Dave Sharma (NSW, Liberal Party) Share this | Hansard source

What we've heard from those opposite today is an exercise in delusion, the description of an alternative reality and messages that the Australian taxpayer and householder have never had it so good. Let's look at what Australians are dealing with. There has been no growth in real GDP per capita for five quarters now, and the Reserve Bank has just said that it doesn't expect there to be growth in real GDP per capita for the next quarter. We've seen real net disposable income per person decline by 8½ per cent in the past 18 months. We see core quarterly inflation at 3.9 per cent and increasing. We've seen 12 consecutive rises in the overnight cash rate, in the interest rates that Australians pay on their mortgages, with no relief in sight and the Reserve Bank warning, just last week, that they were close to raising interest rates and that there were no likely cuts until next year. And we've seen labour productivity down five per cent in the last two years. We've seen out-of-control government spending, with real spending by government growing by 4.5 per cent this year. It is forecast to grow by 3.6 per cent next year.

Those opposite might remember that paragon of fiscal virtue, the former treasurer Wayne Swan. He had a fiscal rule that growth in government spending should not exceed two per cent in real terms year on year. This government has broken that speed limit on two consecutive occasions now. If those opposite are wondering why Australians are feeling worse off and why Australians are frustrated by this government's economic management, they need to look at those statistics. Australians are paying more for life's essentials because inflation is out of control. They're paying more in taxes because of bracket creep. They're paying more for their mortgage because of higher interest rates. And their real incomes are not rising because there is no productivity growth and no agenda. Those opposite can crow about nominal wage rises, but the truth is that if those wage rises are only covering inflation—if they don't take into account the fact of bracket creep, if they don't into account the fact of rising interest rates—then of course Australians, in net terms, are going to be feeling worse off. That's why this figure of real GDP per capita, or real net disposable income per person, is so important.

The decline that we've seen here in Australia of household net disposable income is unparalleled anywhere in the OECD. Other advanced economies have seen inflation come under control. Countries like the UK and Canada have begun to cut interest rates. The Federal Reserve has indicated its next likely move in interest rates is down while the Reserve Bank is indicating that things are heading in the opposite direction in Australia. Those countries have seen real net disposable household income increase in the past 18 months because they've gained control of inflation, because bracket creep is no longer eating into worker salaries, because people are paying less for life's essentials and because the governments have pulled in the fiscal reins and made sure that fiscal policy is pulling in the same direction as monetary policy.

Last week, after the Governor of the Reserve Bank issued a warning that the growth in government spending was contributing to a more difficult inflationary outlook and was making the Reserve Bank's likelihood of reducing interest rates more distant, we had the unedifying spectacle of the Prime Minister and the Treasurer saying that the Reserve Bank governor in fact didn't say these things. Well, it is quite clear in the transcript. It's quite clear in the minutes from the last Reserve Bank Monetary Policy Committee meeting that the growth in government spending is having an impact on inflation in the Australian economy, and that the Reserve Bank is having to keep interest rates higher for longer because fiscal policy is not moving in the same direction. You just need to look at the growth in government spending: 4.5 per cent growth in real spending this year; 3.6 per cent in real spending forecast for next year. All up, $315 billion in additional government spending since this government came to office, and you can see why. Inflation is out of control and is why Australians cannot expect relief anytime soon.