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

I thank the member for Blair for his question. It is a very important one. Of course I do not speculate about future movements in official interest rates but I cannot say the same for those opposite. In fact, yesterday we had the shadow minister for finance out there champing at the bit for a rate rise on Melbourne Cup Day. This is what she said:

I think it’s a pretty safe bet that the Reserve Bank would be looking very, very closely at a rise of 50 basis points on Melbourne Cup Day.

So I think it is pretty clear that the Liberal Party have already put the champagne on ice, not for cup day but in the hope that rates go up by 50 basis points—and shame on them. Why would they consider celebrating an interest rate rise? Because they think somehow it is going to be to their political advantage whilst at the same time they are maintaining this ridiculous position that interest rates can somehow stay forever at a 50-year low. So that is the proposition: they want, on the one hand, to take political advantage out of a rate rise, which is never comfortable for anyone, but, on the other, they want to maintain that somehow, in a public policy sense, rates can stay forever at a 50-year low. Of course, as the governor has said, rates cannot stay at a 50-year low forever and that as the economy recovers they will begin to move. It is simply ridiculous for those opposite to claim that rates could stay at a 50-year low forever. It undermines any pretence that those opposite would have to any economic credibility at all.

The Australian people are pretty sceptical about these claims because they have seen these sorts of claims from those opposite before. They know that the mob opposite have really got form when it comes to scare campaigns on interest rates. They well remember what they over there did back in 2004 when they went to that election campaign claiming that interest rates would stay ‘at record lows’ forever. At record lows was their claim, and the Australian people do remember what occurred after that fraud that they presented to the Australian people. Interest rates went up 10 times in a row and inflation went to a 16-year high. The Australian people well remember what drove that record high inflation, that 16-year high inflation. It was the inattention and inactivity of those opposite to deal with the capacity constraints in the Australian economy that were fuelling inflation. It was their refusal to invest in infrastructure, it was their refusal to invest in education, and the Australian people did pay a price for that refusal—10 interest rate rises in a row.

They were at it again this week. We had the member for Boothby on the doors saying, ‘We now have evidence that a Labor government meant higher interest rates.’ What planet does this guy live on? What planet could he possibly live on by going out there and saying there was evidence that a Labor government meant higher interest rates when interest rates are currently 350 basis points lower than they were when they were last in government? What hide they have. What front and what economic incompetence resides on that front bench, when interest rates are 350 basis points below their peak when they were last in power, when they did not invest in infrastructure and when they did not invest in education, to go around and pretend that they can somehow keep interest rates at 50-year lows.

Those opposite have shredded any pretence of economic credibility. That is why we on this side of the House will continue to put in place responsible economic management, make sure that we carefully manage our stimulus—that it is carefully withdrawn as we go through next year—and make sure that we support jobs and small business in the Australian economy.

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