Scott Ryan (Victoria, Liberal Party) Share this | Hansard source

Senator Fifield has used a line that I was going to use as well—one that is entirely appropriate. In February this year the Treasurer said on the Sky business channel:

There’s no doubt that the former Treasurer, the former Government, let the inflation genie out of the bottle.

At a press conference on 4 February, the day after, he said:

The inflation genie is out of the bottle, it’s been on the march for a couple of years.

This is consistent with them just parroting the line over and over again. If you say it often enough you will allegedly make it true.

I thought it was like watching an episode of I dream of Jeannie, starring the Treasurer as the hapless Major Nelson, always blaming problems on his supernatural partner. But the reality is that there is nothing supernatural about incompetence, and that is what this government and this Treasurer have shown. Incompetence escaped the bottle the moment this government took office and the moment it decided to talk down the economy and start trying to create a false problem.

We had to go to the Reserve Bank governor to clear things up at a hearing of the House of Representatives Standing Committee on Economics. When he was asked, ‘Is the inflation genie out of the bottle?’ Mr Stevens said:

I do not want to comment on colourful things that are said in public debate, but what we have said is inflation has risen and that is a problem. It has to be dealt with and we are dealing with it. We will contain it and it will come down. Is it out of control? No, I have never said that.

What we had at the same time was a Treasurer running around misleading the Australian public and saying that it was out of control. It was the daily challenge of being Treasurer. No-one in the previous government put the economy on ‘set and forget’ in 1996. There were years of difficult decisions. There were ongoing challenges. Tax reform, labour reform, reform of export markets—all of these things are what help keep inflation under control, and it is an ongoing challenge. But going out there and consciously talking inflation up has a serious impact on people’s expectations. Yet when Mr Swan realised that this was actually causing a problem, when Mr Swan realised that his negative talk about the economy was starting to have an impact, he suddenly said, ‘No-one’s allowed to say anything bad about the economy.’ His hypocrisy was shown when he said:

I think that sort of talk—

referring to a recession—

is unhelpful and I don’t think that sort of talk takes into account the underlying strength of the Australian economy.

That was less than six months after he had been talking up the problem of inflation quite irresponsibly.

The simple point we have here is that this government has placed its partisan interests ahead of the nation’s economic interests and the needs of Australian people and families. In a desperate need to find a purpose, and in the fine tradition of its state counterparts, this Labor government seeks to find someone else to blame. This government has attempted to create a myth about the economic situation it inherited, a myth that the Australian people will not fall for. But it has had an impact. Confidence in an economy is critical. People base decisions on investment, which provides jobs, on their confidence and how they think the economy will play out over the coming few years.

Just as inflation is about people’s expectations, all these decisions are based on a hard-to-measure concept of confidence. But we do have quite a lot of measurements coming out, and Senator Fifield went through some of them. The West Australian newspaper reported last month that business confidence had crashed to levels not seen since the terrorist attacks seven years ago. That was a period of trying economic circumstances in which the performance and management of the previous government saw that, while our major trading partners suffered an economic downturn, Australia did not. The August Sensis business index for small and medium enterprises gave the Rudd government a rating of minus 28. This was actually the worst rating of all state and territory Labor governments—which, given the performance of some of them, particularly New South Wales, is not a bad achievement in only 10 months.