Ted O'Brien (Fairfax, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that Australia's industrial relations system has become too complex, too rigid and weighted towards big institutional interests at the expense of workers, small businesses and productivity;

(2) recognises that:

(a) the Government's industrial relations changes have replaced flexibility and fairness with confusion and compliance;

(b) the Government's energy policies have driven up power bills for shops, cafes, workshops and family enterprises; and

(c) small and family businesses are being forced to work longer hours for less return, while competing against government-subsidised sectors and ever increasing compliance costs; and

(3) affirms that the Opposition stands with private enterprise and small and family-owned businesses because their aspiration, innovation and entrepreneurship are central to Australia's economic future.

Australians are poorer today than they were this time last week. In between, they have copped yet another interest rate rise. Unfortunately, by this time next year, they are going to be poorer still because the everyday Australian will experience the price of everything going up even further this year. They will be experiencing higher interest rates this year. They will be experiencing higher taxes that they have to pay this year. Meanwhile, their real wages will be declining this year, and their living standards will continue to erode.

Australians are hurting right now, in particular younger Australians. I'm talking about Australians who might be in their late 20s and their 30s in particular—families who are trying to feed not just their own mouths but the mouths of kids. People are working their tails off every single day so that they can ensure there is food on the table and making really hard choices and trade-offs about what they can and can't afford for their family. A lot of these young people are either saving to buy a home or they're struggling to pay off a mortgage. In the real world out there, beyond the walls of this parliament, young Australians are feeling the pain, and they know, unfortunately, that this year it will only get worse.

This is a direct consequence of a poorly managed Australian economy—an economy which is seeing inflation driven up as a direct consequence of the biggest spending government in 40 years outside of the pandemic. In this financial year alone, this government is spending an extra $50 billion on discretionary measures. We don't deny the right of any government to prioritise its spending. But with that right should come a commensurate responsibility to find room in the budget to pay for it. Again, everyday families do this. They make those trade-offs. If they want a child to do extracurricular sport, theatre, dance or whatever it is and they don't have the money to pay for it, they might cut back on the take-outs or a couple of days of the holiday they were hoping for. These are the normal financial decisions that are discussed around kitchen tables. It is not too much for the Australian people to ask that the same discipline be applied in this place by the Treasurer and this government to keep the books in check. But that is not happening.

Last week, we saw an increase in interest rates. The Treasurer suggested it had nothing to do with public demand—in other words, government spending. By Friday, of course, you had the Reserve Bank governor making it very clear that it did have something to do with public demand. By Sunday, the Treasurer was saying that the last national accounts were suggesting that the growth in private demand was higher than in public demand, but in fact it was the opposite.

We can talk all about the stats. We can talk all about economic figures. But where the rubber hits the road is out in real Australia, which is why we continue to call on this government to do something that everyday Australians do at home: live within your means. That starts with introducing some rules as to how you contain your spending in the budget. This isn't too much to ask, can I say. Every single treasurer since Peter Costello, who introduced the Charter of Budget Honesty, has had a set of rules to control spending, except the treasurer of this government. The more this government spends, butted up against the speed limit of the economy, the more prices go up. When prices go up, interest rates go up and real wages go down. This has been felt in real Australia, and that is why we have to keep raising this issue with this government.

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Rowan Holzberger (Forde, Australian Labor Party) Share this | Link to this | Hansard source

The shadow Treasurer talks a big game, but, as usual, I think the record talks an even bigger one. The shadow Treasurer talks about higher taxes and about real wages coming down, but the breathtaking part about that is that this is from a party that took tax increases to the last election and that kept wages down as a deliberate part of its economic architecture.

The shadow Treasurer is also trying to pursue the line that you run the budget like a family runs its budget. While there is merit in that argument, I think there is more merit in the maxim that a government should run the economy the way a good business is run. The problem for the opposition there is that there are two very different ways to run a business. As somebody who's actually run a business, I know that there are two ways to do that. One is to invest in your plant and your people to build productive capacity in your business for the long term, and the other way is to strip out profits, to put off the maintenance, to cut the investment and to slowly run the country—I mean the business—into the ground. The key lesson is this: not all spending is the same. There is good spending and there is bad spending.

The second thing I'd say is that the government understands that people are doing it tough. The fact that we're even having this argument is not the message that I want to get out to the community, because I know that in my community people are doing it tough, just as they are in most of the communities who are represented in this parliament. Inflation is higher than we would like. Cost-of-living pressures are real. But the argument contained in the motion from this opposition doesn't even withstand basic scrutiny.

First, the shadow Treasurer talks about rules, but inflation under the former government that he was a part of was already at 6.1 per cent and rising when we came to government. Spending peaked under the Morrison government at 31.4 per cent of GDP, and real spending growth was at 4.1 per cent, more than double what it is under this government. This government has delivered $114 billion in savings, and the $20 billion in savings found in the last budget update alone was as much as the former government managed across all of its last seven budget updates combined. So lectures from the opposition about this really are quite extraordinary.

Second, the Reserve Bank has made it clear that the unexpected increase in private demand has been what's contributed to inflationary pressure, and the idea there about the shadow Treasurer crowing about somehow getting the RBA to admit that aggregate demand is made up of both private and sector spending, as if that is some sort of economic revelation, only really explains why nobody takes them seriously on economic management anymore.

Third, the motion calls on the Treasurer to introduce measurable budget rules, which is remarkable coming from a party whose record and plans for the future show the complete opposite. They left black holes everywhere, and in opposition they went to the last election promising higher taxes and higher spending. So I'm not sure what rules you actually want us to follow. There are, of course, real pressures in the budget. Nobody can deny that. Our ageing population is—

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

The member for Moncrieff, on a point of order?

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

I would ask that the member direct his comments through the chair.

Rowan Holzberger (Forde, Australian Labor Party) Share this | Link to this | Hansard source

The opposition left black holes everywhere. One of them is in aged care where there was just some sort of total denial of the reality that the cost of the aged pension is going to increase, that aged-care costs are going to increase and that healthcare costs are going to increase as a result of our changing demographics. But the black hole left behind in the budget, the traps that were left for Labor when they took over the budget, are things that they are dealing with.

Another of them was for veterans compensation. The opposition allowed $1.8 billion, but the real cost was $6.6 billion. Either it was deliberately ripping off those that had put on a uniform to serve our country or it was mismanagement. I'm not sure which one. At the end of the day, the challenges in the economy are a result of a decade of negligence by the opposition. The government has been left trying to thread an economic needle to get wages moving, cut costs for medicine and child care, reduce student debt, invest in housing and energy and support veterans all while keeping the pressure off inflation. That is how you run a business properly, that is how you run a country, and that is why this motion should be rejected.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

I know members opposite, particularly on the backbench, are required to do one thing: read out the talking points. That's all they're allowed to do. But, gosh, that was extraordinary! I think we had five minutes there, and in the last 15 seconds the member for Forde decided to finally talk about the government and what they had achieved. He rattled off a quick list. If you speak to anyone in the community, they're not feeling that. They've never had it tougher. They are struggling to put food on the table, and we have a government that is full of spin—which we just saw from the member for Forde; I have no doubt we'll see it from those opposite—talking about the opposition. They were talking about the opposition being in government for 10 years. Well, newsflash, you've been in government for four years now and counting. Take responsibility for your actions.

This economic cost-of-living crisis we face today sits directly with this government. It sits directly with the Prime Minister and the Treasurer. The scary part for the Australian people is they're doing it so tough right now. It feels like they are on an economic treadmill. They are running harder and harder every day. The speed on that treadmill is going up because of this government. It is getting harder to stay on that treadmill, and it gets worse. The solution over the four years that this government has had for the Australian people on that economic treadmill is to feed them fairy floss. This government has fed the community economic fairy floss and sold it to them like a solution. But the problem with giving fairy floss to a young person as a parent—or anyone else—is it feels good for a moment, but, if they keep eating it, it makes them feel worse and it actually makes the situation worse for them. And that's what this government has done over four years.

This treasurer has either deliberately misled the Australian people by not understanding what is happening—with basic economics 101—or this treasurer does not understand what's happening and is misleading people. Either one is unacceptable. We have a situation where he is misleading this House and the Australian people. On Tuesday 3 February, the Treasurer was talking about government spending, saying, 'It was not a factor in the decision that the RBA took today.' Not a factor at all, the Treasurer said.

Well, I had the opportunity on Friday in the Economics Committee to speak to the RBA governor and asked the RBA governor a question from Matt from Lilydale. He had two questions—a member of my community because that's what we're here to do, represent our communities. His questions were: How is the government spending affecting the economy? Has it contributed to the rate rise? Those are very simple questions that all Australians want answered. What did the RBA governor say? She said:

… I could summarise. Government spending is part of total spending and total aggregate demand in the economy. So it, along with private spending, contributes to aggregate demand. And so, to the extent that aggregate demand is above aggregate supply, which we think it is, that's contributing to inflationary pressures. That's why we've decided to raise interest rates just a bit.

Black and white—it is Economics 101. It should not take the RBA governor to confirm what is basic economics. But, when you've got a Treasurer that does nothing but spin, you need the RBA governor to explain that. As I said, when you have an economy that is being run on fairy floss, it is going to make the Australian people sick.

That is what we are seeing today: interest rates are up, inflation up. The RBA are not predicting that we will hit the band until 2027 if we're lucky, which means interest rates are going to go up even further. Real wages are forecast to be backwards this full year. What does 'real wages' mean? We always talk a lot about economic terms. What it means for the Australian people is that you'll have less money in your pocket and that that money will buy you fewer goods at the supermarket. It will make it harder to get ahead every day. And we have a government that refuses to acknowledge the problems. We have a government that has made the problems worse. We have a government that continues to spin. They continue to tax and they continue to spend.

In a high-inflation environment, we are seeing this government be the highest spending government in 40 years outside of COVID. In no way should you be the highest spending government in 40 years in a high-inflation environment. There are those opposite that know that. They understand the basic economics, but they also know they have nothing to say, because they can't. They've got to follow the Treasurer's talking points. That's all they're allowed to do.

Zhi Soon (Banks, Australian Labor Party) Share this | Link to this | Hansard source

The shadow Treasurer has decided to bring us here today to talk about government spending, and it is my pleasure to join my friend the member for Forde in setting the record straight when it comes to some of the claims being made by those opposite. To begin with, the government has made no secret that inflation remains higher than we would like it to be. But that doesn't mean that we haven't made real progress since we came into government. The inconvenient fact for the opposition is that inflation is far, far below where it peaked under them and what we inherited from them. The decision of the independent Reserve Bank to raise the cash rate will be difficult news for Australian mortgage holders without doubt, including in my electorate. We understand the pressure this puts on everyday Australians, and the decision being widely expected won't unfortunately make it any easier.

The opposition insists that government spending is the problem. We saw a lot of talk about government spending's contribution to aggregate demand from those opposite at the House Economics Committee hearing last Friday. As the member for Casey on the other side helped prove for us, any year 12 economics students could tell you that government spending is a factor in aggregate demand. But the coalition's agenda of blaming it all on government spending does not align with the statement released by the RBA last Tuesday. That statement said very clearly that temporary factors and quicker-than-expected growth in the private sector were the primary drivers of the pick-up in inflation. In fact, the RBA statement didn't even contain the words 'government spending' at all in any context. This is in stark contrast to the claims of those opposite.

If anyone needed the advice to rein in their spending, it was probably the former members for Cook and Kooyong, because real spending growth under the former coalition was nearly 2½ times higher than it is under Labor. Even when excluding COVID era spending, which they claim as a defence, the opposition's average was 2.6 per cent per year, compared to 1.6 per cent. This is only possible because we have found tens of billions of dollars in savings, and $20 billion in the latest MYEFO alone, contributing to a grand total of $144 billion. And, as the House is no doubt aware, this Labor government turned a decade of Liberal deficits into two Labor surpluses. Labor is the party of economic management.

This motion also talks about fiscal rules. This government's fiscal rules are clear, which include reducing gross debt as a share of the economy and limiting real spending growth. It is hard to believe those opposite have the temerity to talk about fiscal rules. Their approach promised budget surpluses and didn't deliver one in nine years. Their fiscal approach promised to bank receipts upgrades but only returned 40 per cent on average, compared to our 70 per cent. Their approach promised to reduce net debt, but debt doubled—even before the pandemic. If those opposite really believed in doing what's best for Australians, they wouldn't have taken the unbelievable trifecta of higher taxes, bigger deficits and more debt to the last election.

At the end of the day, those opposite have spent the last nine months fighting with and amongst each other. The coalition may be back together—for now—but the whole country can see that, while the Liberals and Nationals are focused on themselves, the Albanese Labor government is focused on fighting for the Australian people and the people in communities just like mine of Banks.

Andrew Willcox (Dawson, Liberal National Party, Shadow Assistant Minister for Manufacturing and Sovereign Capability) Share this | Link to this | Hansard source

The most expensive sound in Australia today is the silence of a shopfront where the door no longer swings open. It is the heavy, suffocating silence of a ledger book filled with red ink—a ledger that a small-business owner in Mackay or a farmer in the Burdekin stares at late into the night, wondering what went wrong. A financial crisis arrives in the quiet erosion of a bank balance. It's the unsettling realisation that, despite working long hours, despite cutting every luxury, the numbers simply no longer add up.

For the people I represent, the Australian dream is being replaced by a daily struggle of survival. We heard from the Prime Minister last year that interest rate rises were a thing of the past. We were promised a different path. We remember the Prime Minister standing before the nation making a definite vow; he said life will be cheaper under Labor. But as we stand here in 2026 those promises have been shattered. The reality is that Australians are struggling more today than when the Albanese Labor government came to office. Australians are experiencing a Labor-created cost-of-living crisis. It is a mathematical reality that when this government spends, prices rise and it's the families in our regions who pay the price.

I've been speaking to families right across my electorate of Dawson. They've just finished the back-to-school run, and they are looking at the receipts with genuine fear. They're staring down the barrel of a world where everything costs more. Electricity prices are up, insurance prices are up, grocery prices are up, housing prices are up and mortgage costs are up. Mums and dads across Dawson are feeling poorer because they are poorer. They are being governed by an Albanese administration that cannot stop spending taxpayers' money—and, folks, we all know what that means: when Labor run out of money, they come after yours.

This is the highest-spending government in 40 years outside of a global pandemic, with $50 billion of new discretionary spending in the current financial year alone. If a CEO in the private sector presided over a $50 billion blowout in six months, they would be sacked. Why do we have a lower standard? Why are we holding the Treasurer to a lower standard of accountability? Is it any wonder that inflation is soaring? We're seeing $200 million a day pour out of Canberra, much of it on this reckless renewables-only agenda. It's crazy. Independent experts have made it clear: inflation will be higher for longer in Australia because this government refuses to make the hard decisions. As the price of everything continues to climb, families are forced into heartbreaking trade-offs. They are deciding whether to keep their kids' Saturday sport or keep the lights on. What kind of life is that for our Aussie kids?

Our small businesses, our tradies and our manufacturers are on the front line of this failure. Last year alone, 15,000 small businesses closed. Under the Albanese Labor government, Australia has experienced the largest decline in living standards in the developed world. The Treasurer spent last week in this place claiming that government spending had nothing to do with the latest interest rate hike, yet the RBA governor herself has directly refuted this. She confirmed that government spending is a key driver pushing inflation higher. Mortgage holders have been paying, on average, $21,000 more a year in interest since this government took office. That's an extra $400 a week on the Australian dream. That's unbelievable, and that suggests that the burden will increase even more.

If this treasurer cannot understand the problem, he cannot fix it. Under Labor, we are becoming poorer. We should be a nation of prosperity and growth. Farmers know that you can't harvest what you do not sow and that you cannot spend what you do not have. It is a lesson for this treasurer. He has failed Australia. He has failed the economy. He needs to step up, take responsibility and fix this mess. Stop spending money that we simply do not have.

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.