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Tuesday, 7 February 2012
Page: 22

Economy


Mr CHEESEMAN (Corangamite) (15:27): My question is to the Treasurer. Will the Treasurer update the House on Australia's strong economic performance in a difficult global environment as well as on the importance of putting in place reforms to support jobs and growth?


Mr SWAN (LilleyDeputy Prime Minister and Treasurer) (15:28): I thank the member for his very important question. Today, the independent Reserve Bank left the official cash rate on hold. This follows cuts to the cash rate of 25 basis points in both November and December. In leaving the cash rate on hold today, the Reserve Bank has struck a balance between global uncertainty on the one hand and Australia's strong economic fundamentals on the other. We understand that families are doing it tough, but mortgage rates are significantly below the level that we inherited from those opposite. If you have a $300,000 mortgage at the moment and you are paying the standard variable rate, you are paying $3,000 a year less than you would have paid under the coalition.

It is very important that we have continued sound economic management to deliver strong growth on the one hand and contained inflation on the other. The strength of the fundamentals was pointed to today by the Reserve Bank. They talked about the fact that China is still robust and the challenging conditions in Europe—although those conditions have got a little better. But they also pointed to the fact that domestic growth is strong and that we are expecting through this year trend growth of 3¼ per cent, trend growth which will support job creation in this country. We have seen 700,000 jobs created in Australia over the past four years. But a balance needs to be struck. As the Reserve Bank has said today, should demand conditions weaken materially, the inflation outlook would provide scope for easier monetary policy because the Reserve Bank is acutely aware of the challenges to our economy from the global situation. Thankfully, here we have unemployment at 5.2 per cent, half what we see today in Europe, and we are building on the strengths of our economy. Fundamental to that strength is our determination to deliver a surplus in 2012-13. We have seen the slapstick farce of those opposite today on the question of surplus. Yesterday the finance spokesperson was out there running away from a surplus at a hundred million miles an hour. The deputy leader joined him. Then of course we have the farce on television last night of the shadow Treasurer.

Mr Pyne: Mr Speaker, I rise on a point of order. The question did not allow for any of this indirect attack on the opposition from the Treasurer. I would ask you to tell the Treasurer to be directly relevant to the question. It was not asking about the opposition's position.

The SPEAKER: The Treasurer will return to the question.

Mr SWAN: Most certainly, Mr Speaker, because we on this side of the House are determined to deliver a surplus because it goes to the very fundamentals of our economic wellbeing. Last night we saw on Q&A the biggest political bellyflop in a long time from the shadow Treasurer, denying that he had said there was a $70 billion crater in their budget bottom line.

Mr Pyne: Mr Speaker, I rise on a point of order.

The SPEAKER: What is this different point of order?

Mr Pyne: The first point of order was on direct relevance; this one is to point out to you that he is defying your ruling.

The SPEAKER: I think I am the best observer of whether or not someone is defying my ruling. I call the Treasurer.

Mr SWAN: I was talking about the strength of our economic fundamentals. We have the AAA credit rating—the sovereign, gold plated AAA credit rating—from the three major global credit rating agencies for the first time in our history, something which was not ever achieved by those on that side of House who every day of the week go around the place talking down our economy. We are determined to deliver tax reform to keep our economy strong. Those on that side of the House want to give a tax cut to Gina Rinehart and Clive Palmer and they want to stop a tax cut to 2.7 million small businesses around our country. To keep our economy strong, we need good budget policy, we need tax reform and we need people who are serious about good economic policy. What we have on the other side is simply a rabble.

Ms Gillard: It being past 3.30 pm, I ask that further questions be placed on the Notice Paper.

Mr Hockey interjecting

The SPEAKER: The honourable member for North Sydney will resume his seat.

Ms GILLARD: The opposition understood that would be the position.

Mr Hockey interjecting

The SPEAKER: The honourable member for North Sydney will remove himself from the House under standing order 94(a).

The member for North Sydney then left the chamber.