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 direct declaration of a ‘war on inflation’ on 21 January, which he described as the biggest economic challenge facing the Australian government. Why is there no mention of inflation, which has now risen to five per cent, or the government’s five-point plan to fight the war on inflation in the government’s one-year progress report released on Friday?

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

The Deputy Leader of the Opposition has missed the global financial crisis altogether. The Leader of the Opposition said that it was all hype. But he said it was all hype at precisely the same time he was changing his own personal investment strategy away from unguaranteed funds.

Opposition Members:

Opposition members interjecting—

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

Go ahead. Bring it on. The balance of risk in the economy has changed dramatically—that is why. There has been a dramatic impact from the global financial crisis around the world. Somehow the Deputy Leader of the Opposition has missed the fact that Europe is in recession and so is Japan. Somehow the Deputy Leader of the Opposition has missed the fact that the IMF is predicting that Britain and the United States are heading the same way. The balance of risk has fundamentally changed, and with that change has come the absolute imperative that we in this country and many other countries around the world act decisively to strengthen our economies, particularly through fiscal stimulus but also through monetary policy and through a whole lot of other actions in the financial system that are absolutely fundamental for the stability of our economy and our society. Those opposite simply do not get it.

We on this side of the House do get it. We understand the challenge. We also understand the need to deal with inflationary pressures in the longer term as well. That is what reform of federal-state relations is about. That is what reform of the tax system is about. That is what doing something fundamental in other areas, such as infrastructure, is about. We have our long-term program, but we understand what is going on out there right now. Right now, the balance of risk has changed. We on this side of the House understand the nature of the problem and have acted decisively to deal with it.