House debates

Wednesday, 27 October 2010

Matters of Public Importance


Photo of Harry JenkinsHarry Jenkins (Speaker) Share this | | Hansard source

I have received a letter from the honourable member for North Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to take decisive action to ease the rising cost of living.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

3:36 pm

Photo of Joe HockeyJoe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | | Hansard source

The inflation data that was released today by the Australian Bureau of Statistics recognises in part that Australian families are burdened with everyday cost-of-living increases that are not being properly recognised by this government. Over the past year electricity prices have risen by 12.4 per cent, water and sewerage by 12.8 per cent, gas by nearly 10 per cent, child care by 7.2 per cent, hospital and medical services by nearly seven per cent, postal services by 6.5 per cent, property rates and charges by over six per cent and education by nearly six per cent. They are hefty increases for everyday Australians, who have to meet the sorts of costs that are not properly recognised in the CPI, as the Reserve Bank has stated previously.

Since Labor was elected in the December quarter of 2007, water and sewerage prices in Australia have increased by 46 per cent. Electricity prices since Labor was elected have increased by 42 per cent. Gas has increased by 29 per cent, hospital and medical services have increased by 20 per cent, postal costs are up by 16 per cent, property charges are up by 19 per cent and education costs have risen by 17 per cent. All of that is since Labor was elected in December 2007, when Kevin Rudd, the member for Griffith, said the cost of living was a No. 1 issue for Australians.

Mr Deputy Speaker, what have you got to do about it? I will tell you what you have got to do about it: you have got to make hard decisions. The coalition has never been afraid to make hard decisions, and we have been challenged over recent days by a sanctimonious Prime Minister giving us another lecture about Hansonism. I was in this House when Pauline Hanson gave her maiden speech. My colleagues were here when Hansonism was alive and well, and to have a sanctimonious Prime Minister who was not in the building give us a lecture about Hansonism is just absurd. I will tell you what happened with the now Prime Minister. The now Prime Minister was handing out guides to her mates in the MUA on how to fight waterfront reform. This is a Prime Minister that gives us a lecture about economic reform, yet at that very time she was chief solicitor for Slater and Gordon, running around giving people on the waterfront all the help they could get to resist the sort of reform that was so necessary.

I tell you what, Mr Deputy Speaker: we are the party of reform. We are the party of economic reform. To have the Treasurer come into this place and claim that the Labor Party is part of the grand consensus on economic reform is a joke. When I was on that side of the House and Tony Abbott, the now Leader of the Opposition, was on that side of the House and so many of my colleagues were on that side of the House and we were putting in place the hard yards of economic reform, Labor at every single stage—every stage—fought against it and opposed it. It started with the privatisation of the last tranche of the Commonwealth Bank. Labor opposed the privatisation of Telstra. Even regarding giving the Reserve Bank independence in relation to monetary policy, by putting in place a letter of intent about the inflationary band from two to three per cent, Labor from opposition wanted to take Peter Costello to the High Court. And now they are the custodians of the independence of the Reserve Bank.

The Labor Party opposed our fiscal consolidation. After they left a $10 billion black hole they opposed us every step of the way in trying to fill that black hole to get the budget back into surplus. Labor opposed us in our attempts to pay off $96 billion of debt, to make all the hard yards, and Labor then went on to oppose us in industrial relations reform. They opposed us on tax reform and of course in 1998, after the tax election, the now Prime Minister and the previous Prime Minister voted against tax reform. The previous Prime Minister described it as ‘fundamental injustice day’—1 July 2000. And let us talk about what they describe further as a ‘consensus on economic policy’, because they made my life difficult trying to get the Corporate Law Economic Reform Program through, which in fact helped to inoculate us against the recent global financial crisis. It was the Labor Party which went on to make life so difficult in relation to the establishment of the Productivity Commission. The Productivity Commission that they now laud, the then Leader of the Opposition, Simon Crean, in fact tried to oppose. In fact, he was not the Leader of the Opposition; he was shadow Treasurer. But I would say this: the Labor Party at every step of the way have sought to oppose economic reform when it has been so necessary when they have been in opposition. Now they accuse us of opposing economic reform.

Let me say something about banking. I am not backing down one step from everything that I have said and I have delivered on behalf of the coalition in relation to banking in the last few days. We have a plan to actually help Australian families and small businesses get greater competition out of their banks. It is amazing that, in answer to his own party’s question today, the Treasurer said that there was nothing of substance in our nine-point plan and then in the very next answer, in response to my question about giving the ACCC greater power to take on price signalling, the Treasury said there are a number of good initiatives in the nine-point plan. And there were issues of substance.

But this is the hypocrisy of the Labor Party. What they have to understand is, whether you like it or not, there has been change in the banking system over the last two years. Whether you like it or not, globally and particularly in Australia there has been a reduction in competition. There have been changes in the nature of wholesale funding. Whether you like it or not, in Australia the mortgage originators cannot access a liquid and competitive market. Whether you like it or not, St George is no longer an independent bank. BankWest no longer exists. Wizard Home Loans, RAMS Home Loans, Aussie Home Loans are no longer independent. Whether you like it or not, Societe Generale has left Australia. The Royal Bank of Scotland, Citigroup and a range of other international banks have reduced their activities in Australia. Whether you like it or not, the banking landscape has changed, and the four major banks now have more power and more influence in the market than at any other time. Either we are going to be ahead of this issue or we are going to be in catchup at what could be the most dangerous time in the financial services cycle.

We still face significant global uncertainty. The Treasurer is right: Basel III does put in place greater capital liquidity requirements for our banks. There are going to be challenges for our financial services system in the way that it funds its Australian operations into the future. It is the case, as we universally celebrate, that there is not the same exaggerated growth in credit today or perhaps over the next few months as there was prior to the global financial crisis. So now is the time to do the hard yards of reform. It is this side of the parliament that has mustered the courage that the Labor government does not have and has laid down a platform for reform of financial services that inoculates us against the next financial crisis. If you truly believe the words of the Treasurer that the reforms of today guarantee the prosperity of tomorrow—words that, on so many occasions in this place, he has stolen, without credit, from John Howard—then I say to you, Mr Deputy Speaker, now is the time to undertake that reform. That reform properly considered and properly consulted will deliver a stronger, more robust and significantly more competitive financial services system. You can do that by doing the hard yards and undertaking the challenges. When I talk about engaging in a ‘son of Wallace’ or a ‘grand-daughter of Campbell’, I am saying that we do not want to go down another path similar to the one that Labor went down in the last term of parliament whereby they commissioned reports and then did nothing about them.

Let us talk about reform. Ken Henry made 138 recommendations. The Labor Party have now accepted 1½ of them. They had accepted 2½ reforms but they dumped one—the original form of the mining tax. Now we know that the mining tax itself is no longer guaranteed in this term of parliament. If you want to talk about reform, it is the Labor Party that is doing nothing at all about the labour force capacity of Australia. We did the hard yards: Welfare to Work—the Labor Party opposed us on that; mutual obligation—they opposed us on that; and remember Work for the Dole—the Labor Party opposed us on that. They have not lifted a finger on labour force participation rates. We went to the last election with three detailed policies—getting people under the age of 30 off welfare and getting them into work; helping mums, particularly those who had children, to get back into the workforce; and helping people over the age of 50 to get off welfare and get a job. We had considered, funded policies that helped to increase the participation rate of Australians, without pulling the lazy lever of a massive increase in immigration. The Labor Party did not have one participation policy. They talk about building capacity but—do you know what?—their definition of capacity is to waste $43 billion on fibre optic cable that is going to take years to roll out and will not deliver what they are promising. Their idea of building capacity is to roll out pink batts and school halls at a cost of billions of dollars to the Australian taxpayer. Their idea of building capacity is words; it is not action. The Labor Party fundamentally do not believe that it is appropriate to take unpopular measures that may in fact inoculate us against the challenges that lie ahead.

I come back to where I started. For everyday Australians the cost of living is the number 1 issue. For everyday Australians who get an electricity bill or a water bill, who have to pay school fees or who get bills from a hospital or a doctor, this is the issue. They are now facing higher interest rates. They are facing banks that are price signalling. The banks are actively out there, engaging in price signalling to each other so that they can increase interest rates above and beyond what the Reserve Bank does. We are the only parties that have laid down a plan that will take the upward pressure off interest rates, with $50 billion of cuts to the budget that will deliver a smaller fiscal expansion and real surpluses into the future. We are the only parties that are prepared to stick our necks out, to call it as we see it on banking reform, on real telecommunications activity and on doing something meaningful about climate change. We are the only parties that are prepared, when in government, to undertake the reforms so necessary—be it industrial relations reform, welfare reform, tax reform or productivity reform. We are the only parties that deliver on our word—we are the only ones.

I say to you, Mr Deputy Speaker, do not be conned by the Labor Party’s rhetoric about Hanson economics. We know Pauline Hanson. We know what Hansonism is. The Labor Party is a party that lacks courage. The Labor party is a party that seems to have great one-liners but never has great delivery. The Labor Party is a party that is all bluster and no soul. We have a Prime Minister that is all talk and no courage—a Prime Minister that is more concerned about having the power than using it. I say to you, Mr Deputy Speaker, if you want commitment to economic reform, if you want commitment to the hard yards, if you want commitment to deliver tomorrow’s prosperity, only the coalition can do that. It is only the coalition that has the courage to match its plans.

3:51 pm

Photo of Bill ShortenBill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | | Hansard source

Personally I am glad that this matter of public importance has been raised today. Fancy any opposition giving a reformist, forward-thinking, productivity driven government the opportunity to create more bridges with the Australian community about the strong economic policy that we are delivering. I can report to Australians that the Gillard government is persistently and consistently protecting Australians economically. We have taken decisive action to deal with cost-of-living issues and we are taking more this year. When it comes to the future, to borrow a phrase from a former visitor to this dispatch box, our record is our guarantee.

Today’s inflation figures show that CPI inflation—and the underlying inflation in the Australian economy—has continued to moderate through the year, with underlying inflation easing to its lowest level since December 2005. We welcome the fact that the September quarter results show that the CPI has increased 2.8 per cent through the year, down from 3.1 per cent in the June quarter. We now see the CPI within the band that the Reserve Bank of Australia wants to see it. I point out this not to segue into an analysis for the member for North Sydney’s silly statements about treading all over the RBA’s independence in setting interest rates—I am not going to do that today—but I do make clear that today’s inflation figures demonstrate to those opposite that the cost of the basket of goods is pressured and we are keeping the pressure on to keep the rises to the cost of living as low as possible.

There is no question that the government has empathy with Australians who are finding things hard and to pay the rising bills. Many families do struggle to make ends meet. We are the Labor Party and these are the people that we serve. We do know it is tough. We understand that every time we walk into this place and get on with our jobs. But I am more than pleased to update the House and emphasise to all Australians that—despite the opposition’s bluster on these matters—whilst we understand that many Australians are feeling the cost-of-living pressures we are 100 per cent alongside them in their challenges to pay the bills.

We have put in place a raft of measures to assist people. As I take the House through these measures, I regretfully advise those Australians listening that many—indeed, most—of these measures were opposed by the current recalcitrant opposition. Let me begin with a little bit of history. The discretionary fiscal stimulus packages enacted by the government between October 2008 and the budget of May 2009 were undertaken to respond quickly to the scale and the pace of the global financial crisis. It was a recession which the Australian economy thankfully did not experience, but we certainly experienced the impact of the problems from all around the globe. We provided one-off cash payments in December 2008 and in April and May 2009, which were the most effective way the government could provide immediate stimulus to the economy and support to growth and jobs until our government investments in infrastructure took effect.

The pension increases were also made not only to age pensioners but to disability pensioners, a group who were sorely neglected in previous years by those opposite when they were in power. The fact that the government stimulus and the family and tax assistance measures were part of this stimulus has been welcomed by well-credentialed professionals outside this place. Let us not just take the word of the government. David de Garis, Senior Economist at NAB Capital, observed:

It was a sizeable fiscal stimulus and, I think, appropriate in the circumstances both in terms of the size of the stimulus and also its construction.

In other words, front loading the tax bonus that will be paid from April this year but also slanting the latest stimulus towards public investment which has a longer term and also complementary benefit, lifting productivity and growth down the track, as well as providing stimulus to the economy. As I have indicated, the government appreciates that, whilst the Australian economy has sailed, has moved through, through the global financial crisis into a stronger position than most other comparable economies, there are still many Australians who find it hard to make ends meet.

In the 2010-11 budget—the latest budget—we provided another round of personal income tax cuts, meeting the government’s commitment to deliver real benefits to working families and to ease cost of living pressures. As a result of the personal income tax cuts that we have delivered, a worker earning $50,000 a year will have an additional $1,750 in their pockets. This is a big help to ease the pressure on household budgets. The government also has introduced the education tax refund and increased the childcare rebate to help families with the costs of educating and caring for their kids. These are real things and we should be clear that we are addressing the cost-of-living pressures for younger Australian families.

We are also making sure that older Australians get help. One of the ways we do this is by getting the tax settings correct. In this respect, we provide real income tax relief for eligible senior Australians through our senior Australians tax offset. For example, in 2007-08, when the senior Australians tax offset was combined with the low income tax offset, eligible senior single older Australians had income up to $25,867 without paying income tax. But, as part of our government’s plan to reduce the impact of tax, this increased to $28,867 in 2008-09. It has increased to $29,867 for 2009-10 and it is now at $30,685 in 2010-11.

The government also recognises that housing affordability can be a cost pressure issue for senior Australians. Through measures such as the National Rental Affordability Scheme and A Place to Call Home program, the government is addressing these challenges. In relation to the rental affordability scheme, a total of $622 million has been allocated for the implementation of the scheme to allow it to create 50,000 new affordable rental dwellings over the next four years from 2008 to 2012 for low and moderate income households. Under A Place to Call Home initiative, the government is implementing its election commitment, spending $150 million over five years to deliver at least 600 additional homes across Australia for families and individuals who are homeless. A central anticipation of this measure is that older people will benefit from the scheme.

Another area of substantial change in which this government is delivering protection to Australian people from cost-of-living pressures is through our consumer credit reforms. I am very committed to keeping this robust reform program going here as it will make a real difference to people in every part of our country. I speak of efficiencies for industries that now need only to comply with one law instead of a different law in each jurisdiction of Australia. I am speaking of the protection of consumers from unscrupulous practices that sometimes take place at the fringe of the credit industry. But they also put ordinary families in a better position to manage their credit cards and to save on interest repayments.

Our fairer, simpler banking policy, which was announced in the recent election campaign, will change the way that credit cards operate in Australia. No longer will consumers be unexpectedly caught out by overlimit fees. No longer will consumers be punished because they failed to read the fine print on how the interest on their card will be calculated. No longer will banks be able to allocate repayments to the interest-free component of the debt instead of the part of the debt that is racking up the most interest. These reforms not only protect consumers from unscrupulous players but also will save them money—money that, instead of being eaten up in interest card payments, can go towards the mortgage, putting food on the table or paying off bills. Indeed, it has been estimated that the changes to the way that interest is calculated will save consumers $225 million each year.

In noting the CPI figures, as we did earlier, it is appropriate to update the House on what the government has done and what it is doing to put pressure on household bills. Supermarket bills, I might note, could have been much higher if the opposition had been successful in the last election and their dangerous and ill-thought-through Coles and Woolies tax had been implemented, which would have definitely put upward pressure on grocery prices.

Competition, as I am sure even those opposite would be prepared to agree, is far and away the most effective means of exerting downward pressures on grocery prices. To introduce more competition and empower consumers, the government has taken decisive action on these matters. We have changed the foreign investment policy to extend the time frame for the development of vacant commercial land from 12 months to five years. We have strengthened the laws against predatory pricing. We have provided information about the Australian retail grocery industry in international trade forums to attract new entrants into the Australian market, and we have introduced a mandatory, nationally consistent unit-pricing regime. One only has to watch the shoppers in any shopping centre to see them using this unit pricing to establish best value. I should add that the government also welcomes agreements between the ACCC and the major supermarket operators to phase out restrictive provisions in supermarket leases. These agreements are in the form of court enforceable undertakings that have been voluntarily provided by the major supermarket operators.

Let me turn briefly to electricity prices as there is no doubt these are a particular source of concern for Australian families. Whilst we do experience some of the lower electricity prices around the world, this is cold comfort for many Australians who will be shaking their heads this week and next when they open the envelope and look at their power bill. As the Prime Minister made clear in her speech to the Australian Industry Group warning about economic Hansonism, electricity prices are rising and we believe it is important that the origins of these prices be properly understood. Underinvestment in transmission systems is a key factor, and we are talking about underinvestment over a sustained period. Over the past three years, according to the ABS, residential electricity prices have risen by more than 40 per cent across Australia. We will continue to see electricity prices increase.  The increases in recent years have been, and those in the future will be, substantially driven by a lack of investment.

Significant investment is required to replace ageing network infrastructure and deliver energy security. As the Prime Minister has made clear, we are not going to have another sustained period of underinvestment now, at least not while Labor is in government. That is why we are firmly committed to delivering a carbon price. Delaying the delivery of a carbon price makes the eventual adjustment for industry more expensive. Uncertainty in the market is always an inhibitor of investment and of greater capacity. This is particularly the case in the electricity generation sector, where uncertainty will direct what capacity growth there is towards meeting incremental rises in energy demand rather than long-term baseload growth. As the TRUenergy Managing Director, Richard McIndoe, told the Sydney Morning Herald on 16 September this year:

We all would like a price on carbon … if it’s not done in this government and if this uncertainty continues, not for two to three years, but four to five years, and nobody is building, then you will have power shortages and insufficient capacity.

Whilst those opposite may like to engage in short-sighted scare campaigns about a price on carbon and what it will do to electricity prices, my advice is: drop it and move on with the program. Drop the scare campaign, drop the politicking and recognise the benefit to consumers and to Australian families of delivering a carbon price to the market and building baseload generation from a position of certainty.

I should also mention another reform that goes to help families, another example of decisive action that the Gillard government is committed to—our superannuation reforms. Access to safe, low-cost, simple superannuation is essential to help our retirement savings go further. While you do not get a bill in the post, Australians pay around $85 a month on average in superannuation fees, which is actually more than the average monthly mobile phone bill. Every dollar Australians save in unnecessary superannuation fees directly boosts their retirement savings, helping them enjoy the secure retirement they deserve, a retirement eased by lower cost-of-living pressures.

The Gillard government will allow superannuation funds to offer a simple low-cost superannuation product called My Super from 1 July 2013. It is a key component of our economic plan. The improvement from the assault on high fees in superannuation would lift the retirement savings of a 30-year-old worker on average wages by $40,000. It delivers on the substantial benefits promised by the Prime Minister’s breakthrough agreement on the mining tax, including the boost in the superannuation guarantee from nine to 12 per cent for 8.4 million Australians. Taken together, our reforms in superannuation will add almost $150,000 to the retirement superannuation balance of an average 30-year-old Australian worker. National Seniors Australia, the peak body, has welcomed the transparency and choice in the superannuation changes generated from the Cooper review. NSA’s Michael O’Neill said on 5 July 2010:

The Review’s member, rather than industry, focus will encourage more Australians to have greater ownership and interest in saving for retirement … An overhaul is well overdue. As it stands, the superannuation system is industry-oriented, difficult to navigate and plagued by trailing commissions and hidden fees.

Let me sum up this MPI with an overview. I believe that the evidence and the support of others, not just the government, for a very wide range of measures and policy levers has delivered to ease the cost-of-living pressures that many Australians feel today. We have lowered taxes. That person on $50,000 is paying $1,750 less tax than in 2007-08. We have increased the pension by around $115 per fortnight for single pensioners and around $97 a fortnight for pensioner couples, and the same goes for people with disabilities. Under the education tax refund people can claim up to 50 per cent of costs up to $390 per year for a child in primary school and up to $779 for each child in a secondary school. Nearly a million families and 1.7 million students have benefited from the education tax refund. The childcare rebate that we have pushed helps with the cost of child care. We increased the rebate in July 2008 from 30 to 50 per cent for the out-of-pocket childcare expenses, providing families with up to $7,500 per year. We have made the rebate payment more frequent and 700,000 families are going to be eligible for it. We have got the teen dental plan. We have got the increase of $4,000 to family tax benefit A. We have extended the education tax refund to school uniforms. We are going to have the childcare rebate paid fortnightly. We have got paid parental leave, paid parental leave for dads and further pension increases. We have made tax returns easier and we are providing tax relief for savings accounts. By any objective measure, we are working on cost-of-living pressures. (Time expired)

4:06 pm

Photo of Jane PrenticeJane Prentice (Ryan, Liberal Party) Share this | | Hansard source

I rise in support of the matters of public importance motion of my colleague the member for North Sydney on the failure of this government to take decisive action to ease the rising cost of living. This Labor government, led by Prime Minister Gillard, has failed in so many ways. But, more than ever, Australians are feeling let down following Labor’s broken promise to address the rising cost of living.

Prime Minister Gillard looked Australians in the eye and promised that hers would be a government that was ‘moving forward’, yet it appears that the only direction Labor is heading in is further and further into political spin. I suppose we should not be surprised that the Prime Minister has broken yet another Labor promise, this time the promise to address the cost-of-living pressures on Australians. You only have to ask the former Prime Minister, the member for Griffith, just how much the Prime Minister’s word is worth.

Just like the Prime Minister’s word on 17 May, when she said that there was more chance of her becoming full forward for the ‘Dogs than there was of any change in the Labor Party, the Prime Minister’s—and her Labor government’s—pledge to do something—anything—to ease the rising cost of living is a furphy. It is the case that the Prime Minister did not keep her word to the member for Griffith on three or more occasions, and clearly she is intent on not keeping her word to families, individuals and businesses who are struggling with rising costs under this Labor government.

Anyone who seriously believes that the Rudd Labor government had or the Gillard Labor government has—depending on whether you look at this issue pre or post the events of 24 June—any plan to address the cost-of-living pressures is being deliberately dishonest. Prior to the midnight knock on his door from the member for Maribyrnong and Senator Arbib, the member for Griffith was hailed as the almighty Labor leader who brought the party back from 12 of its most miserable and irrelevant years in opposition. The member for Griffith also boldly looked the Australian people in the eye and promised to address the cost-of-living pressures. But all the member for Griffith has as his legacy are the failed programs GroceryWatch and Fuelwatch—at least $7 million wasted and thrown away, all because the member for Griffith and his then loyal deputy, now the Prime Minister, cobbled together a plan to make the government look as though they were acting on their promise to the Australian people to address the cost of living.

The fact is GroceryWatch was a dud, just as this government is a dud government. Like so many of the Rudd and Gillard government programs, GroceryWatch cost a lot and delivered little. Make no mistake: we could speak for days and days about Labor’s failures, policy debacles, backflips and, to quote the Prime Minister, programs that are ‘a mess’. When you look hard at what this government promised prior to the 2007 election and subsequently, with their new ‘real’ leader, prior to the 2010 election, you see the government has failed to deliver on their main promise, and that was to do something about the rising cost of living. For all Labor’s talk about the rising cost of living eating away at the social fabric of the country, the cost of living meant nothing to a Labor opposition and then a Labor government that is happy to say and do anything to win a vote and, once they have that vote, to do absolutely nothing about a problem that trusting Australians took them at their word to fix. I find it very alarming that in our country today—the best country in the world—we still, despite our records of achievement, hear day in and day out about people rationing food, skipping meals because they cannot afford to go to the grocery stores and, in many cases, not having power for their homes whilst they wait for the next payday to come.

Recently the Courier Mail carried a prominent report which looked at the rising cost of living in the state of Queensland. It said that rising costs across the board are forcing more and more Queenslanders into real hardship. It reported that more than 10 per cent of the population in the Sunshine State is living in poverty conditions. That equates to more than 400,000 people who are struggling to pay everything from grocery bills to utility bills. That is in Queensland alone. I have grave fears that, if this typical Labor talkfest continues, things will get a whole lot worse for these Queenslanders and, no doubt, for other Australians living in extreme financial hardship around the nation before they get any better.

In the Sunday Mail on 12 September it was revealed that householders will have to find as much as $600 more to meet soaring energy and water bills next year. For many, this is another $600 that they do not have and will not be able to find. It is not as though they can send their bills to their state and federal Labor governments who have let them down for far too long. Their taxes and costs go up under Labor, whilst their quality of life goes down. The article found that for a family of five living in a large house with a garden, air conditioning and a gas heater, utility bills would increase by $600 per year; for a family of three living in a three-bedroom home with a medium-sized garden, by $300; and for a couple in a small house with a small courtyard, by $200. These costs are going up under Labor, and taxpayers are getting absolutely nothing back in return.

A separate article in the Sunday Mail predicted that electricity prices will rise by 60 per cent over the next five years and will push low-income families over the edge. These are the very income earners and Australians whom Labor always claim as their own but never support. The article went on to say that it is not uncommon for social workers to find people living in their homes without electricity.

This is not an Australia I want to see. The Labor government has a responsibility to stop the talk and put aside the spin, whether it is the Prime Minister, the Treasurer—now Deputy Prime Minster, following his promotion—the member for Griffith, the member for Maribyrnong or the member for Charlton. It does not matter which one of them wants the credit. The coalition and the Australian people just want to see the problem addressed.

In the September quarter of 2010, the ABS consumer price index rose by 0.7 per cent, compared with 0.6 per cent in the June quarter. However, the most significant rises, which dismiss the government’s rhetoric of ‘moving forward’, were a rise of 12.8 per cent in water and sewerage costs, a six per cent rise in electricity costs and a rise of 6.2 per cent in property rates and charges. In the June quarter of 2010, electricity prices rose by 18.2 per cent, petrol prices rose by 7.6 per cent, childcare costs rose by 5.5 per cent and the price of vegetables rose by 3.3 per cent. Clearly, this nation is not ‘moving forward’, and the Gillard government has not taken any action to remedy this crisis. Take the article in the Adelaide Advertiser on 9 October 2010 which detailed how the cost of a basket of groceries, including milk, bread, butter, oranges, bananas, chocolate, eggs, coffee and laundry detergent, had risen from $210 in the June 2005 quarter to $259 in the same period of 2010, according to ABS data—another failure of this Labor government.

What is most alarming about the Labor government’s ignorance on this issue is that deep down they know they have failed. The government is well aware of their promises and their failures. The tide of popularity that swept the member for Griffith to power in 2007 was largely different to the tide of union and caucus revolt that saw him lose the keys to the Lodge. However, the member for Lindsay was right when he stood up in the Labor caucus to raise concerns about the Labor Party’s disastrous 25 per cent swing in the Penrith by-election, which he believed was due to voter concern about the federal government’s inaction on the issues of asylum seekers and the rising cost of living.

Let us look at Labor’s record of helping families, individuals and businesses with the rising cost of living pressures we all face. The Labor government has seen six interest rate increases in just 10 months and continues to put upward pressure on interest rates through its record budget deficits. Labor cut the maximum child-care rebate by more than $250 per child. Labor has done nothing to bring down rising fuel and grocery prices. Labor is about big spending, even bigger debt and having no plans to address the everyday pressures on families that it pretended to understand so well during the election campaign. This government has failed Australian families and workers by not addressing the rising cost of living, and in doing so it has once again confirmed that it does not take the job of governing seriously. This Prime Minister cannot be taken at her word. Only the coalition can deliver real reform.

4:16 pm

Photo of Darren CheesemanDarren Cheeseman (Corangamite, Australian Labor Party) Share this | | Hansard source

It is with pleasure that I take this opportunity to address this MPI from the member for North Sydney. I acknowledge that many working families are facing cost of living pressures, but the government is taking the necessary steps to address those issues on almost a daily basis. In responding to the member for North Sydney’s MPI, I thought I might take the opportunity to look at the coalition’s record when they were in government.

The first thing that comes to mind is their failed Work Choices policy. We know Work Choices removed significant elements of people’s pay and conditions. Some 64 per cent of AWAs under that legislation removed annual leave loading. That in itself would put significant pressure on many working families. Some 63 per cent cut penalty rates—again taking money out of people’s pockets and making cost of living pressures more difficult for working families to respond to. Some 52 per cent cut shift-work loading and some 51 per cent of those AWAs cut overtime loading. Some 46 per cent cut public holiday pay for workers working outside of normal hours. Some 40 per cent cut rest breaks, which would have made work more uncomfortable and many workplaces far more dangerous, and some 36 per cent of those AWAs removed public holidays.

There is no doubt that the coalition’s record certainly put significant cost of living pressures on families and I think it is worth pointing that out. During the federal election we also had the farcical situation of Tony Abbott signing a blank piece of paper saying that Work Choices was dead.

Photo of Peter SlipperPeter Slipper (Fisher, Liberal Party) Share this | | Hansard source

The member for Corangamite should remember that he ought to refer to the Leader of the Opposition by his title and not by his name.

Photo of Darren CheesemanDarren Cheeseman (Corangamite, Australian Labor Party) Share this | | Hansard source

I apologise. It goes further than this. Since then we have had senior member after senior member of the coalition come out and indicate very clearly and loudly to the Australian community that Work Choices is not in fact dead. Perhaps the name is dead, but the policy is still alive and well. So we know that if they return to this side of the parliament they will bring back Work Choices and they will increase the cost of living pressures on working families throughout this nation.

We have also had an enormous amount of commentary from members of the coalition about electricity prices. I want to debunk this myth. It is very clear that electricity prices have been rising across this nation because of the failure of those on the other side to pass the necessary legislation to put a price on carbon, which has led to a freeze in investment across the electricity sector. That is the reality. We also know that demand for electricity has been increasing over the last few years as people take advantage of modern technologies like air conditioning. Again, it is their policy of resisting putting a price on carbon that is leading to rising cost-of-living pressures for many working families across this nation.

If the coalition want to be serious about easing the cost-of-living pressures that many working families are experiencing then they need to work with the government and the crossbenchers in this parliament to put a price on carbon so that we can start to address the issues in that part of the economy and alleviate the cost-of-living pressures which every Australian household is subject to. I urge them to revise their position on that and start working with all members of this place to address that issue.

I want to compare another of their policies with ours. The National Broadband Network is a very significant piece of economic infrastructure that will enable us to advance and grow our economy in a very, very substantial way. Let us look at the coalition’s position on this. The coalition’s position is to frustrate. Their position is to come up with a new policy every second day of the week. Let us look at some commentary from others on this. The OECD, a highly esteemed organisation, have indicated very clearly that a national broadband network will enable us to grow our economy and increase our productive capacity—and they have written on that. Again, I urge the coalition to get out of the way, start working with the government and enable us to deploy the National Broadband Network as effectively and efficiently as we can. We also know from various studies that have been undertaken that the implementation of a wide-scale broadband network across this nation could assist our economy to the tune of $2 billion to $4 billion a year. Of course, that will create jobs, increase the productive capacity of our economy and alleviate the cost-of-living pressures that this country is currently facing. The government have a raft of other policies to help many young people in terms of the cost of living. I would like to highlight to the House our various housing affordability programs that enable young people to enter the housing market and enable young people to work in the building industry.

Also, let us look at some of the other things that this government have done to address the cost-of-living pressures. The first is making sure that people have work. Over the last few years the Australian economy has gone through the global financial crisis. Of course, this government put in place a stimulus package that helped protect our economy and keep people in the workforce, particularly those in the building sector. In an area like mine in the southern suburbs of Geelong, construction is a vital part of our local economy. Those on the other side opposed the stimulus package. If you want to respond to cost-of-living pressures, the best thing you can do is keep people in work. That is something those on the other side failed to recognise.

In conclusion, I note that the Treasurer released a media statement today which looks at the September quarter’s inflation rate. It is fair to say that the efforts of this government over the last few years have ensured that the CPI has remained as close as possible to the two to three per cent target band set by the Reserve Bank. Again, that is about reducing cost-of-living pressures on working families.

4:26 am

Photo of Michael McCormackMichael McCormack (Riverina, National Party) Share this | | Hansard source

Costs of living are increasing and Australians are worried. Today’s official consumer price index figures on the cost of living must surely send a signal to the government to stop its reckless spending and ease the financial pressure on Australian families. Labor’s refusal to reduce spending is putting upward pressure on inflation. The September quarter CPI figures released today by the Australian Bureau of Statistics show that inflation rose by 0.7 per cent in the quarter, lifting the annual rate to 2.8 per cent. Over the past year the cost of essentials has risen: electricity by 12.4 per cent; water and sewerage 12.8 per cent; gas 9.8 per cent, child care 7.2 per cent; hospital and medical services 6.9 per cent and education 5.8 per cent. Increases in essential goods and services have applied considerable tension on already stretched household budgets.

The recent minutes of the October meeting of the Reserve Bank of Australia show an interest rate hike is now seemingly inevitable, revealing that the RBA ‘could not wait indefinitely’ due to increased pressure on inflation. Why is the government continuing to spend at a recession-like rate and accumulate a $41 billion budget deficit at a time when the economy is running at near full capacity? Labor must immediately stop its spending largesse to relieve some of the upward pressure on interest rates.

Increasing interest rates will cause more pain for all Australians who are facing higher costs as a consequence of the Gillard government’s failure to deliver on its promise to reduce the cost of living for working families. Families are desperately worried about electricity prices, which have shot up 35 per cent since the end of 2007—35 per cent in just three years. In the same period, gas prices have risen by 24 per cent, water prices by 29 per cent and rents by 15 per cent. There is constant concern that mortgage repayments could be pressured by banks lifting their rates above and beyond the Reserve Bank of Australia’s cash-rate increases.

Alarming too is the continual upward trend of the price of food, placing undue and excessive strain on the family budget. The weekly grocery bill just gets higher and higher, and it is not as if shoppers are placing any more items in their trolleys. In fact, the opposite is the case as families struggle to make ends meet. It is certainly not as if the poor old farmer is getting a higher price for produce. The price at the farm gate does not change. If anything, farming is less and less profitable. The difference in prices from paddock to plate is unreasonable, unfair and unAustralian. The farmer is being ripped off, likewise the customer at the checkout. This fiscally irresponsible Labor government knows not how or when to rein in its reckless and wasteful spending. The Rudd-Gillard governments have continued to borrow at $100 million a day, even after the worst of the global financial crisis is behind us. This is feeding into inflation.

People respect the need for taxes but expect value for money. They expect government to ease cost-of-living pressures, not burden them with more. Any small business owner or those who do a simple household budget know a government cannot go on borrowing $100 million per day. Those borrowings have to come from somewhere. Most of them come from offshore, meaning less available money for Australian businesses to access: businesses needing to invest in research and development, businesses investing in capital equipment and technology, businesses investing in their own people, products and futures—our people, products and futures. What we end up with is our federal government competing for finance in the capital market against Australian businesses, which then have to pay more to finance their growth and futures, in turn pushing up prices for goods and services and adding to inflationary pressures.

It cannot continue. This government has failed to take decisive action to ease the rising cost of living, and middle Australia is hurting as a result. Especially hurting is regional Australia. The government stands condemned for its diabolical mismanagement of the water issue. This has created so much uncertainty in rural areas which make up the food bowl of the nation. The fact that this government took six months to get to a water policy, 18 months to set up the Murray-Darling Basin Authority and 36 months to determine that there needs to be a proper analysis of the social and economic impact—the human cost—of water reform is, quite frankly, beyond belief.

It is little comfort now to the thousands of people in basin communities that a parliamentary inquiry has been established to look into the water issue and that the Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke, has received legal advice that the socioeconomic effects of the Water Act should and must come into play in any deliberations of the MDBA. It is little comfort because some of the damage to the confidence in these basin communities has already been done. People already troubled by cost-of-living increases have been hit with the added woe of whether their farm or business has a future if water cuts of a proposed 45 per cent are introduced. It is a responsibility, an obligation, of this government to now restore that confidence. The government has a duty to move within what would be considered a reasonable time frame—and country people are reasonable and patient—to allay the widespread and growing fears about the future of regional Australia; about how regional, and indeed all, Australians will meet costs of living and about how they will be able to balance household budgets.

Australian families will quite correctly lay the blame for interest rate rises fairly and squarely with the Gillard government. They will also sheet home to the Gillard government the blame for our refusal to pay or delay repaying the national debt. As far as longer term challenges and, hopefully, opportunities are concerned, a necessary requirement is to lift productivity and the speed limits on growth. Contrary to what the Minister for Regional Australia, Regional Development and Local Government and Minister for the Arts, Simon Crean, said in question time this afternoon, productivity growth is slipping, and that should be of considerable concern to all of us in this place.

We need to better promote and increase labour force participation. Small business, the engine room of the Australian economy, has to be helped, not hindered. On this side of the House we see the need for more prudent spending—restraint, responsibility and respect for taxpayers, working families and all Australians. An achievable and attainable benchmark is spending as a proportion of gross domestic product to be no higher than in the last year of the coalition government—23 per cent. Of course, national debt will not in any way be assisted by a Labor government which is rolling out a $43 billion National Broadband Network without a proper cost-benefit analysis, with no business case and with no guarantee of a take-up rate which would go anywhere near close to justifying such a gross misuse of Commonwealth money, the people’s money.

Now this same incompetent, spend-happy government wants to inflict a carbon tax on all of us, which will be such a roadblock to future growth and prosperity and which will especially hurt regional areas. It is a slippery slope on which this government is taking us. The suggestion that electricity bills will reach up to $10,000 a year for families in five years if a carbon tax is introduced should send a shiver up the spine of every Aussie battler. As a nation we seem so intent on rushing down the path of environmentalism for the sake of environmentalism that we are forgetting Mr and Mrs Average, pensioners, businesspeople and farmers, who are trying to keep pace with ever-increasing costs of living brought about by this Labor government.

This Labor government has wasted so much money on Building the Education Revolution, the failed Home Insulation Program, Fuelwatch, GroceryWatch—I could go on. All the while, hospitals across Australia are in a state of disrepair, regional fuel prices are extraordinarily high, the price of groceries everywhere is soaring—again I could go on. It is time for Labor to rein in the spending, stop the waste and repay the spiralling debt before it is too late.

4:35 pm

Photo of Amanda RishworthAmanda Rishworth (Kingston, Australian Labor Party) Share this | | Hansard source

I am very pleased today to speak on this MPI proposed by the member for North Sydney because the member for North Sydney has been having a bad week. His bluster here in the chamber today certainly showed that he has no plan to ease cost-of-living pressures.

The member for North Sydney hung his hat on what he saw to be the major achievements of the Howard government. The two examples he gave were Work Choices and the privatisation of Telstra. Work Choices was something that I am sure the member for North Sydney did pursue; however it is certainly not something he should hang his hat on. Work Choices ripped away basic conditions and pay from ordinary Australians. I am not entirely sure how that would have eased the cost-of-living pressures on working families. It did nothing to improve productivity. Instead, it reduced the take-home pay of many ordinary Australians.

The second thing he hung his hat on was the Telstra privatisation. He failed to demonstrate exactly how the privatisation of Telstra reduced cost-of-living pressures on ordinary families. The feedback that I get from my electorate is that Telstra continually hampers price competition in my local area. It does not provide connections for many people to ADSL2 and it really has not been able to provide basic competition with the other telcos.

The other telcos often lament the fact that without a separation between the wholesale and the retail parts of the network they have not been able to adequately achieve decent competition in telecommunications and it has been up to this government, with the bill before the parliament at the moment, to fix this monumental error made by the previous government. They were the two examples on which the member for North Sydney hung his hat, saying that they were great and difficult reforms made by the previous government, but neither of those reforms led to any improvement of cost-of-living pressures for ordinary Australians. In fact, I would argue that they increased cost-of-living pressures on ordinary working families.

During the election we heard a lot from the member for Riverina and a lot from the other members who spoke in this debate about the big national debt that Labor is accumulating. Might I remind members on the other side that the big spenders at the last election—the huge proposals, throwing money at everyone—were indeed the Liberal and National parties. They outspent the government significantly. While we were not out there trying to buy votes, the Liberal and National parties were out there spending spending, spending. They tried to hide this from the Australian people but unfortunately their $11 million black hole was exposed after the election. If we want to talk about restraint, member for Riverina and members on the other side, maybe you should sit down and look at your policies.

The other big policy taken to the last election was indeed the Liberal Party’s great big new tax. We hear a lot about great big new taxes from the Liberal Party. Certainly increasing company tax would have been a great big new tax which would have significantly impacted on cost-of-living pressures. This government have been showing restraint. We have been very clear that we intend to return the budget to surplus. Senator Penny Wong has made it clear that she will do that and the government have been very certain about that.

On the other side of the House there have been no plans, apart from the member for North Sydney’s plan to nationalise the banks. The member for Ryan seemed in her contribution to support nationalisation of the banks, which is not good economic reform. The member for North Sydney reminds me of the attempt to nationalise the banks. On our side of the House we are doing a lot. We have done a lot and we will continue to do a lot to address cost-of-living pressures. In the global financial crisis this government made sure that people had a job. If you do not have a job, it is very difficult to pay bills. This government stepped in and ensured that we protected jobs.

In addition, as soon as we were elected to government we addressed child care costs, increasing the child care rebate from 30 per cent to 50 per cent of out-of-pocket expenses. We introduced the education tax refund—something the Liberal Party did not propose at the 2007 election. This was an initiative of the Labor Party and, once elected, we introduced it. Now families are claiming up to 50 per cent of the cost of school fees for both primary and secondary school children. At the last election we made a commitment to build on that to ensure that school uniforms were part of it.

This government implemented tax cuts very quickly. That means, for example, that someone on $50,000 is paying $1,750 less tax than when the Liberal Party was in government. This was another significant reform. Something that the coalition could not bring themselves to do in the whole time they were in government was to address cost-of-living issues for pensioners. Pensioners in my electorate told me how difficult it was and how important the increase was. The coalition could never ever commit to it. Instead, they allowed the pension to be eroded so that many people had much difficulty in just living. It was this government that moved to increase the pension and reduce cost-of-living pressures.

We also moved on housing—something the coalition completely ignored while in government. Housing was a significant problem and we have moved on social housing and also on the Rental Affordability Scheme. This scheme has led to approximately 50,000 properties which will come on line to provide affordable rental accommodation. This is part of our housing policy and will have a big impact on families looking for affordable housing—and it is something that those on the other side have never done.

At the beginning of this debate we saw the member for North Sydney beating his chest about his great economic credentials. I guess he has to do it because no-one else is doing it for him. This government will not be distracted by some of the slogans from the other side. This government is going to get down to business and do something about productivity. This government will build the National Broadband Network.

Those on the other side regularly talk about how they are the party of small business. Small business nominate that not having access to broadband is the No. 1 impediment to their economic growth. That is something they see as of critical importance to ensure that they are able to grow their business, to employ people and to do those things which we want small businesses in our country to do. For those on the other side to say that they want productivity advice—you need to invest. We need productivity growth in this country to ensure that our country continues to improve and that those working Australians get a better slice of the pie. I would urge those on the other side to ensure that they do support the National Broadband Network because it will help our economic growth not only in the medium term but also in the long term, certainly in my local electorate.

On this issue, the government is doing a significant amount on cost-of-living issues, much more than was ever done under the previous government and much more than the current Liberal-National coalition plans to do. I will continue working with the government to ensure that we are looking at this very important issue and I will let those on the other side use their slogans and glib phrases to try to con the Australian people.

4:45 pm

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party) Share this | | Hansard source

The 43rd Parliament is full of ironies and nothing could be more ironic than the member for North Sydney, of all people, coming into the House on the day that the Australian Bureau of Statistics has reported the lowest underlying inflation rate for five years to complain about cost-of-living pressures. It is ironic for two reasons. The first is that the consumer price index does matter, yet the member for North Sydney came in here trying to suggest to the broader community—tapping in to some popular sentiment, I must add—that the CPI is somehow wrong and distorted. I look forward to hearing from him his proposal to reform the way in which we measure the cost of living in this country. The other irony is obvious. I said the ‘member for North Sydney’—the member who represents a suburb which rates amongst the five wealthiest areas in our country. The member for North Sydney would not know what it is like to put a family budget together, what it is like to worry about how the electricity bills will be paid, and how the groceries will be paid for.

The government, despite our fantastic economic performance, recognises that there are cost-of-living pressures out there in the community. This is a debate about what we have done about that and what those opposite did not do about that. We know inflationary pressures come when the aggregate economy gets out of balance, when demand outstrips supply, and that is why we have been working over the past three years or more to address that imbalance by investing in infrastructure and in the supply side of the economy.

The best thing you can do for a working family is to grow the economy, which we have done in the face of the greatest global financial crisis in decades. We have kept interest rates relatively low because we have returned balance to the aggregate economy. Just as importantly as any of that, we have kept people in jobs. Those opposite believe the best way to help those who earn money on behalf of their families is to make it easier to sack them. That is what the member for North Sydney believes in. He believes in making it easier to sack them. His view of the world is that that is how you help families deal with cost-of-living pressures.

Let us ask ourselves what this government has done to help families deal with cost-of-living pressures. How about lower taxes? They do not believe in lower taxes. The member for North Sydney was with the leader of those who introduced large tax cuts in 2005 targeted at those people living in North Sydney but which forgot all those who were really struggling out there in the broader community. The fact is that someone on $50,000 today is paying $1,750 less tax than they were in 2007-08. Since 2009 we have increased the pension by around $115 a fortnight. With the education tax refund families can now claim up to 50 per cent of the cost—up to $390 a year—of putting their children through education. The Prime Minister went through many these during question time today.

The member for North Sydney came in here full of bluster but he put forward not one proposal to ease cost-of-living pressures on Australian families and said nothing about the Labor government’s record over the last three years. How laughable it is for the member for North Sydney to come in here on the release of the CPI—a day of record low inflation—and feign concern for those working-class families who are facing cost-of-living pressures. Of course, power prices have been going up—that is true—but it is a state issue. Those opposite are professionals at coming in here and talking about state issues. They do not want to talk about national issues or issues which are the responsibility of the Commonwealth government, because they are ashamed of their record and they are envious of those of us on this side of the parliament who again, in the face of the greatest global financial crisis in decades, managed to restore this country to slow growth, managed to create jobs and managed to take that pressure off working families.

How ridiculous it is for the member for North Sydney to come in here and spend most of his time talking about industrial relations, which of course we are happy to debate—particularly the relationship between Work Choices and cost-of-living pressures on working families. He tried to argue that somehow we were not a reforming government; that they were. I do remember a reform on that side—it was called the GST. They will argue that it is a tax now accepted by the broader Australian community. Let me give those opposite one example of how the GST continues to impact on Australian families, notwithstanding what they would argue is the compensation put in place to offset the GST.

Let us take members opposite to something called petrol prices. Does anyone on that side ever hear from constituents concerned about petrol prices? Let me give you the story. When the GST was introduced, the excise was reduced to offset the impact of the GST on petrol. Otherwise you would have had a compounding tax-on-tax effect on petrol prices. But here is the trick: the excise was reduced by 7c or thereabouts. The calculation was that that would offset the impact of the GST while ever petrol prices were less than 70c a litre. Of course any price above 70c a litre means that the GST is adding to the cost of petrol. With petrol at about a $1.30 a litre, everyone listening to this debate will immediately and easily see that the GST remains a tax on a tax on petrol. Every time motorists fill up their vehicle with petrol, they should remember the coalition’s only real reform—and it was called the goods and services tax.

Specifically, what is Labor doing in areas like my own to reduce cost-of-living pressures? Again, we are growing the economy locally and we continue to open up our economy to the rest of the world, unlike those opposite who have gone all insular and are now embracing these Hansonite policies. We are introducing a new tax on coalmining to ensure that the dividend of the next mining boom is fairly returned to the people who own the resources.

I remember that, when the new tax was first mooted, people were saying: ‘Gee, the member for Hunter won’t like this. This will be bad in his electorate. He’ll be worried.’ No, people in my electorate were cheering because, while they appreciate the wealth that coalmining has brought to the valley, they also have to put up with the impact on air quality, the impact on water quality, the congestion on the roads and so on. They are so pleased that they are finally about to have a fair dividend from that mining boom returned to them. This is another reform, another initiative, that those opposite oppose. All they can do is run a scare campaign.

I see the member for Wentworth sitting at the table. He knows, just as the majority of the Australian community knows, that something has to be done to address climate change. There is emerging consensus in the community, including in coalmining electorates like the Hunter, aluminium-smelting electorates like the Hunter and coal power generation areas like the Hunter, that something has to be done about climate change. But will the coalition join us in a consensus on an issue which impacts on cost-of-living pressures on families? No, they just want to wreck, they want to run interference, they want to deny climate change exists and they want to deny climate change is human induced. They have no ideas. They are an absolute rabble. If they really want to help Australia families, they should just get out of the way. (Time expired)

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Deputy-Speaker) Share this | | Hansard source

Order! The discussion is concluded.