Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for North Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to take decisive action on cost of living pressures in the lead up to Christmas

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

I will begin on a more sombre note by talking about a few crucial issues facing everyday Australians and then I will perhaps join in the Christmas cheer and focus on exactly what might be under the Labor Party Christmas tree this year. During the course of question time and afterwards, I thought this parliament moved away from the concerns that everyday Australians have about meeting some of the challenges of the Christmas period.

It remains unanswered why so many Australians feel that they are doing it tough at the moment. When economic data is presented about the unemployment rate of just over five per cent and GDP growth of over three per cent, Australians are perceived to be doing extremely well, but everyday Australians feel it is getting tougher. When they look at the bills they receive at home they see that electricity prices have risen 12½ per cent this year, water and sewerage prices are up nearly 13 per cent, gas prices are up nearly 10 per cent, childcare prices are up over seven per cent, hospital and medical service prices are up seven per cent, postal service prices are up 6½ per cent, property rates and charges are up over six per cent, and education prices are up nearly six per cent.

Even though they have perhaps received a wage increase of around two to three per cent, Australians are still asking why they are worse off. It is because everyday costs are not properly factored into the inflation data. The prices of everyday things that they cannot avoid, such as gas, water, education and health, are rising by far more than the official inflation indicator suggests.

Audiovisual and computing equipment fell over 20 per cent. That is not something Australians buy every day. Pensioners do not buy a new television set once a year. I know that Gerry Harvey and others have been complaining about cheaper goods online, but I say, ‘All strength to the consumer’ if they can get cheaper goods elsewhere. Even though it is difficult for shop owners, I say to those people, ‘The consumers are the ones who are hurting at the moment and without a consumer there is no retail business.’

This government just does not get it when it comes to these key figures. It does not understand that the Australian people on a day-to-day basis feel that they are worse off. If the government did understand that it would not be so self-indulgent in focusing on its own ructions and inner debates; instead, the government would be focusing on structural tax reform and getting the budget deficit down.

As the chief economist of HSBC, someone who worked at the Reserve Bank for 12 years until recently, said this week in an op-ed in the Financial Review, ‘If the government is serious about taking upward pressure off interest rates, it will cut its own budget and cut dramatically.’ But the government is not serious. We have laid down, as the shadow minister for finance said, $50 billion of detailed spending cuts. That is our Christmas gift to the Labor Party. We on this side of the House have the courage to say, ‘Here is a list of $50 billion of cuts that you can make to the budget that we will not oppose because we are so desperately concerned about the capacity of our nation to fund itself over the next few years.’ We are prepared to make the hard yards but the government has not got the courage to do it. Instead it is focused on its own workings.

What we know is that, in the great tradition of the Labor Party and in the great tradition of previous state Labor governments, they will have no limit on their Christmas spending this year. When they give gifts to each other they will say, ‘There are no spending limits. We’ll do whatever we can.’ So you can imagine Christmas Day at the Lodge and the Prime Minister and her spouse running to the Christmas tree wondering what is there from Santa. I thought to myself, what would the Prime Minister be looking for this Christmas? I know what the Prime Minister will be looking for. The Prime Minister will be looking for a series of electronic ankle bracelets with a GPS tracking device for Kevin Rudd and Bill Shorten so that she can keep an eye on them during the course of 2011. They will be piping the footage straight through to the Sony BRAVIA 42-inch TV set in the Lodge and she will be watching everything they are doing during 2011, and I bet she will have a data back-up service in Altona, having converted the house for servers. What would the Deputy Prime Minister want for Christmas? Well, I have brought him a present. It has nice pink wrapping. I was thinking, what would the Deputy Prime Minister, the Treasurer, be wanting this Christmas?

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Ms Julie Bishop interjecting

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Funny you should say that! I got old Swanny Economics for Dummies. It has an Australian introduction by Lindsay Tanner which starts with the words, ‘With some frustration I welcome this authoritative guide for my Labor colleagues.’ But I would not leave it just to one book. As the Treasurer is so concerned about the Greens at the moment, I did a little search on Amazon.com and I came up with a new copy of Tom Gorman’s authoritative text, The Complete Idiot’s Guide to Economics. It is on sale for $12.89. In fact, I am not giving it to him. It is to be for the Greens as an authoritative text on economics. And do you know what? It also has an introduction by Lindsay Tanner which says: ‘With some frustration I welcome this authoritative guide for my Greens colleagues.’

But what would you give the Minister for Foreign Affairs? I am sure that with the help of the Leader of the Opposition we could give him a signed copy of Lazarus, because beating in the bosom of the Minister for Foreign Affairs is the hope that just one day he can do what his predecessor did and come back from the dead and lead his political party. But, not to be outdone with the Christmas cheer, we have the Assistant Treasurer to consider. I was rather hoping the Assistant Treasurer, Bill Shorten, would be here. I thought, what would you give the Assistant Treasurer? What would Santa Claus give the Assistant Treasurer for Christmas? I thought there was only one thing you would give the Assistant Treasurer and that would be something from Peter’s of Kensington, not Ken’s of Kensington. I found a six-piece Grosvenor Bisteca steak knife set. When I looked up the sale value of it, I saw this:

Looking for the kind of cutlery that makes a statement?

Even though Grosvenor has been making beautiful, quality cutlery since 1928, they’re not stuffy and dull … far from it, actually! You’ll love the fresh, modern, funky designs Grosvenor has to offer. They’re not at all ordinary …

Our Bill’s not ordinary! It continues:

When it comes to steak, sometimes your average knife just won’t cut it.

But wait, there’s more. We cannot leave the four horsemen of the apocalypse out of it: Senator Mark Arbib, Senator David Feeney, Paul Howse—we will get to him in a minute—and Senator Don Farrell. I will start with Senator Arbib. What would you give him? Well, Senator Arbib likes knives, not just at the Golden Century in Sussex Street. He is someone who is an avid reader, particularly of polls. When it comes to Christmas cheer, Santa, my colleagues and I would like to give him a copy of Toby Young’s How to Lose Friends and Alienate People. In fact, he could have been the co-author of that one. You can buy it on Amazon for $6. But, not to be outdone, you would ask, ‘What would you give the other faceless men: Senator Feeney, Senator Farrell and Paul Howse?’ I believe they deserve a facial from the Ella Bache College of Skin and Beauty Therapy in North Sydney. I am prepared to chip in. It says:

Radiance Intensive Eye Express Facial Treatment

A gentle massage and botanical peel-off mask make this the ultimate anti-ageing treatment for puffiness, dark circles and fine lines.

And do you know what? That is only $28 for 45 minutes. So far I have been operating within a budget, which is what the coalition does; we operate within a budget. But, hang on, there’s one more.

It has been NBN week in this place, hasn’t it? I thought to myself: what would you give Senator Stephen Conroy, the minister for communicating confusion?

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

A business plan.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

A business plan was one suggestion. You can readily buy one off Amazon for a lot less than $50 billion, but there is only one thing that I would give the Minister for Broadband, Communications and the Digital Economy this year. It is a DVD copy of The Cable Guy. It was a 1996 film. That was a great year, not just for the production of The Cable Guy. On Rotten Tomatoes they describe the DVD as:

… a lonely and disturbed cable guy raised on television who just wants a new friend, but his target … rejects him.

The good thing about this gift is that you can buy it on eBay for 99c if you get in early. That could be a starting bid.

When it comes to Christmas cheer, the Labor Party will indulge. As they have done over the course of the last year, they will partake in their own indulgent dialogue where they will focus on whether Kevin was robbed or whether Julia deserved her position. Over the last 12 months it has been the coalition, under the leadership of the Leader of the Opposition, that has shown formidable discipline and a formidable focus on the interests of everyday Australians. Everything we have done, everything we have said, every policy we have presented has been focused on the Australian people. We have done so with an unqualified commitment to improve the lot of the people, to give them more opportunity to put more money in their pockets, to give them more certainty and stability in an uncertain time. What we have done is present to the Australian people—at the election and beyond—policies that put in place, that lay down, a sustainable future for our nation. It goes back to the fundamentals of what Australians are going to go through this Christmas when they actively consider whether they have enough money to buy their children the sorts of presents their children want. How can it be like that in a prosperous nation, a nation in the most bountiful period arguably in its history? How can it be that so many Australians will wonder whether they can afford the desires and the aspirations of their children this Christmas?

It is because Australians are not confident under Labor leadership. They are not confident that tomorrow is going to be better than today. They are not confident that they can take a risk. They are worried about tomorrow’s bills. They are worried about how they are going to pay today’s bills. It is only the coalition that is prepared to do the hard yards. It is only the coalition that is prepared to state emphatically that we are focused on the Australian people, that we are focused on the family budgets, that the rules that apply to the family budget of not spending more than you have as income should be applied to the national budget as well. If you as a government do not make hard decisions now when you have the best terms of trade in 50 years, when you have unemployment of around five per cent, when you have inflation under three per cent and when you have economic growth above trend, you will never have the courage to make the hard decisions when they will be absolutely necessary.

If you want to look at what happens when you have not got the courage to make hard decisions, pick up a newspaper and look at what is happening in Ireland today, pick up a newspaper tomorrow and have a look at Portugal or Spain or get yesterday’s newspapers and have a look at what has happened in Greece, because the only reason Australia has any confidence today is that the coalition has done the hard yards in the past and, as of today and into the future, we will do the hard yards again for the Australian people. (Time expired)

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Before calling the Minister for Defence Materiel, I just remind the member for North Sydney that he ought not to refer to other honourable members by their names.

Jason Clare (Blaxland, Australian Labor Party, Minister for Defence Materiel) Share this | Link to this | Hansard source

As this is one of the last debates before we head off for the Christmas period, can I wish all members—colleagues on both sides of the House—a very merry Christmas and trust that they have a great new year and come back safe and sound. This is a revealing debate because the member for North Sydney, the shadow Treasurer, talked about indulgent dialogue. For people listening to this broadcast across Australia or people watching this in the public gallery, it will not have gone unnoticed that he spent the first 13 minutes of his contribution cracking jokes and talking about the other side and only spent the last two minutes of his speech talking about cost of living.

He said that Australians are doing it tough and that there are cost-of-living pressures, and he is dead right. You cannot be the member for Blaxland and not understand that and not appreciate that, because when cost-of-living pressures bite, when interest rates rise and mortgages get harder to pay it is in the electorate that I represent in Western Sydney that it is often felt harder than most. But there is also another important point to make here, and that is that you cannot pay the mortgage if you do not have a job. There would be a lot more people this Christmas sitting around the Christmas tree without the opportunity to buy presents for their children or to think about a holiday up or down the coast if it was not for the action that this government took.

It is important for us from time to time to remember the position that Australia was in two years ago when Lehman Brothers collapsed. Who here would have expected that today we would be talking about an unemployment rate of 5.4 per cent? Who here would have predicted that MYEFO would say that unemployment will go down to 4.5 per cent? At a time when unemployment in Europe is near 10 per cent and unemployment in the United States is close to 10 per cent, unemployment here in Australia is at 5.4 per cent.

In the last 12 months we have created more than 300,000 jobs. This is a remarkable figure and it is a testament to the strength of the economy and the decisions that we have made. To put this into perspective, you need to understand the challenge that Australia would have confronted if we had gone into recession and unemployment had gone up to the level it is in Europe or in the United States. I state this for members and everybody listening to this broadcast to reflect upon: if unemployment had gone to 10 per cent, like it is in the United States, it would have taken us five or maybe 10 years to get that unemployment rate back to where we are now with all the catastrophe of people losing their jobs and perhaps never going back into full-time employment again.

Our success, though, brings its own challenges and its brings us to the focus of this debate. Because we did better than any other advanced economy in the world, we now face the challenges of recovery before any other advanced economy in the world. One of those is skills shortages in a tight labour market. Another, invariably, will be interest rates. If the challenge of the last term of government was to avoid recession, then the challenge now is to manage growth. The budget update, MYEFO, makes that very clear. It shows that new engineering constructions are expected to grow by more than 16 per cent this financial year and by 21 per cent in the next financial year.

In the next financial year the mining industry is planning something like $55 billion in new investment. That is the highest it has been in over 40 years. That creates a lot of wealth and a lot of good news for people all around Australia, but it also brings a number of economic challenges. Meeting these challenges requires us to do a number of things. One of them is returning the budget to surplus as quickly as we can. You do this through a spending discipline, keeping spending at a capped growth level of two per cent. Another is making sure that election promises do not add a single dollar to the budget bottom line. We have done that. We made the promise that all the promises we made during the election campaign would be fully offset and they will be.

This is not just about spending. It is also about where and how you invest. If you want to keep inflation within the band of two to three per cent as we set for the Reserve Bank—this is a debate that will not end here today; it is a debate I am sure we are going to engage in over the course of the next 12 months and beyond—then the key to this is boosting our productivity. This means investing in things like skills and infrastructure. In short, if there is a shortage of skills in our economy, if there is a shortage of labour, if there is a shortage of infrastructure that business needs, then that economy cannot grow as fast as it wants to. An economy that cannot grow as fast as it wants to then creates price pressures. It pushes up prices, pushes up inflation and has a massive impact on interest rates.

This is an area where, quite frankly, the last coalition government failed. They did not recognise this challenge even existed before it was too late. There was nothing on skills, nothing on infrastructure and spending growth over the last term of the Howard government grew every year by four per cent. Reflect upon that. I said ‘a spending cap over the forwards of two per cent’ and that spending growth in the last coalition government was four per cent. This is what partially drove the Reserve Bank to increase the cash rate time after time after time, ending at 6.75 per cent.

It hurt a lot of people. It hurt more people in my electorate than anywhere else in the country. I had more people lose their homes because of high interest rates than any other member of this parliament. It got to the point where 60 families a month had their homes repossessed, which was three a day. So I understand what the impact of high interest rate rises is and I understand the importance of a productivity agenda. It is the importance of managing growth. In 2007, 10,000 families across Australia lost their homes. This is no small thing. We as a government and as a parliament need to focus on the productivity agenda and managing growth. It is not an easy task; it is a very hard task. It is one that the former coalition government failed to manage and one that we are focused on.

When we were talking about this in the parliament over three years ago the member for Wentworth said, after an interest rate rise, that interest rate rises were overdramatised. That is how much the Liberal Party cared about this issue three years ago and, obviously, how much they care about it now given the contribution of the member for North Sydney who gave all of two minutes to this important issue. If they really cared about this issue they would have done something when they were in government, when three families a day in my electorate were losing their homes.

Interest rates and repossession levels are lower now than they were when the coalition lost office. The RBA would have to increase the cash rate another eight times before it got back to the level it was when the Howard government lost office. The cash rate would have to go up another eight times. That does not mean that people are not doing it tough. Every member worth their salt knows that when they go out and talk to their constituents.

What this government will never do is make irresponsible promises. What this government will never do is say that we will keep interest rates at record lows. That is what happened in 2004 when the Howard government said, ‘We will keep interest rates at record lows.’ Off the back of that people trusted that promise and went out, invested and got a mortgage. Then in 2007, 10,000 Australian families had their keys taken off them and lost their homes because they trusted the Howard government when they said that they would keep interest rates at record lows. By 2007 they did not believe them anymore when they said, ‘Australians have never been better off.’

This government would never make a statement like that. We do practical things and give practical help like increasing the childcare rebate, increasing the pension—the biggest increase in the pension in over 100 years—introducing the Teen Dental Plan, expanding the education tax refund so it will now apply to school uniforms, giving more support to families of teenagers by giving them support through the family tax benefit fund and, of course, come 1 January, more help for young mums and dads through the introduction of Australia’s first Paid Parental Leave scheme.

Compare that with the opposition. This is a debate about the cost of living. What are their policies? What are their plans? We did not hear any from the member for North Sydney in his contribution but, more importantly, we did not hear any from the Leader of the Opposition either in this parliament or in the election campaign. Members might remember tuning into Sky News and listening or watching the contribution from the Leader of the Opposition in the Sky News Courier-Mail debate during the election campaign. A woman named Tammy asked the Leader of the Opposition: ‘What will you do to help with cost-of-living pressures?’ His answer was:

There is no magic wand, I’ve got to say. I’d like to be able to come in and tell you that I could make all of that that pain disappear.

David Speers then said:

Just on that, nothing particular that you’ll do on cost of living.

Tony Abbott then responded:

… there is no across the board bit of magic that is going to dramatically reduce our cost of living.

The question was asked twice. There were no ideas and no plans. It is no wonder that the member for Moncrieff is saying in the party room, ‘Where are the positive ideas?’ And it appears to be contagious because, only this week, when the Premier of Western Australia was asked about increasing electricity bills his response was, ‘People should turn their air conditioners off.’ That was his response to the cost of living: people should turn the air conditioner off.

Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

Mr Keenan interjecting

Jason Clare (Blaxland, Australian Labor Party, Minister for Defence Materiel) Share this | Link to this | Hansard source

For people living in Victoria who are contemplating their vote on the weekend, that is the Liberal Party’s policy when it comes to the cost of living: turn the air conditioner off. There are no policies except increasing taxes through their own paid parental leave scheme, refusing to support a tax cut for small business and talking about getting rid of unfair dismissal laws. No wonder it is a party that is not supported by the general public.

We also hear a return to the debate of the flat tax. The last person to come in here and talk about flat tax was Pauline Hanson. It is no wonder we talk about economic Hansonism when we have a return of the debate about a flat tax, which would mean that the average income earner would earn $500 less a year and people like us would get an extra $4,000 a year in our pocket. So, if you are a politician, if you are earning our income, the cost of living might be easier under a flat tax regime but I tell you what: it will not be for the 60 per cent of Australians that it would affect. It would mean less money in their pockets. When you are talking about the cost of living, it is not only how much things cost but how much you can pay. How much is in your pocket can be a lot less if there is a flat tax regime. It means that you get less money, less take-home pay—a lot less if we were to return to a system like WorkChoices, when more than a million Australians earned up to $4½ thousand less as a result of those changes.

Through the contribution of the member for North Sydney, the Liberal Party have shown that they have no credibility and no argument when it comes to the cost of living—more importantly, they have shown that it is the Liberal Party that have lost their way. To be frank, the Liberal Party lost their way a long time ago. If Menzies were alive today he would not recognise the modern Liberal Party. Menzies would not have voted against tax cuts for small business. Menzies would not have voted against tax cuts for the forgotten people. But the Liberal Party intend next year to vote against tax cuts for small business. Menzies would not have taxed Australian business with a paid parental leave scheme, as this Liberal Party want to do. Menzies would not have voted against the National Broadband Network. How do we know this? When the biggest nation-building project of Menzies’ era came about, the Snowy Mountains Scheme, what did Menzies do? Menzies criticised it. He argued about it, he asked lots of questions and, at the end of the day, Menzies voted for it. He acted in the national interest. The same cannot be said of his successors. The Liberal Party look more like the Australian branch of the Tea Party. You have the Tetley branch in the Liberal Party and the National Party is the Bushells faction of the Tea Party, and the Leader of the Opposition is more like Sarah Palin than he is like Robert Menzies.

As the parliament comes to an end in 2010, the Liberal Party has become a party of the extreme Right, with no ideas and no solutions when it comes to the cost of living. They just have jokes—13 minutes of jokes. Their only agenda is to attack everything and destroy. Given the great challenges that this country faces the people—(Time expired)

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

I rise to support this matter of public of importance about the cost-of-living increases being imposed upon Australians, leading up to Christmas. But I do not think we should make the mistake of thinking that this is some Johnny-come-lately thing. It took three years of hard labour to get to this point. It was not done overnight. The current Prime Minister has been gleefully forging ahead in the big-spending, throwaway way in which she acted as a minister in government, and she still seems to be ploughing on with the same reckless abandon towards what those in the Australian public have to pay—interest rates on cars, interest rates on houses and, particularly, interest rates on small business. It is right there in front of us. After three short years, the government is continuing the rhetoric without the action.

There is one thing that every Australian does, no matter their background or which state or region they come from: we all eat. The one thing that will happen is that food prices will go up. Admittedly, in the course of the three years it has taken to get to this kind of pressure, we did have GroceryWatch, which we all remember. We do not hear a lot about it now. One of the things that the former Prime Minister said in ‘07 was, ‘We are going to bring down the cost of living.’ That was three short years ago. GroceryWatch is the only thing I noticed that was ever actually aimed at it, and that was no more successful than Fuelwatch. And fuel is probably the other thing that most Australians have to use as well.

I recall that, at one stage, they did try to pass off the pink batts as a way of dropping the cost of living. I am not quite sure how successful that was. Parts of that I do not want to talk about today, but certainly it cost a lot of money. It almost cost more money to try to fix than to do, and that was a heck of a lot. At the same time we had the school halls program. There might have been schools around Australia that were glad of it, and why would they not be? No-one knocks anything back that is free. The point that was missed by the minister in question time today was that the school halls cost about three times more than they should have. The reason I lock in the batts and school halls together is that it was a lot of money, a lot of borrowed money, which, as I recall, we were criticised for voting against.

There is one thing that we have to look at with the borrowing side of this issue as we run up to Christmas. The previous speaker mentioned the previous government. The previous government left this government in the best fiscal position of any government at any time in Australia’s history. And what have they managed to do to the position we left them in three short years of hard labour? What did happen? Not only did they spend the surplus we left them, I think they might have borrowed a little too. And now we are looking at a wonderful communications network. As with the school halls, people like something they get for nothing, but in actual fact they will still have to pay for the NBN. We are talking about $55 billion. The communications industry—not John Cobb, not me, not any of us—looked at the summary for this program and said ‘Whoops!’ Mind you, they have always been a bit amazed by the whole NBN proposal. The communications industry is now talking about $55 billion. That is okay. We will borrow a bit more. But the issue of all this borrowing is that the rest of us—the constituency of Australia—have to deal with it. If you come from where I do, you do have to deal with it—that is, retail sales have gone down. Even though we are now getting into the festive season, retail sales are going down out of sight. In towns where I come from, Bathurst and Orange, retail sales are shrinking rapidly. Why? Is it because the government have run up such a debt? The previous speaker spoke about interest rates. The government have managed to bring interest rates back to a situation where they are higher than at any time in the 11½ years of the previous government—and it has not taken this government long to do it.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Rubbish.

John Cobb (Calare, National Party, Shadow Minister for Agriculture and Food Security) Share this | Link to this | Hansard source

The member for Monaro might not like it but it is a fact. As somebody from a so-called regional electorate, he ought to know better than to poke fun at the cost of living of people in regional areas. We all know very well that, with the issue of debt, it is the ordinary people who have to pay it. This government and their union mates believe that it does not matter how much they borrow, because big business will pay it back. Everybody knows that the people who really struggle to pay off debt under a high tax regime are the ordinary workers who pay their taxes every week—and that is a fact. That is what is occurring in the electorates of Calare and Monaro, and you had better start thinking about it.

As well as that, let us look at the fact that everybody has to eat food and that prices for food are going up and will continue to go up. Let us also look at what has gone on in the Murray-Darling Basin, where a high proportion of fresh food is being produced. The previous minister, Senator Wong, was not terribly concerned about what happened to ordinary Australians, or what they did or what they paid. She just wanted to take all the water from the basin. However, we now have a new minister, the member for Watson—the minister for water and various other things. Should he inspire confidence in us? I doubt it. In his time as Minister for Agriculture, Fisheries and Forestry, in one year he took $1 billion out of his portfolio—a portfolio that concerns the very people who produce the food, the best food in the world, and that keeps food prices down—and gave it to Treasury and various other people. He took money away from the CSIRO. He took money away from R&D. He now proposes to cut half the amount of R&D money that goes to industry to keep the costs down so that people wanting to shop in supermarkets do not go broke at the thought of walking in there, let alone paying for anything. Let me talk for a moment about where we are going with the water cuts and what effect this will have on food production. If you take 30 or 40 per cent of the water out of the basin, you are taking about 10 or 15 per cent of all the available fresh food in Australia.

One of the other huge over-costs that this government is wearing is the boat people who are coming to Australia. The government is blowing a billion dollars there. But the biggest refugees in Australia are the political refugees who have come from Sydney to Canberra, and the member for Watson, the Minister for Sustainability, Environment, Water, Population and Communities, is one of them. Three years ago he woke up to what was going on in New South Wales and he got out. He came from the upper House there to the House of Representatives in Canberra. That man is a protege of Joe Tripodi and Eddie Obeid. It is not really a great recommendation for somebody to talk about policy and not just about politics—and that is all he is worrying about. He is a protege of the New South Wales Right. It is not something that I would want to skite about in any parliament of Australia. He got out because he knew what was going on.

There have been two federal elections since the last state election, and the Joe Tripodis and the Eddie Obeids are getting out too. People talk about having confidence in the minister for water; it is not just about his handling of the basin. He and his predecessor knew what that report was going to show before it was tabled. Do you really think the authority would not advise the minister how drastic that was going to be? Of course they did. You would sack them if they did not. Yet one did not give a damn and the other one looked at it and thought he would get away with it. The minister for water did not even care about it from the point of view of food prices or what it would do to the basin until such time as he suddenly realised that the average Australian is a fair dinkum person and believes in a fair go. Suddenly, they realised they were in trouble with the Australian media in the main cities, not just with the two million people in the Murray-Darling Basin. Now they are saying, ‘We’d better have a look at it.’ Well, he had better do that in a hurry.

This government have empowered the Greens; they are pursuing policies in agriculture, mining, forestry and transport that are being pushed by the Greens. These policies will not just lift prices on electricity and food; they will send them through the roof. It is Christmas and people have stopped buying because they know what is coming. (Time expired)

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to be speaking in this afternoon’s debate because I am particularly pleased to see that the opposition has finally, in this near final sitting day for 2010, determined that cost-of-living issues are a matter of some significance. I am very pleased that they have reached that conclusion. We on this side of the House have known for quite some substantial time that these are issues that are of significance to ordinary Australians, which is why we have embarked on a very significant and comprehensive series of policy initiatives and reforms and have done so from day 1 of our term in office.

Those reforms have spanned areas such as taxation, superannuation, pensions, child care, education and skills development, jobs and job security and, recently, the cost of PBS medications. In contrast to that, the opposition, as was noted by the Minister for Defence Materiel earlier this afternoon, has come up with no positive or constructive policies. They are yet to enunciate anything that would in fact address the issues that they so vehemently say are matters of concern.

The one thing I will say, however, is that the shadow Treasurer mentioned earlier in today’s debate that something they would be seeking to do was to cut spending, presumably in the areas of health and education as we saw during the years of decay of the Howard government. What he unfortunately failed to indicate to us was the margin for error in that $50 billion figure that he mentioned in spending cuts. Unfortunately, call me a nitpicker or a pedant, I tend to think that a margin of error of plus or minus $11 billion is somewhat significant if one is aspiring to position oneself as a Treasurer in this country.

I am very pleased this afternoon to be able to articulate in a bit more detail the significant areas of reform that we have embarked on in those particular areas of taxation, superannuation, pensions, child care, education and skills development, jobs and job security and the cost of medications. We know that this government has delivered tax cuts for three years in a row to assist working families. These are real and practical measures that will impact upon Australians’ cost-of-living concerns. We know that this was achieved even against the backdrop of a global financial crisis, so our dedication to these issues is clear and consistent. Our tax cuts mean that a worker earning $50,000 is paying $1,750 less tax in 2010-11 than they did in 2007-08. These are fairly significant practical changes that this government has delivered. We have doubled the low-income tax offset, which has increased the tax-free threshold from $11,000 to $16,000. As many Australians know, we have also reduced the marginal tax rates faced by many workers, which means that they get to keep more from an extra dollar of income.

We know that this government has increased the childcare tax rebate from 30 per cent to 50 per cent, which is something that has an incredibly significant impact in my electorate, which is a growing area that has a significant and growing population of young families, who will rely on and benefit from that significant policy change. Yet, again, in more than a decade of Howard decay, none of these initiatives for Australian families were delivered.

We will deliver the new family tax benefit arrangements to assist families with teenagers, who continue to bear the significant costs that come with raising teenage children. We all know that this is a very significant reform and reflects our hope that teenagers will stay at school and develop skills for their futures. Yet again, it is a practical reform that provides financial assistance to families and is targeted at ensuring that teenagers remain at school and develop skills.

We also know that this government has delivered a historic pension rise, which is something that the Howard government did not prioritise. During more than a decade in office professing to have an interest in and regard for older Australians, it gave nothing back to them. It took this government, in its first term and once again against the backdrop of a global financial crisis, to achieve a significant increase to the age pension.

Another significant issue that will be of relevance to older Australians and to pensioners in this country relates to a reform that this government has achieved in only the last week, and that is the reform to the Pharmaceutical Benefits Scheme. We have made changes to the PBS which will mean that the price taxpayers pay at the pharmacy for PBS medicines will now more accurately reflect the market price instead of the current listed price, which is often much higher. The opposition did not support this measure. Tellingly, the people who profess to be concerned about the real costs to the pockets of ordinary Australians facing cost-of-living pressures were precisely the people who objected to this measure. Here is the alternative they so helpfully suggested: they proposed that we take up the proposals of the Generic Medicines Industry Association, which would have meant that pensioners would pay an extra $5 per script for their medications. To a pensioner $5 per script is a fairly significant amount of money. I am sure that most members in this place would be aware of that. So, we have increased the pension by a historic amount during our first term in government, and the opposition’s terribly constructive proposal, in the manner in which it proposes to regulate the PBS, is to take money away from those people whom we have given that increased pension to.

I say again that I am particularly glad that the opposition, in a rare moment of illumination this afternoon, has come to understand that cost-of-living pressures are something to consider. Unfortunately their rhetoric and the reality of their behaviour in relation to these matters are somewhat at odds. We on this side have been taking measures for some time to address cost-of-living pressures. It is extraordinary that the opposition, which has once again taken an opportunity to berate the very successful BER program and which let the education sector flounder without adequate funding for so very long during the Howard years of decay, should talk about the need for attention to the cost of living. Because what better way is there of assisting the long-term prosperity of our young people, and their capacity to earn a decent wage, than through investments in their education and then securing their employment? On both fronts this government has been leading the way.

We have almost doubled the education funding of the Howard government in our first term, again against the backdrop of the global financial crisis. We have created, as the Treasurer mentioned again today, an estimated 650,000 jobs during the last three years, achieving much of this through the stimulus spend and through other endeavours to sustain the Australian economy during difficult global international circumstances.

When people have studied and worked hard to get an education, to get qualifications and to get jobs, we would really like them to keep those jobs. That is why in our first term we moved to restore fairness in workplaces around this country, something which those opposite persist in questioning today. Indeed, we have heard that the member for Moncrieff has once again raised whether industrial relations ‘reform’, as they put it, should be revived in the Liberal Party’s agenda. We showed during our first term, and we continue to show, that it is possible to work with industry and workers for the best outcomes. We implemented the Fair Work Act and we abolished Work Choices.

The only measure that the opposition have proposed in addition to their spending cuts, which again have that plus or minus threshold of a mere $11 billion—pocket change!—is tax increases which they need to support their paid parental leave scheme. I am pleased to say that on this side of the House we have been able to initiate and implement a paid parental leave scheme without needing to impose additional taxes which would have flowed on to consumers and thereby raised the cost of groceries and other everyday ordinary items, increasing cost-of-living pressures for ordinary Australians.

The final point I will make is in relation to superannuation. This government is seeking to increase the superannuation guarantee to 12 per cent. We all know the public position of the opposition on this. What better way to provide for the long-term quality of life and economic circumstances of our retiring Australians than to provide appropriately for superannuation.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I rise to support the matter of public importance today. The government should be ashamed that it has failed to take any action to alleviate the cost-of-living pressures in the lead-up to Christmas. This is a time when family budgets are pushed to the brink, when a lack of funds means fewer Christmas presents or maybe no Christmas presents at all, fewer guests at the Christmas table or maybe no guests at all. It could mean that school holiday activities have to be significantly reduced or perhaps not take place at all simply because there are no funds or there are very limited funds.

I know the cost of living is hurting Australian people a lot. I hear it from the people in my electorate of McPherson. I receive emails and calls on a regular basis in which people talk to me about the impact that rising prices are having on their day-to-day life. People raise it with me in person. They stop me at shopping centres and in the street to tell me how difficult life is for them at the moment. I heard it before and during the campaign and I hear it more and more as the situation deteriorates.

Unfortunately, the issue is most often raised by those who are most vulnerable in our community. What I want to know is what the government is actually doing to reduce the pressure on our most vulnerable: our seniors on fixed incomes; our welfare recipients; the unemployed, who have no capacity to increase their incomes to compensate for the additional cost pressures they face. Of course it does not only affect the most vulnerable amongst us; if affects the entire community. And it affects us most dramatically during the holiday period.

At the 2007 election, the government promised to address cost-of-living pressures. They made a commitment to the Australian people to reduce the cost of everyday expenditure on items that we all rely on. They promised to do something about groceries, they promised to do something about fuel and they promised to do something about banking. But what have the government done to fulfil the promise that really was the centrepiece of their campaign? If you cannot think of anything, Mr Speaker, I can assure you that you are not on your own. Very few of us can think of anything real and tangible that the government have done. But let me point out to you a few things that they have attempted.

Firstly, there were a range of websites. Fuelwatch, which was supposed to reduce our fuel costs, was of course the ridiculous embarrassment that the coalition predicted it would be. The Royal Automobile Association of South Australia went so far as to say that it believed that Adelaide motorists would be $100 a year worse off as a result of Fuelwatch. So not only did it not help; it actually exacerbated a situation. It is easy to say that $100 is not much, but $100 here and $100 there most certainly does add up, and it becomes very significant to those in the community who are most vulnerable.

Then there was GROCERYchoice, the now abandoned white elephant that did not help retailers reduce their prices, did not help consumers get the best prices, and cost Australian taxpayers at least $7 million. A team of up to 30 people had been working around the clock to develop the site, and $7 million went out of the pockets of the Australian people and down the drain. What did this project achieve? Absolutely nothing. It was poorly planned and poorly thought through.

It is actually not unlike the government’s favourite project at the moment, the NBN—poorly planned, poorly thought out and a potential financial disaster of a magnitude not seen before in this country. It is again a project done without due diligence and with an ever-increasing bill payable by us, the Australian taxpayers. Why is this relevant to cost-of-living pressures? With a budget deficit in excess of $40 billion this year and a budget deficit next year, this government is going to deliver to all Australians a burden of debt that will put upward pressure on interest rates and have a huge impact on all Australian families, potentially for years to come. Wasting money on poor projects, including the failed home insulation project, increases the debt and deficit, and that is really only making the problem worse.

A debt-free government is one that does not compete with individuals and businesses for finance. This government is borrowing $100 million a day. It is a AAA rated borrower. This government is in competition for finance with ordinary Australians. This pushes up costs for us, the ordinary Australians. When you reduce the debt you reduce the costs on borrowings. This is certainly a simple concept but the government either does not understand it or chooses to ignore it. The seven interest rate rises in the past year have added more than $500 a month to the repayments on an average mortgage—an extra $500 a month just to keep a roof over your head.

The coalition has a plan to make banking fairer for consumers and for a better all-round financial system with our nine-point plan. This is the only proposal on the table that looks to address issues with our banking system outside the RBA’s interest rates increases. This plan will culminate in a full review of our financial system. Considering the impact financial services and lending have on household budgets, this is a necessary measure that will help address the cost-of-living pressures. The government will not consider it and they will not consider addressing their reckless spending, but families and individuals have to look at their own spending, at their own budgets. I say, if it is good enough for families, why is it not good enough for the government to manage the budget?

It is disgraceful that, because this government has shirked its own responsibilities, Australians are now paying the price and will continue to pay that price for some time in future. And of course it is not only in the form of increased prices; it is the potential for increased taxes or at least taxes that are not reduced. If your family is debt free, you are still hit with cost-of-living pressures outside the interest rate rises. Electricity is up 34 per cent. Gas is up 26 per cent. Water and sewerage are up 29 per cent. The issue here is that you just cannot decide to disconnect your electricity, gas or sewerage. You can use less, and in Australia we have a very proud history of demonstrating that we can conserve water, that we can reduce electricity use by simply switching off the power. We are already doing this but we are still faced with the rising cost pressures of those services.

Health care is not something families should be skimping on, but the cost of health care under the Labor Party has risen up to 18 per cent. Education costs are up 17 per cent and no government should want families to cut back on that and sell out our children’s future. Year over year prices generally go up. I accept that; we all accept that but we should accept that only up to a point. 

We need to look at the period over which these price increases have occurred. We are constantly reminded—and the Treasurer reminded us this week in the House—of the seriousness of the global economic downturn. Australia, thanks to years of strong economic management and reforms prior to the 2007 election, was in a good position to weather the GFC. There was a reduction in inflationary pressures and this is shown in the figures, but these everyday prices kept rising despite the GFC. The value of the dollar is higher than ever. We should be able to get more for our dollar, so there is no excuse there either. There is a link between the actions of this government and the prices we all pay for our everyday expenses that the government just will not accept. They are shirking their responsibility to the Australian people in this regard and the impact of this is exacerbated as we move towards the holiday season.

They do not understand that there is a link between government expenditure—their reckless spending—and the impact interest rates and prices are having on everyday Australians, or maybe they just do not care. Not only are they not willing to be part of the solution but also they continue to be committed to being part of the problem. The government need to take responsibility for the impact they are having on ordinary Australian households. They need to take responsibility for the impact they are having on our most vulnerable and they need to understand the correlation between their actions and what is in the next household bill for families across the nation. In July, the Treasurer said:

We will do everything as we go forward to ensure we minimise those cost-of-living pressures.

I say to the Treasurer: the government has failed Australian families and must immediately change its pattern of behaviour. It must start planning properly, improve its financial management, start proper project implementation and act in the best interests of all Australians.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

When I saw this MPI this afternoon, I was a bit surprised and wondered to myself where the member for North Sydney has been during the 43rd Parliament. Has he not been listening? I do not think so, because he has been so hell-bent on destroying, cutting and slashing that he cannot hear above the din of chainsaws, demolishing balls and jackhammers in his head. Had he listened, he would have learnt that Labor saved this country from recession. He would have learnt that we created 650,000 jobs. That figure makes me think about what is happening in the UK and the US at the moment, and what is happening in Europe. Just recently, I heard of 500,000 public service jobs being slashed in the UK. Compare that to 650,000 jobs being created here in Australia.

Had the member for North Sydney been listening, he would have learnt that we have an unemployment rate of 5.4 per cent. Again, compare that to the UK, the US and Europe, where the unemployment rate is double that. Had he been listening, he would have learnt that we are heading for a surplus in three years time. That makes me cast my mind to the extraordinary and tragic situation in Ireland at the moment, where they are being bailed out by the EU. Where are we in Australia? We are heading towards a surplus in three years time, we have created 650,000 jobs, we have unemployment at 5.4 per cent and our workers are now working under Fair Work arrangements, enjoying good pay and conditions.

Had the member for North Sydney been listening, he would have heard about the infrastructure that we are creating in this country, that we are building after decades of neglect. He would have learnt that we have doubled the spend on roads, that the spend on rail has gone up tenfold. He would have learnt that we have invested $16.2 billion in the Building the Education Revolution for children now and for Australia’s future. He would have learnt that we are overhauling the health system and increasing the number of GPs, doctors, nurses and carers throughout the country, and he would have learnt that we want to improve productivity in this country through the National Broadband Network, that we want to ensure that this country stays up to date with what is happening in the world and continues to be innovative and productive. That is why the National Broadband Network is so crucial.

Had he been listening he would have learnt that Labor is doing an enormous amount to ease the cost-of-living pressures on families. On 1 January next year we will introduce paid parental leave, an amazing achievement after decades of fighting by women for this. It will benefit not just women and men but also all families. It is thanks to Labor that this amazing achievement has happened. Had he been listening he would have heard about the increase in childcare rebates from 30 per cent to 50 per cent and also the range of reforms we are introducing in that area to improve the delivery of standards of child care and the education, fulfilment and commitment of childcare workers. Had he been listening he would have heard that the pension had gone up. My mother is on the pension and she was greatly relieved to hear that news. It was thanks to Labor that that has been delivered for both singles and couples. Had he been listening he would have heard about the education tax refund for uniforms, the dental health system for teens and also the plans we have for super so that Australians can enjoy prosperity and decent conditions when they retire. Had he been listening he would have heard about the tax cuts—18 per cent for people who are earning $50,000 a year. That is nearly 20 per cent over three years, putting more money in families’ pockets. And had he been listening he would have also heard about the increase that we are planning in family tax benefit A.

The investment that Labor has been making in this country, and also the efforts it has been making to reduce the cost-of-living pressures, has extended to Canberra, thanks to the Gillard Labor government. We now have cranes everywhere around the city. We have not seen cranes on the horizon of this city for decades. Now we have roadworks everywhere, which I know cause some complaints amongst my constituents, but it is the first time for decades that we have had roadworks. Now, for the first time in decades, we have millions of dollars being invested in our schools. Parents, students, staff and the grandparents of Canberrans are very grateful for the investment we are making in their schools.

Had he been listening he would have realised that the Gillard government is deeply committed to the people of Canberra and deeply committed to investing in our future to ensure that we continue to grow and thrive. I contrast that with what happened under the coalition government in 1996. I contrast that with the fact that when the coalition government came to power they axed 30,000 jobs in this town.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Rubbish.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

They axed 30,000 jobs—go back to it.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Shocking. The whole region was affected.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

As the member for Eden Monaro can attest, 30,000 jobs that had an impact not just on this city but also on this region. As a result of the axing of those jobs, we went into a countercyclical recession for four years. The coalition does not care about Canberra; it does not care about the Public Service. It has complete disdain for it. Not only did it impact on the Public Service but also it impacted on the region as businesses closed down. It had a knock-on effect right throughout the economy, and that lasted for four years. Only now in some parts of the city are we gradually getting out of the recession that was caused by the coalition government. We still have empty shops as a result of its complete disdain for the Public Service and for Canberra.

Not only does the opposition have complete disdain for Canberra’s existence but 10 years ago it also had complete disdain for 30,000 jobs. The coalition’s promise to public servants in Canberra if it was to win office again in 2010 was 12,000 more job cuts, plus an increase in the efficiency dividend. This is what the coalition promises Canberra. It has complete disdain for this city and the Public Service.

The member for North Sydney has obviously not been listening to what has been happening in this 43rd Parliament over the last few weeks. He obviously has not been listening to the significant range of achievements that this government has delivered for the people of Australia and, most importantly, for the people of Canberra and the significant effort it has gone to to ease the cost-of-living pressures throughout Australia. He feigns concern that he is worried about the people of Australia. If he is concerned about the people of Australia, he is certainly not concerned about the people of Canberra. He and the coalition are intent on destroying this city. The coalition destroyed it in 1996 and it took 15 years for it to be rebuilt. The coalition is intent on doing it again in 2010 and onwards. Do not pretend otherwise. It should not pretend that it is interested in this city and the welfare of the people of Canberra in the guise of Christmas cheer.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The discussion is concluded.