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

For those who were watching or listening to my speech earlier today, I'm in continuance. I ended my contribution earlier today before we hit the hard marker by quoting the views of some economists with respect to the inflationary impact of the budget which was brought down by the government back in May—and we've seen that now wash through the system. This was a typical Labor, big spending, big taxing budget, an expansionary budget—the last thing we needed at this point in time, and now we're seeing the consequences of that.

I want to go through the inflation statistics that were released in April. I think this really provides an insight into the effect of a high-inflation environment. When you actually break it down into the separate goods and services which make up that basket of goods and services, which, in aggregate, form the basis of the consumer price index, you see the impact on people of this high-inflation environment—and it's absolutely devastating. Let me go through some product categories. Under food and non-alcoholic beverages, the inflation rate for the April 2022 to April 2023 period for bread and cereal products—there can hardly be anything more basic than bread and cereal products—saw an 11.4 per cent increase over 12 months. Meat and seafood, the source of protein for so many people, saw a 4.4 per cent increase. Dairy and related products saw a 14.5 per cent increase in the period from April 2022 to April 2023. These are horrendous increases. Fruit and vegetables, 3.5 per cent; food products NEC, 11.7 per cent; non-alcoholic beverages, 9.7 per cent. These are typical staples that an average Australian working family would have in their shopping trolley when they go and do their weekly shop, and we've seen inflation impacts of 11.4 per cent, 4.4 per cent, 14.5 per cent, 11.7 per cent, 9.7 per cent.

Then we move down to rent, a 6.1 per cent year-on-year increase; new dwelling purchases by owner-occupiers, 9.2 per cent; electricity, 15.2 per cent; furnishings, 6.3 per cent; transport costs, 7.1 per cent; communication, 0.2 per cent; recreation and culture, 6.4 per cent; holiday travel and accommodation, 11.9 per cent. If you're an Australian working family and you're trying to get a break from all of these financial pressures, we've got here an inflation rate impacting holiday travel and accommodation at 11.9 per cent. These are very, very distressing figures, extremely distressing figures, which are having an impact on all Australians.

With the headline inflation rate from April 2022 to April 2023 of 6.8 per cent and an expansionary budget, what have we seen? On 6 June 2023 another interest rate increase. In a statement made by Philip Lowe, Governor of the Reserve Bank—he has a very difficult job at the moment. He's got a very difficult job because the government is going one way with its fiscal policy and he's trying to go the other way with monetary policy. It makes things extraordinarily difficult. On 6 June 2023 Dr Lowe said:

… the Board decided to increase the cash rate target by 25 basis points to 4.10 per cent. It also increased the interest rate paid on Exchange Settlement balances by 25 basis points to 4.00 per cent.

What really concerned me when I read the RBA Governor's statement was in the last paragraph. It said:

Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe …

Let's just reflect on that, 'some further tightening of monetary policy may be required'. Translation: perhaps another interest rate increase. I go back to the RBA's statement:

… but that will depend upon how the economy and inflation evolve. The Board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.

The RBA is essentially doing its job, as it's commissioned to do under the legislation of this parliament, in returning inflation to the target range of two to three per cent. What the governor is warning us about is that further tightening of monetary policy may be required to ensure that inflation returns to that target.

So at a time when you've got bread and cereal products up 11.4 per cent, dairy products up 14.5 per cent, food products general up 11.7 per cent et cetera, the RBA's saying there could be a further interest rate increase at absolutely the wrong time for Australia, and that's of grave concern. Everyone needs to reflect on this situation and the government needs to have answers. We wait to hear the government's plan to tackle inflation. (Quorum formed)