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

Before the 2022 election Australians had good reason to be hopeful. They had a strong economy. They'd come through COVID. They had a budget that was in balance, and we had come through the pandemic well. But, of course, in the lead up to that election in May 2022, Labor had promised more. They had promised lower energy prices, lower electricity prices—indeed, $275—a lower cost of living, cheaper mortgages and higher real wages. Australians, of course, took them at their word. Australians, understandably, are good people. They are trusting people.

But, sadly, the experience of the last two years tells a very different story indeed. In that last two years the cost-of-living index for Australians who are working has gone up by over 18 per cent. As of today we see an 18 per cent increase in the cost of living for working Australians. Those opposite like to crow about how wages are going. Sadly, wages have only got up at half of that rate—at 8.8 per cent versus 18.2 per cent. Here's the point that those opposite don't get: it's the purchasing power in your pay packet that matters. That's the only thing that counts. The reason Australians go out and work hard is so that they can buy the things they need to live for their families to get by every single day. Those opposite don't get that when prices have gone up by double the rate of wages, then the purchasing power in their bank accounts and pay packets dissipates. That is exactly what's happened, with a reduction in real wages of over nine per cent for working Australians during that timeframe. Central to that are 12 interest rate increases under Labor.

The saddest indictment on what we have seen since those happier days back in early 2022 when there was real hope for Australians is that, compared to peer countries, we are absolutely at the back of the pack in dealing with inflation. Indeed, since December last year we are the only one of the major 10 countries in regions around the world that has seen inflation accelerating—going up. In every one of those parts of the world, other than us, we've seen inflation going down. We are absolutely at the back of the pack. Those opposite like to make international comparisons. That's the one that counts. We are seeing interest rates starting to come down in many of those countries, but not here. I'll have more to say about that in a moment.

But, at the same time, we're seeing an economy that has shuddered to a halt. GDP per capita hasn't gone forward for five quarters. We are in a household recession, and, in that grim economic context, we've seen 19,000 businesses going into insolvency. It's tragic to have to say this, but that is a record, and there are many lives and many family businesses that have been absolutely shattered by that set of circumstances, and we're seeing it every single day. Whilst those opposite pat themselves on the back, we go out and talk to Australians who are doing it very, very tough.

This is not the Australia that Labor promised. This is a poorer Australia. Australians have got poorer since Labor came to power. Part of this is that not only is inflation too high in Australia but it's too sticky. After three failed budgets—$315 billion of extra spending, $30,000 per household—we are now fighting on two fronts: an economy that's shuddered to a halt and inflation that's sticky. The harsh reality is that the Reserve Bank is saying this. It's calling it out. It's abundantly clear. The RBA said just last week that inflation, and therefore interest rates, will be higher for longer. That sends shudders down the backbones of so many Australians and Australian families who are trying to make ends meet every single day. Last week, Michele Bullock, the governor of the Reserve Bank, said, 'Make no mistake: inflation is still too high.' She also went on to say that she is not expecting to see rates come down any time this year. There are many Australians who felt the pain of that when she said it.

This is a result of a Labor government that has failed to make inflation—beating inflation and fighting inflation—its top priority. Independent economist Steven Hamilton put it very well when he said, 'Every lever of government has been geared towards exacerbating inflation.' Indeed, the RBA went even further. On page 4 of its Statement on monetary policy, it says:

Public demand is forecast to be stronger than previously expected, reflecting recent public spending announcements by federal and state and territory governments.

It's true that their mates in the state governments are adding to it. That's true. We know that. The Victorian government and the Queensland government are big spenders too. They're all doing it together. They're all in it together! There's no doubt about that. On page 50 of the Statement on monetary policy, it says:

The stronger outlook for public demand reflects ongoing spending and recent announcements by federal and state and territory governments.

This is backed in by Chris Richardson, another independent economist who is highly respected. He went on to say that it's 'clear as they can be', referring to the Reserve Bank. He said, 'There is extra spending in the system as a result of the budget'—the failed budget, the third failed budget of this Treasurer.

But apparently that wasn't clear enough for the Prime Minister or the Treasurer, because they both claimed that the RBA didn't say that. It's in the transcripts. It's in the statements. It couldn't be clearer. But, when the only thing you've got is spin, I guess you just spin. There's nothing else you can do. This was the Treasurer on RN Breakfast. This is good stuff. When it was put to him that Commonwealth spending, including by Labor, is fuelling inflation, he said: 'I don't accept that. I don't agree with that.' Well, the Reserve Bank governor said otherwise. And what about the PM? He just went into denial. He said, 'That's not what they've said.' They went to war. They want to fight with everybody, including us, except inflation. The only thing they don't want to fight is inflation, and that's exactly the one thing they should be fighting.

There is a long list of economists who have made similar comments. In the cost-of-living committee last week, Shane Oliver said, 'The RBA's job would be a lot easier if they didn't have the surge in government spending that's been occurring over the last few years.' How much clearer can you be? Steven Hamilton said, 'The RBA has got its foot on the brake, and the government has got its foot on the gas.' That's a good line. Warwick McKibbin, former RBA board member, said that he agreed with the RBA governor rather than the Treasurer. He said, 'It is excess demand that's the problem. Government policies are adding to excess demand.' Richard Holden, a respected economist, told the cost-of-living committee last week that Labor had delivered three very expansionary budgets that were putting upward pressure on inflation. I don't know how many people I have to quote here, but it's clear that there is a better way.

Those opposite spent $500 million on a failed referendum. They are spending billions on corporate welfare. It was pointed out by one of my colleagues that one of the billionaires has decided to give the money back because it's no good, but, anyway, that's what they're doing. They are giving millions in grants to the union movement, including the CFMEU. Grants to the CFMEU—that's well-spent money, isn't it? No wonder they don't want to deregister it!

Whilst I'm talking about deregistration, productivity in this country is going backwards by five per cent. It's unprecedented. We've never seen labour productivity go like that as it has in the last two years, making the job of the Reserve Bank nigh-on impossible. The Reserve Bank governor herself has said that. She said: 'We would really like productivity to get back to its trend levels before the pandemic. That will be the key to the fortunes of this country.' Those opposite have no idea. They are out of their depth. They are out of touch. They are getting every decision wrong.

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