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Wednesday, 15 October 2008
Page: 9194


Ms JULIE BISHOP (2:38 PM) —My question is to the Treasurer. Has the Treasury or the Reserve Bank advised the government whether the $10.4 billion package will put upward or downward pressure on inflation or interest rates?


Mr SWAN (Treasurer) —The Treasury has strongly endorsed this package because it is our key economics adviser. Of course, this is, by definition, a package which is being put in place to strengthen growth—and to strengthen growth at a time when the Reserve Bank is easing monetary policy and to support that easing. I am not sure whether the shadow Treasurer actually understands the fundamentals of economics at all. We are having an easing of monetary policy and because growth is slowing we have decided to stimulate our economy. That is what is required at the moment, and that is what the Treasury has supported in our discussions with it. That is what all advisers and leaders around the world are looking to do—everyone except, apparently, the Leader of the Opposition and the shadow Treasurer.

We have brought forward this package because it is very important to get ahead of what is occurring internationally, to act early and to act decisively. We have done that, and all of the forecasts will be published when we publish MYEFO, in the normal, transparent and open way—and that will be in the next month. But those opposite want to have it both ways. They want to pretend, on the one hand, that they support the package. Of course, what the package is doing is drawing down on the surplus, but who opposed the surplus’s creation in the first place? Those opposite did. The Leader of the Opposition said, prior to the last budget, that we did not need a larger surplus. That is what he said, and since that time he has been trying to vandalise the surplus in the Senate. We are in this position of strength in our economy precisely because the government had the foresight at the May budget to anticipate that there could be a turn for the worse, and unfortunately there has been. But we will act, we have acted and we will continue to act in the Australian national interest.