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: 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 incapable – of addressing.
Declining labour productivity, which has fallen by 6.3% in just over two years, speaks to a broader problem.
We now require 6.3% 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, 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.
And that is not happening – and, likely, cannot happen – under Treasurer Jim Chalmers and the Albanese Government.
Conclusion
In conclusion, the path forward for Australia is clear.
Under a Dutton-led Coalition government, we will 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 the charities and not for profits sector once.
It was the same story in today’s statement.
This sector is one of our largest employers and, in many cases, is literally keeping Australians alive through a crisis of the Albanese Government’s making, yet Labor repeatedly turns its back on it.
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 Cost of Living Committee, 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.
And charities are not immune from inflation, themselves struggling to operating in an environment of skyrocketing operating costs – something acknowledged recently by Reserve Bank Governor Michelle Bullock.
On top of all this, Labor had failed to progress in any meaningful way its election commitments to the sector – and all Australians – necessary to provide a stronger, more resilient future for our charities and not for profits.
ENDS