Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the importance of responsible budgeting and recent warnings about the impacts of irresponsible budgeting on inflation and interest rates?

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 do understand that responsible budgeting and investment for the future is critical, and it is needed to tackle inflation. That is why we have delivered a strong surplus. And, of course, that is why we have reined in growth in government spending to one per cent, in contrast to the past four years where spending under those opposite grew by four times that amount. Those opposite went on a spendathon over a four-year period. The whole time they were engaged in that spendathon they were mean and silent about pensioners in their priorities. Pensioners were not in their priorities at any other time during their 12 years in government.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister Assisting the Shadow Minister for Defence) Share this | Link to this | Hansard source

Mr Baldwin interjecting

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

I warn the member for Paterson!

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

So why do we have this gimmick and why do we have this stunt from those opposite? Plan A over here, the Leader of the Opposition, did not have this position at budget time. His spokeswoman did at budget time, but she was overruled by plan C, the member for Wentworth—it is great to see you back. You have the Andrew Peacock suntan—terrific!

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

Order! The Treasurer will get back to the question.

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

Of course, plan B is not here today. Plan B, of course, was the architect of the spendathon. It has fallen to this government to control reckless spending. It has fallen to us because the consequence of that reckless spending was upward pressure on inflation and upward pressure on interest rates.

The IMF told a few home truths about this last week. In effect, the IMF said that that spendathon, that spending spree put upward pressure on inflation and upward pressure on interest rates. That was backed up by Treasury minute after Treasury minute after Treasury minute. Indeed, in their last budget, they had a $40-billion spendathon. Could they find any room in that budget to do something about the base rate of the age pension? No, they could not. So why has the Leader of the Opposition got this proposition here today? I will tell you why: because he is now being hunted by plan C, the member for Wentworth. It would not be here if it was not for the looming leadership challenge that is coming from the member for Wentworth. There is nothing in their proposal which is genuine. They are leaving out 2.2 million pensioners. We on this side of the House will do the responsible thing: we will put in place a set of arrangements which are economically responsible and fair because we have a 100-year history of looking after low-income earners.

Opposition Members:

Opposition members interjecting—

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

Yes, we do. You on that side of the House do not have that history. We will do it responsibly. We will do it in a way which is economically responsible and looks after the most vulnerable in our community.