Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

As the recent budget and this government's own commentary around inflation have demonstrated, when it comes to running the economy, Labor just doesn't get it. It's like an episode from the Twilight Zoneanother Labor government trying to rewrite the fundamentals of economics. The RBA are trying to put a brake on the economy by raising interest rates, yet this government keeps pouring fuel on the inflation fire by increasing government spending and overseeing wage expansion without the dividend of growing productivity. We had the madness of the Prime Minister saying that higher wages in the care sector were essential to growing productivity. This was only a week after the RBA increased interest rates yet again—for the 11th time—under this Prime Minister's watch.

A reading of the recent RBA minutes shows its heightened concern about the rising unit labour cost and the lack of productivity gains—both factors that contribute to higher inflation. Yet, shortly, this government will introduce a same job, same pay bill, which is motivated by nothing more than pure ideology and ignores the RBA's caution on wage growth. In his article on 20 June, Robert Gottliebsen wrote:

The biggest government policy force driving inflation is arguably Burke, who pressed Fair Work to lift wages sharply and raise expectations—exactly what Lowe did not want to happen. Burke's industrial relations legislation lowers productivity.

We all want higher wages, but they cannot come without lifting labour productivity. For the government to try to spend its way out of a high inflationary environment will only force the hand of the RBA to keep interest rates up, adding yet more cost-of-living pain and suffering for Australian families.