James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

A letter has been received from Senator Dean Smith:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Reserve Bank of Australia's 'Statement on Monetary Policy' released this month highlighted the Albanese Labor Government's cost-of-living crisis is forcing more Australians to seek support from charities for the first time, including more dual-income households and mortgage holders.

Is the proposal supported?

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

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

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

The government are deaf to the cries for help from Australians suffering from the cost-of-living crisis, and they are blind to the real suffering that is happening across our community. Of course, at the coalface of this cost-of-living crisis in our country are charities, not-for-profit organisations and other community sector organisations. In fact, perhaps the most important underreported feature of the Reserve Bank of Australia's Statement on monetary policy released earlier in August were the RBA's two statements on the cost-of-living pressure—the cost-of-living crisis caused by, fanned by and encouraged by Prime Minister Anthony Albanese and Dr Jim Chalmers, the Treasurer—and how charities and community sector organisations are suffering.

In that Statement on monetary policyand I encourage Labor senators to pull it out in front of them now—on page 29, and at page 42, you'll see the statement in black and white. This is what the RBA has had to say:

Community service organisations report that demand for their services remains at a very high level compared with the years before the pandemic owing to cost-of-living pressures and a shortage of affordable housing.

That same report, the Statement on monetary policy, authored by the governor of the RBA, says at page 42 that community service organisations:

… are now supporting a broader range of clients, including dual income households and those with mortgages who are often seeking support for the first time.

Why are Prime Minister Anthony Albanese, Treasurer Dr Jim Chalmers and charities minister Dr Andrew Leigh choosing to make life harder for our charities, not-for-profit organisations and other community groups?

In fact, in the news in the last two days, reputable charitable organisations have been ringing the bells, saying they are experiencing levels of demand that they have never seen before. If you were watching ABC News yesterday, you would have heard stories from Foodbank. There is a headline, 'Foodbank Victoria blames cost-of-living crisis for understocked shelves'. The story says:

Foodbank Victoria has been forced to launch a two-day emergency food drive across August 10 and 11 to re-stock its "dangerously empty" warehouse shelves.

The story goes on to say that Foodbank says this is:

… a national problem driven initially by the COVID-19 pandemic and later cost-of-living pressures eating into families' financial buffers.

"Week on week, we've seen more people, across the whole country, having to access food relief for the first time.

"You see middle-income people, working families, duel-income families just trying to survive and entering these food relief centres for the first time.

OzHarvest, another respected, reputable charity, says it has been forced to open a new supermarket in Adelaide's west, offering groceries to people in need as demand for food relief rises. Those of us in this place know the important work Ronni Kahn AO, the OzHarvest founder, has done. She has said:

"In my 20 years of running OzHarvest I have never seen the demand as great—the cost of living, the results of post-COVID—it's biting into ordinary working people."

But you don't have to believe OzHarvest or even Foodbank. The 10th annual report of the Australian Charities and Not-for-profits Commission makes it very clear. The foreword, by commissioner Sue Woodward, says:

Our data shows that cost of living issues had an impact on charities in 2022, with increases in expenses and liabilities outpacing increases in revenue and assets …

She says expenses increased in the same year, employee expenses are now the highest they have been and while donations did grow they did not grow at the rate they have in previous years. Why are Dr Jim Chalmers, Andrew Leigh and the Prime Minister making it hard for charities and community organisations in our country?

Tony Sheldon (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I find the language 'people are deaf and blind to what's happening to cost-of-living' both inappropriate and unfortunate. With those opposite, we are faced with people who are both heartless and unapologetic for the fact that they have opposed every substantial initiative to help people with cost-of-living challenges—initiative after initiative. On 1 July 2024 Labor brought tax cuts in. When women and men across this country, mothers and fathers, turned around and received an opportunity, like millions of people, to get tax decreases, what did Sussan Ley say? She said that she wanted to scrap those decreases in taxes. This is the heartless, unapologetic approach from those opposite to the cost-of-living crisis, whilst we've actually made a number of changes in support in a whole series of areas. Around 13.6 million taxpayers will get a tax cut, with an average cut of $1,888 a year, or $36 a week. Sussan Ley says that she wants to scrap it, to get rid of it. They're unapologetic. They are heartless.

We know there are challenges now. That's why we've made so many more initiatives, like electricity bill relief. The average family would be $230 worse off in 2023-24 without Labor's Energy Price Relief Plan. Of course, the coalition voted against it. The list goes on. There's fee-free TAFE to give us an opportunity to not only build capacity within the economy but also, most importantly, to give our young and those that want to be retrained an opportunity to turn around and be trained and to build a more productive economy. We've seen over 200,000 fee-free TAFE places in 2023 and an additional 300,000 for 2024. The coalition called that 'wasteful spending'. They're harsh, heartless and unapologetic.

Then you look at the more affordable homes and the Housing Australia Future Fund, the HAFF, which will build 300,000 social and affordable homes. The coalition voted against it—heartless and unapologetic. We're creating jobs and getting wages moving again, with the largest increase to the minimum wage in decades. The minimum wage grew by 8.6 per cent, or $1.85 an hour, based on a 38-hour week. This is a rise of $3,655 yearly, and the coalition opposed it—heartless and unapologetic—because that's the approach they take. They say one thing and they do the direct opposite. If what they're saying and what they're putting about the pressures that are on community—and there are pressures on community—is correct, they should be standing with us rather than standing against the community and being so heartless and unapologetic.

It's about time that those opposite started getting off their backsides and actually listening to what people want and need and started supporting those initiatives that are giving people more support. We know it's tough out there. We know that we have to make sure that there's more support given out there in the community.

As the RBA governor, Michele Bullock, quite rightly said on Thursday in Armidale:

… governments have a job to do and I have a job to do. My job and the Reserve Bank's job is to get inflation down. The governments have a different job. Their job is also to get inflation down, and they acknowledge that—

'They acknowledge that,' she said. But, she went on:

… it's also to provide services and infrastructure for the Australian people. So, they need to do that at the same time as they need to focus on keeping inflation down.

Well, guess what? We're doing both. The heartless and unapologetic approach from those opposite is to oppose initiative after initiative that helps Middle Australia. Under those opposite, the middle class in Australia shrank. Wages went down; real wages declined. Now, for three successive quarters, real wages have increased in this country. We've been making it quite clear that our objective is to make sure that Australians have more in their pockets, to make sure that they have more opportunity whether it be in fee-free TAFE, whether it be getting a decent wage or whether it be making sure that there are increases in a number of the arrangements that we've entered into, such as the important areas of Medicare—

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

Thank you, Senator Sheldon. Senator McKim.

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

Here we go again. For the third day in a row this week, the Liberals have come in here complaining about government spending. We all know what that means the Liberals really want. What they really want is austerity. What the Liberals really want is to cut spending on things like health, education and essential public services—the things that so many millions of Australians rely on to even claw their way towards some kind of dignified life. Money that actually helps people live with dignity is anathema to the Liberal Party.

I'll tell you what: if the Liberal Party is serious about wanting to find some savings in the budget, the Greens have got some suggestions for them. Let's start with AUKUS. What a reckless $368 billion! That commitment to AUKUS is quite possibly the biggest waste of money in the history of this colony that we call Australia. Those self-proclaimed responsible spenders in the Liberal Party signed a cheque for over a third of a trillion dollars to the merchants of death in the military-industrial complex, and then they have the gall to come in here and complain about government spending. Let's not forget the Labor Party is right there with them, backing this outrageous waste of money while pretending that they can't afford to do more to help people who are doing it tough by, for example, putting dental and mental health into Medicare. It's free money for the merchants of death and it's austerity, under the establishment political parties in this country, for everyone else.

We've got some more savings. What about the $14 billion plus in every single year of the current budget for fossil fuel subsidies? These are direct government subsidies encouraging people to burn more fossil fuels in the middle of an environmental and climate crisis that the United Nations warns is rendering the capacity of this planet to sustain human life in question. It is $14.5 billion of Australians money handed over every year to encourage the burning of fossil fuels, with many billions of it going straight into the pockets of the giant fossil fuel corporations who are making obscene profits while cooking the planet.

The Greens aren't going to have a bar of it. We will fight against that kind of reckless spending, and I say to the Labor and Liberal parties: if you need any other suggestions about how to cut expenditure in the budget, come and see the Greens. But we will never support cutting expenditure on the help that people really need.

Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

I'd like to thank Senator Dean Smith for raising this matter of public importance. It's something that the coalition has been speaking about for such a long time, because this is what we're hearing every single day when we go out into the community and talk to people around how difficult and challenging the current environment is. It is an absolute cost-of-living crisis. It is a housing crisis and it is a rental crisis. At every point, people are suffering and struggling.

What we're concerned about is why this is not being dealt with in the way that it should be. This is a critical matter of importance, and we need our Prime Minister and our Treasurer to act. But it's not happening, and life is continuing to get harder and harder for all Australians. That's being reflected in the pressure on Australian charities, where working families are struggling to make ends meet, where working families have to make decisions about whether they can afford to buy the food that they need, which bill they're going to pay this week or what they're going to cut back on, or whether they can stretch something out for another couple of weeks. It's basic stuff too, like kids' haircuts. They have to say, 'That can wait an extra month or two,' or, 'That can wait an extra few weeks.' They are having to take normal everyday activities out of the family's life because they have to be able to afford their food, their electricity, their fuel, their rent or their mortgage, and that is a very sad state of affairs in a country like Australia.

The reality is that life under Labor is hard, and that is because of the actions, or lack of action, from this government. The current situation stands in absolutely stark contrast to what the Prime Minister promised before the last election, which was that everybody would be better off under this government. It's very, very clearly not the case. Not only is it not the case but sadly it couldn't be further from the truth. These aren't talking points; these are facts. Australians are paying 20 per cent more in income tax. Employees' real wages have collapsed by about nine per cent. Living standards have dropped by about eight per cent. Household savings have collapsed by about 10 percentage points. A homeowner with a $750,000 mortgage, which is roughly the average, is $35,000 a year worse off. That's an extraordinary amount of money to have to come up with. With food, health and education up by 11 per cent each, housing and rent up 15 per cent, finance and insurance up 17 per cent, electricity up 22 per cent and gas up 25 per cent, this is just absolutely relentless.

The impacts are being seen not only through the charity sector; the impacts are being seen through counselling services like the Debt Helpline. I'd like to read you something from an article I wrote a couple of weeks ago:

According to Helpline counsellor Mike Dunkley, the recent explosion in demand stems from the spiralling costs of housing. Over 60 per cent of calls are made by young people aged between 18 and 39—

I'll repeat that: over 60 per cent of calls are made by young people aged between 18 and 39—

with the majority of those being young women struggling to pay rent. No wonder young Australians have lost faith and trust in the political process and those charged with governing.

There's one further piece in this housing crisis, where we need our construction businesses and we need our tradies. Under this government, small and family businesses are being crushed by the weight of our flailing economy. ASIC reported more than 7,700 foreclosures from July 2023 to March 2024, with construction companies leading the way with more than 2,000 of these business failures. Construction companies need to lead the way out of our housing crisis, not lead the way into bankruptcy. This is a really, really dire state of affairs.

Yesterday in the other place, the Leader of the Opposition asked the Prime Minister why he promises one thing and then does the other. We didn't get a real answer from the Prime Minister that answers and addresses the real, lived experiences of Australians and how much they are struggling.

Dave Sharma (NSW, Liberal Party) Share this | Link to this | Hansard source

I thank my colleague Senator Smith for raising this matter of public importance. The RBA's Statement on monetary policy released last week should be a sobering wake-up call to us all, because what the RBA said—in short, and in polite central-bank-ese—was that the fight against inflation in Australia is not going well. They no longer expect us to be inside the target range, which is two to three per cent, until late 2025. The RBA doesn't expect us to hit the midpoint of that band, around 2½ per cent, until 2026. Headline inflation is expected to increase, as the various one-off cost-of-living measures introduced by the government expire or lapse or wash through the system.

The Reserve Bank also makes the point that most advanced economies' central banks have either lowered their policy rates or are expected to do so over coming months. Now, Australia is the outlier here, but not in a good way, not in a positive way, because, whilst inflation in other advanced economies, other OECD economies, is subsiding and whilst other central banks around the world are easing monetary policy—in Canada, the Canadian central bank has cut rates; the British central bank has cut rates; the US Federal Reserve has indicated a rate cut is likely—in Australia, we've been told by the Reserve Bank that inflation is actually expected to increase in coming months. We've already seen inflation increase on a monthly basis and on a quarterly basis in recent economic figures, and the Reserve Bank does not expect to have inflation back to its target range until late 2025, almost 18 months away. What that means is that the prospect of interest rate relief—and high interest rates are hurting many Australian householders—is ever more remote.

Australians have now experienced 12 rate rises—four percentage points or 400 basis points—in total under this government. If you have a mortgage of $750,000, that means you're paying, in interest alone, $30,000 more per year or $2½ thousand a month.

But that's not the only challenge you're facing. You're facing high inflation. You've seen the cost of everyday essentials go up since Labor came to office. You've seen food prices increase by 11 per cent. You've seen house and rental prices increase by 15 per cent. You've seen electricity prices increase by 22 per cent. You've seen gas prices increase by 25 per cent. So you're dealing with higher interest rates and you're dealing with a higher cost of living. But you're also paying a larger tax bill.

Personal income tax collections have increased by 27 per cent since Labor came to office, and even Labor's much vaunted revised income tax cuts are forecast to generate additional revenue of $28 billion over the next 10 years, as taxes increase. Australia now has the most expensive passport, at $398. We've got alcohol excise at $104 per litre for spirits. So people are paying a whole lot more in tax. What is making the Reserve Bank's job harder is that a lot of that extra tax—take the windfall from bracket creep and the windfall from higher commodity prices—is being spent by this government.

We've seen this government increase its spending by $315 billion since coming to office—that is, $4 out of every $5 of additional revenue has been spent. We've now got the highest level of spending as a share of the economy since 1986, if we neglect the COVID period, at 26.4 per cent, and we see in the most recent budget and in next year's budget that real spending is forecast to increase by 4½ per cent this year and by 3.6 per cent next year. That is a massive fiscal stimulus. It's little wonder that the Reserve Bank is finding their job harder and is having to warn us that inflation is likely to remain higher for longer and that interest rates are likely to have to remain higher for longer. That's because when the government is putting so much additional stimulus into the economy, when it's putting an increased amount of money chasing a finite supply of goods and labour, then the natural result is inflation. So, at the moment, the Reserve Bank is having to do all the heavy lifting to control inflationary pressures in the economy.

The RBA's Statement on monetary policy last week should have been a sobering wake-up call for this government that the fight against inflation is not going well and that their attempts to alleviate the symptoms without addressing the cause of high inflation are failing. I urge this government to heed the message and adjust their policies.

Ralph Babet (Victoria, United Australia Party) Share this | Link to this | Hansard source

Obviously, I rise here today in support of Senator Smith's matter of public importance. There is probably no matter more important to the Australian people right now than the cost of living. The fact that so many Australians right now are relying on charity to meet their day-to-day needs is an indictment on this Albanese Labor government.

Believe it or not, I'm old enough to remember when we used to call ourselves 'the lucky country'. Are we still the lucky country today? These days, under this Prime Minister, under this government, you're lucky if you can find a house, and you're extremely lucky if you can afford to even turn on the heating in your house.

But let's be clear: this cost-of-living crisis hasn't appeared out of nowhere. It hasn't snuck up on us like a thief in the night. This cost-of-living crisis has been brought on by excessive government spending during a time of low employment and rising interest rates. To put it simply, the government has increased its spending while, at the same time, the Reserve Bank has been trying to pump the breaks on inflation. The result is that our once prosperous nation continues to bear the burden of high interest rates and skyrocketing prices as well.

If the Albanese government would simply decide to live within its means, like every Australian household is expected to do, then this cost-of-living crisis would more quickly ease. Long-suffering voters are nowhere near as stupid as this Albanese government potentially assumes them to be, and they will punish this government for financially abusing them, just as soon as this Prime Minister is brave enough to call an election. I look forward to that election. Vote 1, UAP.

Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

The overall fiscal stance is what is at fault here, and the fact that there is a massive cost-of-living crisis is of no great surprise to me, because, over the last 18 months or so, when we've had the Reserve Bank come to Senate estimates, I have asked the governor, whether it was Philip Lowe or Michele Bullock: is the government running a fiscal stance which is contractionary, neutral or expansionary? Never once has the Governor of the Reserve Bank said, 'The Commonwealth government is running a contractionary budget stance.' They were very polite, but they were less polite last week in their meeting minutes when the Reserve Bank made it clear that the government is going on the wrong direction and forcing the Reserve Bank to seriously consider raising interest rates at a time when our global peers are cutting them. So this question of homegrown inflation is not in doubt. This is not something that's just being said by politicians in the building; this is the position of the independent Reserve Bank and the Governor of the Reserve Bank as appointed by this Treasurer.

I am in no doubt that the Reserve Bank is desperately wanting the government to recalibrate its fiscal stance. But, if you look at the budget papers, where we're going is deficit, deficit, deficit over the next three years, after we get through this fiscal year. We are going in the wrong direction, and all you've got to do is look at the on-budget and off-budget items to see the picture. Even though there are off-budget items—a slush fund or a multibillion-dollar fund like the reconstruction scheme or the housing scheme—these things spend real money. They spend billions of dollars, and that is adding to the inflation problem. My view is that, while we have these massive schemes, the inflation problem will only get worse.

Of course, the housing question is desperately sad for so many Australians. We see in the data that rents have gone up significantly over the last couple of years, but so have housing and construction costs. We know about the 30 per cent tax the CFMEU levies on every Australian wanting to build a new house as part of a larger construction. That CFMEU tax is avoidable. We only have that tax because Labor is totally beholden to this union. It has been allowed to run the country's construction sector. That has massively inflated construction costs, which has meant the Australian dream is further from reach than it should be.

As a result of Labor's intransigence on housing, their high inflation and their commitment to the CFMEU, plus their failure on housing policy more broadly, we have now had to establish a separate inquiry to look at the question of lending. The government never talk about the problems facing individuals, because they are so blinded by their obsession with what's good for institutions. The government is more interested in what's good for Vanguard, BlackRock and Cbus than in what's good for the average worker. That is where we are in this country right now. The lending inquiry will look at how we can restore the ability of an average worker on an average wage to get a mortgage, because, if you can't get a mortgage, you can't get a first house. Australia is becoming a country where you have to be a rich person to get a loan. That is a very sick position for a country like Australia with an egalitarian ethos where the middle classes and the average worker could access a mortgage and a house. It is hugely regrettable that we've now had to take this step of establishing a special inquiry to look at the question of lending and how we can allow the average worker to get into a mortgage, because, if we close the door on the financing of housing for individuals, we are closing the door on the Australian dream.

Labor might be happy with the idea of giving Cbus, AustralianSuper, BlackRock and Vanguard tax cuts so they can do build-to-rent housing and with Australian people become serfs to these major institutions, but that is not the Australian dream. We want to see housing become affordable once again in Australia.

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

The time for the discussion has expired.