Matters of Urgency — Cost of Living

Marielle Smith

Senator Paterson has submitted a proposal, under standing order 75, today, as shown at item No. 14 of today's Order of Business:

The need for action to address the worsening cost of living crisis facing Australian families and small businesses, driven by persistent inflation and higher interest rates, and exacerbated by the Government's reckless spending and policy failures—including on housing—which are keeping prices and mortgages higher for longer.

Is consideration of 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.

James Paterson

I move:

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

The need for action to address the worsening cost of living crisis facing Australian families and small businesses, driven by persistent inflation and higher interest rates, and exacerbated by the Government's reckless spending and policy failures—including on housing—which are keeping prices and mortgages higher for longer.

Today is a tough day for many Australian households, particularly those with mortgages, because they've received the news of the 13th rate rise on Labor's watch. They've received the news that their mortgage repayments will be going up. For many Australian families, this is not the news they were promised. This is not the news they were expecting, because they've heard our Prime Minister, and our Treasurer, Mr Chalmers, tell them that the worst is behind us, that better times are ahead, that they've slayed the inflation dragon and that they've got it under control. But nothing could be further from the truth.

The truth is, the average Australian household is $21,000 a year worse off than they were when it comes to mortgage repayments than when Labor came to office. That is, someone with an average loan of $600,000 is paying $21,000 more a year on their repayments because of interest rate rises that have happened on this government's watch.

This government has presided over three interest rate reductions. When those happened, Jim Chalmers was very quick to take credit, very quick to say that it was as a result of the government's economic management that rates were coming down. But now that rates are rising again he's even quicker to say that he bears no responsibility, that the Albanese government bears no blame and that others are to blame—that international factors are responsible are for rising inflation.

The problem with that story is that it's not true. In fact, Australia has some of the highest inflation among advanced economies—higher than the United States, the United Kingdom, Canada, Japan, Germany and many others. While their rates are falling, our rates are rising, and it is very clear why. You can ask any economist what the effect of Labor's reckless spending is and they will tell you that with spending at a 40-year high outside a recession, as a proportion of the economy, that is driving upward pressure on inflation and that is leading directly to interest rates increasing today.

Take, for example, Judo Bank's Chief Economic Adviser, Warren Hogan, who said:

But if the governments of Australia do nothing, I think the RBA is going to have to take the cash rate above where it was a year ago—above 4.35 and most likely towards five and put this economy at risk of recession.

They have to do that though if the government of Australia will not act.

Or take AMP Deputy Chief Economist Diana Mousina, who said:

… it appears that directly, the government has been adding to inflation in recent years, as you would expect in an environment of public spending lifting to a record high.

Take AMP's Chief Economist, Shane Oliver, who said last week that a lot of the factors driving inflation relate to government spending. Even Alex Joiner, the chief economist of IFM Investors—which is, of course, a vehicle of the industry superannuation industry—has said:

We already have fiscal policy getting looser, but it could be even looser than we expect. The fiscal guard rails have come off.

And HSBC Chief Economist Paul Bloxham said yesterday:

… the primary driver of the pick-up in inflation is not strong demand. To the extent that demand is playing much of a role, it is that public demand growth has been strong, due to government spending.

These are the expert opinions that Jim Chalmers would like to dismiss as partisan, but I don't think these economists are partisan, and neither are economists at the RBA, who have made many similar observations in recent months, or, of course, the RBA governor herself, who acknowledged to me in Senate estimates recently that, all else being equal, if government spending is rising then that drives up pressure on inflation and therefore interest rates.

When it comes to this government's wasteful spending, sometimes it's the small things that tell the story and sometimes it's the big things. We learnt recently that the government spent $1.6 million renovating a party room for their Greens partners here at Parliament House—that is, one room in Parliament House and $1.6 million to tune it up to the circumstances that the Greens expect. When you can build a brand-new home, a perfectly nice family home, for $400,000 to $500,000, it seems extraordinary to me that Labor thinks $1.6 million is good value for taxpayers' money. Or take the CSIRO, which was recently exposed as having spent $500,000 on manicured lawns and rented pot plants. This is an agency that employs botanists in-house and so could probably manage to water a plant if required. Then there is the big one, the EV tax uptake, which was supposed to cost $90 million this financial year but has blown out by 15 times to $1.35 billion.

The truth is that when Labor spend you pay. This is a government that's failed to control its spending. That's why rates have risen today and that's why you will pay.

Ellie Whiteaker

I rise this afternoon to oppose the urgency motion moved by Senator Paterson. Frankly, I think it's extraordinary that those opposite still can't seem to remember all the great things our government has done to help with the cost of living—although I probably shouldn't be surprised, because they've been a bit distracted recently. What's really clear to me and I think what's becoming increasingly clear to Australians is that, while the Liberal Party and the National Party are focused on fighting themselves, our government is the only party that is focused on delivering for Australians, the only party that has the capacity to be responsible economic managers and the only party that is committed to bringing down the cost of living.

Australians are seeing support from our government at the pharmacy counter, with our cheaper medicines policy bringing the cost of pharmacy scripts down to $25, the lowest it has been since 2004. Australians are seeing support when they go to the doctor, thanks to our bulk-billing incentive. They're seeing support with their childcare bills, with our three days of guaranteed child care. They're seeing support in their pay packets, with our plan for further tax cuts, with the tax cuts we've already delivered and with the higher wages that Labor has delivered. University students are seeing support from our government, because we have cut their HECS debts and reduced the amount at which they have to start repaying them.

Senator Paterson and his colleagues like to talk about housing, but they seem to forget a really crucial fact. The coalition—sorry, they're not the coalition anymore. That is my mistake. We're going to have to keep reminding ourselves of that as things change day by day. The Liberals and the Nationals have opposed every single housing initiative that we have brought before this parliament—yes, every single one. They have opposed our measures to build more homes. They have opposed our measures to get more people into their first homes. They have opposed our investment in social and affordable housing. The absolute hypocrisy from those opposite to come in here and talk to us about housing! They complain about housing affordability, yet they have not presented a plan to this place or to the Australian people as to what they would do when it comes to making housing more affordable.

I want to talk to the decision by the RBA today to lift interest rates. This, of course, is not news that we were hoping for, but it is news that we were expecting. We know that, for many Australian families, it is difficult news. We understand that this increases pressure on Australian families who are trying to pay mortgages. That's why our government is committed to continuing to roll out cost-of-living relief. We will not stop, and we will continue to do what we can to help. There are further tax cuts to come later this year, and, at the same time, we're doing what we can to strengthen the budget and address our longstanding productivity challenge. Our midyear update showed that the budget is more than $233 billion better off than when we came to government. We have found more than $114 billion in savings since coming to office, including $20 billion in last year's midyear update.

We are committed to undoing the mess that we were left by those opposite. When we came to government, inflation had a six in front of it. It's really clear to me—and I think it's clear to Australians right across this country—that those opposite should perhaps spend some time, instead of fighting each other, supporting our government's cost-of-living measures and supporting our housing affordability measures.

Mehreen Faruqi

I must say it is pretty rich of the Liberals—the party most closely aligned with the one per cent—to talk about the cost of living. I am really sick and tired of the Liberals, the Nationals and Labor lecturing people about a cost-of-living-and-housing crisis that their governments created and their governments continue to perpetuate. It is hypocritical, it is hollow and it is cruel. When ordinary people are suffering, the Liberals turn up like charlatans in the town square, claiming to have answers, but they are selling the same snake oil they always do: racism, fear, hate and blame. They talk about solutions but offer only scapegoats: migrants and minorities. And Labor is cut from the same cloth, just with different marketing. Labor, the Liberals and the Nationals all claim to stand with ordinary Australians, but their actions tell a different story. When it comes time to act, relief flows in one direction only—upwards to the big banks, to landlords, to coal and gas giants, and to billionaires. They protect corporate profits and refuse to tax obscene wealth. This is not an accident. These parties defend a broken housing system, which lets speculators pocket millions while first home buyers and renters suffer.

Today's interest rate rise is pure profit for the big banks while mortgage holders and renters are being pushed deeper into pain. None of the big parties can claim the moral high ground while fanning the flames of hate and blaming migrants, exactly like One Nation does, and making matters worse for ordinary people. We need structural change to overhaul an unfair economic system so that it starts working for the 99 per cent. (Time expired)

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