Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Hansard source

I move:

That the Senate take note of the answers given to questions without notice asked by coalition senators today.

Last night there was a coronation: the crowning of Dr Jim Chalmers as the king of wishful thinking! Over the last few days Jim Chalmers went out and told the Australian electorate that the government's predictions, supported by the Treasury, would mean that inflation in this country would fall to 2.75 per cent, within the RBA's range of two to three per cent, by December this year—wow! He said that before the parliament and the electorate got an opportunity to read the budget papers last night. What is the political ploy that the king of wishful thinking is casting over the Australian electorate? He is setting up a new villain in the minds of Australian families and households. Can you guess who that new villain is about to be? It's none other than the new governor of the RBA. Dr Chalmers is out there saying, 'Inflation's coming down to 2.75 per cent before the end of the year.' He's out there splashing $315 billion of new money around the Australian economy, and then he says: 'If interest rates don't come down, don't look at me. Look at the RBA.' That is the cynical ploy that underlines the political strategy in this budget.

You cannot bring inflation down in this country when you are spending an additional $315 billion at a time when you're not growing the economy. You can't bring inflation down when you have wasteful government spending. The government says it's saving. As Senator Hume highlighted in question time, it saves $1, but it spends $4. Who pays the price? The price is being paid today by Australian businesses and families, with the cumulative effect of 12 consecutive interest rate rises on household budgets. This is at a time when the government says: 'We're going to spend an extra $315 billion. By the way, that's about $30,000 extra for every Australian household.' Dr Chalmers is out there saying, 'Have no fear because inflation will come down by December.' He's silent on interest rates.

The test for this government is inflation and the inflation rate—there's no doubt about that—but the most important test is what happens to interest rates. This government is trying to create a great distance of responsibility between its actions and those of the RBA when it is forced to raise interest rates and to keep interest rates higher for longer because the government has taken its hands off the economic wheel. The government is recklessly driving this budget. At a time when our terms of trade are at 100-year highs, at a time when our unemployment rate is at a 50-year low at 3.8 per cent and at a time when the Treasury coffers are overflowing with tax receipts on the back of personal income taxes because the government chooses to do nothing about bracket creep and are overflowing on the back of prices for coal, iron ore and other commodities, this is an irresponsible budget. It shows no restraint.

We're now in the window of the next election. This is an election that will absolutely be fought on inflation and on interest rates. The government cannot avoid being responsible for the interest rate decision that the independent bank will be forced to make because the government has acted recklessly with such a high level of government spending.