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

My question is to the Treasurer. I refer the Treasurer to the Prime Minister’s comments yesterday, where he said, ‘Words are bullets.’ Does the Treasurer now regret saying, ‘The inflation genie is out of the bottle,’ not once, not twice but three times in the week before the Reserve Bank meeting in February?

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

I thank the member for her question. Words are certainly bullets. Inflation hit a 16-year high in the months of October, November and December last year. And of course the current Leader of the Opposition described that as a ‘fairy story’. The fact that inflation hit a 16-year high under the Liberals is very embarrassing to all of those Liberals who sit opposite. Essentially, it points to their central failure in economic policy. I make no apology for being frank about the situation in the Australian economy, about the legacy left to this economy by the Liberal Party—inflation at a 16-year high, which pushed up interest rates 10 times in a row. When they pushed up interest rates 10 times in a row, on about the seventh occasion, when there was a 25 basis point rise, the current Leader of the Opposition said that it had been ‘overdramatised’. Yes, words are bullets. The bullets that side have been firing into their economic record are substantial.

The record that they left this country has exposed the economy at a time when the international situation has turned. So, precisely at a time of great global uncertainty, their legacy of inflation at a 16-year high and 10 interest rate rises in a row have led to less room for the Reserve Bank to move. Fortunately, this government put in place responsible economic policy during the budget and the consequence of that budget was to provide the Reserve Bank with room to move. We cut back on reckless spending, and we put in place essential spending to enhance the productive capacity of our economy so we can do something in the long-term about inflation and do something to get interest rates down in a sustainable way. That is our record. We are proud of it. That is their record and they should be ashamed of it.