Senate debates

Wednesday, 27 July 2022

Statements

Economy

1:53 pm

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | | Hansard source

Today we had a very high inflation rate, and I didn't even bother reading what the number was because it doesn't matter. Ultimately, inflation is a product of either too much demand or not enough supply. In this case, we don't have enough supply in this country, and it is a function of about 30 or 40 years of underinvestment in infrastructure. Now what the RBA is proposing to do to tackle inflation is to rapidly increase interest rates. That is incredibly negligent. Anyone who has followed the actions of the RBA over the last couple of decades would know that it has always taken the easy way out and lowered interest rates to zero. That was a very foolish thing to do because it was always going to create a bubble. But what is worse is now it has created the bubble it is going to jack up interest rates way too fast and risk threatening the economy and risk many young families with mortgages going broke, and we can't have that happen.

So how do we deal with inflation? There are two ways to deal with it. The way that the RBA is trying to deal with it is by basically increasing austerity to reduce demand. It is the wrong thing to do. What we need to do is to increase productivity by building more infrastructure, and, if we build more infrastructure and supply more water and supply more energy—supply all those things that all our families need to live and that all our businesses need to basically run and operate—that will make us not only more productive but also more competitive on the international markets.

Now I'm calling on the RBA, in conjunction with Treasury, to look at a quantitative easing program designed to build this nation. For too long, paper-shufflers have been fiddling around with interest rates, and it's the only policy that we've applied to monetary policy in the last 30 years. The only people that helps are basically speculators and paper-shufflers, and it's got to stop. For too long, the paper-shufflers have been getting rich in this country at the expense of the hardworking people of Australia.