Labor Have No Concrete Answers to Soaring Living Costs

A shopper holds money to make a purchase of fruit and vegetable produce at Paddy's Market in Sydney, Australia on Oct. 22, 2022. (Lisa Maree Williams/Getty Images)

No concrete solution for Australia’s skyrocketing living costs from the government–that is the conclusion one may reach after watching politicians talking during a recent Q&A television program.

On Feb. 13, several Australian politicians from the incumbent centre-left Labor party, the centre-right Liberal party and the left-wing Greens party joined a Q&A program hosted by the Australian Broadcasting Corporation to talk with community members about some important topics, including soaring inflation and interest rates.

At the start of the program, an audience member asked the panel where they could find help for the current high inflation situation in Australia.

The Minister for Early Childhood Education and Youth, Anne Aly, acknowledged how soaring living costs were severely impacting Australians.

Still, she said there was hope as Treasurer Jim Chalmers believed inflation had reached its peak.

Aly also said the federal government were providing some cost-of-living relief, such as cheaper childcare, as well as repairing the economy and the budget and invigorating the manufacturing sector to create more jobs via new funding.

Greens Senator Dorinda Cox, who represents Western Australia, said the excuses from the current and previous governments had come thick and fast and that some measures could be implemented to provide relief to Australians right now, such as making changes to the stage-three tax cuts, introducing housing rent freezes, and raising income support above the poverty line.

Senator Dorinda Cox is seen in Perth, Australia, on Oct. 31, 2022. (Matt Jelonek/Getty Images)

However, Aly said the stage-three tax cut were a few years away and that the government was putting in place some “real relief.”

But she said the government needed to make sure that those measures would not add more to inflation.

“All of those things individually aren’t going to help, but collectively they can afford families, they can afford individuals some relief,” Aly said.

Stories of Australians Suffering under High Inflation and Interest Rate Hikes

During the program, the panel and community members shared stories about how inflation and rising interest rates were making life harder for Australian households.

Aly told the audience that she witnessed a man in her well-off local area struggling to buy a loaf of bread.

“The other day, I was at the shops, and I was just observing a gentleman there who was buying bread and was counting his coins to buy the bread,” she said.

“And [saying] how expensive the bread was.

“I remember those days from when I was a single mum, but to see people in some of my wealthier suburbs doing that, it really does hit home.”

Liberal MP Keith Wolahan also witnessed people begging for food in his electorate.

“I see mums begging for food with kids in the car,” he said.

“I’m genuinely worried. There are six food banks in my electorate, and the lines are out the door.”

Meanwhile, audience member Amy Yet Foy said she and her husband had to face an additional mortgage repayment of $500 per week due to higher interest rates despite her refinancing effort.

She said her family had to cut back on everything and that she could not earn more to pay the mortgage.

“At the end of the day, I can’t earn anymore,” Yet Foy said.

“My capacity is what it’s at, and so is my partner’s.”

“When our fixed rate comes up in the next 12 months, and we can’t afford an additional $500 a week. We don’t know what we’re going to do.”

Since May 2022, the Reserve Bank has embarked on an aggressive monetary tightening policy, which saw the official cash rate take from the historic low of 0.1 percent to 3.35 percent in February 2023, the fastest interest rate hiking cycle on record.

Commercial banks have been quick in passing on the rate rises to customers, forcing mortgage holders across the country to bear thousands of dollars more in annual repayment.

Minister Admits What She Says Will Not Help the Community

After listening to stories from the community, Aly said she knew that nothing she said would ease the pressure off people who were struggling.

However, the minister noted she felt the pain that people were feeling in both her electorate and across the country, as she used to be in a similar situation.

Regarding the interest rate hikes implemented by the Reserve Bank of Australia, the minister said the central bank made the decision independently and that the government had no control over the matter.

Minister for Early Childhood Education and Minister for Youth Anne Aly during question time at Parliament House in Canberra, Australia, on Feb. 6, 2023. (Martin Ollman/Getty Images)

Nevertheless, she noted there was a “glimmer of optimism” there and that things would get better when the government rolled out more cost-of-living relief measures.

“I know it feels like empty words coming from a politician, but take it from somebody who is a single mum, and who’s been through that as well and who has lived in poverty, that I know nothing we say is going to make it better for you,” she said.

Meanwhile, Wolahan said the Reserve Bank governor would be subject to a Senate inquiry on Feb. 15 where he would be questioned about the central bank’s interest rate decisions.

The Liberal MP also noted that monetary policy was one lever to curb inflation.

“It is blunt, and it hurts people, but it is a necessary one,” he said.

The other lever Wolahan mentioned was fiscal policy, which he said was about reducing spending.

“Labor and Liberals need to reduce spending in government, and it brings inflation down, and it helps people,” he said.

“You can’t have one foot on the accelerator and one foot on the brake. And currently, that’s what we are doing.”