Dave Sharma (NSW, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Hansard source

We heard from those opposite boasting about real wages growth in question time today and the change in, the increase in, nominal wages. But what we have seen in Australia over these last three years is one of the largest declines in living standards in the developed world. Since 2022, across the OECD, across advanced economies around the world, living standards have increased by an average of five per cent; in Australia, they've gone backwards by seven per cent. So the OECD has gone ahead five per cent in the past three years; Australia has gone backwards by seven per cent. We have seen the economy, per person—real GDP per capita—go backwards in Australia for nine of the past 12 quarters as well.

If you take a look at the outlook using the RBA's own figures, things do not look positive. Firstly, we've got inflation coming in at 3.2 per cent in the September quarter—up significantly from 2.1 per cent in the June quarter—and that prompted the RBA to keep the cash rate on hold at its last board meeting in November, warning of the continued upside risk to inflation. In fact, most analysts and commentators now expect the RBA to hold rates and possibly the next move in rates to be up. So we are at the end of the interest lowering cycle. The RBA also expects headline inflation to increase to 3.7 per cent next year and to stay high across 2026, whilst it expects wage growth to be only three per cent. So if you've got inflation running at 3.7 per cent and you've got wages growing at three per cent, your real wages are going backwards—that's what the RBA expects to happen next year in 2026.

Of course, living standards aren't just the wages you take home; they also reflect the cost of goods you're purchasing and how much you're having to pay for things like rent, or housing, or mortgage repayments, and how much you're paying in tax. Let's look at each of those in turn.

An average Australian borrower at the moment is paying $1,800 more per month in interest on a mortgage because of the 12 interest rate rises that have happened under this Labor government. As I said before, there is no real prospect of further cuts in interest rates on the horizon, which means that those costs are going to be baked in.

People are paying more in tax. Personal income tax receipts are now the largest share of GDP since the GST was introduced a quarter of a century ago, and the Parliamentary Budget Office expects that income tax receipts will go from 12.7 per cent of GDP—already a record right now—up to 14.3 per cent in the next decade. If you look at the government's own budget forecast in the budget estimates, the entirety of the budget repair job—bearing in mind we have a decade of fiscal deficits—is being done by bracket creep. People are paying more income tax, going into higher tax brackets, which means they are underwriting more of government spending.

What have we got here? We've got government spending too high. We've got no productivity agenda. We've got the burden of red tape growing. We had an economic reform summit in August, which the Treasurer convened. Part of the commitment of that was to look at having less regulation across the Australian economy, but just today a report commissioned by the Australian Institute of Company Directors found that the cost of federal regulatory compliance has gone from $65 billion in 2013 to about $160 billion last year. That's an increase of $100 billion just in federal regulatory compliance—not state or other levels of government; it's federal regulatory compliance alone.

What do we have under this government? We have spending too high. Spending is the highest it has been in four decades, outside of the pandemic, at about 27 per cent of GDP. We have inflation remaining a threat. It was 3.2 per cent in the last quarter, and the Reserve Bank expects it to stay above three per cent next year. We have debt growing, forecast to hit $1 trillion in federal gross government debt this year—another record. We have prices going up. We have interest rates not coming down. We have productivity stagnant. We have living standards flat. We have income tax growing year on year, and we have the burden and complexity of red tape growing and growing. This is a recipe for continued decline in living standards for Australians, which means we will fall further behind other advanced nations, and Australians are less able to raise families and build a future. (Time expired)