David Gillespie (Lyne, National Party) Share this | Hansard source

We have a toxic brew in the economy at the moment. I know that it's Thursday and everyone is keen to get out of here, but this is a really serious issue, because people are hurting in Australia. Everywhere you look, inflation is eating away at the value of their savings and their assets. The year-on-year CPI issued by the Ai Group was seven per cent for the last year. Inflation is eating away any wage rise that people get. Admittedly, it may finally be working. The monetary policy that the Reserve Bank governor was basically sacked for has had its effect, and that monetary policy is slowing things down. But, yet again, today we see that house prices are taking off already. The interest rate increases may not have ceased. We will watch closely.

But, as inflation is galloping away, what do we have from the other side? The last budget saw the low and middle income tax offset removed. There are increased taxes on superannuation. Franking credits—the lifeblood of many retirees in my electorate and around the country—are being limited by changes in the rules. There are workforce shortages as a consequence of COVID. Yet, despite all this, we don't see anything, beside what the Reserve Bank governor has done, to stop inflation eating everything away.

We know that inflation happens when you spend money without any productivity or anything to show for it. What we got in the last budget was mind-boggling. You would think that the fundamental economic theory of reducing government spending to reduce the amount of unproductive capital in the economy would be followed, but the Treasurer just threw fuel onto the fire. An extra $185 billion of government spending has come out of COVID.

We were cutting back. We were putting the brakes on. The former Treasurer, Josh Frydenberg, was described as 'cruel' by members on the other side, yet they wanted to spend more during COVID. We put the brakes on and started removing all the supports, and then they came in and inherited a booming economy. Now it's all going pear-shaped because they put an extra $185 billion into the economy with nothing productive out of it. They've just let the unions loose on the workplace. The flexible, agile philosophy of our wages and industrial policy is being wound back 20 or 30 years, and that will lead to less productivity. To improve productivity we should be allowing flexibility in the workplace, not making it rigidly controlled. All of that is a recipe for more inflation.

As well as that, coupled with tax increases and interest rate rises, the standard variable rate with one of our biggest well-known banks is varying from 6.24 per cent to just over seven per cent. Admittedly, when we were in government, rates were very low, but we haven't seen an increase in interest rates like this for decades. It's all happening on your watch, and you can't keep blaming the former government.

As I said, everywhere you look there are increased costs in business. Wages for unskilled labour have gone up. The wage structure that's been forced on the NDIA has really made unskilled labour unaffordable for lots of businesses, because you can get paid double or triple in the NDIS. It is really distorting the marketplace. No wonder there are shortages in coffee shops. You can get 15 or 20 bucks more by taking people who are on the NDIS out for coffees than you can by working in a coffee shop, or in lots of industries. Look at the electricity bills we're all facing. It's because of your environmental policies, which are shutting Tomago, just like the plant in Gladstone is going to be closed, because of the safeguard mechanism. (Time expired)

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