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

Senator McKim has submitted a proposal under standing order 75 today:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Government to stop letting the Reserve Bank of Australia smash the economy, renters and mortgage holders, and to instead use and retain its power to overrule monetary policy decisions of the Reserve Bank, and to directly tackle the causes of inflation by stopping price gouging, capping rent increases and making big corporations pay their fair share of tax.

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.

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

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Government to stop letting the Reserve Bank of Australia smash the economy, renters and mortgage holders, and to instead use and retain its power to overrule monetary policy decisions of the Reserve Bank, and to directly tackle the causes of inflation by stopping price gouging, capping rent increases and making big corporations pay their fair share of tax.

The fact is that millions of people who rent in Australia and millions of people who hold mortgages in Australia—in particular, young people and their families—are getting absolutely smashed at the moment because of the relentless Reserve Bank rate hikes and the failure of Labor to step in and offer meaningful assistance to control inflation and help people with cost-of-living pressures. Since Labor came to power, in 2022, rates have gone up by a staggering 31 per cent—that is, 31 per cent in the first two years of a Labor government. The average mortgage repayment has increased by an equally staggering $1,667 a month. People are getting smashed, and Labor are sitting on their hands.

Last week the Governor of the Reserve Bank finally conceded that the RBA's rate hikes are pushing some people so close to the brink that they are facing the brutal reality of having to sell their homes, and she noted that low-income people and low-income families are particularly struggling. And of course the reason the Reserve Bank is having to step in and use the only tool it has in its toolkit, in the form of interest rates, is that Labor won't step in and stop corporate price gouging, which is driving inflation. It won't step in and cap rent increases, which are driving inflation. And it won't step in and put in place a corporate superprofits tax, which would disincentivise corporations from price gouging and the obscene profiteering that they are undertaking at the moment. Hiking rates penalises those who are least responsible for inflation and it actually helps the people who are most responsible for inflation—mostly older folks, mostly people with savings—who are increasing their spending at the moment, while people with debt, mostly younger people, are getting smashed for a problem they didn't cause.

The RBA is driving this country closer and closer to a recession, and they're bringing the economy to its knees. The June quarter figures showed that the economy grew by just 1.5 per cent in the last year. Apart from the abnormal 2020-21 pandemic year, that is the worst result since the 1990s recession. If we take out population growth, GDP fell by 0.4 per cent in the June quarter. That is the sixth consecutive quarter of negative GDP per capita growth in Australia. We are in a per capita recession. It is no wonder people are hurting.

Finally, people like Wayne Swan, Minister Gallagher and Minister Chalmers are conceding what the Greens have been saying for many months: that the RBA is smashing the economy. But what Labor won't tell you is that they've got the power to do something about it, to intervene and bring interest rates down. That's what Labor should be doing: intervening, overriding the RBA, bringing down interest rates and providing some relief to the millions of Australians who are getting smashed by food and grocery prices, by rent increases at a staggering rate and by staggering mortgage increases.

Not only is Labor refusing to use that power; they are trying to get rid of it, because they want to take section 11 of the Reserve Bank Act out of the act and remove the power of a democratically elected government to override a bunch of unelected technocrats on the RBA board. And of course the reason Labor wants to get rid of this power is that they want to wipe their hands of any responsibility they have for the economic pain that people are facing and that that they are allowing the RBA to inflict on people.

So, I say to Australians: if you're facing the imminent prospect of having to sell your home or you can't afford to pay your rent or your mortgage bills at the end of the month, know that Labor has the power to intervene and bring down interest rates and meaningfully help you with the cost-of-living crisis that you are experiencing, but Labor is choosing not to do that.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Well, clearly the country has a surplus of money at the moment. That's why we have inflation at levels we haven't seen for a generation. But it's been pretty clear from listening to the Senate for a couple of hours this afternoon that we also have a great surplus of wishful thinking in this place. I was in here earlier when Senator Bilyk was saying, 'Oh, we just need to pay people more money.' Senator McKim is now saying, 'All we need to do is lower interest rates and everything will be fine.' But there is in no way any logical or reasonable discussion of what would happen if we did what Senator McKim suggests. What would happen if we just said, 'Yep, let's intervene and drop the interest rate by'—I don't know: 25, 50 or 100 basis points? What is likely to happen? We already have inflation well above three per cent, the highest in the developed world. If we were to just go and cut interest rates, take the easy solution that Senator McKim suggests, that would certainly—it has to, by definition—put more money into the money supply to lower interest rates. That's how the Reserve Bank does it. They buy up bonds. They either print money or go into their vaults, take more money and chuck it into the economy. That will increase inflation, and no-one will be better off at the end of it. In fact, almost certainly we'll be worse off over time because inflation will get out of control, we may end up with a wage price spiral and we will be back to where we were in the 1970s. It will take years and decades and a lot of economic pain to fix up.

So it's a very childish approach to these issues. I think Australians are desperate for some leadership from this place. They're sick and tired of this juvenile pointscoring from the likes of Senator McKim. They all know in their real lives that things are tough. They all know there's no easy answer when you're struggling to pay the bank or when you're worried about whether your credit card says 'insufficient funds' at the check-out. At least there's no-one there to see you these days. You've got no check-out person there to witness your embarrassment. But people are worried about that.

They know there's no easy answer; they have to make tough choices in their own lives—to decide not to get a new car, not to go on a holiday or to cut back on other expenses. They make those decisions. Yet they look at this place and they look at their leaders, who are not willing to make any tough decisions at all. They're telling them these sweet nothings: 'You can have it all. We can cut interest rates and we can just get rid of price gouging, and everything will be fine.' Life is not like that, Senator McKim. These are very tough times for Australians, and to get out of tough times you have to make tough decisions. You have to make tough decisions about working out what the appropriate interest rate is.

The really tough decision we have to make is about how we reform our economy to help business get going. The real result of inflation and the cost-of-living crisis we have right now is our terrible productivity growth. Senator Gallagher is back here. She was a bit embarrassed before to state the productivity figure under this government, which has fallen, as I said earlier, by 6.3 per cent in two years—an average decline on a compound annual growth rate of 2.9 per cent. Senator Gallagher was trying to claim to the Seante earlier that the growth under the coalition was much worse. Actually, I went and had a look at the figures, and growth was 1.3 per cent in GDP per hour worked on a compound annual growth basis during the coalition's term in office. So it's terrible. That's 1.3 per cent compared to -2.9 per cent.

That is the reason people are struggling right now: our productivity has fallen through the floor. Nowhere in this motion—I only caught just over half of Senator McKim's speech—did I hear him mention the word 'productivity'. That's the key way to get out of this crisis. It's hard. It's not an easy answer for people to say. It means we probably have to work harder, work smarter and make tough choices about what we do about our energy situation and our housing situation. But that's the only answer to get out of this crisis. Senator McKim just completely ignores it. It is a juvenile response to this issue.

The government at least says some things about it, but it's not willing to change course at all. Its answer—I asked this to Senator Gallagher earlier —to my question about getting productivity growing was, 'We need to invest more in solar and wind,' like these things are working. They've been complete and utter failures. Productivity in our energy sector has fallen by seven per cent under this government. That's a seven per cent fall in the productivity of our energy systems because of this mad rush to invest in types of energy that don't work. When the cost of energy goes up, the cost of doing everything goes up.

So it's about time we had a hard look in the mirror as a country and realised that a lot of what we're doing right now is wasting our taxpayer resources that people worked so hard for. We just dole it out on a handout basis like candy. We're also making silly decisions on things like net zero emissions, thinking it won't come at a cost. It is, and everybody is facing that cost right now.

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

Despite the inevitable shouting from the Greens and the grandstanding and fearmongering from the coalition, our plan is actually working to put downward pressure on inflation. Inflation is moderating because of our government's plans, and that is just a fact. When we took office, inflation had a six in front of it. Now it has a three in front of it. The pain and the bite of high inflation is actually easing. The data shows us that it is tracking down. It is a fact. But we know that, while progress is being made, there is still a lot of work to do. We are rolling up our sleeves and we are doing just that.

Importantly, there is real work to be done to make sure that the moderating inflation and the impacts of that are truly felt across Australian households, because we know that Australians are doing it tough. We know that they are feeling the pressure right now, and that is why our government is doing so much work to ease the cost-of-living pressures that people face. It's why our budget, our cost-of-living measures and our economic plan have all been needed, and they are working. Our targeted and careful spending is balancing the need to keep the economy ticking all while we are bringing inflation down and delivering responsible cost-of-living relief too.

We've done the hard work, and we've found savings in the budget. We are being responsible. We are being restrained where it's needed, and we are doing that in a way where we are keeping the economy moving at the same time. We're generating hundreds of thousands of jobs in the economy, and we are getting wages moving. We are getting the wages of women moving and boosting women's workforce participation too. All of this is needed, and it is all a priority for us. It's work that we are getting on with. We are getting on with the job while others scream and fearmonger. We are actually delivering our economic plan and putting downward pressure on inflation.

We've seen from the national accounts just why our plan is so important, because we know that the RBA's interest rate rises are putting real pressure on families and households. They are putting real pressure on business and the economy as well. We know that households are cutting back their spending. We know that without our careful, targeted cost-of-living investments the economy would have slowed even more, and that's exactly why we're delivering real cost-of-living relief to households that is bringing down inflation, like our energy bill rebates, cheaper child care, cheaper medicines, our investments in Medicare and significant increases to rent assistance. All of this cost-of-living relief is directly tackling the inflation challenge, and, of course, our tax cuts for 13 million taxpayers mean that workers are keeping more of what they earn—earning more and keeping more as well. Our tax cuts for every taxpaying Australian are easing cost-of-living pressures, and that's why we made those changes to the stage 3 tax cuts.

We know that if those opposite were in power we could absolutely guarantee that things would be a lot worse. Not only would those opposite have failed to put downward pressure on inflation; they would have slammed the brakes on the economy, because they've opposed our cost-of-living measures when they had the option to support them. They have opposed measures that are actually directed at bringing down inflation. They basically came to this place and tried to vote for higher inflation. They have also told Australians that they'll cut the budget to the degree of around $300 billion and that they'll do that at a time when the economy is barely growing. At this challenging time, they want to slash, cut and burn the budget in a way that we know would hit the economy even harder.

We will get on with the job of providing targeted cost-of-living relief to Australians that actually puts downward pressure on inflation. We will get on with providing the support that the economy needs to keep moving forward, and we will do that in a responsible way. We have banked two surpluses already in a way that the RBA governor said put downward pressure on inflation, and we will keep our responsible plans moving forward.

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

Inflation is out of control across the Australian economy. It's disgraceful though for the Greens to leverage this human disaster to advance their green communist ideology. Advocating price controls is the economics of wishful thinking—a victory of feelings over facts, common sense, historical experience and basic economics. Price controls don't work. They have never worked and will never work, and they make things worse.

The price of an item is not some magical creature with a life of its own that government can control. Price is an outcome of other factors—material costs, input costs and retailer margins, to name a few. In recent times, the Greens have talked about the lack of competition in retailing, especially in food retailing, but they have missed the point. The answer to poor competition is not price controls; it's more competition. It is Harris Farm Markets opening new concept stores that rival Coles and Woolworths. It's the Reject Shop, which increasingly undercuts Coles and Woolies by significant amounts. It's your local butcher or produce store, which now sell products cheaper than Coles and Woolies.

To a degree, the Greens are using misdirection. They're asking Australians to look over here at profiteering instead of looking at the root cause of inflation, which is the increasing cost of business inputs, starting with the Greens' own net zero energy policies. Net zero fairytale power is pushing up power prices, and, if power goes up, everything goes up. Farmers need power to run their coolrooms, they need diesel to run their farm equipment and they need fertiliser, which is made from natural gas. Manufacturers and wholesalers need electricity, gas and diesel for every aspect of their operations, yet the Greens are over there on my left—on everyone's left, really—advocating for no new oil or gas projects. Scarcity causes the price to rise. Their own net zero policies are a major cause of inflation. Now the Greens want to fix that with price controls. Controlling the price causes producers, wholesalers and retailers to go broke as their input costs exceed their selling price. To stay in business, these companies will most likely stop selling anything they sell at a loss.

This is exactly what happened in Venezuela and Sri Lanka, where price controls led to food shortages and black markets appearing for food staples. Criminal gangs moved into those black markets. I know Coles and Woolies are bad, but I would take them over criminal gangs. Sri Lanka is especially relevant here. Their food crisis was caused by forcing farmers to abandon the use of hydrocarbon fertilisers and pesticides in the name of net zero—inhuman. Farm productivity fell and prices rose, as farmers tried to make enough money to feed their families. The government intervened with price controls. The result was food shortages, starvation and then rioting that forced the government to back down and, once again, allow modern production techniques to feed the people. Another problem with price controls is that investment moves away from industries that are rendered unprofitable with price controls. Investment in buildings, equipment, software and staff training will fall in price-controlled industries. That is fact that has been proven repeatedly throughout history. This leaves long-term supply deficits that will keep prices higher for longer and hurt everyday citizens.

Unlike the Greens' policies, One Nation's policies will solve the cost-of-living and housing crisis without making either problem worse. We will do the opposite of the Greens, which is always a good policy. We will reduce red, green and blue tape. We will reduce new arrivals until the market can fairly provide for those who are already here. In housing, we will prevent homes being owned by those outside of Australia and allow councils to impose penalty rates on vacant homes or on those being used for casual letting which conflicts with the zoning. We will review the federal government housing code, which imposes unnecessary requirements, including making every house wheelchair friendly despite there being no wheelchair users in the house. I understand that that adds about $40,000 to the price of every new house. We will allow Australians to use their super to invest in their own home. We will create a people's bank to provide mortgages at five per cent interest over 30 years on a five per cent deposit and allow a HECS debt to be rolled into the mortgage so that people can get a home loan. This policy means that an Australian with a good job, even if they have a HECS debt, will be able to afford their own home now and start paying it off.

There are many, many ways to solve the humanitarian disaster that the policies of successive Liberal and Labor governments have created. Price controls and green policies on housing, immigration, the environment, mining and farming are the exact opposite. One Nation wants to free up the people and free up our markets.

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

Well, it's a pretty ordinary debate, really. We've got what passes for 'economic populism' from the Left, sort of—from the Greens political party—and a pale imitation of right-wing economic populism from Senator Roberts, and then you've got a whole chorus of nothing from the Liberal and National parties. That is what passes for, allegedly, an economic debate brought on by Senator McKim, and then I think we've got something later on from Senator Hughes. It's the same old nonsense. The truth is that inflation is a very significant challenge for this economy, just like it is for every economy around the world. The truth is that inflation, left unchecked, has a deeply unequal impact. It has its toughest impact on low-income households.

Now, I don't want to spend a lot of time on Senator McKim's prescriptions for what should happen in the economy. At least he's honest enough to advance some. The key element of the Greens political party's approach—it's always economic populism; meme first, nothing later—is a rent cap, something that the Commonwealth government can't implement. It's constitutionally prohibited from implementing it, and if it was implemented, what it would lead to is less housing construction and poorer quality accommodation. It would be back to the slums of the 1930s. That's where Senator McKim wants to take Australians. Social media memes do not equal sensible economic policy that goes towards solving very real challenges, and leading people into a cul-de-sac, which is what the Greens political party does by talking absolute rubbish and pretending to people that there are simple solutions for very challenging problems is exactly the kind of left-wing populism that's not actually left-wing—because, if you're actually left-wing, you advance solutions and you mobilise people around them, and they're credible—it's just populism.

But let me turn to the alternative party of government, so-called. What I think is remarkable and is a lesson for all of us is that everybody's got a capacity for personal growth. Having had no interest in all of these issues over the miserable decade that they were in government, suddenly they're on about productivity in the economy, despite the fact that, for the decade they occupied the Treasury benches, productivity growth was at its lowest ever and they did nothing about it. Suddenly they're interested in wages growth, while, during their period in office, wages growth was at its lowest ever. In fact, if you applied the average level of wages growth during the miserable Abbott-Turnbull-Morrison period, 2.1 per cent, to workers' wages over the period of this government, where growth in average weekly earnings has been 3.8 per cent, Australians would be $4,700 a year worse off. That's the truth, and all of this nonsense about real wages growth from those opposite, who never displayed any interest in it when they were in government, is a most callous position that has an utter disregard for the ordinary living circumstances of average wage earners.

On fiscal policy, suddenly they're deeply interested in proper, sound fiscal management, but they delivered not one surplus in government, not even the one that they promised, and they left Australia one trillion dollars in debt with nothing to show for it. They're very interested in building homes, they say, but they took their hands off the wheel completely during their period in government.

There is no policy over there—none—but you can see it beginning to take shape. If they ever got into government or if they had governed over the course of the last two years, what do we know? It would mean savage cuts to public expenditure. Opposing Labor's sensible cost-of-living measures would mean higher inflation, and the economy would be in recession today. That would be the effect of the so-called economic policy prescriptions of those opposite. Australians would be poorer and in a recession. There would be fewer jobs and higher inflation.

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

I, too, rise to speak to this motion before us today. Since the Labor government came to power in 2022, rents have gone up by 31 per cent and the average mortgage payment has increased by $1,677 a month. The ruthless Reserve Bank rate hikes, as my colleague Senator McKim said earlier, are smashing millions of renters, mortgage holders, young people and families across the country. Despite this, we've heard the governor of the RBA spell out that they don't expect the RBA will cut rates in the near term.

'The RBA is smashing the economy.' The governor of the RBA even conceded that these rate hikes are pushing people so close to the brink that some are facing the brutal reality of having to sell their homes. Goodness knows where they're going to find one to rent when they sell it, or a rental that they can afford. Through all of this pain, as my colleague Senator McKim has pointed out, the key thing to remember is that Labor and the Treasurer have a specific power in the legislation to overrule the RBA and bring interest rates down. But every day, Labor, like they do on so many things, make an active decision not to. Not only are they making an active decision not to, they are actually trying to secretly get rid of their own power to overrule the RBA and their rate hikes for good. Why are they doing this? Well, the Treasurer is trying to get rid of the power to overrule the RBA because that way the Labor government can just wipe their hands clean of the job of actually governing and dealing with the issues that they're causing. They want to wipe their hands clean of the job of actually caring about people in this country.

Just as the Treasurer is wiping his hands clean of the rate hikes smashing millions of people across this country, Labor are also wiping their hands clean of the millions of people who are living in poverty. The cost-of-living crisis is destroying people on income support. Today, ACOSS reported that more than 70 per cent of Centrelink recipients are cutting back on meals, medications and seeing friends due to cost. They're not worrying, as Senator Canavan said, about whether they can go on a holiday or buy a new car; they're worrying about whether they can eat or take their medication. Seventy-one per cent are cutting back on meat, fresh fruit and vegetables; 74 per cent are having difficulty affording the medicine or medical care they need. Someone in the ACOSS report said they're taking only half of their prescribed diabetes medication.

Labor could introduce a super profits tax to take the pressure off inflation, but they're too busy protecting their corporate mates to do that. So for those on income support, skipping meals or skipping medication, the message from Labor is clear: tough luck. 'We're not going to leave anyone behind,' they said. Well, tell that to someone who's on income support.

Instead of letting the RBA turbocharge this cost-of-living crisis, Labor should be fighting inflation and corporate profiteering by supporting the Greens' super profits tax policy; freezing rents, which are a big cause of inflation; putting dental into Medicare; raising the rate; maybe tackle supermarket price gouging—that's driving up inflation. Senator Ayers said that inflation is having the toughest impact on low-income households. Well, people on income support are in the lowest income households in the country. When are you going to help them? You also said that rent caps don't work. They have them in the ACT. I don't see slums forming anywhere around here.

I think Labor just thinks it's all too hard. Senator Ayres said he wasn't going to spend too much time on the Greens. Well, he spent quite a lot of time attacking what we're putting forward. Maybe, instead of attacking us, you could go to the people of Australia and actually do the job of tackling inflation, tackling the cost-of-living crisis and helping people out of poverty. (Time expired)

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

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