Mr BOWEN (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer) (4:45 PM) —The Leader of the Opposition has lodged this matter of public importance about the so-called lack of an effective plan for managing the Australian economy. There is a certain irony about this matter of public importance, because the government which did not have a plan for Australia’s future was thrown out on 24 November. The government which did not have a plan to bring Australia’s level of investment in education and skills up to international standards was thrown out on 24 November. The government which did not have a plan to let Australians compete with the rest of the world on the basis of their skills and innovation was thrown out on 24 November.

The Australian people voted in a government with a plan for Australia’s future. The Australian people voted in a government willing and able to invest in skills, education and infrastructure. The only plan that the previous government had was called Work Choices, and the Australian people passed judgement on that plan on 24 November. Of course, the shadow cabinet also passed judgement on that plan this week and rolled the Leader of the Opposition and the Deputy Leader of the Opposition.

To cover up their lack of a plan in that election campaign, they developed a scare campaign. Remember the ads? ‘Seventy per cent union officials will ruin the country.’ Those terrible union officials! ‘Labor is anti business.’ That was their excuse for a plan—a scare campaign. Well, a scare campaign does not fix inflation. A scare campaign does not fix the bottlenecks in the supply chain of this country. A scare campaign does not put downward pressure on demand and interest rates. Only a plan will. They delivered a scare campaign; we delivered a plan.

We have a plan to compete on innovation and skills. They had a plan to cut wages and have a race to the bottom. We have a plan to increase productivity. They had a plan to slash working conditions. That is the essential difference between the two sides of the House. They did not develop a plan when the Reserve Bank gave them 20 warnings on the growing inflationary pressures. They did not develop a plan when the Reserve Bank warned that the economy was overheating. They did not develop a plan because they were not capable of it. Of course, they have not learned. They still do not have a plan. They are the alternative government of Australia.

Remember what the shadow Treasurer’s plan to fight inflation is? It is an oldie but a goodie. Remember his plan? ‘Ignore it and it shall go away.’ ‘Don’t talk about inflation because you’ll exacerbate inflationary tendencies.’ He has issued press releases saying, ‘The Treasurer is increasing inflationary pressure in Australia by talking about inflation.’ His plan is: ignore it and it will go away.

The Reserve Bank minutes came out yesterday. I am sure we all read them. We all know about them. What did they say when talking about their decision to increase interest rates? They said:

I would expect that the shadow Treasurer last night penned a very strongly worded letter to the Governor of the Reserve Bank, complaining that he was increasing inflationary expectations in this country. Has the shadow Treasurer called each and every member of the Reserve Bank board to complain that they have been talking about inflation too much? Silence—he has not put in the call. Why didn’t you call, Malcolm? He has not put in the call and he has not penned the letter, because he is full of hollow words. All he can come up with is to say that the Treasurer of this country should not talk about inflation. When the Reserve Bank talks about inflation, we have deathly silence from the shadow Treasurer, because he does not want to get into a public spat with the Reserve Bank governor. He does not want to get into a spat with the Reserve Bank board. He has been caught out. He has been caught out saying we should stop talking about inflation, and what does the Reserve Bank do? It issues a warning: inflation is growing. The Treasurer says that the inflation genie is out of the bottle. The Reserve Bank comes out and says ‘inflation would rise further in the March quarter’. Deathly silence—he is not going to criticise the Reserve Bank because he does not want to be at war with the Reserve Bank. He does not want that; he just wants to be making cheap political points against the Treasurer of the country.

Mr Pyne —I rise on a point of order, Mr Second Deputy Speaker. There are forms of the House in which the member can ask the shadow Treasurer questions, as you would be aware. If he wishes to ask a question—

The DEPUTY SPEAKER (Hon. BC Scott)—Is that your point of order?

Mr Pyne —he is entitled to do so and the shadow Treasurer, I am sure, is quite happy to respond.

The DEPUTY SPEAKER —The member for Sturt will resume his seat. There is no point of order.

Mr Price —On the point of order, Mr Deputy Speaker: this is a deliberate tactic. This is the 20th point of order today.

The DEPUTY SPEAKER —There is no point of order.

Mr BOWEN —They did not have a plan then and they do not have one now. Perhaps they did not have a plan because they did not think they had a problem. Remember what our old friend the member for Higgins said? ‘We’ve got inflation exactly where we want it.’ The old ghost of Christmas past in by-election alley up here—he thinks he had inflation right where he wanted it. They did not have a plan because they did not think they had a problem. They left us with the highest underlying inflation in 16 years, and that was exactly where the former Treasurer wanted it. I am glad about that! It is not where we want it, it is not where the Reserve Bank wants it and it is not where any objective, serious economic commentator on the future of this nation would want it.

Perhaps that is why they were happy to leave Australia’s investment in education at 5.8 per cent of GDP—17th in the OECD, behind Poland and Hungary. They did not care about the supply side. They did not care about the skills and education crises in this country because they had inflation right where they wanted it. Perhaps that is why they were happy not to invest in infrastructure. Perhaps that is why they were happy not to invest in preschool education and to leave Australia’s investment in preschool education at one-fifth of the OECD average. They did not care. They did not think they had a problem. They did not have the wit to come up with a solution. They were happy to oversee a reduction in investment in higher education in Australia of seven per cent when the OECD average was an increase of 48 per cent. That is what they were happy to do. We have an alternative approach. We do have a plan.

We hear a lot about reform under the Howard-Costello years and what great economic reformers they were. We hear it almost universally from that side of the House. We do not hear other people commenting on that. We hear a lot about what great economic managers they were. Well, let us hear a bit more about it. Let us hear Andrew Charlton, the respected economist, who said:

They were coasting on the miner’s back, happy to let the commodity boom increase demand in Australia but not happy to make the important, fundamental reforms to the Australian economy, not happy to invest in infrastructure and skills to put downward pressure on inflation, not happy to invest further in our future by racing to the top by competing in skills and innovation—just happy for a race to the bottom by cutting wages and by cutting working conditions.

What are the implications of their lack of reform? Eleven interest rate increases in a row. What is the real impact of this? As a Western Sydney MP, I will tell you the real impact: housing foreclosures doubled and people are losing their homes. That is the real legacy of their government. There are other members here who are seeing this day after day, just like I am, across the country. These people are entitled to know not only what the plan of the alternative Treasurer of this country is but what he thinks. They might get an insight. He will remember walking through the doors of the parliament after an increase in interest rates under the previous government. We remember. What did he have to say? What was his comment? ‘I think the interest rate hike has been overdramatised.’ He said that there was not a problem.

Mr Price —Who said that?

Mr BOWEN —The member for Wentworth, the alternative Treasurer of Australia. The interest rate increase ‘has been overdramatised’! Well, the people in Western Sydney do not think it has been overdramatised. Eleven interest rate increases in a row means they are losing their homes in record numbers. This is his government’s legacy, the legacy of its lack of a plan. Those people do not think that we are being overdramatic when we say that we need to put in place a very conservative fiscal policy to put downward pressure on interest rates. They do not think that we are being overdramatic when we say that increasing government spending by 4.5 per cent a year needs to stop. They do not think we are being overdramatic when we say that we need to invest in infrastructure and skills to put downward pressure on interest rates by fixing the bottlenecks in the Australian economy, like the Reserve Bank asked the former government to do 20 times. (Time expired)