Schooling the Coalition on the economy amid the cost of living crisis

Today in Parliament, Abigail contributed to a debate offering the Opposition some pointers on how the economy actually works.

Abigail said:

What a lot of rubbish. I am not much of a capitalist, but I understand how capitalism works. It astounds me that we continue to have this sort of misinformation and lack of understanding about how the basic principles of a capitalist economy work. It has now been made very, very clear that inflation was never demand‑side driven; it has always been, in the past couple of years, about supply. It has been about shocks to supply, price gouging and a bunch of other things. The truth is that as capitalism ages in an economy that already has seen significant growth—at this late era, end‑of‑life part of capitalism—we end up with the capitalists effectively eating themselves. That is what we have with an economy that has two completely different speeds. We have the very, very wealthy, who are getting wealthier and wealthier—and we only need to look at statistics to see that happening—and then we get the rest, which now includes even people who used to think of themselves as relatively wealthy, who are finding it incredibly tough to even feed themselves.

When we read the data that was released just last month we can see what is happening in the economy. We can see it very clearly. Although we are beginning to see wages creeping up after all of the stagnant years that we saw under the Coalition, they are not keeping pace with the cost of living. People are still ending up with less in their pockets than they had a couple of years ago. They can spend less than what they had a couple of years ago. The data shows that there is no spending. People are not spending lots of money on haircuts or whatever the Reserve Bank of Australia [RBA] was being silly about. They are spending their money on rent, on their mortgage, on food and on everything else that is getting more and more expensive every day because of faulty government policy. These things are also more expensive because of the wrongheaded ideas that the Reserve Bank had in lifting interest rates to try to deal with inflation, which was never the right response and should never have been done. The Federal Reserve in the United States is now putting interest rates down because it can see the folly of its ways.

This is a ridiculous motion. The economy does not have anything to do with Labor's policies. I wish Labor had some type of effect on the economy, I really do. I wish Labor would put some policies in place that actually make a difference. I would start with removing negative gearing to address the drivers of the housing crisis, but Labor is not doing that. We need an independent RBA. It is absolutely appropriate for the Treasurer of the day to criticise the RBA. This is a nonsense motion. The Greens oppose it.

 

Read the full debate in Hansard here.

 

18 September 2024

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