Topics: National Accounts, Labor’s Detainee Handling scandal

E&OE

ANGUS TAYLOR:

Well, National Account figures have just come out and they highlight the grim Christmas that so many Australian households will face. Let me make a number of observations about what we're seeing in these numbers. The first is that the economy is shuddering to a halt, only growing at 0.2% for the quarter. The second, is the only thing holding up growth in the economy now is immigration. The only thing holding up growth in our economy now is immigration. We are in a GDP per capita recession. GDP per capita fell by half a percent through the quarter, that's two quarters in a row we're seeing negative GDP per capita. And so we are in a GDP per capita recession. And right at the heart of that is a record level of growth of population and immigration at 0.7%.

Now, before the election, back in 2019, the Treasurer lectured the government regularly on GDP per capita recessions, and there wasn't one in 2019. But today, we see a GDP per capita recession, and he doesn't mention it, we hear crickets. The truth is that this is a Treasurer, who held to a different standard before the election when he was in Opposition, to the standard he's holding now. He needs to take responsibility for an economy that is shuddering to a halt, for an economy that is only growing because of record levels of immigration, for an economy that is in a GDP per capita recession. Now, the third observation I'll make about these numbers, is that middle Australia is being crushed by rising mortgage payments, rising prices, and rising taxes.

Middle Australia has been crushed by rising mortgage payments, rising prices, and rising taxes. Mortgage payments have increased by 7.6% in the quarter, and they have almost tripled since Labor came into government. Almost tripled since Labor came into government. Taxes have risen by 7.6% in the quarter, and they've risen by over 27% since Labor came to government. And rising prices - Labor's homegrown inflation, which is a tax on everything - has increased prices since the last election by almost 10%. This is Labor's tax on everything.

Now, the fourth observation is that Australia is absolutely at the back of the pack in dealing with these economic challenges. We have seen the highest or the sharpest reduction in household disposable income of any advanced country, it's now minus 6.6% in the last 12 months. Inflation is amongst the highest of any advanced country, inflation is more entrenched, according to The Economist than any advanced country in the world. And long term interest rates are the highest of any major advanced country in the world. This is homegrown, this is homegrown. If it was coming from overseas, it wouldn't be anywhere near as bad as it actually is. The final observation is perhaps the most important one, which is that households are now making very big sacrifices, very big sacrifices.

We see they're digging deep into their savings. Indeed, saving has basically stopped. It's down to 1% of disposable income, which means most or a large proportion of households are not saving anything anymore. They've dug very deep into the savings. They are making big sacrifices in their household budgets. And we see they're cutting back on things like fresh food, which is exactly the opposite of what you want to see. And we are also seeing over the course of the last year that many Australian households are working extra hours in aggregate over the year we've seen an increase in hours work to just try and make ends meet.

Now, this is what you get when you have a Treasurer that simply doesn't understand economics. He started the year, the Treasurer, with a 6000 word essay on remaking capitalism. He's finished the year with an economy that is crushing Australian households. This is what you get with a government that has been distracted and has had its eye off the ball. And this is what you get with a Prime Minister that's had the wrong priorities and has been making bad decisions. There is a better way, having the right priorities - a priority to fight inflation first, a priority for sustainable fiscal balance built into the budget, a priority to grow the economy faster than spending.

This is a government that's been making the wrong decisions, as I say. But there are better decisions that can be made. In industrial relations, allowing workers and employers to work together to make workplaces more productive. To deliver on commitments on energy prices, the $275 reduction that this government committed. To contain spending when we've seen $188 billion of additional spending, since Labor came into government, almost $20,000 per household, and that includes things like the $450 million on the failed referendum. Competition policy that is focused on competition, not crony capitalism, not looking after your mates at Qantas. And of course, making sure that you've got a Reserve Bank that is fit for purpose, not making your first appointment somebody who has no credentials when it comes to fighting inflation first. We can do that. We can do that. But this government has the wrong priorities and is making bad decisions. Happy to take questions.

JOURNALIST:

On the figures today, productivity was up nearly 1% this quarter. So how do you explain that? And do you give the government any credit on that?

ANGUS TAYLOR:

Well, productivity is down sharply over the year. But most importantly, household disposable incomes have been in freefall. They're now down by 6.6%. This is crushing households, absolutely crushing households, rising taxes, rising mortgage payments, rising prices.

Middle Australia hasn't seen these kinds of circumstances for a long while. They've had to accommodate that by working extra hours, by digging into their savings, by making sacrifices in their budgets like fresh food. There is very little relief, and very little positive to say about the numbers that've come out today.

JOURNALIST:

Now on another topic, Mark Dreyfus, Clare O'Neil and Andrew Giles have refused to apologise to Australians affected by the detainee release. What do you make of this today?

ANGUS TAYLOR:

Well, they should take responsibility. This was a government that promised it would take responsibility. This was a Prime Minister who promised he would take responsibility. I don't see any sign of it. They need to take responsibility.

JOURNALIST:

Given the pressure from the Federal Government's income tax take, which is now at a record high, is there a case for a new round of income tax cuts beyond the stage three tax cuts?

ANGUS TAYLOR:

Well, the first thing I'd say Michael is with a 27% increase in taxes since coming into government, 7.6% in the last quarter alone, the alarm bells should be ringing for Labor that we don't need more tax. We don't need more tax, and I can tell you, if Australians are wondering why there's less in their bank account right now than they expected, they're paying more tax. And it's a big number. So this means the stage 3 tax cuts are a very high priority. They need to proceed and they are really important reform. Why? Because it means for the vast majority of Australians, over 95% of Australians, they won't pay more than 30 cents in the dollar, you'll keep 70 cents of the dollar in their wallets. And it means when they work hard, they get to keep it. Those extra hours that Australians have put in over the last year, they deserve to keep 70 cents in the dollar. And that's exactly what the stage 3 tax cuts mean. We also have made very clear that important initiatives like accelerated depreciation for small business, which we supported strongly when we were in government, which have been wound back by this government, need to be put back into place. I mean, these are the sorts of initiatives that we know drive productivity, we know they drive investment, and they're critical. And so tax reform is important. The first and most important of those though, is stage three tax cuts. And we see regular breakouts from Labor, as backbenchers or other members of the Labor Party seek to get rid of them. I know they'd like to get rid of them, but we need them.

ENDS.