Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Hansard source

Around Australia, this Prime Minister's cost-of-living crisis is affecting millions of Australians. The Prime Minister was pretty clear in the promises he made before the last election. He promised to reduce energy bills by $275 not once, not twice but 97 times. Of course he promised there would be cheaper mortgages, and he promised that Australians would be better off under a Labor government. It was all very clear and very simple. It did not admit of any doubt. So Australians would naturally be very troubled to find that the reality today is extraordinarily different from what this Prime Minister promised. Inflation is at its highest level in over 30 years, core inflation is higher than in the US, Britain, Canada and indeed every G7 nation, and electricity prices have gone up and up and up.

It is in the experiences of Australian families and households where we see the true toll of this government's escalating cost-of-living crisis. Australian families are experiencing the largest fall in their spending power in this century as more and more families struggle with the crippling effects of inflation. Australian families are even resorting to changing their diets, with one report showing that two-thirds of Australians are finding it less affordable to eat healthily. Banks are reporting more Australian families are falling behind on their repayments, and higher-risk customers can't even get a loan or get refinancing. Business collapses are surging, with warnings of an insolvency Armageddon as Labor's first year in office has seen almost a doubling in the rate at which businesses are becoming insolvent.

More Australians with mental health concerns are being forced to cancel appointments with psychologists because they simply can't afford them. Growing numbers of Australians cannot afford to maintain their cars, and they are skipping vital maintenance and repairs. Mortgage risk reports are showing more and more Australian towns and suburbs are entering mortgage shock, with repayments eating up to 60 per cent of household income in some post codes. More than three-quarters of Australians report that they are either extremely or very concerned about the cost of living, with most saying electricity prices are a key concern. The gap between the cost of a typical home and the amount that an average Australian can borrow has more than doubled.

More and more Australians are resorting to having meals at home and buying generic brands of food and groceries under this Labor government's cost-of-living crisis. More and more Australians are buying canned food because they cannot afford to buy fresh fruit and vegetables. Australians are turning to charities for support, with Lifeline and other crisis providers reporting huge increases in the number of families requesting their assistance, including, in many cases, families that have never before needed to turn to a crisis provider for help. Families are facing no option but to cut back on non-essential purchases.

According to the national youth mental health survey, the cost of living is the single biggest concern for young Australians. According to analysis by Deloitte Access Economics, at least 300,000 Australian households may be experiencing negative cashflow—more money going out than coming in—following the 10 interest rate rises on this government's watch. The St Vincent de Paul Society in Queensland has reported that more families, particularly young women, are being forced to sleep in their cars due to this government's cost-of-living crisis. The CEO of Foodbank in Queensland recently said:

As cost of living continues to rise, families are being forced to choose between keeping a roof over their heads and putting food on the table.

This is a very grim picture, and there is very little reason to be confident that this government has a plan to deal with it.

It is absolutely critical that there be a focus on inflation—getting inflation down, attacking those cost-of-living increases. That will be the test of this budget—whether it puts downward pressure on inflation. When inflation is high it erodes purchasing power, it eats away at savings and it lowers the standard of living. This is the central economic issue facing Australians—the need to get inflation down.

Fighting inflation with handouts is not the solution to this problem. We need a government which is addressing the problem of inflation at its source, not the symptoms. If Labor were serious about tackling inflation, it would build on the strong economic management that it inherited from the previous coalition government. It would restore the fiscal guardrails to the budget, including the goal of budget balance and including the tax to GDP cap. Is it any surprise that under this Labor government there is now no formal rule as to the maximum percentage of tax it says it will collect as a percentage of GDP?

Labor is seeking to distract from its spending plans by dropping to the media that the budget will be in surplus for 2022-23, but the real story is what happens in 2023-24, the actual year the Treasurer is preparing a budget for, and in the out years beyond that. A short-term surplus thanks to a one-off jump in commodity export prices and strong employment numbers inherited from the Morrison government is one thing, but a structural deficit over the next few years as Labor fails to get spending under control is very bad news for the Australians who are concerned that inflation will become entrenched and that their cost of living will go up and up.

The simple fact is: if this government does not get spending under control, this budget will drive more inflation. Unless this government limits spending, it will be adding to the cost of your mortgage, your rent, your groceries and just about everything else Australians need to spend their hard-earned money on. We need to see from this government and this budget a long-term approach to controlling spending. It is critical that the economy is growing faster than spending. That's how the coalition operated between 2013 and 2019, prior to a once-in-a-century pandemic, and it was that budget rule, that fiscal discipline, which produced the outcome of a steadily reducing budget deficit until we achieved budget balance. But that is very different to the psychology and the instinctive nature of Labor governments. There is nothing a Labor government likes to do more than spend and tax. We've seen the pattern with every previous Labor government, and already we are seeing the same pattern materialise when it comes to the Albanese Labor government.

In the October budget, we saw the Albanese Labor government add $115 billion of spending over the four years of the forward estimates compared to the budget brought down by the Morrison government in March 2022. There's another $45 billion of spending that we have opposed because that is not what our budget needs. It's not what our fiscal policy needs. It's not what we need as a nation if we are going to attack the core problem which is challenging the lives and lifestyles of every Australian—that is, the problem of inflation and ever-rising cost of living. As this government adds more spending, it also adds additional interest costs over many years into the future.

We saw a very traditional Labor approach in its first budget in October last year. We saw Labor increase spending, making the structural deficit worse, and we saw Labor abandon any formal goal of achieving budget balance. That's not a responsible approach. It's not good budget management, and we see now that, around Australia, Australian households and Australian families are paying a price for this government's poor management of the budget.

The other very important reason to keep spending under control is: if you're controlling spending, you don't need to go around raising taxes. Higher taxes are a huge problem. They kill aspiration. They hurt families. They delay the investment that provides jobs and helps small businesses to grow.

Australian families, every day, every week, are making very tough decisions about their household budgets. It is imperative that we have, as a nation, a budget that also involves decisions that address the fundamental problem of cost of living and inflation.

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