Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Yes, we are happy to help. My question is again to the Prime Minister. I refer the Prime Minister to page 56 of the Reserve Bank’s recent statement on monetary policy which warns of ‘the risk of generating an upward drift in inflation expectations which could feed into wage and price setting behaviour’. Given the Reserve Bank’s view that expectations can in themselves drive inflation, why are he and his Treasurer going around and talking up inflation?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

In response to the honourable member’s question, I would have thought all of us in this place would know that public economic enemy No. 1 across Australia right now is inflation. I would have thought that the common resolve of the parliament, and all people responsibly contributing to public policy in this parliament, would be to do what we all can in the fight against inflation. Let us deal with some facts first. As of the December quarter last year, the underlying inflation rate delivered by the then data tells us that inflation as of when this government took office was running at its highest annualised rate in 16 years. That is a fact from the ABS, not a piece of politics from the Australian Labor Party or this government. That is a fact from the Australian Bureau of Statistics, however uncomfortable members opposite may find it. That is the first point.

The second is that, if you reflect on the further facts contained in the Reserve Bank of Australia monetary policy bulletin released only a few days ago and the inflation projections contained in that document going out not just to 2008 but to the end of 2009 and the beginning of 2010, they are projecting an inflation number in excess of the three per cent band. This is the inflation reality we inherited from the previous government. It is a fact contained in the data produced by the ABS. It is a fact reflected in the forward projections independently by the Reserve Bank of Australia.

The government of Australia has been in office for 72 days. If you look at the Reserve Bank warnings to the government which preceded us, going back for more than two to three years, there were 20 warnings on capacity constraints in the economy and each of those warning was ignored by the government which preceded us. The government which I lead has embarked upon a course of action to deal with, first and foremost, skills constraints in the economy. Second, we will deal with infrastructure bottlenecks—critical, ignored for a long period of time as far as the national government is concerned. And third, and also critical, when it comes to proper, prudent conservative management of the public finances of the Commonwealth, we have set ourselves early a budget surplus target of 1.5 per cent of GDP at least to be delivered in the upcoming budget. This is responsible in terms of the proper management of public finance, responsible when it comes to public savings, responsible in terms of our five-point plan against inflation dealing with the encouragement of private savings and responsible also on the supply side of the economy—skills, infrastructure and workforce participation—where, regrettably after 11½ long years of the coalition in office, there is so little to show for it.

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. The Prime Minister referred to 20 warnings by the RBA to the previous government about inflation. I ask him to table those warnings.

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

I do not think the Prime Minister was referring directly to those, and that is the only time that he would have to table them. He made mention of them.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Mr Schultz interjecting

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

The member for Hume has made more than a 90-second statement already, even though it is only question time, and he should be very careful making remarks about the Speaker like he did. I will ignore it and not ask him to withdraw, but he is well and truly warned.