Taxing and spending is not the road to prosperity

Taxing and spending is not the road to prosperity

Last week’s decision by the Reserve Bank of Australia should sound a warning bell for all Australians.

After four years in office, the government needs to accept responsibility for the state of our national economy and the record is clear:

• Australians have experienced the biggest fall in living standards in the developed world.

• Inflation in Australia is higher than in every major advanced economy, and it is being driven by decisions made in Canberra, not just events overseas as the independent Reserve Bank has made clear.

• Government spending is at a 40 year high outside a recession, and that spending is keeping inflation higher for longer.

When inflation stays high, interest rates stay high. That is why Australians have now endured 15 rate rises under Labor, putting further pressure on households and businesses.

The average Australian family is paying around $29,000 more a year on a typical mortgage.

Our national debt is racing towards $1 trillion and Australians are paying around $50,000 a minute just to service it.

Every dollar of debt today is a tax bill for the next generation tomorrow.

Labor seemingly wants to lecture Australians about intergenerational inequity but spending more today and sending the bill to young Australians will do little to alleviate the challenges faced by young people.

In each of the last two years, the economy has recorded its slowest growth outside a recession, showing how weak the foundations have become, productivity has collapsed, falling nearly 5 per cent.

Recent murmurings in the lead up to the federal budget regarding the abolition of capital gains tax discounts and limitations on negative gearing would suggest that the government has no economic plan. Just higher taxes, more spending and lower expectations.

Australians are paying more for everything, energy, rent, insurance, food, healthcare and education, with costs rising faster than wages.

This is what happens when a government loses control of the basics. The budget, inflation and productivity all slip and ultimately Australians pay the price.

At a time when Australians are under real financial pressure, they need a government that understands its focus should not be on increased spending, more debt and higher taxes - it should be on cutting regulation, beating inflation and taking action to get energy prices down.