Costs of living are increasing and Australians are worried. Today's official consumer price index figures on the cost of living must surely send a signal to the government to stop its reckless spending and ease the financial pressure on Australian families. Labor's refusal to reduce spending is putting upward pressure on inflation. The September quarter CPI figures released today by the Australian Bureau of Statistics show that inflation rose by 0.7 per cent in the quarter, lifting the annual rate to 2.8 per cent. Over the past year the cost of essentials has risen: electricity by 12.4 per cent; water and sewerage 12.8 per cent; gas 9.8 per cent, child care 7.2 per cent; hospital and medical services 6.9 per cent and education 5.8 per cent. Increases in essential goods and services have applied considerable tension on already stretched household budgets.
The recent minutes of the October meeting of the Reserve Bank of Australia show an interest rate hike is now seemingly inevitable, revealing that the RBA ‘could not wait indefinitely' due to increased pressure on inflation. Why is the government continuing to spend at a recession-like rate and accumulate a $41 billion budget deficit at a time when the economy is running at near full capacity? Labor must immediately stop its spending largesse to relieve some of the upward pressure on interest rates.
Increasing interest rates will cause more pain for all Australians who are facing higher costs as a consequence of the Gillard government's failure to deliver on its promise to reduce the cost of living for working families. Families are desperately worried about electricity prices, which have shot up 35 per cent since the end of 2007-35 per cent in just three years. In the same period, gas prices have risen by 24 per cent, water prices by 29 per cent and rents by 15 per cent. There is constant concern that mortgage repayments could be pressured by banks lifting their rates above and beyond the Reserve Bank of Australia's cash-rate increases.
Alarming too is the continual upward trend of the price of food, placing undue and excessive strain on the family budget. The weekly grocery bill just gets higher and higher, and it is not as if shoppers are placing any more items in their trolleys. In fact, the opposite is the case as families struggle to make ends meet. It is certainly not as if the poor old farmer is getting a higher price for produce. The price at the farm gate does not change. If anything, farming is less and less profitable. The difference in prices from paddock to plate is unreasonable, unfair and unAustralian. The farmer is being ripped off, likewise the customer at the checkout. This fiscally irresponsible Labor government knows not how or when to rein in its reckless and wasteful spending. The Rudd-Gillard governments have continued to borrow at $100 million a day, even after the worst of the global financial crisis is behind us. This is feeding into inflation.
People respect the need for taxes but expect value for money. They expect government to ease cost-of-living pressures, not burden them with more. Any small business owner or those who do a simple household budget know a government cannot go on borrowing $100 million per day. Those borrowings have to come from somewhere. Most of them come from offshore, meaning less available money for Australian businesses to access: businesses needing to invest in research and development, businesses investing in capital equipment and technology, businesses investing in their own people, products and futures-our people, products and futures. What we end up with is our federal government competing for finance in the capital market against Australian businesses, which then have to pay more to finance their growth and futures, in turn pushing up prices for goods and services and adding to inflationary pressures.
It cannot continue. This government has failed to take decisive action to ease the rising cost of living, and middle Australia is hurting as a result. Especially hurting is regional Australia. The government stands condemned for its diabolical mismanagement of the water issue. This has created so much uncertainty in rural areas which make up the food bowl of the nation. The fact that this government took six months to get to a water policy, 18 months to set up the Murray-Darling Basin Authority and 36 months to determine that there needs to be a proper analysis of the social and economic impact-the human cost-of water reform is, quite frankly, beyond belief.
It is little comfort now to the thousands of people in basin communities that a parliamentary inquiry has been established to look into the water issue and that the Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke, has received legal advice that the socioeconomic effects of the Water Act should and must come into play in any deliberations of the MDBA. It is little comfort because some of the damage to the confidence in these basin communities has already been done. People already troubled by cost-of-living increases have been hit with the added woe of whether their farm or business has a future if water cuts of a proposed 45 per cent are introduced. It is a responsibility, an obligation, of this government to now restore that confidence. The government has a duty to move within what would be considered a reasonable time frame-and country people are reasonable and patient-to allay the widespread and growing fears about the future of regional Australia; about how regional, and indeed all, Australians will meet costs of living and about how they will be able to balance household budgets.
Australian families will quite correctly lay the blame for interest rate rises fairly and squarely with the Gillard government. They will also sheet home to the Gillard government the blame for our refusal to pay or delay repaying the national debt. As far as longer term challenges and, hopefully, opportunities are concerned, a necessary requirement is to lift productivity and the speed limits on growth. Contrary to what the Minister for Regional Australia, Regional Development and Local Government and Minister for the Arts, Simon Crean, said in question time this afternoon, productivity growth is slipping, and that should be of considerable concern to all of us in this place.
We need to better promote and increase labour force participation. Small business, the engine room of the Australian economy, has to be helped, not hindered. On this side of the House we see the need for more prudent spending-restraint, responsibility and respect for taxpayers, working families and all Australians. An achievable and attainable benchmark is spending as a proportion of gross domestic product to be no higher than in the last year of the coalition government-23 per cent. Of course, national debt will not in any way be assisted by a Labor government which is rolling out a $43 billion National Broadband Network without a proper cost-benefit analysis, with no business case and with no guarantee of a take-up rate which would go anywhere near close to justifying such a gross misuse of Commonwealth money, the people's money.
Now this same incompetent, spend-happy government wants to inflict a carbon tax on all of us, which will be such a roadblock to future growth and prosperity and which will especially hurt regional areas. It is a slippery slope on which this government is taking us. The suggestion that electricity bills will reach up to $10,000 a year for families in five years if a carbon tax is introduced should send a shiver up the spine of every Aussie battler. As a nation we seem so intent on rushing down the path of environmentalism for the sake of environmentalism that we are forgetting Mr and Mrs Average, pensioners, businesspeople and farmers, who are trying to keep pace with ever-increasing costs of living brought about by this Labor government.
This Labor government has wasted so much money on Building the Education Revolution, the failed Home Insulation Program, Fuelwatch, GroceryWatch-I could go on. All the while, hospitals across Australia are in a state of disrepair, regional fuel prices are extraordinarily high, the price of groceries everywhere is soaring-again I could go on. It is time for Labor to rein in the spending, stop the waste and repay the spiralling debt before it is too late.