Thursday, 4 July 2019
Questions without Notice
My question is to the Minister representing the Treasurer, Senator Cormann. When the Reserve Bank cut the cash rate to 3.25 per cent, former Treasurer Hockey said:
The Reserve Bank are cutting interest rates not because the Australian economy is doing well but because the Australian economy is deteriorating. So we are one cut away from emergency levels of a cash rate.
Given the Reserve Bank this week cut the cash rate to a record low of one per cent, how does the Treasurer describe the current cash rate?
It is absolutely no secret that the Australian economy is facing global economic headwinds and is dealing with some downside risks in the domestic economy—it is absolutely no secret at all—which is of course why Labor's agenda of higher taxes and the politics of envy was precisely the wrong way to go. It would have made our economy weaker. It would have put jobs at risk. It would have left all families worse off. In a way, we've actually won that policy argument, because the Labor Party, having argued for $387 billion in higher taxes in the campaign, are now saying that we should have more tax cuts sooner because that's the right thing to do by the economy. On one hand you say that we need more taxes for the economy and we can't legislate tax cuts in the future because that's bad for the economy, and now you're saying that we need more tax cuts sooner, even though the budget can't afford that.
In Australia, monetary policy and fiscal policy are absolutely heading in the same direction. Our budget is a pro-growth budget. Over the last two financial years, we have put forward $302 billion worth of income tax relief for hardworking families and a hundred-billion-dollar infrastructure investment pipeline. Of course, the Labor Party is arguing in favour of higher taxes. As to their current proposition—maybe that might be position five or seven; I don't quite know the page—their current position is to have lower taxes because that helps the economy, but they're arguing at the same time that we should have higher taxes in case there is trouble in the economy down the track! The Labor Party position on tax and on economic policy makes no sense at all. I think you need to go on a retreat and seriously think about it, and see what your consensus position actually is.
I ask a supplementary question. Former Treasurer Hockey also said:
We have had the extraordinary situation where the Reserve Bank has cut interest rates to record lows and consumer confidence falls. And why? Because consumers have been spooked …
Well, why wouldn't they be? Given the Reserve Bank has cut the cash rate to one per cent, is it any wonder that consumers are spooked and consumer confidence is falling?
It is true that, on the back of a lot of media reporting—which turned out to be quite misguided—a lot of Australians were concerned about the possibility of a Labor government, which would've had a very negative effect on the economy. They were concerned about the retiree tax and the housing tax, higher taxes on investment, and all of the other higher taxes that Labor were pursuing—which is why, of course, they voted for our agenda of lower income taxes for all working Australians. We are getting on with the job. We are getting on with delivering what we promised we would deliver to the Australian people, to build a stronger economy and secure Australia's future.
Mr Hockey also said:
… if anyone thinks that the Reserve Bank acted today because the economy is doing really well … they'd be deluding themselves.
Will the minister admit that the economy is facing a crisis, or is he deluding himself?
As I said, our government has a clear plan to build a stronger economy. It's a plan that was endorsed by the Australian people. And you know what? The Labor Party can continue to persist with the argument they ran before the election. We'll continue to get on with the job of implementing the plan that the Australian people voted for.