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

I know that members of the opposition find it tedious that we have handed down a $22 billion surplus, but you had better get used to it. Today’s figures reinforce the need for responsible spending and dealing with the capacity constraints that we inherited after a decade of neglect under the recently revived member for Higgins. The government will not rest until we get the long-term policy settings right that will enable the building of a modern economy that will deliver sustainable, strong growth and low inflation.

I have a very simple message for the opposition here: the last thing that the Australian economy needs, the last thing that the Australian people need, is to loosen the fiscal settings that have been put in place by this government to slash the surplus and to pump more money into the economy. That is the last thing that the Australian economy needs and that is the real message that comes through from these national account figures. The opposition are endeavouring to mount a smash-and-grab raid on the surplus through the Senate. They have the swag over the shoulder, the funny mask on and they are off in the corridors of the Senate seeking to mount a smash-and-grab raid on the surplus. That is simply a recipe for higher inflation and higher interest rates. I understand that the Leader of the Opposition was out there handing out even more money this morning, but still there are no offsetting savings and no explanation of what impact this would have on inflation and interest rates. These accounts indicate that real growth eased to 0.6 per cent in the March quarter, or 3.6 per cent over the year, and they do show that families are feeling the impact of rising prices and higher interest rates, with household consumption slowing to 0.7 per cent in the quarter and 4.3 per cent over the year.

It is good news, though, that business investment continues to grow strongly, rising by 1.6 per cent in the March quarter and 6.6 per cent over the year and, as a share of the nominal economy, business investment remains at approximately its highest level since the early 1970s. Net exports detracted from GDP growth in the March quarter and reflect, as the Prime Minister indicated, ongoing weakness in export volumes and, in turn, the problems with capacity constraints that this government is so committed to tackling.

In conclusion, the Rudd government is committed to playing its part to putting downward pressure on inflation and interest rates through a responsible budget that delivers a strong surplus and invests in the future. That is something the Leader of the Opposition did not understand a few months ago. Higher inflation means higher interest rates which, in turn, tend over time to reduce economic growth and reduce employment growth. That is why it is so crucial to get inflation in check and that is why it is so crucial to run a strong surplus. I urge the opposition to think very carefully before they throw their economic responsibility credentials completely out the window in the Senate.

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