Senate debates

Wednesday, 10 May 2023

Questions without Notice: Take Note of Answers

Answers to Questions

3:06 pm

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

I move:

That the Senate take note of all questions asked by coalition senators of government ministers today.

What we saw last night was a typical big spending, big taxing Labor budget. That's what we saw last night—big spending and big taxing. It's expansionary in terms of the spending measures which were undertaken; it's also stimulatory. There is an incoherence at the heart of the budget strategy that was put up by the federal government last night.

On the one hand, they acknowledge that inflation is an issue and that there's a cost-of-living crisis in this country. We've got the RBA lifting interest rates on numerous occasions, impacting average families across the whole of Australia. But, on the other hand, they delivered a budget last night where the fiscal strategy is not in keeping with, not complementary to and not consistent with the monetary strategy being adopted by the Reserve Bank of Australia. That goes to the heart of the issue that the Australian economy is facing at the moment.

It's not just me saying this. Many of Australia's leading economists are pointing this fact out and are saying that last night's budget will provide a basis for the Reserve Bank of Australia to increase interest rates yet again. There will be a direct line between future interest rate increases and the budget that was delivered by the government last night. It's not just me saying that. Let me quote from some of Australia's leading economists. Chris Richardson, who is probably one of the most well-known economists to the Australian public, said: 'I had thought that the Reserve Bank was done and dusted, but this has notably'—'this' being the budget—'raised the chance that they will do another swing of the baseball bat.' That's from Chris Richardson, one of Australia's leading economists, who says that the budget last night will increase the chance of the Reserve Bank of Australia taking another swing of the baseball bat, which means higher interest rates and higher mortgage payments.

That goes to the heart of Senator Cash's question, in which she said that, if you compare the prosperity of an average Australian family before the last federal election with their prosperity today, that average Australian family—mum, dad and two kids—is now worse off by $25,000 a year. Why? Because of the mortgage rate increases, inflation increases—seven per cent inflation—and increases in electricity and power bills. Let me quote from Standard & Poor's Global Ratings—again, this isn't a politician saying this, these are actual participants in the market who are making decisions every day with respect to interest rates. This is what S&P Global Ratings said in their press release in relation to the budget:

Further, we expect inflation to be stubbornly higher than the Reserve Bank of Australia's target until fiscal 2026.

They also said:

… handouts in today's budget may add to inflationary pressures.

That's Standard & Poor's drawing a direct link between last night's budget and future interest rate increases and inflation. Andrew Boak, Goldman Sachs' chief economist—again, this is someone who engages in the markets as their profession. That's their expertise. They live and die by how well they engage with the market in relation to issues like this. What does he say?

… we assess the budget's near-term boost to household incomes to have an incrementally hawkish read-through for monetary policy

That means interest rates are going up. That's what that means. He also says:

… more tightening being required—

that means interest rates going up—

and potentially as soon as next month's board meeting.

So, just when Australian households who have gone out and borrowed money to buy that key asset in their family's prosperity, the centrepiece of a family's prosperity, their family home, interest rates are going up again. That's what we are going to see as a result of last night's budget.

David Bassanese, who is Chief Economist for Betashares, described the budget as 'unambiguously expansionary'. He was quoted in The Australian today saying the budget consisted of 'smoke and mirrors'. That's how the Chief Economist of Betashares described the budget. Robert Gottliebsen said: 'There's a risk that a shocked Reserve Bank will not cut interest rates and may even be forced to raise them. The blame will sit squarely on the government.'

3:12 pm

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party) Share this | | Hansard source

I want to make my contribution today, but for all those Australians sitting out there listening, really, you have to be in here to understand some of the absurdity and some of the craziness that goes on. It's alive and well on that side. I will say this, Mr Deputy President McLachlan, through you: there are some very smart cookies on that side. I counted three of them today, and you're one of them. Seriously, you know your stuff. I can tell you how you tell the smart ones—they're the ones that aren't interjecting. They're the ones that aren't saying anything. They're the ones that know, in all the nine years we have just gone through, about the irresponsible fiscal attitude that was taken, particularly in the last term, by Mr Frydenberg and Mr Morrison. We know for a fact that, even in the infrastructure area, there were billions and billions of dollars announced for infrastructure, knowing darn well that they didn't have the money to pay for it, knowing darn well that we didn't have the contractors to do it, knowing darn well there weren't the tradies to carry out that work.

It's quite embarrassing, because I can say this with my hand on my heart, as some of the smarter ones over that side—I identified three—well, one, and the other two we'll keep a secret. One's walking out now so that leaves one more. I have to say this: it's basic, fundamental, fiscal management. You can't spend what you don't have. You can go out and borrow money. We were all brought up in this nation by our parents to start saving, go to work, put your boots on, get out of bed, get a car, pay your board, pay off your car, put some money aside to try to get a mortgage. That's how we learned to deal with debt. We were taught by our parents—debt is something that we'd rather not have, but responsible debt or good debt, if it puts a roof over your head or buys you a car, is nothing to fear.

When you get the situation with the incompetence of the Morrison government and Frydenberg in particular, and have that lot screaming that we're not spending enough, or we're spending too much—they can't quite get their story right—this is the embarrassing bit. It depends on who you speak to. When you go to the corner, down the bottom of the garden path here to the concrete gnomes, it gets even crazier. You see, I can deal with money. I understand. When Fiona and I started our own little trucking business, we understood that every single cent—am I keeping you awake, Senator Bragg? I can just about call you number three. When we had to spend the money, it was our money. And if we didn't have the money, we had to make the decision: do we go to the bank to get a loan to buy a new truck, or do we go to the bank to get a loan to repair the diff or the engine that just blew up? Then we had to work out what we did have in the bank, and we had to pay it off. It just amazes me—I can't even comprehend the preselection processes from the other side of the chamber. I really can't. I really don't get it, because some of you have never been in the real world. Some of you are very good at telling people how to spend other people's money. When I sit and listen to the interjections coming from that side, I really do scratch my head.

I'm all for interjections when they're witty and intelligent, but some of the stupidity that comes out of that side—how some of them can even open their mouths to start screaming abuse at us for trying to manage the mess that they left us. They left a trillion dollars of debt—and let's not forget the 'back in black' mugs. They've still got a few of them hidden in their offices. Hats off to the Prime Minister, Mr Albanese, and the Treasurer, Mr Chalmers, for delivering a $4 billion surplus in our second budget in seven months, but, quite clearly, we're being responsible. Of course we'd like to hand out more money, but we've got to pay off the debt.

I do have to apologise to some of the poor people that may have been in the gallery listening to the carry-on today. Seriously, it does really make you wonder. I know there's tension within the LNP. I know that, as the other half of the 'no-alition' and the Nats, you, the LNP, really are battling with your mates. I know. I'm not deaf—these ears aren't painted on. I hear the conversations. I know you still blame them from bringing down your government. Whatever the deal that was done with Mr Joyce and Mr Morrison—God only knows; I'd love to know—look at the result it has left you. I know you're divided. I know that you can't stand the sight of each other sometimes. I know in my heart of hearts that there are a number over there who understand business, who understand fiscal responsibility and actually understand that, if you're going to start spending money, you've got to have it in the bank.

3:17 pm

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

This country was built by the battlers and it belongs to the battlers, and last night there was nothing in the budget for the battlers. The working class Australians didn't get an income tax cut. The one thing that the coalition did when it was in government was to always give a low to middle income tax offset to the lower working-class people of Australia. It cost the budget $11 billion a year. We could have gone back to surplus earlier, but we did the right thing by the battlers. We didn't get caught up on honouring the gods of the foreign banks—'Oh, we've got to pay back their debt.' No, no, no, that's not the way the way the world works. The way the world works is that we keep the battlers' heads above the water. We don't want them drowning.

The Albanese government are out of control on immigration. Last year's budget forecast that 235,000 people would come into this country in this financial year. We've got 400,000 people coming in. What's that doing? We've got a housing crisis and a rental crisis in this country, and it's kicking Aussie battlers out on the street. They are living in the backs of cars. They're living in the old panel vans. Who can forget the old 1970s saying, 'Don't come a-knocking if this van's a-rocking'? That spirit doesn't live on anymore. Well, it kind of does, but the van's not rocking that much, because they're just freezing out there. Imagine living in a panel van in Canberra in this cold weather. That is not easy.

Sorry, Senator Sterle. I know you've got your head down there. I know you're zipped up there. It's all good. I can tell you that we should never turn our backs on the battlers; we know that. What else are we doing? We've got an energy policy from the other side. They're basically importing foreign renewables at the expense of our coalminers and gas workers in Australia. The reason these guys are backing the budget, apart from massive immigration, is that we've had windfall profits from coal and gas companies that are luckily keeping our heads above water. And what do these guys want to do? They want to destroy those industries. Senator O'Neill is from near the Hunter Valley, and what is she doing?

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

The Central Coast!

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

Well, it's close enough.

I do know. I used to go mountain-biking up at Ourimbah and Awaba. I know those areas like the back of my hand because I used to ride the tracks. I used to race up there. Let me tell you that the Labor Party has turned its back on the coal miners, the blue-collar workers in this country. I haven't. I'm an openly avowed protectionist. I'm here to protect this country. I'm here to protect the workers and our families. I can tell you, when mum and dad come home from work tonight, there is nothing in the jar for them—nothing.

And what about the cost of living? What about rent? What are we going to do? How on earth are you going to find housing for all these immigrants you've got coming in? If they're moving out to the regions, I can live with that. If they're building dams and adding more water, irrigation and food to the supply side of the economy, that's all good. But if they're just going to university, these universities are collecting lots of revenue, as per section 50-50 of the Income Tax Assessment Act 1997, and they don't have to pay any tax on that. Why don't these universities have to pay taxes on foreign students? They add to the demand side of the economy. Why aren't we making the universities in the inner cities, these elite academics, pay tax on the increased demand? We have enormous demand for infrastructure. By all means, if you want to go to Central Queensland University—where I was a couple of weeks ago—to the School of Mining and the School of Manufacturing to do a TAFE degree—where you actually get some real-life skills—and not to one of the inner-city universities where you just get brainwashed with all these new crazy ideas, that's fine. But don't bring people here if all they're going to do is go to uni and then go and work for Uber and deliver ice cream to people who can't be bothered buying ice cream from supermarkets. That's not on. This budget isn't going to do anything for the working-class Australians.

3:22 pm

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

I am aware of the literary form of stream of consciousness, and it has its place in literature, but what we just heard from Senator Rennick, despite the fact that he's an elected senator, was just a riff on nothing that makes sense to anybody who has any vision for this country. It was just a rant of dissent and idiocy, in my view. It didn't speak to anything truthful, and that's really the story of today.

Yesterday we had a budget, a very important budget. It was delivered after nine long, dark years of the Liberal-National government, which purported to be good with finance. Let's just get the facts on the record: in nine years, they never delivered a surplus. Despite all their crowing, despite all their assertions, the facts tell the truth—they just didn't do it. It's that knowledge that we need to apply to the comments that have been put forward today. My colleague Senator Gallagher, in response to questions from Senator Cash, completely reduced to nothingness this absurd claim, done on a dodgy, broken calculator, that somehow the budget that's going to deliver incredible relief to families is going to cost people $25,000. Those figures are as dodgy as the Liberal government's claims that they would ever deliver a surplus.

There is no coherence. There is the myth they created, and there is the reality of what they delivered—an Australia that was in pretty bad shape, an Australia that was anxious, an Australia where businesses couldn't figure out what was going to come at them any day. People are now telling me that they've had a post-traumatic response to what they experienced after nine years of chaos under a Liberal-National government: three leaders, never a surplus in sight, a billion dollars in debt, permanent panic every day, wondering what disaster they would talk about next, and that fearful nature they created for Australia. That is what we saw in the questions today. The first question was hysterical. The second one was 'be afraid—be very afraid—of the Australian Labor Party's budget; it is going to be bad for you,' which is at odds with the fact that this is a budget that is responsibly looking to the future, is investing in Australians, is building our capacity, is making sure that those alongside us who are doing it a bit tough get a little bit of a handout because that is what they need today, and is dealing with the debt that we have because of those bad economic managers on the other side.

The third question from Senator McDonald really revealed what they try to do. 'I am standing up for the miners' and 'You need to say thank you for the miners for the money they put in in tax,' she says. Of course we say thank you to the miners for the money they put in tax—20 per cent. I also say thank you to the part-time worker at Woolworths or Coles who paid pay their tax, all the workers of Australia who lifted the revenue of this country since we have come to government by 40 per cent because their wages are going up. There are more jobs, more Australians are working and there is more tax that we can then use to invest in our own country. That is what is really going on. I say to every Australian business owner, every Australian worker in every sector: thank you for doing your bit, and we will very responsibly manage the money that you entrust to this government in your name to benefit the country.

This is a budget that is economically responsible. It will absolutely deliver a change in the way our economy is working, moving towards a better and sounder future with a direct reduction of inflation by three-quarters of a per cent in 2023-24. I want to say that again because the myth that this opposition is trying to stitch together in response to an excellent Labor budget is that we are in all sorts of financial crisis. Well, we will have a surplus. There are headwinds. We need to manage our economy responsibly and that is what we do. We made sure that we banked the revenue gains that were somewhat unexpected. We have banked them so we can deliver cost-of-living relief for Australians and invest in a way that will make it possible for Australians to access the services they desperately need, like their local doctor.

3:27 pm

Photo of Andrew BraggAndrew Bragg (NSW, Liberal Party) Share this | | Hansard source

I rise to take note of all the answers. There has been a lot of discussion this afternoon about inflation. The question is: has this budget done anything to fight inflation? Today's Financial Review, other esteemed publications and people like John Keogh have said that the big fib at the heart of this budget is that it will help the Reserve Bank to reduce inflation, when in fact Labor's policies are tipping a net extra amount, $44 billion, into the economy. He also said in the editorial of the Financial Review that it is a $44 billion stimulus to the economy which starts to feed in during this high-inflation year, and SNP global ratings agree that these handouts will add to inflationary pressure.

Given the government has spent over $100 billion since the election, it has decided to run an inflationary fiscal position. That is its right. But it should be honest if that is what it is doing. It is making the Reserve Bank's job much harder. That has been clear. It is unfortunate that a lot of people want to hug the talking points in these debates. But the truth is that the last coalition's budget was inflationary, this one has been significantly inflationary and that is hurting people who are the most impacted by inflation—lower and middle-income earners. So to walk around and argue that this is a deflationary position is not the case.

The fact that we saw the Reserve Bank feel that it needed to raise rates only about 10 days ago surprised economists. I think it is a very worrying sign that the government has chosen to plough another $50 billion into the marketplace, into the economy. It is very much a negative for those low- and middle-income earners, who are going to have to contend with higher interest rates because it is very likely, given that the federal government has decided to run at inflationary fiscal position, that the central bank will have to increase interest rates.

In fact, Chris Richardson, who is a well-known economist, said, 'I had thought the Reserve Bank was done and dusted but this has notably raised the chance that they will do another swing of the baseball bat.' Another market economist, David Bassanese from BetaShares, said it was 'unambiguously expansionary,' and Cherelle Murphy from Ernst & Young said 'inflation is already running at an annual rate of seven per cent and more than one in every four dollars spent in the Australian economy is by a … government.'

The central problem here is that the government has decided to fuel inflation. That is the decision they have taken, but they have not been honest with the Australian people that that is the decision they have taken. I understand why. Politically, it is very difficult to cut spending, and they have a lot of vested interests, lots of mouths to feed and lots of noisy stakeholders. But it is better to be honest about the problem. This has been done before by both parties of government. The Labor government did it in the eighties and we did it in the nineties. Spending was cut and hard decisions were made because there was recognition at the time that that would be the best time to protect low- and middle-income earners. This is not going to be a massive problem for the super-rich people in society. It is mainly going to impact people in the lower- and middle-income bracket. That's the issue that we have today.

The government predicted in the budget that they will basically halve inflation over the next 12 months and that we'll see an inflation number with a three in front of it, as opposed to a seven or a six in front. That is a prediction that they've put in the budget, and that is their right. I would say it is very bold to be predicting that inflation will be cut by 50 per cent when they are running a budget strategy like this. They don't seem to be able to say no to many of the rent seekers and blood suckers who are wanting to line up outside their doors and ask for more money. These are the unions and the super funds—all the usual suspects. That is going to be the great test for government now. They've been deceptive and we will ensure that they'll wear that crown of thorns if they fail to cut inflation.

Question agreed to.