Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

This government has made significant headway in helping Australians manage cost of living pressures. I am pleased to speak on both the broad and specific measures we have undertaken to support Australian families, particularly the most vulnerable, to keep their heads above water. I think it is extremely important to recognise that these achievements have been made in the face of the greatest challenges a federal government has had to tackle in many decades: firstly, the most significant global financial crisis since the Great Depression and, secondly, 11 long years of neglect and inaction by the previous government, which withdrew millions of dollars from our hospitals and schools, refused to tackle the need for investment in infrastructure and skills, and refused to embark on the reforms desperately needed in our taxation and welfare systems.

The global financial crisis was averted by the swift and decisive actions of the government. There is nothing like unemployment or underemployment to really reduce the standard of living and to increase the net cost of living for Australian families. It was action by the Rudd government—in the teeth of opposition by the coalition parties—that averted the very imminent threat that has had a great impact on countries in Europe and on the United States. The reality is that this government has not only faced these things but overcome them since being elected to government. I proudly stand here and defend this government’s actions to support Australians and their families in these difficult times. This government has been willing to make difficult decisions, as opposed to the ‘do nothing’ response in the face of the global recession and the ‘climate change is crap’ mantra of the opposition.

Senator Kroger mentioned there are high inflation and high interest rates under this government. That is extremely rich coming from the Liberal opposition—the Liberal Party that left Australia with the highest inflation in 16 years. In the last quarter of the Liberal government, underlying inflation had risen to its highest level in 16 years. The average increase in the Reserve Bank of Australia’s measure of underlying inflation reached 3.7 per cent in the year to the December quarter 2007. There were 10 straight interest rate rises. Under the Liberal government, standard mortgage interest rates rose from 6.05 per cent in April 2002 to 8.55 per cent in November 2007. This rise cost families $484 more a month, or $5,805 a year, on a standard $300,000 mortgage. That cost of living increase really affects your standard of living. Even after recent increases, a family with a $300,000 mortgage is still paying around $600 a month less than they were 18 months ago under the Howard Liberal government. That is the kind of thing that the Rudd Labor government has done about inflation rates, whereas the Liberal government ignored 20 warnings from the Reserve Bank of Australia about inflation.

The Howard government left us with twin deficits—a skills deficit and an infrastructure deficit—and declining productivity growth. When we are talking about standards of living we need to acknowledge that productivity, innovation and infrastructure are intertwined as a means of improving the future for Australians. The coalition parties have always been poor at looking at the future, at looking ahead, and considering how macroeconomic policies will impact on ordinary working families.

Currently inflation is subdued. The CPI figures from last week show that inflationary pressures in our economy remain subdued. They reflect an economy that is, unfortunately, still operating below its capacity. CPI inflation was 2.1 per cent through the year to the December quarter and at the lower end of the RBA’s two to three per cent target band.

So there is that macroeconomic setting, but the government has also helped working families directly. There are of course two parts to cost of living pressures. One is the income side and one is the expenditure side. On the income side, the government has recognised that working families face rising prices. It has also taken steps to help on the income side. The government has delivered not only at an interest rate level but on its promise of tax cuts for Australians. This means that a person earning $50,000 a year pays 14 per cent less tax in 2009-10 than they did in 2007-08. Further tax cuts in 2010-11 mean that they will be paying 18 per cent less than in 2007-08. That is a tax cut of $1,750. Other measures include increasing the childcare rebate from 30 per cent to 50 per cent, improving affordability for parents. So, recognising that there are price increases, the government has taken action to improve income and benefits.

We have introduced paid parental leave, which will provide up to $9,788 for around 48,000 mothers and primary carers each year. We have also introduced the 50 per cent education tax refund, which provides up to $750 per primary school child and $1,500 per high school child to help with the costs of education. Again, recognising that there will be, in the nature of things, cost increases, the government have taken steps to offset those increases. Very importantly, we have also delivered a historic pension increase of $32.50 a week for single pensioners, costing $14 billion over four years. Cost of living pressures were increasing under the Howard Liberal government, but did the coalition take any measures to improve the lot of ordinary people? Not many, and not at all for pensioners. They took no steps to help those on low fixed incomes to cope with cost of living increases. And the Liberal opposition have the temerity to come in here and move a motion like this! They did nothing for people on low fixed incomes. Also on the pension side, we have increased the utilities allowance from $170.20 to $500 a year.