CANBERRA—Federal Treasurer Wayne Swan says he is "stunned" the opposition doesn't think tackling inflation is important and that cutting spending is key to that fight.
Mr Swan concedes current price pressures will take time to contain, but he said the central task of his first budget next Tuesday is to rein in spending so that inflation can be brought under control.
Opposition treasury spokesman Malcolm Turnbull says the Government would need to cut spending by $5 billion or $6 billion this year to have an impact on inflation, but thinks this would be unwise given the hardships families are already suffering.
"I'm pretty stunned that the opposition doesn't think fighting inflation is important and doesn't think cutting spending is a very important part of fighting inflation," Mr Swan told journalists in Canberra.
"Inflation is a cancer, it eats away at prosperity, that's why it must be dealt with."
New data released today shows inflation grew even further during April, despite 12-year-high interest rates.
The TD Securities-Melbourne Institute monthly inflation gauge jumped 0.5 per cent in April, lifting the annual rate to 4.3 per cent, the highest level in the series' five-year history.
Its underlying inflation gauge rose 0.6 per cent, which also lifted the annual rate to 4.3 per cent.
These are higher than last month's official readings of inflation for the March quarter and way above the Reserve Bank of Australia's (RBA')s two-to-three per cent target range.
"(Inflation has) taken a long time to build and will take some time to deal with. But tackle it we will, because we are determined to protect the living standards of Australian families and the prosperity of our economy for the long term," Mr Swan said.
The Rudd Government's first budget aims to cut Government spending to produce a surplus of at least 1.5 per cent of gross domestic product (GDP), or $17 billion.
Mr Swan said the Government outlined $10 billion worth of savings over the forward estimates prior to last year's federal election and has found more during the budget process.
Finance Minister Lindsay Tanner told the Australian Financial Review the Government had signed off on $2.2 billion of savings from public sector cuts and tougher tax compliance in moves to comfortably reach its budget surplus target.
"This Government is determined to be economically responsible, the opposition is being economically irresponsible," Mr Swan said.
Mr Swan said three examples of the former Howard Government's excessive spending were its rorting of the regional partnership program, government advertising and the implementation of Work Choices.
Mr Turnbull rejected claims the former Howard Government was responsible for the inflation problem.
"If Wayne Swan wants to write political history or economic history, he should get out of politics and get a job at a university," he told reporters in Sydney.
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