Varun Ghosh (WA, Australian Labor Party) Share this | Hansard source

Australians are facing significant cost-of-living pressures, but there's an incorrect premise in this urgency motion, which is that this is as a result of the policies or the actions of the Albanese government. That's a premise that's simply not supported by the actual numbers on inflation and real wages.

Cost of living in this country is a function of what things cost for people day to day, how much they earn by way of their wages or income and the support that government provides in addition. In relation to those three things, what the numbers actually bear out, once you look past all the rhetoric, is that things are heading in the right direction in terms of inflation. Things are heading in the right direction in terms of the real wages of people in this country. While we are in this cost-of-living crisis, the Labor government is actually supporting people to try and help them get through it. The coalition narrative amounts to, 'We made a huge mess on those three metrics, but you guys haven't cleaned it up fast enough, so you should give us back the keys,' and I think that that's just flawed at its heart.

But let's talk about inflation. I spoke last week about the profligate spending of the Morrison government, but the numbers don't bear out their argument today. I'm going to use two sets of numbers to make that point. The first is headline inflation, not seasonally adjusted, and the second is trimmed mean inflation, and that is going to be seasonally adjusted. That's the way the RBA reports those numbers.

If we go back to March 2022, those numbers were at 5.1 per cent headline and then 3.8 per cent trimmed mean, and then they start to ratchet up. They ratchet up through June 2022 to 6.1 per cent headline and 4.9 per cent trimmed mean, and then they ratchet up again in September to 7.3 per cent and six per cent and then again in December to 7.8 per cent and 6.8 per cent. That's the lag, the inflationary hangover, of Morrison government policies. And then you start to see that inflation moderate, you start to see some of the economic signals slow a little and you see some of the anti-inflationary policies of the Albanese government start to work. That number comes down and down and down until we have, most recently, in December 2024, a number of 2.4 per cent of headline inflation, not seasonally adjusted. That's back in the Reserve Bank band. That's inflation within target—from 7.8 per cent to 2.4 per cent. But, if you want to exclude the most volatile parts of the CPI—that is, trimmed mean inflation—it's down to 3.2 per cent, so we're slightly out of band. But, if you talk about the trajectory, it's been coming down and down. While the government has got inflation under control, we would accept that prices remain really high for people, and that's partly the reason we've been providing all this cost-of-living relief.

The other thing I want to talk about is real wages, because that's the other piece of the puzzle. If your real wages are going up, you've got more money to spend, and real wages have gone up in the last four quarters. But where it really hurts—this is where the Morrison government and their policies of trying to suppress wage growth really hurt ordinary Australians—is where you've got inflation high on one hand and real wages going down on the other. If you look at those numbers across that timeframe—I'll show you two or three data points—headline inflation in June 2022 was 6.1 per cent, and real wages fell 3.4 per cent. When costs are going up and wages are going down, that hurts people. When we got to the Morrison hangover's peak in December 2022, it was 7.8 per cent headline inflation, and real wages fell 4.4 per cent. That's the cost-of-living pinch that people feel when the money coming in is going down and the money going out is going up, and we've reversed that. Real wages are now growing again. We've had four quarters of small but promising real wages growth.

What are we doing about the pain for ordinary Australians? There are lots of measures that we've talked about in this chamber for the last year, but I'll focus on two. The first is tax cuts for every Australian—that is, every Australian taxpayer got a tax cut on 1 July 2024. And that was most helpful to the people earning $45,000 or less, who weren't going to get anything before. The second is energy bill relief, which you've heard a lot about. Inflation is trending down. Real wages are growing again, and we are trying to assist Australians with their cost-of-living pressures.