Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Local Government) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice asked today.

I do so with particular attention paid to answers given by Senator Minchin and Senator Scullion in relation to the cost of living and the increase in the cost of living and with particular reference to my question to Senator Scullion about the increased pressure on first home buyers and homeowners in Australia and the rise in the cost of their mortgages as a result of interest rate hikes. But perhaps I should start my comments today by referencing new data released showing that many families are facing cost of living pressures that are well in excess of what is implied by the average consumer price growth.

Today’s ABS data shows that the living costs of families have increased by some 3.1 per cent over the last 12 months, one whole percentage point higher than growth in the consumer price index. Over the last five years, we know that the CPI has increased by 14.5 per cent, but according to today’s Australian Bureau of Statistics data the living costs have increased by 18 per cent for employee households, 15.8 per cent for aged pensioners and 16.6 per cent for households receiving government benefits, showing that all of these groups of people—families, pensioners and people receiving benefits and everyone in the mix there—are enduring far greater costs of living than is recognised by the CPI increase.

Over the same five-year time frame, prices for many household essentials have also skyrocketed. Fruit and vegetable prices have increased by 41.9 per cent, education costs have increased by 32.6 per cent, health costs have increased by 31 per cent, housing costs have increased by 20.6 per cent and child-care costs have risen by a massive 88 per cent. Apart from these steep increases in costs of living, one of the reasons why the cost of living pressures are outstripping the CPI is that the CPI does not include mortgage interest repayments.

Today’s data partly reflects the impact on household budgets of Mr Howard’s broken interest rate promise following nine rate rises despite his promise to keep rates at record lows. This data, of course, shows even more evidence of how deeply out of touch Mr Howard and his government are with the realities of many household budgets. It is for that reason that I was surprised to see the very aggressive, arrogant and desperate response by Senator Minchin and Senator Scullion to questions asked by the Labor opposition today in question time. I think such a rant would have been found to be offensive by anyone listening who is enduring these cost pressures within their household and struggling to manage their household budget.

I think the questions asked by Labor today really do highlight that this government is living in a different universe, a universe that has no connection with the reality of Australian households. There is no possible way you can equate all of those increases in the cost of living with the general rhetoric emanating from the Howard government saying that workers and families have never been better off. That is not how the working people of Australia—and, indeed, pensioners and those in need of our support—are feeling at all. They are feeling the pinch, and the cost of living is making their lives harder and harder.

I think it is very interesting when you add in even more stresses on the household budget—a 53 per cent increase in petrol prices over the last five years, a 25 per cent increase in bread prices, a 60 per cent increase in the price of butter and, as I said, a 41.9 per cent increase in the price of fruit and vegetables. All these things start to really compound on the household pressure. The Labor Party is the only party that has some practical suggestions and policies that go to the heart of reducing inflationary pressures in the Australian economy and, indeed, specific programs to improve things like household affordability and far greater scrutiny by the ACCC on things like grocery and petrol prices to hopefully bring into check some of those unreasonable price hikes that have occurred because of the Howard government’s failure to pay any interest at all to what can be done by government to shine a spotlight on increases of that nature.

It is very easy to relate the cost of this increased pressure to the impact of Work Choices. We now know, based on information received today, that workers in retail and hospitality—some of our most vulnerable—have been worst hit by the effects of the government’s extreme industrial relations. (Time expired)

Mitch Fifield (Victoria, Liberal Party) Share this | Link to this | Hansard source

It is always very interesting when senators opposite talk about pressures on households. They only ever talk about one side of the household budget. They talk about the expenditures in a household—which do have to be taken into account. What you never hear the Labor Party talk about is the income side of a household budget. You never hear how real wages have increased under this government. You never hear how household assets have increased under this government. When looking at a household budget, you have to look at both sides of the ledger: you have to look at the outgoings and you also have to look at the incomings.

In my remarks this afternoon I would particularly like to focus on interest rates, which Senator Lundy touched on. There are a range of factors that determine the interest rate environment. The government has within its power the ability to set a range of policies conducive to lower interest rates. One of the most significant of those is government borrowing and government debt.

When this government came to office, we—as most of us here know—inherited a $96 billion debt from Labor. This debt and the interest repayments required to support it were putting upward pressure on interest rates. That is a fact. When this government came to office, not only did we have a $96 billion debt but there was also a $12 billion budget deficit. This government determined to do something about that. We introduced a tough budget in 1996. It was not popular and it was not easy but it was necessary. We set about the task of balancing the budget and paying down Labor’s debt. We set about the task of creating an environment conducive to lower interest rates.

But guess what. Every single measure that this government introduced to pay down the debt, to balance the budget or to help take pressure off interest rates, Labor senators opposite opposed. Time and again they knocked back our measures. Fact: every program we put up, Labor knocked back. But, despite that opposition and despite the fact that for a majority of our time in government we have not had a majority in this chamber, we managed to balance the budget. We managed to pay down Labor’s debt without their help on one single day. In fact, the government is now a net saver, helping take pressure off interest rates.

In contrast, the collective of state and territory Labor governments is forecast to accrue something in the order of $70 billion of debt. These state Labor governments are putting upward pressure on interest rates. It does not matter whether it is a state Labor government that borrows or some other level of government that borrows; that puts pressure on interest rates. Federal Labor have the opportunity to do something to help relieve the pressure on householders. They have the opportunity to do something to take pressure off interest rates. They can talk to their state Labor colleagues and say: ‘Do something about releasing more land. Do something about stamp duty.’

Senators opposite need to learn something about the basics of economics. They need to learn about supply and demand.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

You haven’t got long enough to teach them.

Mitch Fifield (Victoria, Liberal Party) Share this | Link to this | Hansard source

Indeed. They need to learn that increasing the supply of something lowers the price. If you increase the supply of land, that will lower the price of houses. If you cut stamp duty, more money will remain in the pockets of householders, which means that they will be in a better position to afford their mortgages. That is something that they can do today. But they will not. We know from their track record that they will not. We know from local government amalgamations in Queensland that federal Labor dare not argue a case with state Labor governments.

If you are after independent verification as to the efficacy of our policies, you need look no further than the International Monetary Fund’s public information notice from today, which praises the Australian government’s monetary policies, fiscal policies and structural policies. They give us a huge tick. They commend our fiscal policies and monetary policies. If you want independent confirmation of the robustness of our policies and how they are helping Australian living standards, you need look no further than the IMF. You certainly should not look to the other side of this chamber. (Time expired)

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I too would like to take particular note of answers given by Senators Scullion and Minchin to questions without notice asked today. If ever we wanted more evidence that senators opposite are out of touch with working Australians and Australian families, we heard it today in the answers of Senator Minchin and Senator Scullion. We already know that government members are out of touch. We learnt that when the Prime Minister came out with that cracker of a comment that working families in Australia have never been better off. What an absolute purler that was. But the government’s arrogance and ignorance about what is happening out there in the real world of Australia was on display again here today.

Those opposite like to forget that they have a Prime Minister who has presided over a government that has delivered Australia such things as the highest ever petrol prices, the highest ever rates of credit card debt—which currently averages around $3,000—five interest rate rises since the Prime Minister promised to keep interest rates low and nine increases in a row under the Prime Minister and his henchman Mr Costello. They have plunged the nation into a housing affordability crisis. As we heard from Senator Lundy, average family incomes in South Australia, for example, fall $10,000 short of what is needed to pay off an average size housing loan. In 10 years, the annual income needed to afford mortgage repayments on an average priced house has risen from $31,000 to $85,000.

Senator Fifield made some comments about some economic statistics that were released today. I have some too. Mine are from Dun and Bradstreet. This came out just before question time. In their report, they make mention of the fact that household debt in Australia has risen dramatically over the past 1½ decades and is now just over 150 per cent of household disposable income.

There are more statistics that are damning for this government and which highlight its incompetence and heartlessness when it comes to caring for ordinary working Australian families. ABS statistics show that living costs for working families have increased by 3.1 per cent over the past 12 months. There has been a 30 per cent increase in the number of families using services for the homeless. Half a million Australians are paying 30 per cent or more of their income on rent. In the southern suburbs of Adelaide in the electorate of Kingston, 77 per cent of renters are paying more than 30 per cent of their income in rent. The cost of child care is rising at the rate of about 12 per cent per year. As we have also heard, the price of fruit and vegetables has risen by 41.9 per cent over the past five years—and that is when the nation is facing a crisis of obesity among our children. Those are the statistics. That is the legacy of the 11 long years of this government.

Senator Fifield made mention in his comments just then about how we need to take account of both sides of the household budget. I agree with that. I am going to take account of both sides of the household budget and make reference to a new report that was released today. This report was prepared by the University of New South Wales and gives us the most disturbing evidence to date about this government’s Work Choices legislation and the impact that it has had on wages and conditions.

That report into the centrepiece of this government’s term of office and the Prime Minister’s ideological vendetta against unions has shown that Work Choices has delivered to hapless workers in the retail and hospitality sectors who were forced onto non-union collective agreements incomes that were in many instances reduced by as much as 31 per cent. So when Senator Fifield lectures us about taking account of both sides of the household budget you can bet your bottom dollar we are taking account of both sides of the household budget, and so are working Australian families. That is why this government is on the nose. Australian working families have seen their cost of living go up and their wages either not keeping pace with the cost of living or going down. The statistics that are quoted, as we know, are inflated because some workers are doing well in the current boom in the resources sector, but ordinary working Australians, particularly in sectors like retail and hospitality, are going backwards in terms of wages. (Time expired)

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

The key to maintaining a responsible economy and increasing housing affordability is having the experience and responsibility to run a prosperous economy. The Howard government in 11½ years has delivered unemployment at an all-time low, low interest rates and low inflation. The key to housing affordability is the release of affordable land by state governments. It is the reduction of the impost placed upon the cost of housing by state governments. The Howard government has both the experience and the policies to make a difference in the foreseeable future. On top of the Howard government’s experience, the Howard government has already talked about an audit of Commonwealth lands. The Howard government has talked about seeking expressions of interest in respect of public housing.

What is the alternative? Is there really one? The Rudd opposition would have the Australian electorate believe that there is one. But the Rudd opposition is a team of inexperience backed by, infiltrated by and dictated to by a union movement. What Rudd opposition policy will deliver a difference in terms of interest rates? What Rudd opposition policy will deliver a difference in terms of housing affordability? The Rudd opposition, and Kevin Rudd in particular, would have you believe that he cares. But Kevin Rudd and the Rudd opposition care about one thing—they care about winning. I do not see that they care about governing because I do not see their policies to deliver low interest rates. I do not see their policies to deliver affordable housing. Instead, I see a Rudd opposition that would turn to their union bosses to look for policy to take Australia forward, were there ever to be that very horrifying prospect of a Rudd government.

To see this writ large you only need to look at my home state of South Australia where, as has been outlined earlier today, new homebuyers—mum and dad buying their first home costing about $300,000—face a state stamp duty impost, straight to the Rann Labor government, of some $11,000. They have to scrimp and save for it in addition to the $300,000 purchase price. What does a Rann Labor government do with the money that it takes from taxpayers? It finds a way to funnel part of that money back to its mates in the union movement. Look no further than the Rann Labor government’s so-called initiatives to increase safety in South Australia’s workplaces. I am talking about the South Australian Rann government’s recent granting of some $3 million over three years to South Australian unions—to some 12 unions—supposedly to increase safety in South Australian workplaces, with no evidence that this would be the case.

Have a look at the 12 unions to whom this money has been given. Interestingly, five of those 12 unions were amongst the top 10 donors to the Rann-led Labor Party in South Australia in 2005-06. So it is a take from taxpayers by a Labor government that finds its way in terms of finances back to the union movement so that the Labor Party can ensure that it looks after its union mates and so that it can ensure, whether at state or federal level, that it focuses on winning rather than governing. The Labor Party focuses upon returning favours to its union mates so that when they are looking for some policy direction they know where to go, and they go straight to their union mates. We need look no further than what is happening in South Australia. It would appear that the Labor Party is set to welcome a Mark Butler from the LHMWU. (Time expired)

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to take note of answers by Senators Minchin and Scullion to various questions relating to economic matters, the cost of living and the like. One must say at the outset that there is not any doubt that in the last 12 months or so the cost of living and the costs to families have been spiralling out of control. You only have to look at the latest CPI figures, recently released, to see the price hikes in food, education and health. You cannot consider a more basic package of the three items for ordinary families than food, health and education, and the latest figures show their costs rising up and up and, it is fair to say, heading out of control. Just to put this in a bit of context and to set the environment: vegetables are up by six per cent, petrol is up by an astonishing nine per cent and medical services are up by nearly four per cent. These are staple items for every ordinary working family in Australia.

To address the other side of the ledger, an independent study report from the University of Sydney shows how millions of Aussie workers are facing another cost, and that is their reducing wages intake. This report released today and reported in the press today shows how Work Choices has cost thousands and thousands of battlers in the retail and hospitality industries a third—30 per cent—of their salaries. In other words, we pay more, we take home less. So much for the Prime Minister’s flippant remark, oft quoted, that we have ‘never had it so good’ in this country. The only good thing coming up in the immediate future is the likelihood of an election. Then, hopefully, this government will pay the ultimate price for its draconian Work Choices legislation.

Let us look at that study more carefully. Twenty researchers examined the wages and working conditions of thousands of sales assistants and bar staff. After scrutinising, examining, studying and analysing every collective agreement in their industries registered in the first nine months of Work Choices, they found that that group of workers had lost up to 30 per cent of their income under these draconian new laws. These new laws have seen basic conditions of employment stripped away and they have stripped workers of both penalty rates and overtime.

But it is not just the academics, the researchers from Sydney University, who have this terrible news for the current government. Leaked data from its own departments show that 45 per cent of individual contracts, AWAs, have stripped away all of the conditions the government promised to protect, 52 per cent of workers lost public holiday pay and 51 per cent of workers lost overtime pay. What standards does that show this government has brought to ordinary working people over the last 12 months? Very low standards—that is the obvious and only answer. Indeed, there is now a mountain of evidence showing how Work Choices has ripped off and continues to harm Australian families. That is how the Prime Minister and his cohort of conspirators, Mr Hockey and Mr Costello, treat the average battler doing it tough out in the suburbs. Their unfair and extreme workplace laws have gone too far this time. They have cut the conditions, take-home pay and working standards of ordinary families.

Earlier this year, Labor, to get on top of the matter, was forced to start a Senate inquiry into the cost of living. We were concerned then and we remain concerned now at how hard older Australians are finding it to make ends meet. Mr Deputy President, you and I both know that if Labor is elected we will get the balance right. (Time expired)

Question agreed to.