Paul Scarr (Queensland, Liberal Party) Share this | Hansard source

I move:

That the Senate take note of all questions asked by coalition senators of government ministers today.

What we saw last night was a typical big spending, big taxing Labor budget. That's what we saw last night—big spending and big taxing. It's expansionary in terms of the spending measures which were undertaken; it's also stimulatory. There is an incoherence at the heart of the budget strategy that was put up by the federal government last night.

On the one hand, they acknowledge that inflation is an issue and that there's a cost-of-living crisis in this country. We've got the RBA lifting interest rates on numerous occasions, impacting average families across the whole of Australia. But, on the other hand, they delivered a budget last night where the fiscal strategy is not in keeping with, not complementary to and not consistent with the monetary strategy being adopted by the Reserve Bank of Australia. That goes to the heart of the issue that the Australian economy is facing at the moment.

It's not just me saying this. Many of Australia's leading economists are pointing this fact out and are saying that last night's budget will provide a basis for the Reserve Bank of Australia to increase interest rates yet again. There will be a direct line between future interest rate increases and the budget that was delivered by the government last night. It's not just me saying that. Let me quote from some of Australia's leading economists. Chris Richardson, who is probably one of the most well-known economists to the Australian public, said: 'I had thought that the Reserve Bank was done and dusted, but this has notably'—'this' being the budget—'raised the chance that they will do another swing of the baseball bat.' That's from Chris Richardson, one of Australia's leading economists, who says that the budget last night will increase the chance of the Reserve Bank of Australia taking another swing of the baseball bat, which means higher interest rates and higher mortgage payments.

That goes to the heart of Senator Cash's question, in which she said that, if you compare the prosperity of an average Australian family before the last federal election with their prosperity today, that average Australian family—mum, dad and two kids—is now worse off by $25,000 a year. Why? Because of the mortgage rate increases, inflation increases—seven per cent inflation—and increases in electricity and power bills. Let me quote from Standard & Poor's Global Ratings—again, this isn't a politician saying this, these are actual participants in the market who are making decisions every day with respect to interest rates. This is what S&P Global Ratings said in their press release in relation to the budget:

Further, we expect inflation to be stubbornly higher than the Reserve Bank of Australia's target until fiscal 2026.

They also said:

… handouts in today's budget may add to inflationary pressures.

That's Standard & Poor's drawing a direct link between last night's budget and future interest rate increases and inflation. Andrew Boak, Goldman Sachs' chief economist—again, this is someone who engages in the markets as their profession. That's their expertise. They live and die by how well they engage with the market in relation to issues like this. What does he say?

… we assess the budget's near-term boost to household incomes to have an incrementally hawkish read-through for monetary policy

That means interest rates are going up. That's what that means. He also says:

… more tightening being required—

that means interest rates going up—

and potentially as soon as next month's board meeting.

So, just when Australian households who have gone out and borrowed money to buy that key asset in their family's prosperity, the centrepiece of a family's prosperity, their family home, interest rates are going up again. That's what we are going to see as a result of last night's budget.

David Bassanese, who is Chief Economist for Betashares, described the budget as 'unambiguously expansionary'. He was quoted in The Australian today saying the budget consisted of 'smoke and mirrors'. That's how the Chief Economist of Betashares described the budget. Robert Gottliebsen said: 'There's a risk that a shocked Reserve Bank will not cut interest rates and may even be forced to raise them. The blame will sit squarely on the government.'