Matt O'Sullivan (WA, Liberal Party) Share this | Hansard source

I commend Senator Hume for bringing this matter before the Senate right now because it is a very important issue. There is no bigger or more important issue than what Australians are facing right now, which is the rising cost of living.

I would, however, point out that, while the government have no plan to bring down inflation, they are doing something even more reckless than that. Their policies are actually driving higher inflation. We don't need any more reminders that we are facing rampant inflation caused by the government's decisions than we've seen today, with the RBA's decision to increase interest rates by another 0.25 per cent. The government are very fond of blaming everyone else but themselves for high inflation. They should look in the mirror and see that they are, in fact, the ones who are responsible.

The impact of inflation is not just arbitrary. Its effect is uneven and it's being felt by everyone across the economy, from families to businesses. Even worse, inflation's pernicious impacts are felt daily because families never feel that they're able to get ahead with their household budget. And, boy, are families feeling that right now. This further increase to mortgages today is impacting Australians terribly, and we are seeing that impact.

Any MP or senator who spends time in their community will know exactly what I'm talking about. Any wage increase that people gain evaporates instantly at the fuel pump or the supermarket checkout. Cost of living is the biggest issue that this country is facing, yet we're not seeing the government step up to the plate and deal with it.

When I go through the electorates of Tangney and Burt, which are close to my home, people tell me they are struggling to get by. And it's not just in the mortgage belt areas, the newer parts of those electorates, or the outer suburbs; it's even close to town, where people would be more affluent. People across the board are feeling it, and this government is not doing anything to deal with it.

At last month's meeting the RBA made this observation:

Real household disposable incomes had declined by 3 per cent over the preceding year, as strong growth in nominal aggregate labour income had been more than offset by high inflation and rising tax and net interest payments. This had resulted in a period of weak growth in household consumption, including a decline in per capita terms.

Yet the Treasurer keeps saying that there is nothing to see here and nothing that he can do to get inflation under control. It's all Russia's fault. It's because of the rising cost of fuel that's impacting upon Australians. The government can do something about it. They can't just shift the blame. The government can control aggregate demand, which is adding fuel to the inflation fire, by cutting fiscal spending. They can do that. They can get more money from people's pay packets into their pockets by bringing in tax cuts.

If the government doesn't tame inflation, it will become sticky and persist for longer. As the RBA said in its decision today:

… if high inflation were to become entrenched in people's expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment.

The RBA has already indicated that inflation won't be back to the two to three per cent target band until late 2025. What does this mean for Australians? Are we going to continue to experience high rates of inflation because the government are not taking action to reduce the pressures upon the economy that are driving up inflation? They're putting fuel on the fire by bringing in things like the industrial relations reform, the so-called closing loopholes bill. All that is going to achieve is greater reliance on and influence of unions in our workplaces. It will decrease productivity in the workplace, which of course we know will add further fuel to the inflation fire that this government is not taking control of.