The Australian Labor government failed the cost of living crisis by causing it and then making things worse for Australians. The PM and Treasurer blamed it all on external factors, but they caused it by continually overspending.
Australians are battling a relentless cost-of-living crisis, with critics pointing to government policies as the root cause of inflation, housing shortages, and skyrocketing interest rates.
Reserve Bank Rate Increases Cause Major Pain
The Reserve Bank of Australia raised interest rates 13 times since May 2022 in a misguided effort to curb inflation, including four increases of 0.50% and nine of 0.25%. Economists say this drastic action stems directly from government policies that pushed inflation higher, starting with a fuel excise tax hike that increased transportation costs and triggered a ripple effect across the economy. In the USA, the same excuses were given by the government after its own massive spending increases and The Federal Reserve’s actions.
Adding to inflationary pressures, the government spent more than $1.1 billion in foreign aid to Ukraine, drawing criticism for prioritizing international conflicts over domestic needs. Meanwhile, millions of dollars continue to flow into renewable energy projects, which some argue offer little short-term benefit to Australians struggling with energy costs.
The government’s inflationary pressures also came as the Fair Work Commission announced a 3.75% minimum wage increase that will leave some small businesses on the brink of closure.
Broken Promises
Energy relief payments of $300 were issued to households as a stopgap measure after the government failed to deliver on promises to lower energy prices. Instead, this move added to inflationary pressures, critics say.
The crisis was compounded by the government’s unprecedented surge in immigration, with an additional 1 million people entering Australia. This influx, critics argue, was poorly planned, or not planned at all, causing housing shortages that helped push home prices up by 25% or more in many areas. Rents also spiked by over 12%, leaving families priced out of markets and struggling to find affordable housing.
Salvos Highlight Housing Insecurity
The Salvation Army’s May 2023 At Breaking Point report highlighted the growing housing insecurity faced by Australians. The report found that 27% of respondents were behind on their rent, mortgage, or board payments, with 51% of those in arrears falling behind by up to two weeks and 78% by up to four weeks. Additionally, 35% of private renters identified securing and maintaining safe, affordable housing – and avoiding homelessness – as one of their greatest challenges over the past year.
“The housing market is broken,” said David Bliss, Branch Secretary of the SDA union of Newcastle and Northern Branch. “Too many workers are struggling to put an affordable roof over their head.”
Labor Government Squeezes Battlers
Families across the nation are now squeezed between soaring living costs and escalating mortgage or rental payments. The Reserve Bank’s aggressive rate hikes further strained households, as interest on home loans surged. These moves caused an additional 766,000 households to come under mortgage stress and at risk of losing their homes. This brought the total up to a record 1,573,000, according to the Senate Second Interim Cost of Living report.
Australians call for urgent government action to address these interconnected crises. Economists suggest reforms to stabilize housing markets, reduce inflationary spending, and better manage immigration to align with housing and infrastructure capacity.
As the crisis deepens, the government’s response and its broken promises remains under scrutiny, with many seeing that current policies are driving the country further into economic hardship.
