Extract from Hansard, 14 May 2008

Mr BOWEN: There are three things the government can do to deal with inflation. We can get government spending under control, we can deal with the infrastructure crisis in Australia and we can deal with the skills problems in Australia—the three things that the Reserve Bank has pointed out have led to inflation.

Let us deal with getting government spending under control. I have to say that there are people who can explain this better than I can. I would like to share with the House an article from the Sydney Morning Herald by Stephen Anthony, a former very senior official in the Treasury and department of finance. This is what he had to say about the tax-and-spend Liberals who sit opposite. He said this:

Unfortunately, the Howard government lost its way from 2004. When the China boom arrived with soaring commodity prices there was no offsetting tightening in fiscal settings to “bank” windfall revenue gains from mining. The drunken sailors pillaged the budget for political expediency and produced a structural deterioration in the bottom line.

Those are not my words; they are the words of a former senior official in the Treasury and the department of finance. He went on:

The huge spending injection coincided with the further upturn in the business cycle. Blind Freddy knew inflation would be the result.

That is what Stephen Anthony has said. He has told us of the lie in what the shadow Treasurer has just put before the House. They say they had government spending under control. Well, if hypocrisy were a crime the shadow Treasurer would be doing life, because they had government spending completely out of control and it has been up to us to put downward pressure on inflation by getting government spending back under control.

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