Andrew Bragg (NSW, Liberal Party) Share this | Hansard source

In giving some comments on this taking note session, the fundamental problem is that the distorted priorities of the government, combined with the government's inability to say no to the same distortions in its midst, mean that there has not been any capacity for the Commonwealth government to make any meaningful contribution to the battle on inflation. The battle on inflation has been fought solely by the Reserve Bank of Australia, which has ratcheted up interest rates 13 times since the election. They've been doing that in the teeth of the Commonwealth government running a fiscal policy which is fundamentally inconsistent with the approach taken by the central bank.

When the Governor of the Reserve Bank was recently at Senate estimates, the question was put to the governor: is the government running a contractionary, neutral or expansionary fiscal policy? The governor said that the government was running a neutral fiscal policy, when, of course, it should be running a contractionary fiscal policy. We don't know how much longer the government will persist with this approach, but, if it does persist with this neutral approach, it guarantees that there will be more interest rate rises. The 8,000-pound gorilla in the Australian economy is the national government. Every time the Treasurer produces a budget, this Treasurer produces more spending, and that means that the interest rate pain will continue. There is the table of truth in the budget paper, which presents this in all its detail. It presents the fact that the Treasurer is spending more money and taking new decisions to spend new money, which is making a bad situation with inflation worse.

The Australian people need a government that can run a contractionary fiscal stance. That is the thing that will aid the fight on inflation. If the national government can run a contractionary fiscal policy, then the Reserve Bank and the government will be in sync, and then there will be fewer interest-rate rises and there will be less pain at the kitchen table for the Australian people, who don't want to pay higher interest rates. The Australian people do not want to pay high interest rates on their houses. Prospective homebuyers can't afford to pay high interest rates. This is stopping people from getting into the housing market. Labor's stupidly high inflation and high interest rates, which the Labor Party is solely responsible for, are stopping millennials and gen Zs from getting into the housing market. That is the No. 1 priority for this government: to take inflation seriously and to slow new spending.

I was reading the Canberra Times the other day, and it reliably informed me that there are 10,000 new public servants to be employed by the Commonwealth as a result of this latest budget—the biggest increase in 15 years. This is just one example of expenditure by this government that is not necessary. We don't need more bureaucrats. We don't need more people working in Canberra. This is a good example of where the government could make some cuts. It could be part of a contractionary fiscal stance.

As it stands, there appear to be few solutions on the government benches. Many solutions have been developed by vested interests at the unions and the big super funds. That is basically the policy manifesto of the modern Labor Party: a bunch of vested interests and a bunch of rent-seekers. Sadly, none of these are solutions for inflation, which is the topic du jour. Therefore, I think we are stuck in this problem that the government has created for the Australian people. That's why we are flagging different options that can be deployed to address these issues, particularly in relation to housing, where we do think that there is a very important debate to be had around helping first home buyers get into the housing market but also ensuring that people who have a house can keep their house.