Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

I am glad to rise today to speak to the Treasury Laws Amendment (2023 Measures No. 2) Bill 2023. While I thoroughly support the measures in this bill to help small business, the fact of the matter is the bill doesn't go far enough. It does nothing to help the people in this country who get out of bed every day, put their noses to the grindstone and actually produce goods and services.

I noticed before that my colleague Senator Hume raised the very pertinent issue that it does nothing to deal with inflation. What causes inflation? It's when either demand is higher than supply or supply isn't high enough. What we have here is a budget that has 400,000 migrants coming into this country—that will increase demand—while at the same time it is cutting the infrastructure that supplies the goods and services. How is that going to help inflation? If you want to increase supply, you have to build infrastructure. That is the way it has always been done in this country.

Those of you who know your history about the early colony will know that for the first 17 years of the colony Australia relied on foreign debt. When that foreign debt was repatriated when they had the drought of 1805, they started in rum. That literally went topsy-turvy until Governor Lachlan Macquarie came. He was the first governor to see Australia as a country and not a colony. He knew that any country had to control its own currency. He issued the 'holey dollar'. He got a heap of Spanish peso and punched a hole in the middle of that peso and called it the 'holey dollar' and the 'dump'. With that he built infrastructure, some of which still stands in Sydney today—the Sydney Hospital and the Sydney barracks.

If we want to actually fix the inflation crisis in this country, we need to do what Lachlan Macquarie did and we need to build infrastructure. But that is not what's happening in this budget. They have pulled infrastructure works. They have pulled infrastructure for things like Hells Gate Dam up in North Queensland that's going to provide hydropower and more irrigation to irrigate the soil. That would produce more fruit and vegetables and cropping and things like that. Instead, they are going to put money into what are known as 'renewables', which they aren't. They are going to import billions and billions of dollars of 'unreliables'.

We could build hydro. I'd back hydropower, by the way. I don't want to turn my back on hydro. That is genuine renewable power because the water comes from the sky. No-one has to build a solar panel or a windmill to get that water. No-one has to build anything other than a dam, and those dams can last hundreds of years. Whilst they do have a little bit of an environmental impact, I think their footprint is quite low.

The problem with this budget is that we are not dealing with the underlying issue of supply and demand. Instead, what this government has done is take no fiscal measures whatsoever, when it's otherwise known that you can use quantitative easing. Instead, what they are relying on is the RBA to use this brutal measure of qualitative easing of something like 12 interest rate rises in 13 months—I'll stand to be corrected on that. Who's going to pay for that? I'll tell you who's going to pay for that. I'll tell you who's going to suffer the most from that. It's the battlers. It's the people who actually get out of bed every day and put their nose to the grindstone. What do those people do? They supply goods and services.

That's the other thing about this particular budget. There is nothing in it to cut taxes from the bottom up for the battlers. If you want to increase supply, cut taxes on the people who supply the goods and services. That would be another way to deal with inflation, but we are not doing that—no. We are not giving any tax cut at all to the people who actually need it the most. We're going to let bracket creep jump up another seven per cent. This doesn't help them at all.

This is the other thing. I tell you, don't start me on Treasury. I could be here all day. They do not model secondary impacts. Why doesn't Treasury model the velocity of money? If they did that, they would realise that tax cuts for low-income earners cost next to nothing. How do we know that? Because, under the Howard-Costello government, they constantly cut income taxes right throughout the income tax spectrum. That's what we need to be doing. I look forward to next year's budget because we will finally get the Morrison government's income tax cuts coming through, and they are desperately needed.

Senator McKim, I'll take that interjection, but I will say this: when you've got inflation at seven per cent, it won't be long before we go up. Up to 150 grand, everyone is going to be appreciated. I mean, 150 grand doesn't get you very far these days, either. But, as I've said, I've always supported income tax cuts right throughout the entire bracket because, as I've always said, businesses get a tax deduction for the cost of doing business, so the workers should get a tax deduction for the cost of living. It is completely nonsensical in this country that we tax someone on, say, 50 grand, who pays six grand in tax and six grand in super. They're actually going backwards. So that's something that we can look at.

The other thing that really concerns me is the fact that we are trying to kill the very goose that lays the golden egg. Of course, that is the royalties and the company profits from things like coal, iron ore, gas and gold. We have to acknowledge the vast and massive contribution to all the budgets in this country of our mining sector, which has been holding up this country. A large reason for the budget surplus is that the iron ore and coal prices are so high. I think coal prices have slipped back a bit.