Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House warnings from the IMF about the impacts of reckless spending on domestic inflation and interest rates?

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

I thank the member for Chifley for his question. Today at the Press Club we heard an extraordinary attempt to rewrite political and economic history. When it comes to political and economic history, I would rather rely upon the advice of the International Monetary Fund and upon the advice of the Treasury. What they say is something quite different to anything that appears in the member for Higgins’s book. They do record the reckless spending of the member for Higgins, the legacy of which was high inflation and high interest rates. In fact, there were some extraordinary revelations last week in the Australian Financial Review about what the IMF had to say about the member for Higgins. Paul Cleary summed them up in the Australian Financial Review this way:

The result of this outbreak of bad policy in the last years of the Howard government is likely to be a long period of inflation and weak economic growth, and it may take some considerable time, and pain, to get the balance back in the right order.

That was the conclusion of all the work provided by the IMF about the member for Higgins. But of course there is no chapter in his book about inflation hitting 16-year highs and there is no chapter in his book about 10 interest rate rises on his watch. The problem here—and this just goes to the heart of the negligence of those opposite—is that it was not as if the member for Higgins had not been warned. He was warned; we now know that from executive minutes from the Treasury. He was warned way back in April 2005. This is what they had to say:

With the factors affecting monetary policy being finely balanced, any economic impacts flowing from the May budget are likely to be an important consideration for the RBA board in coming months.

That was the warning to the then Treasurer about what the likely impact would be of the reckless spending from those on the other side of the House. But it gets worse. This is what the Treasury advised the member for Higgins in November 2006—

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. I request that the Treasurer table that brief from Treasury.

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

At the end of his answer I will ask the Treasurer whether he has quoted from documents.

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

Well, he is quoting.

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

I would usually ask that at the end of the answer, and I will do that. The Treasurer has the call.

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

In November 2006 this is the advice that was tendered to the member for Higgins. Treasury said:

… there is a real risk that significant spending will add to inflationary pressures.

At that time the Howard government were only proposing an additional spend of $13 billion. They went on to spend an additional $40 billion. They completely ignored all of the advice. They put their foot on the accelerator precisely at the time that there should have been some restraint. That is what these minutes show, but of course this does not appear anywhere in the memoirs of the member for Higgins. The consequence of this was another four interest rate rises and inflation at 16-year highs.

As we were saying yesterday, when this spendathon was going on, where were the priorities of the Liberal Party? Were they with pensioners?

Government Members:

Government members—No!

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

Were they with low-income earners?

Government Members:

Government members—No!

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

Where were they? They were with high-income earners; that is where they were. When Mal Brough took a proposal to the cabinet room to do something about the base rate of the pension, did they agree? No, they most certainly did not agree.

Now the member for Wentworth, who has no past, sits over there and pretends that he had nothing to do with it. But, of course, he was sitting around the cabinet table at that stage. Plan C over here was around the cabinet table with plan B, who is still up the back. Plan B is still operational—45 votes to 41. Eighty-six votes for Work Choices and high interest rates—that is what happened in the Liberal party room today. Now they want to make it worse—they want to raid the surplus again. They think you can block a surplus and spend it at the same time. They think that there is a magic pudding. What they are trying to do in the Senate is knock off $6 billion from the surplus, and in his press conference today the new Leader of the Opposition locked himself into spending another $20 billion. This is the same behaviour that gave us high inflation and high interest rates. It is about time that we had some responsibility from those on the other side of the House. The member for Wentworth is smiling. He is up there orchestrating and supporting in the Senate vandalism of the budget on important measures like alcopops. Of course, the member for Wentworth has no great affiliation with those sorts of everyday goods—he thinks alcopops is the noise that is made when he uncorks the Moet!

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. This could not be relevant to the question that he wrote for his own side to ask him. I ask you to bring him back to the question that he was asked; otherwise everyone will continue to consider him a joke.

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

Order! The Manager of Opposition Business does not assist his case in making a point of order when he makes those sorts of additions to his point of order. The Treasurer has concluded. Was the Treasurer reading from a document?

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

Yes.

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

Was the document confidential?

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

Yes.

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

To the Manager of Opposition Business: there is no ability for the Manager of Opposition Business to ask for the tabling of a document that is being referred to—which is probably what he was trying to do.