Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

This MPI is quite encouraging. At long last it appears the opposition now accepts that there are cost of living pressures on Australian families. At long last it seems that they finally accept that ‘Australian working families have never been better off’ was a false premise. At long last they accept that inflation is a problem. This MPI is about cost of living pressures on Australian families. What are cost of living pressures? Cost of living pressures are price rises. What are price rises? Price rises are inflation. So the proposition being put to us by honourable members opposite today is that last night’s budget did not do enough about inflation—not enough about the cost of living. Last week inflation was a charade! The Leader of the Opposition said:

The inflation crisis is a complete charade.

The honourable member for Wentworth has said:

We have heard a lot of fairy stories about the important challenges of inflation ...

So last week it was a charade and a fairy story; tonight he says that we did not do enough. The view of the opposition is that they would like us to do more about the charade. They would very much like us to deal with the fairy story. That is the position they are putting to the Australian people. They have been trying to convince us that the inflation problem is overblown or, as the shadow Treasurer might say, ‘overdramatised’—as he has said about interest rate increases in the past.

On 6 February he even penned an op ed. He sat down at his desk and wrote an article for the Australian, claiming that the government was wrong when they said that inflation is higher in Australia than generally in the OECD. And to support his argument he pointed out that inflation was actually higher than Australia in China, India and Singapore. But those countries are not in the OECD—a slight technical problem for the shadow Treasurer! His answer to inflation being higher in Australia than it is in the OECD is to put more countries into the OECD. Next he is going to be coming in here and saying, ‘Inflation is not much of a problem in Australia because it is actually higher in Zimbabwe.’ That is his solution to inflation in this country. That is his solution to the cost of living pressures on Australian families.

There are three things the government can do to deal with inflation: we can get government spending under control, we can deal with the infrastructure crisis in Australia and we can deal with the skills problems in Australia—the three things that the Reserve Bank has pointed out have led to inflation.

Let us deal with getting government spending under control. I have to say that there are people who can explain this better than I can. I would like to share with the House an article from the Sydney Morning Herald by Stephen Anthony, a former very senior official in the Treasury and department of finance. This is what he had to say about the tax-and-spend Liberals who sit opposite. He said this:

Unfortunately, the Howard government lost its way from 2004. When the China boom arrived with soaring commodity prices there was no offsetting tightening in fiscal settings to “bank” windfall revenue gains from mining. The drunken sailors pillaged the budget for political expediency and produced a structural deterioration in the bottom line.

Those are not my words; they are the words of a former senior official in the Treasury and the department of finance. He went on:

The huge spending injection coincided with the further upturn in the business cycle. Blind Freddy knew inflation would be the result.

That is what Stephen Anthony has said. He has told us of the lie in what the shadow Treasurer has just put before the House. They say they had government spending under control. Well, if hypocrisy were a crime the shadow Treasurer would be doing life, because they had government spending completely out of control and it has been up to us to put downward pressure on inflation by getting government spending back under control.

We have reduced government spending as a percentage of GDP by a full percentage point to make it the lowest it has been since 1989-90—that is real spending cuts and real responsible economic management, which the former government could not achieve. The increase in government spending of 1.1 per cent is exactly a quarter of the average over the last four years. That is what responsible economic management is all about. That is what being serious about inflation is all about—when you go through an ERC process and put a ruler over every single item of government expenditure, which they became too lazy to do.

They became too lazy to do that, because they did not think inflation was a problem. The previous Treasurer, the member for Higgins, said, ‘Inflation is right where we want it.’ That is what they really thought about inflation. Now it is ‘a charade and a fairytale, but we’d like you to do more about it, thank you very much’! No wonder the opposition has lost all economic credibility with the Australian people. The other focus to this budget is on helping working families—helping families deal with the cost of living pressures. You can put downward pressure on inflation by getting government spending under control but you also need to put measures in place to help working families.

Now the shadow Treasurer—I was almost going to call him the Leader of the Opposition; I am getting slightly ahead of myself—has become the John Cleese of Australian politics. You can just imagine him. He says to the Australian people, ‘What does this budget do for Australian families?’ They say, ‘Well, it delivers tax cuts for lower-middle income earners.’ And he says, ‘Yes, but apart from tax cuts for lower and middle income earners, what does it do for the Australian people?’ They say, ‘It increases the childcare rebate from 30 per cent to 50 per cent.’ And he says, ‘Well, apart from the tax cuts and increasing the childcare rebate what does it do for Australian families?’ And they say, ‘It introduces an education tax rebate.’ He says, ‘Well, okay, apart from the education tax rebate, the increase in the childcare rebate and the tax cuts for working families, what does it do for us?’ They say, ‘Well, it increases the utilities allowance for pensioners.’ And he says, ‘Okay, apart from the increase in utilities allowance, and the increase in the childcare cash rebate, the introduction of the education rebate, and the tax cuts, what have they ever done for us?’ They say, ‘Well, they got government spending under control, which you never did.’ And he says, ‘Okay, apart from getting government spending under control, the childcare cash rebate, the education rebate and the tax cuts, what’s this government ever done for us?’ At least John Cleese was trying to be funny. The shadow Treasurer is just a joke and a laughing stock. No wonder the Australian people have passed their judgement on this mob, who no longer stand for anything but make cheap political points.

I agree with the comments of several commentators on the complete lack of responsibility that the shadow Treasurer has shown over the last few weeks. Let’s have a look at what some of them have said. The shadow Treasurer said, ‘Inflation is a fairytale,’ whereas Chris Richardson from Access Economics says, ‘You have an inflation time bomb.’ Chris Caton, Chief Economist of BT Financial, said he was ‘not so much surprised as amused at the coalition’s attacks on Labor’s cut in government spending’. Saul Eslake said:

The last two terms of the Howard government featured wasteful and misdirected spending that needs to be corrected.

He said:

Turnbull is advocating a do-nothing budget. He is all about politics and not about economics.

He is all about the leadership of the Liberal Party, trying to make himself look better, and not about economics. Economic credibility is actually important in this country, and you no longer have any. You have completely bankrupted yourselves and sold yourselves out.

When we are talking about cost of living pressures we also need to talk about the pressures on the Australian people from things like grocery prices and petrol prices. Our old friend the member for Dickson has been talking about those. He has been making certain commitments on behalf of the opposition. This is what he said on 14 May:

I think Brendan Nelson would have a greater capacity to deliver lower petrol prices for families and lower grocery prices.

Oh, really! This was the promise by the shadow minister for finance. He said that they will reduce grocery prices and petrol prices. Let’s talk about petrol prices. Why don’t you give motorists a fair go? Why don’t you get on the side of motorists for a change and back our FuelWatch scheme? The ACCC did an analysis of FuelWatch and found that it puts downward pressure on prices by 2c a litre. Why don’t you accept the offer of a briefing from the ACCC? The ACCC has offered you a briefing on the modelling and you have declined it. What have you got to hide? Why don’t you accept the offer of a briefing from the ACCC? Members opposite do not need to take my word for it. They can listen to one of their own, our old friend the leader of the Liberal Party in New South Wales, Mr O’Farrell, who said that FuelWatch:

... will ease the burden on families and pensioners by helping drive down petrol prices.

That was not from a Labor leader; it was from a Liberal leader. He went on to say:

This is about putting the interests of motorists’ wallets ahead of oil company profits.

Which side are they on? They have a choice. They are either on the side of motorists or they are against them. They have chosen to take the evidence of people with a vested interest ahead of the evidence of the people’s watchdog, the ACCC. Shame on them. They have outsourced policy development to the oil companies and to people with a vested interest and they are putting motorists last. This government will not do it. We will proceed with FuelWatch and we will put it through the parliament.

If the opposition blocks FuelWatch in the other place, they will have some talking and explaining to do. When prices go up at the end of the week and in the lead-up to a long weekend by 10c or 15c a litre and people have no notice of that and FuelWatch is not in operation because the opposition blocked it, they will have to explain why they stood in the way of this reform, which will give motorists more information about where to find the cheapest petrol and 24 hours notice of increases in petrol prices so that they can get ahead and buy the petrol before the price goes up.

On any given day in any capital city the difference between the price of petrol at the cheapest petrol station and the most expensive one can be as high as 10c or 15c a litre. How can people find it at the moment? They have to drive around. They have to drive around and use a lot of petrol to find it. Under FuelWatch they will be able to log on and find where to get the cheapest petrol. But those opposite will stop it. They will stop this happening and they will not do anything about the price volatility.

The government will take FuelWatch to this House, where I expect it might pass, and we will take it to the other house, where crossbenchers have indicated support. But it would be a lot easier with the support of the opposition. You have to decide: are you with motorists or against them? Are you with the vested interests or are you against them? You come in here and lecture us about the cost of living. You can do something about petrol prices. You can do something about giving consumers more information about where they can get the cheapest petrol by backing our plan. You have said that you could reduce petrol prices. The member for Dickson said it in his endorsement of the Leader of the Opposition against the member for Wentworth. He said, ‘Brendan Nelson could do a better job than Kevin Rudd about bringing down petrol prices and grocery prices.’ Where is your plan? Either back our plan or come up with your own. If you cannot come up with your own then back ours and do something about it.

It will hang around your head if you stand in the way of this important reform. At last you say that Australian people are doing it tough. For a long time you said that Australian working families have never been better off. The opposition has said, ‘Australian working families were never better off than under the Howard government.’ At last now they recognise that the price of non-discretionary expenses—groceries and petrol—is putting working families under pressure. But what they have to do is back up their promise with a plan, or they have to back ours. They have to back our spending cuts, back our reduction in government expenditure as a percentage of GDP and stop going along with emotional claptrap about every mother loving their baby to justify millionaires getting the baby bonus. You have got to become serious about economic credibility in this country. You have got to become serious about getting inflation under control. You have got to become serious about getting government expenditure under control. You have got to become serious about putting more transparency in the petrol market and more competition into the grocery market.

The government announced a modest reform freeing up foreign investment rules to encourage more foreign owned grocery retailers and supermarkets into this county, to get more competition. All the evidence shows that when you have more competition you have more downward pressure on grocery prices. Do you know what the opposition said? They said, ‘You should not support foreign grocers and supermarkets.’ They engaged in Hansonesque xenophobia instead of putting Australian consumers first. That is what they said. They have completely bankrupted their policy development by refusing to back Labor’s practical and sensible plans to put downward pressure on prices wherever we can and to get more transparency and competition into the market.

We have a choice. You can have a government which says: ‘Working families are doing it tough and we will do what we can to help where we can. We will get government expenditure under control. We will increase the childcare rebate. We will introduce an education rebate. We will have tax cuts for low- and middle-income earners. We will put more transparency and competition into the petrol market. We will put more competition into the grocery market, and we will do what we can where we can to help.’ We have an opposition that says, ‘We thought Australian families had never been better off.’ It seems they now accept that they were wrong, but they say: ‘We are not sure what we can do about it. We are going to oppose everything the government puts up to do with it.’ No wonder you are a joke; you are pathetic, and the Australian people have come to that conclusion.

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