Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

Personally I am glad that this matter of public importance has been raised today. Fancy any opposition giving a reformist, forward-thinking, productivity driven government the opportunity to create more bridges with the Australian community about the strong economic policy that we are delivering. I can report to Australians that the Gillard government is persistently and consistently protecting Australians economically. We have taken decisive action to deal with cost-of-living issues and we are taking more this year. When it comes to the future, to borrow a phrase from a former visitor to this dispatch box, our record is our guarantee.

Today’s inflation figures show that CPI inflation—and the underlying inflation in the Australian economy—has continued to moderate through the year, with underlying inflation easing to its lowest level since December 2005. We welcome the fact that the September quarter results show that the CPI has increased 2.8 per cent through the year, down from 3.1 per cent in the June quarter. We now see the CPI within the band that the Reserve Bank of Australia wants to see it. I point out this not to segue into an analysis for the member for North Sydney’s silly statements about treading all over the RBA’s independence in setting interest rates—I am not going to do that today—but I do make clear that today’s inflation figures demonstrate to those opposite that the cost of the basket of goods is pressured and we are keeping the pressure on to keep the rises to the cost of living as low as possible.

There is no question that the government has empathy with Australians who are finding things hard and to pay the rising bills. Many families do struggle to make ends meet. We are the Labor Party and these are the people that we serve. We do know it is tough. We understand that every time we walk into this place and get on with our jobs. But I am more than pleased to update the House and emphasise to all Australians that—despite the opposition’s bluster on these matters—whilst we understand that many Australians are feeling the cost-of-living pressures we are 100 per cent alongside them in their challenges to pay the bills.

We have put in place a raft of measures to assist people. As I take the House through these measures, I regretfully advise those Australians listening that many—indeed, most—of these measures were opposed by the current recalcitrant opposition. Let me begin with a little bit of history. The discretionary fiscal stimulus packages enacted by the government between October 2008 and the budget of May 2009 were undertaken to respond quickly to the scale and the pace of the global financial crisis. It was a recession which the Australian economy thankfully did not experience, but we certainly experienced the impact of the problems from all around the globe. We provided one-off cash payments in December 2008 and in April and May 2009, which were the most effective way the government could provide immediate stimulus to the economy and support to growth and jobs until our government investments in infrastructure took effect.

The pension increases were also made not only to age pensioners but to disability pensioners, a group who were sorely neglected in previous years by those opposite when they were in power. The fact that the government stimulus and the family and tax assistance measures were part of this stimulus has been welcomed by well-credentialed professionals outside this place. Let us not just take the word of the government. David de Garis, Senior Economist at NAB Capital, observed:

It was a sizeable fiscal stimulus and, I think, appropriate in the circumstances both in terms of the size of the stimulus and also its construction.

In other words, front loading the tax bonus that will be paid from April this year but also slanting the latest stimulus towards public investment which has a longer term and also complementary benefit, lifting productivity and growth down the track, as well as providing stimulus to the economy. As I have indicated, the government appreciates that, whilst the Australian economy has sailed, has moved through, through the global financial crisis into a stronger position than most other comparable economies, there are still many Australians who find it hard to make ends meet.

In the 2010-11 budget—the latest budget—we provided another round of personal income tax cuts, meeting the government’s commitment to deliver real benefits to working families and to ease cost of living pressures. As a result of the personal income tax cuts that we have delivered, a worker earning $50,000 a year will have an additional $1,750 in their pockets. This is a big help to ease the pressure on household budgets. The government also has introduced the education tax refund and increased the childcare rebate to help families with the costs of educating and caring for their kids. These are real things and we should be clear that we are addressing the cost-of-living pressures for younger Australian families.

We are also making sure that older Australians get help. One of the ways we do this is by getting the tax settings correct. In this respect, we provide real income tax relief for eligible senior Australians through our senior Australians tax offset. For example, in 2007-08, when the senior Australians tax offset was combined with the low income tax offset, eligible senior single older Australians had income up to $25,867 without paying income tax. But, as part of our government’s plan to reduce the impact of tax, this increased to $28,867 in 2008-09. It has increased to $29,867 for 2009-10 and it is now at $30,685 in 2010-11.

The government also recognises that housing affordability can be a cost pressure issue for senior Australians. Through measures such as the National Rental Affordability Scheme and A Place to Call Home program, the government is addressing these challenges. In relation to the rental affordability scheme, a total of $622 million has been allocated for the implementation of the scheme to allow it to create 50,000 new affordable rental dwellings over the next four years from 2008 to 2012 for low and moderate income households. Under A Place to Call Home initiative, the government is implementing its election commitment, spending $150 million over five years to deliver at least 600 additional homes across Australia for families and individuals who are homeless. A central anticipation of this measure is that older people will benefit from the scheme.

Another area of substantial change in which this government is delivering protection to Australian people from cost-of-living pressures is through our consumer credit reforms. I am very committed to keeping this robust reform program going here as it will make a real difference to people in every part of our country. I speak of efficiencies for industries that now need only to comply with one law instead of a different law in each jurisdiction of Australia. I am speaking of the protection of consumers from unscrupulous practices that sometimes take place at the fringe of the credit industry. But they also put ordinary families in a better position to manage their credit cards and to save on interest repayments.

Our fairer, simpler banking policy, which was announced in the recent election campaign, will change the way that credit cards operate in Australia. No longer will consumers be unexpectedly caught out by overlimit fees. No longer will consumers be punished because they failed to read the fine print on how the interest on their card will be calculated. No longer will banks be able to allocate repayments to the interest-free component of the debt instead of the part of the debt that is racking up the most interest. These reforms not only protect consumers from unscrupulous players but also will save them money—money that, instead of being eaten up in interest card payments, can go towards the mortgage, putting food on the table or paying off bills. Indeed, it has been estimated that the changes to the way that interest is calculated will save consumers $225 million each year.

In noting the CPI figures, as we did earlier, it is appropriate to update the House on what the government has done and what it is doing to put pressure on household bills. Supermarket bills, I might note, could have been much higher if the opposition had been successful in the last election and their dangerous and ill-thought-through Coles and Woolies tax had been implemented, which would have definitely put upward pressure on grocery prices.

Competition, as I am sure even those opposite would be prepared to agree, is far and away the most effective means of exerting downward pressures on grocery prices. To introduce more competition and empower consumers, the government has taken decisive action on these matters. We have changed the foreign investment policy to extend the time frame for the development of vacant commercial land from 12 months to five years. We have strengthened the laws against predatory pricing. We have provided information about the Australian retail grocery industry in international trade forums to attract new entrants into the Australian market, and we have introduced a mandatory, nationally consistent unit-pricing regime. One only has to watch the shoppers in any shopping centre to see them using this unit pricing to establish best value. I should add that the government also welcomes agreements between the ACCC and the major supermarket operators to phase out restrictive provisions in supermarket leases. These agreements are in the form of court enforceable undertakings that have been voluntarily provided by the major supermarket operators.

Let me turn briefly to electricity prices as there is no doubt these are a particular source of concern for Australian families. Whilst we do experience some of the lower electricity prices around the world, this is cold comfort for many Australians who will be shaking their heads this week and next when they open the envelope and look at their power bill. As the Prime Minister made clear in her speech to the Australian Industry Group warning about economic Hansonism, electricity prices are rising and we believe it is important that the origins of these prices be properly understood. Underinvestment in transmission systems is a key factor, and we are talking about underinvestment over a sustained period. Over the past three years, according to the ABS, residential electricity prices have risen by more than 40 per cent across Australia. We will continue to see electricity prices increase.  The increases in recent years have been, and those in the future will be, substantially driven by a lack of investment.

Significant investment is required to replace ageing network infrastructure and deliver energy security. As the Prime Minister has made clear, we are not going to have another sustained period of underinvestment now, at least not while Labor is in government. That is why we are firmly committed to delivering a carbon price. Delaying the delivery of a carbon price makes the eventual adjustment for industry more expensive. Uncertainty in the market is always an inhibitor of investment and of greater capacity. This is particularly the case in the electricity generation sector, where uncertainty will direct what capacity growth there is towards meeting incremental rises in energy demand rather than long-term baseload growth. As the TRUenergy Managing Director, Richard McIndoe, told the Sydney Morning Herald on 16 September this year:

We all would like a price on carbon … if it’s not done in this government and if this uncertainty continues, not for two to three years, but four to five years, and nobody is building, then you will have power shortages and insufficient capacity.

Whilst those opposite may like to engage in short-sighted scare campaigns about a price on carbon and what it will do to electricity prices, my advice is: drop it and move on with the program. Drop the scare campaign, drop the politicking and recognise the benefit to consumers and to Australian families of delivering a carbon price to the market and building baseload generation from a position of certainty.

I should also mention another reform that goes to help families, another example of decisive action that the Gillard government is committed to—our superannuation reforms. Access to safe, low-cost, simple superannuation is essential to help our retirement savings go further. While you do not get a bill in the post, Australians pay around $85 a month on average in superannuation fees, which is actually more than the average monthly mobile phone bill. Every dollar Australians save in unnecessary superannuation fees directly boosts their retirement savings, helping them enjoy the secure retirement they deserve, a retirement eased by lower cost-of-living pressures.

The Gillard government will allow superannuation funds to offer a simple low-cost superannuation product called My Super from 1 July 2013. It is a key component of our economic plan. The improvement from the assault on high fees in superannuation would lift the retirement savings of a 30-year-old worker on average wages by $40,000. It delivers on the substantial benefits promised by the Prime Minister’s breakthrough agreement on the mining tax, including the boost in the superannuation guarantee from nine to 12 per cent for 8.4 million Australians. Taken together, our reforms in superannuation will add almost $150,000 to the retirement superannuation balance of an average 30-year-old Australian worker. National Seniors Australia, the peak body, has welcomed the transparency and choice in the superannuation changes generated from the Cooper review. NSA’s Michael O’Neill said on 5 July 2010:

The Review’s member, rather than industry, focus will encourage more Australians to have greater ownership and interest in saving for retirement … An overhaul is well overdue. As it stands, the superannuation system is industry-oriented, difficult to navigate and plagued by trailing commissions and hidden fees.

Let me sum up this MPI with an overview. I believe that the evidence and the support of others, not just the government, for a very wide range of measures and policy levers has delivered to ease the cost-of-living pressures that many Australians feel today. We have lowered taxes. That person on $50,000 is paying $1,750 less tax than in 2007-08. We have increased the pension by around $115 per fortnight for single pensioners and around $97 a fortnight for pensioner couples, and the same goes for people with disabilities. Under the education tax refund people can claim up to 50 per cent of costs up to $390 per year for a child in primary school and up to $779 for each child in a secondary school. Nearly a million families and 1.7 million students have benefited from the education tax refund. The childcare rebate that we have pushed helps with the cost of child care. We increased the rebate in July 2008 from 30 to 50 per cent for the out-of-pocket childcare expenses, providing families with up to $7,500 per year. We have made the rebate payment more frequent and 700,000 families are going to be eligible for it. We have got the teen dental plan. We have got the increase of $4,000 to family tax benefit A. We have extended the education tax refund to school uniforms. We are going to have the childcare rebate paid fortnightly. We have got paid parental leave, paid parental leave for dads and further pension increases. We have made tax returns easier and we are providing tax relief for savings accounts. By any objective measure, we are working on cost-of-living pressures. (Time expired)

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