The primary cause of this week’s interest rate rise is the massive blowout in government spending.
Over the past two years, the Federal Government’s budget has blown out by $100 billion.
That means that we are spending $100 billion more than we expected two years ago.
Extra government spending pushes up inflation and Australia now has the highest inflation rate in the developed world.
That makes it harder for struggling families to pay for groceries, afford back to school expenses and make mortgage payments.
Those mortgage payments will increase even higher thanks to the decision to raise interest rates this week.
The average homeowner will now pay an extra $1000 per year thanks to higher interest rates in Australia when interest rates are going down almost everywhere else in the developed world.
While government spending is the primary cause of Australia’s woeful economy, there is another government decision that is making things worse too.
Since COVID, the Australian Labor party has opened our borders and let an unprecedented number of people into our country.
Before COVID, Australia issued an average of 470,000 visas for people to come into Australia every year.
Over the first three years of this Labor Government, they have issued over 650,000 new visas each year.
Some argue that we needed to issue more than average numbers to “catch up” from the border closures during COVID.
But Labor has not just caught up on COVID they have raced ahead. During COVID we issued an average of 360,000 visas per year.
That is, we were about 100,000 per year lower than average for three years – a 300,000 person deficit.
Since COVID, we have issued an average of 200,000 visas more than average for three years – a 600,000 above average increase.
So in net terms, we have 300,000 more people here than if we had not had COVID and instead just run our migration policy as it had been.
Those 300,000 people need homes, food, electricity, use roads, hospitals and schools.
All of this extra demand pushes up the price of things.
That is basic economics.
When demand is higher than supply, prices rise.
None of this is the fault of the migrants themselves.
I understand why people want to come here and we can take a sustainable number of migrants every year.
The fault sits with the ‘asleep at the wheel’ governments that have opened our borders without any due regard to what that means for inflation, housing availability, hospital bed availability and the unity of Australian culture.
Since COVID, our population has increased by 6 per cent but the number of hospital beds has only increased by 3 per cent.
We are not building more houses for the people that are arriving.
That means rents and house prices are increasing and lots more Australians are homeless.
It is hard to visit a park in our major cities that is not packed with people living in tents.
These pressures are creating divisions among Australians.
New migrants to Australia must assimilate to the Australian way of life.
We have generally done a good job of that but when we take in so many people so quickly it is just impossible to keep our nation united.
This is unacceptable and the welfare of Australians must take priority over Labor’s obsession with running an open border regime.
We need to get to the bottom of Labor’s spending blowouts and this week I have moved for a Senate inquiry into them.
We need an external audit on how they got these numbers so wrong.
But the immediate thing we can do is to cap the number of people that can come to Australia in the next few years.
We don’t need to “catch up” on the mass migration that Labor has let happen in the past few years.
We now need below average migration for a few years so that Australians are given a break and a chance to ‘catch up’.
