Mr TURNBULL (2:06 PM) —My question is addressed to the Treasurer. I refer the Treasurer to the fact that state final demand in Australia’s largest state contracted in the June quarter. I also refer to the fact that, nationally, household spending contracted. I ask the Treasurer: why is the government increasing the prices that households will pay for cars, private health insurance and alcohol?

Mr SWAN (Treasurer) —I thank the member for his question. The member has great difficulty in welcoming any good news when it comes to the economy. But today’s growth figure is a solid 0.3 for the quarter and 2.7 for the year. Given the international circumstances that we face and given the impact particularly of 10 straight interest rate rises under the Liberals, the economy is certainly slowing. That is there for all to see in the national accounts today—the impact of 10 consecutive interest rate rises under the member for Higgins and the global difficulties that we experience.

The member for Wentworth is living in cloud-cuckoo-land if he thinks slugging families with a $400-a-month interest rate bill does not make much difference, because that is what 10 interest rate rises in a row under those opposite have done to Australian families—the Costello interest rate bill: $400. And that has an impact on consumption. I know the member for Wentworth does not think that an interest rate rise has an impact on consumption because, when interest rates went up for the seventh time, he said their impact was overdramatised! That is what he said. He does not think $500 a year means a lot to families. But it certainly does. And $400 a month—which hit families, particularly in New South Wales, and hit them hard—has a very, very big impact on consumption.

Mr Hockey —So why are you putting up taxes?

The SPEAKER —Order! The question has been asked.

Mr SWAN —So it is true: consumption in New South Wales did take a hit. And the reason is simply this: there are more people in New South Wales under housing stress because they borrow a lot more to get into the housing market, and it has, unfortunately, impacted there. So the member opposite really ought to be much more truthful about what is going on in the economy, who is responsible for what has occurred and what needs to be done to address this problem. Last night, the member for Wentworth was on The 7.30 Report, and this is what he said:

Isn’t that an awful thing to say about Mr Howard and the member for Higgins—particularly on the night that Mr Howard is in the House! That is a terrible thing to say about them because it is so true. And New South Wales is now living with the consequences of the neglect by the Liberals of capacity constraints, particularly in infrastructure, and the consequences of their reckless spending. But we on this side of the House accept our responsibility to put in place a disciplined fiscal policy that deals with inflation and to make the investments for the future that deal with the capacity constraints so that we can generate growth with lower inflation and lower interest rates.