Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. I refer to the Treasurer’s media statement of 5 March, which referred to the household final consumption expenditure chain price index. Would the Treasurer explain to the House why this index is widely considered a broader measure of inflation than the headline CPI? Will the Treasurer confirm that the national accounts showed the index of household final consumption expenditure increased by 0.4 per cent in the quarter, the second lowest quarterly rise in 2½ years? Given that the national accounts showed this measure of consumer price inflation moderating, does he now regret egging the Reserve Bank on to hike interest rates with his intemperate remark, ‘The inflation genie is out of the bottle’?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his question. No, I do not regret it for one moment. It is not more reliable than the CPI. It is not more reliable than the Reserve Bank’s underlying rate of inflation. It is not as reliable as the Reserve Bank’s underlying rate of inflation. That is the situation in economics.

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

Why?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Because that is the view of the Treasury and that is the view—

Opposition Members:

Opposition members interjecting—

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

So we are going to question the honesty and integrity of the Treasury again, are we? Are you going to put your foot in your mouth again? The truth is that anyone who understands the consumer price index in this country, anyone who understands inflation, knows it is the consumer price index and the Reserve Bank measures of underlying inflation—

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

Why?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

They are the ones that are showing that inflation is at a 16-year high.

Peter Costello (Higgins, Liberal Party) Share this | Link to this | Hansard source

Mr Costello interjecting

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

The sound effects man up the back is going to put his hand up again! A 16-year high! The member for Wentworth came into the House last night and gave a speech on inflation. Do you know what he had to say here last night?

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

Mr Speaker, a point of order on relevance: the question was, ‘Would the Treasurer explain to the House why this index is considered a broader and more reliable measure of inflation than the CPI?’

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

Order! There is no need to repeat the question. The member for North Sydney will resume his seat. The Treasurer will continue.

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

Why, Treasurer?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Because it is not a more reliable measure. Here we have another fiction from the member for Wentworth. He came into this House last night and gave a speech on inflation. Do you know what he had to say? Listen to this. He said in the fight against inflation it was ‘mission accomplished’. Can you believe this guy? What planet is the member for Wentworth living on? He does not sit around the same kitchen table as the average Australian. They know inflation is high.

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

Mr Speaker, on a point of order: the Treasurer was asked why this index is considered a broader and more reliable measure of inflation than the CPI.

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

The member for North Sydney will resume his seat.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

On the point of order, Mr Speaker: once again I draw your attention to a frivolous point of order from the member for North Sydney. This is a question about inflation and the Treasurer is answering a question about inflation, even if this bloke thinks it does not—

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

The Leader of the House will resume his seat.

Sophie Mirabella (Indi, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

Get someone who can be a Treasurer, not a wimp!

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

I warn the member for Indi! I call the Treasurer.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

The member for Wentworth was in the House. It was about 5.30 last night. He gave a long speech about the Australian economy. In it he declared the battle against inflation was ‘mission accomplished’. All that was missing was the banner, the jumpsuit and the aircraft carrier.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, a point of order on relevance: he was not asked about alternative views.

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

The Treasurer will return to the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I would be absolutely delighted, Mr Speaker. What is this all about? This is about covering up the legacy of those opposite—the highest underlying inflation in 16 years. The member for Wentworth will say anything and do anything in his quest to get rid of the Leader of the Opposition, to get a cheap headline, to tell a lie about a particular figure, to distort and attack the head of the Treasury. He will do anything. Last night in the House he declared that the battle against inflation was ‘mission accomplished’.

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

Mr Speaker, I ask him to withdraw the comment about the lie.

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

The Treasurer will withdraw.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I withdraw, Mr Speaker. Those opposite do not want to front up to their legacy, a legacy of incompetence, which produced the highest underlying inflation in 16 years—recognised by the IMF, the Treasury and the Reserve Bank—and they cannot live with their dreadful legacy.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

My question is also to the Treasurer. Will the Treasurer further outline the need for disciplined fiscal policy in the current inflationary environment?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his question. This government is committed to delivering strong surpluses, getting government spending back under control and targeting investment to increase the productive capacity of our economy, because that is what is required in the fight against inflation—a fight the opposition do not recognise. They argue that inflation in this economy commenced on Monday morning, 26 November last year. The truth is that it did not. It has been on the march for a couple of years. That is what the Reserve Bank says, that is what the Treasury says, and they certainly cannot live with it. Part of the reason is that spending got out of control. Spending increases under this government have been at the highest level in any four-year period in the last 15 years. That is the legacy of the member for Higgins, who complained to Mr Howard’s biographers that he could not control the previous Prime Minister. The result of that has been eight interest rate rises in the last three years. That is their legacy. We are determined to put in place our five-point plan to tackle inflation and to look after Australian families who need some relief.