Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank the good senator for his question. This budget marks the beginning of a new era of responsible economic management. The opposition left this government with a serious inflation problem. We now have the highest domestic inflation in 16 years. Headline inflation recently hit 4.2 per cent and underlying inflation is running at a similar pace. The former government neglected warnings from the Reserve Bank and Treasury that their spending policies were fuelling inflation. The current opposition do not understand that high inflation is a drag on growth, it distorts investment and it erodes the living standards of families.

The Rudd government, however, has made fighting the war on inflation and addressing cost-of-living pressures a priority. This is the responsible budget that Australia needs at this time of high inflation at home and international turbulence abroad. The budget will fight inflation and deliver for working families on a number of fronts. The Rudd government has delivered a strong budget surplus of $21.7 billion for 2008-09, 1.8 per cent of GDP. This is the largest budget surplus as a proportion of GDP since 1999-2000 and the second highest in 35 years. It honours and exceeds the 1.5 per cent target set by the Rudd government in January without relying on revenue windfalls.

A strong budget surplus ensures that fiscal policy is playing its part to take pressure off inflation and that the heavy lifting is not left to the Reserve Bank. This surplus is built on a disciplined approach to spending. After years and years of short-term political bribes and profligate and irresponsible spending, this government has restored a disciplined approach to spending. Growth in real spending has been reined in to 1.1 per cent in 2008-09. This is the lowest real growth rate in nine years. It is significantly lower than the four per cent growth in spending over the preceding four years. That is right—four per cent growth delivered by those opposite.

In this budget, spending and taxation have been reprioritised to meet the needs of modern Australia and to assist working families under pressure. This budget delivers a $55 billion working families support package across tax, child care and education expenses. The budget tips the scales back in favour of working families, who are the backbone of the Australian economy. The government is putting the fairness back into the tax and benefits system to ensure assistance is directed to where it is most needed. With the tax cuts and child care and education initiatives, a typical family— (Time expired)