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

Before the last election, Labor promised Australians a great deal. They promised cheaper mortgages. They promised lower electricity prices. They indeed promised a $275 reduction in electricity prices. But most of all they promised Australian families that they would be better off. What they certainly didn't promise is that Australians would be poorer under Labor. But, over the last two years, despite the great hope Australians had—and Australians are fair-minded people. They'll always give a new government a go. Sometimes, I wonder about the wisdom of letting this lot have a go, but they had a go, and we've got to respect the last election. But they're trusting, and they've given this lot two years to do what they said they were going to do. But the truth of the matter is that in recent months we've seen a complete and abject failure to deliver on those promises.

What we saw yesterday in the inflation data that came out is an absolute shocker. Most importantly, as a result of what we saw yesterday, Australians are losing hope. Labor promised that the hard times that Australians were experiencing under them—the 12 interest rate increases they'd seen, the sharp increases in prices, the 20 per cent increases in personal income taxes being paid—were all temporary, that there was light at the end of the tunnel, that there was a way through this. They spun it, day in and day out. That's all the Treasurer does. He's not a doctor of economics, of course; he's a doctor of spin.

But he has been running out of spin in recent weeks because what we have seen are Australians losing hope. The light is not there at the end of the tunnel. Indeed, we have seen homegrown inflation continue to surge. The promise was that it would keep coming down. But for four months in a row we've seen core inflation rising, not going down. It was promised that it would go down. He said, 'There would be a bit of zig and zag.' Well, there's no zig and zag; it's only going one way, and that is up. That is up. And he is in complete denial about it because he thinks he can actually change the economy with spin. You can't. You've got to do it with substance. You've got to do it with real policies.

The inflation problem, as the Reserve Bank governor has told us, is homegrown. It has come from Labor's policies—the wrong priorities, their wrong policies. We see this in the numbers that came out yesterday. Core inflation has gone up to 4.4 per cent—up. I never thought I would have to say this. The hope was that, at the very least, it was going to stay where it was, but it has gone up. Headline: 'Inflation—up to four per cent.' But here's the real tell-tale in this. The real tell of what's going on is that non-tradable inflation—that's the domestic stuff; that's the homegrown bit—is 5.32 per cent, and it's up. It's the high bit. For tradable inflation, the important bit, they love to blame the Ukraine. The Ukrainians are going through a tough time right now, and they don't need the blame from this Treasurer for our inflation. But the good news for them is that it's not their fault, because tradable inflation—imported inflation—is only 1.6 per cent.

When we look at the prices that Australians are having to wear right now, it's quite extraordinary. Since Labor came to power, food is up 11.4 per cent; housing 14 per cent; rent 14.2 per cent; electricity 21.5 per cent; gas 22.2 per cent; health 11.1 per cent; education 10.9 per cent; financial services 16 per cent—and it goes on. That's not the end of it. Financial services up 16 per cent—the Assistant Treasurer is doing a great job there, isn't he? He really is! It continues to surge under those opposite.

That is only part of the economic disaster that we're seeing in front of the country at the moment because we are in a household recession with GDP per capita going backwards for four-quarters in a row. In fact, it hasn't gone up for five-quarters. That's a real household recession. So not only are Australian households seeing sharply rising prices; they're also seeing that GDP per person is going backwards.

Despite what those opposite love to say, real wages have collapsed. Here are the numbers. The member for Parramatta had a go at trying to say otherwise but the facts speak for themselves. For a working family, the employee living cost index is employees who earn real wages. The employee living cost index is up over 16 per cent since Labor came to power and nominal wages are up by less than half of that, so real wages are down by 8.9 per cent since they came to power. That is about the purchasing power in your pay packet. What counts is how much your pay packet can buy, how much the money in your bank account can buy. Those opposite are completely mystified by all of this but that is how it works and that has been a complete calamity for Australian households.

The data we saw yesterday was totally demoralising for Australian households because it sends a strong signal that interest rates are not going down any time soon. The response in the last 24 hours by markets and economists to this has been to say interest rates are not coming down and it is worse. Over the next 12 months there is real probability of an interest rate increase. In August, the Reserve Bank will have to think hard about whether the absolute abject failures of the three budgets handed down by this government are such that they will have to raise rates. But one thing is clear: they are not going down anytime soon and Australians are going to continue to pay a very high price for that. The Treasurer's answer for that is to hand down a budget where he attempts to manipulate the inflation data. Well, I don't think the Reserve Bank governor is going to take any notice of that absolute nonsense.

But it gets worse, because we are absolutely at the back of the pack internationally in dealing with this problem because across peer country after peer country, inflation is coming down as it goes up here. Since December, Sweden is down 2.3 per cent, the UK is down 1.6 per cent, Japan down 1.6 per cent, Norway 1.4, Canada down 0.8; New Zealand, Euro, US, Switzerland, all down. In Australia, which way has inflation gone since December? Up. Four months in a row we have seen it continue to rise.

We see economists commenting very quickly on this. They did not take much time. Dr Jim is certainly running out of spin on this one, because they are telling the truth there. Chris Richardson has said, 'Governments have abandoned the field in the inflation fight.' Abandoned the field! 'We are fighting the inflation fight one-handed.' It sure is not the Treasurer's hand that is doing any fighting. Governments are throwing a lot of money at the symptoms of the cost-of-living crisis but are making it worse. That is what Chris Richardson says.

David Bassanese, a highly respected economist, said this price report is an absolute 'shocker' and 'places huge pressure on the Reserve Bank to raise interest rates in August'. Canstar's Steve Mickenbecker says the ABS data is 'diabolical'. Moody's economist says Labor's policies 'risk injecting a bunch of new spending into the economy as the Reserve Bank of Australia desperately tries to tighten households' purse strings'—another failure. Shane Oliver said, 'As a result of the May inflation data, the risk of another hike in August is now around 45 per cent.' There is no talk of a rate cut anymore; it is all gone under the policies of this government.

There is a better way. It is about going back to basics. It is about getting the supply side of the economy right. It is about not fuelling inflation. There has been $315 billion of extra spending since Labor came to power. That is $30,000 for every Australian household and, I tell you what, I do not hear many households say they feel anything like better. In fact, Australians know they are poorer under Labor because they are poorer under Labor. There was $450 million on a failed referendum, corporate welfare, grants for the union movement, funding of spin units in the Treasurer's office and elsewhere. That is not how you get inflation down. There is a better way. It is about getting Australia back on track by getting back to basics.

See this speech in context