Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Hansard source

TAYLOR () (): I rise to speak on the appropriation bills of 2024-25. These bills, Appropriation Bill (No. 1) 2024-2025 and the Appropriation (Parliamentary Departments) Bill (No. 1) 2024-25, provide for the funds from consolidated revenue for the 2024-25 financial year. Collectively, these bills provide for expenditure worth $187.5 billion to support the operation of government for that year. We, of course, will be supporting these bills; however, the budget handed down with these appropriation bills has failed Australians.

Australia needed a budget that took a back-to-basics approach to getting the country back on track. That means, firstly, that what we needed in the budget was a restoration of our standard of living that finally addressed the inflation and interest rate pressures being felt by families right across Australia: at the check-out, when they pay their energy bills, when they pay their mortgages, when they pay their rent—when they pay for anything. We're seeing enormous pressures on Australians, and the restoration of that standard of living had to be the first priority of this government.

Secondly, we needed a government that restored prosperity and created opportunity for all Australians, particularly younger Australians, by helping them into homes and by supporting small businesses to invest in the future to create a pathway for low-inflation, competitive, high-productivity growth that would be good for all Australians.

Thirdly, we needed a government that restored the budget disciplines that had been dropped by this government from the moment they handed down their very first budget. They dropped those budget disciplines that had been in place since the Charter of Budget Honesty, fiscal guardrails that ensure we have a low-inflation, high-growth economy that we all want to see, was put in place by Peter Costello.

Sadly, the budget has failed all of these tests. It has simply delivered more spending and more taxation and has not delivered the restoration of the Australian standard of living that we all want to see. Labor's third budget, like its past budgets, tries to put bandaids on bullet wounds rather than deliver those underlying solutions that deal with the sources of the problem and not the symptoms of the cost-of-living crisis that Australians are facing under this government.

The fact is that Australians still won't see the $275 reduction in their energy bills that this Prime Minister promised so many times before the last election. It wasn't just him; it was also the rest of the ministers, including, of course, the hapless energy minister. They all claimed that this reduction was coming through, and there has been no sign of it. There has been no sign of it, and not once has any government minister been able to stand up at the dispatch box and say that they're still committed to the $275 reduction, because they've failed to deliver it. In fact, many Australians will now need to see a $1,000 cut in their bills just to get the promised $275.

Similarly, this Prime Minister promised cheaper mortgages to the Australian people, but after two years and three budgets the average Australian household with a mortgage is $35,000 worse off. Cheaper mortgages? They're $35,000 worse off. This just tells you how out of touch this government is.

According to the experts, the budget is likely to simply keep those rates higher for longer because it is doing nothing to take pressure off inflation. Michael Blythe, Chief Economist of PinPoint Macro, said the budget 'adds to the higher for longer to the interest rate thesis'. Cherelle Murphy, Chief Economist from EY, has said:

… the Budget has thwarted the task of tightening the structural deficit.

It also undermines the Government's inflation forecast—which was lowered below the Reserve Bank's forecast and assumed to drop into the 2-3 per cent target band by the end of this year.

It has undermined that inflation forecast. In other words, inflation is expected to be worse than they had said. The government's energy bill relief is simply a political trick, according to former Reserve Bank Board member Warwick McKibbin, and 'smoke and mirrors' according to Brendan Rynne, KPMG's Chief Economist. This budget has been panned by economists across the board. The fact is that after two years and three Labor budgets, Australians have become poorer under Labor. Australians have become poorer under Labor. Despite being promised, before the election, cheaper mortgages, cheaper power bills and a lower cost of living, time and time again Australians have seen nothing of the sort.

Alongside raging inflation, Australia is in an entrenched GDP-per-person recession. Our standard of living has fallen by more than seven per cent since the last election—two years—a collapse that is unprecedented in comparison to other advanced economies. Real wages for working households have collapsed by almost nine per cent. Our consumer confidence remains entrenched at recessionary lows. McKinsey has labelled Australia as being in a productivity recession. The number of unemployed people and the number of people on JobSeeker's caseload are increasing. Most alarmingly, youth unemployment has increased, and we've seen more than 16,000 businesses enter insolvency since June 2022. The Economist has declared that Australia has the most entrenched inflation in the advanced world, and inflation remains stubborn—The Economist says—because our policy settings are not right. Domestic inflation is running at more than five times imported inflation. This Treasurer likes to say it's all someone else's fault, but the truth is that the RBA Governor has said that Australia's inflation is homegrown.

We've now seen three Labor budgets. They've had three chances to make the right decisions and focus on the right priorities, but Labor's only answer on each occasion has been for a big-spending, big-taxing, big-government, big-Australia approach. Australia has committed to an extra $315 billion of spending since the last election. That's more than $30,000 for every Australian household, and there are not many Australian households who will say they're feeling the benefit of that kind of extraordinary government spending. On policy decisions in this budget, Labor is spending $4 for every dollar raised. Government spending as a percentage of GDP is forecast to be at its highest level since the mid-eighties—outside of the pandemic—and nominal spending is growing at 16 per cent over the next two financial years. There's double the rate of economic growth—we see the same when you look at real growth as well as nominal.

Labor says this is unavoidable, but included in this spending is unnecessary waste. We saw $450 million spent on a failed referendum, billions in corporate welfare, millions in grants to the union movement, funding of anti-resource-project activists, and more than $85 million for spin units in the Treasurer's department. When he can't deal with a substantive issue, he just spends money on spin. That's what he does. There are 36,000 additional public servants in this budget, and there's $45 billion in off-budget spending that we've opposed. This so-called unavoidable spending is unavoidable only to Labor.

We need a better way. In order to get Australia back on track, we need a back-to-basics economic agenda that gets the country back on track. We've announced policies that will make it easier to get a job or run a business supporting pensioners, veterans and jobseekers to work more without losing their payments. We have policies that will restore the dream of homeownership by letting first home buyers and older women access super to help with a deposit and by aligning migration and housing. We will make our communities safe and secure with practical policies like banning sports betting advertisements during live sport, doubling the size of the Australian Centre to Counter Child Exploitation and making it illegal to glorify criminal activity online. We will ensure our lights stay on, our manufacturers stay open and we bring down power bills by investing in the gas we need now and in the future. We will make it easier to see a doctor and access mental health and women's health treatments by supporting the training of the next generation of GPs and by committing funding for endometriosis and ovarian cancer. All of these are crucial priorities, with the last one, I would say as a regional MP, hugely important to health in our regions.

A coalition government will put productivity and per-person GDP growth at the centre of its economic strategy because that's what's required to support higher real wages without higher inflation. This allows both workers and businesses to flourish. We've already gone far further than typical oppositions, opposing more than $58.7 billion of Labor's new spending, and that's because Labor has no fiscal guardrails. It's abandoned the rules that have supported every good budget since Peter Costello established the Charter of Budget Honesty, including putting a speed limit on taxing and spending through a tax-to-GDP cap, constraining spending growth to less than GDP growth and committing to reducing debt and delivering structural surpluses over the medium term. We will re-establish those rules. Getting productivity back on track is essential because the first step of tax reform is to restrain the growth in spending. The gap between receipts and payments, at $43 billion in just over a year's time, is absolutely not sustainable.

Of course, Labor wants to support future spending growth with never-ending bracket creep. Australia has high rates of income tax and one of the highest company tax rates in the world. Indeed, we've seen Australian households paying more than 23 per cent additional personal income tax since this Labor government came to power. Our guiding principle is that taxes should be, lower, simpler and fairer, and our commitment in this budget reply to make the instant asset write-off permanent is a down payment on this priority. It'll simplify depreciation for 2.5 million small businesses. The Treasurer should have a listen to this. These are policies that would actually deliver low inflation and high growth. This will give small businesses the certainty that they can plan investments on a longer-term basis rather than year to year.

This is a major commitment boosting cash flow in millions of small businesses, rewarding them for having the investment they need to grow their businesses and the economy, and it sits alongside our focus on making sure that housing and immigration come into line in this country, because this government has absolutely lost control of its immigration policy. The result of that is that young Australians are struggling to buy a home or even rent a home as we've seen immigration grow at over 530,000 in a year—

See this speech in context