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

Every Australian feels it, Senator Babet, because it is real. It is present in the economy, and it is probably the single most negative force in the Australian economy at the present moment. This government has done absolutely nothing to address it. It talks about the cost of living, but it doesn't talk about how it is dealing with inflation. It has left that up to the Reserve Bank. What does that mean? The Reserve Bank has got only one lever at its disposal—just the one. The only thing the Reserve Bank can do is increase interest rates, and that's what they did. The only thing the Reserve Bank can do is increase interest rates. Governments have choices; the Reserve Bank doesn't. The government has choices. The government has numerous levers it can pull if it wishes to impact on the economic settings—the economic parameters—of this country. The Reserve Bank has one very blunt instrument, which it had to use with full force, because it watched and it saw the government doing nothing.

That is the single biggest impact: inflation and interest rate rises that accompany the inflation have been the single biggest destroyer of standards of living in this country. Households have gone backwards a long way in the last 18 months, and that is why the community is rightly sceptical of this approach which bakes in bracket creep. It bakes in tax rises over the longer term through bracket creep—something like $28 billion over the next decade. So calling this bill before us a tax cut is actually a huge misnomer. It's actually a bill to increase taxes in the longer term. It's actually a bill to entrench bracket creep into our tax system over the next decade, and bracket creep is, again, the hidden way that governments try to sneakily deal with the problems they give themselves through not being able to control their own spending and not being able to live within their means. That's why it is important, coming into the next election, that we will have a very clear plan to deal with it. I absolutely endorse that, because bracket creep, again, just undermines the living standards of Australians. Nobody can deny that. Nobody can doubt it. It's been known for decades.

We have a system where, quite frankly, the government's probably quite happy to have a little bit of inflation going on for a little bit longer, destroying standards of living, because it deflates their debt over time; it bumps up wage rises over time. They like that. They like to be able to claim higher wage rises, even though the interplay between wages and inflation is well-known and damaging. Without productivity improvements, wages going up higher than inflation can only be inflationary.

And where will that lead? Senator Scarr, you said it. It has to lead to unemployment. It has to lead to longer unemployment queues. Senator Scarr, I'll put you in the bucket with me, of those of us who remember the 1970s—it's a big bucket, the 1970s—and the destructive impact of the combination of high inflation and high unemployment. It's just something that we do not want to see in this country again. Yet this is where we will head if we get these parameters wrong. If we see an inflation-wage connection where inflation is outside the Reserve Bank band but being driven by wages, we will see unemployment queues lengthening. That shouldn't be something that anyone in this place should be contemplating—and certainly should not be celebrating. It's something we should, each and every day and each and every moment, be putting every single effort into avoiding.

And yet, do we see anything from the other side? No. We see broken promises. We see claims about addressing cost-of-living crises that add up to nothing. We see a massive decline in the standard of living for every Australian. That is something that will be to the eternal shame of this Labor government.