Mr VAN MANEN (2:23 PM) —My question is to the Treasurer. Given today’s inflation data show that households are already under pressure from massive increases in the costs of electricity, gas, water, health, child care and education, why is the government persisting with its plan to double the cost of electricity generation through a carbon tax?

Mr SWAN (Treasurer) —I do thank the member for his question about today’s CPI data, because it is very important. I think it is important because it shows that inflation is moderating. Underlying inflation at 2.4 per cent in the figures today is now at its lowest level in five years. I would have thought those opposite might have had something positive to say about that. CPI inflation for the quarter was 0.7 per cent and over the year it was 2.8 per cent, and this is down from 3.1 per cent.

The government is not complacent about these figures. We are not complacent about them at all. We do have a strong economy and, as I was explaining to the House yesterday, very strong job creation. We are now in mining boom mark 2 and that does put a very big obligation on the government to invest in extra capacity in the economy, and no area could be more important here than superfast broadband to lift our productivity, to lift our economic capacity. But it is not just that—it is the investment in the roads and the rail and the ports. It is that investment in capacity which is the best way to secure growth with lower inflation. That is very, very important. We do acknowledge that utility prices have risen substantially in recent times. That has been something that the Prime Minister has addressed at length, firstly in her speech to the Australian Industry Group the other night and again today in the House.

As the Prime Minister has explained, that is why we have put in place three tranches of tax cuts over three years, recognising that families are under financial pressure. It is why we put substantial increases into the education childcare cash rebate. It is why we are putting in place the education tax refund. It is why we are supplying additional family payments to families with teenage children. We are doing all of those things. But what we must do over time if we are to achieve sustainable growth with lower inflation is get the economic fundamentals right. There is simply no other alternative and that is why it is so disappointing to see that the economic consensus that we have had in this country has been fractured by those opposite.

Mr Pyne —Mr Speaker, on a point of order: the minister was not asked about economic consensus. He was asked about why putting a carbon price on will reduce the cost-of-living pressures on struggling families. He needs to talk about carbon taxes.

The SPEAKER —The Manager of Opposition Business will resume his seat. The question referred to the inflation data and the cost of a number of items that were listed and then went on to the aspect that the manager has spoken about. The Treasurer is responding to the question as per the standing orders, but I hope that he is not encouraged to wander from that.

Mr SWAN —Yes, Mr Speaker, I was explaining that fundamental economic reform is, of course, tomorrow’s prosperity. It is the key to sustainable growth; it is the key to lower inflation. A price on carbon is part of the fundamental reforms that we require such as the investment in superfast broadband. So fundamental reform is the key to sustainable growth and it is the key to achieving inflation outcomes that are consistent with our objectives. Today, we have seen some commentary from the former Prime Minister Mr Howard. We have also seen some commentary from the former Treasurer Mr Costello. There is one thing that they agree on: that the populism of those opposite is a trashing of their economic reform record.

Mr Pyne —Sit down, windbag.

The SPEAKER —The member for Sturt will withdraw.

Mr Pyne —Mr Speaker, I withdraw in deference to you. I did not realise ‘windbag’ was unparliamentary. I withdraw.

The SPEAKER —Order! The member for Sturt knows that he should withdraw without condition and he knows that when he does it in defiance of standing order 65(b) there is a lower standard. Whether he likes his expressions or not, that is the way that I treated him last parliament and I will continue it in this parliament.