Labor’s failed management of the economy caused by insane Net Zero spending has resulted in the skyrocketing cost-of-living crisis that’s causing financial suffering in everyday Australians. This is callous behaviour from government.
We must confront the fact that the Net Zero fairy-tale is the biggest single cause of the economic downturn. Australians are seeing the result of this government’s pursuit of Net Zero goals in every aspect of life right now. If even the Bank of England accepts that fact and former Liberal Treasurer Peter Costello, along with Australia’s Reserve Bank have all publicly acknowledged Net Zero is inflationary, then the Albanese government needs to sit up and take notice.
End the Net Zero madness now.
Transcript
As the servant to the many different people who make up our one Queensland community, I agree with this matter of public importance from Senator Hughes. I’m not sure about ‘triple whammy’. Perhaps a more appropriate term is a perfect storm of government incompetence and callousness. Food essentials are dearer because successive Liberal-National and Labor-Greens governments have taken water off farmers to give to kill trees, driving up the price of irrigation water and, with them, the price of food. Profiteering from Coles and Woolworths is not helping. Both have just booked record profits on behalf of their foreign owners, including BlackRock and Vanguard. Real wages are falling—five per cent in the last year alone. Yet the inflation we’re currently experiencing is on the heads of the previous Liberal government, who, along with Labor, Greens and teals, destroyed the economy to control people and transfer wealth during COVID, in the process printing so much money that inflation was the inevitable result, as I said over and over across 2021 and 2022.
Interest rates were always going to rise from an artificial low of 0.1 per cent. The reason they’ve risen so quickly and so high is on both sides of this chamber. The largest single cause of our economic woes is the net zero fairytale. Today even the Bank of England accepts that net zero is inflationary. Former Liberal Treasurer Peter Costello and Australia’s Reserve Bank accept that net zero is inflationary. When baseload power is replaced by fairytale weather-dependent power, energy costs rise. The sun and the wind are free, true. The materials to capture that very low density energy are not. That’s why the cost per unit of energy is so high. Australians are seeing the result of net zero in their mortgages or rent payments, at the shops and in their utility bills. Money doesn’t go far enough to pay for the net zero fairytale, yet this government continues down that path regardless, despite the financial suffering this is causing everyday Australians—callous behaviour indeed.
Labor is running a Ponzi scheme covering up a per capita recession. It’s bringing in huge numbers of new arrivals to increase spending to hide the per capita recession. They are running Australia’s economy like a Ponzi scheme, relying on a flood of overseas arrivals to prop up GDP numbers with their spending. That increased spending adds to inflation and that contradicts the Reserve Bank’s (RBA) strategy of raising interest rates to cut spending in an attempt to stop inflation.
The government’s high level of new arrivals into Australia goes against the RBA strategy and forces the RBA to further increase interest rates. Albanese’s government is letting Australians suffer in a per capita recession and worst decline in per capita income of all the developed nations.
This is why life for everyday Australians is continuing to get worse. Excluding tourists and short stay visas, there are 2.3 million visa holders in the country competing with Australians for a roof over their head.
One Nation proposes net zero immigration where Australia only replaces the numbers who leave the country until the housing supply, essential services and infrastructure can catch up with the demand.
Transcript
I move:
That the Senate take note of the answers given by the Minister representing the Minister for Immigration, Citizenship and Multicultural Affairs (Senator Gallagher) to a question without notice I asked today relating to immigration and the economy.
Instead of cutting the record flood of overseas arrivals, the Albanese government is letting Australians suffer in a per capita recession and the worst decline in per capita income in all developed nations. According to Reserve Bank and Bureau of Statistics June quarter data, Australian residents’ spending fell, with the overall total spending driven positive due only to increased demand from tourists and international students. The government is running Australia’s economy like a ponzi scheme, relying on a flood of overseas arrivals to prop up GDP numbers. Meanwhile, for the typical Australian, life continues to get worse.
Excluding tourists and short-stay visas, there are 2.3 million visa holders in the country likely to need a home right now. In one year, the Albanese Labor government issued a record 687,000 student visas—687,000! We only have 100,000 dedicated student accommodation beds. Yet Treasurer Jim Chalmers went on national TV and deceitfully told the Australian people the level of net overseas migration is ‘not something the government determines’—blatant misinformation. It’s no wonder the government have exempted themselves from their proposed misinformation and disinformation bill.
The government claim their housing bill will fix everything. What they don’t tell Australia is that we are short hundreds of thousands of homes yet their bill will only build a maximum of 6,000 homes a year. Any Australian who can’t afford a house or who can’t afford rent—if they can find a rental—knows Treasurer Chalmers lied when he said the government doesn’t control how many people come into Australia. The Labor government is letting overseas arrivals—
The DEPUTY PRESIDENT: Senator Urquhart had a point of order. I think it was around the use of the word ‘lie’. Can we just—
Senator ROBERTS: I withdraw that word and substitute ‘misinformation’. The Labor government are letting overseas arrivals run out of control and don’t even know how many will arrive this year. The government are making a deliberate choice to let Australians suffer so that their big business mates and the banks can profit from a cheap workforce and high property prices. We need to stop this crushing flood of overseas arrivals that are here purely to hide a per capita recession. Our first duty is to take care of people who are here already.
I asked Minister Gallagher questions about the government’s immigration policy which is bringing large numbers of new arrivals into Australia. The Australian Bureau of Statistics has released figures that show that spending from new arrivals is running interference on the Reserve Bank’s attempts to cut inflation rates.
The Minister’s defence was to, once again, blame the previous government, then COVID and then she made the claim that many of the new arrivals were just returning Australians.
Transcript
Senator ROBERTS: My question is to the Minister representing the Treasurer, Senator Gallagher. Australian Bureau of Statistics data and the Reserve Bank for the June quarter reveals that Australian’s spending fell while new-arrival’s spending increased, because the number of new arrivals increased. Minister, the government’s policy of bringing so many new arrivals to shore up domestic demand is acting against the Reserve Bank’s low-inflation strategy. Why do you have your foot on the accelerator while the Reserve Bank has its foot on the brake?
Senator Gallagher: I thank Senator Roberts for the question. I disagree with it, and I don’t accept that we are not working alongside the Reserve Bank. They have their job to do, which is to bring inflation back within the target band without crunching the economy. We have our job to do, which is to implement our economic plan and roll out, as I said before, the cost-of-living relief to get the budget in much better shape, which we have done, and to make much overdue investments into energy, skills and housing across the country, which are causing pressure in other areas of the economy.
In terms of the population growth, or what we’ve been seeing from the net overseas migration numbers in particular—we’ve spoken about this in this place on a number of times—we are seeing some of the results of having our borders closed, essentially, for a couple of years. So we’re seeing people returning to this country, particularly international students to study, at a time when we’re not seeing as many leaving the country. We are seeing that, and that’s reflected in the budget numbers.
But I can absolutely guarantee, Senator Roberts, that we are working with the Reserve Bank. The decisions that we take are about not making their job harder. It’s an already difficult job that they are doing, and our job is to support that in the areas that we have responsibility for, which is to deal with that cost-of-living relief, to get the budget in much better shape, which we have done, and to invest in the productive side of our economy into things like the energy transition, skills and housing, which are areas that were left neglected after a decade—
The PRESIDENT: Thank you, Minister. Senator Roberts, a first supplementary?
Senator ROBERTS: Australian Bureau of Statistics data shows that in the June quarter new private house commencements fell 6.6 per cent and new private apartment commencements fell 19.6 per cent. Minister, in line with the Reserve Bank’s 13 interest rate rises, housing construction is falling when you need to build more homes for all the Albanese government arrivals. What are you going to do—pump up the economy with more arrivals, causing more inflation and more interest rate rises, or accept that you made a mistake and put the brakes on new arrivals?
Senator Gallagher: I would just say that we have not changed the policy settings that were in place around net overseas migration, so your characterisation is incorrect. In response to some of the economic data you cite, yes, we are seeing moderation in a couple of areas, and that is because many Australians are doing it tough right now, and the Reserve Bank is trying to lower demand with some of the decisions that they’ve been taking. So, yes, we are seeing that translate into other areas of economic data, but I would also say to the senator, who voted against the Housing Australia Future Fund, that our housing policies are about dealing with this long-term underinvestment and failure to acknowledge that the Commonwealth government has a role to support the construction and delivery of social and affordable housing. That is the area the Commonwealth neglected in the previous decade. We have a range of policies targeted to housing to address—
The PRESIDENT: Thank you, Minister. Senator Roberts, a second supplementary?
Senator ROBERTS: Talking misinformation about your housing bill won’t save this government. Everyday Australians know they can’t afford their rent or mortgage, and they know your government is swamping the country with even more arrivals. Minister, why are you papering over your economic mismanagement and running an immigration Ponzi scheme?
Senator Gallagher: That question is simply incorrect. I would say that there is a huge amount of work that’s being done by the Home Affairs minister and the immigration minister to fix the broken system that we inherited, and we’ll have more to say on that shortly as the work that they are doing is finalised. But it’s simply not true to allege what you are alleging. We have inherited a migration system that the minister herself has said is broken, so we are dealing with issues to fix that.
But, in relation to some of the numbers that we’ve been seeing, particularly in relation to international students and working holiday-makers who have returned to the country with valid visas after the borders had been closed, just because you say ‘misinformation’ doesn’t mean it is misinformation. These are the facts; let’s deal with the facts. We accept that there is pressure in the housing market, which is why we’re responding to deal with it.
The new Governor of the Reserve Bank is not ruling out raising the cash rate again to further control inflation. She refers to these measures as part of a tightening phase.
The Reserve Bank is unwinding the massive expansionary monetary policy it took during the COVID response which created $500 billion out of thin air. Meanwhile the States and the Federal ALP are spending money like it is play money.
This spending acts against the Reserve Bank’s rate rises. This is why I say this Government is hitting the brake and the accelerator at the same time.
The high rate of immigration is expanding the economy and that also acts against the dampening effect of rate rises. The pain and stress of mortgage rate hikes can be attributed to the costly COVID response and to immigration. That is all on Prime Minister Albanese and Treasurer Chalmers.
One Nation will reduce immigration to reduce rents and take the heat of the property market, removing the need for further rate rises.
Transcript
Senator ROBERTS: Congratulations on your appointment.
Ms Bullock: Thank you, Senator.
Senator ROBERTS: How does it feel being in a highly complex job which is affecting so many people’s lives and livelihoods?
Ms Bullock: I do feel a great deal of responsibility, Senator.
Senator ROBERTS: Thank you. Inflation has gone from 7.8 per cent, peak, to 5.4 per cent. In your speech yesterday you went on record to say the Reserve Bank will not hesitate to raise rates again if it looks like inflation is not coming under control. Is inflation coming under control? I’m guessing from your comments so far that you’re wary and there are signs that it’s not.
Ms Bullock: I’d say what I said earlier, which is that we got an important piece of information yesterday. We need to take that away, analyse it and figure out what it means for our forecast going forward. That’s no different to the comment we’ve been making to date, which is that we are—’wary’ is a good word. We’re looking at some of the more persistent parts of inflation and asking ourselves: are there signs that those might be coming down in the future? So, yes, we are wary. We don’t know if the job is done yet, and we’ve made that very clear. Even though we haven’t raised interest rates since our last interest rate rise in June, we’ve made it very clear that we might need to go again. We had not ruled that out, and we’re in the same position now.
Senator ROBERTS: When debating the need for a rate rise, is the effect on mortgage affordability, especially mortgage stress, taken into account? If so, what measure do you use, and what is that measure telling you about how hard life is getting for mortgagees?
Ms Bullock: We do understand that there is a distribution—let me step back for one moment. Higher interest rates and monetary policy work through a number of channels. The one that gets the most attention is what we call the cash flow channel, which is the impact on people who have debt. That gets a lot of attention, particularly in Australia, because, as Chris already mentioned, most of the debt of households and businesses is variable rate debt or very short fixed-rate debt. That’s why that channel gets the most attention, but there are other channels. In fact, Chris gave a speech on that fairly recently. One is the intertemporal channel, which basically means: as interest rates go up, people are incentivised to save rather than to spend, and in fact we are observing that. We are still seeing people in aggregate save, and there’s an incentive even for mortgage holders to save. Their interest rates have gone up, so, for them, there’s an incentive now to try and put even more away into their offset and redraw accounts if they can. That’s the other way that it works. Another channel is the exchange rate channel. The way that works is: as interest rates rise, the exchange rate—if everyone else wasn’t raising their interest rates the exchange rate would rise, but at the moment it means that it hasn’t fallen very much. It has been reasonably stable over the last year. We’re not getting inflation through that particular channel. There are other channels as well.
Senator ROBERTS: Do you measure the stress?
Ms Bullock: No. We can’t very precisely say: particular channels contribute X to inflation. We can’t do it that way. But they’re all the channels that we’re watching and trying to understand how they might impact.
Senator ROBERTS: How do you assess whether or not people are under mortgage stress? Ms Bullock: We don’t do individual mortgage stress assessments. What we can observe is data we get from the banks on hardship calls that they’ve got, arrears rates and those sorts of things. We can observe those at aggregate level. The feedback we’re getting at the moment, from the banks and from the data we see, is that that has risen but it’s still at very low levels.
CHAIR: Last question.
Senator ROBERTS: Surely the inflation that’s still hitting Australians has something to do with the Reserve Bank creating $500 billion out of thin air—or, as Dr Debelle said, electronic journal entries—over COVID. Have you thought about that? Your predecessor admitted it was a cause of the inflation problem, creating that $500 billion out of thin air.
Ms Bullock: Basically, you’re referring to the massive expansionary monetary policy that we undertook during the pandemic?
Senator ROBERTS: Yes.
Ms Bullock: I think my response would be that, at the time, we were facing a very, very dire economic situation, and the appropriate response at the time was to run a very expansionary monetary policy. We have now unwound that and we’re in a tightening phase, so, yes, the purpose of the expansionary monetary policy was in fact to encourage demand and encourage growth. That was very much the intention. To the extent that we look back and now say, ‘Well, demand is too strong,’ we are now in a tightening phase to wind that back. But I wouldn’t say it was the sole reason for the increase in inflation. You might remember that there were very big supply chain issues as well, and when constrained supply meets high demand, you get inflation.
Senator ROBERTS: Building on that, you have a very blunt tool to attack inflation, don’t you? Because the cash rate for the entire country is a very blunt tool to try to bring down inflation.
During the recent Senate Estimates, I questioned the Reserve Bank about the effect of the ascendant BRICS alliance on the Reserve bank’s holdings of US Dollars (USD) and US Treasuries (UST). I also asked Mr Lowe about his expectations of the US Economy’s movement in the next few years and how this may affect Australia. Mr Lowe avoided any pessimistic projections regarding the US economy.
I then asked if the Reserve Bank was increasing its gold reserves as a precaution against the BRICS group releasing a gold-backed currency. The RBA has actually reduced our gold reserves from a peak of $5.2 billion to $3.9 billion now. The answer I received was also negative.
I think this is a mistake. Australia should be increasing our gold reserves as a hedge against international currency fluctuations in the uncertain times ahead.
Transcript
Chair: Senator Roberts?
Senator Roberts: I have a question about the Reserve Bank’s reserves. Let me get to it by giving some background. At the BRICS meeting in Cape Town on 2 and 3 June, 13 nations will formally apply to join BRICS, which is currently Brazil, Russia, India, China, South Africa—and Saudi Arabia, with an each-way bet. Candidate nations include Mexico, Argentina, the United Arab Emirates, Egypt, Indonesia and Iran. BRICS is now the world’s largest trading bloc, accounting for 25 per cent of world trade which is expected to grow to 50 per cent by 2030. And it’s big in oil. BRICS member states are abandoning the US dollar in favour of using their own currency or the Chinese renminbi in an environment where other countries, including Australia, are doing the same thing. Pakistan is now buying Russian oil and renminbi. The US dollar is now denominating just 58 per cent of all world trade. The United States has printed $10 trillion over the last seven years, doubling their M2 money supply. That increase has been absorbed in part by an increase in international trade. As the world moves away from the US dollar the value of the US dollar may fall. The Reserve Bank holds United States treasuries and dollars. Have you modelled the effect on your balance sheet from that probable fall in the value of US holdings.
Mr Lowe: Not as a result of these other global changes you’ve talked about. We spend a lot of time and part of our risk management processes looking at volatility in currencies, because currencies move around all the time, don’t they? That affects the value of those assets on our balance sheet, so we model that from a risk-management perspective. Despite the developments you’re talking about, most countries still hold the bulk of their foreign reserves in US dollars. There’s diversification going on, which is good, but the US dollar is going to remain the dominant currency for some time.
Senator Roberts: What is the value of Reserve Bank holdings of US dollar and US treasuries in Australian dollars?
Mr Lowe: Our total foreign reserves at the moment I think are the equivalent of U$35 billion. What’s the share, Brad?
Dr Jones: I think it’s 55 per cent.
Mr Lowe: Roughly half of that $35 billion is allocated to US dollars, and then we have holdings of yen, Korean won, euros and rmb.
Senator Roberts: What about treasuries?
Mr Lowe: When we hold US dollars we invest it in US Treasury securities. We don’t invest in bank deposits or any other securities. We invest in US government securities.
Senator Roberts: What’s the reverse holding of Australian government currency and bonds held by the US government or their agencies?
Mr Lowe: We don’t have data on that.
Senator Roberts: Could you get that on notice?
Mr Lowe: No.
Senator Roberts: You don’t have it?
Mr Lowe: We don’t have data on specific holdings of other countries.
Dr Jones: If I understood your question correctly, Senator, the US holds euros and yen, from recollection, but not in large quantities.
Senator Roberts: While that arrangement helps with international stability across holdings, it is a method for backdoor quantitative easing. Does the Reserve Bank expect to increase your holding of US treasuries in the next 12 months?
Mr Lowe: We’ve just done an exercise where we were looking at how much of our balance sheet should be held in foreign assets. We said we’ve got $35 billion at the moment. As the size of the economy grows you would expect that to gradually increase. But, no, nothing dramatic. As the economy grows and the nominal value of the Australian economy gets bigger, then you would expect a bigger portfolio in US dollars and foreign currency.
Senator Roberts: The Reserve Bank has a mission to anticipate movements in major trading partners and in world markets. As it affects your provisioning and portfolio, does the Reserve Bank anticipate being affected by any out of the ordinary moves in financial markets in connection with the US economy or the US dollar over forward estimates?
Mr Lowe: We’ve recently been focused on the US debt limit issues in the US. If an agreement had not been reached there, that would have had implications for currency markets and economies around the world. So that’s one thing that we’ve looked at carefully. It looks like that has been resolved, thankfully. And, just as part of our general risk management exercise, we’re looking at developments in other economies and their implications for currency markets in own economy.
Dr Jones: As a general rule though, the way the bank has operated its reserves has changed quite a bit over the last, say, 25 years, and now the bank effectively sets key benchmarks and sticks to them. There are not big discretionary decisions going on every day. There’s wild speculation going on at the Reserve Bank, I can assure you, about the future value of exchange rates.
Senator Roberts: I wasn’t implying that. Worldwide purchases of US treasuries by central banks has fallen $600 billion in 2022 as compared to a baseline year of 2013. That’s just arbitrary—2013. Purchases of gold have increased $300 billion. So something is going on that Australia would be prudent to hedge against. Is the Reserve Bank increasing its gold reserves as an each way bet against BRICS introducing a gold brick currency of some form?
Mr Lowe: No, we’re not. We’ve got our gold reserves. We haven’t bought and sold for a long time and we have no intention of changing that at the moment.
https://img.youtube.com/vi/Br6XLHZsdN8/maxresdefault.jpg7201280Sheenagh Langdonhttps://www.malcolmrobertsqld.com.au/wp-content/uploads/2020/04/One-Nation-Logo1-300x150.pngSheenagh Langdon2023-06-14 16:28:132023-06-15 17:26:51Is the Reserve Bank in Denial?
https://i0.wp.com/www.malcolmrobertsqld.com.au/wp-content/uploads/2023/04/RBA.png?fit=396%2C225&ssl=1225396Senator Malcolm Robertshttps://www.malcolmrobertsqld.com.au/wp-content/uploads/2020/04/One-Nation-Logo1-300x150.pngSenator Malcolm Roberts2023-04-27 15:42:482023-04-27 15:43:10The RBA is trying to send everyone broke to fix the inflation they caused by printing too much money
