Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, with rising interest rates, petrol and grocery prices, and pre-budget confirmation of increased taxes on cars and alcohol while cutting support for essential services, isn’t this a budget of confusion from a government that does not know what it is doing?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I find the conclusion to the question by the Leader of the Opposition interesting indeed. The Leader of the Opposition has made a number of comments about the importance of the budget and the disciplines associated with the budget. On one day he says that there is an inflation problem; on the next day he says that there is no inflation problem. If people were to be confused, one would be reasonable to conclude that there is a fair bit of confusion lying on the part of those opposite. But this is the one that I particularly like in terms of consistency of policy position on the part of those opposite. It goes to the framing of budget—

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

Mr Speaker, I rise on a point of order. The Prime Minister was asked a specific question about his own budget in the light of existing circumstances, rising interest rates, rising costs and selective budget leaks. He was not asked about alternative policy. He was not asked about our position on the budget. He was asked about his own—

Opposition Members:

Opposition members interjecting—

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

Order! While I am not sure what I am warning him for, I warn the member for Mayo for his constant sniping! If he wants to assist proceedings, as I have invited him to do on several occasions in this parliament, he can rise on a point of order. The problem with this at the moment is that the question was a very broad question relating to matters that are to be revealed later tonight and I think on that basis it is an opportunity for a fairly broad answer.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The question goes to the coordination and coherence of government and budget policy. In January this year we made it very plain what our approach to the fight against inflation was—five points. First, we have got to deliver a substantial budget surplus so that we can draw down public demand so as not to fuel the fires of inflation, because fighting inflation is a critical part of the economic challenge. Second, we said that we would be in the business of investigating necessary measures to increase private savings in the economy, again to draw down overall total demand in the economy, which again fuels overall demand in the economy and then fuels inflation.

Third, you then go to the question of the supply side constraints—firstly, on skills policies and, secondly, on infrastructure policy—and act decisively in those areas to boost the supply side measures, because if you fail to do so then you are failing to act on the 20 sets of advice which the previous government received from the Reserve Bank and failed to act on. And through all these measures you need to make sure that you have a coordinated approach to fighting the fight against inflation. That is what we have said since January. We have taken it as the right way through.

By contrast, what we have from those opposite is this: an argument which says that there is no—repeat no—inflation crisis, that inflation is a charade, that inflation is a fairytale. I say to those opposite: say that to the mums and dads in Australia tonight who are confronted with the inflationary impact they face, the consequences of which flow through to their mortgages, to their rents, to the prices they have to pay, to childcare costs and the rest. Secondly, they not only say that inflation is a charade; they further advance this argument—this is the economic credibility of those opposite: there is no economic case to reduce government spending.

Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order. The Prime Minister knows that what has been said by me and the shadow Treasurer is that there is no inflationary crisis but there is a challenge.

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

There is no point of order. The Leader of the Opposition will resume his seat. There are other forms in the chamber that might be used.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

There is their argument that not only is there no inflation crisis; inflation is a fairytale and a charade! Furthermore—and this is the ultimate underlining of their economic irresponsibility—they say there is no economic case to reduce government spending. That is what the alternative Treasurer of the country said barely a week or so ago. I have not heard any recanting of that yet—that there is no economic case to reduce government spending. This from the Liberal Party—the Liberal Party attacking this federal Labor government, from the left, with a single argument saying: ‘You should be spending more on government spending.’

I find it remarkable that their third point is this—this is the trifecta of their new economic orthodoxy: we should preserve welfare payments to Australia’s wealthiest. That is their orthodoxy: firstly, there is no inflation problem; secondly, there is no case to cut government spending; and, thirdly, we should preserve welfare payments for the wealthiest.

But when it comes to consistency, I conclude with this on the question of revenue—and revenue measures were touched on specifically by the Leader of the Opposition himself in question time today—and it goes to the excise on alcopops. Brendan Nelson on 27 April said:

The proposed increase in the excise on alcopops is something that will be supported by us ...

Brendan Nelson on 1 May said:

What we’ve learnt is that they spin a few things out into the newspaper like the outrageous half a billion dollars tax binge on ready-mixed drinks ...

I presume that means you are now opposed to it. What a long time a week constitutes in politics. Supporting the introduction of this tax one week, opposing it the next. And the opposition has the gall to ask the government about consistency of economic policy! The opposition needs to take a long hard look at itself. It is no longer articulating any credible economic policy position in the lead-up to this budget.