Milton Dick (Speaker) Share this | Link to this | Hansard source

I've received a letter from the honourable the Manager of Opposition Business proposing that a definite matter of public importance be submitted to the House for discussion, namely:

This government's failure to take effective action to reduce inflation after 11 interest rate rises under this Prime Minister.

I call upon those honourable 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—

Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

FLETCHER (—) (): Before the election, the Prime Minister promised Australians the bright, shining uplands. He promised that they would have cheaper mortgages. He promised: 'You will be better off under me.' He promised that power bills would fall by $275. So Australians might well have expected, in light of those promises, that more than a year into the tenure of this government they would be enjoying cheaper mortgages, they would be enjoying lower interest rates and they would be enjoying a cost of living that was improved and more addressable and was easier to deal with. But the simple fact is that, despite these claims from the Prime Minister and from the Labor Party, there has been a complete failure to take action and deliver on what Australians are crying out for, which is relief from the relentless increase in prices that all of us are facing every day—power prices and grocery prices—a relentless increase in what those Australians with a mortgage are paying on their mortgage and a continued increase in what Australians who are renting are paying for rent. Across the economy, we are seeing prices rise, area after area after area, and the bad news just keeps coming.

Last week we saw the Reserve Bank lift the official rate by another quarter of a per cent, raising the official cash rate from 3.85 per cent to 4.1 per cent—the 11th rise under this Prime Minister—and the Reserve Bank governor has warned that it may need to lift rates again, in coming months, if the Reserve Bank is to get inflation back down to its target of two to three per cent. I say 'if the Reserve Bank is to get inflation down to the target rate' because the fact is, right now, the Reserve Bank is out there on its own.

It is getting no help from this government, no help from the Treasurer, no help from the Prime Minister and no help from the budget that was brought down recently, which went in precisely the opposite direction. Surely, the first objective of any government with pretensions to responsible economic management must be to get inflation down, because inflation insidiously and remorselessly affects every Australian, from the highest earning to the lowest earning.

That is the urgency of the challenge that we face as a nation, a challenge that the Governor of the Reserve Bank is fully seized of, but there is no evidence at all that this government is fully seized of it. Indeed, we saw a troubling breakout of 'shoot the messenger' from the Prime Minister just last week, because the Governor of the Reserve Bank expressed some home truths about how difficult the challenge is that we face as a nation in reducing the insidious threat that inflation presents. For his troubles, you certainly couldn't say that the Prime Minister backed him in. On the contrary, the Prime Minister seemed very keen to white ant and undermine the Governor of the Reserve Bank.

It is not just the opposition making these observations about the dire situation we face as a nation. Many economists are making similar forecasts. Westpac, one of our biggest banks, has indicated that they now expect a further two rises in interest rates as the Reserve Bank struggles to get inflation under control. We've seen economists and we've seen the markets react. What that now means, amongst other things, is that the budget—only a month or so old—is already out of date. It assumed a peak cash rate of 3.85 per cent, because the Treasurer was going to wash his hands of that. He had other things to do. He was going to renovate capitalism. Remember that? Bold aspirations—all to be done within calendar year 2023, by the way, which makes you wonder why he thought it was a good idea to write that remarkably pretentious essay.

The simple fact is that already, a month or so in, the budget that was brought down by the Treasurer is already exposed as being hopelessly out of date, out of touch and not producing the policy remedies that we desperately need as a nation. The simple fact is, if you have a $500,000 mortgage—and many Australians have mortgages of that size or higher—this decision adds another $75 a month to your repayments. Your monthly instalments, compared to May 2022, compared to the change of government, now are $1,130 higher. If your mortgage is $750,000—and many Australians have mortgages of that magnitude—you'll now be paying $1,856 more each month. That's more than $22,000 a year, in addition, that needs to be found.

Is it any surprise that the data, therefore, says that a record number of Australians are struggling to pay their mortgage? According to new research by Finder, 40 per cent of Australian mortgage-holding households admitted that they struggled to pay their home loan in May. That is the highest number recorded since tracking began in 2019. We've just recently had the former governor of the Reserve Bank, Dr Glenn Stevens, say that inflation was 'way too high' and that interest rates could remain elevated for some time yet. We face an inflation crisis, we face an interest rate crisis, and of course we face a cost-of-living crisis. A recent report from the Commonwealth Bank describes the scale of the challenge we now face under this indolent and hopeless government in very stark terms. The report's author, Wade Tubman, said:

The cost of living pressure … has started to rapidly pick up since Christmas and certainly the trends are that financial pressure will continue to rise.

What have we seen as to the social impact of this economic managerial incompetence from those on the other side of the chamber? According to the Queensland Council of Social Services, demand for free food and meal vouchers has skyrocketed this year, in their words. Neighbourhood Centres Queensland have reported that food relief need has nearly quadrupled between 2019 and 2022. According to the Australian Automobile Association, for the first time, weekly transport costs have exceeded $500 in Sydney, Melbourne and Brisbane. As the association accurately said, that is a heavy burden for Australian families to bear in this cost-of-living crisis. Neighbourhood Centres Queensland have revealed that demand for their food relief packages has gone up and up and up. We also know that the economy has been shown to be growing at the slowest rate since September 2021. At the same time, according to the Australian Bureau of Statistics, the cost of food and groceries has gone up by 7.9 per cent in the past year.

What is this government doing in response to these extraordinary challenges we face as a nation? One thing they're out there doing is busily encouraging, cheering on, the award of markedly higher wages. The Reserve Bank governor has rightly warned that this risks a wage price spiral. He was quoted as saying that the recent 5.75 per cent wage increase was 'higher than we'd factored into our forecast'. We hear claims from the other side that wages are increasing and it's all great. It's a cruel con, because real wages are falling. We heard them talk about this repeatedly in opposition. They're in government. They've got their hands on the levers. What is the disastrous outcome that millions of Australian households are now experiencing? Real wages are dropping.

Apparently this is one of their highest priorities, and what's the genius outcome they've delivered? They've delivered the very opposite of what it is that they claim to be concerned about, the objective they claim to be delivering—just as they have delivered the complete opposite of the cheaper mortgages that the current Prime Minister promised when he was Leader of the Opposition; just as they have delivered the complete opposite of the $275 reduction in power prices that they have claimed; just as they have delivered the complete opposite of making Australians better off, which the current Prime Minister claimed that he would do. This government has no plan to deal with the pressing economic challenges that our nation faces, and they need to admit that reality.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Government MPs certainly understand that inflation and interest rates are affecting cost of living and squeezing household budgets. They certainly understand that this government, through both of its budgets, is acting to help households and small businesses get through this difficult period. The Australian people also understand the reality that neither side of politics is to blame for the recent bout of inflation and interest rates. The Australian people certainly understand that interest rates are determined independently by the Reserve Bank of Australia, not by the Liberal Party and not by the Labor Party. They are determined independently by the Reserve Bank based on market economic conditions.

The reality is that there are many reasons why inflation has increased in Australia over the recent years. Those facts relate to supply chain constraints associated with the COVID pandemic, increased government expenditure that was undertaken by all governments throughout the world to support jobs when economies were being locked down—and there was bipartisan support for those policies in this parliament—and, of course, the recent effect that the war in Ukraine has had on international energy markets. They are the reasons why inflation increased over recent years, and they are the reasons why the Reserve Bank, independent of government, had to act on those factors.

It's a fact that Australia is not the only economy in the world that is experiencing inflation. It's been a widespread effect of the pandemic worldwide. New Zealand, the United States, Canada, most of Europe and most of Asia have all been experiencing inflation increases and interest rate increases. All of these nations have also had increases in their interest rates, most of them at a higher rate and a higher level than Australia. In the United States, in Canada, in the UK and in New Zealand, interest rates increased at a much higher pace than they did in Australia and have been at higher levels than they are in Australia.

The reality regarding inflation and interest rates is that they predominantly relate to the COVID pandemic and the war in Ukraine and that no political party or government is to blame for that. But what the Australian people do want to know, and where political parties do have a responsibility, is what you are going to do about it and what policies you will develop and implement to assist households and small businesses to get through this difficult period.

It is here where there is a stark contrast between the approach of the Albanese Labor government and the Liberal coalition. The government is not seeking to come in here and move juvenile motions and shout at each other and point fingers across the chamber or, indeed, to blame the previous government. We're not seeking to do that at all. What we are doing is developing and implementing policies that will assist households and small businesses to get through this difficult period and hopefully see pressure taken off inflation over time and interest rates come down. That is the approach that we've taken since day one after the election last year.

There are a number of policies that we're implementing to assist households. When it comes to energy prices, we put price caps on gas and coal prices. We've partnered with the states to provide energy relief in the form of household and small business rebates. What was the approach of those opposite when we brought those policies into the parliament? They voted against them. Ordinarily, that's okay; that's alright. You can vote against them, but you've got to have an alternative, you see. You've got to have a policy that you're going to put in place as an alternative. I still don't understand or know what their policy alternative is. They're only going to come in here and vote against our policies for pure personal political interests. They're putting their political interests ahead of the welfare of the Australian people, and that is what is wrong with this opposition.

When it comes to health care, we've introduced policies that reduce the cost of medicines: reducing the co-payment and introducing 60-day dispensing of stable, dependable pharmaceuticals on the advice of a general practitioner. This is providing real relief, particularly to people who rely on medicines on a daily basis. What is the approach of those opposite? To vote against it and to rubbish the policy.

We all know that families are dealing with the cost of child care and that it's a big impost on household budgets. The Albanese government has a policy to assist Australians and to reduce some of that pressure on household budgets with our cheaper childcare policy that begins in less than a month's time. We will increase the rebate for the childcare subsidy, and we're removing the cap that ensures that there's a disincentive for families to continue working on a weekly basis. What's been the policy of those opposite? To oppose it but not to offer an alternative.

When it comes to health care, we know that the cost of seeing a doctor increased dramatically under the previous government because they had frozen the bulk-billing rebate for GPs over a number of years, forcing many general practitioners to charge a co-payment for a visit to the doctor. This government has responded to that in our recent budget by tripling the bulk-billing incentive for children and concession card holders, again providing real policy relief for Australians doing it tough around their healthcare costs. Housing is a massive issue in Australia at the moment, and we have policies to deal with it. In the budget, we increased rent assistance for the most vulnerable Australians, who are having difficulties paying their rent. We've got a housing future fund that's aimed at building 30,000 new houses throughout the country, predominantly in the social and low- to middle-income areas. Again, that was opposed by the opposition, who had no alternative policy in place and nothing as an alternative to what the government is offering. In energy efficiency, we're increasing rebates for households and small businesses to ensure that they can install appliances that reduce their energy costs. We're even introducing vehicle emissions standards to ensure that Australia keeps pace with the rest of the world and that we can reduce the cost of motoring for Australians over time. These are but some of the policies that the Albanese government is introducing and implementing to help Australians deal with inflation and reduce the impact of interest rate rises. But what are the opposition's policies? We don't know—and the Australian people don't know—because the opposition haven't announced anything.

Another important factor when it comes to the cost of living is incomes. People want to make sure that their incomes are increasing so that they can deal with the cost-of-living pressure that they're facing. The approach of the previous government was to do everything they could to dampen the real incomes of Australians. Do you remember when penalty rates were cut? What did the previous government do? They supported it, while Labor opposed it. Do you remember when minimum wage cases were undertaken under the previous government? Did they put in a submission supporting a wage increase for low-income workers? No, they opposed it. In the recent minimum wage cases that have been undertaken by the Fair Work Commission, you've had a government that actually supports them and that puts in a submission saying, 'We support a wage increase for low-paid workers,' in stark contrast to the previous government. We've agreed to fund an aged-care workforce wage increase, as recommended by the royal commission, and we're fixing the bargaining system to ensure that Australians have the opportunity to bargain in their workplaces.

The government is also taking responsibility when it comes to government expenditure. Any revenue upgrades that we received in the recent budget could have been spent on shiny announcements by the government, but we didn't do that. We took the responsible approach, with 87 per cent of revenue upgrades being returned to the budget in both our recent budgets. We won't be pouring fuel on the fire of inflation on this side. That led the Reserve Bank governor to say: 'I don't think that the budget is adding to inflation. It's actually reducing inflation in the next financial year.' That's the view of the independent Reserve Bank. The government takes these inflation challenges very seriously. We're implementing policies to assist Australian households and small businesses, and we are showing government restraint. What you'll hear from the opposition is a lot of yelling, screaming and finger-pointing, but what you won't hear is one policy to assist Australian households and small businesses to get through this difficult period.

Angie Bell (Moncrieff, Liberal National Party, Shadow Minister for Early Childhood Education) Share this | Link to this | Hansard source

In the lead-up to the last election, those opposite, Labor, promised Australians that life would be cheaper under them. I ask Australians: do you remember that? Labor promised cheaper mortgages, cheaper electricity and cheaper child care. All of those have been broken promises, because all we've seen in the last 12 months is the cost of living and the cost of everything continuing to increase under this Labor government. Families are simply struggling. Bills are piling up, grocery costs are skyrocketing and those who own a home or are looking to buy have watched 11 consecutive interest rate rises under this Prime Minister. Australians are concerned about what those interest rate rises mean for their budgets and about the difficult decisions they face over the coming months. Under the latest rate rise, Australians with a typical mortgage of $750,000 will now be paying $1,856 more per month. That's huge. That's more than $22,000 a year that they'll need to find. Where are they going to find it from?

And what is this Labor government doing to support you and to support your family? Nothing. In fact, this month's interest rate increase is just further proof that Labor's budget did nothing to fight inflation. Labor has been in government for more than a year now—more than 12 months—and they've delivered two budgets. This is Labor's rate rise. It's a fail. This rate rise belongs to this government. The Reserve Bank has made it very clear that there's more interest rate pain on the horizon. There's more pain coming for you if you have a mortgage. This is the genie out of the bottle. It's the inflation genie that has been let out of the bottle. It's the failings of this government to take leadership on addressing the biggest economic challenge faced by all Australians, which is inflation. It's not coming from the war in Ukraine. It's not coming from Vladimir Putin, as those opposite like to claim it is.

I hear scoffs from those opposite. It's not coming from there; it's coming from here! Inflation is coming from Canberra. It's coming from this government, and it's about time this government did something to address it. Unless the government limits its spending, Labor will continue to add to the cost of your mortgage, rent, groceries and just about everything else that you're spending your hard-earned money on. Australia has one of the highest rates of core inflation amongst similar advanced economies. Millions of Australians are hurting and have just simply been forgotten by this government. They're feeling the pain of the cost-of-living crisis.

According to realestate.com.au, some Queensland homeowners are cutting back on early childhood education just to pay the bills. They're taking their children out of care so that they can meet their bills—something the government promised families would be cheaper under them. That's another commitment they won't be able to follow through on because fees are going up and subsidies will be eroded. We know that. We have been warning against this.

The government has benefited from the last nine years of the coalition's strong economic management. We created over two million jobs in nine years and left Labor with the lowest unemployment rate in almost half a century—50 years. We also bequeathed interest rates at historic lows. It's an undeniable true fact. Labor also benefited from company tax receipts and the revenue generated from soaring coal, gas and other mining commodities, and they've squandered it all. The decisions made by this Prime Minister and his government are causing the economy real damage and causing Australian families real damage.

Labor have had the chance to deliver a budget that reduced inflation and reined in spending to combat the cost-of-living crisis facing all Australians. Instead, their budget makes life harder for Australians, small businesses, self-funded retirees and those mortgage holders. Their budget also confirmed that real wages are stagnant, that the cost of living will continue to rise, that gas and electricity bills will continue to skyrocket, that the unemployment rate will rise, that inflation will remain stubbornly high—it's all in the budget papers—and Australians will continue to face higher taxes.

Many Australians are asking themselves whether they are better off under Labor after just one year. This is just 12 months under Labor; imagine what it will be like in two or maybe even three years time. Three things are clear when it comes to this government: you can't trust Labor, you can't trust Labor to run the economy or to keep their promises, and Australians will always pay more under a Labor government.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I'm happy to rise to speak on this matter of public importance. It was put forward by the member for Bradfield, for those playing along at home. Then there was a great response from the member for Kingsford Smith to the suggestion of 11 rate rises. He didn't mention 12 rate rises; he mentioned 11 rate rises. The member for Kingsford Smith, who I know is a little bit unhappy after the Dragons beat his team on the weekend, put forward a great response. Then came the member for Moncrieff, who didn't hear anything that the member for Kingsford Smith put out there in terms of how we're addressing cost-of-living issues.

This MPI put forward by the member for Bradfield is a little bit disingenuous, really, because it's that deliberate great big fear campaign that has been the No. 1 strategy of the Liberal and National parties since they got into opposition. This MPI is all about conflating monetary policy and the independent Reserve Bank—I don't think the Reserve Bank governor sits in the Labor caucus—

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

No, he certainly doesn't.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

he certainly doesn't—and fiscal policy, the things that the Commonwealth government does in terms of borrowing, spending, taxation and all those things. Those opposite, hopefully, do know that the Reserve Bank is independent, though certainly when we came in there'd been 10 years of appointments to the Reserve Bank by the coalition.

Let's go back to why we've had these interest rate rises. That is what the MPI is about. The last time we saw a CPI jump of 2.1 per cent, the largest quarterly rise in inflation this century, who was in government? The Morrison government. That was in the March 2022 quarter. It was a record inflationary increase, and the member for Cook was Prime Minister. He was also the Treasurer and the finance minister, so he was certainly responsible for it. I think some guy called Josh Frydenberg might have been involved as well, but it was mainly the member for Cook. Cast your mind back to that last budget before the election last year, where they sprayed money around like it was champagne after a grand prix. Do you remember, Madam Deputy Speaker? They were obviously shameless endeavours by the Liberal Party to win votes, and we've seen from Audit Office report after Audit Office report that it was not done with anything like sensible government but with all sorts of rorts and weird priorities.

Those opposite don't mention in this MPI the first interest rate rise. I will give some credit to the coalition in terms of responding to COVID. I've been in government when we've been responding to a budget emergency. Measures have to be rushed, they have to be quick, and it's hard to be precise. When the global financial crisis hit, we rushed money out to people. It was a difficult time. So responding to COVID meant that some budget measures were a case of spraying money around. I acknowledge that and accept it, and there was bipartisan support from us in opposition for those endeavours; in fact, we suggested some of them. But the budget before the election last year was not a COVID budget. That was a case of running into the cabin with the fire hose and spraying water everywhere. And now they sit over there and say, 'Gee, its wet in here.' Everything's damaged, we've got to repair everything, we're paying interest on the repair bill, and they've got the hide to say, 'Gee, look at that; there've been a couple of interest rate rises from the Reserve Bank governor'—the independent Reserve Bank governor.

We are against inflation because we know that inflation hurts workers first and hardest. We know that. We know that some of their core voting groups actually like inflation—some of them do. That's not our core constituency. Workers are first and foremost in our considerations when it comes to economic policy, and we know that workers will be hurt. That's why we put out a responsible budget that did so many things that weren't inflationary: cheaper child care—not inflationary; cheaper medicines—not inflationary; increased bulk-billing rates—not inflationary. Do you remember when the member for Dickson was the health minister? He was going to put in place a GP tax, which would have been inflationary, if he'd got his hands on the budget. Fee-free TAFE and expanding the paid parental leave scheme also are about increasing demand, but both are devoted to boosting flatlining productivity, which is what any sensible government does. Those opposite have no idea.

Zoe McKenzie (Flinders, Liberal Party) Share this | Link to this | Hansard source

The government has had ample opportunity to address inflation. They've had more than a year in the job now, and we're still hearing that it's someone else's fault. We've just heard it was the coalition government's fault. It was COVID's fault, it was Kyiv's fault, it was America's fault, it was even the fault of the floods for a while there. It's been everyone's fault—everyone but the Labor government.

Remember a year ago when the Treasurer said that 5.1 per cent inflation was 'a full-blown cost-of-living crisis'? Today, inflation sits at around seven per cent—higher than in the United States, Canada, Germany or Japan. So whose responsibility is this? In May 2022, just before the election, the Prime Minister made this solemn promise to the Australian people:

… as your Prime Minister—I won't run from responsibility. I won't treat every crisis as a chance to blame someone else. I will show up, I will step up, I will bring people together.

Then his Treasurer to be jumped up on the same bandwagon. He said:

… we want to show up every day and take responsibility. Not just for the good things, but for the difficult things as well.

Well, through you, Deputy Speaker, to the Treasurer, I've got news for this government: it's time to show up. As a result of the government's inability to tame inflation, its constant stoking of the economic engine with brand-new spending, Australians have confronted 12 interest rate rises in almost as many months. The average Australian household is now more than $25,000 worse off each and every year following the last budget. And Australian families are paying more for everything: their mortgage, their energy bills, their tools, their groceries, their kids' school needs, their clothes and their shoes.

So what is this government doing to address inflation? Ask them and, literally without blinking, they will list a stream of handouts—handouts which, in turn, risk making inflation worse. Anthony Walker, a director at independent rating agency S&P Global Ratings, noted in May that handouts in the most recent budget may add to inflationary pressures. Former RBA governor Glenn Stevens has conceded the Albanese government's budget would have an expansionary effect. This government needs to be exerting downward pressure on inflation, not upward. What it needs is a comprehensive economic plan to boost productivity and to tame inflation. Without an economic plan, the Reserve Bank is having to do all the heavy lifting along. Without an economic plan, Australian families and our struggling small businesses will have to keep paying the price for Labor's laziness.

I see my local residents paying the price for Labor's failures—Labor's inability, in their own words, to step up. So many residents of Flinders are on fixed incomes. Indeed, more than 22,000 of my electors are pensioners, with very little room to absorb increased costs. About one-third of dwellings on the peninsula, roughly 34 per cent, are owned with a mortgage. Back in 2021, when we had the last census, 15 per cent of them were already spending more than 30 per cent of their income on their mortgage interest repayments. Those who were lucky enough to secure interest rates in the high ones or low two per cents during the last government's tenure are now facing their interest rates shooting up to more than eight or nine per cent the day after their fixed term expires.

A few weeks ago AGL came to visit me and told me that the default price for gas in Victoria for homes and small businesses will be going up by about 30 per cent midyear. What will that do to local businesses like Bass & Flinders Distillery, which I visited on the weekend? A thriving local business, it makes the best gin in the country—as I see that the member for Casey is not here to correct me, I proclaim it to be true! How will businesses like Bass & Flinders in Dromana, or Chief's Son and Original Spirit Co in Somerville, who all run their gas-fired distilled spirits stills on the peninsula for days on end, absorb a 30 per cent price increase overnight? What will it do to Sealite, a world-leading business in marine technology and safety which manufactures giant ocean buoys and navigation moulds from molten plastic produced exclusively by gas? Labor's failure to act to address inflation has a real impact on the ground across my electorate.

Just after the last Labor budget back in May, I received an email from a constituent which summed up the impact this government's policies are having. She allowed me to share her words here: 'Dear Zoe, I have been in business since March 1980. In the late eighties we had that recession. I remember clearly what it was like: high interest rates and cost-of-living increases. Many people lost their houses, jobs and businesses and could not sell the house for months. At the present time I feel we are going full circle. Business has dried up. People are really tightening the belt to pay their mortgages and bills. I know I am saying what you already know, but what a sad state of affairs our beautiful country is in.' (Time expired)

Alicia Payne (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on what is a ridiculous matter of public importance topic from those opposite. It simply exposes that they have no ideas and are all about politics. Inflation right now is public enemy No. 1 when it comes to the economy. It makes the money in all of our pockets less valuable. It means we can buy less with the same amount than we could a year ago. That the opposition would have you believe that Australia exists in a vacuum, that we are in our own world, is simply nonsense. They would have you believe that we are the only place going through these significant economic headwinds, but we are not. They would have you believe that inflation is the result of higher wages, when all evidence points to the contrary. The unfortunate fact for those opposite is that the Australian people are far smarter than they give them credit for. The Australian people see straight through these fibs from the opposition. They know when they're being taken for fools. So let's get some facts on the record.

The inflation that we see permeating through the economy did not begin when this government took office. The first rate rise actually took place under the former government, before the election. We know that the rates have risen as a consequence of persistently high global inflation, caused by several factors. First is the war in Ukraine and second is the completely broken global supply chains, which have been neglected for far too long—including by those opposite when they were in government. We also know that the rate rises in Australia have been comparatively less severe than those seen in comparable countries, such as the US, Canada, the UK and New Zealand. Of course, that isn't of huge comfort to Australian mortgage holders and borrowers, who are copping the rises and doing it tough, but it does paint a clear picture which contradicts pretty much all of the arguments of those opposite, and the idea put forward by them that the government is doing nothing to get on top of this issue is beyond ridiculous.

Tackling inflation is an essential focus of our economic plan and, in particular, in the budget that the Treasurer handed down last month. It's a budget that was specifically designed to take the edge off some of the cost-of-living pressures while driving down inflation. The independent Reserve Bank governor has made it abundantly clear that this budget addresses inflation and doesn't add to it. In Senate estimates he said:

I don't think that the budget is adding to inflation, it's actually reducing inflation, it's actually reducing inflation in the next financial year.

In fact, advice from the Treasury is that our policies to ease the cost-of-living pressures are expected to directly reduce inflation by three-quarters of a percentage point in 2023-24.

What a contrast to those opposite! If they were so concerned about the impact of inflation on cost-of-living pressures, maybe they would back some of our policies. Did they back us when we capped power prices? No, they didn't. Are they backing our measures to lower the cost of medicines for Australians? No. Did they back $2.8 billion invested in the incomes of the lowest-income Australians through our increases to JobSeeker, rent assistance and moving single parents onto the parenting payment? No. Do they support our cheaper childcare policies that will begin in a matter of weeks and will take so much pressure off Australian families? No, they don't. Besides criticising from the sidelines, what have the coalition actually proposed? What solutions have they come up with? A big fat nothing. They just say no.

You'd think that if they had anything substantive to offer or actual questions to ask that they might have done so during the Leader of the Opposition's budget reply, or throughout the two weeks of budget estimates. Did they do that? No. Instead they wasted everyone's time with disgraceful lines of questioning about whether a public servant was wearing a tie. That's where these people are: no vision, no ideas and no clue from the no-alition. But why would they start now? They weren't doing anything while they were in government so why would they propose ideas from opposition?

As I said, the Australian people are smarter than these people give them credit for. What they want to see is an alternative government. They want to see ideas and solutions, and they want to see their representatives supporting measures that this government is putting in place to help them with their costs of living and to drive down inflation. So they should start listening to people in their electorates and looking after them.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It's interesting to note that the member for Canberra couldn't even use up her full five minutes in trying to rebut the arguments in the member's excellent MPI. Just to correct the record for the member for Canberra in relation to the piece of legislation she referred to: the opposition actually did support that piece of legislation. We moved an amendment to actually allow people who are on unemployment benefits to earn more money than what the government was proposing under their legislation. So if she's looking for something positive that the opposition has put on the table, there is example No. 1.

In addition, in the Leader of the Opposition's budget-in-reply speech to the government's first budget—bearing in mind that the May budget was their second budget—we also moved a similar proposal for those on pension incomes to increase the income-free amount that they could earn before their pension started to be reduced. So we have put positive items on the agenda for discussion. It was actually the government that voted down people on unemployment benefits being able to earn more money before their unemployment benefits were cut. This at the very time we have four hundred and something thousand vacancies in this country and 800,000 people on unemployment benefits. The coalition has always been focused on seeking to provide the environment and framework for people who are unemployed to get back into work. We know the benefits that that provides to Australians.

More importantly, in relation to this MPI, we have seen 11 interest rate rises in the past 12 months and inflation stuck at nearly seven per cent under the current Prime Minister and this government. It's worth reminding the chamber that this government increased spending in the latest budget by $185 billion over and above what it was spending previously. If we think that is any way to reduce the pressure on the inflation rate, then think again. And it's hardworking Australians who pay the price. When they want to get ahead, they are actually going backwards. We see that each and every day, whether it's in grocery prices or in mortgages going up.

We still have another $880-odd thousand people on fixed rate mortgages who will come off their fixed rates in the second half of this year. I know from talking to my constituents that they are extraordinarily worried about the impact on their finances of moving from a fixed rate to a variable rate. We are slowly seeing first home buyers' dreams evaporate and slip away as interest rates rise under this government. We are seeing renters continue to struggle as the housing crisis continues. We're seeing them forced to deal with higher and higher rents. This is in addition to ever-growing costs in electricity, groceries and a range of other ordinary day-to-day expenses that people can't do without.

We see each and every day Australians struggling and going backwards. And those opposite want to say that it's imported. Well, it's not. It's coming from those opposite and their inability to rein in their spending to take the pressure off inflation. We have seen consumer confidence cratering, and the most significant concern for consumers is that continued inflation. To look at that more locally, in the last four weeks alone, in my electorate of Forde, Lighthouse Care Loganholme have had some 500 families come through their doors requiring assistance. They now provide over 200 home deliveries each week. Last month, the Twin Rivers Centre at Eagleby had 900 families who needed emergency relief, up from 80 in April. All of these are examples of this government failing to do its job and look after vulnerable Australians.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

r BRIAN MITCHELL () (): What those opposite have failed to remember or, in fact, have conveniently forgotten is that interest rates started going up under them. We've inherited the mess, and we're cleaning it up. Every credible economist and commentator acknowledges that inflation is a global challenge. It is not restricted just to Australia; it's a global challenge. The Reserve Bank of New Zealand's rate is 5.5 per cent; the US Federal Reserve's rate is five to 5.25 per cent; the Bank of Canada's rate is 4.75 per cent; the European Central Bank's rate is 3.25 per cent; and the Bank of England's rate is 4.5 per cent. Clare Lombardelli, the Chief Economist of the OECD—who worked for a bloke those opposite know all too well, Mathias Cormann, the Secretary-General of the OECD—said:

The global economy is turning a corner but faces a long road ahead to attain strong and sustainable growth …

G20 inflation is expected to drop from 7.8 per cent to 6.1 per cent and then to 4.7 per cent in 2024. This is a global challenge, not just restricted to Australia. It is these global pressures from the war in Ukraine and neglected, broken supply chains that drive the higher inflation that is leading to these globally higher interest rates.

The situation in Australia was only made worse by the previous government due to its wanton neglect of energy policy and skills shortages, its wanton vandalism of the national finances and its failure to back advanced manufacturing. The coalition presided over a decade of missed opportunities and misguided priorities, resulting in deliberately lower wages, increased cost-of-living pressures and a trillion dollars of debt, without enough to show for it. They voted for higher energy bills for millions of households. They had the opportunity in December to come in here and vote for energy relief, and they decided not to do it. They voted against that relief for households and small businesses. They want more expensive medicines, and they won't support more affordable housing. There is a bill in the Senate right now that will deliver 30,000 homes over the next five years, including 4,000 homes for women and children escaping domestic violence. It would increase housing supply in this country, bringing down those pressures, and those opposite are voting against it, or they're blocking it in the Senate. Get on the phone to your senators and tell them to stop getting in the way of increasing housing supply. The Leader of the Opposition, when he was a minister, wanted a GP tax.

By contrast, the Labor government's economic plan prioritises controlling inflation while making sure we look after people who need it most: cheaper child care; cheaper medicines; expanding paid parental leave; tripling the bulk-billing incentive; wage increases; fee-free TAFE and more university places, especially for kids from the regions; building more affordable homes; providing power rebates; and increasing the base rate for eligible recipients of JobSeeker, Austudy, youth allowance and other working-age payments—effective action and structural change, not a grab bag of giveaways and rorts such as those opposite subjected us to.

It has to be said the Liberals are the eshays of Australian politics. It's free pizza and beer for their mates, except it's not free pizza and beer; it was all put on mum and dad's credit card. They trashed the house, they racked up the bills, they upset the neighbours and they left behind a whopping big mess. Well, mum and dad have come home. We're cleaning up, we're paying the bills and we're repairing relations with the neighbours. But it's going to take time.

The Albanese Labor government has carefully tailored its budget to ease cost-of-living pressures while tackling the inflation issue that Australians face. In fact, Treasury's advice is that our policies to ease cost-of-living pressures are expected to directly reduce inflation by three-quarters of a percentage point in 2023-24. It is still higher than we'd like and more persistent than is ideal, but it's down from where it would have been, making a meaningful difference to families around the country, and I've got it here it on the front page of the latest edition of Our Lyons Community. Labor is tackling the cost of living: cheaper child care, cheaper medicines, power bill relief, rent relief, fee-free TAFE, backing high wages, homebuying support and more support for over-55s. We're getting on with the job of delivering the relief this country needs while also making sure we don't contribute to higher inflation, because we know inflation is bad for the country and we're determined to tackle it.

Tony Pasin (Barker, Liberal Party, Shadow Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I hasten to interrupt the member for Lyons quoting the member for Lyons in a publication that the member for Lyons produced and disseminated, seeking to hoodwink his electorate into believing it was a community newspaper. In any event, in the lead-up to the last federal election, the now Prime Minister said voters expect leaders to 'take responsibility'. I agree with that statement. Leaders need to take responsibility. But the problem is that that rhetoric that was provided in the lead-up to the election, no doubt as a last-minute attempt to make sure that undecided Australians voted for him to become Prime Minister, isn't matched by his actions now as Prime Minister, because as Prime Minister, rather than taking the responsibility for the circumstances we find ourselves in, which I'll provide some detail about in a moment, he says: 'Oh, no, no, no. This problem about inflation hasn't come from Canberra. It's come from the Kremlin.' That's not a leader taking responsibility. As for the Treasurer, the Treasurer says, 'Well, we're not making it worse.' No, you're not, but you're not making it any better, either. With respect, this is like the CFS volunteer who turns up to the fire with the equipment to put the fire out and says: 'Don't blame me; I didn't start it. I didn't start the fire.' Fair enough, but you've got the means to put it out. So it's time you pulled those levers.

What do Australians face right now? Don't take it from me. Take it from those opposite and their budget. What does their budget say about what Australians can expect over the next four years, or at least over the next 12 months? Next year real wages will be stagnant. They are stagnant and they will remain stagnant. The budget makes it clear that the cost of living will continue to increase. It goes further, and it assumes that gas and electricity prices will continue to go up, that unemployment will rise—these are the assumptions that those opposite have made in their own budget—and that inflation will remain stubbornly high for longer. But, as we heard today in question time, the assumption those opposite have made for a peak cash rate have already been exceeded within a month. And Australians will continue to face higher taxes. That's what those opposite have baked into their budget. Real wages will be stagnant, the cost of living will continue to increase, gas and electricity prices will continue to go up, unemployment will rise, inflation will remain stubbornly high and Australians will continue to face higher taxes. And that's after 12 months. Imagine a poor, hardworking Australian out there today thinking to themselves, 'Well, if this is how much harder it is under Labor after 12 months, imagine what it will be like after three years.'

All the while, in the midst of a cost-of-living crisis, those opposite obfuscate responsibility and blame the Kremlin while they pursue the Voice. I have a suggestion for the leader of our nation, the Prime Minister. He can start dealing with this issue. Australians are unquantifiably more concerned about the cost of living than they are a referendum around constitutional change to implement a voice to parliament. So why don't we do this: why don't we pull back from that proposal. Why don't we spend the next six months not arguing about the Voice but seeking, in a bipartisan way, to address the cost-of-living issues. Australians would thank the Prime Minister if he were to make that his priority. They would absolutely thank him. Instead, what's going to happen—I'll predict it for those opposite—is that we will have a referendum around the middle of October. I estimate—nay, I expect—it will fail, and Australians will wake up with a hangover, a referendum hangover, on 15 October. They will turn to their government and say, 'I cannot believe that you have spent the last six months pursuing this idea instead of addressing cost-of-living challenges.' An average Australian household is $25,000 worse off today than it was when the coalition left government. For the benefit of those opposite, that's $25,000 after-tax. That's more money then you can fly a rocket ship over.

Michelle Ananda-Rajah (Higgins, Australian Labor Party) Share this | Link to this | Hansard source

Australia is caught up in an inflationary challenge that is indeed sweeping the world. Yes, our headline inflation rate is too high, at seven per cent. In the UK it is currently 8.7 per cent; in New Zealand it is 6.7 per cent; and in Germany it is six per cent. The only bright spot here is the United States. The United States's inflation has drastically come down. It is sitting at around five per cent. It peaked in June of last year at nine per cent. That should offer some hope for us.

The issue here is that Australia is in this position when it didn't need to be struggling like this. We're in this position because those opposite removed the shock absorbers from our economy. What were those shock absorbers? They were around energy, they were around housing and they were around supply chain, including labour and skills. Had they actually been addressed then our country would have been able to buffer itself from these economic headwinds and from a black swan event, which we all know about, the pandemic. Now we are also affected by the threat multiplier of climate change, which is very much upon us.

What is not discussed, unfortunately, is that those opposite actually poured high octane fuel over this inflationary problem. It surprises me that no one has actually talked about this. There was a report that came out in the Fin Review in April of this year that cited a respected economist, Chris Murphy, who had done an analysis. What he showed was that the stimulus of those opposite, of approximately $429 million, added an additional three points of inflation. So instead of having an inflation problem of seven per cent we could have had an inflation problem of four.

Australia, incidentally, was one of five countries in the OECD, a group of 38 mostly rich countries, that basically pumped too much stimulus into the economy during the early stages of the pandemic. Those opposite like to style themselves as the fiscal guardians of this nation. They're meant to be the fiscal conservatives. Instead what we had was a demonstration of fiscal incontinence—I can say that, as a doctor. Our focus as a government is squarely on providing targeted cost-of-living relief, laying the foundations for our future prosperity and putting our budget on a more sustainable footing, so that we can actually provide those services that Australians rightfully expect—things like education and health care, for example.

In terms of energy, we are going through an energy crisis we did not need to have. We were simply overexposed to fossil fuels after a decade of policy chaos. With the passage of our historic Climate Change Act, we have now delivered policy certainty. That has actually translated to unprecedented investment in the fourth quarter of last year of $4.29 billion—that is, final investment decisions were made last year, 10 times higher than the third quarter of last year. If that doesn't send a signal that Australia is open for business, then I don't know what does.

We have also invested and opened up three offshore wind zones around Australia—one in the Bass Strait. As we speak, there is a ship in the Bass Strait that is drilling. It is not drilling the seabed for gas. It is actually drilling the seabed where the footings of wind turbines that are 300 metre tall will stand. This is the future we are delivering for young Australians. This is the future that they are going to seize. Those wind turbines, one day, will be made from green steel. Why? Because we invested $2 billion in that budget into green hydrogen. We've also invested $15 billion into making more things in Australia—a future made in Australia. We're investing in our sovereign capability—something those opposite voted against. It is absolutely baffling, considering that in the league table of the OECD we are at the bottom of that list. We get the wooden spoon for self-sufficient manufacturing in our country.

These are all programs that are going to yield dividends in the longer term. But we know that people are struggling now, which is why we invested in tripling the bulk billing incentive in order to arrest the decline in bulk billing that we are seeing around the country. We've also brought in extended dispensing, so that Australians pay less for their medicines. I would say that there is a lot we are doing and we are future focused. (Time expired)

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

The discussion has concluded.