No-one, and certainly no constituent in my electorate of Mackellar, is in any doubt that we're living through a cost-of-living crisis. A full four percentage point rise in interest rates since May 2022, increasing electricity, gas, petrol and grocery bills, and higher prices for everything from travel to education are hurting individuals, families and small businesses alike. A record 1.5 million people, almost a third of all mortgage holders, are now considered at risk of mortgage stress. That's without even considering the people, particularly young people, who may have been able to get into the property market a few years ago when interest rates were low but now can't because of higher interest rates and higher costs of living.

There's no doubt that the cost of living is one of the very biggest issues facing Australia today. And there's no doubt it's a difficult problem for governments to solve, not just our government but governments all over the world. However, governments elsewhere are taking bold steps to tackle not only this cost of living issue, but also the greater existential crisis of our times: climate change. Tackling these issues at the same time can be done. It's clear that climate policy and policies that tackle cost-of-living pressures are inextricably linked.

Our closest ally, the United States, last year introduced its Inflation Reduction Act, and it is changing the world in a positive way and at pace. The Inflation Reduction Act, amongst other things, is an investment by the US government into domestic energy production through the promotion of clean energy and the electrification of the nation using this clean energy. It is the largest piece of federal legislation ever to address climate change. The Inflation Reduction Act provides tax credits and incentives for things like electric vehicles, home energy efficiency upgrades, home energy supplier improvements and advanced manufacturing. Within less than a year of its operation, the success of the act is clear. $US370 billion of government rebates and incentives have mobilised an estimated $US1.2 trillion in additional private sector capital.

Australia can and must rise to the challenge thrown down by the US. In fact, it is not so much of a challenge as a once-in-a-generation game-changing opportunity—for renewables, industrial revolution here in Australia. To do nothing would be to lose talent, investment and innovation to the more favourable conditions established in the US. To do nothing would be to miss an opportunity to reduce the cost-of-living pressures facing millions of Australians.

It's time for the Australian government to design a system of incentives and rebates to turbocharge the transition to a clean energy economy. Our response must be unique to Australia, of course, and play to our comparative advantages. That comparative advantage is incredible. Our wind, solar, critical minerals and energy transition metals are the envy of the world. Here is what we could start with: the production and export of green iron and steel, green alumina and aluminium; the processing and refinement of minerals and metals; advanced manufacturing of solar, wind and battery componentry, electrolysers and grid control technology; the electrification of heat pumps and home energy management systems; the acceleration of transmission infrastructure including cabling and towers; and investment in zero carbon transport—vehicles and fuels.

Climate and energy finance expert Tim Buckley quite rightly says that Australia's response to the US act should be commensurate to our opportunities, that our opportunities are limitless, and that we have the opportunity to change the world. Just three weeks ago Australia's Centre for Policy Development released a report entitled Green Gold – a strategy to kickstart Australia's renewable industry future. The report calls for the Australian government to respond more aggressively to the US Inflation Reduction Act by spending $100 billion for green aluminium and ammonia and onshore processing of iron ore over the next 10 years. What is incredible is that this could be paid for by simply ending federal subsidies for the fossil fuel industry, which currently sit close to $10 billion a year or $100 billion over 10 years.

An Australian IRA-style bill would not only help to decarbonise our economy but help create the highly paid clean energy jobs of the future and, importantly, help to reduce a huge cost-of-living pressure that Australians face. We must urgently rise to this challenge.