Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance and Deregulation (Senator Wong) to a question without notice asked by Senator Payne today, relating to the economy.

In that response the minister referred, amongst other things, to the recently released Mid-Year Economic and Fiscal Outlook, MYEFO, papers which were released last Tuesday. In fact, as the coalition has been at great pains to point out, what the MYEFO really showed was that Labor’s budget position has deteriorated even as the economy is actually projected to be stronger—quite a ‘stunning’ accomplishment, really, when you think about it. What they have managed to do is to deliver higher deficits, lower surpluses and higher net debt. So what actually should have been going on in this period of time is that so much more should have been done to cut spending and to reduce upward pressure on interest rates, which of course was the tenor of the question I asked the minister. What is clear to us from their actions in relation to these issues is that they simply cannot take the hard decisions. They make a lot of noise and they talk about it quite a lot but, when it comes to the reality, there is no capacity to make the hard decisions that this economy needs.

The fiscal deficit this year, for example, is projected to be $48½ billion. But for the month of September alone the government’s deficit was $13.8 billion, the highest on record. In the first three months of the financial year, Labor’s spending was $9.6 billion higher than for the same period last year, despite the fact that revenue was $1.9 billion lower. And who is paying the price? The price is being paid by Australian homeowners. They are paying the price for Labor’s extravagance through higher interest rates, and that is a pretty simple fact that the government seems incapable of accepting. The net debt relative to the pre-election fiscal outlook has increased by $4.9 billion and is now expected to peak at $94.4 billion in 2011-12.

When you look at government programs and what is actually being done at the moment, like the Building the Education Revolution debacle, they are quite simply inflationary. They are putting pressure on inflation and on interest rates. Just last week the Treasurer of Victoria, Mr Lenders, said that only 20 per cent of BER projects in Victoria were completed, and that means that 60 per cent of the funding has still to be rolled out. So, by their own admission, Labor are continuing to stimulate the economy even after the worst of the global financial crisis has passed. There is a further $6 billion to come in the construction of school halls in response to that quarter of negative growth back in 2008.

They do try and wave it away. They try and dismiss it with a wave of the hand and a waving around of the MYEFO documents. It is actually not quite that simple, though, because we then come to the September quarter CPI, and that shows that Labor’s excessive spending still continues to put pressure on inflation. We see steep rises in power, in water and in rents accounting for most of the increase in CPI. It is not rocket science to work out where that hurts the most: it hurts the most in the average Australian family.

In the September quarter, water and sewerage charges rose by 12.8 per cent, electricity by six per cent, property rates and charges by 6.2 per cent and rents by over one per cent. When you put that all together, though, since the end of 2007—since this government was elected—electricity prices have risen by 35 per cent, gas prices by 24 per cent, water prices by 29 per cent and rents by 15 per cent. Add to that the fact that there have now been seven interest rate rises on Labor’s watch since October 2009. And what do those interest rate rises do? They also increase the cost of building materials, they make badly needed new homes yet more expensive to build—and we are falling ever behind on new home construction—and renters suffer more as landlords, reasonably, try to pass on the higher costs of mortgage interest rates to tenants. Who hurts? The Australian people hurt. Australian families hurt. In November they have had an interest rate rise, and the commentators say that more are expected. So we look to December, to Christmas and to a new year. If the record of this government since the end of 2007 is anything to go by, there will be very little in the Christmas stocking for most Australian families.