Matthew Canavan (Queensland, Liberal National Party) Share this | Hansard source

It is very clear now that the government's budget, which is just a month old, is out of date. It's already past its expiry date. It's gone stale. It can no longer be consumed. Just a month ago the government forecast that its budget would help bring inflation down to three or less than three per cent by Christmas. As others have said today, inflation in fact has surged back up to four per cent a month after the government's budget. It's going in the wrong direction. In fact, we now have one of the highest inflation rates in the developed world. Of the world's 20 biggest economies, the only countries with higher inflation than us include Argentina, Turkey, Russia, Brazil, South Africa and Mexico. They've the only ones. Every other country in Europe, the United States and Canada, and New Zealand all have lower inflation rates than Australia now. That is a lot to do with this government's complete mismanagement of our economy.

There have been two great sins here that the government has presided over that have caused this inflationary crisis. The first is that they botched the recovery from COVID. We had to reopen our borders after COVID. We had to let some people into this country. But this government opened the floodgates without any control whatsoever, and we now have a situation where over the past few years we've taken in a population bigger than the size of Canberra every year. We can't do it. We don't have the houses for it. We don't have the infrastructure for it. It's plain in front of everyone's eyes here in this country that we can't house this number of people. It's shocking that, in a country of Australia's standard and history, we now have a situation where there are multiple tent cities in our major capitals. It's something I never thought I would see as an Australian. You go overseas and see it. Sometimes you even see it in developed countries. But we were such a well-managed country—an island nation too, which obviously helps a little bit. There are no excuses here, really; every other government since federation has been able to manage our basic housing needs. There are different stresses at different times, but we've never had a situation where thousands upon thousands of working families find themselves with no alternative but to live in their cars or in tents. That's the situation. The government completely lost control of our borders, and that has partly led to these inflationary pressures on rents, housing and other services.

The other big error that's happened at the same time is the government pouring fuel on that inflation fire. We just heard from a Labor senator there that they got to office and inflation was already high. It is true that inflation was increasing. It hadn't set in yet, but it was starting to rise when the Labor Party got to office. So what do you think you would do in an environment where you knew that inflationary pressures were starting to rise and it was happening all around the developed world? A logical, sensible government would seek to rein in government spending to take pressure off the economy, to avoid adding fuel to that inflationary fire and to make the job of the Reserve Bank easier. Instead this government has increased spending in their first two full budgets by more than $40 billion for their own decisions. It's not just the spending; they've made decisions to increase spending by more than $40 billion.

How does that compare? These two budgets now are the two biggest-spending budgets—not including COVID, which was pretty special—since the global financial crisis and Kevin Rudd's budgets. At least Kevin Rudd had a global financial crisis to respond to. He went a bit far, but the direction was right. We had to spend some money to cover our economy from a global downturn. This government has gone in the complete opposite direction from what sensible economic thinking would say. During an inflationary spiral, when inflation is breaking out, governments should pull spending back, not add to it.

That's the mess we find ourselves in now and, unfortunately, the Reserve Bank is possibly going to have to come along and clean up this mess. If they do raise interest rates in the next couple of months, just another 25 points will mean that the average Australian homeowner will be paying $1,000 more a year in repayments. That will swamp all the electricity rebates and other sweeteners they put in their budget. So start a new budget and avoid an interest rate rise in August.

Question agreed to.