Andrew McLachlan (SA, Deputy-President) Share this | Link to this | Hansard source

I inform the Senate that the President has received the following letter, dated 6 March, from Senator McKim:

Pursuant to standing order 75, I give notice that today the Australian Greens propose to move "That, in the opinion of the Senate, the following is a matter of urgency:

Given the RBA's admission that between half and three-quarters of the increase in inflation is a result of supply shocks and that monetary policy can do very little to offset supply shocks, the RBA should not raise interest rates and the government must act to address inflation and the cost of living crisis, including by introducing a national freeze on rents".

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We are witnessing something extraordinary and devastating unfolding in this country: the lives of the poorest Australians, those who can least afford to be made worse off, are being degraded in the relentless and dogmatic pursuit of a self-defeating economic goal. Renters and mortgage holders are being smashed by a Reserve Bank stuck in the past and in denial of reality. Tomorrow will just be the latest chapter of this unfolding ruination of the poorest Australians when the RBA does what it shouldn't do and lifts interest rates for the 10th consecutive time. Meanwhile, the government is more interested in ashen-faced commentary rather than doing what it was elected to do, which is to actually help people. We find ourselves today, and we will find ourselves tomorrow, at the dead end of neoliberal economics. And at that dead end lies the inherent flaw in one of the hallmarks of this corrupt ideology: so-called independent central banking.

Independent central banking is fundamentally undemocratic. The justification for one of the most important economic tools not being in the hands of elected government is that monetary policy is too important to be left to politics. We are told that interest rate decisions are best left to those who really understand the economy, and that inflation is always and everywhere a function of excessive demand that the RBA alone should be left to get under control. It's on this reductive logic that the RBA's nine consecutive rate rises have been based and have gone unchallenged by the government. And it's on this reductive logic that tomorrow's 10th interest rate rise will again be based. But the logic is flawed. How do we know it's flawed? Well, because the RBA have told us so.

Last month, the RBA said that between half and three-quarters of the increase in inflation is a result of supply shocks. And the chair of the board of the RBA, Mr Lowe, said, 'There is very little that monetary policy can do to offset supply shocks.' He said, 'Our models are not well suited for supply shocks.' So, there it is: our glorious, technocratic, wise-above-all-others, independent central bank, responding to a problem it can't understand with a solution that doesn't suit. That's the great travesty happening before our eyes.

We know that interest rates are not the right tool to deal with the current inflation spike, but we are stuck in this bizarre Pavlovian state where the RBA raises interest rates to squash a non-existent price-wage spiral and the government goes through its 'nothing we can do about it' routine, and the poorest Australians—the renters and the mortgage holders of this country, who did nothing to create the problem of spiking inflation—are paying the price. And we're supposed to believe that this is the best we can do, while the wealthiest in this country continue to make off like bandits. Well, it's not good enough.

I say to Labor: people's lives are being destroyed, so wake up and do something about it. Tax corporate super profits, tax the wealthy, freeze rents, make child care free, put dental and mental health into Medicare, and raise income supports. These are meaningful actions that Labor could do if they would just take their heads out of their centrist fundaments and look to the light on the hill. Please, do something. Don't just sit there and pretend you can't.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

nator RENNICK () (): It must be a blue moon tonight, because it's not often that I agree with Senator McKim. I agree on most of his motion; I'm not too keen on the national freeze on rents, even though I accept that there's a genuine problem in regard to rents. But much, much more needs to be done than just allowing an unelected, unaccountable RBA to run riot and destroy the economy through this blunt instrument known as qualitative easing. For too long, Western governments have relied on these central bankers, who are unaccountable and who all report to the Bank for International Settlements. We had that confirmed by Michele Bullock during the last set of estimates, where she admitted that she wouldn't release the minutes of those meetings with the Bank for International Settlements because they wouldn't be allowed back at the table. That's not what I call accountability. But I will address that issue another day, because I want to go back to the crux of this, which of course is the cost of living and the crisis that is going to be caused by the RBA's reckless behaviour.

The problem with the RBA is that they are all lifers. The last four RBA governors all started work at the RBA. They've all had careers in the RBA and have no idea of what goes on in the real world. They base everything on theory and very, very little on practice. I think we need to look—and I know Senator McKim is touching on this; I didn't quite pick up all of it, but I think I'm on the same path as him—at the fact that they deal only with the demand side. I've asked the RBA this myself. They deal only with the demand side. What we've got here in Australia at the moment is that we've had supply shocks. People often think inflation is caused only by too much demand, but that's not the case. If trying to make ends meet is too much demand, well, I'm sorry, but that's not too much demand; that's a lack of productivity in our own economy because we don't build enough nation-building infrastructure to provide essential services at affordable rates. What we really need to do in this country is stop being afraid of building infrastructure—in particular, what I call the sovereign seven, which are dams, rail, road, power stations, telecommunications, airports and ports. We need to supply more of these things, through quantitative easing. It took me 30 years to unbrainwash myself, because I had this rubbish forced down my throat at university, but there is nothing wrong with doing this. There is nothing wrong—companies do it all the time. They issue shares. They issue equity. They issue new equity to build a new mine.

As a country we can issue new equity to build infrastructure. It's debit, asset; credit, equity. You can create an infrastructure bank here at the federal government level. They can lend to the state governments, and the state governments pay interest back to the national infrastructure bank. The national infrastructure bank can pay dividends back through to the federal government, which will basically be a form of raising revenue, adding more infrastructure and more supply to the economy. This will push down the prices of essential services. That's not just good for the cost of living; it will make it more competitive—for our businesses to compete with other businesses in the world. Look at China, for example. They didn't go out and buy trillions of US dollars. They did all that infrastructure building in China, on the back of their own central bank.

We have a history here in Australia of doing the same thing. One of Australia's first governors, and he was the first governor to issue our own currency, was Lachlan Macquarie. He built the Sydney hospital, the Sydney barracks, with our own currency, the holey dollar. That was Australia's first currency. Unfortunately, today that holey dollar is used as a logo for Macquarie Bank, who happened to act on—because of superannuation. This is what people don't want to admit about superannuation, the fact that this facilitated privatisation of our infrastructure assets. So now they're in the hands of unelected superannuation board members.

There are other things we can do to ease demand on inflation. We should look at lowering the immigration rate. Two-thirds of our immigration rate is driven by foreign students. Universities don't have to pay tax on income derived from foreign students. So if you want to talk about a super profits tax, let's make universities pay tax on the profits they derive from foreign students. That will reduce the demand caused by over immigration.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

or WALSH () (): I too rise to speak on the urgency motion moved by Senator McKim. The Albanese government is talking to Australians every day, and we know that Australians are facing cost-of-living challenges. We know that families are doing it tough. We hear it every day. After a decade of waste and rorts and stagnant low wages, a pandemic and a war in Ukraine inflation is quite appropriately the top issue on our agenda.

The Reserve Bank makes its decisions independently in its response to addressing inflation, and it should stay independent. Today's debate shows exactly how important it is that the RBA sets rates, not the politicians in this chamber. Our role as the government is to deliver a responsible economic plan and to deliver relief to those who need it most. It is a responsible plan that will help drive down inflation. Because of a decade of the former coalition government's wasted opportunities and questionable priorities, we have a lot of work to do. We're dealing with a trillion dollars of debt with absolutely nothing to show for it.

Our response to inflation is a three-point plan, which is about relief, repair and, importantly, restraint. We're providing cost-of-living relief that doesn't add to inflation. This year, we've successfully argued for a minimum wage increase, and we're proud of that increase. We've delivered cheaper medicines, which has seen Australians save more than $36 million in the past two months. We know energy bills are a stress point for households, so we're working with the states and territories to provide energy bill relief. This will be a key policy in the May budget.

Last December we introduced emergency caps on gas prices. It's been confirmed in Senate estimates that this will push down future prices significantly. According to Dr Kennedy, over the year to June 2024 our price caps will continue to reduce inflation by half a per cent. This is also a point acknowledged by Mr Lowe, who cited in estimates our energy policy as having a key downward force on inflation.

We know people need relief, right now, from the rising cost of living today as well. So we're delivering cheaper child care; we're delivering free TAFE; we're expanding paid parental leave; we're building more homes. At the same time, we're repairing our economy. Senator McKim does raise an important point: it is supply shocks that have contributed to inflation. The coalition did nothing in government to strengthen our supply chains. That has only made things worse for Australian families.

We have plans to repair our broken supply chains. We're doing that by investing in the long run of our economy. Our $15 billion National Reconstruction Fund will diversify our economy. It will bring manufacturing back to our shores. It will create secure, well-paid jobs. We're investing in the renewables that will bring down energy prices and help us reach our emission targets too.

So what is important right now is that, as a government, we make quality investments that strengthen and diversify our economy, secure our energy and our supply chains and create new jobs across the economy. Notably, our plans don't add to inflation, and that's because we're being responsible and restraining our spending. We're returning 99 per cent of revenue upgrades to the budget over the next two years. The average of the last government was just 40 per cent. The last thing that we want to be doing is contributing to inflation pressures. The plan is working, and we need to stick to it. We know that Australians are doing it tough, and we're taking responsibility for addressing inflation. It is the defining challenge that we face right now this year. But we're prepared to face it with sensible plans. We're working every day to make Australians' lives better, by delivering secure jobs, cheaper child care and cheaper medicines and investing in the long run of our nation, with more housing and cleaner energy, and bringing back manufacturing. This is what we were elected to do, and we're getting on with the job.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

nator ROBERTS () (): As a servant to the many different people making our amazing Queensland community, I know rental prices are a savage problem. Interest rate rises are increasing mortgage repayments and forcing more investment property owners to dip into their own pockets to pay their mortgage. If owners do not have that extra money, then negative gearing is not going to help. Inflation of 7.8 per cent means that council rates, water rates, maintenance costs and insurance are making it harder and harder to hang on to investment properties. Now the Greens propose a rent freeze, which is really a 7.8 per cent rent reduction each year that it goes on. The only effect of a rental freeze will be to drive investment property owners out of the market. Australia needs investment property owners to provide a home to people who are renting. Driving them out of the market will hurt the 400,000 new Australians who arrived last year and the one million likely to arrive during the course of this government.

Rising rentals are a product of too many people chasing too few rentals. We know 10 per cent of Australian homes are owned by investors who are not renting them out. Their investment strategy is to buy a new home and keep it locked up while it appreciates in value. Having a tenant in there is a complication they don't want and lowers the resale value because the home is no longer new. Most of these properties are foreign-owned. One Nation would give these owners 12 months to sell those properties to Australians. Bringing that number of homes onto the market would do more to bring prices down than a price cap. And One Nation would reduce immigration to net zero, meaning there would be only enough arrivals each year to replace those that leave. This will allow time for the housing construction industry to catch up with demand. It is about supply and demand. These sensible, honest policies are One Nation's solutions to high rents, which will protect real estate values from the chaos a rental cap will introduce.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak to the urgency motion put forward by Senator McKim. Once again, we have to contend with the Greens political party's range of fantasies about the way in which the economy operates. Labor believes in real solutions for all Australians, not dramatic and impractical action. We need to use an evidence base, and evidence shows that rental freezes simply don't work. Yet that is one of the profferings from Senator McKim for consideration by the Senate, and it should be rejected.

To Australians I say: the Reserve Bank is independent, and it's at arm's length from government. There's a reason it was constructed that way, and it remains so. But that doesn't mean that, as a government, we don't understand what's happening for real Australians. We understand that both renters and mortgage holders are feeling the pain right now. They're feeling it, absolutely. That's why we'll focus on real solutions—not fantasies in another world that doesn't exist but real solutions to address the real concerns of Australia in a fiscally responsible way. Regulation of residential tenancies is, frankly, not a matter for federal governments. It's a matter for state and territory governments, and the Commonwealth can't actually require those governments to freeze rents. So the motion falls over completely on its face just with that one point.

In contrast, Labor is absolutely focusing on increasing the supply of new houses in the market. We are helping to increase supply through our $10 billion Housing Australia Future Fund, which will deliver 30,000 new homes in the first five years alone. The future fund is only one part of our very ambitious and much-needed reform agenda to make up for nine lost years under the Liberal and National parties. We're striking a new National Housing Accord between all levels of government, investors and industry to build affordable homes our country really, really needs. We need to boost the supply of new houses. We're widening the National Housing Infrastructure Facility, with up to $575 million available to invest in more social and affordable homes right across the country, with many projects already announced. The Regional First Home Buyer Guarantee was brought forward by three months. More than 2,000 places have already been taken up, with hundreds of Australian families now in their new home. These are practical outcomes. That's what people need, not pie in the sky that you make up as you go so you can get a headline on the way through.

Help to Buy, a new program brought forward by the Albanese government, is here to help Australians get their own homes sooner. We are establishing a permanent National Housing Supply and Affordability Council. It is hard to believe that there wasn't one, but there wasn't. For nine long years, this whole space has been profoundly neglected. The interim council that we established, as a Labor government coming in under Prime Minister Albanese, has been operating since 1 January, providing independent expert advice to government. We're also developing a National Housing and Homelessness Plan, because everybody knows that that is at crisis point in our country.

The gentrified Greens over there in the corner so often appear to be nimbys. They have never seen an affordable or social housing project that they haven't opposed. In my own home state of New South Wales, the outgoing Greens member for Balmain, when a candidate, campaigned against a plan for a mere six apartments. There were six apartments, and the Greens opposed it. Three of them were designated as affordable housing. The site is 180 Darling Street in Balmain. To the Greens, one new affordable housing apartment being built is like a disaster. One new home for a middle- or working-class family is one entirely too many. They come in here with ideas that are absolutely implausible and impractical. They're out of touch. The Greens political party need to understand that increased supply will drive down prices. If that political party actually cared about reducing rents and prices, their councillors and candidates across Australia would stop opposing reasonable new property developments. They have to be reasonable. There's got to be new stock built. You can't just stop everything. You just can't do it.

Inflation is a worldwide problem caused by Russia's illegal invasion of Ukraine. Supply chains are strained by war and global pandemics. We've got to get inflation under control, and we're helping with cost of living, child care, medicines, direct energy bill relief, minimum wage rises and fee-free TAFE. That's real. That's practical. That's Labor. That's Australia's government.

David Shoebridge (NSW, Australian Greens) Share this | Link to this | Hansard source

Every single day that goes by without subsidising skyrocketing energy bills, raising wages, effectively dealing with the housing crisis and stabilising interest rates, this government from the Labor political party is choosing poverty for millions of people across the country. Poverty is a political choice, and it's a choice that this government, the Labor political party, is making each day. While corporate profits hit record numbers, there are more than half a million people languishing on the social housing waiting list across the country. And, while there are 5½ million people relying on Centrelink payments below the poverty line, this government is deciding to give $240-odd billion in tax breaks to the super wealthy and is even standing up while people in this place are about to pocket an extra $9,000 a year in tax cuts. And they accept that wages for ordinary people and ordinary people's living standards are going backwards.

Tomorrow, when the RBA raises interest rates again, the Labor political party will cry crocodile tears and say there's nothing they can do. That is a surrender of political leadership, and it's entrenching intergenerational disadvantage.

In my home town of Sydney, we've seen property and rental prices at historic highs. Young people in particular are suffering, and we've seen the Labor Party get into bed with property developers every time they're in government and never address affordable housing. There's never been a property developer that the New South Wales Labor party hasn't loved, and it's never ever succeeded in providing housing for the people who need it. The data shows that in Sydney, from Palm Beach to Cronulla and across to Baulkham Hills, you actually need to earn $100,000 a year just to avoid housing stress. It's obscenely common for people to be getting a $100 or $200 or $300 a week rental increase. No-one is getting a pay rise of that magnitude. But of course some uber-rich people are going to be offered tax breaks even greater than that by the Labor political party.

We should step in and support much needed rent freezes. It's a simple, achievable and meaningful step to hit pause on the cost-of-living crisis—just press pause on it. I've been out at Addi Road Food Pantry in Marrickville in the heart of Sydney and seen just how many people are coming in asking for help with putting food on the table right now. It's going to get worse tomorrow. Those people know that they can rely on their community to pitch in, and they should expect their government to do the same. I've joined with Turbans 4 Australia, out in Clyde, at their warehouse where they provide food for those who need it because of the policy failures of federal and state governments. They are taking the time to understand the real cost-of-living crisis. And, if you say you care about supporting those who are doing it tough, then you need to step up on delivering that, and this Labor political party needs to deliver policies that help the people most in need.

Penny Allman-Payne (Queensland, Australian Greens) Share this | Link to this | Hansard source

Australians continue to suffer in a cost-of-living crisis caused by corporate profits, yet the RBA, aided and abetted by the Labor political party, continue to kick the teeth of workers by jacking up interest rates. We now have fresh evidence that inflation above the target rate is being driven largely by corporate profiteering. The RBA knows this, and the government knows this too, and, yet again, working Australians are being pummelled by the blunt tool of monetary policy, being forced to suffer for the inflation that they are not causing.

The government is delighted to be able to keep the RBA's interest rate rises at arm's length, but the government is also to blame for the cost-of-living crisis Australians have found themselves in through no fault of their own. Time and time again, we've seen a government unwilling to take meaningful action on cost-of-living relief. What we don't need are useless platitudes. What we need is a government brave enough to actually make policy decisions.

We need to reverse the atrocious quarter of a trillion dollars worth of tax cuts for the super rich, we need an immediate rent freeze and we need public education that is truly free. If Labor scrapped their stage 3 tax cuts, we could fund real cost-of-living relief. We could have a two-year freeze on rents. Then we could cap rent hikes at two per cent for 24 months. It's been done in Victoria, British Colombia, New York and Germany. Let's do that here too and give real, meaningful cost-of-living relief to Australians.

We could make public education truly free. We've seen the exorbitant costs that even parents of students in public schools are having to pay for their child's education, and we're hearing how university students are getting smashed by student debt and people who are trying to pay off HECS bills are having that eat into their income. Of the $243½ billion of Labor's stage 3 tax cuts, $188 billion, or 77 per cent, of the benefit will go to the wealthiest 20 per cent of the population. Even worse, you are giving the richest one per cent as much as the bottom 65 per cent. Australians deserve a government that is serious about cost of living and that abolishes tax cuts for the rich.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

We are in the midst of the cost-of-living crisis in this country. We hear day after day after day of the struggles of everyday people to afford rent, to afford the hike in their mortgage repayments, to put food on the table and to buy uniforms for their kids at the beginning of the year.

Yet here in Canberra the government is overseeing two of the government's biggest government owned corporations, Australia Post and NBN Co, whose executives, this year alone, have each banked over half a million dollars in bonuses. The CEO of Australia Post has a $2 million salary and over half a million dollars in bonuses. We know that the CEO of NBN Co, Stephen Rue, was paid nearly $700,000 in bonuses, which pushed his salary up to nearly $3 million. I ask the everyday Australians out there: 'How is your NBN going? Good? Is it worth nearly $3 million for the guy who was running the gig?' I don't think so.

While everyday people are struggling, these fat cat executives on the public payroll in government owned corporations are raking it in. We have seen the polite letters written by the shareholder ministers to both Australia Post and NBN Co, but I say this: put the pen down and take some actual action. We actually need caps on these bonuses and salaries and to start installing public expectations of the wages, salaries and bonuses— (Time expired)

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The question is that motion moved by Senator McKim be agreed to.