Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak about inflation, which was not addressed in the budget that was handed down last night. You don't solve inflation by having an expansionary, stimulatory budget, and that's what we saw last night—a typical Labor big-taxing, big-spending budget. What do we know about inflation? I often quote from my book on basic economics, which I keep in this chamber, and I know those opposite enjoy it when I do. It says: 'Inflation is, in effect, a hidden tax. The money that people have saved is robbed of part of its purchasing power, which is quietly transferred to the government. And inflation is not only a hidden tax; it's also a broad-based tax. It siphons off wealth across the whole range of incomes and wealth, from the richest to the poorest.'

That is basic economics, and what we saw last night from the Labor government was a typical Labor budget—big spending, big taxing. It will do nothing to solve the cost-of-living crisis that Australian families are facing all over this country. You do not spend your way out of an inflation cost-of-living crisis. It doesn't work that way. The budget last night will contribute to inflation. In an Australian Financial Review article that was put up recently, economists are already predicting that there is going to be another interest rate rise directly flowing from last night's budget because of its expansionary impact—an injection of $21 billion this year into a red-hot economy facing inflation. It's the wrong budget at the wrong time.