Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) the Government has failed to tame inflation;

(b) because of its undisciplined and unnecessary spending, inflation has remained higher for longer;

(c) interest rates have already gone down in the United States, Canada, the United Kingdom and in New Zealand but are still high here; and

(d) the Prime Minister said life would be 'cheaper' under his Government, and promised 'cheaper mortgages' but has instead delivered a household recession; and

(2) acknowledges that only the Opposition has a plan to get Australia back on track.

The Reserve Bank has made it clear that interest rates are staying higher for longer due to Labor's reckless spending. We have seen, under this Labor government, interest rates go from 0.35 per cent to now 4.35 per cent, with the Reserve Bank refusing to rule out further increases. This means that, every month, mortgageholders and renters are worried about increasing rates and how they can afford to cover their repayments or their rent.

Under this government we've seen some 12 interest rate rises, with the average mortgageholder now $35,000 a year worse off through increased mortgage repayments—and that's before we get to the small to medium sized business sector. I'm speaking to plenty of businesses who are struggling with increasing repayments or increasing interest costs on their overdrafts or their loans, and that is starting to impact on their ability to continue to do business.

Whilst Australians have been watching as interest rates go down in other countries across the world, including in the United States, Canada, the UK, South Korea and New Zealand, we are yet to see a rate cut here in Australia. This is despite the Reserve Bank's position being clear that underlying inflation remains too high and despite the Prime Minister declaring that the fight against inflation is done. It's a long way from the case.

The Reserve Bank forecast showed that the core inflation target of 2.5 per cent will not be reached until somewhere around December 2026. That's still two years away—two years more pain for hardworking Australian families.

Let's have a look at some of the prices that have gone up over the past several years. Since the election the price of everything has gone up by nearly 10 per cent—or more, in many cases—including: health costs, up by some 10½ per cent; education costs, up by 11.2 per cent; food prices, up by 12.3 per cent; housing costs, up by 13.1 per cent; rents, up by 16.3 per cent; financial and insurance costs, up by 17.3 per cent; and gas prices, up by nearly 34 per cent. It's that last one that I'd like to touch on. For one of my local businesses that uses a lot of gas to produce their fabric products, their gas bill has gone up from $125,000 a year to now $350,000 a year. They are talking about closing their doors, because they're saying now it is too hard to continue to do business.

All this is in the context of the Prime Minister saying during the last election campaign that things would be cheaper under a Labor government. Well, as I frequently say to people back in my electorate, don't listen to what this government says; look at what they do, because nine times out of 10 these are two completely and utterly different things. That is exactly what we've seen with the government's promises and the promises by the Prime Minister in the lead-up to the election. They all sounded great and sounded very nice, but at the end of the day the government have failed to deliver, whether it's on electricity, cheaper mortgages or just things being cheaper more generally. This government hasn't delivered for the Australian people; they've actually made things worse.

It is only a coalition government that will get things back on track so the Australian people can enjoy an improved standard of living. And we need to see this government continue to work, to fight, to tackle the scourge of inflation. Yet they're not doing that. They're continuing their reckless spending and the ideological pursuits right across the policy suite. We saw again on the weekend the true cost of their energy plan come to fruition, which is only going to further increase inflation. Only a coalition government will work towards bringing costs down for everyday hardworking Australians.

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

Is the motion seconded?

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Sam Rae (Hawke, Australian Labor Party) Share this | Link to this | Hansard source

Australians are doing it tough. Families have been grappling with rising costs, whether at the grocery checkout, at the petrol station or in their mortgage repayments. For many, these pressures have made it harder than ever to stretch their budgets and make ends meet. We understand this, which is why tackling the cost of living has been and remains the top priority for the Albanese Labor government.

I want to make two points right upfront here. Firstly, Australians are not going to cop the arrogant hypocrisy of the Liberal Party coming to this place, crying crocodile tears and pretending to care about working people. Secondly, the Liberal Party, in their last term of government—nearly a decade—did immense damage to our economy, and it will take significant time to turn that damage around and set our economy straight. But we are putting in place the critical components to ensure that we have a strong, resilient, sustainable economy that serves working people.

When Labor came to office we inherited an economy that was burdened by a trillion dollars of Liberal debt. And it wasn't just the size of the debt that was concerning; it was the legacy of poor decision-making behind it. Over their decade in power, we saw the worst productivity growth in more than 50 years. We saw deliberate wage suppression that kept Australians' pay stagnant. And we saw reckless spending, including billions in handouts, to corporations making record profits. This was an approach that left Australian families worse off and our economy weaker overall. Inflation had soared under the Liberal Party to 6.1 per cent, and real wages were falling, leaving households under immense pressure. That's why the Albanese Labor government took strong and decisive action to stabilise the economy, address inflation and ease the strain where possible on families and households.

Today headline inflation has dropped to 2.8 per cent—its lowest level in nearly four years. This progress didn't happen by accident. It was the result of tough decisions to repair the budget, improve fiscal discipline and deliver targeted relief to those in our community who need it most. Our energy rebates, childcare reforms and cheaper medicines have all made a difference, but we know that there's more to do.

Falling inflation doesn't yet mean lower prices for families. For many the pressure on their budgets remains severe, and we are under no illusion that our work is already done. To truly ease the burden on Australian families, it is essential that workers see real wage growth. For too long wages stagnated while prices soared. Australian workers were falling behind, working harder but able to buy less. This was the reality under the previous Liberal government.

Under our Labor government that trend has reversed. Real wages have now grown for four consecutive quarters. The latest ABS data shows the wage price index grew by 0.8 per cent in the last quarter, bringing annual growth to 3.5 per cent. Crucially real wages adjusted for inflation rose by 0.7 per cent in the year to September 2024. This is the strongest real wage growth in four years. Compare this to the five quarters leading up to the last election, when real wages fell by 3.4 per cent under the coalition—that's five consecutive quarters where workers were going backwards, with rising costs eroding their take-home pay.

Since we came to office nominal wages have grown at an annualised rate of 3.8 per cent, nearly double—double!—the 2.2 per cent recorded under our Liberal predecessors. While wage growth has moderated slightly, it remains stronger than at any time during the coalition years. For the first time in years Australian workers are seeing their pay outpace inflation. It's not just a statistic. People can feel it at home in their household budgets and when they go to the supermarkets.

The problem is not solved—no-one is suggesting that it is—but it is a meaningful shift that is finally helping families to manage higher costs and to improve their quality of life. There's not an Australian worker in this country—no matter who they vote for, no matter what their politics are—who believes that the Liberal Party will do a better job of helping Australians in realising real wage growth, realising a regular pay rise and keeping their household costs down.

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

I rise today to speak in support of the motion moved by the member for Forde. Many of the people in the electorate of Longman, which I proudly serve, are doing it tough. The question is: why? Of course there are factors that contribute to why we have seen, since Labor came into government, a real decline on Australians' standard of living. But these factors are not unique to this government. The specifics, or factors, that contribute to why interest rates rise, why household expenses rise and why inflation grows at a faster rate than real wages grow vary.

Whether it be a conflict at home or abroad, unforeseen blips in the stock markets around the globe, a GFC or a once-in-a-hundred-year pandemic, every government has faced unforeseen challenges that affect our Australian economy and our way of life. But the test for any government is how these issues are dealt with to minimise, or even to remove entirely, the impacts on the Australian people. This, after all, is one of the key responsibilities of any government, regardless of which party is the incumbent.

Forget the spin, the headlines, the talk, the political war of words and the name-calling. The real litmus tests on the success or failure of any government on how they have performed in neutralising the impacts on the people we were elected to serve—the Australian public—are simply measuring the data and comparing that data to previous governments and long-term averages, and, most of all, the actual real-life experiences of people. When we do this measurement and comparison at this time, the results are not good, to say the least.

We can see that interest rates have risen 12 times since this government came to power, meaning that people paying off their family homes are now paying on average an extra $2,916 per month on their mortgage, while the average household income has only risen by $616 per month in the same period. Electricity has risen by an average of 30 per household, or $420, since the last election. Rents have risen $520 per month on average in the city of Moreton Bay as investors with mortgages are paying much higher repayments with the 12 interest rate rises, which in most cases they simply cannot absorb and have to pass on either in full or in part to tenants already enduring this homegrown cost-of-living crisis.

Why has this homegrown cost-of-living crisis happened on this Labor government's watch? Would the results have been different under a coalition government? History demonstrates that, yes, Australians have always fared better under a coalition government. Historically, real wages have been higher and interest rates and inflation have been lower under a coalition government. However, there is an underlying issue people rarely speak of: business confidence. I can testify that, in my own small-business experience, quite simply, whenever the coalition has been in government, my businesses have experienced double-digit growth, including during the pandemic. In contrast, when Labor have been in government, the businesses I was involved in had either single-digit growth or, worse, no growth. From speaking to other small-business owners, the experience in the main is much the same.

What does this mean practically? It means that, when business confidence is down when we have a Labor government, small and medium businesses stop spending and investing in their businesses. Just the bare necessities are purchased. New staff are not employed and in some cases staff must be laid off to the lack of growth. This all contributes to a slowing economy. When the coalition is in government, business confidence is high and, as a result, small and medium businesses invest in new equipment and hire extra staff in anticipation of growth in their businesses. This of course leads to cash being fed into the economy through higher tax receipts as businesses become more profitable, which slows inflation. Unfortunately, with the fall in business confidence and the following tightening of their purse strings, the Labor governments begin to spend taxpayers' money on splashing tax to help alleviate the inevitable hard times the Australian people begin to suffer, which is a short-term fix that just increases debt and inflation, only compounding the problem.

To exacerbate the problem even further, as the unemployment rate rises, Labor governments are forced to employ more public servants to keep the unemployment rate down, as evidenced in this term, for which the data from the ABS shows that around 90 per cent of new jobs in 2024 were in the public sector or industries like aged care or the NDIS, which are funded by the federal government, compared with more than 50 per cent of new jobs created in the private sector under the previous coalition government. Of course, we need a healthy Public Service, but private sector jobs create revenue for government through taxes paid, whereas Public Service jobs are just straight out costs to government.

Australians aren't stupid. They will see through the spin, the headlines and the personal attacks, and the question they will ask themselves before they vote at the next election is: am I better off than I was three years ago? The answer in nearly every case will be a resounding 'no'.

Andrew Charlton (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I thank the mover of this motion because many Australians are struggling with cost-of-living pressures and feeling the effects of inflation. Inflation takes the most from those who have the least to give. It hurts people who can't make their budget stretch any further. It hurts first home buyers who can't pay high interest rates or who are struggling with rent. It hurts people already experiencing low wages growth over the last 10 years. Nowhere is this more obvious than in my electorate, where financial pressures are palpable. Parramatta Mission's daily meals program saw an increased uptake of more than 100 per cent over the past year. Food parcel uptake was up nearly 200 per cent in that same period, and Centrelink referrals have more than tripled.

This is the front line of the inflation challenge in Australia. The problem is serious, but, unfortunately, the motion put by those opposite is not serious. They don't seek to grapple with the causes of inflation and they don't seek to provide any sensible alternatives on how to deal with it. The first part of this motion notes 'that the government has failed to tame inflation'. Saying that the government has failed to tame inflation is a bit like the arsonist asking the fire brigade why it took them so long to put the fire out, because inflation was caused by the Liberals.

Inflation increased in the last two years of the Liberal term. It was running at 3½ per cent in the fourth quarter of 2021 and, by the time they left office, it had risen each quarter: from 3.5 per cent to 5.1 per cent to 6.1 per cent to 7.3 per cent and finally to 7.8 per cent. In the last year of the Liberal government, inflation was on the escalator going up quarter after quarter, getting worse and worse. They left the inflation problem that this government has had to deal with.

Why did it go up so much? Why did the Liberals increase inflation so much as to leave it at the highest rate that it had been in Australia in decades? The answer is that they had the most expansionary budgets in Australia's peacetime history. They wasted billions of dollars on JobKeeper, the worst targeted program in Australia's economic history, subsidising businesses that were fine, subsidising businesses that had profits going up and subsidising businesses that were employing more people and posting record returns. Treasury analysis shows that JobKeeper wasted $50 billion. It was paid to Harvey Norman, private schools, Qantas and hundreds of companies that did not need it.

They put an enormous amount of money into the Australian economy that stoked the inflation fire. As I said, it increased it from 3.5 per cent to 7.8 per cent. The reason inflation is high in Australia is the fiscal profligacy of those opposite. Not only did they not deliver a budget surplus but they did not get within a bull's roar of a budget surplus.

The second part of this motion talks about interest rates. It says that interest rates have already gone down in the United States and the United Kingdom. I have a couple of things on this. Firstly, interest rates in the United Kingdom and the United States are higher than they are in Australia. Interest rates in both the UK and the US are 4.75 per cent—higher than rates in Australia. Secondly, when we look at the record, Australia has actually had a smaller increase in inflation overall than in all of those other countries.

The opposition are continually saying that inflation is coming down in these other countries. They had cumulatively more inflation than Australia has experienced. The UK, from the latest figures back to 2020, had 25 points of increased inflation, the USA had 24 points and New Zealand had 23 points. By contrast, Australia, over that same period, had just 20 points increase. We had a lower increase in overall price level than all of the three countries mentioned in this motion. And the reason we had a smaller increase in the price level than all of the countries that the opposition mentions in this motion is that we have delivered the fiscal discipline in order to bring inflation back down. In fact, we've more than halved the inflation that they left us with.

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

I would like to start by thanking the member for Forde for bringing this very important debate into this chamber, the people's house. Any local member that's out in their community, talking to and listening to their constituents, will know just how tough people are doing it right now across this country. I know how tough they're doing it in my seat of Sturt and I'm sure that's no different to any other electorate across the country right now.

After 2½ years of this government, unfortunately, things are tougher than ever and families are making very difficult decisions around the kitchen table about the household budget because costs are ever increasing and they are finding it more and more difficult to make ends meet. Coming into the Christmas season, it's a particularly tough time for some families that have to make sacrifices they haven't had to make before in the period leading into Christmas. There's just not enough discretionary spending left in the household budget because the cost of things that you can't avoid are so very high under this Labor government.

Whether you've got a mortgage or you rent, whether you're going to the supermarket, buying your groceries or whether it's been the dramatic increase in energy prices—your electricity and gas bills—those costs have dramatically increased 2½ years into this Albanese government. Of course, we'll never forget that Labor said that, by voting for them, bills would go down by $275 a year. Well, I've never had anyone come into my office since Labor came to power and say that anything like that has occurred to their household electricity bills. They're all going up.

The previous speaker interestingly just gave us a lecture on fiscal discipline and responsibility, and I suppose maybe he is or isn't on the inside with how this government is going to pursue their own fiscal decisions in the lead-up to the next election. What we've heard so far—what we've seen so far—is that this government seems to be interested in spending a lot of money going into the next election. We've seen the beginnings of some massive multibillion dollar commitments, but we hear rumours of many more to come. We hear that the federal Labor government want to follow the strategy of the Queensland state Labor government, which is interesting given the result of that election just recently. We hear of massive amounts of expenditure. They are trying to throw money around and buy the votes of the Australian people in the lead-up to the election to try and make it look like they have a plan to deal with this cost-of-living crisis that we're in. What that'll mean is a lot more—dramatically more—spending from this government. The last thing that we need right now is a huge amount of government spending when interest rates are high and when inflation has been running hot. The worst thing for our economy that we could see happen right now is an enormous amount of government spending. You don't have to take my word for that, because we know that the Reserve Bank governor herself has made it very clear that big spending government programs will increase inflation and will of course impact on the decision-making processes that the Reserve Bank go through in the months ahead.

Everyone, hopefully, wants to see interest rates coming down, and everyone wants to see the Reserve Bank be in a position where the data supports them reducing the cash rate. I want that for my constituents. I'm sure everyone wants to see that happen. So, if the Reserve Bank governor is making comments and giving warnings about massive increases in government spending, meaning that they will be in a position where they can't reduce interest rates—in fact, they might have to go up again, depending on just how significant this Labor spendathon that we anticipate happening in the months ahead is—then that is a frightening prospect for the average Australian family. Going into this election campaign, if Labor are announcing multiple billion-dollar cash giveaways to try and buy votes from people, I know that the average Australian will know what that means: that higher government spending is inflationary. It means your mortgage is higher, it means your rents are higher, it means all the costs in our economy will be going up, and, at the same time, we might have to see taxes go up as well for this government to meet some of those costs. We don't know whether they'll hand down a budget. It doesn't feel like they will. I wouldn't want to if I were them, given what they've got planned in store. But it is a frightening prospect for the people of this country that Labor are going to spend, spend, spend and increase interest rates in the process.

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

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.