Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Evans, the Minister representing the Prime Minister. Can the minister outline to the Senate what the government is doing to manage inflationary pressures on the economy, including easing the skills crisis?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank Senator Forshaw for the question. The Rudd Labor government is very focused on building a modern economy to meet the challenges of the future, but at the moment we have very pressing concerns on the domestic front with inflation. Inflation hurts working families and businesses; it eats away at savings and threatens our national prosperity. The cause of the pressure is clear. The Reserve Bank repeatedly warned the Howard government to address the skill shortages, the lack of capacity and the infrastructure constraints in the economy. I know that very well because, when I talked to business while in opposition as our resources spokesperson, the thing that business stressed to me all the time was the capacity constraints in the economy. What was concerning business was the lack of skilled labour, the lack of infrastructure and the lack of capacity to grow their businesses. The RBA and business warned them, but the former Howard government failed to heed those warnings and failed to assist in building the capacity of the economy. As a result, we became ill prepared to deal with the inflationary pressures.

The economy is strong, but future prosperity is threatened by the cancer of inflation. The government is realistic in knowing that the problem cannot be solved overnight. These pressures took a long time to build and will take time to turn around. That is why we have been hard at work meeting the challenge since day one. We did not create the problem. The gentlemen on the other side created the problem, but we are going to fix it. That is why the Prime Minister has outlined his five-point plan to fight the inflation legacy that the Howard-Costello government left us. Senator Minchin should take responsibility for his failure to rein in the spending of that former government. Senator Minchin ought to take responsibility for the fact that his Prime Minister and Treasurer spent like drunken sailors while he sat on his hands. They spent like drunken sailors while the finance minister was missing in action.

Opposition Senators:

Opposition senators interjecting—

Alan Ferguson (President) Share this | Link to this | Hansard source

Order! Resume your seat, Senator Evans. I call Senator Evans.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

The Rudd government is very much focused on fighting the inflation challenge because we know inflation hurts families and businesses and undermines our capacity to build a modern, successful economy.

We have been focusing on our five-point plan. The first point is fiscal restraint, with the aim of delivering a budget surplus of at least 1.5 per cent of GDP in 2008-09. That fiscal discipline is vital to us in beating inflation. We have to find spending cuts. We have to cut the wasteful spending, such as the regional rorts program run by the previous government, and deliver the fiscal discipline that the previous government failed to deliver. We have to provide incentive to encourage private savings. We have already made a start on that with the First Home Saver Accounts, but more will be done.

We have to tackle the chronic skills shortage in the economy. I was blown away the other day when, I understand, the shadow Treasurer apparently claimed there is no skills crisis. I do not know where he has been, because every business that comes in my door, every business organisation that talks to me, says they have a skills crisis. But, according to the rudderless opposition, they do not think there is a skills crisis. As I look across the chamber, I see a skills crisis all right!

Opposition Senators:

Opposition senators interjecting—

Alan Ferguson (President) Share this | Link to this | Hansard source

Order!

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Look behind you. Talk about a skills crisis!

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

What I see is the government, Senator Minchin. So this government will provide national leadership. We will tackle the infrastructure bottlenecks, we will look to lift the participation rate by encouraging people to back the economy and we will run a proper immigration program. (Time expired)