Senate debates

Thursday, 28 August 2008

Cost of Living

3:40 pm

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

At the request of Senator Parry, I move:

That the Senate notes:
(a)
that many Australians are worse off today than they were in 2007;
(b)
that many Australians are experiencing difficulties due to increasing cost of living pressures; and
(c)
the Government’s failure to address these difficulties.

Whilst we call these types of discussions debates, there should really be no debate about this motion. I say that because there are some irrefutable facts. The motion reads firstly that many Australians are worse off today than they were in 2007. Even the Prime Minister himself has acknowledged this. He has said that Australians are worse off than they were under the previous government.

The list of ways in which they are worse off is extensive and it is felt by every family, by every carer, by every pensioner and by every child in this country. What does the Labor government do? It fiddles while Rome is burning. It has inquiries, it has reviews and then it does the Pontius Pilate and washes its hands of any responsibility. It passes the buck. It makes a mockery of the phrase ‘the buck stops with me’ that Mr Rudd trumpeted around so often in opposition. He has not mentioned it quite so frequently in government because he knows he leads a do-nothing government, a government all about spin and rhetoric and little about delivering tangible results.

The second part of this motion states that many Australians are experiencing difficulties due to increasing cost-of-living pressures. Once again, there can be no reasonable or coherent debate refuting this statement because the cost-of-living pressures that are affecting families, the mums and dads of Australia, those on fixed incomes, those reliant on pensions and carer payments and those in particular difficulties are eroding and eating away at their lifestyle, at their options and, in some instances, at their very ability to function above a stressful level.

The third part of this motion notes the government’s failure to address these issues. As hard as the members on the other side—the government—will try and refute this part of the motion, they really have done very little. They are in the process of having 150 inquiries, inquiries into inquiries and reviews. They have had summits. What they have not had is any coherent plan to resolve the financial crisis that the Australian people are being placed in by this government. Some of the examples which I and other speakers will give, and I am sure the government will put their best spin doctors on to refute, will be horrifying.

In my state of South Australia, we have a wonderful organisation called Meals on Wheels. Meals on Wheels today were forced to increase the price of all the meals that they supply to the thousands of pensioners and other people who are doing it tough, thereby eating into the fixed income of the single pensioner which this heartless government has refused to confront in its very first budget, a budget where they have attempted to plunder $23 billion from the Australian people—and for what purpose?

Was it to pay back debt? No, there was no government debt when they came into government. Was it to assist with additional measures? No, it was not, because they cut funding from important areas. They tried to cut one-off bonus payments to pensioners. They tried to slash programs, all the while squirreling away money that the Australian taxpayers have earned and so desperately need to compensate for the inactivity of this government. Inactivity might be a bit cruel because, as I have mentioned, they have had many reviews—150-plus reviews. They have created such meaningful venues for disseminating information as the ‘grocery watch’ website where, for the privilege of 13 million taxpayer dollars, the Australian public can now look at what prices were like in the good old days—a month ago—before they started to go up.

We have a government that is intent on looking in the rear-view mirror. After nine months of looking in the rear-view mirror and seeing how good things were, the great emperor himself decided yesterday to wander down to the Press Club and give his vision for the future. I thought the Australian people had heard Mr Rudd’s vision for Australia’s future in the election campaign last year, but he has realised that spin and rhetoric could only carry him through nine months and now he has had to enunciate another vision. It is another series of reviews; it is another Mythbusters. In fact, on this side of the chamber, I think we should get those people from Mythbusters in here because that is what we have to do. We have to continue to bust the myths that have been put out by the poison spin doctors in the government’s ranks.

The government come in here and say they have inherited a mess. It is simply not true. They have handed down a budget where they have plundered money from the Australian people that they need to spend—$22.8 billion. Mark my words: the budget surplus will be even higher again when the final figures are handed down because they are taxes of stealth. On this side of the chamber, we want to relieve this burden from people. We want to make sure that they have enough money with which to pay their bills. We want to ensure that people can make decisions with their money that are in the best interests of their own family because we believe that individuals are best placed to do this—not the collective wisdom, not the almighty combination of the union movement that now resides in the executive office.

This government is already having a profoundly negative impact on the Australian way of life. It is consumers that are feeling the pinch. It is small businesses that are feeling the pinch. It is employees—or should I say former employees—who are feeling the pinch because people are losing jobs as our economy slows down. It is an engineered slowdown—in fact, a swan dive—engineered by Mr Rudd and more than ably assisted by Mr Swan and the other comrades in the government that just want to take more money from the Australian people because they believe they, rather than the Australian people themselves, have the answers about what they should be spending their money on.

There is a problem when governments increase taxes, or take consistently more than they need to either protect the economy or to repay Labor’s financial ineptitude, such as we were forced to do when we inherited a $96 billion debt and a $10 billion black hole. We fixed all of that up and now we have a government that was elected under a mandate of saying they wanted 1.5 per cent of GDP as a surplus. Now in their first budget, they have upped that to nearly 2.3 per cent of GDP. That does not sound like much, but it is $6 billion or $7 billion a year. It is an enormous amount of money. They have increased spending programs on things they do not need to and ignored real need.

This is a government that has chosen not to give any additional money to pensioners outside of election commitments, which they aped off the coalition, but has decided to spend $100 million on marginal seat pork-barrelling. This could have helped Australians with their cost of living pressures. What have they done? Nothing about it at all. This is a government that really does not care. It is an extraordinary indictment on how far the Labor movement have fallen. When they get into power, they cannot help themselves. They can preach financial and fiscal responsibility, but when it comes to actually delivering, they cannot. They cannot do it because they are not designed for it. They are not equipped to deal with financial matters in an appropriate, open and transparent manner.

We have seen this on so many occasions. We have seen the myths put out by the Labor government not only about the alleged problems they inherited with the economy. We have seen Mr Rudd wash his hands of the ‘buck stops with me’ approach. We are going to hear a whole bunch of nonsense from people on the other side in a moment because there is no logical way they can say that Australians are not worse off today than they were a year ago. Even your own Prime Minister has said that. I would be very interested to hear Senator Hurley, Senator Hutchins and the other spear-carriers’ speeches. As I have said in this chamber once before, they are going to be overcooked asparagus spears that you are going to be throwing at us because they are going to have absolutely no penetration with the Australian public. Stand up and take responsibility for your own decisions later on rather than pass the buck.

The government also cannot dispute the fact that many Australians are experiencing difficulties today. You watch. They will trot out their compassion and their mantra, ‘But we have done all we can; we cannot help any more.’ That is what Mr Rudd said. He said:

… we have done as much as we physically can to provide additional help to the family budget.

He has given up already. Mr Rudd, of course, being the leader of possibly the worst government in 30 years, said:

What I can say to carers and pensioners right across Australia—there is no way on God’s earth that I intend to leave them in the lurch.

Let me tell you: the carers and pensioners of Australia have been left in the lurch. They have been left in the lurch because where they have been relying on Meals on Wheels they now suddenly have to pay a little bit more. There has been no increase in the basic pension for them. The cost of living has gone up 4½ per cent. Many of them are now unable to drive their cars, or are unwilling to drive their cars, because the choice of putting petrol in the tank or having a meal is a very real and stark one. It is a cold and dark winter—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Why did you drive interest rates up?

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

made all the darker—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Why did you ignore the Reserve Bank’s warnings?

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

by the Labor Party coming into power and shutting off the power for pensioners. They have not been able to turn their heaters on and they have not been able to keep themselves warm during the cold and dark winter, and that goes to the essence of the cold and dark heart that lies at the very centre of this government.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Senator Conroy interjecting

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

Last time I checked, Mr Rudd had failed at every single turn. He presented himself as a credible alternative and now the veneer of credibility has simply disappeared.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I’ve just done a Hansard search and you have never mentioned ‘pensioner’ in the whole time you have been here!

Photo of Alan FergusonAlan Ferguson (SA, Deputy-President) Share this | | Hansard source

Order! Senator Conroy, if you wish, you may have a chance to speak later on, but I will have Senator Bernardi heard in silence, please.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

Thank you, Mr Deputy President. I would say to you that it is unlikely Senator Conroy will say anything in this debate because it is a debate about the cost-of-living pressures and would require a working knowledge of economics. I am sure they have trotted out Senator Hutchins and Senator Hurley to do this.

I return to the fact that, as credible as what I say in this chamber is, of course it is going to be refuted. But there are some things the government will be unable to refute—that is, the simple fact that the cost of living has risen by 4.5 per cent. It is a cost-of-living increase that we have not seen since we radically reformed the taxation system that made this country function much more efficiently and much more appropriately thereby giving greater revenue to the states. This figure is a product of nine months of very, very poor decisions and a lack of important decisions by the Labor Party. I will name some of the cost-of-living increases. Financial insurance services have increased by 9.9 per cent over the last 12 or so months. Transportation has increased by 6.9 per cent. Every family has suffered at the hands of these sorts of increases. Health and alcohol and tobacco have each increased by 4.8 per cent. These are increases that impact upon so many Australians.

We all require health and we on this side want to see private health insurance taken up and encouraged because it will keep premiums down for everyone and relieve a burden on the Australian public health system. But what does the government do? The government tries so hard to reinvent itself and then cannot help but fight the class war against private health insurance. We are going to see about one million people reduce their private health insurance if the government gets its way, which I sincerely hope it will not. We are going to see an increased burden on the public health system, which is going to see an increase in costs for private health insurance.

What does the government do about the cost increases for alcohol? The fact is they whack up another tax. They try to grab another $3 billion under the guise of a health measure. This has been disproved time and time and time again, but the simple fact is they want another $3 billion. They want $3 billion, so they look around and they think: ‘How can we do this? Let’s tax the men and women of Australia, who probably enjoy a ready-mixed drink on the weekends around the barbecue.’ They have put up taxes in all sorts of ways and accordingly are adding to inflation. Inflation is measured by the consumer price index. When prices go up in the basket of goods on which CPI is measured, inflation rises. This seems to have been lost on some on the other side.

I want to go back in history to a noted commentator—noted by those of us who are interested in history—who in 1605 was asked to give advice to the king on how he could maintain his treasury.

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

Which king? James I?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Uh oh!

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

This noted theological philosopher—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Come on, name names.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

His name was Juan de Mariana. He was a Jesuit priest.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Which king?

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

He definitely wasn’t one of the Stuarts!

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

He gave enormous advice—

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

To who?

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

to King Philip II, Senator Conroy, but it is timely advice that should be retained by governments over the course of time. The first of these bits of advice was that the king cannot demand tribute from his subjects without their consent. The fact is, that is exactly what this government has done. It has gone out there and it has demanded more money from the Australian public without asking for their consent at an election. Contrary to the previous government, where taxes were reformed but with the aim of reducing them, this government, at its very first chance, has sought to advance them and increase the cost of living.

The second piece of advice was, and this is what I suggest for those opposite, that the king should reduce his budget by reducing his spending. But that is not Labor’s way. This is a government that increases its spending. His third piece of advice was that the king should also reduce the size of the gifts given to those who serve him. This is what Father Mariana wrote. The simple fact is that the Labor Party are simply enriching those in their own court by increasing burdens on Australians. You are taking money from the pockets of Australians, which they need to assist them to tackle their increased cost of living, to run a $23 billion surplus. This is a very simple process. The fact is that we need to hold to account the jesters that reside in the king’s court on that side of the chamber—because Australians demand it. This is a grotesque abuse of the trust that the Australian people placed in this government. They are struggling and this government simply does not care about their needs or their welfare. It is time for this government to get its act together. You will get thrown out because the Australian people deserve much, much better than they have received from you.

4:00 pm

Photo of Annette HurleyAnnette Hurley (SA, Australian Labor Party) Share this | | Hansard source

That was quite interesting, going from a perfectly proper discussion about the rise in the price of Meals on Wheels—a basic necessity for older people in our society—to talking about the need to reduce tax on alcopops. I think there is a bit of a disconnect there. I am not quite sure where it was on the road to Damascus that the opposition had the heavens open and they discovered that working families are doing it tough. It is a bit ironic, after 11½ years of neglecting the cost of living pressures, that the opposition should now introduce this matter of urgency. The opposition had 11½ years to address issues that could have helped working families but they signally failed to do so. They did not even seem to realise that working families were doing it tough. In 2006 the member for Wentworth told families that the highest inflation in 16 years was a fairy story and that they were overdramatising interest rate rises, and only last year the former Prime Minister told Australian families that they had never been better off. Only last year the opposition was telling Australian families that they had never been better off! It was Kevin Rudd who was pointing out to the then government that families were doing it tough, that people were feeling cost of living pressures and that the government was ignoring them. The result of that was that people voted Kevin Rudd in as Prime Minister because they saw that he understood that families were finding life difficult with cost of living pressures. It illustrated quite clearly to the electorate that the government was completely out of touch with what was happening in the real world, and they voted the Labor Party into government.

The opposition have made it clear that they did not understand the impacts of higher inflation and interest rates on family budgets and on consumer confidence. They kept ignoring warnings about this. They kept ignoring the pleas of families. But this government understands that many families are doing it tough with interest rates, high global oil prices, high food prices and the effect of the global credit crunch on family budgets. This government does understand it very well and all the opposition can do is to castigate the Prime Minister for recognising this. The fact of the matter is that every economy in the world is facing tough economic conditions—and that is the cold, hard reality of the matter. Working families, working Australians, pensioners and carers are doing it tough, and the cost of living pressures are significant. We know this. We understand this. We are in touch with the community. It is wonderful that now they are in opposition the coalition parties have discovered this fact and want to move this motion. Slower world growth, global financial turbulence and higher interest rates are slowing our economy. One of the most significant pressures we are facing is the high inflation rate that we inherited from the previous government—an inflation rate at a 16-year high—that has pushed up interest rates. The former government, ignoring warnings from the RBA about inflation and spending, had pushed inflation to its highest level in 16 years and we have interest rate rises as a result of that. It is an incontrovertible truth that that is exactly the parting gift that was left to us by the former government, and we have to deal with it. It is a result of their reckless spending and their inaction on important issues like infrastructure.

Those opposite let inflation build. They ignored the warnings from the Reserve Bank of Australia and, despite 11 interest rate rises in a row, told working families that they had never been better off. It should not come as a surprise, then, that consumer confidence has been affected—after eight interest rate rises in the three years following the reckless spending of the previous government, the highest inflation in 16 years, sky-high global oil prices and the ongoing condition of the global financial market. It is important to look at the world situation and at where Australia stands in the current world conditions. The global credit crunch that everybody has been hearing about has sent shockwaves around the world and has affected not only the United States, where it seems to have originated, but also Europe and, of course, Australia and Asia. That global credit crunch, as well as a global oil price shock, has impacted on confidence right around the world—we are not alone. It has pushed up borrowing costs for households and businesses right around the world. Global share markets have fallen by an average of around 20 per cent in developed economies since this turmoil began. Stock markets around the world have also been affected by the global financial crisis and by a slowing world economy. It makes sense. Consumer confidence across the OECD economies has fallen to its lowest level in almost 30 years.

Over the weekend we learned that the UK economy did not grow at all in the three months to June. Japan, Germany, France, Italy and Canada have all recorded negative growth in their most recently reported quarters, and the impact on the US economy is well known. We are hearing time after time of the impacts of the mortgage situation on the housing market over there. So, overall it is likely that economies around the world have not grown, and we should not be surprised that these global difficulties, together with eight official rate rises in three years, are slowing our economy. But we do need to put this in perspective.

Although we confront the most difficult global circumstances in a quarter of a century, the fundamentals of our domestic economy remain strong. That is the important message that our Labor government has been sending—that confidence should be strong because our economy is strong. In response to these difficult world economic conditions, we have built a strong budget surplus. That acts as a buffer and gives us the flexibility we need in difficult global times. The government did warn that it would be a tough budget because we do need that buffer—because we have to withstand the global conditions and the legacy that was left to us by the former government of high inflation and high interest rates. It is very important that we tackle those twin problems.

Developing economies in our region, however, continue to grow and commodity prices are still at generational highs, so we are relatively well placed. We have a strong, well-regulated financial sector and do not face the same problems being experienced in the US housing and subprime mortgage markets. So, while we are not immune to global difficulties, we are far better placed than most countries to withstand the fallout. We are confident that with the right policy settings we will come through difficult global times in a stronger position than other countries. That is what the government set out to do with this budget, with its emphasis on long-term planning.

So, while these global challenges are beyond Australia’s immediate control, the government is focusing squarely on the things that it can influence. We have been responsibly addressing domestic inflation. We inherited it at 16-year highs, and it is now made worse by global factors. That is why we have budgeted for that strong surplus. It gives the Reserve Bank room to move. It will ensure our economy is buffered against the global turmoil. It is a responsible and balanced budget—yet in that tough budget we have made room for a $55 billion package for working families because we do understand that they have been doing it tough. That package includes $47 billion of tax cuts over the next four years. We are helping people to buffer their families against the effects of high inflation and high interest rates as well as looking to Australia’s economy. That is what the government is doing.

Other measures in the budget include the increase in the childcare tax rebate from 30 per cent to 50 per cent—a very important issue for working families with young children. That is what we mean by helping working families. One suspects that sometimes people opposite do not even understand what working families are doing and the kinds of pressures that they are under. But the Rudd government does. We also implemented the education tax refund in the budget. We have removed—or we are trying to remove—a slug on middle-income earners by increasing the Medicare levy surcharge threshold, something which the opposition is opposing. Unlike those opposite, the government is standing up for families, not ripping away their wages and working conditions like those opposite did.

Photo of Helen CoonanHelen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | | Hansard source

We don’t support increased taxes that hurt working families.

Photo of Annette HurleyAnnette Hurley (SA, Australian Labor Party) Share this | | Hansard source

It is interesting to hear the opposition bleat about the pressures of price rises on working families when, through their Work Choices legislation, they were trying to squeeze down those wages and conditions. The Rudd government, on the other hand, not only has given people security in their working conditions but is trying to help families find a better deal at the bowser, at the checkout and at the bank, despite the opposition refusing to support some of those measures.

The government is also investing responsibly in nation building. It has laid the foundation for $40 billion worth of responsible investment in nation building and growth for the future. That includes the government’s commitment to invest $4.7 billion to facilitate the rollout of a high-speed national broadband network. It was a signal failure of the former government to sit back on the proceeds of the resources boom and play the blame game with the states rather than get in there and build the kind of infrastructure that was required to enable this country and this economy to go ahead. Our budget balanced the need to address inflation pressures with the need for vital investment in future growth. The Rudd government will ensure Australia’s long-term prosperity. It will not be content to sit on the benefits of a resources boom whose length we do not know. The government has been investing that money in the future and will continue to do so.

One of the other important factors in this is our financial services—how we sit in the region and how we perform in that regard. The Prime Minister and other ministers have indicated that they see Australia as a very significant financial services player. They have already taken measures to ensure our future in that area. We have implemented the Financial Stability Forum recommendations in full and are encouraging their implementation internationally. We have taken steps to support liquidity in the government bond market to ensure broader financial markets operate more effectively. We are strengthening protections for deposit holders in the unlikely event that any of our financial institutions get into trouble. We are improving transparency around covered short selling and reviewing the disclosure requirements around equity derivatives.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

That’s going to help pensioners, isn’t it!

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Order!

Photo of Annette HurleyAnnette Hurley (SA, Australian Labor Party) Share this | | Hansard source

It is going to help position Australia as a strong financial services provider in our region. If those in the opposition do not understand why that is important to our country and our economy and how it affects everyone in our society, then they have learned very little so far.

The government strategy combines relief for families with long-term investment in growth, which is the best way to respond to the global challenges that we are faced with. We will not make the same mistake as the Liberals made in government, which was to celebrate prosperity but never do anything to sustain it into the future. They frittered it away on the kind of pork-barrelling that the Auditor-General’s office uncovered. We have very little infrastructure investment to show for it and we have a lot of these pressures on working families that those opposite now claim to be worried about.

The focus on responsible economic policies was demonstrated in the government’s first budget. It struck the right balance. We have made room in the budget to deliver tax cuts and the much needed support to low- and middle-income households, who we know were doing it tough. This approach has been strongly endorsed by the IMF, which stated:

The reduction in public spending growth in the latest budget illustrates the government’s commitment to help reduce inflation.

The IMF went on to say:

Saving some of the revenue from the commodity price boom in three new funds will take pressure off monetary policy in the near term and enable increased infrastructure investment over the medium term.

If only the shadow Treasurer would heed the advice from the IMF. If only the opposition would heed the advice from the IMF. Instead, what are they doing? They are opposing some of the government’s key budget measures that will enable that surplus to buffer us against the global economic situation and enable us to yet deliver some relief, some buffer, to working families. The opposition is being completely irresponsible in blocking some of the measures that would enable us to develop that surplus. And for what? So that luxury cars will be cheaper? So that alcopops will be cheaper? Is this the kind of measure that they see will help those people who are having to pay more for their Meals on Wheels meal? The logic of it completely escapes me and I am sure that no-one in the opposition would be able to carry through any of that logic. The Liberal Party demonstrate by this that they will always choose cheap short-term politics over responsible economic management.

The government has taken a responsible approach to addressing domestic inflationary pressures and the challenges of global uncertainty. Yet it is faced with an opposition trying to blow a $6.2 billion hole in the budget surplus—a surplus that the Australian economy needs. It is nothing more than a political stunt by the opposition, nothing more than the use of their numbers in the Senate while they still have them. The opposition should get out of the way and pass the budget that will help fight inflation and in turn ease the cost of living pressures felt by working families. It is all very well to come into the Senate and move motions that express support; the concrete thing that the opposition can do is move support for responsible budget measures that will ensure that working families and pensioners are better off and that they do not have to face higher prices, inflation and interest rate pressures. This is what the opposition can do to ensure that the many Australian families that are starting to feel the cost of living pressures will be relieved of those pressures.

Families are struggling to make ends meet after 11½ years of reckless spending by the former government. That is why the Rudd Labor government is working hard to address these challenges and ease the pressures on working families. Our predecessors lacked the foresight to invest in our economy’s future and deal with those inflationary pressures before they gathered pace. And that was all for short-term political advantage. This led to the highest inflation in 16 years and eight rate rises in the last three years.

We on this side acknowledge the challenges. Unlike those opposite, we have a plan to deal with them. We are focused on long-term plans for the economy and we will not be deterred by the short-term politics practised by those opposite. The government is taking practical actions to help by modernising our economy so it is strong enough and flexible enough to meet future challenges. The major challenge for the opposition is to have the courage to support a reasonable and responsible budget so that the many Australians who are experiencing difficulties due to increased cost of living pressures will have some hope for the future with a government that is prepared to take the hard decisions to address those economic challenges in our own country and use our strong economic situation to buffer ourselves against the economic challenges abroad.

4:20 pm

Photo of Helen CoonanHelen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | | Hansard source

I rise to support this motion that notes that many Australians are significantly worse off today than they were just last year; that many Australians are facing difficulties due to increasing cost of living pressures; and that the government has spectacularly failed thus far to address these difficulties. In these kinds of debates obviously discussion ranges far and wide, but the Senate does have an obligation and I believe that individual senators have an obligation to make their comments and remarks at least factually accurate. Senator Hurley on three occasions in her remarks to the chamber said that the so-called inflation inherited by the Rudd Labor government was the highest in 16 years. That is just factually wrong and should be corrected. In 2000-01 inflation was 6.1 per cent due, the Senate will recall, to the biggest ever reform of our taxation system. It is simply not correct to continue to repeat as a mantra something that has no factual basis.

In 2007, Mr Rudd ran very hard on promises: he was the one who would put downward pressure on inflation; he was the one who had the magic wand to keep grocery prices in check; he was the one who would keep the lid on petrol prices. Mr Rudd led the Australian people to believe that they would be better off under a Rudd Labor government. They were sorely mistaken.

When he became Prime Minister in November last year Mr Rudd’s government inherited an economy with a healthy surplus, the envy of course of most other developed nations, characterised as the ‘wonder down under’ by the renowned publication the Economist. I should say that it was an economy that had withstood many shocks and was superbly managed by the former Treasurer, Mr Costello. But instead of using this auspicious head start and getting on with the job, Mr Rudd and the Treasurer, Mr Swan, have continued constantly to talk down Australia’s economic standing and with it of course—and we are now seeing the fruits of this—pulling down business and consumer confidence to historically low levels. This is dangerous ground that Labor is heading into.

It is clear now that, for all the talk, Mr Rudd cannot walk the walk and the rapid 2008 price rises in groceries and petrol are irrefutable proof that this nine-month old government has run out of answers. It is a government that is clearly having trouble accepting the responsibilities—and they are heavy responsibilities, as we know—that go with governing, with making decisions and taking sensible steps to keep the economy strong and growing. Mr Rudd’s failure to tackle difficult matters is evident in his government’s constant denial of any responsibility, choosing instead to blame someone—anyone but himself.

Mr Rudd is unhappily steering a rudderless ship on the economy. He has already admitted that prices are beyond his control. In rather extraordinary circumstances the Prime Minister actually admitted a couple of days ago that Australians are now worse off under his government. And when faced with the reality that he is rudderless, what happens next? Yes, the blame game starts. Out of the coalition’s first 550 questions without notice directed to Labor, Mr Rudd and his ministers have answered 422 by blaming the former coalition government. We have seen that in Senator Conroy’s notebook he does it without even trying to answer a question. Put simply, that is 77 per cent of questions and issues that are just sitting in Labor’s too-hard basket—no answers at all.

This is from the party that promised 146 times to end the blame game. This is from Mr Rudd who, before the election last year, assured Australians repeatedly that ‘the buck stops with me’. But of course now Mr Rudd is singing a very different tune. We have a Prime Minister and a Treasurer who now acknowledge that Australians are struggling. We have heard this mantra repeated this afternoon. We have heard Minister Macklin admit that families are struggling and that they are worse off now than they were just a year ago. But their response is to endlessly watch, inquire, review, buck-pass and dither but never accept responsibility for their own inept fumbling of the economy.

I am interested to hear, I must say, who exactly the imaginative Labor machine will today blame to explain this morning’s findings of the lowest level of small business confidence in any Australian government—and that is recorded: ‘in any Australian government’. I went back and had a look at the way things stood in 1995 before the Howard government took office in 1996, and this attitude of the Labor Party is eerily repetitive of old Labor and the Keating government. I am reminded of what the former Prime Minister, John Howard, said to Mr Keating in 1995—and we could be listening to it today. He said:

The Prime Minister and the Treasurer should be ashamed of themselves because nothing will release them from the burden they bear for what they are doing to Australian families.

It is clear that in the lead-up to the election the Australian people were sold a pup or perhaps a whole litter of pups.

It has become obvious that the only plans Mr Rudd, Ms Gillard and Mr Swan possess have been poached from the coalition. Mr Rudd’s framework for schools announced yesterday is of course coalition policy. The transparency aspect was revealed by the Howard government in 2004 and announced, and the teacher retention and teacher quality facet was outlined by Dr Nelson as recently as this year’s budget reply. And of course Labor had no tax policy of its own and, with only minor changes, delivered the coalition’s tax cuts when it got into government. Once Labor runs out of our policies to copycat it fills the vacuum with yet another committee or inquiry. The Labor government has I think, sadly, become famous or infamous for its reviews, committees and inquiries, and it is not hard to see why. As my colleague Senator Bernardi said in his remarks, the Rudd government has announced over 150 of them since it came to office nine months ago.

This may be just a shifty way to avoid making a decision—or 150 of them—but for a party that was in opposition for almost 12 years you would be forgiven for thinking that they might have actually had a few thoughts of their own and that they would come into government with a few policy ideas of their own and not be entirely reliant on everyone else to help them out with some. Instead, they have delayed any action on the most crucial of issues such as those facing pensioners and carers. The matter of pensioners and pension rates has of course been sent off to be reviewed amongst the myriad of other concerns encompassing the Henry tax review. The Henry tax review is not to be handed down until December 2009. It means that many of its recommendations will not even be implemented until the budget of 2010-11 at the earliest, at which point the Rudd government will have been in power for almost an entire term.

Do you get the picture here? The economy was booming under the coalition. It was Mr Rudd who tried to dismiss the Howard government’s achievements as being down to the mining boom: it all happened on the back of the mining boom and all of those proceeds were being squandered; any mug could run the economy; anyone could do it. Guess what? The mining boom is still there but under Mr Swan’s squawking there is now talk of a recession.

The sad thing is that by putting the inflation genie front and centre of their budget strategy and then bringing down an expansionary budget that inflames prices, the Labor government is hurting the hip pockets of working families, pensioners, carers and our seniors. It is these Australians who are worse hit than others. The Rudd government’s price increases on the back of tax hikes will be a difficult and unnecessary pill to swallow, considering that prices for employee households are already pushing well above the inflation rate—up 5.7 per cent in the last financial year.

The Senate should make no mistake about this. Under the Rudd government, Australians are hurting financially, but the most vulnerable sector of our community, the frail aged pensioners and their carers, are suffering most of all. Can a single pensioner existing on a fixed income of $273 per week eat a review? Of course not. What they need are dollars and cents—an immediate adjustment to assist them in meeting basic cost of living items. In contrast, under the Howard government pensions were under constant review.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

And they were increasing.

Photo of Helen CoonanHelen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | | Hansard source

Yes, as Senator Bernardi says, we took action. We have heard nonsense from the other side about us doing nothing for 11 years. That is another patent falsehood that has been perpetrated during this discussion. Pensions under the Howard government increased by more than two per cent above inflation every year for 10 years, and we also introduced one-off payments to pensioners—pension bonuses and carer bonuses—when the budget could afford it. Because of our good management of the economy, we could afford to pay and did pay increased pensions every year for 10 years. That is what we did. Is that enough? Of course, with the effluxion of time, it is not. Pensions, in my view, are ripe for an overhaul.

Now let us look at what the Rudd government is not doing for pensioners and carers. Look at the Rudd review into payment levels to both pensioners and carers—the Harmer report. Yes, it will not report to the Minister for Families, Housing, Community Services and Indigenous Affairs until when? February 2009. And even then, unless there is a total change of direction by this government, pensioners might be lucky if they get an adjustment as of July 2009. But I suggest that a much more likely scenario is that they will not get anything until the conclusion of the Henry tax review, which, the Senate will remember, is not due to report until towards the end of 2009, which means that pensioners will not get any structural change in the base pension until the 2010-11 budget.

Our pensioners, who have spent their working lives contributing to this nation of ours, are being swept aside by the Rudd government’s total lack of both attention and compassion to their daily plight. Which of us here in this chamber could live on $273 a week? I asked Senator Evans this question yesterday and he had no answer, although to his credit he acknowledged that more needs to be done. I thought that was encouraging. But I will ask the question again. Which one of us could live on $273 a week with the ever-increasing price rises they are facing since the Rudd government came into office? The answer has to be none of us. Frankly, if we have got the stomach to admit that, why is it that this government is forcing vulnerable, frail, aged people to do just that—subsist on a fixed income of $273 a week? It shows a lack of compassion that is breathtaking in its sheer callousness, and it sits squarely at the feet of the Rudd government.

To put that in context, let me give the Senate a couple of statistics that come from the government’s ‘Pension Review Background Paper’:

... 4.6 million Australians receive an income support payment of some kind from the Australian Government in the form of a pension or allowance ...

That equates to 27 per cent of the population aged 15 years and over, the paper states, and it goes on to state:

  • 77 per cent of Australians over the age of 65 receive income support ...

The paper states that 59 per cent of those are women and 58 per cent are single. The paper further states:

Most pensioners have low incomes: over half have less than $20 a week of private income ...

…            …            …

... 30 per cent report having bank balances of less than $1,000 ...

…            …            …

Many pensioners rely on income support for long periods. The average total time on income support of current Age Pensioners is 13.1 years.

It is abundantly clear that the pension will need a substantial boost. What is the Rudd government going to do about it? You would think that an attentive and responsive government that was aware of the problem would be pushing now for at least an immediate one-off adjustment on the basis of the facts in this background paper alone. But what do we get? It is all too hard to do now, and more months of delay is Labor’s refuge.

When it comes to pensioners and carers and looking after our seniors, the Rudd government appears to have no policy direction and no ideas. Frankly, pensioners and carers come a dismal second when looking at Labor’s pecking order of working families. The only policy they have adopted is one where they have once again copied the Howard government, which introduced the carer payments, allowances and bonuses. Only after considerable public and media pressure did the Rudd government announce the continuation of those payments. And in relation to the Howard government’s utilities allowance, this government eventually decided to keep it.

The financial future and security of pensioners and carers is simply not sustainable on an ad hoc, afterthought basis, which is all they have got from Labor. Yesterday, in a press conference at Parliament House, the Chairman of National Seniors Australia, Mr Everald Compton, said:

This issue of the ageing of Australia and the cost of the ageing of Australia is a greater crisis than climate change.

But:

It’s not as sexy a subject as climate change ...

It is always difficult to rate big competing national priorities, yet the despair of pensioners after the budget in May caused groups of them to strip off their shirts in public in protest in the realisation that the very real claims for financial help that they had submitted to the government had simply been ignored. What have we come to as a country when proud senior citizens are forced to take that sort of public protest action to draw attention to the fact that they cannot live on, let alone live adequately on, $273 a week.

Let us look at another fact. The recent inquiry of the Senate Standing Committee on Community Affairs into cost of living pressures on older Australians found that people on low incomes are disproportionately affected by rises in the cost of petrol, food, medical care and rental accommodation. All we have seen from the Labor government is their spectacular stunts: Fuelwatch and ‘grocery watch’. We know for instance that ‘grocery watch’ is now getting fewer hits on its website than an average amateur blog, and it is still costing the Australian taxpayer $13 million for the privilege.

So how can this be allowed to happen in this developed, wealthy country of ours? It is not as if we are talking about enhancing our comfortable standard of living. We are dealing with the failure to ensure just a basic, decent standard of living, and I think the pensioners and carers of Australia are entitled to nothing less. There seems to be a pattern emerging from the Rudd government—that is, a disposition to cold, callous indifference to the most vulnerable people in our communities: those who have contributed so much over their working lives and our fellow citizens to whom we owe so much. But it gets worse.

What that group of our vulnerable senior citizens is now facing is what the Rudd government has flagged as another change of policy. Not content to leave pensioners and carers out of the loop in the budget—out in the cold—this government has also taken a stick to the nation’s seniors, and 27,000 people are now at risk of losing their eligibility for the Commonwealth seniors health card. They are the very people who need the card most, and the government is penalising them while admitting that as the population ages there will be more demand on medical and pharmaceutical assistance for our aged folk to access concessional prescriptions as they get older. Yet some 27,000 of them are at risk of losing their Commonwealth seniors health card due to mean-spirited eligibility changes proposed by this government.

I could go on and on about consumer confidence. I could go on and on about how the pensioners who are so badly affected by petrol prices have been duped by useless policies like Fuelwatch. They are just smoke and mirrors, with the government wasting its time investing heavily in a fuel price-fixing program that will do nothing to bring down petrol prices. It is easy to see why consumer confidence is taking a hit, and it is time that the Prime Minister and the Treasurer took responsibility for the dramatic decline in consumer confidence rather than simply blaming it on everything else, including overseas. We know that there has been a reduction in household wealth, we know that small businesses are in a crisis in terms of lack of confidence and we know that the neediest Australians, our pensioners and carers, are crying out for help.

Labor truly are Australia’s economic vandals when you boil it all down. Australia is now worse off in wealth terms because of this government, which has run out of excuses. True leaders step up and take responsibility. All we have seen from Labor is overwhelming arrogance. They are out of touch and already out of puff.

4:39 pm

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

Listening to Senator Coonan today, I think some of the coalition members probably need a bit of therapy to get over the fact that they are no longer in power. At least Senator Bernardi was not a senior member of the government. He was not here for the full period like Senator Coonan.

Photo of Helen CoonanHelen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | | Hansard source

Why can’t you face up to doing something about it?

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

Senator Coonan, what you have to do is get over it. All we heard throughout most of her contribution is that she alleges that the Labor government has somehow or other adopted coalition policy. If the coalition are so good, why are they not in power? Why did the people kick them out so comprehensively in November last year? If they are so good, why are they not still in office? Even the Prime Minister lost his own seat at the last election. In this, a period of unprecedented economic prosperity the Prime Minister lost his seat. The last and only other Prime Minister to lose his seat at an election was Stanley Melbourne Bruce during a recession. So why did they get kicked out if they were so flaming good? I will tell you why. It is because the people knew that they were vandals. They are the economic vandals, not us.

I will have an opportunity in a moment to highlight exactly what they did in their 11 years in power. I was interested in one thing in Senator’s Bernardi’s contribution. I had my office look up that famous Jesuit priest and how he was advising Phillip II of Spain. As I think you might have been reminded by Senator Bernardi, Mr Acting Deputy President, Phillip II of Spain was one of those great architects of the Spanish Armada and somehow seemed to lose a lot of his gold and silver out of South America. But what this great Jesuit was advising Phillip II of Spain to do was to rein in public debt and also that: ‘The king should reduce his favours to his supporters.’ Does that sound familiar, Senator Bernardi? Maybe we should have highlighted that to the Auditor-General, because look at what you did in those last years of government: the regional rorts that were so spectacularly carried out by your government.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

Senator Bernardi interjecting

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

I will supply you with a copy of this information so you can put it on your desk, Senator Bernardi, and you can look at what you should not do if you should ever get into power again. Follow this great Jesuit, and you may well find yourselves in power again.

But we know why the coalition lost the election. It was because they took their eye off the ball. After 11 years in power, what did they spend their last few years in office doing? They had unprecedented control of the country and its economy—unprecedented. They controlled this Senate. They could do whatever they liked. There were 39 of them and 37 of us on the other side. What did they spend their final years in office doing? You know what they were doing, Mr Acting Deputy President. I know what they were doing. They were spending their last years in office trying to stab the then Prime Minister in the back. The Costello supporters—and there are a few in here at the moment—were doing everything they could to undermine the then Prime Minister.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

How do you know that?

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

From what I have read in reports. In fact, probably one of the most capable ministers in the previous government, the Leader of the Opposition in the Senate, Senator Minchin, the then Minister for Finance and Administration, did not have a conversation with the then Prime Minister for over 12 months. Why wouldn’t people say, ‘Let’s get rid of this mob’? Let me again tell you why that was, just to remind you—and, as I said, Senator Coonan and some of the others might need some therapy to get over the fact that they are no longer on this side of the House because the Australian people did not want them anymore.

Let me remind you of some of the figures that we had in 1996 compared to in 2007. After 11 years of economic vandalism and neglect, Australians were not saving as much, their wages and salaries were not going as far as they used to and mortgage repayments were rising. When Howard was elected, Australians were saving $6.50 for every $100 they earned. When Howard left office—

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Senator Parry interjecting

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

and took with him a number of your own colleagues, Australians were spending 40c extra for every $100 they earned. Get that in your minds: when Labor lost power in 1996 people were saving $6.50 for every $100 they earned; when you left office, after 11 years of neglect, working families were spending 40c more for every $100 that they earned. When Howard took office in 1996—

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

I rise on a point of order, Mr Acting Deputy President. I have let this go three times: would the honourable senator please refer to the former Prime Minister by his correct title, not just by his surname?

Photo of Mark BishopMark Bishop (WA, Australian Labor Party) Share this | | Hansard source

Order! Standing orders apply to members of the other place and to members of the Senate. They do not apply to former members.

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

When Howard came into office in 1996 national household debt was $289 billion. When he left office in April last year it was five times that. When Howard was elected to office in 1996 the average home repayment was $955, which was 28 per cent of the average wage. In September 2007 that figure was $1,949 or 36 per cent of the average wage. You ignored 20 Reserve Bank warnings about the way you conducted the economy. Between 1999 and 2004 the cost of living outstripped inflation by eight per cent. Between 2002 and November 2007 there were 10 consecutive interest rate rises. Under the Howard government, childcare payments doubled. One hundred thousand people were prevented from joining the workforce because they could not afford child care under your stewardship. Health care was affordable when you wanted to visit a doctor under the Keating government. It doubled when you were in power. The cost of a loaf of bread rose by 26 per cent over five years under your watch. Petrol prices have risen more than 53 per cent since 2001.

As Senator Hurley mentioned earlier, we are all aware that there is a global downturn. No-one is going to say that there are not responsibilities. I was reading Lloyd’s List Daily Commercial News during question time and I read that there is a five per cent reduction in container freight into the United States so far this year. Considering the millions of containers that go into the United States, that is a significant downturn. We need to be well aware of that impact not just on the Americans but also in our own part of the world. We are also aware of the oil prices. Senator Bushby and I had the opportunity to visit our sailors and our airmen in the Middle East and we saw two of the oil platforms there that supply 14 per cent of the world’s oil production. We do not produce the oil we need and have to bring it in from elsewhere, which is a fact of life.

Today we face many difficulties. The government understands that many Australians are doing it tough as interest rates, high global oil prices, food prices and the effect of the credit crunch impact on family budgets. That is why the government has been responsibly addressing domestic inflation pressures, which have been made worse by global factors. That is why we delivered a strong surplus to give the Reserve Bank room to move. That is why we made room in the budget for a $55 billion Working Family Support Package. The government’s tax reforms outlined in the budget will provide $46.7 billion of personal income tax cuts over the next four years and they will provide significant additional relief to household budgets. For a taxpayer earning $50,000 a year the tax cuts will deliver an additional $19.23 per week from 1 July. This will increase to $25 a week from 1 July next year and to $33.65 a week from July 2010. When fully implemented, they amount to an almost 20 per cent reduction in their tax bill.

In addition to these tax cuts the government’s decision to increase the Medicare levy surcharge will provide significant additional assistance to those who cannot afford private health insurance. For a single taxpayer earning just over $50,000 a year the Medicare levy surcharge will result in a further saving of around $500 on their tax bill. Those with children also stand to benefit from the $4.4 billion education tax refund and the $1.3 billion 50 per cent childcare tax rebate.

I might add that these policies were not put forward by the coalition. Not even Senator Coonan could accuse us of doing that. A family on $58,000 with two children aged between four and six is worth an extra $1,630 a year or $31.34 a week on top of the tax cuts that they would also be entitled to. Extra help is on the way. The government is confident that these changes will make a real difference to working Australians who are struggling with higher petrol and grocery prices. The Rudd Labor government budget will be based on sound principles of fiscal discipline, just as Father Mariana would have it.

In opposition, the Prime Minister made a solid commitment to the Australian people. He said that he was an economic conservative who could be trusted with the Australian economy. The Prime Minister delivered on this promise. But, as we all know, the budget will not be delivered in an environment without challenges. In fact, the legacy of the time on the Treasury benches of those opposite is an inflation problem at its worst since the early 1990s. Government spending was out of control, with a cost of living legacy that is hitting working families hard right now. There was massive underinvestment in education, health and infrastructure and a complete rejection of the realities of climate change. None of this is good enough for a modern, efficient Australian economy. None of this can be ignored in our modern world.

Fighting inflation is the central challenge facing our economy today. The government’s five-point plan to tackle inflation is focused on fiscal restraint and improving the quality of government spending, expanding the economy’s productive capacity by addressing skills shortages and infrastructure bottlenecks, lifting national savings and lifting workforce participation.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

And pork-barrelling.

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

You on that side know all about pork-barrelling. You got a gold medal in it over the last few years. Your Jesuit friend would not be very impressed with you. You would have to do a few Hail Marys for that, Senator Bernardi.

There is no doubt that working families are under tremendous financial pressure with rising food and petrol costs. The cost of living index figures released yesterday show that CPI for the 2007-08 period was 4.5 per cent. That reinforces the need for what we are doing to help families find a better deal at the bowser, at the checkout and at the bank; reinforces the need for a strong surplus to give the Reserve Bank room to move; reinforces the need for the room that we are making in the budget for a $55 billion Working Families Support Package; reinforces the need for the $47 billion worth of personal income tax cuts over the next four years as part of that package; reinforces the need for an increase in the childcare tax rebate from 30 per cent to 50 per cent; reinforces the need for our new education tax refund; reinforces the need to remove a tax slug on the middle-income earner by increasing the Medicare levy surcharge thresholds; reinforces the need for the government’s responsible approach to addressing domestic inflation pressures made worse by global factors; and reinforces the need for our approach to helping families.

That is why the opposition should get out of the way and pass our budget. But the Liberal Party is intent on opposing key budget measures which will blow a $6.2 billion hole in that surplus we need. This is the height of economic irresponsibility: vandalising the budget at a time of heightened global uncertainty. No responsible economic manager would choose to increase uncertainty at home at a time when we face significant uncertainties abroad. No responsible economic manager would choose to vandalise the surplus, making it harder for the Reserve Bank to cut interest rates.

Those opposite stand for lower taxes for luxury cars—isn’t that wonderful? Rather than lower interest rates for working families doing it tough, they stand for big oil, rather than standing up for a better deal for motorists at the bowser. They stand for higher taxes, rather than standing up for relief through our changes to the Medicare levy surcharge threshold. They stand for a windfall tax gain for one company rather than the responsible economic management that the government is providing.

At a time of heightened global uncertainty, the country needs a strong surplus, not short-term political games—something that I thought you might not have been involved in, Senator Bernardi. I thought that you might have had a bit more credibility, what with you quoting Jesuits, and would not go down this path. But it seems that you have been seduced by the dark side to pursue this short-term, politically opportunistic tactic. We are providing economic leadership. We are providing strong leadership in uncertain times. That is why they turned to us last year. That is why they will continue to turn to Labor. We know how to run things when things get tough.

What happened to those opposite? Let me just show you how much working families thought of the coalition at the last election, particularly those in the outer Western Suburbs of Sydney. In Lindsay, there was a 9.7 per cent swing; in Werriwa, there was a 8.3 per cent swing; in Parramatta, there was a 7.71 per cent swing; in Macquarie, there was a 6.5 per cent swing; in Macarthur, there was a 10.43 per cent swing. The member for Macarthur lives in Mosman now—you might know that, Senator Boyce. Once in a while he commutes all the way across the Harbour Bridge and gets down to Macarthur to visit his constituents. Finally, in Greenway, there was a 6.85 per cent swing against the coalition. And why wouldn’t they? One of the things that John Howard got hoisted on was something that he said at that election just highlighted how out of touch that government was. You may well remember this, Acting Deputy President Bishop. He said, ‘Working families in Australia have never been better off.’ Do you remember that? He said that working families have never been better off.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary for Families and Community Services) Share this | | Hansard source

Senator Bernardi interjecting

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

They did not think that. I have just shown you that they did not think that at all. They showed him the door. They showed a lot of your colleagues the door. And, if you continue to oppose our budget measures and you dare us, you will be shown the door as well—again and again and again. You may well get to be leader, Senator Bernardi, because none of them over there will be left. Minchin, Coonan and all those others will have gone. They will have gone to their therapy classes. But I tell you this: if you oppose our budget measures, you will be punished unmercifully by the Australian people.

5:00 pm

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

What an interesting little exercise we have just had from Senator Hutchins in the fascinating Labor Party strategy of empathise and ignore: ‘Oh, it’s a terrible problem; oh, we know people are doing it tough; oh, yes; oh goodness; oh, gracious; there are all these rising prices; oh, dear, oh, dear; there are terrible problems; we’ve got all these problems but we’re going to inquire about how we may go about ignoring them!’ The empathise and ignore strategy goes on and on and on. Yes, as Senator Hutchins pointed out, there has been a drop in consumer confidence in Australia. The Prime Minister, Kevin Rudd, has agreed. He has empathised that, yes, it is a terrible problem, that there has been a drop in consumer confidence and that Australians are worse off than they have been. But, according to the Prime Minister, this is not the fault of the Labor government; he is not to blame. It is the economic downturn, the global economic slowdown that has done it and nothing to do with the Labor government. The only problem with that line, of course, is that, according to the latest AC Nielsen index on the subject, consumer confidence in Australia has dropped 11 points. The average global drop was 5.5 points. So we have double the drop in the consumer confidence index in Australia compared with internationally. I am not sure who we are going to blame for that extra increase because it obviously cannot be Mr Rudd and his government; he has told us that it could not possibly be him.

Having looked at consumer confidence, let us look at business confidence. The Sensis business index, which Senator Coonan referred to so ably today, shows that small businesses believe they have come to the lowest view of a government in the past 28 years. Small business in Australia has no confidence. They have declared the Rudd government the worst in the country in terms of their confidence. They say that Mr Rudd and Mr Swan have set a new record for the quick drop in small business confidence in Australia. So we have this wonderful record where they empathise with the problems—’Tsk, tsk, yes, there are global problems; Australians are doing it tough’—and then they go about ignoring them. This is the way they continue to carry on. We have figures, in fact, showing that the working families of Australia are paying 5.7 per cent more, on average, for their household goods this year than they were last year. These are the latest Australian Bureau of Statistics figures. The CPI has gone from 2.1 to 4.5 and, most chillingly of the lot, self-funded retirees and pensioners have had a cost-of-living increase of 4.3 per cent over the past year. Now we have Minister Macklin and numerous senators sympathising and empathising with the pensioners. They say: ‘Yes, pensioners are doing it tough; yes, self-funded retirees are doing it tough.’ Then they think: ‘We’ve done the empathise bit; now let’s do the ignore bit,’ and say, ‘Well, we’re going to have a review and we’ll let you know in February what we might or might not do about this.’ Minister Macklin has, in her empathy, told pensioners that we need to get this right for 2028—for 20 years time. I am sure that will be a useful piece of information to pensioners who are doing it tough right now.

I will pass on to you some of the information about the costs-of-living pressures that Queenslanders—in my home state—are currently experiencing. Last month, in July, the insurance company AAMI found that three in five Australian drivers—that is, 58 per cent of Australian drivers—said that their overall standard of living had dropped because of higher petrol prices. Drivers in Brisbane were among the top three hardest hit, with 57 per cent of people in Brisbane saying that their overall standard of living had dropped. In Melbourne, it was 60 per cent; in Adelaide, 58 per cent. Rural drivers, with longer distances to drive, were even worse off. They were more likely to leave their car at home than any other drivers, with 63 per cent of them saying that they were more likely to stay at home. When we look at the effect this has on people in terms of their ability to socialise, particularly in remote areas, their ability to get involved in community events, their ability to volunteer and even their ability to undertake paid work, it is a very serious issue. Of course Australians are worse off than they were last year. They are experiencing huge difficulties with the cost-of-living pressures that have been meted out to them by this ‘empathise and then ignore’ government.

I would like to bring to your attention some of the 770 letters I have received recently from pensioners and self-funded retirees in the Brisbane area about their concerns and asking me to get Mr Rudd to give them a fair go. They listed as their top concerns petrol prices, grocery prices, healthcare bills and housing costs. Many of them went on in detail to explain what their problems were. One constituent from Mitchelton advised that he could no longer retain his private health insurance because of the costs he was experiencing at the age when he most needed it, yet we have the government proposing to create a situation where the premiums for private health insurance will increase dramatically when they attempt to push through their Medicare levy surcharge changes.

I had a letter from a pensioner constituent in Kelvin Grove who said that he did not have to worry about petrol prices any more because he had been forced to sell his car. He could not afford to put petrol in it. He could not afford to register it and he could not afford to insure it on the level of pension that is being empathised with by the government. A constituent in Spring Hill said that with increased rental costs they were not sure how much longer they would be able to keep a roof over their head. A constituent in Wilston wrote:

I cannot afford to eat properly due to the cost of fruit and vegetables.

I received a longer list from a constituent in Alderley:

I can’t afford to run a car. I always purchase old fruit and vegetables, and the rent is getting beyond me.

A constituent from Windsor wrote:

I can’t afford to buy new clothes or shoes that are badly needed. I do not have any superannuation or a car or a house, only a pension. I cannot even afford to die because I cannot afford a funeral.

I received a letter from Daisy Hill saying:

Thank you for caring about the problems.

Then we went onto the lists from people who wanted to speak directly to the Prime Minister, Mr Rudd. A constituent from Everton Park wrote:

I wonder if you—

meaning the Prime Minister—

know how tough it is or if you really care.

A constituent from New Farm wrote:

We can’t wait till 2009 for help. I’ve worked all my life paying taxes and I voted for you.

meaning the Prime Minister—

No more inquiries. Just do it.

So they are tired of the ‘empathise and ignore’ strategy of setting up an inquiry. The constituents of Brisbane and the voters of Queensland are tired of inquiries. A letter from Cornubia to the Prime Minister said:

I expected more from you.

Perhaps one of the most telling ones, from Mount Warren Park, said:

Are you hoping that we will die before February?

This was addressed to the Prime Minister. It would save money but the old ‘empathise and ignore’ strategy will not work with people like that. A constituent from Boronia Heights wrote:

I challenge you, Mr Rudd, to try and survive on $273 per week.

Following on from Senator Hutchins’ concerns about the voting patterns in the Sydney area, I would like to point out to him a comment from a constituent in Warren Park in Queensland:

I voted for you, Mr Rudd, in the federal election but never again.

From Edens Landing:

On $270 a week, can you do it, Mr Rudd?

From Slacks Creek:

Try living on a pension, Mr Rudd.

And from Spring Hill, perhaps the most succinct comment of the lot:

Stop posing, Mr Rudd. Get real.

From Loganlea:

I’m sorry I voted for you—100 per cent sorry, Mr Rudd.

So if you want to look at voter intentions I would suggest to the Labor government that that is a good place to start. Probably summing up most succinctly the feelings of the pensioners and self-funded retirees of Australia, one constituent from Stafford wrote, ‘Not only do I feel that Mr Rudd cheated the pensioners, I think he has cheated the whole country.’ I have received over 770 of these letters in the past few weeks. I think they give us a very strong indication of how the voters of Australia feel. As Senator Hutchins pointed out, the government changed in November last year, but there are a lot of people who are very concerned about how they changed it and cannot wait to change it back. I think we need to look further at the recalcitrant attitudes of this government and their ‘empathise and ignore’ strategy.

They were handed information by National Seniors Australia. They have had five months since the Senate Standing Committee on Community Affairs inquiry into the cost-of-living pressures on older Australians was brought down, but what have they done in five months? They have announced that they will have an inquiry. They may very well not last long enough to do much more than have an inquiry. By February next year the current government will have been in for 15 months. They claim to have known before they even came into government how bad it was. They have had the evidence of the cost-of-living pressures on older Australians, an inquiry established by the Howard government, to build on the—

Photo of Jan McLucasJan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | | Hansard source

Hang on! No, it wasn’t

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

The inquiry was established by the Howard government.

Photo of Jan McLucasJan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | | Hansard source

Go back and check the Hansard!

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

The Senate inquiry by the community affairs committee into the cost-of-living pressures on Australians was established by the Howard government and completed after the change of government. Most of the evidence was taken—

Photo of Concetta Fierravanti-WellsConcetta Fierravanti-Wells (NSW, Liberal Party) Share this | | Hansard source

Order! Senator McLucas, please address your remarks through the chair. Thank you.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

We may be arguing over semantics here, Senator McLucas. However, at a time when the Howard government was the government and had the opportunity to decide whether the inquiry went ahead or not, the inquiry proceeded with the approval of the then government.

Photo of Jan McLucasJan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | | Hansard source

That is the way it worked.

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

I hope that satisfies the process aspect of this, Senator McLucas. But let us talk about those figures from the National Seniors Association. For instance, at present almost 800 Australians turn 50 every day, and by 2020 closer to 900 Australians will be turning 50 every day. This means that in the very near future there will be more people who are over 50 than under 50 in Australia. People over 50 will face the prospect of living a further 38.8 years, if women, and a further 34.4 years, if men. Let us look at those figures again—between 35 and 39 years after they turn 50. Let us go back to the sort of information that pensioners and others were giving us. It is going to be a very, very long 35 and 39 years if this government does not stop inquiring and start acting. Empathy is all very well, but it does not achieve anything if it does not help the people who we already know need help. It is very obvious that there is a case to be made for assisting pensioners and others on fixed incomes, particularly single pensioners, who currently receive 56 per cent of the couples pension. That has been obvious since the Senate Standing Committee on Community Affairs inquiry was completed in March and will continue to be obvious whether or not we get a result out of this inquiry.

Let us look at some of the other inquiries we have going on which are part of the good old empathise and ignore strategy. We are going to set up Fuelwatch. That will be great, won’t it! Yes, the government wants to set up Fuelwatch so that it can standardise prices across Australia, with no opportunity for business initiative and no opportunity for anyone to drop prices. Probably the end result will be to drive independent stations out of business and therefore to put up prices.

Let us look at ‘GroceryWatch’. That is going to be a great winner! Almost no-one is using ‘GroceryWatch’—they had a quick look at it, decided it was useless and have given it away. But when the website was first established, I, like many others, got online to see what information I could get. There were four prices for four various baskets of grocery items in Queensland. I did not find it particularly useful to know what the average price of an item in Mt Isa or Cairns was, or what the average price of an item between Longreach and Gladstone was. Without specific useful information, it has achieved nothing. It is completely useless and it will not assist anybody—so more and more smoke and mirrors, and it goes on and on.

The empathise and ignore strategy has worn thin already, as I think has been pointed out by the comments that have been made here. The people of Australia want action on the cost-of-living pressures and they want the government to rightfully accept blame for the inaction that has been going on to date. Stop going through processes, stop inquiring, stop looking—just do something.

5:19 pm

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

May I say at the outset how pleasing it is to see yet another member of the class of 2004 in the big chair.

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

I am pleased to speak to this motion because it gives me the opportunity to once again highlight the damage the former government did to Australian families and to highlight what the Rudd Labor government is doing to redress that damage. Having said that, I have to say I would prefer that the time of the Senate was being spent in passing the many excellent budget initiatives that should be being passed by this chamber instead of being held up by the opposition. We should be doing that rather than spending time on these silly motions that I think have been put up mainly to improve Senator Bernardi’s standing in the South Australian branch of the Liberal Party.

There is no doubt that the economic challenges that we are facing in Australia today are significant. We have inherited an economy which has suffered nearly 12 years of neglect from those opposite, an economy that was hit with 10 interest rate rises in a row—including eight rises in three short years. Those 10 interest rate rises had a huge impact on the level of economic activity in Australia. Furthermore, when the Rudd Labor government was elected in November last year, inflation was running at a 16-year high, which brings to mind the unforgettable statement by the now shadow Treasurer, the member for Wentworth, who in 2006 told families that high inflation was a ‘fairy story’ and that they were overdramatising interest rate rises—and you wonder why they lost the election.

Unlike those opposite, those of us in the Rudd government have no intention of sticking our heads in the sand and hoping these challenges will go away. We have not hidden from economic challenges in the past and we will not hide from them today. Labor have made it clear to the Australian public that we acknowledge the various economic challenges we are up against and that we are determined to address them.

We have been and will continue to be upfront with the Australian people, giving them the honest answers they deserve because we have nothing to hide. Labor did not have a hidden agenda when it went to the election, as the now opposition did when it won an election and subsequently introduced Work Choices. As everyone in the chamber is aware, those regressive industrial relations laws were never mentioned to the public before the 2004 election. The former Liberal government was dishonest with the Australian people, and once it had the numbers in the Senate it rammed through laws without giving the public the opportunity to express their views, laws that people neither wanted nor asked for. Labor is determined not to participate in that kind of deceptive and arrogant style of politics.

An example of our straightforward approach to the challenges that face the nation is our attitude to climate change. That is not only an environmental challenge but also an economic one and it should be spoken about in this debate. Reducing our greenhouse gas emissions will not be easy and it will not be cheap. It will cost the economy initially, and we do not shy away from that fact because we know that this will be an investment that will ensure that we are able to maintain a modern, competitive and sustainable economy into the future. We will implement the carbon pollution reduction scheme in a way that secures the economy of today and the future in order to insure the nation against risk and to seize the future’s significant opportunities. That means implementing the scheme in the most economically responsible way, and that is why the government have made it clear that we will shield Australia’s most emissions intensive industries from the full effects of the scheme. We are talking to those industries on an ongoing basis about the best way to shield them without pushing the burden of reducing emissions onto the rest of the economy.

We will also help industry embrace low emissions technology. We will establish the climate change action fund to invest in innovative new low-emissions processes and projects. We will set a responsible national emissions trajectory. We will be guided by Treasury modelling to provide enough scope for new and existing businesses to lower their emissions while still fostering new world-leading low-emissions industries. Labor is upfront about addressing the issue of climate change and the economy with a vision for the future, although we know that that will not be without some level of pain for the Australian economy. It is an example of our willingness to tackle the hard issues instead of trying to buy our way out of trouble with exorbitant spending on government advertising, which the former government did and which the Australian people did not buy. We know they did not buy it because we know who won the election last year.

Global economic factors are another challenge that we are facing—the government do not ignore that we are a player in the global economy—and which is affecting us greatly. The government understand those global factors impacting on our economy as we face some of the most difficult global conditions that have been seen in many years. Those opposite are trying to pretend that that is not the case. They choose, as in this motion, to attempt to blame the current government for anything and everything, but it is a reality that there are significant pressures out there and it is difficult for a relatively small economy in the global scheme of things, like Australia, to deal with them. The global credit crunch, for example, and increasing oil prices have had a dramatic effect on the global economy. In turn, consumer confidence—not just in Australia but at the international level—is in a difficult situation, waning in some instances, and growth is slowing. As we know, borrowing costs for both domestic consumers and businesses are going up. Again, this puts a brake on spending and is causing significant issues in the economy. Global share markets have fallen by an average of around 20 per cent in developed economies since the global turmoil began. Stock markets around the world have been affected by the global financial crisis and a slowing world economy. And consumer confidence across the OECD economies has fallen to its lowest point in almost 30 years.

Over the weekend we learned that the UK economy did not grow at all in the three months to June this year. Japan, France, Italy and Canada have all reported negative growth in their most recently reported quarters. And the impact on the United States economy is well known and well reported. We should not be surprised that those global difficulties—together with eight official rate rises in three years—are slowing our economy. But we do need to put this into perspective: although we are confronting the most difficult global circumstance in a quarter of a century, the fundamentals of our domestic economy remain strong. We are able to recognise that, while we are unable to control some things, we can control others. That is what the government are doing; it is what we are focused on: doing what we can to control the things that we can. For example, we can put our money into investment funds which can drive the productive capacity of our economy and we can deliver a budget with a strong surplus of $22 billion. Of course, we cannot deliver it unless the opposition agrees to our budget initiatives and we sincerely hope they will. At the moment the signs are not looking promising. It would be the second biggest surplus in 37 years, a surplus that is being attacked by the opposition.

Through responsible fiscal policy and through the budget that we announced in May, this government has sought to put downward pressure on inflation and downward pressure on interest rates. They are the two most significant things we can do to relieve the economic pressure that Australian families are facing. Interest rates are a huge problem in the real economy and have had an impact on confidence, but the Rudd Labor government are confident that our course of action is the responsible course of action to address the problems that the previous government left us. The irresponsible response to the problem would be to ignore it, which would just compound the problem. Of course, compounding the problem is what the former government did with their outrageous spending sprees that drove up inflation. When Labor came into government, government spending was running at between four and five per cent growth. We have reduced that to just on one per cent already. If we had continued with the irresponsible spending of the previous government at the same growth level that the previous government had it running at for the last several years, it would have cost taxpayers an extra $23 billion worth of outlays. That would have been $23 billion of taxpayers’ money—ordinary Australians’ money—blown away.

The Rudd government has taken a very different approach to that of the Howard government. Instead of going on spending sprees, we focused on savings. We have generated $33 billion in savings to ensure that our new spending initiatives of $24.7 billion were met from savings. While our first budget addressed the various economic challenges that I have outlined, it also will help to deliver to those who need assistance right now, helping them to be better off than they were in the years of the previous government. Those Australians who are struggling under financial pressure will benefit greatly from our budget, if indeed the opposition allows us to implement all our budget measures instead of vandalising our budget.

The rising cost of living has made life difficult for families during the last decade. We acknowledge that in the last two years rent has risen by over 10 per cent and that the price of fruit and vegetables has increased by 14 per cent. The cost-of-living index figures recently released show CPI for 2007-08 was 4½ per cent. We are addressing those issues, but the former government failed to assist families while those financial pressures increased. Instead, the coalition contributed to inflation by spending nearly $285 million—let’s not forget that figure, nearly $300 million—in the 2006-07 financial year on government advertising. They did not seek to assist Australians at all by that advertising. They did exactly the opposite—they used it to support legislation such as Work Choices, which made it even harder for working families to make ends meet. Contrary to what Senator Bernardi’s motion says, Labor is addressing the issues before us and working to assist Australians with cost-of-living increases.

We have delivered our first budget, and it is a budget that will deliver to working families. The centrepiece of it is our $55 billion Working Families Support Package. There are numerous facets to that package and I will outline a few of them. For example, we are increasing the childcare tax rebate from 30 to 50 per cent and implementing the new education tax refund. Then we have tax cuts totalling around $46.7 billion. The benefits of those tax cuts are twofold, as they will not just deliver benefits into people’s pockets but also, very importantly, encourage more Australians to enter the workforce.

The best way to alleviate financial pressures, particularly on low-income families, is to ensure that people get into the workforce and into employment that provides them with a decent, sustainable income. Under our new system Australians will be able to earn up to $14,000 for the next financial year without having to pay any tax. Effectively, that is $3,000 higher than the previous threshold. That will be of particular benefit to part-time workers—and we know many part-time workers are women on lower incomes—who, according to the Productivity Commission, make up 29 per cent of the workforce.

The rising cost of housing has placed immense pressure on Australian families. That is why Labor has announced in its budget a housing package investing $2.2 billion over the next four years into boosting rental stocks, helping people save for their first home, lowering housing construction costs and building new homes for the homeless. The Housing Affordability Fund will invest $359 million in this budget period and a total of $512 million over the next five years to lower the cost of building new homes, with an emphasis on proposals that improve the supply of new entry-level housing.

Over the next four years $622.6 million will be used to create 50,000 new rental properties with our new National Rental Affordability Scheme, which will increase the supply of affordable rental housing and reduce rental costs for low- to moderate-income households. The government is also establishing first home saver accounts to help people save for their first home in which to live. Those accounts will provide a simple, tax effective way for Australians to save for their first home through a combination of a government contribution and lower taxes. These are extremely practical measures to assist particularly lower income Australian families to get into the housing market and thereby have some security and an ability to establish a financial base for their future.

I am very proud to say that the government in its first budget has also allocated $100 million over the next four years to provide homes for the homeless across our nation. There has been a lot of debate in this chamber over the last week about the luxury car tax and fuel prices. We should not forget that many Australians could not even think of purchasing any car, let alone a luxury car. Those people are our fellow Australians who are homeless. It is a great thing that we are able to do something to assist them in our first budget.

The Medicare levy surcharge thresholds are also a subject of debate in this chamber and possibly subject to obstruction by the opposition, who are opposed to core elements of our budget. Changes to the thresholds will be of significant benefit to some Australians. Under our plan, singles with incomes of up to $100,000 and families with incomes of up to $150,000 will no longer have to pay the surcharge. As a result, that will be money in their pockets. Why anyone would want to oppose that measure I do not know.

The government is also investing responsibly in nation building. We have laid a foundation of $40 billion worth of responsible investment in nation building and growth for our future. That includes the government’s commitment to invest $4.7 billion dollars to facilitate the rollout of a high-speed national broadband network. Our budget overall balanced the need to address inflation pressures with the need for vital investment in future growth. The neglect by the previous government of Australia’s infrastructure is probably one of its most appalling legacies. It will take some time for the Rudd Labor government to redress that neglect, but we are determined and we are already doing many things to ensure that that occurs.

It is unfortunate that we have seen again from the opposition the kind of arrogance that we saw in 2005 when they first secured control of the Senate numbers and used those numbers to foist an agenda on the Australian people that had not been asked for nor wanted. We now see that kind of arrogance return as the coalition seeks to block four important measures of the Rudd government’s first budget. If they continue on that path it will only be to the detriment of ordinary Australians, will again put pressure on inflation and will vandalise the surplus that we are aiming to achieve in our first budget—a responsible surplus that provides a buffer for the nation, which is facing difficult economic circumstances, as I have outlined. Our first budget was very responsible, and it will be a great shame and of great detriment to the Australian people if the opposition continues on its path and fails to pass that budget.

We should stop putting up silly motions such as the one we are debating this afternoon—although it does gives us a chance to talk about things we want to. We should stop obstructing budget measures that will lower inflation. Opposition members should stop defending lower taxes for luxury cars, stop standing there fighting against lower interest rates for families and stop standing there fighting for higher taxes. Let’s bring some sensible economic responsibility back into the chamber. Let’s pass the Rudd Labor government’s budget and let’s get on with it.

5:38 pm

Photo of Judith TroethJudith Troeth (Victoria, Liberal Party) Share this | | Hansard source

Senator McEwen’s words are eerily reminiscent of the Hon. Julia Gillard’s words last week when she told the opposition that they should simply get out of the way and let the government govern. Well, in the Westminster system, we take a different view. We believe that a responsible opposition should hold the government accountable—and that is exactly what we are doing this afternoon by pointing out the way in which cost-of-living pressures have adversely affected the Australian people under the wonderful new world of the Rudd Labor government!

In the lead-up to last year’s election, Prime Minister Kevin Rudd raised expectations among all Australians that he would help out with cost-of-living pressures. He raised expectations that he would do something about fuel prices; he raised expectations that he would do something about grocery prices. Mr Rudd’s idea of doing something is to create Fuelwatch and GROCERYchoice. I am an English teacher and I would have thought that ‘watch’ and ‘choice’ involve two very passive concepts. You can watch and watch, but you do not actually have to do anything. GROCERYchoice has not eased the cost-of-living pressures in Australia. In fact, the cost of living is higher than it was 12 months ago.

I would also like to point out that the words that Mr Rudd used before the election and the words that Mr Rudd used after the election are proving to be somewhat different. He talked a great deal about ‘opportunities’ and ‘working families’ et cetera. I will not tell you all about these again. But the Senate might like to take note of the fact that he used the phrase ‘fresh ideas’ 87 times before the election but has used it only seven times since. Perhaps we have not got any ideas and we are looking for fresh inspiration. He has proclaimed ‘the buck stops with me’ only once since November—perhaps he has now realised that he really is Prime Minister—although he declared that that would be the case 31 times in the lead-up to the election.

Mr Rudd’s way of working ‘the buck stops with me’ is to pass the buck even further on. One hundred and fifty-plus reviews, committees, commissions, working groups, inquiries, discussion papers, summits, audits and consultations are all wearing the brunt of ‘the buck stops with me’. But perhaps he is just too obsessed with getting out a message every 24 hours. The net result of that is that he has obscured the message overall. Mr Rudd may not realise this but the Australian public do. Most members of the Australian public are in a week-to-week battle of paying food prices, grocery prices in general, fuel prices as they fill up their car, the mortgage, interest rates on that mortgage, private health insurance and so on. They are far too worried about where the next week’s money is going to come from to have a chance to think about Mr Rudd’s grand ideas.

Let us take Fuelwatch. The coalition opposes Fuelwatch. Fuelwatch calls on petrol stations to nominate the price they will charge for petrol the next day. This has been trialled in Western Australia. As we all know—those of us who do drive cars—fuel prices fluctuate during the week: they are often higher on the weekends, dare I say it, or before school holidays than they are on any particular day during the week. Motorists can make a choice about when they are going to fill up their car, and a lot of motorists choose the day on which fuel is cheapest. That normally happens once a week. Fuelwatch in Western Australia lengthened the fuel cycle from one week to two weeks, and that meant that there was only one cheap day in the fortnight. That forced consumers to purchase fuel at a higher price every other week. According to the Australian Automobile Association, 76 per cent of motorists buy fuel at least once a week, and 88 per cent of them are aware that petrol is cheaper on certain days. Well, if we go the full way with Fuelwatch, that will not be able to happen. Many of the motoring associations have indicated that they do not support a national rollout of Fuelwatch. The AAA—the Australian Automobile Association—the Royal Automobile Club of Queensland, the Royal Automobile Club of Victoria , and RAAA in South Australia have indicated that they do not support this. The Australian Automobile Association in their press release of 30 March 2008 stated:

Lower prices on Tuesdays, coupled with high volumes is a simple equation that translates to working families being able to save money each year by taking advantage of existing, predictable price cycles.

That will not happen under Fuelwatch. Indeed, information sourced from the ACCC indicates that, under Fuelwatch, proportionately more Perth motorists are buying petrol at prices greater than the average price for fuel over the cycle. There is no concrete evidence that Fuelwatch has lowered petrol prices in Western Australia and there is no guarantee that this scheme will temper petrol prices. Mr Rudd needs to explain to the Australian people—and his speech yesterday to the Press Club would have been a very good opportunity—how Fuelwatch will lower the cost of fuel. No motorist should be worse off under Fuelwatch, but we have yet to see that proven.

So we are watching prices, which is a very inadequate response. Australians expect their government—and this is what Senator McEwen and the other Labor senators on the other side of the chamber are now charged with doing—to come up with policies that will keep cost-of-living pressures under control, which is what the coalition did in its 11½ years in office. Home loan rates averaged 7.25 per cent, unemployment was down to a 30-year low and average real wages grew 21.5 per cent from March 1996 to June 2007.

Let us take the small item of private health insurance. With the new threshold that has been imposed by the Labor government, those who drop out of private health insurance because they feel they do not need to pay it anymore will be the young and the fit. The people who stay in private health insurance will be those people with families who want the best health care for their families and older people who are taking care of the illnesses they are encountering in their old age. They will bear the brunt of this private health insurance scheme because premiums will undoubtedly go up with a smaller number of people in each scheme.

Real wages dropped $8 or 0.73 per cent from June 2007 to June 2008. It is not surprising that ordinary average weekly earnings are falling when you look into the average retail price of selected items. Some of the items that I am about to name have become less affordable to ordinary Australians due to price rises. From June 2007 to June 2008 the following goods rose: milk, 12.5 per cent; bread, 5.7 per cent; a kilogram of fresh chicken, 39.9 per cent; corn based cereal, 21.1 per cent; 500 grams of strawberry jam, eight per cent; a kilogram bag of potatoes, 15.8 per cent; and a litre of unleaded petrol, 17.1 per cent. Many people across Australia are really having trouble balancing their family budget. More and more people are weighing up what they will pay this week and what they will pay next week in order to get to the end of the fortnight or the end of the month without having a debit bank balance. I believe that Australians ought to feel deceived by Kevin Rudd because he raised expectations that the government would fix these problems.

As I mentioned before, one of the solutions Mr Rudd has come up with—the GROCERYchoice website—has failed to address this serious problem properly. People do think about what they are going to buy in the supermarket and if they find another supermarket in their neighbourhood that is offering cheaper prices they may go and shop there, provided that they do not have to drive too far to get there and thus spend more money on petrol than they would actually save on buying the groceries. With the GROCERYchoice website, the people who are most likely struggling the most to balance their budgets—pensioners and low-income families—are the demographics least likely to have the internet. You cannot access GROCERYchoice without an internet connection.

GROCERYchoice does not offer prices on individual in-store products, only categories of products. That is, the bread and cereals basket, which shows an overall raising or lowering of price, does not help you identify if Cornflakes are cheaper than Rice Bubbles. Also, so much of the information is not relevant. I logged on to the GROCERYchoice website today and I checked out the prices available to those people in Heywood in western Victoria, a small town of 1,200 people where I lived for nearly 30 years. The problem with GROCERYchoice if you are a resident of Heywood—and this applies to all the small towns in western Victoria, western New South Wales and western Queensland—is that it compiles the prices of products across western Victoria ranging from Warrnambool to Swan Hill. If you wanted to go to Swan Hill from Warrnambool, that would be a return drive of somewhere between 10 and 12 hours. If you found cheaper groceries in Swan Hill, are you likely to set out from Warrnambool to go and buy those cheaper groceries? I suspect not. You would need to refuel an average family car three times to get there and that cost would add up to more than the savings you would achieve on the grocery products. I know many people from Warrnambool and I can tell you that none of them travel to Swan Hill to do their grocery shopping. In fact, even the $1.19 saving that was identified in a supermarket in the neighbourhood would be eaten up by fuel consumption if I shopped at Coles instead of Safeway by the time I got down the road anyway. So how are we expected to take this seriously? Similarly for towns in eastern Victoria, where the website says ‘click on your region’, it identifies towns from Morwell in the Latrobe Valley to Wangaratta, which is near the Murray River. This is simply laughable.

GROCERYchoice and Fuelwatch, which look at prices instead of actually doing something about them, are substandard policies implemented by a government obsessed with reviews and spin rather than actually delivering tangible results for the people of Australia. Ultimately, the Australian people are going to look at Mr Rudd and say, ‘These were his promises before the 2007 election and nothing good—

Photo of Kerry O'BrienKerry O'Brien (Tasmania, Australian Labor Party) Share this | | Hansard source

Senator O’Brien interjecting

Photo of Judith TroethJudith Troeth (Victoria, Liberal Party) Share this | | Hansard source

No, I do not think so, Senator O’Brien. They will have woken up well and truly before then.

A few days ago the ABS released data on the cost of living. This is from the Herald Sun online on 27 August 2008 and an ABS report dated June 2008. Mr Rudd’s working families—and this is about the cost of living generally—are paying nearly 20 per cent more for some household items compared to last year. Financial and insurance services have risen 19 per cent; housing costs and transportation, seven per cent. Pensioners experienced an increase in the cost of living by 4.3 per cent over the past year.

We already know that both Mr Rudd and Ms Macklin feel very sorry for the pensioners, who must be finding it a great struggle to live when they have a pension of some $270 a week and who expect the Rudd Labor government to do something. Approximately 77 per cent of Australians over the age of 65 receive income support. The Rudd government intends to set up a pension review. But that pension review board will not report until February 2009 and this will then fold into Labor’s overall review of the taxation system which is due to report in late 2009. So, already, we are looking at a delay of some 12 months.

Photo of Helen CoonanHelen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | | Hansard source

They can eat twigs in between!

Photo of Judith TroethJudith Troeth (Victoria, Liberal Party) Share this | | Hansard source

That is correct, Senator Coonan. There will be no decision on pensions before the 2010 budget at the earliest, and, Senator O’Brien, that is creeping up towards the election. Is this what the government calls action? We, the coalition, forced the Rudd government to reinstate the lump sum seniors bonus which we had always given to pensioners, despite Labor’s attempts to scrap it in March this year. Labor’s first budget actually cuts support to older Australians. For example, changes to income tests will leave thousands of seniors without a health card when they need it most. Under the Howard government, pensions increased by two per cent above inflation every year for 10 years. Strong economic and budgetary management meant that pensioners were able to receive bonus payments and increases to a range of other support measures.

In addition to the percentage of Australians over the age of 65 who are on income support, 30 per cent of pensioners have reported having bank balances of less than $1,000. I spoke earlier of balancing the weekly budget: ‘If I buy this item this week, will I still be able to afford to buy something else or go to the movies for $15—or $9 on the pensioner concession card—or will I be able to have a counter meal at the local pub?’ Those are the sort of so-called luxuries that will have to go—many things that other Australians take for granted. Even Minister Macklin acknowledges that pensioners are suffering.

Many other government members and senators have acknowledged now and in the past that people are suffering from a higher cost of living. But what are you going to do about it? I was very sorry to see that Senator McEwen, who I admire very much, did not give one definite suggestion for what the Rudd government was actually going to do. It is fine to talk about programs and reviews that are going to take place much later in the year. That does not help people now. We need action, families need action, pensioners need action and Australians want action. So what we are trying to do here is bring this government to account.

There was an apparent dichotomy in both Senator Carr and Senator Conroy today in question time attempting to convince both the coalition and the listening public that Australia has a strong economy under them and also that Australia has a weak economy because of the depredations that the coalition government apparently wrought, in spite of what I talked about earlier. How can you have it both ways? How can business and the general community have confidence in the economy when Mr Swan, your Treasurer, talks it down so much? He says both here and overseas that Australia is virtually a basket case. How would you expect business and the general community to have confidence in our own economy? No wonder people are cutting back; no wonder they are watching prices. The general effect of government on your prices is to make them higher and higher, which puts so many items out of the reach of general Australians and makes the cost of living very difficult to bear.

5:57 pm

Photo of Kerry O'BrienKerry O'Brien (Tasmania, Australian Labor Party) Share this | | Hansard source

I have a very short time to make a contribution to this debate. Looking at the motion which Senator Bernardi moved on behalf of the coalition today, I see that the complaint is the government’s failure to address difficulties—that is, the difficulties of Australians and their financial circumstances—and yet, for almost every move that this government makes to try and address those issues, the coalition stands in the way. The coalition is saying we should do more, but what are they going to do?

We want to put in place something like Fuelwatch, which Western Australian motorists—Perth motorists—love because it allows them to know, at three o’clock the afternoon before, what the price is going to be the following day and where that price is going to be available for the whole day. Motorists in Perth do not have the experience that, on their way to work, the petrol on the other side of the road is cheaper and then, by the time they are driving home and hoping to fill up, the price is up to the price that it was on the side of the road that they were travelling past on their way to work. They do not have the experience that prices will change five, 10, 15 or 20 times a day at a particular service station because there is a game being played by those service stations trying to bid the price up or trying to pull the price down, and so motorists never know where they are.

So the coalition is saying we fail to address this issue but, when we put something up to try and help the consumer, the coalition is saying, ‘Well, we’re not going to let you do that.’ Then, when we talk about the pressures on families and the fact that we want to increase the threshold for the Medicare surcharge, which has remained the same since it was introduced—at $50,000—to provide low-income earners who are on $50,000 with some tax relief, we cannot do that either. This is the hypocrisy that the coalition is putting up in this debate. There is hypocrisy about the government doing something when, every time this government tries to do something, they use this chamber and their position in this chamber to try and block it. They did so before 30 June and now they are trying to persuade other senators to join with them to continue doing it after 30 June. So Australians are missing out.

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

It being 6 pm, the time for the debate has expired.