The EconomyPosted August 08, 2007
Mr BOWEN?I am glad that the honourable member for
Now we see the Treasurer coming out and again blaming the states. He accused the honourable member for Lilley of selective quoting. He referred to evidence given by the Governor of the Reserve Bank at a House of Representatives Standing Committee on Economics, Finance and Public Administration hearing on
I think the states by and large have had very prudent fiscal policy over most of the period you are referring to.
Talk about selective quoting: he started the quote late. The Treasurer was being tricky?mean and tricky. The honourable member for
Are there dangers posed to the economy by the states running their fiscal policy in that way?
That was a fair enough question. I am sure that he spent a lot of time thinking about it. He worked it up and asked the governor, and what was the governor?s response? He said:
I think that is a bit of an unfair characterisation.
We did not hear that from the Treasurer. He started at the next sentence. Talk about selective quoting; talk about gilding the lily; talk about playing with the facts. The Treasurer has been caught bang to rights. The honourable member for
I will move on from that.
No wonder, because he did not get the answer that he wanted. He went on to say:
Given that the latest rate rise was in part in response to factors such as oil prices and bananas ...
The government cannot get its lines straight. It is either the fault of the states or the fault of bananas. You cannot blame them both. Apparently, it is everybody?s fault except the government?s.
We had the Prime Minister saying in question time today, ?I didn?t authorise those ads; they didn?t really represent my point of view.? That is not how the Australian people saw it. The Australian people took the Prime Minister at his word. He said that interest rates would stay at record lows, and millions of Australians believed him. But I agree with the Prime Minister on this point: there is something more important than the politics of this issue. There is something even more important than his credibility, which lies in tatters. What is more important is the effect of today?s interest rate increase on millions of ordinary Australians. That is the most important thing out of today?s debate. There is one very good reason why the first economic responsibility of the Commonwealth government?whoever forms it?must be to have downward pressure on interest rates, and that reason is that people are hurting, and hurting badly. Some of us on this side of the House have been talking about this now for almost two years. We have been talking about the stresses in parts of the economy and the pressures on working families. But nobody on the government side listened until
Let us take a snapshot of some of the key indicators. There has been a 13 per cent increase in personal insolvencies across the country?a very substantial increase. In some parts of the country, there has been an increase of much more than that. In
There are more figures, but behind every figure is a family, a family struggling, a family trying to work more, a family reducing expenditure so much that they have already cut out the luxuries and are now into the essentials. This is going on in
This is not what people had in mind when they believed the Prime Minister at the last election when he said, ?I?ll keep interest rates low.? They did not have in mind a regime in which
The Australian people do not want false promises. They know that there are no magic solutions. They know that interest rates do not come down overnight. They know that the Reserve Bank sets interest rates. But they expect the government to listen and to put downward pressure on interest rates. They do not expect a blame game. They do not expect the Prime Minister of this country to say, ?I didn?t promise at the last election to keep interest rates at record lows and, by the way, go and blame the states.? They expect the Prime Minister to show a bit of empathy and to have an economic framework that puts downward pressure on interest rates. They expect the Prime Minister to run a fiscally conservative stance and not to take every item on the smorgasbord, which the Treasurer condemned him for. They expect the Prime Minister to be running a budget surplus that puts downward pressure on interest rates and not having crazy
The Prime Minister and the Treasurer walk in here and say, ?Those terrible states, they are spending too much on infrastructure, you know. They are putting upward pressure on interest rates by spending too much on infrastructure,? when the current and previous Governors of the Reserve Bank have warned them 20 times that the skills crisis and the infrastructure crisis are the things putting pressure on interest rates. I had a look at the Reserve Bank statement today. I thought, ?Oh well, clearly Morris Iemma, Peter Beattie and John Brumby are going to cop a whack in the Reserve Bank Governor?s monetary policy statement issued today.? But the word ?states? does not get a mention. The word ?Premier? does not get a mention. The words ?deficits run by state governments? are just not there. What we get is a full page statement from the Governor of the Reserve Bank with no mention of the apparently evil states putting upward pressure on interest rates.
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