Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Foreign Affairs and Trade) Share this | Hansard source

This afternoon, we are going to debate this: the Albanese Labor government is presiding over the largest decline in living standard in the developed world, driving up inflation through record spending and nearly $1 trillion in debt, and the consequence is that Australian families are worse off having to deal with falling wages and higher interest rates.

It's worth reminding ourselves why it is that inflation is such a menace. You would have thought that the Labor Party, traditionally the party of working families, would be highly attuned to the menace, to the risk, that inflation causes to families, to businesses and to the economy. It is a menace because it reduces people's purchasing power. It is a menace because it disproportionately affects low-income households. It's a menace because it creates economic uncertainty and makes it harder for families to plan and to save, for businesses to plan and to save, and for businesses to grow.

Inflation is not an abstract statistic. It is the weekly grocery bill that keeps creeping higher. It is rent and mortgage repayments swallowing more of household income. It is electricity, healthcare and insurance costs all rising faster than wages. Earlier this month, it was another interest rate rise. Labor promised Australians interest rates would not need to rise again. Instead of confronting the economic reality, the government prefers to operate in a state of denial. Ministers complain that this is not a high-spending government and some ministers even tried to rewrite history by blaming the Howard government. But their own budget papers tell a stark truth. Under Labor, this government is clocking up record spending. Commonwealth spending has reached 26.2 per cent of GDP under this Labor government. That makes it the highest-spending federal government outside the pandemic in 40 years. Just think about that—the highest-spending federal government outside of the pandemic experience in 40 years. Let's just think about that by way of comparison. During the Howard government, spending peaked at 25.1 per cent and fell to 23.2 per cent when they left office. Let's compare this Labor government with the final Keating Labor budget—25.6 per cent, still lower than this Labor government. What does the Treasury project? The Treasury projects that spending will rise further, to 26.9 per cent in coming years.

This is not temporary; this is structural. This is a government who wants to deny that increasing government spending leads to inflationary pressures in the economy, which forces the RBA to raise interest rates. Who suffers? The people that suffer are Australian families and Australian businesses—the very same people who, in 2022 and 2025, trusted the Labor Party to look after their future. That trust has been betrayed; that trust has been broken.

ABS data confirms what Australians already know from their lived experience. That is that inflation is rising again. Headline inflation is 3.8 per cent. The trimmed mean inflation is 3.3 per cent, above the RBA target. Price pressures are broad. Everyone is experiencing them. Food is up 3½ per cent. Housing is up 5½ per cent. Health is up 3.6 per cent. Now the world deals with an international crisis—one that will negatively impact inflation, one that will negatively impact interest rates. 2026 is going to be a dark year for Australian families and Australian businesses. Guess what? If Labor had been more prudent over the last four years and worked harder to tackle inflation, our country would be in a better position. It is not in a better position; it is in a worse position, and Australian families are going to— (Time expired)