Shadow Assistant Minister for Competition, Charities and Treasury – Opposition Reply in the Senate, Ministerial Statement on the Economy – 20 November 2024

Speeches

Senator Dean Smith Shadow Assistant Minister for Competition, Charities and Treasury Liberal Senator for Western Australia OPPOSITION REPLY IN THE SENATE, MINISTERIAL STATEMENT ON THE ECONOMY  20 November 2024  ***Check against delivery*** Introduction 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 childcare, 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. State of the Economy The Treasurer’s attempted to project his usual calm and confidence today, pointing to global economic pressures as the root of our challenges. He speaks of a “strong recovery” and “record low unemployment,” but I must ask, Dr Chalmers: Where is this recovery being felt? 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 two and a half years ago. Disposable incomes fell by 8.7% per capita between March 2022 and June 2024 – the steepest drop across all OECD nations. Nearly 94% of Australians surveyed in a recent committee study experienced cost of living pressures. More than 90% were forced to re-prioritise 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 left 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 policy has left Australia in an 18-month per capita recession, with annual economic growth stagnating at just 1.5% – 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% annually, and food prices remain high at 3.3%. Even the Government’s much-touted Energy Bill Relief Fund has proven to be nothing more than a band-aid, offering temporary relief but failing to address the underlying situation. Electricity prices may have decreased by 17.3% in the September quarter, but Australians know that subsidies won’t last forever. The IMF predicts Australia’s headline inflation will still be at 3.6% in 2025—nearly a full percentage point above the next highest country in the developed world. And the RBA has forecast that underlying inflation won’t return to its target range until late 2025, with the midpoint not expected until 2026. Officials reconfirmed this to me during Senate Estimates just a couple of weeks ago. The WA Experience I focus briefly on the economic experience of Western Australians as a case study – not only because I am a Senator for that state, but because it has set records for all the wrong reasons under Labor. Last financial year, one thousand 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 recorded during the 2008 Global Financial Crisis. Western Australians are spending an extra 1 billion a year on mortgage repayments – money which, at best, cannot be spent to support the wider economy and, at worst, is forcing families make decisions like skipping meals. That, of course, is if they can make their repayments at all. WA has the second highest rate of mortgage arrears in the nation at 0.62%, according to data I obtained 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 the average loan in Western Australia jumped 36% – or $146,800 – since the low-interest rate environment at the beginning of the pandemic. When I started tracking ABS figures on this mid-year, I found the average home loan in WA was now the highest since published ABS data began, having jumped over $62,000 in just eight months. And the largest rises are in the more affordable areas of Perth, where first homebuyers, 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. Housing 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 this housing crisis. That includes restoring the dream of home ownership by unlocking up to 500,000 homes through investment in infrastructure, ensuring faster delivery. And, because unmodeled and record immigration is a key component of this challenge, we will reduce migration numbers and ban foreign investors buying existing homes. Economic Alternative This reality of what Australia is experiencing highlights a key structural problem:…

Shadow Assistant Minister for Competition, Charities and Treasury – Transcript – Interview with Nadia Mitsopoulos – ABC Perth Radio

Transcripts

Senator Dean Smith Shadow Assistant Minister for Competition, Charities and Treasury Liberal Senator for Western Australia TRANSCRIPT – INTERVIEW WITH NADIA MITSOPOULOS, ABC RADIO PERTH TOPICS: ABC gives; Food Donation Tax Incentive Bill; supporting Charities sector E&OE NADIA MITSOPOULOS: Well, should there be tax breaks for companies who donate to food charities? WA Liberal Senator Dean Smith introduced a Private Senator’s Bill to try and make this happen, but the Albanese Government has indicated it will reject this proposed legislation. I’m keen on your thoughts if you think this is something worth doing. And I have Senator Dean Smith on the line now. Good morning, Senator. Thank you for your time. DEAN SMITH: Good morning to you, Nadia. It’s great to be with you. And can I just congratulate the ABC on what’s a fantastic initiative, and the generosity of West Australians who have given so generously thus far. I think it’s a fantastic opportunity and a great partnership with Foodbank. NADIA MITSOPOULOS: Senator, thank you and we look forward to your donation! DEAN SMITH: Indeed you will! Please send me the link. NADIA MITSOPOULOS: We will do that right now. Let’s look at some context. I guess 7.6 million tonnes of food is dumped annually. We understand most of that is fit for consumption. Why isn’t more donated? DEAN SMITH: The reason that generous primary producers like our farmers and food manufacturers are not making this food available to food relief charities like Foodbank, Ozharvest and Secondbite is because it’s cost prohibitive for many of them to do that. So, what I mean by that is the transport costs that it might take to shift this food from where it’s being made or where it’s been produced to a food relief charity. Those costs, those additional labour costs, are so inhibitive that people decide to dump that surplus food into landfill. We just heard that from your previous interview. At a time when we know that cost of living pressures are pushing more families to food relief charities like Foodbank and others than we’ve ever seen before. The Salvation Army has come out yesterday and supported my initiative. Anglicare has come out and supported the initiative. Saint Vincent De Paul has come out and supported the initiative. This is an initiative that Foodbank and Ozharvest and Secondbite have been talking about for some time. And unfortunately, the only people that seem to stand in the way at the moment are the Federal Labor Government, which is very disappointing. At such a critical time, they are putting politics before people. NADIA MITSOPOULOS: So, Senator, explain what your Private Senator’s Bill proposes? DEAN SMITH: It’s very simple and practical in its construct. And that’s why I remain optimistic that perhaps early in the new year we will get this legislated. But put very simply, it provides for companies with a turnover of less than $20 million the opportunity to get a refundable tax offset of 45% for costs that are incurred to shift food to a food relief charity. A company with a turnover of over $20 million but less than $50 million would get a tax offset of 40%, and then a company in excess of $50 million turnover would get a tax offset of 30%, up to a cap of $5 million. Those numbers might sound large to your listeners, but what’s important about this is that we’ve had the National Farmers’ Federation come out and support the initiative, recognising that this will support farmers. AUSVEG, which is a key industry association for vegetable produce farmers, has come out and supported the initiative. So, an important feature of this, Nadia, is that we hope that the cost-of-living crisis ends at some point. And that’s why I’ve put a time limit around this initiative. We would hope that within three years, cost of living pressures might improve, and that an incentive like this would not be necessary anymore. But we have a collision of significant factors, huge food waste in our community at a time when families are very vulnerable. Probably the most vulnerable they’ve ever been. And food relief charities are asking for more help. NADIA MITSOPOULOS: And this is very different to the tax deductions that corporate sponsorships and donations already get, because we’re talking about covering the cost of transporting the physical food. That’s the difference here, right? DEAN SMITH: That is correct. And, importantly, the Bill has integrity measures. So, companies will not be able to double dip if they are getting other sorts of tax benefits, they wouldn’t be able to double dip from this particular initiative. The Senate Economics Committee, we had a public hearing, well supported by many organisations across the country. KPMG, Chartered Accountants of Australia, and others also came or made contributions. So, it enjoys very wide support. People can be very confident that this is a prudent use of their taxpayer dollars at a time of critical need in our community. NADIA MITSOPOULOS: My guest this morning is WA Liberal Senator Dean Smith, saying the time has come to provide tax breaks to companies who donate to food charities. So, we’re not talking about the money. And thank you for those that are sending me messages about how they already get tax deductions for their corporate sponsorships and donations. We’re talking about the physical moving of food because it all ends up getting dumped. And so, there’s food waste issues here as well. And I wonder if you think this is a good idea and is it something the Government should be considering? The number is 1 302 720. The charities that you’ve spoken to who support this, what have they said to you about the difference this would make in regard to their donations? SENATOR DEAN SMITH: I’ve been doing committee work in the Senate for a number of years now. I’ve been pleasantly surprised with the clarity with which food relief charities and other organisations have come and…