James Stevens (Sturt, Liberal Party) Share this | Hansard source

I rise to speak on Appropriation Bill (No. 1) 2022-2023. It's a slightly strange time to be addressing our 2022-23 budget in November, but, obviously, it relates to the timing of the federal election. Though it was way back in May, the new government announced that they would update the appropriation bills, effectively, or introduce new ones to the budget that was handed down by the previous government in March. And here we are debating the new government's update to the budget.

In many ways, this budget—as government speakers, more than any others, have pointed out—is effectively just implementing election commitments that the government took to the election. We would absolutely expect them to do that. It's not overly impressive to have a budget that keeps promises that you made when you went to the people and asked for their support, although it doesn't keep all the promises that the government made. There is one related to electricity prices that it spectacularly confirms it will not keep, but I'll come to that in a moment.

This budget was handed down in very dire economic circumstances. None of us in this place want to see the Australian economic environment deteriorate, but, regrettably, inflation in particular is at a very dangerous point. It is at the highest level since the early 1990s. The ABS's most recent figure is 7.3 per cent. Each quarter it is steadily ratcheting up. The other really concerning thing is that, each time the government or the Reserve Bank update their forecasts, they're updating with increases. Each time new forecasts are given, as these things are updated, we're not seeing anything other than a revision up on inflation. That's really frightening because in my adult life we've never had inflation like this. People around my age or younger have never really experienced what inflation does.

It is the most insidious thing in an economy. It's the great destroyer of wealth. It destroys savings. It destroys plans that people have made for their futures, particularly when they're on a fixed income. They might be retired and have provisioned an amount of money that they expected could look after their financial needs into the future. Inflation really takes all that away. I certainly remember that my grandparents retired in the early 1970s just before Gough Whitlam came to power, and the destruction of their savings over the next few years under that government was a story that stayed in our family for decades. It was a story that I heard in the mid to late 1990s about the early 1970s.

One thing that really worries me is whether we're not taking inflation as seriously as we should be. I certainly think that in this budget we're not taking inflation seriously at all. We know what a budget can do to help an inflation challenge. We know what the Reserve Bank is doing from a monetary policy point of view. As we speak, they are increasing interest rates. They're increasing the cost of capital, by which they are attempting to dampen economic activity, make it more expensive to borrow money and therefore create a higher consequence for the decision and the outcome of doing so, in an attempt to take some of the heat out of inflationary pressures.

What the federal government could do is assist from a fiscal point of view. When inflation is running high, what you don't want is the government contributing to it by spending a lot more money than they take in—that is, running significant government deficits—because that is pumping money into the economy by its very nature. If you're taking in a certain amount of money in tax and other revenues, but you're putting more out in expenditure, then you are pushing more money into an economy that's already overheating to the tune of 7.3 per cent, as per the most recent forecasts.

We didn't see the government respond to inflation in this budget, in these appropriation bills, whatsoever. In fact, heartbreakingly, what we also saw is that, despite going to an election in May saying that they would put in place policies that would reduce the average household energy bill by $275 a year, the budget that was handed down by the government two weeks ago confirmed that over the next two years electricity prices will increase by 56 per cent. The next two years are the 2022-23 and 2023-24 financial years. If the government are saying they will still achieve that $275 reduction, then I suppose that means in the year 2024-25 they will be cutting electricity prices by something like 60 per cent or more. That would be absolutely remarkable—all strength to their arm—but they're not making that commitment. However, I make the point that, to achieve the solemn promise they made, that's the magnitude of what would have to be achieved against their own forecasts. So it's very frightening to see the confirmation of that. That gas prices, equally, are rising 20 per cent this year and another 20 per cent next year is really frightening. But what is devastating is that in their budget the government confirmed these price increases, and also confirmed they would do absolutely nothing whatsoever about this dramatic increase in burdens on the average family and the average business in our economy.

The budget was an opportunity to say: 'Look, we've got to come clean. We said at the election that we were going to cut electricity prices. Far from it, they're going up by 56 per cent. Because of that, these are all the things we're going to do to support households and businesses to meet this dramatic increase in the burden on them of their electricity prices.' That was a very simple opportunity, and it didn't happen.

Yes, the government implemented a number of their election commitments, except the electricity price one, which I would venture to say was a pretty significant one for the average voter. I think they would feel pretty cheated, pretty dudded. If you were undecided going into that ballot box, you might have said, 'The one thing the Labor Party have said they'll do is cut my power bill by $275.' For a lot of people, their electricity bill is a very significant burden on the household budget. For many businesspeople it is the most significant cost pressure in their expenditure. So I've got no doubt that a lot of people might have been swayed by that commitment, but it turns out that that will not be honoured; that will not be happening.

The people of Australia will mete out there commensurate punishment on this government for that at the next election, but in the meantime we really are here not to delight in the political misfortune of that; we're here to plead with the government to actually do something to help people address this devastating blow that was confirmed in these appropriations bills regarding the burdens that will come onto the household budget. While the Reserve Bank is fighting inflation, they're increasing interest rates, so, as your power bill's going up, your mortgage and the interest rate on your business loan is as well.

We've got no idea what the end in sight is or if the end is in sight on interest rates going up. They've gone up at every meeting of the Reserve Bank since May, including a very unorthodox 50 basis points for a couple of meetings in a row, which dropped back recently to 25 basis points. There's one more meeting before Christmas and one early next year. We don't know what 2023 has in store for the cost of capital in our economy, but, at the same time as the Reserve Bank is increasing interest rates, they're also saying that they expect inflation to be higher than the figure it is at the moment, which is provoking the current increases.

Regrettably, if their predictions come true, there will be more rate rises in the future. Power bills are going up. Mortgages are going up. Of course, as we know, the impact of mortgage increases will be felt by people on fixed-term loans when those loans reach the maturity and they go to refinance. In our economy, the typical average of a fixed loan is about three years, so every week, every month, people are refinancing. Their refinancing is probably not going up by 25 basis points but by three per cent and climbing. That will have a huge impact on the family budget. The people of Australia need this government to recognise just how hard it is to make ends meet and what these challenges are, and the government need to be focused on making decisions and supporting the families and businesses of this country to meet these challenges.

In my own electorate, regrettably, there seems to have been precious little committed insofar as infrastructure and other things are concerned. I am hoping that, with all the reprofiling of infrastructure et cetera that a commitment that was made and confirmed in the pre-election fiscal outlook, a decision of government to fund the Kensington Gardens Reserve clubroom upgrade of $3.6 million is going to be honoured. There is ambiguity around that commitment as it stands, because that program has been ceased, but there is some waffley language about the potential to reprofile projects committed to prior to PFO through other funds. Nonetheless, I will continue to hold the government to account for that one single commitment that was actually something that we delivered. All they need to do is not remove the funding for that and it will see the good people of Sturt get one solitary investment out of this budget. If they take that away, it will be truly low and disgraceful, because these are deserving sports clubs in our community and they deserve that money. It is a merit based decision, and I expect the government to honour that commitment.

In my last few moments, I will conclude by saying whilst we commend and will be supporting—

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