Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Hansard source

Sorry. I withdraw. The Treasurer had Australia flailing in the wind with the highest inflation in the developed world when this external shock came across, and, yes, of course it's adding to inflation. When you have the highest inflation in the entire developed world, there is nowhere for Australian businesses to hide. There's nowhere for Australian households to go. In that environment, an external shock like the war in Iran rips through this country. It rips through the businesses, it rips through the transport operators, it rips through the small businesses and it's ripping through households. Just like the St Vincent de Paul Society was attesting to me directly this week, it is ripping through Australia. These increased fuel prices were going straight to inflation.

The sad news is that, because government spending is at a 40-year high outside of the pandemic, inflation was already running high and interest rates were running high. We heard the Reserve Bank governor express herself less than a month ago that this increased government spending was fuelling inflation and fuelling interest rates. Unfortunately, this reckless, out-of-control government spending is going to add fuel to the inflation fire—and that is not fuel we want. We want more diesel, but we don't want more fuel added to the inflation fire. Why is it going to do that? Because there are no offsets for this. There are no offsets to what is essentially increased government spending, so there's going to be even more demand.

The coalition has sensibly proposed offsets for this measure. If they didn't like our offsets, we could have had a discussion. What other offsets are there? We don't want inflation to further increase because of this measure. It must be offset with spending cuts. It has to be. Otherwise, we're going to be back here again in another couple of months, staring down another Reserve Bank interest rate rise. I deeply worry for those families in my community—that mum unable to pay for her kids' packed lunches, those families who have children sleeping on the floor with a blanket without a bed, those families that are unable to make ends meet and who are getting fuel vouchers. These are real stories from real people in the electorate of Cook, and I can only imagine that there are thousands, if not tens of thousands, of similar stories right across Australia. The truth is that with government spending this high, without offsetting this in the budget, it's going to further add to inflation.

We heard from the Reserve Bank last month. They had modelled in another two interest rate rises this year. That was before the war in Iran. We've had one, so that means one of the Reserve Bank's interest rate models has come true, but they've modelled and forecast another one. On top of this inflationary cut to excise that has not been offset, how many more is that adding? Is that going to add another two or three? We know families with a mortgage are already paying $27,000 a year in interest alone. We know on average they're paying $1,400 a year more in electricity bills. We know that with diesel and petrol at its current prices, it's another $1,400 a year. That's for an average family with an average mortgage—they are paying up to $30,000 per year in after-tax money. And it doesn't stop there. Domestic inflation is running at 4.9 per cent. So guess what's happening? Their money is getting eaten up because things are costing more, they are not getting the wage increases they deserve and bracket creep is stealing more money from these hardworking Australians as the government's tax coffers grow through bracket creep.

There's still no clear plan on fuel supply. While we back in this reduction in excise and road user charging, and this price relief is welcome, you can't cost the price of fuel that just isn't there. Today in question time we heard that there are almost 500 petrol stations without fuel. We heard last week, in response to a question, the energy minister was unable to answer how much fuel there was in South Australia, Western Australia and the Northern Territory. When pressed on that by those on this side, instead of answering that, he said he was done and sat down. Frankly, we need an energy minister who is across his brief, who is across those numbers. It was pleasing today that he was across those numbers in question time. I'm glad he has made those adjustments and moved forward, and I think the Australian people are glad and thank him for that. But we need an energy minister who is across these details.

It's great National Cabinet is working together. This needs to be a team Australia moment where we rally together to acknowledge energy is the economy. Energy is the economy. It's fuel, it's diesel, it's electricity and it's gas. This government is just waking up to it. We saw on the electricity and gas side what carnage it wrecked in the economy—Whyalla Steelworks going bankrupt, Nyrstar going bankrupt, Mount Isa smelter going bankrupt. We saw industry after industry get bailed out. The CEOs of BHP, BlueScope Steel, Cadbury and Mars say that they don't think manufacturing has a future in this country, that it's at a crossroads and they're investing at other places. BlueScope Steel is saying gas costs two to three times more here than it does in the US. The CEO of BHP is saying energy costs more than double here than it does in other countries. So we were dealing with this on electricity and gas, and now we are dealing with it on fuel. It's happened at such a rapid rate. Hopefully it's not too late for this government to change course. If they do, we will join with them to actually lower the price of energy.

Only a couple of weeks ago, we were forcing Ampol to export our fuel overseas. We said, 'This fuel is not good enough to be burnt in Australia; it can be burnt to overseas,' like that made a difference. As if burning it in Indonesia makes some difference to the atmosphere, since it wasn't burnt in Brisbane or Sydney or Melbourne. Somehow burning it in Indonesia is cleaner, more virtuous. What did that do? It cost Australian businesses more. It cost Australian households more. It's one of the reasons the people in my electorate are paying $1,400 more a year in fuel. We welcome the decision to allow Ampol to sell fuel here so that Australians can burn it. But we're in this crazy utopian world where the very things that make Australia wealthier, the very things that lower energy costs for the country, the very things that actually lower the cost of living, we don't allow here. Instead, we're giving the advantage away to Australia's competitors. We're giving the advantage away to countries that don't have Australia's track record of safety and that don't have Australia's track record of keeping their workers and the environment safe. We're giving that away and acting as though there's a difference between whether that fuel or that energy is used here or in another country. The effect on the planet is the same. So, if those opposite really believe it, they should outlaw it everywhere. Stop exporting it, or stop playing political games and exploiting political advantage.

One thing this prime minister has been very good at is exploiting domestic political advantage—I have to give him credit for that—whether it's a moment of national unity, such as post-Bondi, or it's fuel relief. But today we welcome this. We welcome it; we called for it. Australians must answer a simple question: why is the Prime Minister always last to lead with principle in a national crisis? Why is that the case, Prime Minister? He should have come out earlier with the plan, but instead, what he's apt at—and I'll give him credit for it—is to wait, sit back and look for the political advantage in any of these crises.

The coalition will always support measures that reduce costs for industry, that reduce costs for households and that reduce the costs of the inputs to business. We will hold the government to account for delay in poor planning and inflation risks—and those inflation risks are ample. They are everywhere right now. Australians deserve relief today and responsible economic management for tomorrow. Unfortunately, this fuel crisis is happening at the worst possible time. It's coming after four years of economic mismanagement—four years of inflation that has not been below the 2½ per cent that the RBA targets. It has never been below that target rate in four years. If you look at the RBA's forecasts for the next two years, it's not forecast to ever get below. So the RBA is forecasting that, in the first two terms of the Albanese government, inflation will never drop below their target range—never. At this very moment, when you're looking at two entire terms of inflation being above the RBA's 2½ per cent target, government spending is at a 40-year high. How irresponsible is that? But, yes, they have a spending problem. Why they're not quick to fix it is because bracket creep is helping that spending problem—that inflation is actually a good thing for the budget to pay for this increased spending.

The government's response has been chaotic in complacence. For three weeks they denied there was a problem. First they were dismissing concerns as, 'It was just panic buying;' now, this week, we're hearing there are problems with supply. We're now hearing that it's a crisis. This is not leadership. This is a drift that demands urgency—and that urgency is finally coming, because the consequences for this are real. Fuel is not an abstract issue; neither is energy. It's in the cost of everything. It's from freight to farming to family budgets. This crisis is taking the homegrown cost-of-living and inflation crisis and making it worse for every Australian household.

What makes this worse is that Australia is entering this crisis weaker than any other advanced economy in the world. This government had the responsibility to shelter us and to look after us, but, instead, Australian households and businesses are flailing in the wind. The thing I fear about this is the fact that they have not done budgetary offsets, which means it's going to be inflationary. That is the key difference between what this government is now doing and what the coalition government first proposed over a week ago.

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