Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Hansard source

I really do compliment my friend and colleague Senator Bragg on his contribution. The more effusive I am with my compliments to Senator Bragg the more difficult it will be for him to leave the chamber as I give my contribution. He's such a courteous individual. He can leave if he wants to, if he has other things to do, and he can watch my contribution later on ParlView, which I'm sure he'll do. I see he's taken the opportunity, as well, not that I can reflect on that.

One of the most terrifying things I've seen in relation to post-budget commentary in recent times is an article by Michael Read, economics correspondent for the Australian Financial Review. For those listening to this debate, you're hearing the words of different politicians putting forward their own perspectives, and that's what this place does, but I want to cut through that and go to the words of the Reserve Bank of Australia. These are the professional economists whose role it is to make decisions about interest rates. When they make a decision to either keep interest rates where they are or to increase interest rates, that has consequences for every single Australian, especially those who have mortgages over their homes, so we should listen very carefully to what the Reserve Bank of Australia is saying post budget. From my perspective, that provides the Australian public with the best objective evidence as to whether the budget reflected in these appropriation bills has been successful or unsuccessful.

We've now received that evidence, in relation to the latest consideration of interest rates by the Reserve Bank of Australia, and it is deeply disturbing. What is especially disturbing is that the Treasurer, Jim Chalmers, member for Rankin, came out after the Reserve Bank's statement by the Reserve Bank governor, Michele Bullock, who is an expert of the first order, and said: 'I don't tell the Reserve Bank of Australia governor, Michele Bullock, how to do her job, and the governor doesn't tell me how to do my job.' Let's consider that. We have the Treasurer of Australia, who's responsible for the budget and fiscal policy in this country, defending his position and saying: 'Well, the Reserve Bank of Australia governor shouldn't tell me what to do. I don't tell her what to do.' We've got the Reserve Bank of Australia raising concerns about inflation and therefore interest rates, and that's how the Treasurer responds. That's how the Treasurer responds to comments made by one of the most important people in our system of government, the Governor of the Reserve Bank of Australia, who leads the decision-making process on interest rate changes. It is deeply, deeply concerning that the Treasurer of Australia would make that comment: 'I don't tell RBA governor Michele Bullock how to do her job, and the governor doesn't tell me how to do my job.'

If you were in any organisation in any position which required close collaboration, dealing with extraordinarily complicated matters to achieve an outcome, and you had someone who has a leadership role in achieving that goal making that sort of comment—this is someone in a senior position in this country, with their hand on the lever of interest rate policy—you'd be astounded. It is deeply disturbing that we have the Treasurer of Australia making that comment. Quite a few economists have come out and said that the economy is in burnout mode. What they mean by that is that the federal Labor government has its foot on the government-spending accelerator and the Reserve Bank of Australia, at the same time, has its foot on the brake, trying to address the inflationary problem through monetary policy—higher interest rates. What do you get? You get a burnout. And the comment from our Treasurer is: 'I don't tell RBA governor Michele Bullock how to do her job.' I should say this is Michele Bullock, graduate of the London School of Economics, who's worked at the Reserve Bank of Australia for decades. The Treasurer doesn't tell her how to do her job. Well, that's great. 'And the governor doesn't tell me how to do my job.' Maybe—just maybe—the Treasurer of Australia should actually listen to what the Governor of the Reserve Bank of Australia is saying, because the comments of the Reserve Bank of Australia reflect what economists told us following the last budget.

I want to quote from some of those comments following the last budget. I quoted them when the budget was brought down. Independent economist Chris Richardson agreed that budget spending had made the RBA's juggle trickier:

My key test for the budget was that it not poke the inflationary bear. I don't think it's passed that test. I've consistently been saying for a long time that I didn't see a rate cut until the end of this year but that's starting to slip into next year.

So many Australians are struggling in the middle of a cost-of-living crisis, trying to pay those increased mortgage rates and trying to do things like put the fuel in the car, pay for groceries and pay the electricity bill, and I'm hearing from colleagues—and I've heard it again this week—that, when they attend sporting events, numbers are down in terms of children's sport. Why? It is because people are cutting back anywhere they can in terms of their discretionary spending. That's what's happening out there at the coalface.

Another economist said 'a lot of spending in the budget and a lot of it is not particularly targeted'. They said the government 'haven't quite hit the mark on reducing inflation'. Another economist said, 'We were left disappointed on all three fronts.' Ross Greenwood, whom people would be familiar with, said, 'This is the biggest taxing government in 23 years.' Steven Hamilton, economist, said:

This is the most irresponsible budget in recent memory. The government set itself a simple standard: not to make the Reserve Bank's job harder. Michele Bullock—

the Reserve Bank of Australia governor—

may just choke on her cornflakes.

That's what they said immediately after the budget.

I have extracts from a transcript of an interview with the Governor of the Reserve Bank of Australia, who Jim Chalmers doesn't want to tell him how to do his job—maybe Michele Bullock should change careers, move into the political sphere and actually do the Treasurer's job. I'm sure she could do it much better than the current Treasurer. In an interview after the last interest rate decision of the Reserve Bank, which kept interest rates high, the Governor of the Reserve Bank of Australia said:

And as I noted earlier, on average households have reduced their saving rate by more than we thought to support their spending. It's tough just to keep up with essentials—groceries, petrol, health, education, rents, insurance expenses, I could go on, they're all going up.

But the Treasurer, Jim Chalmers, doesn't want the governor to tell him how to do his job. It sounds to me like the Reserve Bank of Australia governor is right on the mark. I'll quote further:

So, what does this all mean? Well, the recent data have been mixed but, overall, they reinforced the need to remain vigilant to the upside risks to inflation.

That's what the Governor of the Reserve Bank of Australia said—not a politician. She also said:

We need a lot to go our way if we are going to bring inflation back down to the 2-3 per cent target range. The Board does need to be confident that inflation is moving sustainably toward target and it will do what is necessary to achieve that outcome.

This is deeply concerning. Are we going to have an interest rate rise by the end of the year? This is what the governor said. Those opposite, including the Minister for Finance, tell us in this place, 'We're putting downward pressure on inflation; there's downward pressure on inflation.' The Governor of the Reserve Bank, the governor who Jim Chalmers does not want to tell him how to do his job, says—