Tania Lawrence (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

My question is the Treasurer. What does today's decision on interest rates by the independent Reserve Bank mean for the economy?

Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Thank you to the wonderful member for Hasluck for her question. But, more than that, I thank her for championing the 84,000 taxpayers in the electorate of Hasluck, including the 84 per cent of them who will get a bigger tax cut to help with the cost of living as a consequence of our changes.

I know the member for Hasluck's community has been especially sensitive to the interest rate rises when they began before the last election, and I know that her community and communities right around Australia will particularly welcome the decision by the Reserve Bank today to keep interest rates on hold. The independent Reserve Bank kept interest rates on hold at 4.35 per cent today; this is a decision which will be welcomed right around the country. This will come as welcome relief for Australians who are already under the pump. As the Reserve Bank said in its statement released a few minutes ago, there are encouraging signs in our economy and inflation is moderating. But they recognise, as we do, that inflation is still too high in our economy. That's why this decision and the inflation figures that we saw last week show that we're making welcome and encouraging progress in this fight against inflation, and that our policies are helping to get inflation down, working in concert with the Reserve Bank.

But it's not mission accomplished. We know that because people are still under pressure. Headline inflation is now at its lowest level in two years and monthly inflation has a three in front of it for the first time since December 2021. The ABS has once again shown that our cost-of-living plan is helping to directly reduce inflation. The ABS says that our cost-of-living policies took half a percentage point off inflation through the year to the December quarter. These were the cost-of-living policies that those opposite voted against when they voted for higher inflation in our economy. Whether it's electricity prices, or rent or cheaper early childhood education, our policies are taking some of the edge off these pressures.

We are realistic about the challenges facing our economy—persistent, but moderating, inflation; higher rates; and global uncertainty—but we face them from a position of genuine economic strength. We know inflation is still our defining economic challenge but we are making encouraging progress, with 650,000 jobs created on our watch under this Prime Minister—a record for a first term. The budget is in much better nick, with the first surplus in 15 years and another in prospect. Real wages have grown for two consecutive quarters. And, from 1 July, every taxpayer in this country will receive a tax cut to help with the cost of living.

Under this Albanese government, more people are working; they are earning more; and, because of our tax cuts, they will keep more of what they earn.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The Leader of the Nationals will cease interjecting.

Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

This will help them service the mortgage, provide for their loved ones and get ahead.