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

My question is addressed to the Treasurer, and I refer to my question to the Treasurer yesterday about Australia’s two-speed economy. Given the budget cuts proposed by the government, what measures is the Treasurer considering to ensure the impact on Australian families is not disproportionately severe in states such as New South Wales, Victoria and South Australia, where economic growth last financial year was well below average and considerably less than the rate of growth in the mining boom states of Queensland and Western Australia?

Jason Wood (La Trobe, Liberal Party) Share this | Link to this | Hansard source

Mr Wood interjecting

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

The member for La Trobe is warned!

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

I thank the member for his question because I have just outlined a plan that we have got to tackle inflation. But I want to make a couple of points about the relationship between fiscal policy and monetary policy, because it is pretty true to say that monetary policy is a blunt instrument. Why is monetary policy a blunt instrument? It is a blunt instrument because it hurts working families. It is a blunt instrument because, when inflation goes up, interest rates follow. One of the problems we have had in this country is that the lax fiscal policy from those opposite is pushing up inflation, and inflation is not something that is confined just to one state or another. Inflation is not confined to Queensland; it is not confined to Western Australia; it is Australia wide. So we have to deal with that inflation problem. We have to deal with it to take the financial pressure off working families. We deal with it through our five-point plan. That is our plan, and those opposite do not have one at all.