Slade Brockman (WA, Liberal Party) Share this | Hansard source

I rise today to speak on the importance of an independent Reserve Bank. Speaking at the annual CEDA dinner, just last Tuesday night, Dr Lowe argued that lifting wages to match inflation would risk a painful 1970s or 1980s-like recession. This is an uncontroversial statement. With inflation currently sitting somewhere between 7½ and 8½ per cent, wage rises around that level would risk a cost price spiral and would risk a significant recession.

Yet what is the response we get from a senior government minister—in fact, the former leader of the Labor Party? He attacked Dr Lowe's comments, calling them 'rubbish.' He argued it depended on how significant the wage increase was. But that's the whole point. The wage increase Dr Lowe was talking about was a wage increase in line with inflation. I find it very odd that while Minister Shorten is willing to attack Dr Lowe, he didn't attack the finance minister who said exactly the same thing in this place just a few days ago, that of course a wage rise at the level of inflation would be damaging and is not something the government is seeking.

The importance of an independent Reserve Bank cannot be understated. The role of the Reserve Bank in keeping inflation under control is a key role in our economic settings. If you politicise the board then you risk the extraordinary history of consistent economic growth and the ability of Australia to weather the storm better than most comparable economies over the last 30 years. An independent Reserve Bank is central— (Time expired)