Anthony Chisholm (Queensland, Australian Labor Party, Assistant Minister for Education) Share this | Link to this | Hansard source

On behalf of the Treasurer, I table a statement concerning the economy.

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 document.

The Australian people were asked to put their trust and their future in the hands of Prime Minister Anthony Albanese and his Labor government—a future where, in his words, no-one is held back and no-one is left behind. This was to be based on a strong economy where Australians could comfortably afford the cost of living. There would be cheaper electricity, cheaper child care and cheaper mortgages, because Labor had real, lasting plans to deliver them. Australians were told to do more than simply vote for a party; they were implored to vote for hope. What has become of this better future? What has become of this hope?

Instead, Australians are struggling to weather a cost-of-living crisis characterised in many cases by record-breaking struggle and suffering. It is the greatest of many broken promises. The Treasurer, Dr Chalmers, stands before us to paint an optimistic picture of the economy, but the lived experiences of Australian households and businesses tell a very different story. The statistics do not lie, the hardship is there for all to see, and the time for spin is over. This Labor government must confront the reality of its own failures. The Treasurer was attempting to project his usual calm confidence today, pointing to global economic pressures as the root of our challenges. He spoke of a strong recovery and record low unemployment. But I must ask: Dr Chalmers, where is this recovery being felt? It's certainly not in the homes of everyday Australians as they grapple with the highest inflation in a generation and stagnant wages.

The evidence is clear—Australians are worse off now than they were 2½ years ago. Disposable incomes fell by 8.7 per cent per capita between March 2022 and June 2024, which is the steepest drop across all OECD nations. Nearly 94 per cent of Australians surveyed in a recent committee study have experienced cost-of-living pressures. More than 90 per cent of those surveyed were forced to reprioritise their spending or go without essentials. These are not just statistics; they are proof of an ongoing struggle.

While the Treasurer praises the government's actions, the truth is Labor's fiscal policies have actively worsened the inflation crisis. Higher spending outlined in the 2022-23 October budget, the 2023-24 budget and subsequent fiscal projections have intensified inflationary pressures. This mismanagement has led the Reserve Bank of Australia to keep interest rates higher for longer, compounding the pain for mortgage holders. Meanwhile, other developed nations, including the United States, the United Kingdom and New Zealand, have already begun cutting interest rates. Labor's policy has left Australia in an 18-month long per capita recession, with annual economic growth stagnating at just 1.5 per cent, which, apart from the pandemic, is the weakest since the early 1990s.

Inflation may have eased slightly, but rental prices have surged by 6.7 per cent annually and food prices remain high at 3.3 per cent. Even the government's much touted Energy Bill Relief Fund has proven to be nothing more than a bandaid offering temporary relief but failing to address the underlying situation. Electricity prices may have decreased by 17.3 per cent in the September quarter, but Australians know that subsidies won't last forever. The International Monetary Fund has predicted Australia's headline inflation will still be at 3.6 per cent in 2025, nearly a full percentage point above the next highest country in the developed world. The Reserve Bank of Australia has forecasted underlying inflation won't return to its target range until late 2025, with the midpoint not expected until 2026. Officials reconfirmed this to me and other senators during Senate estimates just a couple of weeks ago.

I'll focus briefly on the economic experience of Western Australia as a case study, which I know well as it's my home state. It's a case study that's important because it also has set records for all the wrong reasons under Labor. Last financial year, 1,000 WA businesses failed, unable to weather the government's twin cost-of-living and cost-of-doing-business crises. That is double the number of insolvencies of those recorded during the 2008 global financial crisis. Western Australians are spending an extra $1 billion a year on mortgage repayments. That's money which, at best, cannot be spent to support the wider economy and, at worst, is forcing families to make decisions like skipping meals. That is, of course, if they can make their repayments at all. WA has the second-highest rate of mortgage arrears in the nation at 0.62 per cent according to data that I was able to obtain from the Reserve Bank, although the number of people falling behind has also surged nationally. These are also higher rates on larger loans, with the ABS confirming that the average loan in Western Australia jumped 36 per cent or $146,800 since the lower interest rate environment at the beginning of the pandemic.

When I started tracking ABS figures on this midyear, I found that the average home loan in Western Australia was now the highest since published ABS data began, having jumped over $62,000 in just eight months. The largest rises are in the more affordable areas of Perth, where first home buyers, newly arrived Australians and those poorly equipped to deal with cost increases are looking to settle. Renters in the west face similar challenges struggling to find a home in what has become the most restrictive rental vacancy rate in Australia.

I'll return to the coalition's vision for Australia's economy in a moment. But here it is worth mentioning our plan to resolve the housing crisis, a plan that includes restoring the dream of homeownership by unlocking up to 500,000 homes through investment in infrastructure, ensuring faster housing delivery. Because unmodelled and record immigration is a key component of this challenge, the coalition will reduce migration numbers and ban foreign investors from buying existing homes.

This reality of what Australia is experiencing highlights a key structural problem. Australia's economic woes are not simply the result of external forces. They are rooted in deep-seated, long-term issues that Labor is unwilling or unable to address. Declining labour productivity, which has fallen by 6.3 per cent in just over two years, speaks to a broader problem. We now require 6.3 per cent more labour output to produce the same amount of goods and services as we did in 2022, which inevitably leads to employment growth at the expense of living standards. It creates a vicious cycle of increased labour output for less reward. The McKinsey Global Institute's findings stress the need for productivity growth, which is needed to meet the challenges of debt, inflation, energy security and skills shortages. These are challenges that advanced economies like Australia must face head-on. That is not what is happening and likely what cannot happen under Treasurer Jim Chalmers and the Albanese government.

In conclusion, the path forward for Australia is clear. Under a Dutton led coalition government we'll work tirelessly to restore economic stability and prosperity for all Australians. We will tackle the rising cost of living head-on by reducing inflation, curbing excessive government spending and implementing policies that support small businesses, families and farmers. By prioritising productivity growth, simplifying taxes and ensuring affordable energy we will lay the foundation for a future where Australians can once again aspire to homeownership and economic security. We will also address the housing crisis, reduce migration pressures and invest in infrastructure to unlock new homes. Our agenda is focused on getting the basics right, restoring confidence and ensuring a brighter future for generations to come. Australia deserves better, and under our leadership we will get it back on track.

It's worth making one other point, and that is that in his budget speech the Treasurer didn't mention charities or not-for-profits and the pain that they are enduring. This sector is one of our largest employers, and in many cases it is literally keeping Australians alive through a crisis of the Albanese government's making, yet Labor repeatedly turns its back. Millions of Australians are now unable to afford food and other basic necessities, and it is charities picking up the pieces. The final report of the Senate Select Committee on the Cost of Living, released less than a week ago, observes that 'the sector is crying out for help'. Charities told the committee of the severe food insecurity affecting record numbers of Australians, with Anglicare Sydney working with adult clients forced to go hungry so their children could eat. Charities are not immune from inflation. They themselves are struggling to operate in an environment of skyrocketing operating costs, something acknowledged recently by the Reserve Bank governor, Michele Bullock.

On top of all this, Labor has failed to progress, in any meaningful way, its election commitments to the sector. Australia deserves much better. (Time expired)

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

I sort of feel sorry for Senator Dean Smith having to advance that blizzard of words that really betrays the lack of substance and the lack of seriousness that sits behind what passes for economic policy from a once great political party that took economic policy seriously. You wouldn't have caught Mr Peacock or Mr Howard or any of those characters, less than six months out from an election, without any substance on anything.

Well may he say 'back on track'. I have a few things to say about that in a moment, but I just observe that when I began my career in the labour movement there was an outfit called 'back on track'. It was a Trotskyite outfit in the building industry supported by the BLs from Melbourne—

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator Smith, you were heard in silence.

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

and Mr Setka financed that hyper-militant organisation in all sorts of funny ways—they talk a lot of rubbish to building workers, made big promises that could be never kept. 'Back on track' was not only their slogan; it was the name of the election they ran in. They were some of the most disreputable characters in that industry that you'd want to meet. These were the forerunners of some of the issues that that union faces now.

Mr Chalmers has just this morning presented this ministerial statement. The last time that he did it outside of the normal budget and MYEFO opportunities that a Treasurer has was in mid-2022. These kinds of statements are what a responsible government does—treating Australians like adults, talking to them in an open and transparent way about the challenges that the economy faces, levelling with Australians, many of whom are still working with the challenges of increased prices in the economy and increased interest rates. They are working hard in practical ways to work their way through that. But if you cast your mind back to when the Treasurer last gave us a similar statement in the parliament, what was the situation? Inflation was at 6.1 per cent and rising, with no plan. With the tail of spending from the COVID period, there was no plan from the Morrison government—or what passed for the Morrison government then—in any way to substantially tackle the inflation challenge. No plan—the figures just arrived, and the coalition were helpless in the lead-up to an election, with no strategy at all to get Australians through that period. Interest rates were on the way up, but there was no plan from Mr Birmingham, Mr Frydenberg, Mr Morrison, Mr Taylor or Mr Dutton to deal with that challenge. Real wages were down by 3.4 per cent. You can hear the hooting and hollering up on the front bench here about real wages, but the last time they got an opportunity to touch wages policy, Australian were going backwards to the tune of 3.4 percent this year.

Back on track! Politics is about choices, and Australians will have to make some choices. If people think for a moment—I know the smug sense of entitlement over there leads them to think that automatically they are somehow good economic managers, but that smug sense of entitlement blinds them to the fact that Australians don't have to reach very far back at all. Just two years ago was the period when this show—the triumvirate of Mr Morrison, Mr Dutton and Mr Taylor—had their hands on the levers of economic policy, and you don't have to think too far back to know what that meant. Back to the Morrison period! The only thing missing is Mr Morrison himself, who of course occupied a series of simultaneous executive government positions secretly—no wonder economic policy-making was so debauched!

It was 15 years before there was a surplus. Mr Morrison and Mr Taylor—I'll come to Mr Taylor and his duplicity in these areas in a second—and Mr Frydenberg and Senator Hume and others talked about budget surpluses every day except the day they could never deliver one. They never delivered a single budget surplus—not one. It was 10 years of the lowest productivity growth on record—not compared to the year before, or the year before that.

What matters in productivity growth is the trajectory, and the trajectory was down for a decade. You can't grow an economy responsibly, you can't lift wages over time and you can't create opportunity for investment for Australians unless the curve starts to lift up. But the productivity line was going down for a decade. Some of the things that were shouted out by the crowd opposite during question time about productivity growth just show how they don't grasp the problem. It is true that labour productivity has fallen over the last year. Well, I'll let you into a little insight. If you've got a sluggish economy—as it is now, with lower levels of growth than normal—and one million people get jobs, labour productivity falls on the graph because there are more people and lower growth. But that is a good thing. I know that it's resented by the Liberal and National parties, who love nothing more than failure; they want to find failure in everything they see. But a million new jobs under this government, most of them permanent, is an unambiguously good thing. It's a record. It means Australians are earning more because there is more work in the economy and wages are lifting in a sustained and deliberate way—because lifting real wages is a design feature of our economy—and it means there are more Australians in work. Those opposite think that's a terrible thing.

We have seen the charges that have been laid about the fiscal position. All I say is this: two budget surpluses in a row and $80 billion worth of retired debt—lower interest rate payments in a high-interest-rate environment is a good thing—could never be delivered by the people who claim that they would make better economic managers. They could never deliver. Australians gave them a decade, and they could never deliver. And we are doing it for the right reason.

Finally, what sits underneath this claim about the fiscal position? They claim there's $300 billion of additional spending. But what are we going to cut under a Dutton government? Imagine the spectre of an angry, aggressive and reckless Dutton government. Are we going to cut aged care? Are we going to cut pensions and pension growth? Are we going to cut energy bill relief? Are we going to cut support for child care or students? Which bit will be cut in this $300 billion worth of cuts that are contemplated by the other side of politics, and what will it mean for people in Nowra, Port Stephens, Gladstone and Cairns when the government cuts services? We know what that will mean. (Time expired)

Question agreed to.