Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Minister, how will the government’s fiscal policy assist in the fight against high inflation and high interest rates? And, Minister, what are the consequences of this policy not being implemented?

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

Inflation in Australia is currently at a 16-year high, at a rate of 4.2 per cent. What that means is that ordinary Australians throughout the country are experiencing rising prices in supermarkets. It appears I have to remind the opposition about or perhaps introduce them to the concept of what a special is because clearly they appear to have no idea. Ordinary Australian working people do know what specials are—there are little labels on the shelves underneath the product with the word ‘special’ and a price on it—and they have to look for specials because prices are rising. So perhaps you might want to do a little bit of a trip to the supermarkets of Australia yourselves to find out how most Australian working people actually live.

It is crucial that we have a tough fiscal position, a strong budget, to put downward pressure on inflation and interest rates. That is why the government has delivered a $22 billion surplus and that is why we brought spending down from a growth rate of five per cent in the last budget, delivered by the member for Higgins, to a rate of one per cent, and that is why it is crucial that the government’s budget legislation is passed in the Senate. Some of the items that the opposition is proposing to block would blow a giant hole in the surplus, and even delaying the key initiatives in the budget—things like the condensate excise initiative, the luxury car tax, the means test for family payments—will blow a significant hole in the surplus; in fact, Treasury calculates about $284 million simply from that delay. The opposition has taken an ultra-populist line in response to the budget. They have thrown responsibility out the window. They are feeling everybody’s pain: the teenagers who are losing their access to cheap alcopops, the foreigners who are paying more for their visas, the big resource companies who are losing their tax breaks, the millionaires who are losing their family payments—the opposition is feeling their pain.

Yesterday I urged the opposition to heed the wise words of the member for Higgins—admittedly, they were from 12 years ago—and, sadly, it appears that I spoke too soon, because it appears that the honourable member for Higgins has joined the irresponsible populist bandwagon too, which is a source of great distress to me. In today’s Financial Review there is an interview with the member for Higgins where it states that he ‘warned against an excessive short-term response’ to inflation and pointed out that when the CPI had gone negative he did not pump up the economy. Therefore, by implication, if the CPI—the consumer price index—the rate of inflation, goes above the Reserve Bank’s target zone, then there is no reason for tightening the budget, there is no reason for strengthening the surplus. Perhaps, as he is the architect of the wasteful, profligate, growing-too-fast budget that this government inherited—the 2007 budget—with five per cent real growth in the middle of a mining boom, perhaps I expected too much from the member for Higgins.

Although I certainly do not welcome his recent conversion to the cause of fiscal incontinence, I do note that there is something else happening with the member for Higgins. He has been working hard on his application to join the book club. After all these years of pouring scorn and vitriol on people who write, he has decided, belatedly, he wants to join the book club. As a member of the book club, including, I am sure, various other members—the Treasurer and so on—we welcome the interest of the member for Higgins, but there is one word of caution: we write about issues. It is a pretty safe bet that the member for Higgins’s book is going to be about ‘me, me, me’ and that will be the end of it. It certainly will not have any serious savings initiatives.

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. How is this relevant to the question that was asked of the minister?

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

Order! The Minister for Finance and Deregulation will return to the question.

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

The opposition’s response to the budget has been all over the place. Their position changes virtually on a daily basis. They are sniping at most of the major initiatives but relentlessly avoiding taking responsibility for the wider picture and relentlessly avoiding taking any clear position on the inflation problem and what the fiscal settings in this nation should be. This is the core question they have to answer—indeed, it is the core question the member for Higgins should be asked to answer: what fiscal settings would be appropriate for dealing with the inflation problem?

The government will not be diverted from our task of putting downward pressure on inflation and interest rates. We intend to do everything necessary and everything possible to preserve the integrity of the surplus and to ensure we have a strict, responsible budget position. Unlike the opposition, who appear not to know what specials in supermarkets are, we understand the pressures that ordinary families in this country are under, we understand the rising prices that they are having to pay and we understand the importance of getting inflation under control. The opposition are putting this at risk—they are putting the government’s efforts to put downward pressure on inflation and get the inflation problem under control at risk by their actions in the Senate. They should think again. They should act responsibly in the interests of working people in this country.