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Does the Government really have inflation under control?



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Wed, 7th May 2008 DOES THE GOVERNMENT REALLY HAVE INFLATION UNDER CONTROL?

The Hon Peter Dutton MP Shadow Minister for Finance, Competition Policy and Deregulation

Shadow Minister for Finance, Competition Policy and Deregulation, The Hon Peter Dutton, has questioned the Government's commitment to tackling inflation.

''Mr Tanner has said that the nation has an inflation ''problem'', not a ''crisis'' and that giving Victorian teachers a pay increase of up to 15.2% would not cause any flow on.

''How can you seriously argue that this large pay rise will not have an inflationary impact on the economy? If Mr Tanner has received advice from his Department on this issue he should release it immediately.

''It is OK for Julia Gillard to say that the wage increase can't flow on to others, but the precedent has been set. There will be more wage rises. The analysis from the Treasury published in today's Australian backs that up.

''The Tanner and Swan show is turning into a farce.

''The reality of the situation is that the Government is simply cutting Coalition programs to make room to implement Labor programs. In 2009-10 we will likely see a large increase in Government spending. Industrial relations is a good example of this.

''We continue to see policies implemented that will have inflationary impacts, such as the Government's industrial relations policy, FuelWatch, the Alcopop tax, and the raising of the effective diesel tax on freight. The list goes on.

''And we are seeing no action to protect consumers from the rising price of food as we begin to feel the effects of the global food shortage.

''The Government promised cheaper fuel and cheaper groceries, and has delivered nothing but token policy gestures to address these issues to date.

''Mr Tanner and Mr Swan are happy to bang on about the inflation ''problem'' but they are not taking any decisive action to keep it in check. To them inflation is simply a political tool, and questions should be asked about whether the Government has the interests of Australians or the interests of the Labor Party as its first priority.''