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

Two thousand and seventy dollars per year—that's the answer to the question that Senator Gallagher was not able to answer. That's the answer to the question 'How much will an average mortgage holder'—at least in my home town of Sydney—'pay each year in additional interest because of the RBA's cash rate rise?' Anyone who's got a mortgage would have got an email from their bank this afternoon saying that their mortgage rate was going up and to click on a link, or maybe they put it in the email itself, saying, 'This is how much your payments are going to change each month.' I did. It came in during question time. The fact that the Minister for Finance, Senator Gallagher, is not prepared to level with the Australian public and tell them how much this decision is going to cost them speaks volumes, I think.

We heard from this government not long ago that the inflation challenge was behind us. The Treasurer, Dr Chalmers, said just over a year ago, in January 2025:

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

We heard the Prime Minister, Anthony Albanese, say in July 2025:

… we have turned the corner there with inflation …

Neither of these statements has been proven to be true, because inflation is back. It's back in a big way, and that is why the Reserve Bank had to raise rates when it met on Tuesday. We've seen inflation in Australia go from 3.4 per cent on an annualised rate on the November figures to a 3.8 per cent annualised rate on December figures.

It is a uniquely Australian phenomenon that inflation is rising. In other major economies throughout the developed world, inflation is coming down. In the United States, it's 2.7 per cent and falling; Japan, 2.1 per cent and falling; Canada, 2.4 per cent and flat; the eurozone, two per cent and flat; Germany, 1.8 per cent and falling; and the UK, 3.4 per cent and falling. Every other OECD economy has inflation coming down, but in Australia it is going up. That is why—again, almost entirely alone amongst developed economies—interest rates are having to go up in Australia. Nearly every other central bank around the world—there's the exception of Japan; I'll acknowledge that—is cutting interest rates. Their last two movements have been down. In Australia we're putting interest rates up. What is the reason for that? It's straightforward—and you don't need to take our word for it; you can take any number of other people's words for it: the economy is running too hot because government spending is too high.

Just a few minutes ago, we heard Senator Whiteaker cite the IMF and the OECD as expert bodies in this area. Well, last month, in January 2026, the OECD said, 'A tighter fiscal stance is needed to avoid adding to inflationary pressures.' This was just before the inflation figures came out. Well, that tighter fiscal stance has not been forthcoming. Inflationary pressures have been added to and the Reserve Bank is now having to raise rates. The AMP's chief economist, Shane Oliver, said, 'The best thing that Australian governments can do to help bring down inflation would be to cut government spending back to more normal levels'—because government spending is not at a normal level. Federal government spending is at an unprecedentedly high level, 26.9 per cent of GDP in the last budget paper. That is the highest it's ever been outside the pandemic in 40 years.

We've seen again, in the last budget papers, that government spending has been growing at four times the rate of the economy. When government spending is growing at four times the rate of the economy, it is competing for a fixed supply of resources—whether it's land, labour or capital inputs—with the private sector. That's why you've got more money chasing the same amount of goods, prices are being pushed up and the private sector is being crowded out. That is what is happening in the economy. The Reserve Bank has had no choice but to raise rates in those circumstances.

We did just hear from Senator Cox, boasting about real wages. If she actually looked at the RBA's statement on monetary policy that accompanied their decision yesterday, she would have seen that they have laid out, quite starkly, that real wages will decline in the first half of this year. That's because inflation is actually forecast to go even higher, peaking in the middle of the year. It's not going to be back in the RBA's target range until at least June 2027, and not until the midpoint, which is six months later—which means there is no interest rate relief in sight.

Question agreed to.