Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes the Government's economic management has:

(a) delivered the first budget surplus in 15 years, something the former Government promised but never delivered;

(b) seen inflation begin to fall in the face of global pressures, helped by the Government's cost of living policies; and

(c) returned real wages growth faster than expected;

(2) further notes that the Government's cost of living tax cuts will see every Australian taxpayer receive a tax cut on 1 July, and means:

(a) 11.5 million taxpayers will receive a bigger tax cut than under the former Government's plan;

(b) Australians who earn up to $40,000 a year will receive a tax cut when they would not have under the former Government's plan; and

(c) these tax cuts come on top of the billions of dollars in targeted and responsible cost of living relief, much of which was opposed by the Opposition, including:

(i) energy bill relief;

(ii) cheaper medicines;

(iii) cheaper childcare;

(iv) strengthening Medicare;

(v) higher income support payments; and

(vi) the biggest boost to rent assistance in 30 years; and

(3) acknowledges the stark contrast in policies between the Government wanting Australians to earn more and keep more of what they earn, while the Opposition wants Australians to work longer and for less.

The motion that I move today notes that the Albanese government's economic management has, among other things, delivered the first budget surplus in 15 years, something the former Liberal and National government promised but never delivered, and we have done so at a time when we know that Australian families, Australian consumers and the Australian public are doing it tough. They are doing it tough with the cost-of-living issues that are impacting every family across the country, and that's why, with a budget surplus in our first budget, there's a level of trust among the community—certainly in my community of Lalor—in this government and its economic management. They have seen us not just deliver that surplus but also deliver back to Australians in our cost-of-living relief, though energy bill relief, cheaper medicines, cheaper child care, the strengthening of Medicare, higher income support payments and the biggest boost to rent assistance in 30 years.

As well as that, we are delivering Labor's cost-of-living tax cuts, which are incredibly important. These tax cuts will make a real difference for 13.6 million taxpayers who'll receive a tax cut—2.9 million more than would have benefited from Scott Morrison's plan from five years ago. It means 11.5 million taxpayers, 84 per cent, will receive a bigger tax cut. It means that 5.8 million women—that's 90 per cent of women taxpayers—will now receive a bigger tax cut. Nurses, teachers and truckies are some of the most likely to benefit, with more than 95 per cent of those taxpayers getting a bigger tax cut. Parents, particularly women with young children, will be meaningfully supported to return to work under the government's changes, through increases to their take-home pay. Under the proposed changes, taxpayers earning less than $45,000 will now receive a tax cut. For a family on an average household income of around $130,000 a year, with one partner earning $80,000 and the other earning $50,000, their combined tax cut will be over $2,600—about $50 a week. That will help those families with the cost of living.

The government's changes deliver a better and more progressive tax system as well. The plan returns bracket creep for taxpayers and does more to reduce the impact on those most burdened by it. By dropping two tax rates and lifting two thresholds, we're giving everyone a tax cut, providing $359 billion in help with the cost of living and returning bracket creep where we can do the most work, in Middle Australia. As a result, the average taxpayer will pay $21,635 less of their income in tax over the next decade. And that's not all this government has done.

This government has also got wages moving. We said we'd get wages moving and we have. Real wage growth is back, and ahead of schedule. The Albanese government wants people to earn more and keep more of what they earn. We've highlighted time and time again what that means for communities. In communities like mine, there are families right now who have benefitted from the 15 per cent pay rise for workers in aged care, and there are families who now look forward to a tax cut to go with that 15 per cent pay rise. So lifting wages, reducing taxes, earning more and keeping more of what you earn—that's what this government's economic management is delivering.

And we have done that on top of the individual things around electricity bill relief. We all remember, after we were first elected, coming back for that December sitting to have the opposition vote against the measures that were going to make a difference and see electricity prices rise less than they would have without that legislation. We've introduced cheaper child care, which affects thousands of families in my electorate and is making a difference. For those at home, it may not feel like all of these measures, one by one, are making the boldest difference. But, generally speaking, they are, across the board, reducing the cost of living or limiting the cost of living.

We have more Medicare bulk-billing. We've got a Medicare urgent care clinic in my electorate that's seen thousands of patients since it opened its doors. We've boosted income support payments. The fee-free TAFE has made a huge difference to communities like mine.

As well as that, the government is still facing the inflation challenges. The primary focus of the Albanese government is making sure that we support families across the country in this cost-of-living crisis so that they can earn more and keep more of what they earn.

Andrew Wilkie (Clark, Independent) Share this | Link to this | Hansard source

Is the motion seconded?

Carina Garland (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

The motion is seconded and I reserve my right to speak.

James Stevens (Sturt, Liberal Party, Shadow Assistant Minister for Government Waste Reduction) Share this | Link to this | Hansard source

I rise to address this motion about the economic situation in Australia at the moment. I come at it from the perspective that anyone in this chamber would, which is what I'm hearing in my own community from the conversations I'm having with constituents. On Saturday, I was doorknocking in Royston Park, a suburb in my electorate, and earlier in the week I held a listening post at the Newton central supermarket and had some really good and diverse conversations with constituents about the challenges that they've got at the moment. A very consistent theme came up: people in different ways, for different reasons, are finding it really tough at the moment.

I was speaking to a constituent that bought a home a bit over three years ago and has just had her fixed loan roll off to a variable loan and has been hit with an enormous increase to her household mortgage because, of course, interest rates have gone up so dramatically in the last few years under this government. I spoke to a gentleman while doorknocking who has kids in their late 20s who he said have effectively given up the dream of being able to save up to buy a house. He's very worried about how he can support them to do what he was able to do decades earlier, which was, at the age that they're at, already be a homeowner and about how vitally important homeownership was to economic independence and economic security when he was in that stage of life that his kids are now in. I spoke to a lady who is making difficult decisions when she goes to the supermarket about things she used to buy that she's not buying anymore. She's purchasing frozen vegetables instead of fresh at times and different meat that's just what she can afford within the household budget. So it is tough. Those are just three examples of many that I'm hearing. I'd be very surprised if other members don't hear the same things from their constituents.

I think what constituents are looking for from government is not for them to congratulate themselves on how things are going, because no-one out there is saying, 'My life is really good at the moment.' They're saying quite the opposite. It is folly for governments to spin these situations and try to pretend, as this motion indicates, that people should be grateful for what this government is doing for them. I'm not getting that feedback from anyone. I get a lot of different stories and a lot of anecdotes about how things are tough, and they stretch across various issues in the household budget and in people's economic circumstances. But not a single person is saying, 'I feel like this federal government is really looking after us and has the right priorities at the moment and is doing things that are making my life better.' Everyone's talking about electricity prices going up, grocery prices going up, mortgages going up and rents going up. They're finding it tough to make the household budget work as it has in the past and having to make really difficult decisions, like cancelling family holidays, because those sorts of things that people look forward to, that are discretionary, have to be sacrificed in this very difficult economic circumstance that families are finding themselves in.

So I caution the government against congratulating themselves on the economic situation in this country right now, trying to convince Australians that they're doing something about cost-of-living pressures and thinking that the people of this country should be grateful and should be thanking the government for what they're doing, because not a single Australian, no-one in my electorate of Sturt, and I'm sure it's the same for most other members—their constituents are not saying, 'We really feel like the government's on our side, helping us and supporting us at the moment.' I'm getting the exact opposite feedback.

We don't need motions like this from the government, which is completely inaccurate and incorrect, to suggest that Australians are benefiting from any policy decisions of the government. We need decisions that will actually help Australians with the things that they're worried about, and that is the cost of living across a whole range of areas. This government has policy levers available to it that it's choosing not to pull. That means that they're not on the side of Australians; they don't have the right priorities. They should be condemned for that. We in the opposition will keep standing up for Australians that are raising with us these very serious and significant challenges that they're finding in meeting the household budget under this Labor government.

Carina Garland (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to speak in support of this motion moved by the member for Lalor, and I thank the member for bringing it to this place. After almost a decade of economic mismanagement, our government is getting things back on track, delivering the first budget surplus in 15 years—something, of course, that the former government repeatedly promised to do and repeatedly failed to do. This is no small feat for our government. Our economic plan is all about easing inflation and easing the cost of living at the same time that we lay foundations for growth in our economy.

Recent figures show that we have made welcome and encouraging process in the fight against inflation. But, as the Treasurer has noted, this is not 'mission accomplished', given that we know how many people are still under pressure. There is still more to do. But our responsible approach has made room for critical investments that boost the capacity of our economy and lay stronger foundations for growth, including in energy, housing and skills. We're ambitious for our communities. We know that people are under pressure because of higher global inflation and higher interest rates, and the economy is slowing in expected ways. We cannot undo nearly a decade's worth of economic mismanagement in just over 18 months, but we are making welcome progress.

Our entire approach to the economy and the budget is defined by responsible economic management. We said that we would get wages moving again, and we are. Real wages growth is back and ahead of schedule. We believe that hardworking Australians should earn more—and this is great for our local economies too; it's more money to spend in our communities. We want people to earn more and keep more of what they earn.

Additionally, we know that, from 1 July this year, every single Australian taxpayer will get a tax cut. That is 13.6 million people who will receive tax cut, thanks to Labor's tax plan, with 11.5 million taxpayers receiving a bigger tax cut than under the old government's plan. In my electorate of Chisholm, 81,000 taxpayers will receive an average tax cut of $1,640. This will make a meaningful difference to families in my community, including the thousands of nurses, teachers and hospitality workers that call Chisholm home. We are supporting the aspirations of all Australians to build a good life for themselves and their families.

Our cost-of-living tax cuts come on top of the tens of billions of dollars in cost-of-living relief already rolled out and rolling out, including electricity bill relief, cheaper child care and increased rent assistance. We've also invested in more Medicare bulk-billing and cheaper medicines. We've boosted income support payments and invested in fee-free TAFE training, and we're getting to work on building more affordable homes. Our government is also expanding paid parental leave and making sure that wages keep moving.

This is of course in stark contrast to those opposite, who just say no to any idea and have no real policies of their own. We want Australians to earn more and keep more of what they earn, while the opposition wants Australians to work longer and for less. The Liberals said no to cheaper medicines and to energy bill relief, and now they're saying no to lower taxes for Middle Australia. When it comes to the cost of living, those opposite have no genuine plan and always say no. It is all negativity, with zero policies. As the Treasurer highlighted last week, since coming to government the average amount of money that we will bank as a nation will be much higher than under our predecessors. We are more responsible and we're making sure that we've got an eye to the future and to the economic foundations we know we need to build now for growth.

I'm proud to be part of a government that's not only supporting Australians where and when it can but also delivering good economic management that lays a solid foundation for the future. I'm so pleased that the member for Lalor has brought this matter to the House today, and I'm very pleased to have had the opportunity to support it.

Russell Broadbent (Monash, Independent) Share this | Link to this | Hansard source

I don't mind if the government have programs and they say things before an election campaign about what they're going to do in regard to housing. But don't then tell me 100 times that you're going to reduce the cost of power—as the previous member just said, they have a power reduction program—by $275. You said that time after time after time, and people in my electorate listened to you, understood what you were saying and supported you. A whole four per cent of them decided to move towards the Labor Party and away from my position. People thought, 'I'm going to be $275 better off if I vote Labor.' What has happened? They haven't had a $275 reduction.

But then Labor said, 'Oh, no, we've got five years to do that.' The trouble is that the Prime Minister didn't say that during the election campaign. He didn't say, 'In five years time I'll give you a $275 cut.' He just said, 'I'll give you a $275 cut.' It's sort of a reversal of the 'Mediscare' campaign from the previous election. It's a promise to say, 'I'm going to give you this,' but then they don't give it to you. You can understand that people are under pressure, and all the previous speakers have recognised that people are under pressure from power prices and a lot of state government costs, like your water and your electricity. When has the federal government come along and said, 'Here's what we can do for you'? It hasn't happened.

What happens in your new housing program, whatever it's called, which we just debated in the House and went through—it's another first home buyer type scheme; oh, it's the Help to Buy program—when the market intervenes, people can't pay for some reason, their interest rates go too high and they're under pressure?

I went to get a punctured tyre repaired, and the guy repairing the tyre said, 'You're the politician, aren't you?' And I said yes, but I was trying to hide it, with the way I was dressed. He said, 'Do you know my mortgage has gone up 1,500 bucks?' This guy is running and is part owner of a very good tyre business. They've always looked after me very well in Pakenham and always been great. He said: 'It's 1,500 bucks, mate. That's what it's costing me over and above what I was paying.' He said, 'I have to find that money.'

I recently had a very well-paid person come to me and say, 'Russell, you don't understand how high the mortgage is that we've got to pay.' Well, no, I don't understand how high his mortgage is, because when I took out the mortgage on the small farm that I'm on it was $30,000. Then, in the next episode, from others that I've heard about, their mortgages went to $60,000, then $80,000, then $150,000 and then $200,000. When I asked a young girl who worked with me for a while, Priscilla, what she'd borrowed to get into her unit in Parkdale, or wherever it was, she said $400,000. I was in shock. Now people are borrowing $1 million. For some of the people these days who have borrowed that sort of money, a tiny change in interest rates is catastrophic. And they all believed that interest rates wouldn't change for a long time. As we heard from the member who spoke before, people come up to you and say, 'I've just moved from a fixed loan to a variable loan, and the price has gone through the roof for me.' And this has happened to thousands of people across Australia. I learned very quickly that people are now relying not only on their income but also on their savings. They're using up their savings just to survive at the moment.

Governments should be very aware of the electorate when people are under pressure, because they will have regard for everything you say, all the time, about what you're going to do. And if you don't do it beware, because the people will be coming for you.

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

This motion deals with the way in which some of the significant medium-term global economic challenges that have hit Australia are being dealt with. A couple of years ago, some major international ructions affected all of the major economies in the world. There was the post-COVID supply chain issues and the illegal invasion of Ukraine, and the impact they had on energy prices and food prices. All of these impacts led to a global surge in inflation, which Australia wasn't immune from. That led to a cost-of-living challenge, which affected the most vulnerable in our community. The government made clear from the start that, in dealing with that challenge, the most important thing for the living standards of our most vulnerable people is to deal with inflation. What I want to talk about is the fact that the best way to deal with inflation is for fiscal policy and monetary policy to work together. If that doesn't happen, you are not going to deal with the underlying economic challenge that is impacting on people's lives.

We have seen a series of interest rate increases, which was unfortunately a necessary part of dealing with this broader economic challenge. In conjunction with that, the government has put in place a number of targeted but responsible measures, which have provided assistance to the most vulnerable. There have been a number of components of that—rental assistance, cheaper energy bills, cheaper medicine and assistance for child care. In the labour market, there have been a series of very important measures, including the government supporting the case for an increase in the minimum wage, which I might add those opposite opposed, tooth and nail, both in the election campaign and since. The government has also supported a material increase in wages for people—mostly women—working in the aged-care sector, and we've strengthened workers' rights and workers' voices through a series of important industrial relations bills.

All of these measures have meant that people are taking home more and that people are getting direct assistance, but it's important to note that the way in which the government has provided that assistance has not added to inflationary pressures. This is something which has been confirmed by the Reserve Bank, by Treasury modelling and by all of the major economic commentators out there, including all of the chief economists at the big four banks, and on and on it goes. The government has provided assistance, as it should—and the people in my own community have been talking about the way they've been struggling—working hand in glove with the Reserve Bank.

What we also find is that the government has adopted a responsible fiscal position on short-term fiscal uplift—in other words, the increase in revenues, compared to what was forecast, that arose on the government's balance sheet as a result of a stronger than expected labour market and stronger than expected revenue from resources, at least in the previous financial year. The government has banked the vast majority of that. In fact, it has banked far more of the cyclical uplift that the previous coalition government did. It has been managing finances in a way that is very responsible. It's doing it in a way that puts downward pressure on inflation but which, at the same time, allows the government to provide targeted assistance to those most vulnerable.

That's the government's overall approach, and what we see is that inflation has in fact come down materially from a reading of around 8.4 per cent on a monthly basis some 14 months ago or so to a monthly reading now of less than four, and a quarterly reading of 4.1 per cent. So inflation has come down a long way; it's not mission accomplished but it has come down materially and, at the same time, while it's very unfortunate that unemployment has risen, it has risen less than had been forecast. So in terms of the narrow path that we're trying to walk to reduce inflation and to do so with the least possible disruption to people's purchasing power and to the labour market, we have managed to achieve that in a way that's better than what most had forecast would be possible 18 months ago. So the strategy the government is putting in place is a responsible strategy but also one with targeted assistance to those that need it.

Then of course there are the changes to the stage 3 tax cuts, which complement all those measure and which do it in a way which improves bracket creep—and also labour supply, by around 930,000 hours per week. So this is a responsible and effective overarching economic strategy. The job is not done, but we are well on the way.

Garth Hamilton (Groom, Liberal National Party) Share this | Link to this | Hansard source

It's always valuable to hear the contributions from the member for Fraser. Labor have entered another dimension with this motion: they've gone on a journey through a wonderous land of imagination! They've entered the twilight zone. They're nestled deep within the Canberra bubble, comforted by the orchestrated applause of a loving Q&A crowd. They've distanced themselves from the realities of the Australian economy that surround them. They look out and see a world that isn't actually there; they don't see the real world, and that's how you get a motion like this—commending themselves on economic management. What they don't see is a world where grocery prices have gone through the roof—walking down those aisles at the grocery store, with mum and dad asking themselves, 'How much will this cost this time?' and knowing that the answer is always 'more'. They don't see the world where young Australians still want the great Australian dream of homeownership. They don't want government ownership of their homes, they want homeownership and they can't afford it. Prices continue to go up and there's their inability to save to meet the deposit demands, let alone to service growing payments.

They don't see a world where the rental market is so tight and expensive that it has absolutely crushed the ambitions of young Australians who are renting now but who want to be homeowners in the future. They don't see that. But they could, because the facts are out there. The facts are out there on Labor's economic management. Electricity costs are out of control; in some areas, electricity prices have risen by nearly $1,000. Western Sydney is hit particularly by that increase. And for a government that came in promising wage growth, real disposable income has fallen 7.5 per cent. People are working harder and getting less for it—what they can actually purchase is going backwards. Australians are now paying tax revenues 23 per cent higher; Australians are paying 23 per cent more tax to the government. That's money out of Australian pockets; working Australians are paying more and more tax. Prices on almost everything have increased by 9.8 per cent. They could see this; they could get outside the Canberra bubble, see the real world and see these price increases—they're out there. This is not economic management: interest payments on mortgages have almost tripled since Labor came to government. Think of those young families who have purchased the great Australian dream, who have got in on the property ladder but who are now seeing their interest repayments triple. Productivity has fallen 5.4 per cent, the biggest recorded fall since we started recording productivity. It's the biggest fall we've ever seen and, of course, productivity is directly connected to real wages. If productivity goes backwards then real wages go backwards, and Labor have proven that point.

But Labor look outside all this; they look across all this and see economic management, and they come in here to boast about it. They're in the twilight zone; they're in a world of wonderous imagination but horrendous financial pressure. It must be an entertaining world to live in. But for the rest of Australia—those who aren't on the conga lines of staffers and union officials awaiting their appointment to the great Labor machine—for those Australians who have to work for a living, sometimes outside air-conditioned offices—

An honourable member: And pay taxes!

And they pay taxes, and their taxes make this country a great place to live, work and raise a family in. It's not entertaining for them, it's a horror movie.

As Labor approaches their third budget while they're still trying to look somewhere else for blame, they're poorly managing migration. Five-hundred thousand people came to Australia in 12 months—the greatest influx we've ever had—driving house prices and rents up at a time when we've got an all-time low in housing approvals. They've made energy market interventions that haven't worked. No-one has gotten their $275 reduction. Prices have gone up. And worse—these interventions have resulted in massive taxpayer payouts. Just to make things a little bit worse, they've introduced terrible IR legislation that has reduced labour market flexibility, will continue to reduce labour market flexibility and will push productivity further down, which is going to push down real wages. This is economic management, apparently.

Just to top it off, I speak to the people of Groom in what I like to call Prado country. We've got our fantastic new ute tax. A Prado will go up $13,000. If you want to go with the Land Cruiser, it's $25,000. If you like the Ranger, as I do, it's $18,000 more. The tradies—the people doing the work, building this great country, out there sweating in the hot sun and paying their taxes—are going to be paying more. Worst of all, to wrap this up in a neat little bow, this government has introduced $209 billion of additional spending. At a time when the RBA is trying to take money out of the economy, they're pushing money back in.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned, and the resumption of the debate will be made an order of the day for the next sitting.