Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Conroy, the Minister representing the Treasurer. Is the minister aware of recent suggestions that inflation is not a significant problem for the Australian economy? What is the government’s response to these claims?

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

I thank Senator Hutchins for his question. This government believes that taming inflation is an urgent priority of economic policy. We understand that inflation hurts working families. Inflation puts upward pressure on interest rates, erodes living standards and threatens future growth and job creation.

Opposition Senators:

Opposition senators interjecting—

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

Those on the opposite side might not be interested in listening to the answer, but Australian families are, because in order to fix a problem you need to be upfront and honest about it. The key measure of ongoing inflation, the underlying weight of inflation, has risen to the highest level in 16 years. And so you should go quiet, senators opposite; you should go quiet. Inflationary pressures have been building in our economy for some time and they are now manifesting across a broad range of goods and services. The CPI has risen by nine per cent over the last three years, but fruit and vegetables have gone up 20 per cent, child care has gone—

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

There’s been a drought!

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

You may not care, Senator Minchin, but let me tell you Australian families do. You may not care, but child care has gone up more than 30 per cent. Is that the fault of the drought? Petrol has gone up 29 per cent, and that was before the recent increases. There is no escaping the fact that current inflationary pressures are a product of past policy failures by the previous government. They failed to sufficiently invest in expanding our economic capacity to improve productivity. They undertook reckless government spending in an attempt to shore up their political survival, with scant interest in the fact that this would leave all the heavy lifting to the Reserve Bank to protect the community from rising interest rates. As a consequence, Australian families have borne the brunt of 12 consecutive interest rate rises—12 in a row. In the last three years, increases in official rates have added $317 a month to the average mortgage.

The Rudd government has acknowledged the inflation problem, as the first step towards fixing it. It is very disturbing—very, very disturbing, and it continues on—that those on the opposite side continue to be in a state of denial. The shadow Treasurer’s speech last week showed that the coalition is still apparently willing to tolerate high inflation and the risk that it poses to Australia’s economic future. In fact, the shadow Treasurer denies the Liberals’ inflation legacy: it is a fairy story and a political myth! On the very day the December quarter inflation figures were released showing that underlying inflation was at a 16-year high, the shadow Treasurer stood up and claimed the Liberals had managed to contain inflation. On the day inflation hits a 16-year high, the shadow Treasurer says, ‘Not a problem.’ In the light of these comments—(Time expired)