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

An average sized Sydney mortgage holder is going to be paying $2,070 in extra interest per year because of the RBA's decision today to raise rates by 25 basis points. It was only one year ago that the Treasurer, Jim Chalmers, told us:

The worst of the inflation challenge is now well and truly behind us.

That was in January 2025. And it was only six months ago that Anthony Albanese, the Prime Minister, said:

We have turned the corner there with inflation …

That was in July 2025, six months ago. Yet what we have seen in the last four months is inflation in Australia accelerating. It was 3.8 per cent last month at an annualised rate, significantly higher than the previous month's figures, well outside the RBA's target band and, importantly, heading in the opposite direction to the rest of the world. Inflation in the United States is 2.7 per cent and coming down. Inflation in the Eurozone is two per cent and level. Inflation in the UK is 3.4 per cent and coming down. In Canada, it's 2.4 per cent and falling. In Japan, it's 2.1 per cent and falling. In Germany, it's 1.8 per cent and falling. But in Australia inflation is going up. That is why the Reserve Bank is having to raise interest rates.

Now, this isn't the first time, of course. By my count, anyway, this is the 13th rate rise that happened under the Anthony Albanese led Labor government, whilst there's been only one rate cut. What that means is that householders with an average size mortgage in Sydney today are paying $2,000 more in interest a year because of this decision, but they're also paying thousands of dollars a year more because of previous RBA decisions. You are paying more interest, but you're also paying more in taxes because salary earners have been progressively pushed into high-income tax brackets by high inflation, by bracket creep, by this Anthony Albanese government. And you are paying more for goods and services. High inflation means that the price of things is rising at a fast rate. Whether it's food, whether it's electricity, whether it's school fees, whether it's rent, whether it's housing, whether it's utilities, whether it's insurance or meat, fruit and vegetables or school uniforms, all of these things are rising in double digits or high single digits on a yearly basis. If you are a householder in Australia, under this government you're paying more in interest, you're paying more in taxes, you're paying more for life's everyday essentials. That is a trifecta of economic policy failure to have every household in Australia basically worse off.

The government will dispute, and has disputed today, that they have anything to do with this. They say it's not their problem. In their first two years in office they blamed post-COVID supply chain hangovers. They blamed the war in Ukraine. They blamed the commodity price surges. They blamed trade and tariff uncertainties. But the truth is that the rest of the world have gotten on top of inflation. Other central banks around the world are cutting interest rates; it's only our central bank that is increasing interest rates. Only Australia—a unique outlier in all the worst respects.

The government would have you believe that this has nothing to do with their spending. Well, let's just look at what the experts say. We have AMP economist Shane Oliver saying:

The best thing that Australian governments can do to help bring down inflation would be to cut government spending back to more normal levels.

He's not the only one. Government spending at the moment, you would note, is 26.9 per cent of GDP, the highest level of government outlay in 40 years, outside of the pandemic. In the budget papers last year we had government spending growing at four times the rate of the economy. If you have more public money, more government spending competing with the private sector for a finite supply of goods and services and capital labour, it's going to do two things. Firstly, it's going to crowd out the private sector, and we've seen that. The private sector is struggling to attract workers, it is deterred from investing, it can't access capital and it's not investing in the future. Secondly, it's going to push up prices, and that's exactly what we've seen. IFM Investor's chief economist, Alex Joiner, has said that the 'fiscal guardrails have come off'.

If you want to know why Australia alone amongst developed countries has inflation going up, and if you want to know why Australia alone amongst developed countries has its central bank raising interest rates, look to the government, look to their profligate spending, look to their lack of fiscal discipline, look to their abolition of fiscal guardrails.