Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

As with so many economic motions in this place put forward by those opposite, what we see is a list of economic factoids quoted completely out of context and slogan after slogan paraded around this place without even a skerrick of the most basic common sense or analysis. Those opposite say that inflation has nothing to do with the Kremlin, when in fact anybody who has followed the global economy over the last few years would say that elevated inflation is currently a phenomenon that exists in all advanced economies. It is a global phenomenon that followed immediately after a major war in a global powerhouse for food and energy production, and that manifested itself in elevated energy and food prices. Any kind of basic analysis would tell you that, yes, inflation was in fact largely caused by a global phenomenon such as the invasion of Ukraine and such as post-COVID supply chain constraints. So for those opposite to blithely say it doesn't have global aspects is utterly ridiculous.

In fact, those who say that are denying the fact and won't accept the fact that inflation actually started rising on their watch. The largest single quarter of inflation increase was on their watch. Interest rates started increasing on their watch. These global trends were emerging at a time when Australia was poorly placed to deal with them precisely because of a decade of mismanagement in which we hadn't dealt with the energy transition in a way that we should have, in which we hadn't strengthened our economy. Those opposites are denying basic common sense by denying the fact that this is in fact a global phenomenon.

What is the best way to respond to this global economic challenge? As the Treasurer has laid out, relief, restraint and repair—and that is exactly what has underpinned both of our budget strategies. Restraint in spending. We have identified almost $40 billion in saves in our first two budgets—in the October budget and the May budget. That figure of almost $40 billion in saves can be contrasted with the slightly lower figure of zero dollars achieved by those opposite in their last budget. So when it comes to structural improvement in the budget position, those opposite have a shocking record from when they were last in office.

Consider also what happened to the short-term fiscal uplift that this government saw in its last budget as a result of a stronger labour market, stronger nominal wages growth and improved resource prices. Over 85 per cent of that was returned to the bottom line, improving the budget position and also making our budget position much stronger when it comes to future interest rate payments. So when it comes to restraint, this government has demonstrated it in a way that those opposite never did, and that's why we've turned around in one year from an almost $78 billion forecast deficit to a surplus. That is an absolutely critical means by which we are strengthening the bottom line.

Relief—critical at this time, but done so in a way that is proportionate, that is targeted and that doesn't make the Reserve Bank's job harder. We have a range of measures, ranging from energy bill relief to rental relief to increases in key benefit payments. Those opposite again say the government is being reckless, but no economists of any serious stature line up in support of that. The quotes they've given here are, again, often cherrypicked and often out of context, often with caveats.

Alan Oster, the NAB's chief economist: 'We don't think the budget will change the RBA's thinking at all.' Adelaide Timbrell from ANZ: 'We consider the budget to be a relatively neutral one on inflation.' Bill Evans, Westpac's senior economist: 'I don't think there's anything in this budget that will make the Reserve Bank go, "We have to raise rates."' Gareth Aird from the CBA: 'The budget doesn't add to inflationary pressures.' AMP's Shane Oliver: 'The budget's impact on interest rates will be neutral.' We've strengthened the budget's underlying position; we've given significant relief and we haven't made the Reserve Bank's job harder.

And then of course there's repair. The medium-term job is also critical. Again, we just need to go back to the energy transition, which is an area that has been abandoned for 10 years under the previous government. This government has put in place long-term policies setting legislated targets, which those opposite fought tooth and nail, and this government has put in place critical short-term measures to help households and businesses with their power bills. Stephen Kennedy said it would take three-quarters of a percentage point of inflation, directly reducing inflationary pressures. So this government has a plan, a strategy—relief, repair, restraint. In two budgets now we have implemented that and it is already showing results. If you contrast that to what those opposite did—zero dollars in saves, zero long-term policy—it is an absolute contrast and one that the Australian people chose wisely at the last election.

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