James Paterson (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for action to address the worsening cost of living crisis facing Australian families and small businesses, driven by persistent inflation and higher interest rates, and exacerbated by the Government's reckless spending and policy failures—including on housing—which are keeping prices and mortgages higher for longer.

Today is a tough day for many Australian households, particularly those with mortgages, because they've received the news of the 13th rate rise on Labor's watch. They've received the news that their mortgage repayments will be going up. For many Australian families, this is not the news they were promised. This is not the news they were expecting, because they've heard our Prime Minister, and our Treasurer, Mr Chalmers, tell them that the worst is behind us, that better times are ahead, that they've slayed the inflation dragon and that they've got it under control. But nothing could be further from the truth.

The truth is, the average Australian household is $21,000 a year worse off than they were when it comes to mortgage repayments than when Labor came to office. That is, someone with an average loan of $600,000 is paying $21,000 more a year on their repayments because of interest rate rises that have happened on this government's watch.

This government has presided over three interest rate reductions. When those happened, Jim Chalmers was very quick to take credit, very quick to say that it was as a result of the government's economic management that rates were coming down. But now that rates are rising again he's even quicker to say that he bears no responsibility, that the Albanese government bears no blame and that others are to blame—that international factors are responsible are for rising inflation.

The problem with that story is that it's not true. In fact, Australia has some of the highest inflation among advanced economies—higher than the United States, the United Kingdom, Canada, Japan, Germany and many others. While their rates are falling, our rates are rising, and it is very clear why. You can ask any economist what the effect of Labor's reckless spending is and they will tell you that with spending at a 40-year high outside a recession, as a proportion of the economy, that is driving upward pressure on inflation and that is leading directly to interest rates increasing today.

Take, for example, Judo Bank's Chief Economic Adviser, Warren Hogan, who said:

But if the governments of Australia do nothing, I think the RBA is going to have to take the cash rate above where it was a year ago—above 4.35 and most likely towards five and put this economy at risk of recession.

They have to do that though if the government of Australia will not act.

Or take AMP Deputy Chief Economist Diana Mousina, who said:

… it appears that directly, the government has been adding to inflation in recent years, as you would expect in an environment of public spending lifting to a record high.

Take AMP's Chief Economist, Shane Oliver, who said last week that a lot of the factors driving inflation relate to government spending. Even Alex Joiner, the chief economist of IFM Investors—which is, of course, a vehicle of the industry superannuation industry—has said:

We already have fiscal policy getting looser, but it could be even looser than we expect. The fiscal guard rails have come off.

And HSBC Chief Economist Paul Bloxham said yesterday:

… the primary driver of the pick-up in inflation is not strong demand. To the extent that demand is playing much of a role, it is that public demand growth has been strong, due to government spending.

These are the expert opinions that Jim Chalmers would like to dismiss as partisan, but I don't think these economists are partisan, and neither are economists at the RBA, who have made many similar observations in recent months, or, of course, the RBA governor herself, who acknowledged to me in Senate estimates recently that, all else being equal, if government spending is rising then that drives up pressure on inflation and therefore interest rates.

When it comes to this government's wasteful spending, sometimes it's the small things that tell the story and sometimes it's the big things. We learnt recently that the government spent $1.6 million renovating a party room for their Greens partners here at Parliament House—that is, one room in Parliament House and $1.6 million to tune it up to the circumstances that the Greens expect. When you can build a brand-new home, a perfectly nice family home, for $400,000 to $500,000, it seems extraordinary to me that Labor thinks $1.6 million is good value for taxpayers' money. Or take the CSIRO, which was recently exposed as having spent $500,000 on manicured lawns and rented pot plants. This is an agency that employs botanists in-house and so could probably manage to water a plant if required. Then there is the big one, the EV tax uptake, which was supposed to cost $90 million this financial year but has blown out by 15 times to $1.35 billion.

The truth is that when Labor spend you pay. This is a government that's failed to control its spending. That's why rates have risen today and that's why you will pay.