Aaron Violi (Casey, Liberal Party) | Hansard source

Appropriation Bill (No. 3) 2023-2024 is an important bill to speak on. Spending money is one of the core functions of government, and how they do that has ramifications and significant impacts. We also know that, despite the size of the budget, how we spend it is crucial. We don't have unlimited resources.

So it's interesting that, today of all days, we look at government spending. We saw their announcement earlier today of about $14 million for food banks. That is important money. I'm lucky to have a lot of great food banks that I've been able to visit in my community. They play a crucial role and, unfortunately, are needed more than ever. I often think about the Mustard Tree Op Shop & Cafe in Lilydale. I visited them in May last year—it was quite a few months ago that I visited them. They have been in Lilydale for over 30 years. May last year was the biggest month on record for them for demand. It has only gotten worse since. I have been out there since May, and it has gotten worse since.

But it is interesting that, at the same time as this government has committed $14 million to food banks, we hear in Senate estimates that it has committed $40 million of taxpayer money to sell its broken promise on the stage 3 tax cuts. We have $14 million for food banks in a cost-of-living crisis, and we have $40 million of taxpayer money, as the Minister for Finance said in Senate estimates, to sell their broken promise for the stage 3 tax cuts. That example really shows everything that is wrong with the priorities of the Albanese government. It's why, after 20 months of the Albanese government, Australians are struggling so much with this cost-of-living crisis. There is a focus—a $40 million focus, as we found out today—on spin, optics and looking like they're doing something, but there is only a $14 million focus, which is a lot less, on actually giving money to food banks to make a tangible difference in my community and every community across the country. I think about $14 million, and that won't go very far across the country; it is very much a token effort. It is better than nothing—a bit like the stage 3 tax cuts of $15 a week in five months time—but not enough and not soon enough.

These are some of the challenges that we're facing, and a lot of the challenges we face are due to the decisions that have been made by the government. Government spending has a direct impact on inflation and on interest rates. If a government spends more, that drives up demand, drives up inflation and forces the RBA governor to increase interest rates. We've seen that, with 12 increases in interest rates since this government was elected. We talk about government spending, and we see the MYEFO reports that show the Labor government has spent, in the last 18 months, about $209 billion more than the coalition committed in its last budget. That's before we include the $45 billion in off-budget spending that's not part of that $209 billion; that's a cheap little accounting trick by the Treasurer to spend money but not put it in the budget. The reality in the real world and in an economy is: whether it's on budget or off budget, it still drives demand, still drives inflation and still forces the RBA governor to increase interest rates.

As economist Chris Richardson said recently in the AFR:

The rough trade-off is that interest rates would be a quarter of a percentage point lower than they'd otherwise have been if the government cut spending by about $6 billion over the coming year or if it raised taxes by about $9 billion … to leave the RBA (and hence borrowers) bearing the brunt of the inflation fight, as it allows the government to blame someone else for the pain that many are feeling.

As the new Reserve Bank governor, Michele Bullock, said in November last year:

… the remaining inflation challenge … is increasingly homegrown and demand driven.

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