Senate debates

Tuesday, 7 March 2023

Questions without Notice: Take Note of Answers


3:31 pm

Photo of Nick McKimNick McKim (Tasmania, Australian Greens) Share this | | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Gallagher) to a question without notice he asked today relating to interest rates.

As I stand here to make this speech, the RBA has just raised interest rates again. This is the first time in Australia's history that there have been 10 consecutive interest rate rises. The RBA itself has found that the current inflation spike is being driven primarily by supply-side shocks and corporate profiteering. The RBA itself has admitted that its models are not well suited for supply shocks and also that there is very little that monetary policy can do to offset supply shocks. The RBA said today that the monthly CPI indicator suggests that inflation has peaked. Yet here we find ourselves, colleagues, with 10 consecutive interest rate rises.

The RBA is responding to a problem it admits its models can't understand with a solution that it admits is the wrong tool for the job. This is a form of institutional madness. The central bank is out of control, and it needs to reined in. This is where the government should act. Specifically, Treasurer Jim Chalmers needs to wake up from his slumber and take action to save the renters and mortgage holders of Australia from being smashed by the RBA's relentless and dogmatic interest rate rises. The Treasurer has the power under the RBA Act currently, and he should exercise that power rather than sit idly by while the RBA risks tanking the economy and smashing renters and mortgage holders. Instead of sitting on his hands, he should intervene in the RBA.

What he should also do is introduce a corporate superprofits tax. Let's all be clear about where we find ourselves at the moment. Real wages are declining at the fastest rate on record in Australia. Yet corporate profits are going through the roof. We are through the looking glass here, colleagues. This is the dead-end of neoliberal economics. People are starving while the corporations announce mega profits, and the government does nothing about it because it is blinkered by its neoliberal orthodoxy. The opposition is the same. This is where we find ourselves.

The Treasury told the Senate estimates committee that the risk of a wage price spiral remains low, but here we are with renters and mortgage holders getting smashed by interest rate rises in a circumstance where the RBA itself has found that the majority of the inflation spike is being driven by supply-side shocks and corporate profiteering. The government seems to believe that 10 consecutive interest rate rises smashing people, renters and mortgage holders, into poverty is the right response to a non-existent wage price spiral.

Figures out today show that the volume in retail sales is in decline. People are buying less because they can't afford to buy stuff. The poorest Australians, those who can least afford to be made worse off, are being left behind while the wealthiest Australians continue to make off like bandits. Yet all the government can do is offer some ashen faced commentary while people are being smashed into poverty; and while the banks, the fossil fuel corporations and the supermarkets announce mega profits. We need to tax corporate super profits, tax the wealthy, freeze rents, put dental and mental health into Medicare and raise income supports. We could do it all tomorrow if the government would work with the Greens.

Question agreed to.