Dave Sharma (Wentworth, Liberal Party) | Hansard source

It's good to rise to speak about the important measures in the budget to address cost-of-living pressures on Australian households—families, singles and others. These pressures are indeed real and significant, which is why addressing the cost of living was such a big part of the budget for 2022-23, as announced by the Treasurer on Tuesday evening.

It's important to understand the causes of these cost-of-living pressures. Ultimately that has to inform how you address them, and there are a number of them. There is the pandemic and the two years worth of disruptions that has caused. The effects of the pandemic are ongoing, particularly in China, the biggest exporter and manufacturer in the world, which is still subject to significant lockdowns, factory closures and stay-at-home orders. There are strained global supply chains. The member for Grey mentioned the astronomical rise in the cost of shipping a container of goods, for instance, because of the shortage of shipping and the shortage of containers and a number of other things, again to do with the pandemic. There are rising inflationary pressures around the world.

Of course, underway right now is Russia's illegal and unlawful invasion of Ukraine, which is hitting commodity and energy prices particularly hard. Russia is itself the world's largest exporter of coal, the world's second-largest exporter of iron ore and the world's third-largest exporter of gas, and it's also a major wheat producer. Ukraine is also a major wheat and commodity producer, so the effect of that conflict is spilling over into global commodity prices and, of course, into Australian households, because Australia is part of the global economy. We are a trading nation and we are susceptible to changes in the global economy.

What we are seeing here in Australia is inflation that is higher than it has been for some time, at 3½ per cent currently. That's still quite low compared to global figures. US inflation is running at 7.9 per cent, in the Euro area it's about 5.7 per cent, in Canada it's north of five per cent and in the United Kingdom it's around 6.2 per cent. The budget recognises that these inflationary pressures do exist. The cost-of-living pressures are exerting themselves upon Australians. Any person here in the chamber who has gone and done the groceries recently or filled up their car with petrol will know only too vividly that these cost-of-living pressures are real. We have introduced in the budget a number of measures which are temporary, targeted and responsible and which are designed to alleviate these cost-of-living pressures without baking in or creating ongoing structural issues with our budget.

One of the most important measures we have done is to increase the low- and middle-income tax offset by $420, and 10 million Australians will be eligible for that, including 58,000 in my own electorate of Wentworth. This measure will see a single-income household receive up to $1,500 in an offset on 1 July, or $3,000 for a two-income household. That's on top of tax cuts which have been delivered over the last several years, which means that an Australian earning average earnings—$90,000 a year or thereabouts—is already $1,215 a year better off than they were in 2017-18, for instance. This measure is not cheap; it's $4.1 billion over the forward estimates, but it will provide an important and targeted alleviation of cost-of-living pressures.

We're also introducing a cost-of-living payment of $250, which will go to pensioners, welfare recipients, concession card holders and others. There will be five million beneficiaries of this measure across Australia, and 6,000 in my own electorate of Wentworth. Again, that is on top of an increase in these payments of $20 a fortnight, or $30 for a couple, which was announced as an inflationary index measure just a few weeks ago. This measure comes to $1.5 billion in the forward estimates.

We are halving the fuel excise as well. That's already in effect; people will see that the amount of fuel excise they are paying on petrol is at least 22c a litre less than it was before. Again, this is a temporary and targeted measure. It's only going to be for six months, and it's designed to address the spike in energy prices and liquid fuel prices we have seen.

How have we been able to do this? We have been able to do this because the budget is in a strong position and the economy is in a strong position. As the budget papers show, our economy is almost alone amongst OECD countries in being 3.4 per cent larger than it was before the pandemic. Our unemployment figures are much lower than comparable countries, at four per cent—our lowest level in 48 years—and forecast to fall further. Our outlays are lower as a result, which means pressures on the budget have been alleviated and we're able to support these cost-of-living measures.

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