Mark Furner (Queensland, Australian Labor Party) Share this | Hansard source

This government has achieved savings by cutting back inefficient and wasteful programs, better targeting income support to those who need it most, reducing distortions in the business tax system and making government more efficient. Labor’s budget strengthens Australia’s economic foundations and delivers for working families under pressure. Labor’s budget is a responsible one for our nation’s needs at a time of international turbulence and high inflation at home and is a budget designed to fight inflation and ensure we meet the uncertainties of the future from a position of strength. Labor has budgeted for a surplus of $21.7 billion in 2008-09, 1.8 per cent of GDP, the largest budget surplus as a share of GDP in nearly a decade. Those decisions are that of a responsible government, a government that has the prosperity of our nation clearly on its agenda. Even John Howard has had to accept that Labor’s economic record is one of foresight and nation-building.

Although the Australian economy is enjoying its 17th year of growth, productivity growth over the last five years has averaged 1.4 per cent a year, the lowest in 17 years, and capacity constraints have put upward pressure on inflation. When the Labor government came to office, Australia was facing the highest levels of domestic inflation in over 16 years. The previous government left us with high interest rates—interest rates that had gone up 10 times in a row under that government. They went up 10 times in a row under the previous government. The only time they have decreased has been recently, under a Rudd Labor government, in the latest decision by the Reserve Bank. High interest rates and inflation that was on a runaway path left the Labor government with the situation of having to bring down a budget, its first budget, in those economic circumstances.

Now the opposition has the gall to block fiscally responsible legislation like the Tax Laws Amendment (Luxury Car Tax) Bill 2008. We have said that reining in government expenditure is essential if we are to put downward pressure on inflation, and we take the view, unlike the opposition, that the question of the inflationary challenge that this country faces is not a charade. It is not a fairytale, as the opposition would have us believe; it is real and it is hurting working families. While those opposite sit on their hands as inflation climbs to its highest level in 16 years, the Rudd Labor government are determined to act. Inevitably, that—