Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank Senator Campbell for his question. These are challenging times in which to frame a budget, given the conflicting economic forces that Australia confronts. The coalition left this country with a serious inflation problem. We now have the highest inflation in 16 years. Headline inflation recently hit 4.2 per cent, and underlying inflation is running at a similar pace. The Reserve Bank is forecasting both headline and underlying inflation to remain at or above three per cent for the next two years. Underlying inflationary pressures have been building since the start of 2006. They were exacerbated by the previous government’s irresponsible approach to spending. Treasury advice provided to the former government and released last week shows that they were warned about the impact of rising inflation.