Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Is the minister aware of this morning’s speech by Reserve Bank Assistant Governor Malcolm Edey, in which he projects GDP growth to December 2008 of 3¼ per cent but, excluding both the farming and mining sectors, of only 2½ per cent, compared to 4¼ per cent in December 2007? What is the government’s plan to ensure that its claimed inflation-fighting proposed budget cuts will not further reduce growth and jobs in those sectors of the economy outside mining?

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

It would appear that the member for Wentworth does not understand the reason why there is a need to crack down on government spending. On top of the figures he has quoted, I will add another one: government spending is currently running at a 4½ per cent real increase in the current financial year, well ahead of the growth projections—either of the growth projections that he quoted—in the economy. That is what we inherited from the previous government. We inherited a situation where inflation is beyond the Reserve Bank’s target band. It is at 3.6 per cent underlying. We inherited a situation where we had five interest rate increases in the previous six months, and we inherited a situation where government spending is running out of control. The primary commitment of this government is to ensure that government spending gets into an area that will ensure that we put downward pressure on inflation and interest rates.

Let me remind the member for Wentworth that, if he talks to business, the one thing they will tell him they do not want is inflation to take off in this country. The one thing that business in the mineral sector and in other sectors of the economy that are so crucial to the future of this nation do not want is inflation to take off, because that erodes savings, it erodes productivity and, most importantly of all, contrary to the commentary from the Leader of the Opposition a couple of weeks ago, higher inflation means higher interest rates. It means higher interest rates for homebuyers and it means higher interest rates for businesses. So that is why the government is committed to getting government spending under control.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order on relevance. There seems to be a contagion on the government benches of inability to address the questions asked.

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

Order! The minister is relevant. The minister will return to his response.

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

The question I was asked was about growth projections and the significance for sectors of the economy that are particularly important to the future of the Australian economy, especially the mining sector, and how this connected with the government’s economic policy. What I am trying to explain to the member for Wentworth, who amazingly was described the other day by a journalist as one of the more numerate members of this House, is that the critical commitment of this government is to get under control the inflation problem that was left by the former government, and that means getting government spending under control. It means getting rid of the sort of nonsense that we inherited, some of which we cut out of the budget a couple of weeks ago and more of which we are going to cut out. It means cutting government advertising. It means getting rid of the regional rorts. It means getting rid of the plethora of spending programs, all of which were contributing to a pattern of increased government spending, 4½ per cent in real terms—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order. Again, it was a specific question about the impact of budget cuts on the non-mining sector of the economy. It is very important—unless these guys are going to club the economy to death.

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

I simply say to the member for North Sydney that the minister is being relevant to the totality of the question. In the point of order, the member is raising points that are in the introduction to the question, but certainly he loses the chair when he uses a point of order to argue a point, as he did at the end. The minister has the call and will respond to the question.

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

I will conclude on this point. The opposition has a fundamental question that they have to ask themselves, and that is this: do you think there is a problem? Do you think there is a problem with government spending in this country? Do you accept that it is running too fast and that it needs to be brought back under control? And do you believe that programs like, for example, the $3 million that had been earmarked for the fishing hall of fame are fundamental to the economic future of this country, or would you like to relieve the tax and interest rate burden on ordinary working people in this country? That is the fundamental question that you need to ask yourselves, because at this point we do not know. The member for Wentworth has told us that the inflation problem is a fairytale. The opposition leader has said that the government has taken over an economy in first-rate condition. So the question you need to answer is: is there a problem with inflation in this country, or do you think it is a fairytale?