replicate. It is not the type of good government and responsible economic management that Australia benchmarks itself on.

The shadow Treasurer told us only very recently that the inflation problem is a fairytale. The member for Lindsay put it very clearly today when he said that it is not a fairytale; it is a nightmare. It is a nightmare for people around the country, in Western Sydney, and very particularly in my electorate of Blaxland. They are paying the price because the former government failed to act.

In my first speech to this House earlier this week, I mentioned very briefly what the impact of that failure is. Three hundred families in Blaxland lost their homes this year because they could not keep up with the rising cost of interest rates and the pressure that put on them. The value of their houses has also dropped by 16 per cent over the course of the last three years. They lost their homes because the former government lost their way and, as a consequence, the government also lost their jobs.

What lies ahead? The Reserve Bank has advised that interest rates are expected to be at or above the target band for the next two years. If we do not heed this warning, it is not going to be a problem for the next two years; it will be a problem for the next generation. Monetary policy is a very blunt instrument. It ends up hurting about a third of the people in this country—the people with mortgages. We as a good government have a responsibility to do more than just use monetary policy to help the Reserve Bank.

What we have got here is a stark contrast. There are two types of people in this chamber, the Rudds and the duds. The Rudds have got a plan for the future and the duds have lost their way. You have got the Rudds, who have got a plan to tackle inflation, and you have got the duds, who only had one plan to tackle inflation, and that was Work Choices. They said Work Choices would help keep inflation under control. Now they say it is dead. Earlier this week they said it was alive again. Now it is dead again. It is the zombie policy that they are going to bring back to life at the next election. The nightmare of Work Choices will soon be over for the people of Australia, but the nightmare of inflation, which was let loose, let out of control by the former government, is going to hurt the people of this country and the people of my electorate for a lot longer unless we do the work needed to put it in its place.

Luke Hartsuyker (Cowper, National Party, Deputy Leader of Opposition Business in the House) Share this | Link to this | Hansard source

I am pleased to take this opportunity to speak on the motion before the House moved by the member for Lindsay on interest rates. Before I begin the central elements of my contribution, I would like to refer to a number of statements made by the previous speaker, the member for Blaxland. He referred to benchmarking and was somehow attempting to compare the Australian economy to that of Zimbabwe. It is interesting to refer to the words of the member for Fraser from the early nineties. I cannot remember his words exactly, but he was actually comparing this economy to those of Mali, Peru and Bangladesh. We do not compare ourselves with Mali, Peru and Bangladesh anymore, but they were the comparisons being drawn under the previous Labor government. I also refer to the issue raised in relation to high mortgages. The member for Blaxland did not mention the huge state imposts that are put upon home buyers in Western Sydney, the huge costs that are imposed by the New South Wales and other state governments. He was silent on this point. I see him leaving the chamber. He has lost interest because he does not want to hear the truth. He does not want to hear the fact that state Labor is driving up the cost of housing. He has turned around; he has turned tail. He did not want to hear the fact that state Labor is driving up the cost of housing.

Let me continue with my contribution. There is very much an issue of confidence out there in the Australian economy, and confidence is an important element in any market. It is the very foundation for strong economics within those markets; it is the very foundation of an orderly market as opposed to a market that is out of control. What we see appearing in the Australian market—and in the Australian economy, for that matter—is a crisis of confidence in the Treasurer. The people do not believe that the Treasurer has what it takes to run a $1.1 trillion economy. The Treasurer comes into this House and seems to be in a hell of a muddle over what NAIRU is. He seems to think it is the Pacific solution. He referred to a whole range of things and said, ‘Well, sometimes I have the answers and sometimes I don’t; sometimes I’ll be able to give this House the answers and sometimes I won’t.’ The Treasurer, who is responsible for a $1.1 trillion economy, is uncertain of the concept of NAIRU and certainly out of his depth. He has moved from brown-paper-bag-onomics to trying to run a $1.1 trillion economy and he has come up short. And the people of Australia are seeing that. They are nervous. Confidence is faltering and falling. People need to have the confidence to invest; they need to have the confidence to purchase. But, under this Treasurer, we see a fall in confidence. People do not have confidence in him to run the economy. I was reading in the Herald Sun today an article by Steve Lewis. What was said of the Treasurer in that? It said:

Voters rated Swan as ‘dishonest’ and ‘slimy’ with an ‘untrustworthy character’.

That was in the paper today: ‘dishonest’ and ‘slimy’ and an ‘untrustworthy character’. That has to have an effect on confidence.

There is a great irony with the Australian Labor Party. They opposed every measure that the previous government took to bring the budget into surplus, they opposed every measure to implement solid economic policy and they opposed tax reform; yet, at the end of the day, they claim to be fiscal conservatives. They opposed every measure that was put in place. I find it very ironic that members opposite can come into this House and claim the mantle of fiscal conservatism when, during their time on the opposition benches, they did not assist the government of the day with the passage of those bills; they voted against them. All of the previous members are on the record as voting against the GST. We all remember the words ‘day of fundamental injustice’ from the now Prime Minister. (Time expired)

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the motion before the House, put so eloquently by the member for Lindsay. Inflation is impacting on working families around the nation as those on tight household budgets struggle to find extra money to meet daily cost-of-living pressures. Petrol, groceries, housing prices—the basic costs of living—have been spiralling out of reach of many families for way too long. In the light of this, I welcome the leadership of the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs in establishing the national grocery prices inquiry. The ACCC inquiry will make sure that we are getting a fair deal at the supermarket. The inquiry will investigate all aspects of the supply chain, from the farm gate to the checkout, to see what more can be done to ensure that working families have access to a fair, competitive food market.

Of course, there are many causes for Australia’s current inflationary pressures. The US subprime mortgage crisis and spiralling world oil prices are certainly playing a part. However, at home we face our own challenges. A nationwide skills crisis across many industries is driving up wages and inflation, and this pressure in the labour market is simply not sustainable. The freeze on MPs’ wages sends a strong signal to the private sector that we are serious about controlling wage growth. Yesterday, this was acknowledged in the chamber by the member for Slipper.

Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

Peter Slipper, Fisher.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

The member for Fisher. I beg your pardon, Mr Slipper. The neglect of skills and maniacal pursuit of union-busting projects like the Australian Technical Colleges, especially when the real opportunities were waiting in our TAFE colleges and universities, show how the former government dropped the ball when it came to skills. But perhaps the biggest factor in Australia’s current inflationary explosion is the legacy of the previous government. Today’s inflationary pressures are a direct result of the Howard-Costello government’s failure to act on a number of Reserve Bank inflation warnings. How many warnings?

Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

Twenty!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Not one, not two, not three, not 10, not 15, but 20 warnings! The previous government were blind to the needs of working families. The Howard-Costello government just refused to act—six official interest rate rises in the last term of government, and they refused to act. Australians are entitled to feel ripped off. The coalition spent 11½ years masquerading as the masters of economic management, but we now know that to be a complete fraud. While enjoying the spoils of the Hawke-Keating realistic economic reforms—tough reforms—the Howard government failed to address the skills crisis, failed to act on infrastructure for the future and failed to take any meaningful measures to ensure housing affordability. What was their No. 1 economic reform, as mentioned previously by my colleagues? Only one: Work Choices. Now the members opposite treat the Work Choices policy like something they stepped in—they want to get as far away from it as possible. The previous government cared so little about housing affordability that they did not even have a housing minister and contributed very modestly to public housing. Instead, they filled the pockets of private landlords through rent assistance. It was shameful.

The Reserve Bank cash rate now stands at seven per cent. Of course, this means many families are now paying more than nine per cent on their mortgages—and when I say ‘nine per cent’ I am not talking about the Leader of the Opposition’s approval rating! In my electorate, in mortgage belts like Moorooka, Salisbury and Eight Mile Plains, they are really doing it tough. Every rate rise is a kick in the guts for families already struggling to make ends meet. I read in the Sydney Morning Herald today that some families are going without meals and basic health care just to cover skyrocketing rents. That is shameful. That should be contrasted with the economic legacy of John Howard and Peter Costello—I beg your pardon, I should have said ‘the part-time member for Higgins’—who said Australian families have never been better off.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

As opposed to ‘part-time Prime Minister’. Where is the Prime Minister?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Actually, where is the member for Higgins? Where is anyone from the other side? We finally have a federal government that cares about working families and is prepared to do the hard yards to fight inflation. One of our first strategies was to turn the tide of reckless government spending. The member for Higgins wanted to keep wearing Corey’s big, yellow sunglasses and keep the party going. The Rudd Labor government is much more reasonable. (Time expired)

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I am going to enjoy my time in this parliament listening to new members coming forth with overblown rhetoric. I did not enjoy the member for Blaxland’s comment about ‘Rudds and duds’. There is going to be some real inspiration coming from these new members. I am disappointed with the member for Lyons, though, a person of such talent and experience, so raucously attacking a new shadow minister. I recommend that members be careful what they say in this place.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Mr Adams interjecting

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The words you had in your speech on this very important address on inflation will stay in Hansard. You do not want to be in a position where you have stepped in something that you want to walk away from when you leave this House.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: the member is waffling about nothing. He is trying to lecture me. I suggest that you bring him back to the motion before the House.

Mal Washer (Moore, Liberal Party) Share this | Link to this | Hansard source

I call on the member for McMillan to address the motion.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I am responding to the motion before the House and to the speakers who have spoken before me. There is a warning in this. The Labor Party is coming into government at a time when the Howard government—in particular, Peter Costello—has a proud record of delivery of service in this House. Those gains were hard-won by the Howard government. As I said before, that did not come easily. The first three years of pulling the financial and fiscal policy of the nation into order were very hard. There are those in this place who know that some of us on this side of the House paid a very dear price for getting this nation’s house in order when it comes to finances. I was one of those people who paid the price for the cuts we had to make and it was very difficult in Gippsland at that time. But those cuts were made and that is what drove down inflation and unemployment.

That is very important because, as some members have reflected on, the decisions that are made by the parliament and the new government affect individual families in their own homes. It is too early to criticise the new government for anything they might have done at this stage. They have a budget to produce. In that budget, they will be putting themselves on the line as to how they are going to tackle the big issues of the day such as skills shortages, which we all recognise. In a booming economy, a Rolls-Royce economy, there will be skills shortages. It does not matter what industry it is—whether it be the dairying industry or the building industry—there are skills shortages. In parts of Gippsland they can do with 60 plumbers in just one area and there is a shortage of electricians.

We recognise that there are skills shortages and this is driven by a strong economy. But it does not help the nation when the Treasurer of the country says, ‘The inflation genie is out of the bottle.’ The unions respond to that by saying, ‘If the inflation genie is out of the bottle and everything is going to go up, we are going to have to apply for higher wages.’ Politicians can show restraint and have their wages frozen, but it is a symbolic act and no-one is going to fight about it. Let us get on with the job. But, importantly, wages need to be restrained in this booming economy. There are shortages throughout the nation. As you, Mr Deputy Speaker Washer, coming from the west, would know, the shortages in the mining industry are manifest. I know that people are being hauled out of Gippsland just to drive trucks in the west, so we now have a shortage of truck drivers in our area. These things are crucially important because they affect the whole nation.

Paul Keating said he could just pull and turn the levers of inflation and unemployment at any time. He said, ‘I’ve got the levers of the nation in my hand.’ He handed them over to Peter Costello, who handled those levers very carefully for a long time on behalf of this nation. Right now those levers have gone into the hands of Wayne Swan, and the nation will be looking very carefully at how he holds them.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.