Tom Venning (Grey, Liberal Party) Share this | Hansard source

By representing more than 92 per cent of South Australia, I represent small-business owners, farmers and families who understand the value of a dollar. Out in the country we know that weather, like the economy, can be unpredictable. We know that good years can be followed by lean ones. Because of this, country people understand the discipline that, when you have a good harvest, you don't run into town and blow every cent in the pub. No; farmers put money aside to prepare for the drought that they know is coming. They show restraint.

Unfortunately, our Treasurer, Dr Jim Chalmers, is no diligent farmer. Indeed, he has no economic credentials at all. He has a PhD in political science. He, by its very definition, is a spin doctor. I'll go again: he's a spin doctor! I'm a farmer from Bute, but I also went to uni and studied economics and engineering. Economics 101: a fundamental principle of government is to act in a countercyclical fashion to the private sector. In fact, Mr Maguire, my high school teacher, taught me this very fact. Unfortunately, our Treasurer, the spin doctor, cannot stop borrowing our money and spending it, completely ignoring the inflation right under his nose. We saw it today. The Reserve Bank of Australia has been forced to raise interest rates again, and Dr Jim, with a PhD in spin, has nobody to blame but himself.

The facts are simple. Rates are higher than they should be because this Treasurer has absolutely no discipline. Higher grocery prices; higher mortgage repayments; higher energy prices. The Treasurer's own budget papers tell this story. Since Labor came to office, they've added $50 billion of new discretionary spending to this financial year alone—$50 billion! To put this massive number into simple terms: that is money the government chose to spend, but it wasn't scheduled and it wasn't necessary. It was Labor sitting around the table, deciding to spend more money without finding any savings. When a farmer spends more money than they earn, the bank manager steps in. In this case, the Reserve Bank is that bank manager. When the government borrows more and pumps that extra money into the economy, it drives up prices. It makes inflation worse. To fix that, the RBA must raise interest rates to slow the economy and increase prices in the process. And here we are. What a surprise!

Standard economic analysis tells us a scary truth: to cancel out the damage of Labor's $50 billion spending spree, the RBA will need to raise interest rates nine times. You heard that right: nine times. The Treasurer tries to hide. He blames the former government, yet he's the one responsible. It's like being surprised that everyone is drunk when you were the one buying the beers.

The Treasurer even hides behind the Governor of the Reserve Bank. He boasts that she hasn't explicitly called him out. Well, out in the country we know that polite folk don't always go around shouting at people. The governor is polite; she tries not to embarrass this Labor government. But for the Treasurer to use her professionalism as an excuse for his bad management shows a total lack of respect.

Here is the reality for families in the country. If we swapped out one for the other, economists say that Labor's extra spending spree has the same impact on the economy as nine interest rate cuts. Think about that: if Labor had done the responsible thing, if they had acted like the disciplined farmers I represent in regional SA and showed restraint, we could effectively be enjoying the benefits of nine rate cuts now. For the average mortgage holder, that is worth about $14,000 a year. That is $14,000 that should be in the pockets of Australian families, but it isn't, because Jim Chalmers couldn't say no to more borrowing and more spending. To go back to my farm analogy, he couldn't resist the new double-cab 70 series with a lift kit, a snorkel and a bull bar when really the old one was plenty good enough.

Public spending is currently growing twice as fast as the rest of the economy. The government is getting fat while the private sector—our farmers, our tradies and our small businesses—are starving. It is simple. The more the government spends, the higher your mortgage goes. The Treasurer won't take responsibility for this mess. If he can't take responsibility for the problem, he certainly cannot be trusted to fix it. For that, we need a different government.

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