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senate vote 2024-09-09#5
Edited by
mackay staff
on
2024-09-22 15:01:25
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Title
Matters of Urgency — Interest Rates- Matters of Urgency - Interest Rates - Direct action from Government
Description
<p class="speaker">Andrew McLachlan</p><p>Senator McKim has submitted a proposal under standing order 75 today:</p>-
- The majority voted against a [motion](https://www.openaustralia.org.au/senate/?gid=2024-09-09.142.1) introduced by Tasmanian Senator [Nick McKim](https://theyvoteforyou.org.au/people/senate/tasmania/nick_mckim) (Greens), which means it failed.
- ### Motion text
- > *That, in the opinion of the Senate, the following is a matter of urgency:*
- >
- > *The need for the Government to stop letting the Reserve Bank of Australia smash the economy, renters and mortgage holders, and to instead use and retain its power to overrule monetary policy decisions of the Reserve Bank, and to directly tackle the causes of inflation by stopping price gouging, capping rent increases and making big corporations pay their fair share of tax.*
<p class="italic">That, in the opinion of the Senate, the following is a matter of urgency:</p><p class="italic">The need for the Government to stop letting the Reserve Bank of Australia smash the economy, renters and mortgage holders, and to instead use and retain its power to overrule monetary policy decisions of the Reserve Bank, and to directly tackle the causes of inflation by stopping price gouging, capping rent increases and making big corporations pay their fair share of tax.</p><p>Is the proposal supported?</p><p class="italic"> <i>More than the number of senators required by the standing orders having risen in their places—</i></p><p>With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.</p> <p class="speaker">Nick McKim</p><p>I move:</p><p class="italic">That, in the opinion of the Senate, the following is a matter of urgency:</p><p class="italic">The need for the Government to stop letting the Reserve Bank of Australia smash the economy, renters and mortgage holders, and to instead use and retain its power to overrule monetary policy decisions of the Reserve Bank, and to directly tackle the causes of inflation by stopping price gouging, capping rent increases and making big corporations pay their fair share of tax.</p><p>The fact is that millions of people who rent in Australia and millions of people who hold mortgages in Australia—in particular, young people and their families—are getting absolutely smashed at the moment because of the relentless Reserve Bank rate hikes and the failure of Labor to step in and offer meaningful assistance to control inflation and help people with cost-of-living pressures. Since Labor came to power, in 2022, rates have gone up by a staggering 31 per cent—that is, 31 per cent in the first two years of a Labor government. The average mortgage repayment has increased by an equally staggering $1,667 a month. People are getting smashed, and Labor are sitting on their hands.</p><p>Last week the Governor of the Reserve Bank finally conceded that the RBA's rate hikes are pushing some people so close to the brink that they are facing the brutal reality of having to sell their homes, and she noted that low-income people and low-income families are particularly struggling. And of course the reason the Reserve Bank is having to step in and use the only tool it has in its toolkit, in the form of interest rates, is that Labor won't step in and stop corporate price gouging, which is driving inflation. It won't step in and cap rent increases, which are driving inflation. And it won't step in and put in place a corporate superprofits tax, which would disincentivise corporations from price gouging and the obscene profiteering that they are undertaking at the moment. Hiking rates penalises those who are least responsible for inflation and it actually helps the people who are most responsible for inflation—mostly older folks, mostly people with savings—who are increasing their spending at the moment, while people with debt, mostly younger people, are getting smashed for a problem they didn't cause.</p><p>The RBA is driving this country closer and closer to a recession, and they're bringing the economy to its knees. The June quarter figures showed that the economy grew by just 1.5 per cent in the last year. Apart from the abnormal 2020-21 pandemic year, that is the worst result since the 1990s recession. If we take out population growth, GDP fell by 0.4 per cent in the June quarter. That is the sixth consecutive quarter of negative GDP per capita growth in Australia. We are in a per capita recession. It is no wonder people are hurting.</p><p>Finally, people like Wayne Swan, Minister Gallagher and Minister Chalmers are conceding what the Greens have been saying for many months: that the RBA is smashing the economy. But what Labor won't tell you is that they've got the power to do something about it, to intervene and bring interest rates down. That's what Labor should be doing: intervening, overriding the RBA, bringing down interest rates and providing some relief to the millions of Australians who are getting smashed by food and grocery prices, by rent increases at a staggering rate and by staggering mortgage increases.</p><p>Not only is Labor refusing to use that power; they are trying to get rid of it, because they want to take section 11 of the Reserve Bank Act out of the act and remove the power of a democratically elected government to override a bunch of unelected technocrats on the RBA board. And of course the reason Labor wants to get rid of this power is that they want to wipe their hands of any responsibility they have for the economic pain that people are facing and that that they are allowing the RBA to inflict on people.</p><p>So, I say to Australians: if you're facing the imminent prospect of having to sell your home or you can't afford to pay your rent or your mortgage bills at the end of the month, know that Labor has the power to intervene and bring down interest rates and meaningfully help you with the cost-of-living crisis that you are experiencing, but Labor is choosing not to do that.</p> <p class="speaker">Matthew Canavan</p><p>Well, clearly the country has a surplus of money at the moment. That's why we have inflation at levels we haven't seen for a generation. But it's been pretty clear from listening to the Senate for a couple of hours this afternoon that we also have a great surplus of wishful thinking in this place. I was in here earlier when Senator Bilyk was saying, 'Oh, we just need to pay people more money.' Senator McKim is now saying, 'All we need to do is lower interest rates and everything will be fine.' But there is in no way any logical or reasonable discussion of what would happen if we did what Senator McKim suggests. What would happen if we just said, 'Yep, let's intervene and drop the interest rate by'—I don't know: 25, 50 or 100 basis points? What is likely to happen? We already have inflation well above three per cent, the highest in the developed world. If we were to just go and cut interest rates, take the easy solution that Senator McKim suggests, that would certainly—it has to, by definition—put more money into the money supply to lower interest rates. That's how the Reserve Bank does it. They buy up bonds. They either print money or go into their vaults, take more money and chuck it into the economy. That will increase inflation, and no-one will be better off at the end of it. In fact, almost certainly we'll be worse off over time because inflation will get out of control, we may end up with a wage price spiral and we will be back to where we were in the 1970s. It will take years and decades and a lot of economic pain to fix up.</p><p>So it's a very childish approach to these issues. I think Australians are desperate for some leadership from this place. They're sick and tired of this juvenile pointscoring from the likes of Senator McKim. They all know in their real lives that things are tough. They all know there's no easy answer when you're struggling to pay the bank or when you're worried about whether your credit card says 'insufficient funds' at the check-out. At least there's no-one there to see you these days. You've got no check-out person there to witness your embarrassment. But people are worried about that.</p><p>They know there's no easy answer; they have to make tough choices in their own lives—to decide not to get a new car, not to go on a holiday or to cut back on other expenses. They make those decisions. Yet they look at this place and they look at their leaders, who are not willing to make any tough decisions at all. They're telling them these sweet nothings: 'You can have it all. We can cut interest rates and we can just get rid of price gouging, and everything will be fine.' Life is not like that, Senator McKim. These are very tough times for Australians, and to get out of tough times you have to make tough decisions. You have to make tough decisions about working out what the appropriate interest rate is.</p><p>The really tough decision we have to make is about how we reform our economy to help business get going. The real result of inflation and the cost-of-living crisis we have right now is our terrible productivity growth. Senator Gallagher is back here. She was a bit embarrassed before to state the productivity figure under this government, which has fallen, as I said earlier, by 6.3 per cent in two years—an average decline on a compound annual growth rate of 2.9 per cent. Senator Gallagher was trying to claim to the Seante earlier that the growth under the coalition was much worse. Actually, I went and had a look at the figures, and growth was 1.3 per cent in GDP per hour worked on a compound annual growth basis during the coalition's term in office. So it's terrible. That's 1.3 per cent compared to -2.9 per cent.</p><p>That is the reason people are struggling right now: our productivity has fallen through the floor. Nowhere in this motion—I only caught just over half of Senator McKim's speech—did I hear him mention the word 'productivity'. That's the key way to get out of this crisis. It's hard. It's not an easy answer for people to say. It means we probably have to work harder, work smarter and make tough choices about what we do about our energy situation and our housing situation. But that's the only answer to get out of this crisis. Senator McKim just completely ignores it. It is a juvenile response to this issue.</p><p>The government at least says some things about it, but it's not willing to change course at all. Its answer—I asked this to Senator Gallagher earlier —to my question about getting productivity growing was, 'We need to invest more in solar and wind,' like these things are working. They've been complete and utter failures. Productivity in our energy sector has fallen by seven per cent under this government. That's a seven per cent fall in the productivity of our energy systems because of this mad rush to invest in types of energy that don't work. When the cost of energy goes up, the cost of doing everything goes up.</p><p>So it's about time we had a hard look in the mirror as a country and realised that a lot of what we're doing right now is wasting our taxpayer resources that people worked so hard for. We just dole it out on a handout basis like candy. We're also making silly decisions on things like net zero emissions, thinking it won't come at a cost. It is, and everybody is facing that cost right now.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>-
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