Anne Webster (Mallee, National Party, Shadow Minister for Regional Development, Local Government and Territories) Share this | Hansard source

It was very refreshing to hear the member the Forde and his arguments throughout that discourse, particularly that he sees reward for effort as a noble and good thing and that energy is the economy. Those are just two pieces that I took out of his speech. They're very true, and there is a reason we are not into all renewables—because it is not sound policy, as we are discovering with electricity bills around Australia. Every person who gets an electricity bill knows that it is bad policy. Anyway, that's a conversation I will take up at another time. It was very good to hear from you though.

I want to speak about how, when Labor spends, we pay. The biggest collapse in living standards in the developed world—that is a statement no Australian is proud of right now. It comes because Labor has an addiction to spending which is driving up the cost of living. We have a $1.2 trillion debt bomb that future generations—our children, our grandchildren—will be paying for. Who knows how long it will take to come down? It will certainly be a lot longer if Labor stays in power.

Australians are paying more for their mortgages. They're paying more, as we've already discussed, for their power bills and for their groceries. Every time you go through the checkout, every Australian knows, it is so expensive. You can almost see it on people's faces. Let alone rents, which seem to rise at 10 per cent levels on a very regular basis. Australians will pay the price tomorrow as Labor locks in decades of deficits and intergenerational debt.

The Reserve Bank of Australia forecasts the worst medium-term economic growth ever. Economists warn that Australians' living standards will continue to erode—this is not good news—putting more pressure on the federal government's deteriorating budget. The latest central bank forecasts show that the economy is expected to grow just 1.6 per cent over the year to June 2028.

Mortgages are up by an average of $1,800 a month after 14 rate rises since Labor came to office. Mortgage holders have paid at least a $23,000 increase in interest on their mortgages since Labor came to office. Households are paying 16 per cent more for food, 18 per cent more for health, 22 per cent more for rents, 39 per cent more for insurance and nearly 40 per cent more for electricity. So much for $275 in savings!

Households have burnt through all the fat they may have had in their budgets. It has been taken up by rate rises and the rising cost of living. This is tellingly obvious at the supermarket checkout. Families are making hard decisions about how to keep their budgets sustainable, cutting back on anything extra for kids—music lessons, sport and other extracurricular activities. Going out for a meal—that has gone through the roof—if you can find a restaurant still open. And that's if families can continue to service their mortgage or rental property at all.

In my electorate of Mallee, emergency food relief charities are experiencing unprecedented demand, and even then I'm having to fight for them to get their funding reinstated, such as for the Horsham Christian Emergency Food Centre and the Stawell Interchurch Council Cottage, as Labor, as they're want to do, apply a desktop modelling approach and fail to understand the distances between towns in my electorate, thereby cutting funding. Fortunately, the minister has heard my cries. I have met with her, and she has reinstated partial funding for those services. It's not enough in a cost-of-living crisis, when people are hurting day after day.

Spending in the current budget—and, I predict, in the upcoming May budget—is based on heroic assumptions, as former Treasury assistant secretary David Pearl wrote on Saturday 28 February. Mr Pearl writes, accurately:

… we are … in a long-term economic decline … the largest drop in living standards of any OECD country since the … pandemic … little real wages growth since 2011 and labour productivity stuck at its 2015 year level.

That's over 10 years ago. The first false assumption Mr Pearl calls out in his expose of what he calls 'economic fantasies and delusions' is that cutting carbon dioxide emissions will somehow improve productivity. He writes:

… too many of us refuse to accept—or even consider as a remote possibility—that any policy of rapidly cutting carbon dioxide emissions must necessarily lower growth, hurt productivity and lower living standards (while having no effect on the climate, absent similar commitments from the big economic powers). Not by a little bit but, as its whole-of-economy ill-effects compound across time, by a great deal.

He continues:

In the 1990s, this growth trade-off was considered a truism by conventional economists, who opposed heavily front-loaded emissions cuts for that reason.

Yet today Canberra's conventional wisdom is that emissions cuts not only carry no costs but—in the words of Productivity Commission chairwoman Danielle Woods—are an economic prize, relying on the fantasy that wind and solar are the cheapest form of power.

I say 'Hear, hear!' Those opposite should be uncomfortable in their seats, especially those that like to preach about being on the right side of history. Mr Powell says of the second delusion about our public finances:

… too few of us are prepared to admit that the budget's forward estimates and projections are a complete fiction. Not unreliable and inaccurate, as critics typically maintain, but completely divorced from reality. They show that future deficits will remain small in economic terms and virtually disappear by 2035-36, with net debt remaining stable at 20 per cent of GDP—a result that virtually every other developed economy would kill for. But the assumptions they rely on are deeply flawed.

They assume that across the next decade, federal spending will remain stable at close to 27 per cent of GDP—despite the expected rapid growth in the National Disability Insurance Scheme, our interest bill and other programs—because, get this, the cost of the public service is assumed to fall significantly.

As the Parliamentary Budget Office has found, if we are more realistic about the latter, spending could be underestimated by as much as 3 per cent of GDP, resulting in much higher deficits and debts.

Thirdly, Mr Pearl rightly says:

Our third delusion is our inability to accept the world has changed fundamentally during the past five years.

Labor have been in government for four of those.

Events in the Middle East on the weekend have only underscored that comment. I suspect the article was submitted before the bombs fell on the ayatollah in Iran. Mr Pearl writes:

We have seen a return of intense great-power rivalry, reflected in rising military tensions, the fracturing of the world's trading and financial systems, and the collapse in global support for net zero. What we had of a rules-based order (the concept was always overstated by the Davos mob) is under genuine threat, with serious implications for small, trading economies such as Australia.

It is high time the emperor was called out for wearing no clothes. It's time for the delusions to end and for the Albanese Labor government to stop the fiction and be truthful with the Australian people in the May budget.

Labor's spending has blown out to 27 per cent of GDP, the highest level outside of a recession in nearly 40 years. Former RBA governor Philip Lowe made clear that inflation has lasted longer in Australia because of Labor's spending spree. IFM Investors' chief economist, Alex Joiner, said that the fiscal guardrails have come off.

Instead of tackling spending, Labor's answer is to increase taxes on your super, your savings, your housing and your small business. Every minute, we are paying $50,000— or $72 million a day—just on interest on Labor's debt. Every dollar that pays interest is a dollar we can't spend on Medicare, schools, hospitals, NDIS, aged care or tax relief. We cannot put unsustainable spending on the national credit card for our kids to pay back tomorrow through Labor's higher taxes.

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