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

Today is a very appropriate day for us to acknowledge the really important work that the member for Newcastle does in our team and in this parliament.

The inflation challenge is the defining feature of our economy in 2023, just as it was in 2022, and that makes it the government's major focus. In responding to the inflation challenge, the independent Reserve Bank has its job to do. It does that job independently, and we don't interfere with its deliberations or second-guess its decisions.

But we, in the government, have a plan to address this inflation challenge. It has three parts: responsible cost of living relief, which we provided in October and will provide again in May; tackling the supply chain challenges that were left to us, and we've been talking about that today; and delivering a responsible budget with spending restraint so that we're not adding further fuel to inflation. That's why, in the budget, we are returning 99 per cent of the revenue upgrades to the bottom line over the next two years, when inflation will be at its most acute, and returning 92 per cent over four years. That compares to an average of 40 per cent under our predecessors.

Our budget has payments falling in real terms over the next two years and real spending growth averaging just 0.3 per cent a year over the forward estimates. That compares to real spending growth under our predecessors of 4.1 per cent on average, and 2.6 per cent before the pandemic. Our first budget found $22 billion in savings. The impact of policy decisions was less than $10 billion—

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