John Alexander (Bennelong, Liberal Party) Share this | Hansard source

Not likely! Thank you to those opposite for bringing this matter forward. The cost of living is critically important to everyone across Australia, and we're delighted to be talking about it. Unfortunately, this motion lacks context. It's a broader problem with MPIs; the need to keep things pithy and one sentence provides little space for exposition. But, in this, as in everything, context is key. The last few years have been tough—very tough. While the pandemic started as a health crisis, it has rapidly spread to be an economic one. Economies have been hit either way, and movement restrictions, initially, had the same detrimental effect on spending, which led to chaos in the countries who let this virus rip. But the last two years have also shown us that, by taking the pandemic seriously, locking down our borders and using public health initiatives from mask mandates to lockdowns, we have kept disruption to a minimum.

Each time we come out of lockdown, we spend like sailors on shore leave. A quick look at the economic data shows that, for every dip during a lockdown, there is huge growth that follows. That is the story of today's national account figures: there is certainly a dip, but the strong expectation is that the next quarter will see large amounts of growth. As the Treasurer reminded us today, the economy is recovering strongly, and this is particularly clear to see in the labour markets. Those who were working at the end of the last century will remember the high levels of unemployment during the last recessions, in the eighties and the nineties. These have been avoided this time thanks to a huge amount of investment and support from the federal government. Our payments—JobSaver, JobSeeker and more—have kept our unemployment low and supported thousands of Australians when they have needed their government to step up. Since the start of September, 350,000 jobs have come back, and job ads are more than 30 per cent higher than they were at the start of the pandemic. The RBA is forecasting the unemployment rate to fall below five per cent and to be sustainably in the fours, for only the second time in more than 50 years. When unemployment falls, wages rise.

The other function of real wages is inflation. In the June quarter last year, we saw the largest fall in inflation since the 1960s as a result of our COVID-19 response. This saw real wages growth of 2.1 per cent over the year to the June quarter of 2020, which is the highest in over a decade. Inflation has now rebounded from the record fall in CPI inflation in the June quarter of 2020. Once this has flowed through, real wages are forecast to increase.

Today, real wages are in line with pre-pandemic levels. We have faced the greatest economic shock since the Great Depression and come away with optimism, low unemployment and big spending. Real wage levels demonstrate that we have been able to recoup the losses of the pandemic, and on these foundations we will now grow. In the Statement on Monetary Policy released on 4 November 2021, the RBA upgraded their forecast for wages growth, reflecting the upgrade to labour market forecasts. The RBA expects wages growth to pick up to above two per cent by the end of 2021 before accelerating to around three per cent by the end of 2023, the fastest pace in almost a decade. The RBA governor said on 16 November:

Wages growth is expected to pick up … In terms of the specifics, our central forecast is for the Wage Price Index to increase by 2½ per cent over 2022 and 3 per cent over 2023 …

No-one is pretending that the economy has been stellar over the past two years. Of course it hasn't. The pandemic has ensured this in Australia and globally. But I am certain that Australia will see new growth as we leave this pandemic behind, and this growth has been driven by decisions on this side of the House. Our economic stewardship has kept Australia in work and supported, and with these foundations our future looks bright.

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