Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline how the government’s responsible budget is putting downward pressure on inflation, and how irresponsible spending can lead to higher inflation?

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

I thank the member for his question. We on this side of the House understand that responsible budgeting and investing in the future are absolutely necessary to fight inflation and to put downward pressure on interest rates. It is something that is not understood by those on the other side of the House. We have put forward very substantial savings in this budget to put downward pressure on inflation and downward pressure on interest rates. Now the opposition is attempting to blow a $22 billion hole in the surplus. That can do nothing but put upward pressure on inflation and upward pressure on interest rates.

In this budget we cut back spending very hard. We withdrew spending growth to one per cent. Under the previous Treasurer it was four times that—reckless spending from the previous government. In the last Howard-Costello budget they went on a spending spree of $40 billion, without one cent of savings. That is what occurred in their last budget. They did that despite the advice from the Treasury at the time. On 24 November 2006, this is what the Treasury had to say to the then government, including the present Leader of the Opposition and the shadow Treasurer. This is what the Treasury said to the then Treasurer:

… as the economy is running close to capacity there is a real risk that significant spending will add to inflationary pressures.

That is what the Treasury said about their last budget. At that stage, they had $13 billion worth of additional spending on the table—and guess how much they spent when the budget came down? $40 billion. That is what is putting upward pressure on inflation and upward pressure on interest rates. Since that time, interest rates have gone up four times and inflation has hit a 16-year high. They have learnt no lessons from that. A leopard never changes its spots. Old habits die hard—because now they want to blow a $22 billion hole in the surplus. We saw it in the House this morning. We saw it from the shadow Treasurer. He could not even make it into the House to take his speaking slot on the luxury car tax bills. He could not even get in here. They are so disorganised. They have so lost their way, and they do not know where they stand on this budget. Do you know what he said when he arrived in the House? He said, ‘We might be in favour of the luxury car tax or we might not.’ That is the response of the Liberal Party. They are disorganised, they have lost their way and they do not know what they stand for except high inflation, high interest rates and high spending.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, the Treasurer was referring to a minute. As he read it, I ask him to table the minute which he read.

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

Was the Treasurer reading from a minute?

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

No, I was reading from notes.

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

Were the notes confidential?

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

They are.