Milton Dick (Speaker) Share this | Link to this | Hansard source

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

This Government's economy destroying policies which are hurting Australian families and small businesses

I call upon those honourable 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—

Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

Across every front, this government is pursuing economy-destroying policies which are hurting Australian families and small businesses, policies which are driving up interest rates. The most urgent challenge facing millions of Australians is the steady drumbeat of rising interest rates making it ever harder for them to repay their mortgages and hold onto their homes. The current Prime Minister, when in opposition, promised Australians cheaper mortgages, but the reality has been so very different. Today the cash rate sits at 4.1 per cent, after 11 rate rises since this government came into office. Of course, the actual rates that households are paying are so much more than that. Economists—certainly economists who observe the work of the Reserve Bank—and the Reserve Bank are opining that there are even more rate rises to come. Indeed, the Governor of the Reserve Bank recently warned that the central bank may need to lift rates again in coming months to get inflation down to its two to three per cent target. In other words, the Reserve Bank is warning embattled mortgage holders of more pain to come. Economists are pointing out the same risk. Westpac now expects another two rate rises. The NAB chief economist, Alan Oster, believes that the Reserve Bank will lift official interest rates to 4.6 per cent by the end of winter. He has said that the economy is now facing its worst back-to-back years since the 1990-91 recession. According to the latest report from Westpac, household sentiment is stuck at recessionary levels. According to the NAB Monthly Business Survey, the pipeline of future economic activity is shrinking and business confidence is diving. According to the Centre for International Economics, there is flatlining productivity in the mining sector and its supply chains. According to the budget, interest rates were going to stay at 3.85 per cent until early 2024 and then fall. Already, after just over a month, that prediction is sadly out of date.

The grim reality, in contrast to what was forecast in the budget, is that the latest interest rate decision adds another $75 a month to repayments on a typical $500,000 mortgage, making monthly instalments $1,130 higher than when this government came to power. A family with a mortgage of $750,000—an entirely typical mortgage in many parts of Australia today—is now paying $22,000 a year more in repayments than a year ago. It is no surprise that, as a result, a record number of homeowners are now struggling to pay their mortgages. According to new research by Finder, 40 per cent of Australian mortgage holders said that they struggled to pay their home loan in May. That is the highest recorded percentage since that survey began, and is up from 24 per cent 12 months ago. Canstar, the respected website that surveys pricing in many areas of the financial markets, has analysed the impact of the widely expected further increase in the cash rate to 4.6 per cent. As I mentioned, the NAB chief economist, Alan Oster, is among many who is predicting that. According to Canstar, the outcome of that grim increase will be that, for the median home, the typical household will be paying up to half its before-tax pay in mortgage repayments. Is it any surprise that, among young, growing families with a mortgage, 88 per cent are now in mortgage stress?

This government, as well as bringing in policies which are driving up interest rates, is also enthusiastically pursuing ill-judged policies that are driving up the cost of living. Our core inflation is now higher than any G7 nation other than the United Kingdom. In March inflation lifted to 6.3 per cent, with an annual rate, through to April, of 6.8 per cent. That inflation is not coming from the Kremlin, despite the Prime Minister's repeated attempts to point to any possible kind of excuse. It's coming from Canberra. It's about time that this government took responsibility for the cocktail of ill-judged policies they have put in place, which are making the situation worse. There is $185 billion in new spending since this government came to office. There's $2 of new spending initiatives for every dollar of revenue initiatives. There is poorly planned migration that the budget papers say will drive up housing costs. There's of course the truckie tax. There's the $153 million tax on our farmers. There's a fiscal strategy described by economist Steven Hamilton as the weakest fiscal strategy in living memory and a failure to restore the fiscal guardrails that have been in the fiscal strategy since 1996.

Just over the weekend, we saw this ill-disciplined spending continuing, with $2 billion splashed around on top of what was in the budget in a panicked response by this government as its highly dodgy Housing Australia Future Fund failed to get support in the Senate. Of course, the rising taxes that this government is enthusiastically introducing across the spectrum are also adding to the cost of living, whether it's that farmers tax I mentioned, whether it's Labor's franking credits and super taxes, which will be directly felt by self-funded retirees and pensioners alike. Indeed, over the next five years, the tax paid by Australians will increase by more than $300 billion.

What stands out is the way that respected commentators and economists are very clear in their assessments that the government's budget and spending decisions are driving inflation. Despite all efforts by the Treasurer to walk away, to decry responsibility, by the Prime Minister saying, 'nothing to do with me,' by the constant litany of excuses that are rolled out by those in government, the fact is that respected observers and former participants, such as former Reserve Bank of Australia Governor Dr Glenn Stevens, say inflation is way too high and that interest rates could remain elevated for some time yet.

ANU economist Ashley Craig confirmed that the government is making the Reserve Bank's job harder, saying, 'The present government decided to take an expansionary position,' and went on to say, 'If the government's spending and taxation choices are too expansionary, the RBA must act by raising interest rates.' It is this government's decisions which are putting the RBA into the position where it needs to keep raising interest rates, because there is no fiscal discipline being shown by this government.

Steven Hamilton has said the budget is expansionary. In Senate estimates, the RBA governor confirmed that the discretionary spending in the budget was expansionary. Betashares chief economist, David Bassanese, called the budget 'unambiguously expansionary'. What did Rich Insight's director Chris Richardson say? He said that he had thought that the Reserve Bank was done and dusted, but this—namely, the budget—has notably raised the chance that they will do another swing of the baseball bat.

S&P Global Ratings had this to say of the budget 'we expect inflation to be stubbornly higher than the Reserve Bank of Australia's targets until fiscal 2026,' and, 'handouts in today's budget may add to inflationary pressures.'

Policy decisions are increasing the cost of living, policy decisions are increasing interest rates and, of course, let's not forget policy decisions are driving up energy costs. Over nine years of coalition government, power prices rose on average by a mere 0.3 per cent a year over nine years. What has this government delivered for just one year? They delivered 12.9 per cent. This is not a race you want to win. There's more pain to come. New power price increases are up to 25 per cent for households, 29 per cent for small businesses from 1 July with the increase in the default market offer, the Victorian default offer and Queensland regulator prices. Small businesses struggling so hard to keep their noses above water will see electricity bills increase by up to $1,310 a year. This from a Prime Minister who promised 97 times prior to the election that those power bills would go down by $275. In area after area, it is the policy decisions of this government which are destroying the economy and hurting families and small businesses.

Anne Aly (Cowan, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

It's always great to have an opportunity to speak about what this government, the Albanese government, has achieved in the relatively short time that we have been in office—relative, of course, to the nigh on 10 years that those opposite had when they were in government to do anything, relative to other OECD countries and relative to and in spite of global headwinds.

I note that those opposite like to talk about the cost of living. I will remind them that I was elected to this place in 2016, and since 2016 I have lost count of the number of times I've come into this House and spoken about the cost of living for people in my electorate, in the election of Cowan. These are the people in suburbs like Girrawheen, in Lockridge, in Kiara, in Wanneroo and in Balgo, people who live in low socioeconomic suburbs, people whose minimum wages were kept deliberately low as a centrepiece of the economic agenda of those opposite when they were in government, people who have lower education outcomes and people who saw the cost of an arts degree go up by 113 per cent because of those opposite. I had young people, the very first person in their family able to go to university, in my office in tears because those opposite increased the cost of a university degree by 113 per cent, and they were not going to be able to complete their degree. These are the people in my electorate who had to choose between buying food and buying the medicines that they need to take control of their chronic illnesses and their chronic pain. Since 2016, I have been speaking about the cost of living for those people, and I know many of my colleagues on this side of the House have been doing the same for the people in the electorates that they represent.

What have we achieved in just over a year of being in office? We've reversed a $78 billion deficit and turned it into a projected $4 billion surplus. We've created 465,000 jobs in this term of government. And I am very proud to note that I am part of an Albanese Labor government which saw, in March, women's workforce participation at an all-time high, reversing a 20-year trend. None of this was by accident. All of it is in no small measure due to the responsible and responsive budget delivered by the Treasurer in May. While those opposite like to quote, I shall just use one quote in my contribution today, and that quote is from the Reserve Bank governor, who made it clear that our budget is addressing inflation, not adding to it. In Senate estimates, on 31 May, the Reserve Bank governor said:

I don't think that the budget is adding to inflation; it's actually reducing inflation in the next financial year.

The things that we are seeing—the record job growth; the record number of women in full-time employment; the budget returning to a surplus, even though those opposite promised it and were unable to deliver it—are a direct response to a responsible and responsive budget that was designed to deal with the greatest challenge that we are dealing with, which is the inflation challenge. The inflation challenge is a central focus of our economic plan and of the budget that was handed down by the Treasurer.

If we were to look at the record of the Albanese Labor government in the last 12 months compared to those opposite, who had 10 years—or close to 10 years, to be precise. Let's do a compare and contrast. They took us to a record deficit; we saw record jobs. They deliberately kept wages low—let's keep reminding people of that; let's keep reminding people that their economic agenda, their approach to the economy, was to deliberately keep wages low. We have gotten wages moving again. We've seen an increase to the minimum wage, and my colleague the Minister for Aged Care has overseen an increase to the wages of aged-care areas. My mum was an aged care nurse; I welcome that, and I pay heed to the minister for that.

Under those opposite, the cost of early childhood education and care rose by 49 per cent. One of our first acts in government, within our first six months, was to boost the childcare subsidy to provide very much needed cost-of-living relief to 1.2 million families right across Australia, including 265,000 in rural and regional Australia. When those families sit around the family table and budget, one of the first things they factor in is the cost of early childhood education and care. Then they work out everything else around that, including how many hours the primary caregiver—most often the woman in the family—can work before that financial benefit from working is eaten by the cost of early childhood education and care. Those opposite had 10 years to do something about the cost of early childhood education and care, to provide that cost-of-living relief to families, and they did nothing. Our biggest budget promise that we took to the election was that boost to the childcare subsidy, which will come into play on 1 July.

In terms of housing affordability and supply, they did nothing. We have before us the HAFF, the Housing Australia Future Fund, to provide housing supply, particularly for those most vulnerable—particularly for women and children fleeing family and domestic violence. Those opposite teamed up with the Greens political party to block that.

Matt Burnell (Spence, Australian Labor Party) Share this | Link to this | Hansard source

Surprise, surprise!

Anne Aly (Cowan, Australian Labor Party, Minister for Early Childhood Education) Share this | Link to this | Hansard source

Surprise, surprise indeed. Strange bedfellows, might I say. Those opposite did nothing about giving families choice; we increased paid parental leave so that mothers and fathers could stay at home with their children in those first vital six months of their lives. Those opposite increased the cost of university degrees; what did we do? We made more university places available and provided fee-free TAFE for thousands of Australians across the nation. I had the great pleasure of meeting some early childhood education and care students at Swinburne TAFE with the fabulous new member there. They were saving thousands on their degrees in early childhood education and care.

Those opposite failed to land a single energy policy, whereas on this side, as the Minister for Climate Change and Energy mentioned in question time, our changes—which they voted against—will deliver an average of $819 of fee relief on electricity prices for families and households, as well as for small business. Those opposite failed to establish a national anticorruption body, something that they promised for three years. It took them three years where they kept promising it, and then they failed to deliver it at all. We're delivering on that promise, and I look forward to when that body is established.

Those opposite froze the Medicare rebate. We all know what they want to do with Medicare. We all know that their hearts are not in Medicare. What we do know is Medicare is a Labor government legacy and we will always protect it. We have slashed the cost of medicines. We've increased the GP rebate. And we have delivered $100 million saved by Australians on the cost of their medicines.

I note that it's reported in the media that in their caucus meeting today the Leader of the Opposition urged his party to appear to be more compassionate. I would hope that every single member that comes into this place comes here with compassion. It's reported in the media. I would hope that every single person comes here with compassion for their electorate, but, hey, good luck doing that.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

Middle Australia is hurting. Let me say that again: Middle Australia is hurting. That once proud group of Australians who worked hard, day in and day out, to get ahead now find themselves going backwards. Individuals and families who can't work any more hours and can't earn any more are in trouble. Once the bills are paid at the end of the week, there is very little left. In many cases, there is nothing left. This is an economic emergency, and those opposite are responsible. The Albanese government is responsible for this financial crisis.

Those opposite would have Australians believe that this economic crisis has got nothing to do with them. That's what we're hearing, day in and day out. They would have you believe that all this pain is due to what Putin is doing in Ukraine, that somehow this is Ukraine's fault or it's Russia's fault. If that is the case, then why is our core inflation higher than each of the G7 nations, barring the UK? The truth is that inflation isn't coming from Russia; it is coming from Canberra and Labor's reckless economic policies—namely, its policy to add $185 million to the budget. Economists have confirmed Labor's reckless handling of the budget is increasing the supply of money into the economy, which in turn drives inflation and forces the RBA to act by raising interest rates. We've seen that time and time again, sadly, in the last 12 months.

What does Labor's dangerous inflationary policy mean for families and businesses? A typical Australian family with a mortgage and children is $25,000 worse off compared to only 12 months ago—$25,000! While Labor spends and spends, Australians are forced to divert their income to paying those higher mortgages and the higher prices for essential goods. The flow-on effect is that families are not in a position to support their local business community, and therefore it's no surprise that the number of businesses which have gone into insolvency has almost doubled in the past 12 months.

At a time when small businesses are on their knees, Labor should do everything it can to support them. However, this Labor government is instead undermining their success. This is clear through its attack on infrastructure—and I'm very pleased that the Minister for Infrastructure, Transport, Regional Development and Local Government has joined us here at the table today. It is clear through Labor's attack on infrastructure commitments across the country and, in particular, in our regional communities. A great example of this—and I really hope the minister is listening and not just talking—is in a beautiful part of my electorate of Durack, the Shire of York, which is located some 97 kilometres from Perth. York's light industrial area has faced ongoing challenges with heavy vehicles being unable to access the area safely. This lack of access heavily impacts the capacity of local businesses to send and receive freight, with the flow-on effect of reducing their ability to grow and expand.

In March 2022 I met with Mark, of M.A.L. Automotives, who informed me of his issues with his mechanics shop, which was facing problems due to these access restraints. York is one of the most fertile and beautiful areas of the state and has an annual rainfall of 400 millilitres of rain per year. Such heavy rainfall presents flooding issues and, of course, prevents customers from safely reaching M.A.L. Automotives. Working on trucks is a key component of Mark's business, and they told me that improving the safety of access to the light industrial area was critical to their future. This message was consistent, and, after a long consultation process, including multiple meetings with local stakeholders and advocates, I was very pleased to announce a coalition commitment of $8 million towards access improvements, in conjunction with the shire and the state of WA. The improved access was to deliver several benefits to the local community, including, of course, increased safety for road users and drainage upgrades. And it would of course improve economic activity in York's dominant agriculture industry, improve employment sustainability and allow businesses to expand their operations. To my surprise, the Shire of York was emailed last week, on 15 June, and asked for more information, and was given one day to respond. I ask the minister: What sort of show are you running? Would this be due to a lack business experience or the fact that you can't control the department? One day! It is a fantastic project, and we need to support regional Australia— (Time expired)

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

Since I came into this chamber, in 2016, I have welcomed every single opportunity to speak about small business, because that's my background. From being a kid in my parents' newsagency and growing up in that small business, through to having my own business for 25 years, working with a lot of businesses—small, medium and large, here and overseas—I have seen the pressures that small business is under. It's just a fact of life for small business. It is a tough road that you choose when you decide to work for yourself, and I really take my hat off to all the small businesses in my community, including those that I helped celebrate on Friday night at the Hawkesbury Business Awards. There were incredible businesses, from accommodation and hospitality through to plumbing, older business owners, younger business owners—the whole gamut.

The point is that our job here, as parliamentarians, is to make sure we listen to our small businesses and listen to the communities that support those businesses. From what I've seen over my time here, from 2016 onwards, when I've raised issues of concern about the cost pressures that small businesses face, there was a tin ear from those opposite, a complete lack of interest in what my communities were experiencing. That was before the biggest bushfire the world had ever seen from a single ignition point swept through. That was before we had flood after flood. That was before COVID. As you'll all remember, during COVID it took a long time for those opposite to realise that small businesses needed help.

I think that's the big difference I see: we know that things are really challenging out there for people. It's challenging for small businesses, who want to do the best by their customers, but it's also challenging for customers, who want to be able to keep supporting their businesses. When people step back and look at how this has happened, they know that this hasn't occurred in the last 12 months—this isn't because of decisions that were made in the last 12 months. It's the consequence of an attitude that we've had where people were pushed down and their incomes were suppressed. That builds up over time, and everything we're seeing in the economy has been from factors that we saw coming and that those opposite chose not to do anything about. We need to remember that the highest rise in inflation, which was a rise of 2.1 per cent for a whole quarter, occurred not when we were in government but when those opposite were in government. Did we hear a mention of it from them? Maybe they missed that bit in the ABS data that came out.

On this side, we are taking it seriously. We know that small business needs help. One of the things that we did was to come back before Christmas to go: 'Let's not just help every family who's really struggling with power bills; let's help small businesses that are struggling with them.' Before Christmas, we were back here. We were voting on that and we were taking it seriously. I think you have to ask the question: Were those opposite taking it seriously? Were they interested in supporting small business? Well, no. They voted against legislation providing funds to help with electricity bills, funds that will start to flow through to small businesses in the coming quarter. I know it's going to be welcomed by businesses in the Blue Mountains and Hawkesbury. I know it's cold in Canberra today, but it's pretty chilly back in those mountains and the areas of the Hawkesbury.

Not only have we looked at how we support businesses by helping with electricity bills—in New South Wales, businesses will receive $650. We've also looked at how we can equip them to be even better prepared going forward. I think that's the other big difference: we don't just want to solve a problem now; we want to put in a solution that's going to be sustainable and make a long-term difference. When I look at the alternative, I ask myself, 'What great ideas have the opposition come up with? Maybe they were hiding some ideas in government and they've kept them till opposition.' Nuclear power is their solution, and I think we all just go: 'Yeah, right. Really? I don't think that's going to be a quick fix, let alone a long-term fix.' So I'm looking forward to supporting our businesses to lower their energy costs in the long term with renewable energy going into the system and helping them reduce their costs.

Zoe McKenzie (Flinders, Liberal Party) Share this | Link to this | Hansard source

This is a government that really likes to pretend that it's still in opposition. More than a year into the job now, the government has failed Australian families and has certainly failed our small businesses. They still refuse to admit or recognise their failures and the struggle that most families are now confronting. Just now in question time they were constantly talking about the former government, rather than what they are doing for this country.

This Albanese government has no comprehensive economic plan, no plan to reduce inflation, no plan to reduce pressure on interest rates and no plan to reverse the increasing cost of living. What this government has offered, though, is handouts—big wads of cash in the form of cost-of-living bandaids that might stem the bleeding today but do absolutely nothing for tomorrow. There was nothing in their last budget that rewarded effort, nothing that encouraged business owners to create opportunities and employment for others, and nothing that would help Australia's jobseekers into the 400,000 available jobs ready around the country today.

This government would have you believe it did nothing to add to inflationary pressures, but, in fact, its duty is to do something to depress inflationary pressures. That is the job. Its mismanagement has been named by the economic experts and commentariat. Indeed, in May this year Anthony Walker, director of the independent ratings agency S&P, warned that handouts in the most recent budget 'may add to inflationary pressures'. We've also heard from former RBA governor Glenn Stevens, who has conceded that the Albanese government's budget would have an expansionary effect. It's easier to be blunt about the situation when you don't have the sword of Damocles hanging over your head.

This government has clearly lost control, and Australian families and businesses are paying the price for its ineptitude. Australian families—Flinders families—are doing it tough. Food costs more. Petrol costs more. Energy costs more. Rents cost more. Building materials cost more. Houses and mortgages cost more. As we heard in question time, families with an average mortgage have to come up with an additional $22,000 a year. That's $22,000 a year after tax. I don't know how they do it. The goal posts are constantly moving for those who seek the opportunities and the way of life that Australia has historically offered.

RBA governor Philip Lowe recently recommended that we need more people on average to live in each dwelling and said that higher prices do that. The RBA has made it very clear that there is more pain in the pipeline. The NAB expects more rate rises in July and August, and Westpac also expects more to come. In the RBA board minutes released today, the bank made it very clear that there is significant concern for the unstable and growing pressures on households. Household consumption growth has slowed, or, to put it simply, people have stopped spending money, a fact that any small business in my electorate of Flinders will tell you. To make ends meet, many Australians are now taking on extra jobs. Last week's labour accounts data shows that the number of Australians having to take on multiple jobs has increased by more than 10 per cent in the last 12 months.

A few weeks ago, I hosted a tourism and hospitality round table in my electorate with businesses across food and beverage, logistics, hotels and accommodation, and tourism events. We discussed the recent IR law changes, including permission for pattern bargaining, which came into effect earlier this month. I was concerned when I heard from lots of small businesses in my electorate that they couldn't manage the economic impact of these changes, let alone the increases in minimum and award wages, at such a challenging time. This builds on the huge increase in energy costs which small businesses are already facing. The running of a business will become incrementally more expensive. In Victoria the default price for gas for homes and small businesses will be going up by about 30 per cent by midyear. How will vibrant businesses which are internationally competitive, like Chief's Son, the Original Spirit Co in Somerville or the beautiful Bass & Flinders in Dromana, or even bigger businesses like Sealite, which produces marine and aviation navigation tools, manage their costs when the bill for gas, which is absolutely vital to their businesses, goes up by 30 per cent overnight?

In a few days we will reach the 14-month anniversary of the Prime Minister's promise to stand up and take responsibility. On 1 May last year, Anthony Albanese said:

And—as your Prime Minister—I won't run from responsibility.

I won't treat every crisis as a chance to blame someone else.

He actually said that at the ALP campaign launch last year on 1 May last year. And yet Labor is failing to fight inflation, failing to boost productivity, failing to stoke and support economic growth, failing to house a growing population, failing to support small business when they need support the most. We need a government that has a vision of what Australia can be and should be, and a comprehensive economic plan to get us there.

Daniel Mulino (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

As with so many economic motions in this place put forward by those opposite, what we see is a list of economic factoids quoted completely out of context and slogan after slogan paraded around this place without even a skerrick of the most basic common sense or analysis. Those opposite say that inflation has nothing to do with the Kremlin, when in fact anybody who has followed the global economy over the last few years would say that elevated inflation is currently a phenomenon that exists in all advanced economies. It is a global phenomenon that followed immediately after a major war in a global powerhouse for food and energy production, and that manifested itself in elevated energy and food prices. Any kind of basic analysis would tell you that, yes, inflation was in fact largely caused by a global phenomenon such as the invasion of Ukraine and such as post-COVID supply chain constraints. So for those opposite to blithely say it doesn't have global aspects is utterly ridiculous.

In fact, those who say that are denying the fact and won't accept the fact that inflation actually started rising on their watch. The largest single quarter of inflation increase was on their watch. Interest rates started increasing on their watch. These global trends were emerging at a time when Australia was poorly placed to deal with them precisely because of a decade of mismanagement in which we hadn't dealt with the energy transition in a way that we should have, in which we hadn't strengthened our economy. Those opposites are denying basic common sense by denying the fact that this is in fact a global phenomenon.

What is the best way to respond to this global economic challenge? As the Treasurer has laid out, relief, restraint and repair—and that is exactly what has underpinned both of our budget strategies. Restraint in spending. We have identified almost $40 billion in saves in our first two budgets—in the October budget and the May budget. That figure of almost $40 billion in saves can be contrasted with the slightly lower figure of zero dollars achieved by those opposite in their last budget. So when it comes to structural improvement in the budget position, those opposite have a shocking record from when they were last in office.

Consider also what happened to the short-term fiscal uplift that this government saw in its last budget as a result of a stronger labour market, stronger nominal wages growth and improved resource prices. Over 85 per cent of that was returned to the bottom line, improving the budget position and also making our budget position much stronger when it comes to future interest rate payments. So when it comes to restraint, this government has demonstrated it in a way that those opposite never did, and that's why we've turned around in one year from an almost $78 billion forecast deficit to a surplus. That is an absolutely critical means by which we are strengthening the bottom line.

Relief—critical at this time, but done so in a way that is proportionate, that is targeted and that doesn't make the Reserve Bank's job harder. We have a range of measures, ranging from energy bill relief to rental relief to increases in key benefit payments. Those opposite again say the government is being reckless, but no economists of any serious stature line up in support of that. The quotes they've given here are, again, often cherrypicked and often out of context, often with caveats.

Alan Oster, the NAB's chief economist: 'We don't think the budget will change the RBA's thinking at all.' Adelaide Timbrell from ANZ: 'We consider the budget to be a relatively neutral one on inflation.' Bill Evans, Westpac's senior economist: 'I don't think there's anything in this budget that will make the Reserve Bank go, "We have to raise rates."' Gareth Aird from the CBA: 'The budget doesn't add to inflationary pressures.' AMP's Shane Oliver: 'The budget's impact on interest rates will be neutral.' We've strengthened the budget's underlying position; we've given significant relief and we haven't made the Reserve Bank's job harder.

And then of course there's repair. The medium-term job is also critical. Again, we just need to go back to the energy transition, which is an area that has been abandoned for 10 years under the previous government. This government has put in place long-term policies setting legislated targets, which those opposite fought tooth and nail, and this government has put in place critical short-term measures to help households and businesses with their power bills. Stephen Kennedy said it would take three-quarters of a percentage point of inflation, directly reducing inflationary pressures. So this government has a plan, a strategy—relief, repair, restraint. In two budgets now we have implemented that and it is already showing results. If you contrast that to what those opposite did—zero dollars in saves, zero long-term policy—it is an absolute contrast and one that the Australian people chose wisely at the last election.

Nola Marino (Forrest, Liberal Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

An additional $185 billion in the budget does not sound like restraint to me. When we look at cost of living and the cost of doing business for small and family businesses, there is no doubt that inflation is a real issue for them every single day. Input costs are constantly going up for small businesses in the same when they do for a family budget, but for the small business owners that have mortgaged their homes to buy businesses, the increases in interest rates hit them particularly hard. They are actually exhausted from what they had to do during COVID-19. If you're a small family business, you know this well. There is a lack of workforce out there to help you in what you do at this moment. You are now working even longer hours simply to make ends meet, because of those same labour shortages and the extra costs that are imposed on your business through high inflation. We know they will be higher for longer because of this budget.

I was recently talking to Scott Lane, who is co-founder and a director of Premalayer, which is an accommodation and wellness venue in Yallingup in my electorate. As a small business, he has seen around 100 per cent increase in his utilities costs, whether that is power, interest, gas, insurance. He is supposed to keep running his business. His customers cannot afford to pay any more for the services that he provides, so he either has to absorb those increases as a business or go out of business. He has had a 34 per cent increase in other operating costs, in wages and consumables, and an insurance cost that has gone from $6,000 to almost $30,000.

I went and spoke to a number of other small businesses that I used as a litmus test throughout COVID-19 and throughout my time to get a sense of how the local economy is running. One of the areas of discretionary spending that is most affected by inflation and high interest rates and where people find themselves having to meet those significant extra costs in their mortgage is in discretionary spending in places like toy shops. In the toy shop I visited last week, the owner said that people are now only buying what they need for those times in their kids' lives that are most important. There is little being spent in a discretionary sense.

In the retail space, there is a real cooling in the market, particularly in women's clothing. In hospitality, I spoke to the cafes and the small restaurants. In the cafes they are finding that people have come back from possibly getting two or three perhaps coffees a day to one at best. If that is what your business depends on, there are real issues with these increases in costs. I had a chat to an owner of a business called Corners on the Bay after the ceremony on Australia Day. I asked, 'How are you doing?' They said, 'The cost of everything in our business has gone up. The ingredients that we use, what we're putting on tables, have gone up so much that we are struggling to make ends meet. We are working longer hours ourselves and, in fact, we have put up our prices, but the customers are struggling to pay.' So that restaurant is no longer there; they shut. As I said earlier, they are the options you have in small business. You can cut your costs, if you can pass your cost onto the consumer. That may be the case for some. But as a dairy farmer, that is not something we get to do in our business. We have to absorb the extra costs of doing business. When you look at things like fertiliser and energy and the other increases in our costs of doing business, there is no way to pass those on. That was where this small business found itself.

I spoke to John Ablett at Featured Wood Gallery in Australind. It is a tourism operation. He said it has just gone cold. That is what keeps coming through—it's gone cold. I spoke to some of my livestock transporters, particularly in WA, where we see those affected by the closing of the livestock export industry in WA. There's a significant impact on all those businesses and every other small business in the community that depends on them. They're the ones also absorbing these extra costs of doing business. And we've seen significant uncertainty created around the Aboriginal Heritage Act in WA for farmers and pastoralists; I think 600 got together in Esperance, and 400 in Merredin, to talk about this. And we're not even going near pharmacists and what impact the government's changes will have on particularly those small regional and remote pharmacies.

Jerome Laxale (Bennelong, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure to get up in this chamber and speak about the importance of small business to our economy and how this government sees just as much potential in them as I do. Before I do, I thought I might just do a little bit of myth busting.

The first myth busted by this government in our year in office is the myth that those opposite claim to be the better economic managers. We've shone a light on that old chestnut, haven't we, colleagues? The Liberals left office with a trillion dollars worth of debt and nothing to show for it, yet they still believe they're the better economic managers. They handed out rort after rort and delivered budget after budget which added fuel to the inflation fire, leaving the economy in the mess it is in. They're no economic managers and they're no friends of small business.

That is the second great myth in Australian politics—that those corporate wannabes opposite, those failed middle managers over there, understand and care about business. But Australia now knows that it's all show. Those opposite have never been so disconnected from business in their history. During the early days of the pandemic, they were dragged kicking and screaming to support small businesses. And then, of course, when they finally got there, their support was so poorly designed that many small businesses and sole traders were excluded, while big businesses, who didn't need support, were oversubsidised. Then, after hearing small businesses cry out for action on skills shortages, instead of supporting the government's measures to address them they opposed them.

Then, of course, we have these endless culture wars those opposite wage against businesses who are speaking out on behalf of their employees and their customers. Businesses who support climate action, who support the Voice, who speak out against attacks on the LGBTIQ+ community are consistently attacked by those opposite. On economic management and on supporting businesses, those opposite have never been more out of touch. Their base has found a home in the Albanese government, because we've been consultative, measured, fair and transparent. They've found this to be a stable government that's getting on with the job of fixing the mess left behind by the Morrison government.

Before my time in this place, I owned and operated a small business. I've been working in a small business for most of my life. I know firsthand how important small businesses are to our economy. They employ 5.2 million Australians and contribute more than $500 billion to our nation's economy every year. They're the heart of our local communities. They employ locals and they serve locals. As a former small-business owner and operator, I'm proud to be part of a government that sees as much importance and potential in small business as I do.

In just over one year, we've delivered program after program which will help small businesses across the country. The Small Business Energy Incentive will help up to 3.8 million small and medium-sized businesses save energy and save on their energy bills. That figure is $650 for small businesses in New South Wales, which will apply automatically from 1 July. The $394 million industry growth plan will help small businesses innovate and adapt and change the way they operate, to digitise. We've got grants and tax incentives for energy efficiency, and huge investments in TAFE and training to provide a workforce for our modern economy.

We're cleaning up the skilled migration system that those opposite totally destroyed. Small businesses have been crying out for reform to help bring skilled workers to the country but also to skill up local workers. Our fee-free TAFE has been fought tooth and nail by those opposite when those calls have come from small businesses in our economy.

Then, of course, there are our broader macro reforms. Cheaper child care will give more families access to early education, which means more men and women will be able to get back into the workforce, which will help small businesses grow. There's not one business in my electorate that is at full capacity. They're all crying out for help and skills, and those opposite not only boycotted the Jobs and Skills Summit but are opposing measures that we're taking to help small business. Never forget, when they complain about the cost of power, that those opposite voted against price caps on coal and gas, which will go directly to helping small business.

The big difference between the government and those opposite is that we don't just say we support small businesses; we actually deliver for them.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

Time puts things in perspective. We can look to a year ago, when we had an election, and how things have changed. But, before I do that, I'd like to look back a bit deeper to 1990. I remember 1990 as a child. The top hits were by Sinead O'Connor, MC Hammer and Madonna. I also remember it was a World Cup year and staying up late to watch the Italian World Cup with my dad. I also remember that year because that was the year where, in January, this country saw 17 per cent interest rates. It's often used as the high-water mark for a period where Australians did it particularly tough. It was particularly tough because it led into a recession that we didn't have to have. It's often used, for those who can remember that time, in folklore.

I remember my father—we hadn't long been arrived in Australia—qualified as a roof plumber. He qualified as a roof plumber to start his own business as a tradesman who could help people and also help our family to put his three boys through school. But I remember that recession hit so hard because it was a choice between keeping your home or keeping your business. I fear that we are heading into a very similar period in Australian economic history. We can trade insults about who's to blame and who's the best economic manager, but real Australians are hurting right now.

Recently I went and met a cafe owner in my area who runs Project Black. It is an enormously successful business in Mitcham. In fact, it was voted as the second-best coffee in Melbourne. I sat down to talk to him, to listen to him as to what it's actually like for someone running a small business. He said he would like to employ more people, but he can't. He can't afford it. The increased costs of energy, of labour and of interest rates mean he and his wife are the ones who have to work seven days a week. He noted that, after the lockdowns ended in Melbourne, he was serving about 70 kilograms of coffee a week. I asked him, 'How many kilos are you serving now?' and he said, 'Thirty kilos a week.' In an impassioned Facebook post to his customers, he said: 'I'm so sorry. I'm so sorry that I might have to increase the price of your coffee.' He's such a good small-business owner that he takes pride in his product and pride in his customers, and he knew that they were struggling to pay the increased costs that he's facing. He said to me that he's worried that he may not survive.

I worry that those are some of the decisions that small businesses are facing again just like they did in 1990—only it's potentially worse. We talk about 17 per cent interest rates like it's a number by itself, but what is important is the ratio of that interest rate to the debt that Australians have. Australians now have three times the debt that we had in 1990. Let's not forget what happened in 1990. The percentage of mortgage interest rate payments as a share of total household income went from 4.5 per cent to six per cent. What did that do? That saw a huge increase in unemployment in this country, a huge increase in defaults and a huge increase in small businesses closing. It took the best part of a decade to recover from that.

Part of that recovery saw a Liberal government reduce debt, reduce spending and reduce the size of government, because government is not the answer for small businesses. They do it themselves. We've heard speech after speech about how those opposite are the great saviours for people who are struggling, how it's the government that will provide answers. It's not. That is an insult to the people like the owner of Project Black cafe in Mitcham. It is they who are doing the work. He doesn't go to sleep every night thanking you and thanking the Albanese government for the great things you're doing for him. He goes to sleep every night thinking: 'What school trip am I going to have to cut tomorrow? What sporting program will my children not be able to go to? What fresh meat will I not be able to serve on the dinner table, because it might go off and I can't afford it anymore?' And he's going to think: 'Who will I have to let go of in my business? And what second job will I have to take just to pay the increased mortgage payments that I have on my house and my business?' The numbers are extreme. I've spoken about 1990, but you only have to go back one year ago. Australians are entitled to ask if they are better off now than they were a year ago, and $25,000 a year more has to be found. That is before tax income. So families have to find an extra income of $50,000 or savings of $25,000. When you sit down and go through that exercise, that is a tough ask for families, and we should all do better.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

Every day the coalition comes into the House and raises the issue of the cost of living in their matter of public importance, led by the member for Bradfield. I say to members of the coalition: your tactics are simply not working, and they're not working because Australians know what's behind the cost-of-living problems that they all face and which we on this side of the House very well understand. They know that the coalition government that was last in this place wasted nearly a decade in government with no energy policy, no climate change strategy, no skills training policy, no housing policy. It left the NDIS in a mess, Centrelink in a mess, the immigration system in a mess, the health system in a mess, the Department of Veterans' Affairs in a mess. It wasted tens of billions of dollars on COVID support payments to businesses that were actually making an increased profit, and, ultimately, it left the country in $1 trillion of debt, literally trebling the net debt that it inherited when it came to office.

Not surprisingly, in the recent Essential poll when Australians were asked who they trust to deal with climate change the answer was Labor. Who do they trust to deal with the cost of living? It was Labor. Who do they trust to deal with reducing government debt? It was Labor. And who do they trust to manage rising interest rates, the very issues that those opposite want to talk about every day? It was Labor. The reality is that the Australian people have lost confidence in the coalition, and the Australian people understand very well what is behind and what is driving the cost-of-living increases that they face each and every day. And the member for Fraser so clearly articulated all that in his own contribution to this debate.

Small business is the engine room of our economy, and it employs some five million people, as has been stated time and again. Small business, in fact, would have benefited when we capped the price of coal and gas, because energy costs are one of the most important cost areas for small business. And yet, what did the coalition do? They opposed the very move to try and cap those costs. The most important thing that we can do for small business in this country is to put more money in the pockets of ordinary Australian households, because those people will spend their money directly on small business provided services. That's exactly what this government has attempted to do since coming to office. Indeed, we have increased the payments for JobSeeker, Austudy, Abstudy, parenting payment, youth allowance and youth disability support pension. We've increased child care, and we've reduced TAFE costs by having more fee-free TAFE places. All of that puts more money in the pockets of people, who will then spend it with their local small businesses and, in turn, support them.

The truth is that this government has also directly targeted energy costs by supporting energy payments for some five million eligible households and one million small-business people. We've tripled the bulk-billing incentive, again putting more money in the pockets of families, which in turn allows them to spend with small businesses. We've expanded the paid parental leave, and we've introduced a new pensioner work bonus payment, allowing older Australians to keep more of the money that they earn—as well as all of the other payments I referred to earlier.

The coalition might have some credibility if they actually came into this place and said, 'Look, we can see what you're doing, but here's an alternative to what you're doing that would actually make a difference, perhaps a better difference.' But we hear nothing. The truth of the matter is that, just as they had no policies when they were in government, they have no policies now that they are in opposition. Until they come into this place and tell the Australian people what they would do above and beyond what this government is doing, they will have no credibility. The reality is that the Albanese Labor government understands the problems of the people out there in Australia, and we are responding with measures that will make a true difference to their ability to support their families.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The discussion has now concluded.