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

My question is addressed to the Treasurer. Would the Treasurer explain to the House why he is anticipating a fall in official interest rates when inflation is expected to rise to five per cent over the year to December and unemployment is expected to rise to 4.75 per cent?

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

I thank the honourable member for his question, because this is a decision which is taken by the independent Reserve Bank. We on this side of the House respect the independence of the Reserve Bank. From day one, when we came to office, we did take responsibility for dealing with and tackling the inflation problem that was left to us by those opposite—16-year high inflation in October, November and December—

Opposition Members:

Opposition members interjecting—

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

Order! The question has been asked.

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

which produced 10 interest rate rises in a row under the Liberal Party. But we put up our hand and said we would accept responsibility for dealing with it, and dealing with it we are. We are dealing with it through responsible economic management, by building a strong surplus, a $22 billion surplus, that those opposite want to vandalise. We are also dealing with it by attending to the capacity constraints that those opposite ignored for 12 long years, thereby putting further upward pressure on inflation. On top of that, now we have the worst global conditions in over 25 years.

All of these things are taken into account by the Reserve Bank, but one thing we did in our budget was that we made room to move. We made room to move for the Reserve Bank. They will take their independent decision tomorrow. But of course, if those opposite had their way, there would be no room to move for the Reserve Bank, because they want to vandalise the surplus. Do they have one single coherent answer to the problem of inflation, to do something about inflation and interest rates? Of course they don’t. There is not one consistent economic policy coming from any of those opposite who pretend to know something about economic policy. I was talking here last week about the ‘Three Stooges’ on the other side. There was the Leader of the Opposition, the member for Wentworth and the member for Higgins.

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. We are asking very simple, factual questions. In this case, it was a factual question about official interest rates being likely to fall when inflation is expected to rise to five per cent over the year to December and unemployment is projected to rise. I ask you to bring the Treasurer back to the question that was asked.

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

Order! The member for North Sydney will resume his seat. The Treasurer knows the requirement to be relevant to the question. I will be listening very carefully.

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

I am dealing with inflation, I am dealing with interest rates and I am dealing with employment. The Leader of the Opposition was asked at the doors today whether, as Prime Minister, he would instruct the Reserve Bank governor to do what he had just advocated a couple of minutes earlier. This is what the Leader of the Opposition said at the doors in answer to the question, ‘If Prime Minister, does that mean you will tell the Reserve Bank what you expect in terms of rate movements?’ He answered, ‘No.’ He admitted that his policy in opposition is too irresponsible to be put in place in government. That is how irresponsible this Leader of the Opposition is.

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

Order! The Treasurer will resume his seat. Has the Treasurer concluded?

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. Again, the Treasurer was asked a specific question about what he is doing about the economic challenges facing the nation. I ask that you bring him back to the question that was asked.

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

Order! The wording of the question asked the Treasurer to explain. The Treasurer will be very mindful of the question and make his answer relevant.

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

Certainly, Mr Speaker, and because it was a question about who was responsible for interest-rate movements, absolutely. And what we had this morning from the second stooge, the member for Wentworth, at the doors, was that he walked out there and said that the government was responsible for interest rates going up, and in the next breath he said that if they came down we would not be responsible. He cannot have it both ways. On top of that, we had the third stooge—

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

Order! The Treasurer will refer to members by their titles.

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

The member for Higgins had a blinder the other night, Mr Speaker. He suggested—

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

Mr Speaker, I rise on a point of order going to relevance. This is the third point of order that has been taken. He is incapable of answering this question.

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

The member for Wentworth will resume his seat. The Treasurer will respond to the question and will bring his answer to a conclusion.

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

The member for Higgins suggested the other night that if he were still in government the financial crisis on world financial markets would not have happened. I mean, fair dinkum—they are gaga!

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

Order! The Treasurer will resume his seat.

Opposition Members:

Opposition members interjecting—

Government Members:

Government members interjecting—

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

Order! Those on my right!

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

Mr Speaker, I rise on a point of order. The Treasurer was defying your direction that he answer the question or sit down. I suggest he be sat down.

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

Order! The Deputy Leader of the Opposition will resume her seat. The Treasurer has the call and he will bring his response to a conclusion.

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

Yes, Mr Speaker. The Rudd government is dealing with the most complex set of global economic circumstances in over 25 years. And on top of that we have inflation at 16-year highs, bequeathed to the people of Australia by those opposite. And we are doing everything in our power to put downward pressure on inflation and everything in our power to give the Reserve Bank room to move something which would not have happened if those opposite were on the front bench today.

Opposition Members:

Opposition members interjecting—

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

As I remind people, when I give the call to an individual it is not an invitation for everybody to speak. When we are having down time between individuals getting the call, that is also not a time for everybody to speak.