Slade Brockman (WA, Liberal Party) Share this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice asked today.

I particularly want to take note of the answer to the question from my good friend, Senator Dean Smith, on the cost-of-living pressures that are facing all Australians.

The cost of living is a real issue because, contrary to the mistruths that those opposite spread, real wages are going backwards under this government. Real wages actually increased under the coalition government, but you wouldn't know that if you listened to what the Labor Party says. Real wages actually increased under the coalition government, but they increased in a way that was sustainable and within an environment of low inflation and low interest rates. Under this government, real wages are going backwards and, at the same time that real wages are plummeting, we're seeing the largest cost increases on Australian families and Australian households—certainly in living memory and possibly in Australia's history.

We've seen increases in interest rates in the last year of this Labor government, putting extraordinary pressure on household budgets through mortgage interest rate rises. Then we saw—and this really bells the cat—the government say in its budget that it was doing the right thing by inflation. But what did the Reserve Bank have to do at their first meeting after the budget was handed down? Clearly, they wanted to pause interest rate rises but they took a look—they sat down and took a long, hard and sober look at what the budget delivered for this country—and they said, 'No, we're going to have to raise interest rates again.'

The Reserve Bank is independent, and it should be. It's a very positive thing for the Australian economy, and it has delivered long-term economic growth and relatively low inflation rates to this country. But this is a point in time where the Reserve Bank has just increased interest rates at the fastest rate in Australia's history for a sustained 12-month period. And then it paused and had a look at this second Labor budget, and had a look at the economy. It had a look at the factors that are driving inflation within the economy. And what was its judgement after it paused and looked at this second Labor budget? It said, 'No, we're going to have to increase mortgage interest rates again.'

That is a judgement on this Labor budget. It's a judgement on a budget that did put upward pressure on inflation and therefore upward pressure on interest rates. It's a budget that increased spending and therefore increased pressure on inflation and the economy. This is undeniable. Every senior economist in this country—bar two or three who work, quite frankly, for left-wing think tanks—said that this budget was adding to inflationary pressures and made it harder for the Reserve Bank to pause. And the Reserve Bank didn't pause; their sole obligation is to look at the structure of our economy and to look at the data and the information coming into their systems, and they have to make a judgement call. They look at all the information they can possibly get.

Back in my past working life, when I worked for the Pastoralists and Graziers Association of Western Australia, I'd regularly get a call from the Reserve Bank operative in Western Australia to discuss cost-of-living pressures—in that case on the agricultural community: the cost to business and the cost of inputs. We would go through the costs and have our input into the Reserve Bank's thinking process. One of those inputs was what the government was doing with its own spending and what it was doing with its economic policy. To do as the finance minister did today and effectively throw their hands up in the air and say that say that interest rates are just for the Reserve Bank and have nothing to do with the government is just a nonsense, because it's the government's budget that will determine how the Reserve Bank views the future economic settings in this country and determines what it needs to do. And so the Reserve Bank, sitting down in a sober manner, looking at the information flowing into its system, said, 'No, we can't pause any longer. We have to raise interest rates.' That's this government's fault.