Coalition ‘adopts Hanson policies’

Ms Gillard told the Australian Industry Group’s annual dinner at Parliament House on Monday that recent comments by Coalition frontbenchers Joe Hockey and Andrew Robb were putting the economic consensus at risk.

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Mr Hockey, the shadow treasurer, last week called for greater controls to ensure banks could not raise mortgage interest rates beyond the regular adjustments of the Reserve Bank.

And finance spokesman Mr Robb sparked a debate on the merits of floating the Australian dollar.

Ms Gillard said that since the early 1980s there had been a general consensus within the major political parties, business and industry on the need to open up the economy.

“I believe the reform consensus is now under serious threat,” she said.

“If a strain of economic Hansonism takes hold on the conservative side of politics in a parliament which is so finely balanced, our long-term prosperity is at real risk.”

Former Liberal MP and One Nation founder Pauline Hanson advocated protectionism, stronger banking regulation and a flat tax system.

The prime minister said “economic populism” put Australian jobs and growth at risk and industry leaders needed to voice their interest in keeping reform on track.

She said she would put reform at the centre of all decisions, despite having the challenges of being in minority government.

Ms Gillard also put her case for a carbon price, saying it was essential both for the environment and easing pressure on household electricity prices – which have risen by more than 40 per cent in three years.

Setting a carbon price would give power companies greater certainty to invest more in infrastructure while giving them a new revenue stream, she said.

“I’m not going to allow a repetition of this problem in another 10 years by allowing another sustained period of under-investment now,” Ms Gillard said.

Mr Robb later described Ms Gillard’s comments as pathetic attacks on himself and Mr Hockey.

He accused the prime minister of telling blatant lies about them.

“Telling blatant lies about your political opponents is no substitute for taking the hard reform decisions and engaging in a mature debate,” Mr Robb said.

He launched his own attack, saying Ms Gillard refused to accept that her reckless spending and borrowing had sapped Australia’s economic resilience.

“Secondly, to do something about it is the greatest threat to consensus,” he said.

“Sadly, we have an economically illiterate prime minister, who resorts to diversions to deflect from her government’s appalling record of waste and mismanagement.”

Deputy opposition leader Julie Bishop told reporters the government had delivered no reform to date and the coalition frontbench was putting legitimate issues in the spotlight.

“They were raising issues for debate and that’s perfectly legitimate,” Ms Bishop said.

“Raising the issue of banks and interest rates – that’s an issue that bites out in the electorates across Australia and people want to have that debate.

“Issues about our currency should be debated.

“And for the government to shut down debate shows that the government is in danger of serious policy paralysis.”

Ms Bishop said she understood one of the government’s promises to the independents to form minority government – a summit to examine the proposals of the Henry tax review – looked likely to be put off until after the May 2011 federal budget.