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, is it not the case that the Reserve Bank may lower interest rates because the economy is slowing sharply? Is it not also the case that, while inflation continues to rise under your government, Australians are losing their jobs in parallel with a massive collapse in business and consumer confidence? Prime Minister, in plain language, why are Australians worse off since the election of the Rudd government?

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

Working families, pensioners and carers are under real financial pressure, and therefore it is important to have a consistent and comprehensive strategy for dealing with the pressures that they are under. One of the pressures faced by working families is the cumulative impact of 10 interest rate rises in a row. If you do the numbers on an average mortgage of something like $246,000 in total and the impact of 10 interest rate rises in a row, you will see that the flow-through effect is that the Liberals, as a consequence of their high interest rate policy, have given those working families $400 per month in interest rate hikes. That is a simple fact. When those opposite ask why we have real pressures on the cost of living for working families, that is a big fact: $400 per month.

The other impact on many working families is how to deal with pressures like the increase in childcare costs that they face. That is why the government, consistent with its pre-election commitment, increased the childcare tax rebate from 30 per cent to 50 per cent.

Opposition Members:

Opposition members interjecting—

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

Those opposite said it is ridiculous.

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

No, you are ridiculous.

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

You’re ridiculous.

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

The member for North Sydney just interjected and said it is ridiculous that we have increased the childcare tax rebate from 30 per cent to 50 per cent. They are the people who are out of touch with the basic needs of working families, including the need for us to make sure the childcare tax rebate keeps pace with the extraordinary costs which those families are bearing, with higher interest payments off the back of the rises I described before, higher childcare costs and other costs which families face. The government, in response to these challenges, has sought to do at least three or four sets of things, one of which is to deal with the extraordinary pressure on inflation and interest rates which has existed in the economy over a long period.

The absolutely killing effects which those 10 interest rate rises have had on working families seeking to balance their family budgets have been huge. That is why we have taken this agenda as the absolute core priority of the government—so that we could create a set of policy circumstances to make room for the Reserve Bank to start moving in the other direction. That is point 1. Point 2—

Opposition Members:

Opposition members interjecting—

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

Members opposite laugh again at the impact of 10 interest rate rises in a row. I would say that $400 a month—Costello’s $400 a month interest rate hike for working families—is no laughing matter, other than for the Liberal Party. Through the budget we have also sought to honour our pre-election commitments on tax. The taxation reductions that we brought about through the budget, totalling some $44 billion, are designed to assist families under pressure. Added to that are the additional family support payments—I refer to the childcare tax rebate—and also the education tax refund, which parents are requested to begin collecting receipts for this year so that claim-back can occur from 1 July next year. These are significant initiatives, together with the $7.5 billion that we have allocated for additional payments for pensioners and carers.

The Leader of the Opposition asked a question about the setting of interest rates. The Reserve Bank independently does that, consistent with the economic policy settings of the government of the day through fiscal policy. That is why we have acted responsibly in that direction. I again return the Leader of the Opposition to his extraordinary statement on the doors today. How could he go out on the doors and—presumably trying to make a big headline for himself tomorrow—call for a 50 basis point adjustment and then, in answer to the first question, ‘If you were Prime Minister, would you make that call on the government?’ say no?

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 Prime Minister was asked a question about why Australians are worse off since the election of his government. He was not asked about anyone else’s government, just his own.

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

The member for North Sydney will resume his seat.

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

Therefore, in terms of the response to the real cost of living challenges which are being faced by working families, pensioners and carers, the government’s strategy is clear. What is not clear is the strategy of those opposite. They had one foray into policy this week, and that was to go out on the doors, through the Leader of the Opposition, the alternative Prime Minister of Australia, and say that the Reserve Bank should bring about a 50 basis point cut tomorrow. And then in the next breath, when asked whether that would be his position as Prime Minister of Australia if he were so elected, he of course said it would not be. What does that say? It says that the alternative government—as they describe themselves—have a view that the policies they put forward in opposition are far too reckless to be implemented in government. That is what they are saying. I would suggest to those opposite that if there is an alternative explanation for what the Leader of the Opposition meant on the doors this morning, everyone sitting here in this chamber is all ears. Frankly, if you go out and say, as the alternative Prime Minister, ‘I am calling for a 50 basis point cut,’ and then ‘I am not calling for a 50 basis point cut,’ the world would like to know the reason.