Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

I move:

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

Last night there was a coronation: the crowning of Dr Jim Chalmers as the king of wishful thinking! Over the last few days Jim Chalmers went out and told the Australian electorate that the government's predictions, supported by the Treasury, would mean that inflation in this country would fall to 2.75 per cent, within the RBA's range of two to three per cent, by December this year—wow! He said that before the parliament and the electorate got an opportunity to read the budget papers last night. What is the political ploy that the king of wishful thinking is casting over the Australian electorate? He is setting up a new villain in the minds of Australian families and households. Can you guess who that new villain is about to be? It's none other than the new governor of the RBA. Dr Chalmers is out there saying, 'Inflation's coming down to 2.75 per cent before the end of the year.' He's out there splashing $315 billion of new money around the Australian economy, and then he says: 'If interest rates don't come down, don't look at me. Look at the RBA.' That is the cynical ploy that underlines the political strategy in this budget.

You cannot bring inflation down in this country when you are spending an additional $315 billion at a time when you're not growing the economy. You can't bring inflation down when you have wasteful government spending. The government says it's saving. As Senator Hume highlighted in question time, it saves $1, but it spends $4. Who pays the price? The price is being paid today by Australian businesses and families, with the cumulative effect of 12 consecutive interest rate rises on household budgets. This is at a time when the government says: 'We're going to spend an extra $315 billion. By the way, that's about $30,000 extra for every Australian household.' Dr Chalmers is out there saying, 'Have no fear because inflation will come down by December.' He's silent on interest rates.

The test for this government is inflation and the inflation rate—there's no doubt about that—but the most important test is what happens to interest rates. This government is trying to create a great distance of responsibility between its actions and those of the RBA when it is forced to raise interest rates and to keep interest rates higher for longer because the government has taken its hands off the economic wheel. The government is recklessly driving this budget. At a time when our terms of trade are at 100-year highs, at a time when our unemployment rate is at a 50-year low at 3.8 per cent and at a time when the Treasury coffers are overflowing with tax receipts on the back of personal income taxes because the government chooses to do nothing about bracket creep and are overflowing on the back of prices for coal, iron ore and other commodities, this is an irresponsible budget. It shows no restraint.

We're now in the window of the next election. This is an election that will absolutely be fought on inflation and on interest rates. The government cannot avoid being responsible for the interest rate decision that the independent bank will be forced to make because the government has acted recklessly with such a high level of government spending.

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

I quite enjoy the company of many of my colleagues in this place, whether they're on this side of the chamber or the other, and I know we bring our particular beliefs. But what we just heard from the senator then was one of the most miserly views of what could possibly happen for Australians. Added to that was a discussion about politics and elections, as if those are the only things that matter. The reality is we have to attend to what's going on right now in Australians' lives and responsibly manage how we plan and shape the future.

We want to talk about tax relief for Australians, which was completely ignored in the contribution of Senator Dean Smith, who was just on his feet. The fact is that 13.6 million Australian taxpayers are going to get a tax cut, with an average cut of $1,888 a year. That's going to help Australians at a time when we know they are under pressure. But we heard a whinge about that. We've heard nothing but whingeing embedded in the questions that have been asked of the government today. The one thing they seem to whinge about in chorus, including in the question from Senator Cash, is the $300 energy bill relief action for all Australian households. As Senator Gallagher said, the opposition are saying, 'We'll support it,' except every question they asked here in the Senate today indicated they don't want that to happen. If they don't want that to happen, I'm sure they also don't want the $325 electricity bill assistance for the one million small businesses that are eligible.

This is a tale of two very different versions of Australia. One is the miserly, negative view that says any help being given to Australians now is irresponsible spending—this from the government that never delivered a surplus, as opposed to the Labor government that absolutely has. Those opposite have opposed so much in this budget. The reality of our investment in Australians at a time when they need help is very clear to me as a senator for New South Wales, and it's very, very clear to 67,000 workers and businesses in the Riverina. Every single taxpayer in the Riverina electorate will receive a tax cut of $1,425 on average. There'll be 13,959 people with a HELP debt in Riverina who will be advantaged by our government's investment, cutting $3 billion in student debt for more than three million Australians.

In the Riverina, we are making sure that people who need medicines, particularly those on pensions and concession cards, are going to pay no more than $7.70 for their PBS medications. That's not just for the short period of time until the next election.

Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

How much?

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

They're only going to pay, Senator Ciccone, at most $7.70 for the vital medicines they need, and we've committed to that for five years.

Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Wow!

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

It's a very significant cost-of-living pressure relief for those individuals. But it's not just an amorphous mass of 13.6 million Australians who are getting the advantage of the tax cuts; it's down to every individual. In the seat of Lyne, a beautiful coastal part of New South Wales, 57,000 individuals are going to get a tax cut. In Farrer, the seat of the Deputy Leader of the Liberal National Party, 76,000 Australians will receive a tax cut because of Labor's sensible policies. In the seat of Calare, 71,000 Australians are getting the advantage of the tax cut that is coming their way on 1 July. In the division of Hume, the shadow Treasurer's seat, 79,000 Australian taxpayers are set to benefit from this Labor government's investment in you, funded through the budget that came down last night. And in the seat of Parkes, which I will be visiting in coming days, 62,000 taxpaying Australians will be benefiting from Labor policy. It's a good budget, it's a fair budget, and it will help Australians.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

I want to first respond to Senator O'Neill's point with respect to the $300 household electricity rebate. I want to quote from something an outstanding Australian sent me. This is an Australian who does a lot of things for his community, and I am privileged to call him a very close friend. This is what he sent me in the aftermath of the budget: 'Why give everyone $300? They should give that money to those most in need.'

That underlines the issue that we have in relation to the household electricity relief. I am going to get the same money as someone who is, say, 21 years old—renting, trying to buy a new house and trying to get ahead. I'm going to get the same benefit of the $300 as that person who needs it more than me. There's something inequitable about that, especially at this point in time when people are struggling. That's the objection that Senator Cash was raising with respect to the equity of that $300 payment.

It's even worse in Queensland, because the state government is doing exactly the same thing. I'm getting money from the state government and I'm also getting it from the federal government, so there's a compounding effect. I don't know if the Treasurer was inspired by the Queensland government in that regard, but there is that compounding effect.

Those listening to this debate have heard from the senators, the politicians. I want to quote to you what the economists, the experts, say about this budget. This is what Assistant Professor of Economics Steven Hamilton said about the budget. This is not a politician; he's a professor of economics. 'This is the most irresponsible budget in recent memory. The government set itself a simple standard: not to make the Reserve Bank's job harder. Michele Bullock, the Governor of the Reserve Bank, may just choke on her cornflakes.' That's what Assistant Professor of Economics Stephen Hamilton said. I don't know if Michele Bullock eats cornflakes or Weet-Bix or what she has for breakfast. But there is a lot of truth in that statement from that professor of economics.

This is what HSBC's chief economist, Paul Bloxham, said about the budget—again, not a politician but an expert economist: 'Indeed, core inflation is likely to be higher in a world with the subsidies than one without.' These are the subsidies which are being handed out hand over fist by this government as part of $315 billion of additional spending. He said, 'There is a growing risk that rates remain higher for even longer.'

We know that the cash rate target rate at the moment is 4.35 per cent. The quarterly inflation rate is 3.6 per cent. The Reserve Bank, in its last announcement, actually raised the fear that inflation is likely to remain higher and is falling more gradually than expected. That's what the Reserve Bank said before this budget. Then after that statement we have an inflationary budget. So that is bad news for interest rates. It's bad news for those struggling to make mortgage payments. This is the wrong budget for the current times.

Now I want to quote Chris Richardson, a well regarded economist. This is what he said before the budget:

If the government wants to do something about the cost of living, then more than anything else it wants something to be done about inflation.

So, if you want to do something about the cost of living, you need to do something about inflation. That's what he said before the budget. This is what he said last night after the budget:

So my big ask of the budget was that it would not poke the inflationary bear.

I don't think it passed that test.

That is what expert economists are saying about the budget, not senators and not MPs—not people belonging to political parties with their narratives. This is what the expert economists are saying. This is bad news for the Australian people, because, as at this point in time, the average household with a mortgage is $35,000 a year worse off because of those interest rates. That's the impact of those interest rates. And if you're renting—we're facing net overseas migration over a five-year period of 1.67 million people, and in the context of housing construction rates—

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

Thank you, Senator Scarr. Senator Walsh.

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

Despite all the gloom and doom from my colleague opposite, this is a budget that will provide the cost-of-living support that Australians need. This is a budget that will look to the future and build the jobs and the economy that Australians need. We will implement this budget with the discipline that is required to put downward pressure on inflation.

Mr Dutton has the chance on Thursday night to put his alternative vision to the people of Australia, and I'm genuinely looking forward to hearing what he has to say. What will his grand solution be? Is it going to be the long-promised nuclear reactors dotted around the country after 22 failed energy policies over the 10 years when the Liberals had the opportunity to do something about energy in this country? Is it going to be the fantastic opportunity for Australians to raid their own super for housing? Is that what Mr Dutton is going to present on Thursday night, after 10 years of failing to build the houses that Australians need and failing to build the housing supply that Australians actually need to deal with the costs of housing? The opposition can get on with their fantasy solutions to the challenges that Australians face. We'll get on with the real solutions that are in our budget.

Helping Australians with the cost of living is our No. 1 priority in this budget. That's why the budget provides a tax cut for every single Australian taxpayer—an average of $1,800 for each taxpayer in the country. We are providing much-needed energy bill relief of $300 for every single household. We're providing more rent assistance for a million households, the people who need it the most. We're providing student debt relief and so much more to help with the cost of living today, including more homes and more Medicare as well. We are dealing with the challenges that people face today at the same time as looking to the future and building a strong economy for that future, because this budget invests in the people of Australia and their future.

The budget will bring new jobs and new opportunities to Australians across the country in every part of our country. Our Future Made in Australia plan will make the most of our potential and make sure that Australians get the benefits of our rich natural resources. This plan is going to put us in the global race. We will take our place in that race and bring the opportunities that Australians need to see for the jobs of the future with the energy of the future as well.

I'm really pleased that this budget will invest in our care economy as well. They are also the jobs of the future in this country. We'll provide for further wage increases for our essential aged-care workers, a workforce that the coalition refused to see and refused to invest in. We'll provide for a pay rise for our essential but undervalued early childhood educators as well, because we want to see wages moving in this country—and they are. Real wages growth is back in this country after 10 years of the Liberals just loving low wages. Real wages growth will continue in this budget because we believe in good, secure jobs for all Australians.

We heard a lot about inflation in this Senate question time. Like our previous two budgets, this is a budget that is responsible for the times. It is a budget that will put downward pressure on inflation. We are forecasting the first back-to-back surpluses in nearly two decades, and you couldn't produce one. We are banking the revenue upgrades and putting them back to the bottom line. We are putting downward pressure on inflation by reducing energy bills, and we know that that is going to work to bring inflation down. We know that further support for renters will help to bring inflation down as well.

What we know about the Liberals is that the only thing they know how to do is to slash and burn the programs that people rely on and to come up with fantasy solutions to the problems that people actually face. They know how to get the mugs made; they know how to puff on their cigars; they know how to pat themselves on the back; but they don't know how to get the job done. We will get the job done.

Alex Antic (SA, Liberal Party) Share this | Link to this | Hansard source

I am always intrigued when I listen to those opposite talk about the great numbers in this budget, because, as far as I can tell, the only good news story out of this budget is the performance of export of minerals—coal, gas and the like—and the positive impact that has on the budget bottom line. We talk about surpluses. Imagine where this country would be if we didn't have the mining industry and the oil and gas industry—although, if we have another term of this government, that may well become a reality. It always intrigues me that those facts seem to get overlooked.

I actually rise to take note of the answers during question time in relation about inflation. That is the key issue for Australians in this time. They do say that the third time is the charm in life, but we can safely say that is not the case with respect to this budget. This is the third Albanese Labor government budget, and what it has done, in truth, despite the flourish and rhetoric from the other side, is add spending. We heard today that $315 billion of spending has been added to add fuel the inflationary fire, yet all we've heard over the last hour and a half or so is what a great job they're doing. That's not the view, by the way, of Deloitte, who are actually experts in the area as opposed to those in the political domain. Deloitte have said about the budget:

The result is a relatively large increase in government spending over the next four years, potentially putting further upward pressure on inflation.

You would think that a government faced with already crippling inflation, in the form of double-digit numbers in relation to some essentials, would be doing more to step on it.

It's no just Deloitte, of course, though. Ratings agency Standard and Poor's have said that the mechanisms this government has used to create this incredible budget that we're hearing about actually leave an almost zero chance of an interest rate cut. Let's see how that plays out. We heard today, earlier on during question time, that even the government's journalist allies in the New Daily, have said, 'The budget brought down on Tuesday is worth two more rate hikes.' So nobody, it would seem, be they the commentariat, the political class or the economists—the people that actually know—has any confidence that we're going to see anything other than upward pressure on inflation.

Let's break this down in real terms for Australians and households. This budget means $30,000 of extra spending for every single Australian household, on top of what we're seeing already. How can this government have possibly not understood that this would create a further inflationary pressure cooker and lead to interest rate hikes? Australians understand this, though. People understand, out there in the real world, outside the rarefied air of this building. It's a building where the response from those opposite seems to have been performance art in the form of TikTok videos, which we saw floating around on social media of Senator Stewart and Mr Burns MP, who were out there kicking up their heels yesterday—'It's budget week. Put out a video.' If ever you want to see a reflection of what this week means to those in the special, rarefied air of this building, have a look at that. No, don't bother; some things you can't unsee.

Anyway, no amount of TikTok videos are going to fool the Australian people. They're the ones out there who understand the reality of the situation. Housing is up 12 per cent. Rents are up 12 per cent. Gas prices are up 25 per cent, electricity is up 18 per cent and insurance is up 26 per cent. These are real-life examples of what is actually happening.

This budget is nothing more than a cost-of-living con job. What we actually needed in this budget cycle was economic management. What we needed was a restraint on spending, downward pressure on inflation and some fiscal guardrails to protect Australians from this overreach. This third ALP budget shows that the government has no clear path to understanding the job, particularly in relation to the inflationary crisis. What Australia needed was responsible management. That's what they would get from a Dutton led coalition government.

Question agreed to.