Thursday, 24 November 2022
Appropriation Bill (No. 1) 2022-2023; Consideration in Detail
Before I ask my question, I'd like to make a few comments about the budget. It was a budget that sank to the bottom of the ocean faster than the Titanic. Probably in a hundred years time, a rusting hulk will be discovered deep beneath the ocean of absolute nothingness because that's what the budget was, which makes it very difficult to ask questions about it. However, I will make some comments about it before I do attempt to ask a question about this load of nothingness.
This was an incredible missed opportunity. The economy and the budget were in unexpected health. We saw a real economic growth rate of 3.9 per cent in the last financial year and we saw a budget with a massive $48 billion turnaround in the underlying cash balance from the budget forecasts, and from the moment that New South Wales and Victoria were locked down, we saw a budget that was in balance through to the end of the financial year. So this was a chance for Labor to consolidate the strength of that position and, in the process, take pressure off the pressures that Australian households, families and businesses are feeling on interest rates and inflation. And they are very real pressures. As they approach Christmas and they're looking at Christmas presents and holidays over the January period, there is no doubt that the tightening of budgets is really being felt because of the increase in interest rates and the cost of living.
The opportunity for government was to deliver a budget that was responsible and that would do what treasurers normally do when they come into a role, which is to deliver a budget which is improving year on year. In fact what we saw, remarkably, was a budget that made the budget deficit worse over the coming years, going from a $32 billion deficit up to a $51 billion deficit. You say to yourself: how on earth could they have done that as we're coming out of a pandemic? The answer is: they added $115 billion of spending since the March budget, as we are coming out of the pandemic. It is a Herculean feat to have pulled that off. The Treasurer, of course, has chosen on a famous occasion to mishear questions about the budget. I'd be mishearing questions about the budget if I'd achieved such a dreadful outcome as he did in this budget.
When you look at what economists have to say, they reflect this point. Stephen Koukoulas, who's not on our side of politics, a former economist to Julia Gillard, says, 'The budget puts no downward pressure on inflation, leaving "the RBA with all the work of carrying the can in getting the inflation rate lower."' You left them carrying the can. Warren Hogan, former ANZ economist, wrote in the AFR:
… federal fiscal policy has failed to join the fight against inflation, preferring to sit on the sidelines and cheer on the "independent Reserve Bank" as it takes up the task.
And then we see the spectre in recent days of them bagging the governor. Well, they've left him with the job. He's the one that actually has to deal with this situation because their budget does absolutely nothing. And since the budget was released, we've seen annual inflation hit 7.3 per cent, the highest level in three decades. I was looking at the cash rate expected in the futures market. It's expected to go close to four per cent. That puts mortgages in the six to seven per cent range. That's where the market expects it to go.
We've got a long way to go here. There's a lot of pain to be felt. And, sadly, we have no plan; we have a white flag from those opposite, who have absolutely nothing to contribute. I'll tell you what? This is a government with an excuse for everything and a plan for nothing, and the result is that a family with a $750,000 mortgage is now paying more than $1,200 more every month on their repayments compared to May this year, and there is a lot further to go. So, given this budget has no plan to tackle inflation, my question to the Assistant Treasurer—seeing that the Treasurer hasn't found the time to turn up to answer questions—is: will the Assistant Treasurer confirm they have left the RBA carrying the can to fight against inflation?