swan slams coalition over inflation legacy

Reading what Swann has said he is preparing Labor's defence if they can't fix the inflation bogey

THE Rudd Government inherited the highest underlying inflation in 16 years from the Coalition, Federal Treasurer Wayne Swan said today.

The Government today released Treasury Department advice given to it in the wake of last year's election win.

It was the first time an incoming federal government had publicly released such material.

Mr Swan said in Brisbane the brief contained significant material on the economic challenges faced by Australia.

"I guess most importantly this document really pointed to the nature of the inflation problem that Australia now faces,'' Mr Swan said.

"It points to the size of the inflation problem that this government inherited from the previous government and it is a challenge this government is determined to meet.

''. . . In the months of October, November and December Australia had the highest underlying inflation that this country has experienced in 16 years.

"That is a significant problem for the country and ... high inflation certainly does put upward pressure on interest rates.''

Mr Swan said data from the Australian Bureau of Statistics showed that inflation had been well out of the previous government's target band.

"It shows that inflation had been on the march for over two years under the previous government,'' Mr Swan said.

"There is a substantial inflation problem inherited by the government and one that we are determined to act on.''

But the opposition did not recognise the scale of the problem because they were partly responsible for it, he said.

"What the Rudd government will do is everything within its power to put downward pressure on inflation because you see, we had six interest rate rises in the last three years and 10 in the cycle.''

Mr Swan said it would take "some time'' to deal with the problem of inflation.