PARLIAMENT HOUSE, Canberra: I would like to use the opportunity of this debate on Appropriation Bill (No. 3) 2012-2013 and Appropriation Bill (No. 4) 2012-2013 to express my concern about rising cost-of-living pressures hitting residents in my electorate and across Australia, and to express my dismay that the government’s policies are making things worse.
As many in this chamber would be aware, essential goods and services have been going up in price way in excess of inflation or indeed wages. People tell me this in my community on a daily or weekly basis, and the stats back this up.
The official ABS statistics show that the cost of electricity has gone up by 90 per cent since 2007, water by 64 per cent, gas by 60 per cent, education by 31 per cent and medical and hospital by 38 per cent. In the last 12 months, even childcare costs have gone up by 15 per cent. Cost-of-living pressures are indeed rising, and they are starting to hurt families in a very significant way. I receive correspondence and I receive telephone calls on a very regular basis from people who are struggling to make ends meet because of these price increases.
There are many reasons why the cost of living has been going up, but a significant reason in recent years is government policy. I would like to outline in four ways how the government’s policy and the government’s approach have contributed to the increase in cost-of-living pressures.
The first, of course, is by running enormous budget deficits. In the last four years, the government has delivered the four largest budget deficits in Australian political history, and this year there will be a further budget deficit. We know that, if you run large budget deficits, that will have an impact on the cost of living. It is not just me or other members of the coalition who support this particular view.
The Prime Minister and the Treasurer themselves have made exactly this point. The Prime Minister said that achieving surplus was ‘the best thing that we can do to help families with cost-of-living pressures’. Wayne Swan said: meandering back to surplus would compound the pressures in our economy and push up the cost of living for pensioners and working people.
And they are exactly right. By running such huge budget deficits, by continuing to run budget deficits, by abandoning their solemn promise to get the budget back to surplus, they are contributing to higher cost-of-living pressures for every Australian in the nation.
The second way the government are contributing to cost-of-living pressures is through specific measures that they have put in place. They introduced the carbon tax, which had an immediate effect on electricity prices and gas prices and, through those two things, every good and service in the nation. Electricity has gone up by at least 10 per cent in the last 12 months alone, and that is entirely due to the introduction of the carbon tax. Gas has gone up by nine per cent—also entirely due to the introduction of the carbon tax. How do we know this?
Because the government’s modelling before they introduced it said that those costs would go up by that amount. So they actually got the forecast right. They knew that costs were going to increase through the carbon tax, and that is exactly what happened.
Bear in mind, Mr Deputy Speaker Lyons, that these cost increases are occurring when the carbon tax is at $23 per tonne. As we know, the carbon tax is legislated to increase to $39 per tonne and it is then forecast to increase to an incredible $350 per tonne by 2050. So, a 15-times increase in the carbon tax is expected by this government by 2050. Imagine the impact that is going to have on electricity prices. Healthcare costs are going up because the government is taking the axe to the private health insurance rebate. They promised they would not, but they have already means tested the private health insurance rebate, which flows through on to everybody, and they are now proposing a further measure to abandon the ability to claim the additional penalties associated with not taking out private health insurance at the age of 30 against the rebate.
Childcare costs have also been increasing directly due to government policy. The government have decided that the staff-to-child ratios in childcare centres must be reduced. They have already been reduced for the nought. Wednesday, to two-year-olds. They will be reduced in future for the two- to four-years-olds. The Productivity Commission looked into this and said, ‘If you go ahead, costs will go up by 15 per cent’. The government knew this, but they have gone ahead anyway. And what do you know? Costs have gone up by 15 per cent, and they will continue to go up as the government’s proposals roll through to child care for the three- and four-year-olds.
The third area where they have put up the cost-of-living pressures is through the taxes that they have imposed. We all know about the government’s taxes on cigarettes, alcohol and other products that working people use. They have actually introduced 21 new taxes since they were elected to government in 2007. Some of them are direct taxes on products that people use, but others are taxes on businesses, which then flow through to the products and services that those businesses offer.
The fourth area is in regulations. The government have introduced 20,000 new regulations over the five years since they were elected, and they have removed only 200. They promised one in, one out, but they have only removed 200 and have introduced 20,000. What these new regulations do is impose red tape and additional reporting requirements on businesses. What that then means is that business cost structures go up and to recoup those costs they then either have to put up the prices of their services or the goods they manufacture or they have to lay off workers. They are the two choices which they have in order to maintain their profitability.
So, in four ways the government have contributed to the cost of living increases: firstly, by running huge budget deficits; secondly, by introducing specific policies which put up costs in certain areas—electricity, gas, child care and private health insurance, for example; thirdly, by putting up particular taxes—21 in all across the board; and fourthly, by imposing 20,000 new regulations which make business costs so much higher, which then flow on to higher costs for the goods and services that those businesses produce.
The government like to talk about their concern that prices have been going up, but when you examine what they have been doing they have, in fact, been contributing greatly to those increases in the cost of living. The astounding thing, though, is that when the government then get some political pressure upon them because costs have been increasing so much, their response is not to examine what they have been doing and remove some of the regulations, remove some of the taxes, tweak some of their policies to try to reduce those cost-of-living pressures or try to run budget surpluses.
No, their response has been to spend more money on cash splashes. Last week, for example, the government introduced a bill for a further billion dollars of cash splashes to certain constituents in the community. It is all very well that those residents get a small amount of additional cash in the short term, but all of that cash was put on the government’s credit card, all of it just contributes to the government’s debt, all of it contributes to the government’s yearly deficit. Hence we get into this vicious cycle. The government has taken us into debt, which puts up cost-of-living pressures. So the government then allocates some more cash, increasing the debt levels again, which then puts up cost-of-living pressures. And so the cycle continues. If we continue on that cycle the government will go broke. You simply cannot continue to allocate more and more cash and put it on the government credit card. It simply cannot be done.
So what should the government be doing to address cost-of-living pressures? It can do a number of things and it can do these things immediately. Firstly, it could get rid of the carbon tax. The carbon tax adds approximately $515 to a family’s budget and it reduces business confidence. That would be the first and best thing they could do to reduce cost-of-living pressures on everyday families, including those in my electorate, and it would also be the best thing they could do to support our manufacturers.
The second thing they should do is re-examine some of their policies which are increasing prices—their child-care policies and their attacks on the private health insurance rebate. Third, they should stop adding taxes and, where possible, they should reduce taxes to make it easier for everyday Australians and businesses. Lower taxes are in the coalition’s DNA. Higher taxes are in the Labor Party’s DNA.
The fourth thing they should do is cut the regulations and get rid of the red tape which is starting to strangle our small businesses in particular so that they can grow and have confidence and their cost structures will be lower, which then means we can have lower-cost goods and services out in the community.
Fifth, they should have a proper competition review, particularly into supermarkets, where many people have concerns that a lack of competition is contributing to higher prices.
That is a list of things the government should be doing. They could be doing those things immediately in order to take the cost-of-living pressures off everyday families. These are some of the things which the coalition will do if we are fortunate enough to be elected to government later this year. The cost-of-living pressures facing families is a very big issue. It is perhaps one of the greatest concerns that residents in my electorate express to me.
But what the government have been doing is not alleviating cost-of-living pressures but the reverse. Through their taxes, through their policies and through their enormous budget deficits they have been putting up cost-of-living pressures for everyday families are making it harder for them.
We need to be doing the opposite. The coalition has a plan to reduce cost-of-living pressures, to get the budget back into surplus, to address some of those policies which are causing prices to go up and to remove the taxes.
Those are the things that we can do if we are elected to government. They should be things that the government do immediately, but they will not. So we do require a change of government at the end of this year to take pressure off everyday families in my electorate and across Australia.